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  Exhibit 4.6    
    


 
  
  BFI CANADA LTD.    
    
    CONSOLIDATED BALANCE SHEETS    
    
    March 31, 2009 (unaudited) and December 31, 2008
  (in thousands of dollars)    

 



									
	 
	 	March 31,

2009 	 	December 31,

2008 	 
	 
	 	 
	 	(Restated — Note 4)
	 
	 ASSETS
	 	 	 	 	 	 	 
	 CURRENT
	 	 	 	 	 	 	 
	 	 Cash and cash equivalents
	 	 $	11,997	 	 $	14,720	 
	 	 Accounts receivable
	 	 	 128,615	 	 	 131,972	 
	 	 Other receivables
	 	 	 543	 	 	 279	 
	 	 Prepaid expenses
	 	 	 21,932	 	 	 23,998	 
	 	 	 	 	 	 
	 
	 	 	 163,087	 	 	 170,969	 
	 OTHER RECEIVABLES
	 	 	 1,619	 	 	 482	 
	 FUNDED LANDFILL POST-CLOSURE COSTS (Note 7)
	 	 	 7,651	 	 	 7,488	 
	 INTANGIBLES
	 	 	 141,232	 	 	 146,827	 
	 GOODWILL
	 	 	 777,095	 	 	 756,597	 
	 LANDFILL DEVELOPMENT ASSETS
	 	 	 10,893	 	 	 10,518	 
	 CAPITAL ASSETS
	 	 	 495,790	 	 	 500,401	 
	 LANDFILL ASSETS
	 	 	 766,093	 	 	 747,761	 
	 	 	 	 	 	 
	 
	 	 $	2,363,460	 	 $	2,341,043	 
	 	 	 	 	 	 
	 LIABILITIES
	 	 	 	 	 	 	 
	 CURRENT
	 	 	 	 	 	 	 
	 	 Accounts payable
	 	 $	57,808	 	 $	66,293	 
	 	 Accrued charges
	 	 	 61,766	 	 	 67,769	 
	 	 Dividends payable
	 	 	 19,620	 	 	 2,862	 
	 	 Income taxes payable
	 	 	 4,595	 	 	 1,699	 
	 	 Deferred revenues
	 	 	 13,648	 	 	 13,226	 
	 	 Current portion of long-term debt
	 	 	 47,000	 	 	 47,000	 
	 	 Landfill closure and post-closure costs (Note 7)
	 	 	 11,360	 	 	 8,829	 
	 	 	 	 	 	 
	 
	 	 	 215,797	 	 	 207,678	 
	 LONG-TERM DEBT
	 	 	

918,615	 	 	

1,022,798	 
	 LANDFILL CLOSURE AND POST-CLOSURE COSTS (Note 7)
	 	 	 69,827	 	 	 62,280	 
	 OTHER LIABILITIES
	 	 	 19,111	 	 	 18,424	 
	 FUTURE INCOME TAX LIABILITIES
	 	 	 73,517	 	 	 69,403	 
	 	 	 	 	 	 
	 
	 	 	 1,296,867	 	 	 1,380,583	 
	 	 	 	 	 	 
	 EQUITY (Note 8)
	 	 	 	 	 	 	 
	 NON-CONTROLLING INTEREST
	 	 	 243,584	 	 	 241,339	 
	 SHAREHOLDERS' EQUITY
	 	 	 823,009	 	 	 719,121	 
	 	 	 	 	 	 
	 
	 	 	 1,066,593	 	 	 960,460	 
	 	 	 	 	 	 
	 
	 	 $	2,363,460	 	 $	2,341,043	 
	 	 	 	 	 	 





1







 
 
  
  BFI CANADA LTD.    
    
    CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME    
    
    For the periods ended March 31, 2009 and 2008

(unaudited — in thousands of dollars, except net income per share or trust unit amounts)    
    



									
	 
	 	2009 	 	2008 	 
	 
	 	 
	 	(Restated — Note 4)
	 
	 REVENUES
	 	 $	278,818	 	 $	244,347	 
	 	 	 	 	 	 
	 EXPENSES
	 	 	 	 	 	 	 
	 	 OPERATING
	 	 	 163,357	 	 	 147,148	 
	 	 SELLING, GENERAL AND ADMINISTRATION
	 	 	 37,434	 	 	 30,341	 
	 	 	 	 	 	 
	 INCOME BEFORE THE FOLLOWING
	 	 	 78,027	 	 	 66,858	 
	 AMORTIZATION
	 	 	 46,564	 	 	 42,577	 
	 INTEREST ON LONG-TERM DEBT
	 	 	 11,461	 	 	 13,374	 
	 FINANCING COSTS
	 	 	 383	 	 	 —	 
	 NET (GAIN) LOSS ON SALE OF CAPITAL AND LANDFILL ASSETS
	 	 	 (167	)	 	 40	 
	 NET FOREIGN EXCHANGE LOSS (GAIN)
	 	 	 104	 	 	 (624	)
	 NET LOSS ON FINANCIAL INSTRUMENTS
	 	 	 660	 	 	 9,047	 
	 OTHER EXPENSES
	 	 	 37	 	 	 31	 
	 	 	 	 	 	 
	 INCOME BEFORE INCOME TAXES
	 	 	 18,985	 	 	 2,413	 
	 	 	 	 	 	 
	 INCOME TAX EXPENSE (RECOVERY)
	 	 	 	 	 	 	 
	 	 Current
	 	 	 3,118	 	 	 1,828	 
	 	 Future
	 	 	 3,608	 	 	 (9,889	)
	 	 	 	 	 	 
	 
	 	 	 6,726	 	 	 (8,061	)
	 	 	 	 	 	 
	 NET INCOME
	 	 	 12,259	 	 	 10,474	 
	 OTHER COMPREHENSIVE INCOME (LOSS)
	 	 	 	 	 	 	 
	 	 Foreign currency translation adjustment
	 	 	 24,566	 	 	 25,972	 
	 	 Commodity swaps designated as cash flow hedges, net of tax
	 	 	 (1,387	)	 	 —	 
	 	 	 	 	 	 
	 COMPREHENSIVE INCOME
	 	 $	35,438	 	 $	36,446	 
	 	 	 	 	 	 
	 Net income per share or trust unit, basic (Note 8)
	 	 $	0.18	 	 $	0.15	 
	 Net income per share or trust unit, diluted (Note 8)
	 	 $	0.17	 	 $	0.15	 
	 Weighted average number of shares or trust units outstanding

(thousands), basic
	 	 	 59,306	 	 	 57,568	 
	 Weighted average number of shares or trust units outstanding

(thousands), diluted
	 	 	 70,443	 	 	 68,706	 





2







 
 
  
  BFI CANADA LTD.    
    
    CONSOLIDATED STATEMENTS OF CASH FLOWS    
    
    For the periods ended March 31, 2009 and 2008
  (unaudited — in
thousands of dollars)    
    



										
	 
	 	2009 	 	2008 	 
	 
	 	 
	 	(Restated — Note 4)
	 
	 NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES
	 	 	 	 	 	 	 
	 OPERATING
	 	 	 	 	 	 	 
	 	 Net income
	 	 $	12,259	 	 $	10,474	 
	 	 Items not affecting cash
	 	 	 	 	 	 	 
	 	 	 Share based compensation
	 	 	 414	 	 	 —	 
	 	 	 Write-off of landfill development assets
	 	 	 —	 	 	 728	 
	 	 	 Accretion of landfill closure and post-closure costs
	 	 	 924	 	 	 781	 
	 	 	 Amortization of intangibles
	 	 	 9,009	 	 	 8,035	 
	 	 	 Amortization of capital assets
	 	 	 22,803	 	 	 19,297	 
	 	 	 Amortization of landfill assets
	 	 	 14,752	 	 	 15,245	 
	 	 	 Net (gain) loss on sale of capital and landfill assets
	 	 	 (167	)	 	 40	 
	 	 	 Net loss on financial instruments
	 	 	 660	 	 	 9,047	 
	 	 	 Future income taxes
	 	 	 3,608	 	 	 (9,889	)
	 	 Landfill closure and post-closure expenditures
	 	 	 (1,527	)	 	 (245	)
	 	 	 	 	 	 
	 
	 	 	 62,735	 	 	 53,513	 
	 	 Changes in non-cash working capital items
	 	 	 (1,757	)	 	 (10,579	)
	 	 	 	 	 	 
	 Cash generated from operating activities
	 	 	 60,978	 	 	 42,934	 
	 	 	 	 	 	 
	 INVESTING
	 	 	 	 	 	 	 
	 	 Acquisitions (Note 6)
	 	 	 (291	)	 	 (19,053	)
	 	 Investment in other receivables
	 	 	 (1,541	)	 	 —	 
	 	 Proceeds from other receivables
	 	 	 140	 	 	 69	 
	 	 Funded landfill post-closure costs
	 	 	 (99	)	 	 (390	)
	 	 Purchase of capital assets
	 	 	 (15,764	)	 	 (13,537	)
	 	 Purchase of landfill assets
	 	 	 (9,357	)	 	 (7,872	)
	 	 Proceeds from the sale of capital and landfill assets
	 	 	 4,252	 	 	 83	 
	 	 Investment in landfill development assets
	 	 	 (308	)	 	 (1,058	)
	 	 	 	 	 	 
	 Cash utilized in investing activities
	 	 	 (22,968	)	 	 (41,758	)
	 	 	 	 	 	 
	 FINANCING
	 	 	 	 	 	 	 
	 	 Proceeds from long-term debt
	 	 	 32,888	 	 	 65,217	 
	 	 Repayment of long-term debt
	 	 	 (159,353	)	 	 (30,617	)
	 	 Common shares issued, net of issue costs
	 	 	 88,366	 	 	 —	 
	 	 Dividends and distributions paid to share or unitholders and dividends paid to participating preferred shareholders
	 	 	 (2,398	)	 	 (31,227	)
	 	 	 	 	 	 
	 Cash (utilized in) generated from financing activities
	 	 	 (40,497	)	 	 3,373	 
	 	 	 	 	 	 
	 Effect of foreign exchange changes on foreign cash and cash equivalents
	 	 	 (236	)	 	 (319	)
	 	 	 	 	 	 
	 NET CASH (OUTFLOW) INFLOW
	 	 	 (2,723	)	 	 4,230	 
	 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
	 	 	

14,720	 	 	

13,359	 
	 	 	 	 	 	 
	 CASH AND CASH EQUIVALENTS, END OF PERIOD
	 	 $	11,997	 	 $	17,589	 
	 	 	 	 	 	 
	 SUPPLEMENTAL CASH FLOW INFORMATION:
	 	 	 	 	 	 	 
	 	 Cash and cash equivalents are comprised of:
	 	 	 	 	 	 	 
	 	 	 Cash
	 	 $	11,996	 	 $	15,042	 
	 	 	 Cash equivalents
	 	 	 1	 	 	 2,547	 
	 	 	 	 	 	 
	 
	 	 $	11,997	 	 $	17,589	 
	 	 	 	 	 	 
	 	 Cash paid (received) during the period for:
	 	 	 	 	 	 	 
	 	 	 Income taxes
	 	 $	(455	)	 $	1,365	 
	 	 	 Interest
	 	 $	11,844	 	 $	11,232	 





3









 









































BFI CANADA LTD.  


