## Table 0 ##
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 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.
Loss (gain) on disposition of assets and impairments, net.
During the year ended December 31, 2010, we recorded a net loss on the disposition of assets of $4.0 million as a result of business divestures, including transaction costs.
Additionally, during 2010 we recorded an impairment loss of $15.1 million related to certain long-lived assets that are held and used.
During 2009, we recorded net gain 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 the Countywide facility, our former corporate office in Florida and impairment on sales of DOJ required divestitures.
Tax effect of permanent items in adjustments.
During 2008, our effective tax rate was impacted by several expenses associated with the acquisition that were not tax deductible.
In addition to the items discussed above, we incurred the following charges during 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, 2010, 2009 and 2008, as follows (in millions):
## Table 1 ##
Revenue We generate revenue primarily from our solid waste collection operations.
Our remaining revenue is from other services, including transfer stations, landfill disposal and recycling.
Our revenue from collection operations consists of fees we receive from commercial, industrial, municipal and residential customers.
Our
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 the Allied acquisition.
Interest expense also increased as a result of accreting discounts applied to debt or imputing interest on environmental and risk reserves assumed from Allied.
The debt we assumed from Allied was recorded at fair value as of December 5, 2008.
We recorded a discount of $624.3 million, which is amortized as interest expense over the applicable terms of the related debt instruments or written-off upon refinancing.
The remaining unamortized discounts on the outstanding debt assumed from Allied as of December 31, 2010 are as follows (in millions):
## Table 2 ##
Loss on Extinguishment of Debt Loss on early extinguishment of debt was $160.8 million for the year ended December 31, 2010, resulting from the following: ?
During 2010, we refinanced $677.4 million and repaid $97.8 million of our tax-exempt financings resulting in a loss on extinguishment of debt of $28.5 million related to charges for unamortized debt discounts and professional fees paid to effectuate these transactions.  ?
In March 2010, we issued $850.0 million of 5.000% senior notes due 2020 and $650.0 million of 6.200% senior notes due 2040.
We used the net proceeds from these senior notes as follows: (i) $433.7 million to redeem the 6.125% senior notes due 2014 at a premium of 102.042% ($425.0 million principal outstanding); (ii) $621.8 million to redeem the 7.250% senior notes due 2015 at a premium of 103.625% ($600.0 million principal outstanding); and (iii) the remainder to reduce amounts outstanding under our Credit Facilities and for general corporate purposes.
We incurred a loss of $132.1 million for premiums paid to repurchase debt, to write-off unamortized debt discounts and for professional fees paid to effectuate the repurchase of the senior notes.  ?
Additionally in March 2010, we repaid all borrowings and terminated our accounts receivable securitization program with two financial institutions that allowed us to borrow up to $300.0 million on a revolving basis under loan agreements secured by receivables.
We recorded a loss on extinguishment of debt of $0.2 million related to the charges for unamortized deferred issuance costs associated with this program.
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.
## Table 3 ##
(A) Changes in estimates on projects accounted for under the percentage of completion method favorably impacted income by approximately $20 in fiscal year 2016, primarily during the fourth quarter.
For additional information, see Note 1, Major Accounting Policies (Revenue Recognition).
(B) For additional information, see Note 3, Materials Technologies Separation.
(C) For additional information, see Note 5, Business Restructuring and Cost Reduction Actions.
(D) For additional information, see Note 16, Retirement Benefits.
(E) For additional information, see Note 15, Debt.
(F) Includes income tax expense for tax costs associated with business separation.
For additional information, see Note 3, Materials Technologies Separation.
(G) For additional information, see Note 6, Business Combination.
(H) The gain is reflected on the consolidated income statements in “Other income (expense), net.
” For additional information, see Note 24, Supplemental Information.
ASSET RETIREMENT OBLIGATIONS Our asset retirement obligations are primarily associated with on-site long-term supply contracts under which we have built a facility on land owned by the customer and are obligated to remove the facility at the end of the contract term.
The retirement of assets includes the contractually required removal of a long-lived asset from service and encompasses the sale, removal, abandonment, recycling, or disposal of the assets as required at the end of the contract terms.
These obligations are primarily reflected in "Other noncurrent liabilities" on the consolidated balance sheets.