 CONSOLIDATED STATEMENTS OF EQUITY  


 For the periods ended March 31, 2009 and 2008

(unaudited — in thousands of dollars)  





																													
	 
	 	Common

shares 	 	Trust

units 	 	Restricted

shares 	 	Treasury

shares 	 	Contributed

surplus 	 	Deficit 	 	Accumulated

other

comprehensive

income

(loss) 	 	Non-

controlling

interest 	 	Equity 	 
	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	(Restated — Note 4)
	 
	 Balance at December 31, 2008
	 	 $	1,006,772	 	 $	—	 	 $	(3,985	)	 $	—	 	 $	675	 	 $	(300,538	)	 $	16,197	 	 $	241,339	 	 $	960,460	 
	 Net income
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 10,519	 	 	 	 	 	 1,740	 	 	 12,259	 
	 Dividends
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 (16,836	)	 	 	 	 	 (2,784	)	 	 (19,620	)
	 Common shares issued net of issue costs and related tax effect (Note 8)
	 	 	 89,901	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 89,901	 
	 Restricted share expense
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 414	 	 	 	 	 	 	 	 	 	 	 	 414	 
	 Common shares acquired by U.S. long-term incentive plan ("LTIP")
	 	 	 	 	 	 	 	 	 	 	 	 (2,215	)	 	 	 	 	 	 	 	 	 	 	 	 	 	 (2,215	)
	 Deferred compensation obligation
	 	 	 	 	 	 	 	 	 	 	 	 2,215	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 2,215	 
	 Foreign currency translation adjustment
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 21,080	 	 	 3,486	 	 	 24,566	 
	 Commodity swaps designated as cash flow hedges net of tax
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 (1,190	)	 	 (197	)	 	 (1,387	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Balance at March 31, 2009
	 	 $	1,096,673	 	 $	—	 	 $	(3,985	)	 $	—	 	 $	1,089	 	 $	(306,855	)	 $	36,087	 	 $	243,584	 	 $	1,066,593	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 






 







 



																													
	 
	 	Common

shares 	 	Trust

units 	 	Restricted

shares 	 	Treasury

shares 	 	Contributed

surplus 	 	Deficit 	 	Accumulated

other

comprehensive

income

(loss) 	 	Non-

controlling

interest 	 	Equity 	 
	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	(Restated — Note 4)
	 
	 Balance at December 31, 2007
	 	$	—	 	$	1,006,751	 	$	—	 	$	—	 	$	—	 	$	(248,815	)	$	(128,747	)	$	251,371	 	$	880,560	 
	 Net income
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	8,776	 	 	 	 	 	1,698	 	 	10,474	 
	 Dividends
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(26,164	)	 	 	 	 	(5,063	)	 	(31,227	)
	 Common shares acquired by U.S. long-term incentive plan ("LTIP")
	 	 	 	 	 	 	 	 	 	 	 	(2,004	)	 	 	 	 	 	 	 	 	 	 	 	 	 	(2,004	)
	 Deferred compensation obligation
	 	 	 	 	 	 	 	 	 	 	 	2,004	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2,004	 
	 Foreign currency translation adjustment
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	25,972	 	 	 	 	 	25,972	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Balance at March 31, 2008
	 	$	—	 	$	1,006,751	 	$	—	 	$	—	 	$	—	 	$	(266,203	)	$	(102,775	)	$	248,006	 	$	885,779	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 





4








 



































 



 
  
  BFI CANADA LTD.    
    
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS    
    
    For the period ended March 31, 2009
  (unaudited — in
thousands, except per share or trust unit amounts, unless otherwise stated)    
    



 1.     ORGANIZATION  



BFI
Canada Ltd. (the "Corporation") was incorporated on May 5, 2008 under the provisions of the Business Corporations Act (Ontario). On July 25, 2008, the Corporation sold
and transferred its sole outstanding common share to BFI Canada Income Fund (the "Fund") and issued an additional 99 common shares for cash consideration of one dollar for each common
share issued. On August 18th, 2008 the Fund's Board of Trustees approved a transaction providing for the reorganization of the Fund's structure from an income trust to a
corporation through a plan of arrangement (Note 5). The plan of arrangement was approved by the Fund's unitholders at a special meeting held on September 25, 2008 and was approved by the
Ontario Superior Court of Justice, effective October 1, 2008. The common shares of the Corporation commenced trading on the Toronto Stock Exchange on October 2, 2008 and the Fund's trust
units were concurrently delisted. At March 31, 2009, the Corporation is the beneficial owner of all of the issued and outstanding trust units of the Fund and its subsidiaries. 


The
Corporation, through its operating subsidiaries, provides vertically integrated non-hazardous solid waste ("waste") services to commercial, industrial, municipal and residential
customers in Canada and the south and northeast United States ("U.S."). 




 2.     INTERIM FINANCIAL STATEMENTS  



The
unaudited interim consolidated financial statements do not conform in all respects to the requirements of Canadian generally accepted accounting principles ("GAAP") for annual financial statements
and should therefore be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's annual report for the year ended December 31, 2008.
The unaudited interim consolidated financial statements have been prepared by management in accordance with GAAP applicable to interim financial statements and follow the same accounting policies and
methods in their application as the most recent audited annual financial statements, except as indicated in Notes 3 and 4. 




 3.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  



 Basis of presentation  


In
accordance with Emerging Issues Committee ("EIC") abstract 170, "Conversion of an Unincorporated Entity to an Incorporated Entity", the plan of arrangement (Note 5), and resulting one for
one exchange of the Fund's trust units into common shares of the Corporation, did not constitute a change of control. Accordingly, the consolidated financial statements of the Corporation have been
prepared applying continuity of interests accounting. Continuity of interest accounting reflects the operating substance of the transaction, despite the change in legal structure, and results in
comparative financial information of the Fund for the three months
ended March 31, 2008 being presented as comparative financial information of the Corporation. For the purpose of these consolidated financial statements, the term "Company" shall denote the
financial position and results of operations for the Corporation and the Fund, and its respective subsidiaries, for all periods presented herein. 


 Use of estimates  


The
preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities as at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Estimates and
assumptions include the following: estimates of the Company's allowance for doubtful accounts receivable; realization of future income tax assets; future earnings, income tax and other estimates used
in the annual test for impairment of goodwill; recoverability assumptions for landfill development assets; the useful life of capital and intangible assets; estimates and assumptions used in the
determination of the fair value of contingent acquisition payments; accrued accident claims reserves; projected landfill construction and development costs and estimated permitted airspace capacity
consumed in the determination of landfill asset amortization; estimated landfill remediation costs; estimated closure and post-closure costs; various economic estimates used in the
development of fair value estimates, including but not limited to interest and inflation rates; estimates used in the development of employee future benefit plan amounts, including but not limited to
discount rates, expected long-term rates of return on plan assets, rates of compensation increases and the average remaining service period for active employees; and future income tax
assets and liabilities. 


In
June 2008, the Company received a certificate of authorization, to allow the Lachenaie landfill to continue operating for an additional year while management works on a
longer-term expansion initiative. Management remains optimistic that approval for a longer-term expansion will be obtained prior to the expiry of the one year extension.
Accordingly no provision for impairment has been recorded. 


If
the longer-term expansion is not successful, the following assets would be subject to material adjustment: landfill development assets $2,939 (December 31,
2008 — $2,921), goodwill $19,859 (December 31, 2008 — $19,859) and landfill assets $86,065 (December 31, 



5







 


BFI CANADA LTD. 


 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 


 For the period ended March 31, 2009

(unaudited — in thousands, except per share or trust unit amounts, unless otherwise stated) 


 3.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 






2008 — $84,042).
In addition, funded landfill post-closure costs may not be sufficient to cover the obligations required to close and monitor the
landfill which may result in a significant increase in accrued landfill post-closure cost obligations. 



The
Company makes various estimates in the determination of estimated permitted airspace capacity. These estimates, if not realized, could result in material adjustments to landfill assets, goodwill,
and landfill closure and post-closure costs. 


 Landfill development assets  


Landfill
development assets represent costs incurred to develop landfills, including costs to obtain landfill permits or expansion permits. Landfill development assets are capitalized to landfill
assets once the asset is available for use and are amortized on a per unit basis as landfill airspace is consumed. Management periodically reviews the carrying values of landfill development assets
for impairment and any resulting write-down to the net recoverable amount is recorded in the period in which the impairment occurs. 


 Acquisitions  


The
Company accounts for acquisitions using the acquisition method of accounting and allocates the purchase price to the fair value of identifiable assets acquired and liabilities assumed and, if any,
the fair value of non-controlling interest or the non-controlling interest's proportionate share of the net identifiable assets. Goodwill is recognized as the excess of
acquisition date fair value consideration, including any amount of non-controlling interest in the acquired company, over the acquisition date fair values, subject to certain exceptions,
of the identifiable assets acquired. If aggregate consideration is less than the net identifiable assets acquired, a gain is recognized to net income on the date of acquisition. 


The
allocation of the purchase price may require adjustment when information is absent and fair value allocations are presented on an estimated or preliminary basis. Subsequent adjustments to
estimated or preliminary amounts are recorded retrospectively to the purchase price allocation to reflect new information obtained about facts and circumstances that existed at the date
of acquisition. 


Certain
of the Company's purchase and sale agreements contain contingent consideration provisions. For acquisitions completed subsequent to January 1, 2009, purchase price allocation
adjustments resulting from contingent consideration provisions are required when additional information is obtained subsequent to the date of acquisition that existed at the date of acquisition.
Purchase price allocation adjustments are permitted, but are limited to the measurement period, which is the earlier of the date on which all facts and circumstances that existed at the date
acquisition are known or are determined to not be obtainable, and one year from the date of acquisition. Changes in events that occurred subsequent to the date of acquisition are not permissible
measurement period adjustments. Changes in the fair value of contingent consideration classified as equity are not re-measured, but their subsequent settlement is recorded to shareholders
equity, while changes in the fair value of contingent consideration classified as an asset or liability are measured at fair value and recorded to net income or loss. 


For
acquisitions completed prior to January 1, 2009, contingent consideration which could be reasonably estimated at the date of acquisition and the outcome of which could be determined beyond
a reasonable doubt, is recognized at fair value in the purchase price allocation. Consideration which is contingent on maintaining or achieving specified revenue or earning levels, satisfying
representations and warranties, achieving specified tonnage thresholds, in the case of acquired landfills, or receiving approval from regulatory authorities for landfill expansion, is recognized as an
adjustment to the purchase price allocation when the contingency is resolved and the additional consideration is issued or becomes issuable. 