The timing and/or method of settlement of these obligations are conditional on a future event that may or may not be within our control.
Changes to the carrying amount of our asset retirement obligations are as follows:
## Table 4 ##
The increase in the liability during fiscal year 2018 primarily relates to new obligations associated with the Lu'An asset acquisition completed in April 2018.
GUARANTEES AND WARRANTIES In April 2015, we entered into joint venture arrangements in Saudi Arabia.
An equity bridge loan has been provided to the joint venture until 2020 to fund equity commitments.
We guaranteed the repayment of our 25% share of this loan, and our venture partner guaranteed repayment of its share.
Our maximum exposure under the guarantee is approximately $100.
As of 30 September 2018 and 2017, we recorded a noncurrent liability of $94.4 for our obligation to make future equity contributions based on our proportionate share of the advances received by the joint venture under the loan.
Air Products has also entered into a long-term sale of equipment contract with the joint venture to engineer, procure, and construct the industrial gas facilities that will supply gases to Saudi Aramco.
We provided bank guarantees to the joint venture to support our performance under the contract.
As of 30 September 2018, our maximum potential payments were $249.
Exposures under the guarantees decline over time and will be completely extinguished after completion of the project.
We are party to an equity support agreement and operations guarantee related to an air separation facility constructed in Trinidad for a venture in which we own 50%.
At 30 September 2018, maximum potential payments under joint and several guarantees were $27.0.
Exposures under the guarantees decline over time and will be completely extinguished by 2024.
During the first quarter of 2014, we sold the remaining portion of our Homecare business and entered into an operations guarantee related to obligations under certain homecare contracts assigned in connection with the transaction.
Our maximum potential payment under the guarantee is ￡20 million (approximately $25 at 30 September 2018), and our exposure will be extinguished by 2020.
To date, no equity contributions or payments have been made since the inception of these guarantees.
The fair value of the above guarantees is not material.
We, in the normal course of business operations, have issued product warranties related to equipment sales.
Also, contracts often contain standard terms and conditions which typically include a warranty and indemnification to the buyer that the goods and services purchased do not infringe on third-party intellectual property rights.
The provision for estimated future costs relating to warranties is not material to the consolidated financial statements.
We do not expect that any sum we may have to pay in connection with guarantees and warranties will have a material adverse effect on our consolidated financial condition, liquidity, or results of operations.
ITEM 4.
MINE SAFETY DISCLOSURES Not applicable PART II ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock (ticker symbol APD) is listed on the New York Stock Exchange.
Our transfer agent and registrar is Broadridge Corporate Issuer Solutions, Inc. , P. O.
Box 1342, Brentwood, New York 11717, telephone (844) 318-0129 (U. S. ) or (720) 358-3595 (all other locations); website, http://shareholder.
broadridge.
com/ airproducts; and e-mail address, shareholder@broadridge.
com.
As of 31 October 2018, there were 5,391 record holders of our common stock.
Cash dividends on the Company’s common stock are paid quarterly.
It is our expectation that we will continue to pay cash dividends in the future at comparable or increased levels.
The Board of Directors determines whether to declare dividends and the timing and amount based on financial condition and other factors it deems relevant.
Dividend information for each quarter of fiscal years 2018 and 2017 is summarized below:
## Table 5 ##
Purchases of Equity Securities by the Issuer On 15 September 2011, the Board of Directors authorized the repurchase of up to $1.0 billion of our outstanding common stock.
This program does not have a stated expiration date.
We repurchase shares pursuant to Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended, through repurchase agreements established with one or more brokers.
There were no purchases of stock during fiscal year 2018.
At 30 September 2018, $485.3 million in share repurchase authorization remained.
Additional purchases will be completed at the Company’s discretion while maintaining sufficient funds for investing in its businesses and growth opportunities.

<table><tr><td></td><td colspan="5">Years Ended December 31,</td></tr><tr><td></td><td>2009</td><td>2008</td><td>2007</td><td>2006</td><td>2005</td></tr><tr><td> Other Operating Data:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cash flows from operating activities</td><td>$1,396.5</td><td>$512.2</td><td>$661.3</td><td>$511.2</td><td>$747.8</td></tr><tr><td>Capital expenditures</td><td>826.3</td><td>386.9</td><td>292.5</td><td>326.7</td><td>309.0</td></tr><tr><td>Proceeds from sales of property and equipment</td><td>31.8</td><td>8.2</td><td>6.1</td><td>18.5</td><td>10.1</td></tr><tr><td> Balance Sheet Data:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cash and cash equivalents</td><td>$48.0</td><td>$68.7</td><td>$21.8</td><td>$29.1</td><td>$131.8</td></tr><tr><td>Restricted cash and marketable securities</td><td>240.5</td><td>281.9</td><td>165.0</td><td>153.3</td><td>255.3</td></tr><tr><td>Total assets</td><td>19,540.3</td><td>19,921.4</td><td>4,467.8</td><td>4,429.4</td><td>4,550.5</td></tr><tr><td>Total debt</td><td>6,962.6</td><td>7,702.5</td><td>1,567.8</td><td>1,547.2</td><td>1,475.1</td></tr><tr><td>Total stockholders’ equity</td><td>7,567.1</td><td>7,282.5</td><td>1,303.8</td><td>1,422.1</td><td>1,605.8</td></tr></table>
<table><tr><td></td><td>2010</td><td>2009</td><td>2008</td></tr><tr><td>Expenses:</td><td></td><td></td><td></td></tr><tr><td>Cost of operations</td><td>$-</td><td>$-6.8</td><td>$153.9</td></tr><tr><td>Selling, general and administrative</td><td>33.3</td><td>41.8</td><td>4.8</td></tr><tr><td>Loss (gain) on disposition of assets and impairments, net</td><td>19.1</td><td>-137.0</td><td>89.8</td></tr><tr><td>Restructuring charges</td><td>11.4</td><td>63.2</td><td>82.7</td></tr><tr><td>Loss on extinguishment of debt</td><td>160.8</td><td>134.1</td><td>-</td></tr><tr><td>Other (income) expense, net</td><td>-</td><td>-</td><td>1.0</td></tr><tr><td>Total charges, net</td><td>$224.6</td><td>$95.3</td><td>$332.2</td></tr></table>
<table><tr><td></td><td>Remaining Discount</td><td>Expected Amortization Over the Next Twelve Months</td></tr><tr><td>$400.0 million 5.750% senior notes due February 2011</td><td>$1.2</td><td>$1.2</td></tr><tr><td>$275.0 million 6.375% senior notes due April 2011</td><td>1.8</td><td>1.8</td></tr><tr><td>$600.0 million 7.125% senior notes due May 2016</td><td>64.5</td><td>9.7</td></tr><tr><td>$750.0 million 6.875% senior notes due June 2017</td><td>86.1</td><td>10.4</td></tr><tr><td>$99.5 million 9.250% debentures due May 2021</td><td>6.1</td><td>0.4</td></tr><tr><td>$360.0 million 7.400% debentures due September 2035</td><td>92.4</td><td>0.9</td></tr><tr><td>Other, maturing 2014 through 2027</td><td>21.9</td><td>2.6</td></tr><tr><td>Total</td><td>$274.0</td><td>$27.0</td></tr></table>
<table><tr><td> 2015</td><td></td><td>Q1</td><td>Q2</td><td>Q3</td><td>Q4</td><td>Total</td></tr><tr><td>Sales</td><td></td><td>$2,560.8</td><td>$2,414.5</td><td>$2,470.2</td><td>$2,449.4</td><td>$9,894.9</td></tr><tr><td>Gross profit</td><td></td><td>731.1</td><td>716.3</td><td>755.0</td><td>753.5</td><td>2,955.9</td></tr><tr><td>Business separation costs<sup>(B)</sup></td><td></td><td>—</td><td>—</td><td>—</td><td>7.5</td><td>7.5</td></tr><tr><td>Business restructuring and cost reductionactions<sup>(C)</sup></td><td></td><td>32.4</td><td>55.4</td><td>58.2</td><td>61.7</td><td>207.7</td></tr><tr><td>Pension settlement loss<sup>(D)</sup></td><td></td><td>—</td><td>12.6</td><td>1.6</td><td>7.0</td><td>21.2</td></tr><tr><td>Gain on previously held equity