The
acquisition date is the date on which the Company obtains control and is generally the date on which the Company obtains legal title to the net assets acquired. To be recognized at the date of
acquisition, assets and liabilities must meet their fundamental definitions. Contingencies existing before or on the date of acquisition are recognized at their fair values if they can be reliably
measured. Differences in the tax versus accounting basis of acquired net assets are recognized to income in the period of acquisition. The Company recognizes acquisition and related costs in the
period incurred. Costs associated with the issuance of long-term debt are recognized in the period incurred while equity issue costs are recorded against share capital on the Company's
consolidated balance sheet. 




 4.     CHANGES IN ACCOUNTING POLICIES  



Effective
January 1, 2009, the Company adopted Canadian Institute of Chartered Accountants ("CICA") accounting standard Goodwill and Intangibles (section 3064). CICA
3064 establishes standards for the recognition, measurement, presentation and disclosure of internally generated goodwill and intangible assets. The adoption of CICA 3064 had no impact
on the Company's consolidated financial statements. 



6







 


BFI CANADA LTD. 


 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 


 For the period ended March 31, 2009

(unaudited — in thousands, except per share or trust unit amounts, unless otherwise stated) 



 4.     CHANGES IN ACCOUNTING POLICIES (Continued) 



Effective
January 1, 2009, the Company early adopted CICA accounting standard Business Combinations (section 1582), which replaced Business Combinations (section 1581). This
section outlines a variety of changes, including, but not limited to the following: an expanded definition of a business, a requirement to measure all business combinations and
non-controlling interests at fair value, and a requirement to recognize future income tax assets and liabilities and acquisition and related costs as expenses of the period. CICA
1582 has been applied prospectively to all business combinations from January 1, 2009 onward and accordingly its adoption had no effect on previously reported amounts. 



Effective
January 1, 2009, the Company early adopted CICA accounting standard Consolidated Financial Statements (section 1601), which in combination with CICA 1602, replaces Consolidated
Financial Statements (section 1600). CICA 1601 establishes standards for the preparation of consolidated financial statements and specifically addresses consolidation accounting
following a business combination that involves the purchase of an equity interest in one company by another. Adopting this standard had no effect on the Company's previously reported consolidated
financial statements. 


Effective
January 1, 2009, the Company early adopted CICA accounting standard Non-Controlling Interests (section 1602), which in combination with CICA 1601, replaces
Consolidated Financial Statements (section 1600). CICA 1602 establishes standards of accounting for a non-controlling interest in a subsidiary in consolidated financial
statements subsequent to a business combination. This section requires retrospective application with certain exceptions. Adopting CICA 1602 changes the Company's presentation of
non-controlling interests from mezzanine equity to equity on the Company's consolidated balance sheet. Non-controlling interest is no longer deducted in the determination of
net income. Instead, net income and each component of other comprehensive income are attributed to shareholders' equity and non-controlling interest. Adopting this section affects the
Company's determination of net income presented in the consolidated statement of operations and comprehensive income, the presentation of net income and non-controlling interest in the
consolidated statement of cash flows, and the presentation of non-controlling interest in the consolidated statement of equity. The effect of adopting CICA 1602 on previously
reported amounts is as follows: 


 Consolidated Balance Sheets  



													
	 	 
	 	December 31, 2008 —

as previously reported 	 	Change in accounting policy 	 	December 31, 2008 —

restated 	 
	 	 Mezzanine equity
	 	 	 	 	 	 	 	 	 	 
	 	 	 Non-controlling interest
	 	 $	241,339	 	 $	(241,339	)	 $	—	 
	 	 EQUITY
	 	 	 	 	 	 	 	 	 	 
	 	 	 Non-controlling interest
	 	 $	—	 	 $	241,339	 	 $	241,339	 






 Consolidated Statements of Operations and Comprehensive Income (Loss)  



												
	 	 
	 	March 31, 2008 —

as previously reported 	 	Change in accounting policy 	 	March 31, 2008 —

restated 	 
	 	 Non-controlling interest
	 	 $	1,698	 	 $	(1,698	)	 $	—	 
	 	 Net income
	 	 $	8,776	 	 $	1,698	 	 $	10,474	 






 Consolidated Statements of Cash Flows  



												
	 	 
	 	March 31, 2008 —

as previously reported 	 	Change in accounting policy 	 	March 31, 2008 —

restated 	 
	 	 Net income
	 	 $	8,776	 	 $	1,698	 	 $	10,474	 
	 	 Non-controlling interest
	 	 $	1,698	 	 $	(1,698	)	 $
	—

	 






 5.     CONVERSION  



Pursuant
to the plan of arrangement, the conversion of the Fund's trust structure to a corporation resulted in unitholder's of the Fund receiving one common share of the Company for each trust unit
held on the effective date of conversion, October 1, 2008. The Class A unit held by IESI Corporation ("IESI") was redeemed by the Fund for ten dollars and the Company issued, and IESI
subscribed for, 11,137 special voting shares for aggregate cash consideration of ten dollars. The participating preferred shares ("PPSs") issued by IESI 



7







 


BFI CANADA LTD. 


 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 


 For the period ended March 31, 2009

(unaudited — in thousands, except per share or trust unit amounts, unless otherwise stated) 



 5.     CONVERSION (Continued) 



remain
outstanding and exchangeable into common shares of the Company on a one for one basis, instead of trust units of the Fund. The consolidated financial statements of the Company have been
prepared applying continuity of interests accounting. Accordingly, the comparative figures presented herein are those of the Fund. 


Share
based compensation arrangements outstanding to the date of conversion, remained in effect post conversion. Share based options to acquire trust units of the Fund were changed to share based
options to acquire shares of the Company. Similarly, restricted trust unit
compensation awards which entitled certain management to trust units of the Fund were changed to entitlements of the Company's shares. 




 6.     ACQUISITIONS  



For
the three months ended March 31, 2008, the Company acquired all of the solid waste collection assets, including various current assets, and assumed various liabilities of two waste
management companies in the U.S. Aggregate consideration, including consideration in respect of liabilities assumed amounted to $2,620 and was allocated to the U.S. northeast and
U.S. south segments as follows: $2,369 and $251, respectively. The allocation of the purchase prices were as follows: intangibles $919, goodwill $826, capital assets $1,333, and net current
liabilities ($458). Aggregate cash consideration amounting to $2,296 excluded holdbacks and cash payments due to sellers for achieving various business performance targets. 


For
the three months ended March 31, 2009, contingent consideration payments in respect of acquisitions completed prior to January 1, 2009 totaled $291
(2008 — $16,757). 




 7.     LANDFILL CLOSURE AND POST-CLOSURE COSTS  



The
following tables outline key assumptions used to determine the fair value of landfill closure and post-closure costs, the expected timing of landfill closure and
post-closure expenditures, and reconcile beginning and ending landfill closure and post-closure costs: 



						
	 	 
	 	March 31, 2009 	 
	 	 Fair value of legally restricted assets
	 	 $	7,651	 
	 	 Undiscounted closure and post-closure costs
	 	 $	497,833	 
	 	 Credit adjusted risk free rates – Canadian segment landfills
	 	 	 5.5%-9.5%	 
	 	 Credit adjusted risk free rates – U.S. segment landfills
	 	 	 5.7%-7.2%	 
	 	 	 	 	 
	 	 Expected timing of undiscounted landfill closure and post-closure expenditures
	 	 	 	 
	 	 2009
	 	 $	11,360	 
	 	 2010
	 	 	 12,630	 
	 	 2011
	 	 	 5,601	 
	 	 2012
	 	 	 12,325	 
	 	 2013
	 	 	 11,794	 
	 	 Thereafter
	 	 	 444,123	 
	 	 	 	 	 
	 	 
	 	 $	497,833	 
	 	 	 	 	 






 





									
	 	 
	 	Three months

ended

March 31, 2009 	 	Three months

ended

March 31, 2008 	 
	 	 Landfill closure and post-closure costs, beginning of year
	 	 $	71,109	 	 $	58,843	 
	 	 Provision for landfill closure and post-closure costs, during the period
	 	 	 10,553	 	 	 1,772	 
	 	 Accretion expense, during the period
	 	 	 924	 	 	 781	 
	 	 Landfill closure and post-closure expenditures, during the period
	 	 	 (1,527	)	 	 (245	)
	 	 Disposal of landfill closure and post-closure costs, during the period
	 	 	 (1,672	)	 	 —	 
	 	 Foreign currency translation adjustment, during the period
	 	 	 1,800	 	 	 1,934	 
	 	 	 	 	 	 	 
	 	 Landfill closure and post-closure costs, end of period
	 	 $	81,187	 	 $	63,085	 
	 	 	 	 	 	 	 





8







 


BFI CANADA LTD. 


 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 


 For the period ended March 31, 2009

(unaudited — in thousands, except per share or trust unit amounts, unless otherwise stated) 


 8.     EQUITY  



 Common Shares  


On
March 6, 2009, the Company closed its public offering of 8,500 common shares at $9.50 per share for total gross proceeds of $80,750. The Company applied the net proceeds from the
public offering, approximately U.S. $61,500, to the repayment of outstanding borrowings on its U.S. long-term debt facility. On March 30, 2009, the Company closed the
over-allotment option on its public offering of 1,275 common shares at $9.50 per share for total gross proceeds of $12,113. The Company applied the net proceeds from the
over-allotment option, approximately U.S. $9,500, to the repayment of outstanding borrowings on its U.S. long-term debt facility. Aggregate equity issue costs
amounted to $4,496 and the tax effect thereon totaled $1,534. 


Details
of common shares for the periods ended March 31, 2009 and March 31, 2008 are as follows: 



									
	 	 
	 	March 31 	 
	 	 
	 	2009 	 	2008 	 
	 	 Common shares
	 	 	 	 	 	 	 
	 	 Common shares issued and outstanding, beginning of year
	 	 	 57,569	 	 	 —	 
	 	 Restricted common shares issued and outstanding, beginning of year
	 	 	 (210	)	 	 —	 
	 	 Common shares issued, during the period
	 	 	 9,775	 	 	 —	 
	 	 	 	 	 	 	 
	 	 Common shares issued and outstanding, end of period
	 	 	 67,134	 	 	 —	 
	 	 	 	 	 	 	 






 Net income per share or trust unit  


The
following table reconciles net income and the weighted average number of shares outstanding at March 31, 2009 and trust units outstanding at March 31, 2008 for the purpose of
computing basic and diluted net income per share or trust unit. 



									
	 	 
	 	March 31 	 
	 	 
	 	2009 	 	2008 	 
	 	 
	 	(Restated — Note 4)
	 
	 	 Net income
	 	 $	12,259	 	 $	10,474	 
	 	 	 	 	 	 	 
	 	 Net income — attributable to common share or trust unitholders
	 	 $	10,519	 	 $	8,776	 
	 	 	 	 	 	 	 
	 	 Weighted average number of shares or trust units, basic
	 	 	 59,306	 	 	 57,568	 
	 	 Dilutive effect of PPSs
	 	 	 11,137	 	 	 11,138	 
	 	 	 	 	 	 	 
	 	 Weighted average number of shares or trust units, diluted
	 	 	 70,443	 	 	 68,706	 
	 	 	 	 	 	 	 
	 	 Net income per weighted average share or trust unit, basic
	 	 $	0.18	 	 $	0.15	 
	 	 	 	 	 	 	 
	 	 Net income per weighted average share or trust unit, diluted
	 	 $	0.17	 	 $	0.15	 
	 	 	 	 	 	 	 






Share
based options are anti-dilutive to the calculation of net income per share or trust unit and have been excluded from the calculation. 



9







 


BFI CANADA LTD. 


 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 


 For the period ended March 31, 2009

(unaudited — in thousands, except per share or trust unit amounts, unless otherwise stated) 


 9.     EMPLOYEE FUTURE BENEFITS  



The
components of net benefit plan expense, recorded as an operating expense in the consolidated statements of operations and comprehensive income, are as follows: 



									
	 	 
	 	March 31 	 
	 	 
	 	2009 	 	2008 	 
	 	 Current service cost
	 	 $	12	 	 $	17	 
	 	 Interest cost
	 	 	 12	 	 	 11	 
	 	 Expected return on plan assets
	 	 	 (11	)	 	 (14	)
	 	 Amortization of transition asset
	 	 	 (1	)	 	 (1	)
	 	 Net actuarial losses
	 	 	 9	 	 	 3	 
	 	 	 	 	 	 	 
	 	 Net benefit plan expense
	 	 $	21	 	 $	16	 
	 	 	 	 	 	 	 






 10.   SEGMENTED REPORTING  



The
Company carries on business through three separate geographic segments: Canada, U.S. south and U.S. northeast. The business segments are vertically integrated and principally include
landfills and landfill gas to energy facilities, collection and disposal of waste and recyclable products, transfer station operations, and material recovery facilities. The geographic location of
each business segment limits the volume and amount of transactions between each segment. 


The
accounting policies applied by the business segments are the same as those described in the summary of significant accounting policies. U.S. corporate selling, general and administration
expenses are allocated to the U.S. south and U.S. northeast segments based on
various factors, which may include income before the following(1). The Company evaluates segment performance based on gross revenues, less operating and selling, general and
administration expenses. 



										
	 	 
	 	March 31 	 
	 	 
	 	2009 	 	2008 	 
	 	 Revenues
	 	 	 	 	 	 	 
	 	 	 Canada
	 	 $	88,396	 	 $	85,768	 
	 	 	 U.S. South
	 	 	 99,684	 	 	 79,816	 
	 	 	 U.S. Northeast
	 	 	 90,738	 	 	 78,763	 
	 	 	 	 	 	 	 
	 	 
	 	 $	278,818	 	 $	244,347	 
	 	 	 	 	 	 	 
	 	 Income before the following(5)
	 	 	 	 	 	 	 
	 	 	 Canada
	 	 $	29,855	 	 $	28,154	 
	 	 	 U.S. South
	 	 	 26,266	 	 	 18,007	 
	 	 	 U.S. Northeast
	 	 	 21,906	 	 	 20,697	 
	 	 	 	 	 	 	 
	 	 
	 	 $	78,027	 	 $	66,858	 
	 	 	 	 	 	 	 
	 	 Amortization
	 	 	 	 	 	 	 
	 	 	 Canada
	 	 $	14,103	 	 $	13,592	 
	 	 	 U.S. South
	 	 	 14,152	 	 	 12,244	 
	 	 	 U.S. Northeast
	 	 	 18,309	 	 	 16,741	 
	 	 	 	 	 	 	 
	 	 
	 	 $	46,564	 	 $	42,577	 
	 	 	 	 	 	 	 











	(5)
	Income
before the following represents net income before amortization, interest on long-term debt, financing costs, net (gain) loss on sale
of capital assets, net loss on financial instruments, net foreign exchange loss (gain), other expenses and income taxes. 


10







 


BFI CANADA LTD. 


 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 


 For the period ended March 31, 2009

(unaudited — in thousands, except per share or trust unit amounts, unless otherwise stated) 


 10.   SEGMENTED REPORTING (Continued) 



															
	 	 
	 	March 31, 2009 	 
	 	 
	 	Canada 	 	U.S. South 	 	U.S. Northeast 	 	Total 	 
	 	 Capital assets
	 	 $	160,814	 	 $	192,363	 	 $	142,613	 	 $	495,790	 
	 	 Landfill assets
	 	 $	185,209	 	 $	152,831	 	 $	428,053	 	 $	766,093	 
	 	 Goodwill
	 	 $	61,629	 	 $	210,065	 	 $	505,401	 	 $	777,095	 
	 	 Total Assets
	 	 $	511,660	 	 $	622,275	 	 $	1,229,525	 	 $	2,363,460	 






 





															
	 	 
	 	December 31, 2008 	 
	 	 
	 	Canada 	 	U.S. South 	 	U.S. Northeast 	 	Total 	 
	 	 Capital assets
	 	 $	163,517	 	 $	192,290	 	 $	144,594	 	 $	500,401	 
	 	 Landfill assets
	 	 $	185,305	 	 $	153,007	 	 $	409,449	 	 $	747,761	 
	 	 Goodwill
	 	 $	61,629	 	 $	203,844	 	 $	491,124	 	 $	756,597	 
	 	 Total Assets
	 	 $	521,641	 	 $	620,760	 	 $	1,198,642	 	 $	2,341,043	 






 11.   COMMITMENTS AND CONTINGENCIES  



The
Company has an accrued environmental liability of $18,774 recorded in landfill closure and post-closure costs on the consolidated balance sheet, related principally to an inactive
landfill (hereinafter referred to as "Tantalo"), which the Company assumed as part of the IESI acquisition. The Tantalo environmental liability consists of remediation and 30 years of
post-closure monitoring totaling $22,583. The initial remediation work commenced in 2004, and the post-closure monitoring commenced in 2007. Tantalo is a 26 acre
landfill that stopped accepting waste in 1976 and has been identified by the State of New York as an "Inactive Hazardous Waste Disposal Site". During its period of operation, Tantalo received
both municipal and industrial waste, some of which has been found to exhibit "hazardous" characteristics as defined by the U.S. Resource Conservation and Recovery Act. Past activities at
Tantalo have resulted in the release of hazardous wastes into the groundwater. A remediation program has been developed for Tantalo in conjunction with the New York State Department of
Environmental Conservation. The remediation program includes: installation of groundwater barriers, protective liner caps, leachate and gas collection systems, and storm-water drainage controls, as
well as methods to accelerate the decontamination process. In addition, IESI purchased a "Cleanup Cost Cap Insurance Policy," with a ten-year policy period, which provides
U.S. $25,000 of coverage in excess of the remediation portion of the liability. 


The
cost of remediation requires a number of assumptions and estimates which are inherently difficult to estimate, and the outcome may differ materially from current estimates. However, management
believes that its experience provides a reasonable basis for estimating its liability. As additional information becomes available, estimates are adjusted as applicable. It is possible that
technological, regulatory or enforcement developments, the results of environmental studies, or other factors could necessitate the recording of additional liabilities which could be material. The
estimated environmental remediation liabilities have not been reduced for possible recoveries from other potentially responsible third parties. 




 12.   SEASONALITY  



Revenues
are generally higher in spring, summer and autumn months due to higher collected and disposed of waste volumes. Higher collection and disposal revenues are partially offset by higher
operating expenses to service and dispose of additional waste volumes and higher landfill asset amortization. 




 13.   RECONCILIATION OF CANADIAN TO U.S. GAAP  



The
consolidated financial statements have been prepared in accordance with Canadian GAAP, which differs in certain respects from accounting principles generally accepted in the
U.S. ("U.S. GAAP"). The effects of significant accounting differences and certain 



11








 


BFI CANADA LTD. 


 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 


 For the period ended March 31, 2009

(unaudited — in thousands, except per share or trust unit amounts, unless otherwise stated) 


 13.   RECONCILIATION OF CANADIAN TO U.S. GAAP (Continued) 



disclosure
differences on the Company's consolidated financial statements are quantified and described in the following tables and notes for the periods ended March 31, 2009 and 2008: 


 Consolidated Balance Sheet

March 31, 2009 (unaudited — in thousands of Canadian dollars) 



															
	 	 
	 	Stated in accordance with Canadian GAAP 	 	Adjustments from Canadian to U.S. GAAP 	 	Note 	 	Stated in accordance with U.S. GAAP 	 
	 	 ASSETS
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 CURRENT
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 Cash and cash equivalents
	 	$	11,997	 	$	—	 	 	 	$	11,997	 
	 	 	 Accounts receivable
	 	 	128,615	 	 	—	 	 	 	 	128,615	 
	 	 	 Other receivables
	 	 	543	 	 	—	 	 	 	 	543	 
	 	 	 Prepaid expenses
	 	 	21,932	 	 	—	 	 	 	 	21,932	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	163,087	 	 	—	 	 	 	 	163,087	 
	 	 OTHER RECEIVABLES
	 	 	

1,619	 	 	 —
	 	 	 	 	

1,619	 
	 	 FUNDED LANDFILL POST-CLOSURE COSTS
	 	 	7,651	 	 	—	 	 	 	 	7,651	 
	 	 INTANGIBLES
	 	 	141,232	 	 	—	 	 	 	 	141,232	 
	 	 GOODWILL
	 	 	777,095	 	 	—	 	 	 	 	777,095	 
	 	 LANDFILL DEVELOPMENT ASSETS
	 	 	10,893	 	 	—	 	 	 	 	10,893	 
	 	 DEFERRED FINANCING COSTS
	 	 	—	 	 	11,910	 	B	 	 	11,910	 
	 	 CAPITAL ASSETS
	 	 	495,790	 	 	70	 	D	 	 	495,860	 
	 	 LANDFILL ASSETS
	 	 	766,093	 	 	14,282	 	D	 	 	780,375	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	$	2,363,460	 	$	26,262	 	 	 	$	2,389,722	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 LIABILITIES
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 CURRENT
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 Accounts payable
	 	$	57,808	 	$	—	 	 	 	$	57,808	 
	 	 	 Accrued charges
	 	 	61,766	 	 	225	 	C	 	 	61,991	 
	 	 	 Dividends payable
	 	 	19,620	 	 	—	 	 	 	 	19,620	 
	 	 	 Income taxes payable
	 	 	4,595	 	 	—	 	 	 	 	4,595	 
	 	 	 Deferred revenues
	 	 	13,648	 	 	—	 	 	 	 	13,648	 
	 	 	 Current portion of long-term debt
	 	 	47,000	 	 	—	 	 	 	 	47,000	 
	 	 	 Landfill closure and post-closure costs
	 	 	11,360	 	 	—	 	 	 	 	11,360	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	215,797	 	 	225	 	 	 	 	216,022	 
	 	 LONG-TERM DEBT
	 	 	