interest<sup>(G)</sup></td><td></td><td>17.9</td><td>—</td><td>—</td><td>—</td><td>17.9</td></tr><tr><td>Gain on land sales<sup>(H)</sup></td><td></td><td>—</td><td>—</td><td>—</td><td>33.6</td><td>33.6</td></tr><tr><td>Operating income</td><td></td><td>432.3</td><td>376.9</td><td>424.8</td><td>474.3</td><td>1,708.3</td></tr><tr><td>Loss on extinguishment of debt<sup>(E)</sup></td><td></td><td>—</td><td>—</td><td>—</td><td>16.6</td><td>16.6</td></tr><tr><td>Income tax provision</td><td></td><td>107.1</td><td>87.7</td><td>104.1</td><td>119.4</td><td>418.3</td></tr><tr><td>Net income</td><td></td><td>337.5</td><td>296.9</td><td>333.2</td><td>350.0</td><td>1,317.6</td></tr><tr><td>Net income attributable to Air Products</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Income from continuing operations</td><td></td><td>326.3</td><td>291.9</td><td>320.5</td><td>346.0</td><td>1,284.7</td></tr><tr><td>Loss from discontinued operations</td><td></td><td>-1.7</td><td>-1.9</td><td>-1.7</td><td>-1.5</td><td>-6.8</td></tr><tr><td>Net income attributable to Air Products</td><td></td><td>324.6</td><td>290.0</td><td>318.8</td><td>344.5</td><td>1,277.9</td></tr><tr><td colspan="2">Basic Earnings Per Common Share Attributable to Air Products</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Income from continuing operations</td><td></td><td>1.53</td><td>1.36</td><td>1.49</td><td>1.61</td><td>5.98</td></tr><tr><td>Loss from discontinued operations</td><td></td><td>-.01</td><td>-.01</td><td>-.01</td><td>-.01</td><td>-.03</td></tr><tr><td>Net income attributable to Air Products</td><td></td><td>1.52</td><td>1.35</td><td>1.48</td><td>1.60</td><td>5.95</td></tr><tr><td colspan="2">Diluted Earnings Per Common Share Attributable to Air Products</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Income from continuing operations</td><td></td><td>1.51</td><td>1.34</td><td>1.48</td><td>1.59</td><td>5.91</td></tr><tr><td>Loss from discontinued operations</td><td></td><td>-.01</td><td>-.01</td><td>-.01</td><td>-.01</td><td>-.03</td></tr><tr><td>Net income attributable to Air Products</td><td></td><td>1.50</td><td>1.33</td><td>1.47</td><td>1.58</td><td>5.88</td></tr><tr><td>Dividends declared per common share</td><td></td><td>.77</td><td>.81</td><td>.81</td><td>.81</td><td>3.20</td></tr><tr><td>Market price per common share:</td><td>High</td><td>149.61</td><td>158.20</td><td>153.93</td><td>148.56</td><td></td></tr><tr><td></td><td>Low</td><td>118.20</td><td>137.07</td><td>136.69</td><td>123.66</td><td></td></tr></table>
<table><tr><td>Balance at 30 September 2016</td><td>$ 119.9</td></tr><tr><td>Additional accruals</td><td>22.7</td></tr><tr><td>Liabilities settled</td><td>- 4.1</td></tr><tr><td>Accretion expense</td><td>5.8</td></tr><tr><td>Currency translation adjustment</td><td>.4</td></tr><tr><td>Balance at 30 September 2017</td><td>$ 144.7</td></tr><tr><td>Additional accruals</td><td>43.8</td></tr><tr><td>Liabilities settled</td><td>- 2.6</td></tr><tr><td>Accretion expense</td><td>7.2</td></tr><tr><td>Currency translation adjustment</td><td>- 2.7</td></tr><tr><td>Balance at 30 September 2018</td><td>$ 190.4</td></tr></table>
<table><tr><td></td><td>2018</td><td>2017</td></tr><tr><td>First quarter</td><td>$.95</td><td>$.86</td></tr><tr><td>Second quarter</td><td>1.10</td><td>.95</td></tr><tr><td>Third quarter</td><td>1.10</td><td>.95</td></tr><tr><td>Fourth quarter</td><td>1.10</td><td>.95</td></tr><tr><td>Total</td><td>$4.25</td><td>$3.71</td></tr></table>

Question: Does the value of Capital expenditures in 2008 greater than that in 2009?