918,615	 	 	 —
	 	 	 	 	

918,615	 
	 	 LANDFILL CLOSURE AND POST-CLOSURE COSTS
	 	 	69,827	 	 	—	 	 	 	 	69,827	 
	 	 OTHER LIABILITIES
	 	 	19,111	 	 	—	 	 	 	 	19,111	 
	 	 FUTURE INCOME TAX LIABILITIES
	 	 	73,517	 	 	4,223	 	B	 	 	82,984	 
	 	 
	 	 	 	 	 	5,244	 	D	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	1,296,867	 	 	9,692	 	 	 	 	1,306,559	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 EQUITY
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 NON-CONTROLLING INTEREST
	 	 	243,584	 	 	2,798	 	F	 	 	246,382	 
	 	 SHAREHOLDERS' EQUITY
	 	 	823,009	 	 	7,687	 	B	 	 	836,781	 
	 	 
	 	 	 	 	 	(225	)	C	 	 	 	 
	 	 
	 	 	 	 	 	9,108	 	D	 	 	 	 
	 	 
	 	 	 	 	 	(2,798	)	F	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	1,066,593	 	 	16,570	 	 	 	 	1,083,163	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	$	2,363,460	 	$	26,262	 	 	 	$	2,389,722	 
	 	 	 	 	 	 	 	 	 	 	 





12







 


BFI CANADA LTD. 


 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 


 For the period ended March 31, 2009

(unaudited — in thousands, except per share or trust unit amounts, unless otherwise stated) 


 13.   RECONCILIATION OF CANADIAN TO U.S. GAAP (Continued) 



 Consolidated Balance Sheet

December 31, 2008 (in thousands of Canadian dollars) 



															
	 	 
	 	Stated in accordance with Canadian GAAP 	 	Adjustments from Canadian to U.S. GAAP 	 	Note 	 	Stated in accordance with U.S. GAAP 	 
	 	 
	 	(Restated — Note 4
	 	 
	 	 
	 	 
	 
	 	 ASSETS
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 CURRENT
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 Cash and cash equivalents
	 	$	14,720	 	$	(100	)	A	 	$	14,620	 
	 	 	 Accounts receivable
	 	 	131,972	 	 	—	 	 	 	 	131,972	 
	 	 	 Other receivables
	 	 	279	 	 	—	 	 	 	 	279	 
	 	 	 Prepaid expenses
	 	 	23,998	 	 	—	 	 	 	 	23,998	 
	 	 	 Restricted cash
	 	 	—	 	 	100	 	A	 	 	100	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	170,969	 	 	—	 	 	 	 	170,969	 
	 	 OTHER RECEIVABLES
	 	 	482	 	 	—	 	 	 	 	482	 
	 	 FUNDED LANDFILL POST-CLOSURE COSTS
	 	 	7,488	 	 	—	 	 	 	 	7,488	 
	 	 INTANGIBLES
	 	 	146,827	 	 	—	 	 	 	 	146,827	 
	 	 GOODWILL
	 	 	756,597	 	 	—	 	 	 	 	756,597	 
	 	 LANDFILL DEVELOPMENT ASSETS
	 	 	10,518	 	 	—	 	 	 	 	10,518	 
	 	 DEFERRED FINANCING COSTS
	 	 	—	 	 	12,168	 	B	 	 	12,168	 
	 	 CAPITAL ASSETS
	 	 	500,401	 	 	70	 	D	 	 	500,471	 
	 	 LANDFILL ASSETS
	 	 	747,761	 	 	13,771	 	D	 	 	761,532	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	$	2,341,043	 	$	26,009	 	 	 	$	2,367,052	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 LIABILITIES
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 CURRENT
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 Accounts payable
	 	$	66,293	 	$	—	 	 	 	$	66,293	 
	 	 	 Accrued charges
	 	 	67,769	 	 	204	 	C	 	 	67,973	 
	 	 	 Dividends payable
	 	 	2,862	 	 	—	 	 	 	 	2,862	 
	 	 	 Income taxes payable
	 	 	1,699	 	 	—	 	 	 	 	1,699	 
	 	 	 Deferred revenues
	 	 	13,226	 	 	—	 	 	 	 	13,226	 
	 	 	 Current portion of long-term debt
	 	 	47,000	 	 	—	 	 	 	 	47,000	 
	 	 	 Landfill closure and post-closure costs
	 	 	8,829	 	 	—	 	 	 	 	8,829	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	207,678	 	 	204	 	 	 	 	207,882	 
	 	 LONG-TERM DEBT
	 	 	

1,022,798	 	 	 —
	 	 	 	 	

1,022,798	 
	 	 LANDFILL CLOSURE AND POST-CLOSURE COSTS
	 	 	62,280	 	 	—	 	 	 	 	62,280	 
	 	 OTHER LIABILITIES
	 	 	18,424	 	 	—	 	 	 	 	18,424	 
	 	 FUTURE INCOME TAX LIABILITIES
	 	 	69,403	 	 	4,341	 	B	 	 	78,800	 
	 	 
	 	 	 	 	 	5,056	 	D	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	1,380,583	 	 	9,601	 	 	 	 	1,390,184	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 EQUITY
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 NON-CONTROLLING INTEREST
	 	 	241,339	 	 	2,775	 	F	 	 	244,114	 
	 	 
	 	 	 	 	 	 	 	G	 	 	 	 
	 	 SHAREHOLDERS' EQUITY
	 	 	719,121	 	 	7,827	 	B	 	 	732,754	 
	 	 
	 	 	 	 	 	(204	)	C	 	 	 	 
	 	 
	 	 	 	 	 	8,785	 	D	 	 	 	 
	 	 
	 	 	 	 	 	(2,775	)	F	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	960,460	 	 	16,408	 	 	 	 	976,868	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	$	2,341,043	 	$	26,009	 	 	 	$	2,367,052	 
	 	 	 	 	 	 	 	 	 	 	 





13







 


BFI CANADA LTD. 


 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 


 For the period ended March 31, 2009

(unaudited — in thousands, except per share or trust unit amounts, unless otherwise stated) 


 13.   RECONCILIATION OF CANADIAN TO U.S. GAAP (Continued) 



 Consolidated Statement of Operations and Comprehensive Income

For the period ended March 31, 2009 (unaudited — in thousands of Canadian dollars, except net income per share amounts) 



															
	 	 
	 	Stated in accordance with Canadian GAAP 	 	Adjustments from Canadian to U.S. GAAP 	 	Note 	 	Stated in accordance with U.S. GAAP 	 
	 	 REVENUES
	 	$	278,818	 	$	—	 	 	 	$	278,818	 
	 	 EXPENSES
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 OPERATING
	 	 	163,357	 	 	—	 	 	 	 	163,357	 
	 	 	 SELLING, GENERAL AND ADMINISTRATION
	 	 	37,434	 	 	21	 	C	 	 	37,455	 
	 	 	 AMORTIZATION
	 	 	46,564	 	 	263	 	D	 	 	46,827	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 OPERATING INCOME
	 	 	31,463	 	 	(284	)	 	 	 	31,179	 
	 	 INTEREST ON LONG-TERM DEBT
	 	 	11,461	 	 	934	 	B	 	 	11,992	 
	 	 
	 	 	 	 	 	(403	)	D	 	 	 	 
	 	 FINANCING COSTS
	 	 	383	 	 	(383	)	B	 	 	—	 
	 	 NET GAIN ON SALE OF CAPITAL AND LANDFILL ASSETS
	 	 	(167	)	 	—	 	 	 	 	(167	)
	 	 NET FOREIGN EXCHANGE LOSS
	 	 	104	 	 	—	 	 	 	 	104	 
	 	 NET LOSS ON FINANCIAL INSTRUMENTS
	 	 	660	 	 	—	 	 	 	 	660	 
	 	 OTHER EXPENSES
	 	 	37	 	 	—	 	 	 	 	37	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 INCOME BEFORE INCOME TAXES
	 	 	18,985	 	 	(432	)	 	 	 	18,553	 
	 	 INCOME TAX EXPENSE (RECOVERY)
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 Current
	 	 	3,118	 	 	—	 	 	 	 	3,118	 
	 	 	 Future
	 	 	3,608	 	 	(227	)	B	 	 	3,431	 
	 	 
	 	 	 	 	 	—	 	C	 	 	 	 
	 	 
	 	 	 	 	 	50	 	D	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	6,726	 	 	(177	)	 	 	 	6,549	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 NET INCOME
	 	 	12,259	 	 	(255	)	 	 	 	12,004	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 OTHER COMPREHENSIVE INCOME (LOSS)
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 Foreign currency translation adjustment
	 	 	24,566	 	 	184	 	B	 	 	24,983	 
	 	 
	 	 	 	 	 	233	 	D	 	 	 	 
	 	 	 Commodity swaps designated as cash flow hedges, net of tax
	 	 	(1,387	)	 	—	 	 	 	 	(1,387	)
	 	 	 	 	 	 	 	 	 	 	 
	 	 COMPREHENSIVE INCOME
	 	$	35,438	 	$	162	 	 	 	$	35,600	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 NET INCOME — CONTROLLING INTEREST
	 	$	10,519	 	$	(219	)	 	 	$	10,300	 
	 	 NET INCOME — NON-CONTROLLING INTEREST
	 	$	1,740	 	$	(36	)	 	 	$	1,704	 
	 	 COMPREHENSIVE INCOME — CONTROLLING INTEREST
	 	$	30,409	 	$	139	 	 	 	$	30,548	 
	 	 COMPREHENSIVE INCOME — NON-CONTROLLING INTEREST
	 	$	5,029	 	$	23	 	 	 	$	5,052	 
	 	 Net income per weighted average share, basic
	 	$	0.18	 	$	0.01	 	 	 	$	0.17	 
	 	 Net income per weighted average share, diluted
	 	$	0.17	 	$	0.00	 	 	 	$	0.17	 
	 	 Weighted average number of shares outstanding (thousands),
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 basic
	 	 	59,305	 	 	210	 	 	 	 	59,515	 
	 	 Weighted average number of shares outstanding (thousands),
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 diluted
	 	 	70,443	 	 	210	 	 	 	 	70,653	 





14







 


BFI CANADA LTD. 


 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 


 For the period ended March 31, 2009

(unaudited — in thousands, except per share or trust unit amounts, unless otherwise stated) 


 13.   RECONCILIATION OF CANADIAN TO U.S. GAAP (Continued) 



 Consolidated Statement of Operations and Comprehensive Income

For the period ended March 31, 2008 (unaudited — in thousands of Canadian dollars, except net income per trust unit amounts) 



															
	 	 
	 	Stated in accordance with Canadian GAAP 	 	Adjustments from Canadian to U.S. GAAP 	 	Note 	 	Stated in accordance with U.S. GAAP 	 
	 	 
	 	(Restated — Note 4)
	 	 
	 	 
	 	 
	 
	 	 REVENUES
	 	$	244,347	 	$	—	 	 	 	$	244,347	 
	 	 EXPENSES
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 OPERATING
	 	 	147,148	 	 	—	 	 	 	 	147,148	 
	 	 	 SELLING, GENERAL AND ADMINISTRATION
	 	 	30,341	 	 	(1,697	)	C	 	 	28,644	 
	 	 	 AMORTIZATION
	 	 	42,577	 	 	309	 	D	 	 	42,886	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 OPERATING INCOME
	 	 	24,281	 	 	1,388	 	 	 	 	25,669	 
	 	 INTEREST ON LONG-TERM DEBT
	 	 	13,374	 	 	947	 	B	 	 	13,786	 
	 	 
	 	 	 	 	 	(535	)	D	 	 	 	 
	 	 NET LOSS ON SALE OF CAPITAL AND LANDFILL ASSETS
	 	 	40	 	 	—	 	 	 	 	40	 
	 	 NET FOREIGN EXCHANGE GAIN
	 	 	(624	)	 	—	 	 	 	 	(624	)
	 	 NET LOSS ON FINANCIAL INSTRUMENTS
	 	 	9,047	 	 	—	 	 	 	 	9,047	 
	 	 OTHER EXPENSES
	 	 	31	 	 	—	 	 	 	 	31	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 INCOME BEFORE INCOME TAXES
	 	 	2,413	 	 	976	 	 	 	 	3,389	 
	 	 INCOME TAX EXPENSE (RECOVERY)
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 Current
	 	 	1,828	 	 	—	 	 	 	 	1,828	 
	 	 	 Future
	 	 	(9,889	)	 	(344	)	B	 	 	(9,808	)
	 	 
	 	 	 	 	 	343	 	C	 	 	 	 
	 	 
	 	 	 	 	 	82	 	D	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	(8,061	)	 	81	 	 	 	 	(7,980	)
	 	 	 	 	 	 	 	 	 	 	 
	 	 NET INCOME
	 	 	10,474	 	 	895	 	 	 	 	11,369	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 OTHER COMPREHENSIVE INCOME
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 Foreign currency translation adjustment
	 	 	25,972	 	 	220	 	B	 	 	26,433	 
	 	 
	 	 	 	 	 	241	 	D	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 COMPREHENSIVE INCOME
	 	$	36,446	 	$	1,356	 	 	 	$	37,802	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 NET INCOME — CONTROLLING INTEREST
	 	$	8,776	 	$	750	 	 	 	$	9,526	 
	 	 NET INCOME — NON-CONTROLLING INTEREST
	 	$	1,698	 	$	145	 	 	 	$	1,843	 
	 	 Net income per weighted average trust unit, basic
	 	$	0.15	 	$	0.02	 	 	 	$	0.17	 
	 	 Net income per weighted average trust unit, diluted
	 	$	0.15	 	$	0.02	 	 	 	$	0.17	 
	 	 Weighted average number of trust units outstanding (thousands), basic
	 	 	57,568	 	 	—	 	 	 	 	57,568	 
	 	 Weighted average number of trust units outstanding (thousands), diluted
	 	 	68,706	 	 	—	 	 	 	 	68,706	 





15








 



































 



 
  
  BFI CANADA LTD.    
    
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS    
    
    For the years ended December 31, 2008 and December 31, 2007

(in thousands, except per share or trust unit amounts, unless otherwise stated)    
    



 Consolidated Statement of Cash Flows
  For the period ended March 31, 2009 (unaudited — in thousands of Canadian dollars) 



																
	 	 
	 	Stated in

accordance with

Canadian GAAP 	 	Adjustments

from Canadian

to U.S. GAAP 	 	Note 	 	Stated in

accordance with

U.S. GAAP 	 
	 	NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES	 	 	 	 	 	 	 	 	 	 	 	 
	 	OPERATING	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Net income	 	$	12,259	 	$	(255	)	 	 	$	12,004	 
	 	 	Items not affecting cash	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	Share based compensation	 	 	414	 	 	—	 	 	 	 	414	 
	 	 	 	Accretion of landfill closure and post-closure costs	 	 	924	 	 	—	 	 	 	 	924	 
	 	 	 	Amortization of intangibles	 	 	9,009	 	 	—	 	 	 	 	9,009	 
	 	 	 	Amortization of capital assets	 	 	22,803	 	 	—	 	 	 	 	22,803	 
	 	 	 	Amortization of landfill assets	 	 	14,752	 	 	263	 	D	 	 	15,015	 
	 	 	 	Interest on long-term debt	 	 	—	 	 	934	 	B	 	 	934	 
	 	 	 	Net gain on sale of capital and landfill assets	 	 	(167	)	 	—	 	 	 	 	(167	)
	 	 	 	Net loss on financial instruments	 	 	660	 	 	—	 	 	 	 	660	 
	 	 	 	Future income taxes	 	 	3,608	 	 	(177	)	B,D	 	 	3,431	 
	 	 	Landfill closure and post-closure expenditures	 	 	(1,527	)	 	—	 	 	 	 	(1,527	)
	 	 	Changes in non-cash working capital items	 	 	(1,757	)	 	21	 	C	 	 	(1,736	)
	 	 	 	 	 	 	 	 	 	 	 
	 	Cash generated from operating activities	 	 	60,978	 	 	786	 	 	 	 	61,764	 
	 	 	 	 	 	 	 	 	 	 	 
	 	INVESTING	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Acquisitions	 	 	(291	)	 	—	 	 	 	 	(291	)
	 	 	Restricted cash withdrawals	 	 	—	 	 	102	 	A	 	 	102	 
	 	 	Investment in other receivables	 	 	(1,541	)	 	—	 	 	 	 	(1,541	)
	 	 	Proceeds from other receivables	 	 	140	 	 	—	 	 	 	 	140	 
	 	 	Funded landfill post-closure costs	 	 	(99	)	 	—	 	 	 	 	(99	)
	 	 	Purchase of capital assets	 	 	(15,764	)	 	—	 	 	 	 	(15,764	)
	 	 	Purchase of landfill assets	 	 	(9,357	)	 	(403	)	D	 	 	(9,760	)
	 	 	Proceeds from the sale of capital and landfill assets	 	 	190	 	 	—	 	 	 	 	190	 
	 	 	Net proceeds on divestitures	 	 	4,062	 	 	—	 	 	 	 	4,062	 
	 	 	Investment in landfill development assets	 	 	(308	)	 	—	 	 	 	 	(308	)
	 	 	 	 	 	 	 	 	 	 	 
	 	Cash utilized in investing activities	 	 	(22,968	)	 	(301	)	 	 	 	(23,269	)
	 	 	 	 	 	 	 	 	 	 	 
	 	FINANCING	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Payment of deferred financing costs	 	 	—	 	 	(383	)	B	 	 	(383	)
	 	 	Proceeds from long-term debt	 	 	32,888	 	 	—	 	 	 	 	32,888	 
	 	 	Repayment of long-term debt	 	 	(159,353	)	 	—	 	 	 	 	(159,353	)
	 	 	Common shares issued, net of issue costs	 	 	88,366	 	 	—	 	 	 	 	88,366	 
	 	 	Dividends paid to shareholders and participating preferred shareholders	 	 	(2,398	)	 	—	 	 	 	 	(2,398	)
	 	 	 	 	 	 	 	 	 	 	 
	 	Cash utilized in financing activities	 	 	(40,497	)	 	(383	)	 	 	 	(40,880	)
	 	 	 	 	 	 	 	 	 	 	 
	 	Effect of foreign exchange changes on foreign cash and cash equivalents	 	 	(236	)	 	(2	)	A	 	 	(238	)
	 	 	 	 	 	 	 	 	 	 	 





16







 


BFI CANADA LTD. 


 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 


 For the years ended December 31, 2008 and December 31, 2007

(in thousands, except per share or trust unit amounts, unless otherwise stated) 



																
	 	 
	 	Stated in

accordance with

Canadian GAAP 	 	Adjustments

from Canadian

to U.S. GAAP 	 	Note 	 	Stated in

accordance with

U.S. GAAP 	 
	 	NET CASH (OUTFLOW) INFLOW	 	 	(2,723	)	 	100	 	 	 	 	(2,623	)
	 	 	 	 	 	 	 	 	 	 	 
	 	CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR	 	 	14,720	 	 	(100	)	A	 	 	14,620	 
	 	 	 	 	 	 	 	 	 	 	 
	 	CASH AND CASH EQUIVALENTS, END OF PERIOD	 	$	11,997	 	$	—	 	 	 	$	11,997	 
	 	 	 	 	 	 	 	 	 	 	 
	 	SUPPLEMENTAL CASH FLOW INFORMATION:	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Cash and cash equivalents are comprised of:	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	Cash	 	$	11,996	 	$	—	 	 	 	$	11,996	 
	 	 	 	Cash equivalents	 	 	1	 	 	—	 	 	 	 	1	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	$	11,997	 	$	—	 	 	 	$	11,997	 
	 	 	 	 	 	 	 	 	 	 	 
	 	Cash (received) paid during the period for:	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Income taxes	 	$	(455	)	$	—	 	 	 	$	(455	)
	 	 	Interest	 	$	11,844	 	$	—	 	 	 	$	11,844	 






 Consolidated Statement of Cash Flows

For the period ended March 31, 2008 (unaudited — in thousands of Canadian dollars) 



																
	 	 
	 	Stated in

accordance with

Canadian GAAP 	 	Adjustments

from Canadian

to U.S. GAAP 	 	Note 	 	Stated in

accordance with

U.S. GAAP 	 
	 	 
	 	(Restated — Note 4)
	 	 
	 	 
	 	 
	 
	 	NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES	 	 	 	 	 	 	 	 	 	 	 	 
	 	OPERATING	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Net income	 	$	10,474	 	$	895	 	 	 	$	11,369	 
	 	 	Items not affecting cash	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	Write-off of landfill development assets	 	 	728	 	 	—	 	 	 	 	728	 
	 	 	 	Accretion of landfill closure and post-closure costs	 	 	781	 	 	—	 	 	 	 	781	 
	 	 	 	Amortization of intangibles	 	 	8,035	 	 	—	 	 	 	 	8,035	 
	 	 	 	Amortization of capital assets	 	 	19,297	 	 	—	 	 	 	 	19,297	 
	 	 	 	Amortization of landfill assets	 	 	15,245	 	 	309	 	D	 	 	15,554	 
	 	 	 	Interest on long-term debt	 	 	—	 	 	947	 	B	 	 	947	 
	 	 	 	Net loss on sale of capital and landfill assets	 	 	40	 	 	—	 	 	 	 	40	 
	 	 	 	Net loss on financial instruments	 	 	9,047	 	 	—	 	 	 	 	9,047	 
	 	 	 	Future income taxes	 	 	(9,889	)	 	81	 	B,C,D	 	 	(9,808	)
	 	 	Landfill closure and post-closure expenditures	 	 	(245	)	 	—	 	 	 	 	(245	)
	 	 	Changes in non-cash working capital items	 	 	(10,579	)	 	(1,697	)	C	 	 	(12,276	)
	 	 	 	 	 	 	 	 	 	 	 
	 	Cash generated from operating activities	 	 	42,934	 	 	535	 	 	 	 	43,469	 
	 	 	 	 	 	 	 	 	 	 	 
	 	INVESTING	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Acquisitions	 	 	(19,053	)	 	—	 	 	 	 	(19,053	)
	 	 	Restricted cash withdrawals	 	 	—	 	 	617	 	A	 	 	617	 
	 	 	Proceeds from other receivables	 	 	69	 	 	—	 	 	 	 	69	 
	 	 	Funded landfill post-closure costs	 	 	(390	)	 	—	 	 	 	 	(390	)
	 	 	Purchase of capital assets	 	 	(13,537	)	 	—	 	 	 	 	(13,537	)
	 	 	Purchase of landfill assets	 	 	(7,872	)	 	(535	)	D	 	 	(8,407	)
	 	 	Proceeds from the sale of capital and landfill assets	 	 	83	 	 	—	 	 	 	 	83	 
	 	 	Investment in landfill development assets	 	 	(1,058	)	 	—	 	 	 	 	(1,058	)
	 	 	 	 	 	 	 	 	 	 	 
	 	Cash (utilized in) generated from investing activities	 	 	(41,758	)	 	82	 	 	 	 	(41,676	)
	 	 	 	 	 	 	 	 	 	 	 





17







 


BFI CANADA LTD. 


 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 


 For the years ended December 31, 2008 and December 31, 2007

(in thousands, except per share or trust unit amounts, unless otherwise stated) 



																
	 	 
	 	Stated in

accordance with

Canadian GAAP 	 	Adjustments

from Canadian

to U.S. GAAP 	 	Note 	 	Stated in

accordance with

U.S. GAAP 	 
	 	 
	 	(Restated — Note 4)
	 	 
	 	 
	 	 
	 
	 	FINANCING	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Proceeds from long-term debt	 	 	65,217	 	 	—	 	 	 	 	65,217	 
	 	 	Repayment of long-term debt	 	 	(30,617	)	 	—	 	 	 	 	(30,617	)
	 	 	Distributions and dividends paid to unitholders and participating preferred shareholders	 	 	(31,227	)	 	—	 	 	 	 	(31,227	)
	 	 	 	 	 	 	 	 	 	 	 
	 	Cash generated from financing activities	 	 	3,373	 	 	—	 	 	 	 	3,373	 
	 	 	 	 	 	 	 	 	 	 	 
	 	Effect of foreign exchange changes on foreign cash and cash equivalents	 	 	(319	)	 	(50	)	A	 	 	(369	)
	 	 	 	 	 	 	 	 	 	 	 
	 	NET CASH INFLOW	 	 	4,230	 	 	567	 	 	 	 	4,797	 
	 	 	 	 	 	 	 	 	 	 	 
	 	CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR	 	 	13,359	 	 	(1,600	)	A	 	 	11,759	 
	 	 	 	 	 	 	 	 	 	 	 
	 	CASH AND CASH EQUIVALENTS, END OF PERIOD	 	$	17,589	 	$	(1,033	)	 	 	$	16,556	 
	 	 	 	 	 	 	 	 	 	 	 
	 	SUPPLEMENTAL CASH FLOW INFORMATION:	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Cash and cash equivalents are comprised of:	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	Cash	 	$	15,042	 	$	(1,033	)	A	 	$	14,009	 
	 	 	 	Cash equivalents	 	 	2,547	 	 	—	 	 	 	 	2,547	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	$	17,589	 	$	(1,033	)	 	 	$	16,556	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	Cash paid during the period for:	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	Income taxes	 	$	1,365	 	$	—	 	 	 	$	1,365	 
	 	 	 	Interest	 	$	11,232	 	$	—	 	 	 	$	11,232	 






The
following table reconciles net income reported in accordance with Canadian GAAP to net income reportable in accordance with U.S. GAAP for the three month periods ended March 31, 2009
and 2008: 



												
	 	 
	 	Note 	 	2009 	 	2008 	 
	 	 
	 	 
	 	 
	 	(Restated — Note 4)
	 
	 	 Net income in accordance with Canadian GAAP
	 	 	 	$	12,259	 	$	10,474	 
	 	 Impact on net income of U.S. GAAP adjustments:
	 	 	 	 	 	 	 	 	 
	 	 	 Capitalized deferred financing costs, net of income taxes
	 	B	 	 	(324	)	 	(603	)
	 	 	 Share or trust unit based compensation and shares or trust units held in a rabbi trust, net of income taxes
	 	C	 	 	(21	)	 	1,354	 
	 	 	 Capitalized interest, net of income taxes
	 	D	 	 	90	 	 	144	 
	 	 	 	 	 	 	 	 	 
	 	 Net income in accordance with U.S. GAAP
	 	 	 	$	12,004	 	$	11,369	 
	 	 	 	 	 	 	 	 	 
	 	 Basic earnings per share or trust unit in accordance with U.S. GAAP
	 	 	 	$	0.17	 	$	0.17	 
	 	 	 	 	 	 	 	 	 
	 	 Diluted earnings per share or trust unit in accordance with U.S. GAAP
	 	 	 	$	0.17	 	$	0.17	 
	 	 	 	 	 	 	 	 	 
	 	 Weighted average shares or trust units outstanding — basic
	 	 	 	 	59,515	 	 	57,568	 
	 	 	 	 	 	 	 	 	 
	 	 Weighted average shares or trust units outstanding — diluted
	 	 	 	 	70,653	 	 	68,706	 
	 	 	 	 	 	 	 	 	 






 Reconciliation of Canadian to U.S. GAAP — Notes  


	A.
	Restricted cash




Under
Canadian GAAP, the Company includes restricted cash balances in cash and cash equivalents as its intended use is deemed to be current. Under U.S. GAAP, restricted cash amounts are
considered investments that limit the holders' ability to utilize such amounts. In addition, deposits and withdrawals of restricted cash amounts are recorded as an investing activity in the
consolidated statement of cash flows. To comply with U.S. GAAP, the restricted cash amounts, reported in cash and cash equivalents on the Company's consolidated balance sheet, were
reclassified. In addition, restricted cash deposits and withdrawals were reclassified to investing activities on the Company's consolidated statement of cash flows. 



18







 


BFI CANADA LTD. 


 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 


 For the years ended December 31, 2008 and December 31, 2007

(in thousands, except per share or trust unit amounts, unless otherwise stated) 



	B.
	Capitalization of deferred financing costs




Under
Canadian GAAP, the Company has elected to recognize all transaction costs in net income, including those related to long-term debt instruments. Under U.S. GAAP, costs incurred
to secure long-term debt are deferred and amortized over the term of the underlying debt instrument. To comply with U.S. GAAP, the Company has reversed the impact of its Canadian
GAAP policy selection, which results in an increase in deferred financing costs and equity (deficit, non-controlling interest, and accumulated other comprehensive loss) and a reduction in
amounts recorded to the Company's consolidated statement of operations and comprehensive income. Amortization of deferred financing costs is recorded to interest expense. 


The
increase in deferred financing costs results in a higher accounting versus tax basis and higher future income tax liability (deferred tax liability) which is recorded to future income tax expense
on the Company's consolidated statement of operations and comprehensive income. In addition, higher deferred financing costs and future income tax liability amounts, which are translated to Canadian
from U.S. dollars results in a change to the foreign currency translation adjustment amount presented on the Company's consolidated statement of operations and comprehensive income. 


	C.
	Share or trust unit based compensation




 Share or trust unit based options  


Under
Canadian GAAP, share or trust unit options, with stock or trust unit appreciation rights, and the related changes thereto are recorded to selling, general and administration expense when the
quoted market price of the share or trust unit exceeds the share or trust unit options exercise price. Under U.S. GAAP, stock or trust unit appreciation rights are measured at fair value at the
date of grant and re-measured at fair value to the date of settlement. The resulting compensation expense is recorded to selling, general and administration expense. The Company elected to
recognize compensation expense on a straight line basis over the requisite service period for the entire award. 


The
Company uses the Black-Scholes-Merton option pricing model which requires the input of highly subjective assumptions. These assumptions include the estimated length of time employees will retain
their options before exercising them and the expected volatility of the Company's share or trust unit price over the expected term. Changes in subjective assumptions can materially affect the
estimated fair value of share or trust unit based compensation and, consequently, the related amount recognized in selling, general and administration expense on the consolidated statement of
operations and comprehensive income. In calculating the options fair value at March 31, 2009 and 2008, the following assumptions were used: 



									
	 	 
	 	2009 	 	2008 	 
	 	 Grant date — February 14, 2006
	 	 	 	 	 	 	 
	 	 Dividend yield
	 	 	5.3%	 	 	8.2%	 
	 	 Expected volatility
	 	 	39.4%	 	 	24.1%	 
	 	 Risk free interest rate
	 	 	1.3%	 	 	2.9%	 
	 	 Expected life, stated in years
	 	 	2.8	 	 	4.0	 
	 	 Fair value, per option
	 	 	$0.10	 	 	$0.82	 
	 	 Grant date — August 25, 2008
	 	 	 	 	 	 	 
	 	 Dividend yield
	 	 	5.3%	 	 	—	 
	 	 Expected volatility
	 	 	33.3%	 	 	—	 
	 	 Risk free interest rate
	 	 	1.8%	 	 	—	 
	 	 Expected life, stated in years
	 	 	5.0	 	 	—	 
	 	 Fair value, per option
	 	 	$0.40	 	 	$—	 
	 	 Grant date — January 9, 2009
	 	 	 	 	 	 	 
	 	 Dividend yield
	 	 	5.3%	 	 	—	 
	 	 Expected volatility
	 	 	34.1%	 	 	—	 
	 	 Risk free interest rate
	 	 	1.9%	 	 	—	 
	 	 Expected life, stated in years
	 	 	5.3	 	 	—	 
	 	 Fair value, per option
	 	 	$0.47	 	 	$—

	 






Compensation
expense (recovery) for the period ended March 31, 2009, recorded to selling, general and administrative expense on the consolidated statement of operations and comprehensive
income, amounted to $21 (2008 — ($796)). As of March 31, 2009, unrecognized compensation cost for share or trust unit based compensation totaled $383
(2008 — $216). Unrecognized compensation cost amounts are recorded through the final vesting date, which was January 1, 2009 for options granted on
February 14, 2006, is January 1, 2011 for options granted on August 25, 2008 and is December 31, 2010 for options granted on January 9, 2009. In 



19







 


BFI CANADA LTD. 


 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 


 For the years ended December 31, 2008 and December 31, 2007

(in thousands, except per share or trust unit amounts, unless otherwise stated) 



determining
the expected life of the options, management considered the age of the recipients and duration between the vesting date and date of expiration. The Company has no historical information
with regards to the behaviour of its option recipients. Expected volatility was calculated using changes in monthly share or trust unit prices for a period commensurate with the remaining term to
expected vesting. 


 Shares or trust units held by a rabbi trust  


Prior
to the conversion of the Fund's trust structure to a corporation (Note 5), trust units of the Fund, acquired for the benefit of the Company's U.S. long-term incentive
plan participants, and held in a rabbi trust were reclassified to Mezzanine Equity. The deferred compensation obligation related to these trust units was reclassified from unitholders' equity to
accrued charges due to the redemption feature of the trust units. Increases or decreases to the deferred compensation obligation, representing changes in the fair value of the obligation, were
recorded to selling, general and administrative expense. Compensation cost recoveries for the three months ended March 31, 2009 amounted to $nil
(2008 — ($901)). An increase or decrease in accrued compensation obligations resulted in a higher or lower accounting versus tax basis and a higher or lower
future income tax asset (deferred tax asset) which was recorded to future income tax recovery or expense on the Company's consolidated statement of operations and comprehensive income. Upon
conversion, shares were issued for trust units on a one for one basis. Issued shares do not share the same redemption feature as trust units and, accordingly, are not subject to the same accounting
treatment. Upon conversion, the deferred compensation obligation and the related deferred tax asset have been reclassified from accrued charges to equity.  


	D.
	Capitalized interest on capital and landfill assets acquired, constructed or developed over time




In
accordance with Canadian GAAP, the cost of tangible assets may include capitalized interest costs directly attributable to an asset's acquisition, construction, or development, prior to the asset's
substantial completion or readiness for use, if the enterprise's accounting policy is to capitalize interest costs. For the purposes of reporting under Canadian GAAP, the Company has not elected to
capitalize interest on tangible assets acquired, constructed or developed over time and has expensed all interest costs incurred on its long-term debt facilities. Under U.S. GAAP,
the historical cost of acquiring an asset includes the costs necessarily incurred to bring it to the condition and location necessary for its intended use, including interest. To comply with
U.S. GAAP, interest costs
attributable to the construction and development of certain Company-owned landfills and certain capital assets have been deducted from interest expense and have been capitalized to the respective
asset. Capitalized amounts are amortized over the asset's intended useful life in accordance with the respective accounting policy. 


The
increase in landfill and capital asset accounting values, due to the capitalization of interest net of amortization, results in a higher accounting versus tax basis and higher future income tax
liability (deferred tax liability) which is recorded to future income tax expense on the Company's consolidated statement of operations and comprehensive income. In addition, higher future income tax
liability and landfill and capital asset amounts, which are translated to Canadian from U.S. dollars, results in a change to the foreign currency translation adjustment amount presented in the
Company's consolidated statement of operations and comprehensive income.  


	E.
	Shareholders' or unitholders' equity and non-controlling interest




Prior
to the conversion of the Fund's trust structure to a corporation (Note 5), trust units were redeemable by their holders at any time. This redemption feature was required for the Fund to
retain its Canadian mutual fund trust status. Upon notification of redemption, trust unitholders were entitled to receive a price per trust unit equal to the lesser of: (i) 90% of the average
closing market price calculated for the 10 days prior to the date the trust units are surrendered for redemption, and (ii) the closing market price on the date of redemption. In
accordance with the Fund's Declaration of Trust, trust units redeemable for cash, in any given month, was limited to $50, which could have been waived subject to the discretion of the Fund's Trustees.
Under Canadian GAAP, trust units of the Company were considered permanent equity and were presented as a component of unitholders' equity. 



Participating
preferred shares were ultimately redeemable for trust units of the Fund. Under Canadian GAAP, participating preferred shares were recorded as non-controlling interest in the
mezzanine equity section of the Company's consolidated balance sheet. 


Under
U.S. GAAP, issued equity, which was redeemable for cash or other assets and was (a) redeemable at a fixed or determinable price on a fixed or determinable date,
(b) redeemable at the option of the holder, or (c) redeemable upon the occurrence of an event that is not solely within the control of the issuer, was classified outside of permanent
equity. Accordingly, the Company was required to classify its trust units and participating preferred shares as mezzanine equity and to record the value of its trust units and participating preferred
shares at their maximum redemption amount at each balance sheet date. The increase or decrease resulting from valuing the trust units and participating preferred shares at their maximum redemption
amount was recorded to deficit. To comply with U.S. GAAP, trust units and participating preferred shares were reclassified from Unitholders' Equity and Non-controlling Interest to
Mezzanine Equity, where Mezzanine Equity is classified between Liabilities and Unitholders' Equity on the Company's consolidated balance sheet. In addition, redemption value adjustments were recorded
to Mezzanine Equity and were offset by an adjustment to deficit. The non-controlling interest's share of net income recorded under Canadian GAAP was eliminated for the purpose of complying
with 



20







 


BFI CANADA LTD. 


 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 


 For the years ended December 31, 2008 and December 31, 2007

(in thousands, except per share or trust unit amounts, unless otherwise stated) 






U.S. GAAP.
Upon conversion, PPSs are ultimately redeemable for shares. The Company's shares do not contain the same redemption feature as trust units and, accordingly, are not subject to the
same accounting treatment. Upon conversion, the redemption amount recorded to mezzanine equity has been reclassified to shareholders' equity. Revaluation of mezzanine equity to the date of conversion
has created a permanent difference in common shares and deficit between Canadian and U.S. GAAP amounting to $86,147.  


	F.
	Non-controlling interest




Adjustments
to non-controlling interest on the Company's consolidated balance sheet relate to the various Canadian to U.S. GAAP adjustments outlined in Notes B.
through D.  


	G.
	Future income tax assets, liabilities, expense or recovery




Adjustments
to future income tax assets and liabilities on the Company's consolidated balance sheet or to future income tax expense or recovery on the Company's consolidated statement of operations
and comprehensive income, relate to the various Canadian to U.S. GAAP adjustments outlined in Notes B. through D. 


In
certain circumstances Canadian GAAP requires the measurement of future income tax assets and liabilities applying substantively enacted tax rates or laws. Under U.S. GAAP enacted tax rates
or laws are the only measure of a company's future income tax assets and liabilities. There were no significant differences between the Company's use of substantively enacted versus enacted tax rates
and laws. Accordingly, no adjustments have been made in respect of this Canadian to U.S. GAAP difference.  


	H.
	Employee future benefits




Under
U.S. GAAP, the over or underfunded status of a defined benefit plan is recognized as an asset or liability with the change in funded status recorded through other comprehensive income.
Canadian GAAP does not require recognition of the plan's funded status. Compliance with the U.S. GAAP standard did not have a significant impact on the consolidated financial statements of the
Company and accordingly is not reflected in the reconciliation between Canadian and U.S. GAAP. 


 Reconciliation of Canadian to U.S. GAAP — Additional Disclosures  


 Restricted cash  


In
accordance with Regulation S-X, restricted cash represents cash received from variable rate demand solid waste disposal revenue bond ("IRBs") drawings in advance of incurring the
expenditure for which the IRBs are made available. At March 31, 2009, $nil (December 31, 2008 — $100) of cash is restricted to fund a portion of
landfill construction activities, and equipment and container expenditures, in the Company's Texas operations. 


 Intangibles  


In
accordance with U.S. GAAP, the estimated remaining amortization expense for the Company's intangibles in each of the five succeeding years and thereafter is as follows: 



						
	 	 2009
	 	$	25,371	 
	 	 2010
	 	 	25,142	 
	 	 2011
	 	 	21,396	 
	 	 2012
	 	 	19,494	 
	 	 2013
	 	 	16,901	 
	 	 Thereafter
	 	 	32,928	 
	 	 	 	 	 
	 	 
	 	$	141,232	 
	 	 	 	 	 






 Deferred financing costs  


In
accordance with U.S. GAAP, deferred financing costs represent fees and costs incurred in connection with securing long-term debt. The Company amortizes these costs, which are
recorded to interest on long-term debt on the Company's consolidated statement of operations and comprehensive income, over the term of the related debt on a straight-line
basis, which approximates the effective interest method. 



												
	 	March 31, 2009



 
	 	Cost 	 	Accumulated

Amortization 	 	Net Book Value 	 
	 	 Deferred financing costs
	 	$	21,141	 	$	9,231	 	$	11,910	 





21







 


BFI CANADA LTD. 


 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 


 For the years ended December 31, 2008 and December 31, 2007

(in thousands, except per share or trust unit amounts, unless otherwise stated) 


 





												
	 	December 31, 2008



 
	 	Cost 	 	Accumulated

Amortization 	 	Net Book Value 	 
	 	 Deferred financing costs
	 	$	20,465	 	$	8,297	 	$	12,168	 






Amortization
related to deferred financing costs for the period ended March 31, 2009 amounted to $934 (2008 — $947). 


In
accordance with U.S. GAAP, the estimated remaining amortization expense for the Company's deferred financing costs in each of the five succeeding years and thereafter is as follows: 



						
	 	 2009
	 	$	2,589	 
	 	 2010
	 	 	3,229	 
	 	 2011
	 	 	2,825	 
	 	 2012
	 	 	434	 
	 	 2013
	 	 	242	 
	 	 Thereafter
	 	 	2,591	 
	 	 	 	 	 
	 	 
	 	$	11,910	 
	 	 	 	 	 






 Accrued charges  


In
accordance with Regulation S-X, other current liabilities in excess of 5% of total current liabilities must be disclosed separately. The components of accrued charges are
as follows: 



									
	 	 
	 	March 31,

2009 	 	December 31,

2008 	 
	 	 Accrued acquisition and related costs
	 	$	2,017	 	$	2,164	 
	 	 Accrued payroll and related costs
	 	 	14,279	 	 	19,610	 
	 	 Accrued insurance
	 	 	17,906	 	 	16,465	 
	 	 Accrued environmental surcharges
	 	 	2,320	 	 	3,184	 
	 	 Accrued provincial and state sales taxes
	 	 	3,338	 	 	3,370	 
	 	 Accrued interest
	 	 	4,941	 	 	7,580	 
	 	 Accrued franchise and royalty fees
	 	 	5,418	 	 	5,204	 
	 	 Accrued share based compensation
	 	 	225	 	 	204	 
	 	 Other
	 	 	11,547	 	 	10,192	 
	 	 	 	 	 	 	 
	 	 Accrued charges
	 	$	61,991	 	$	67,973	 
	 	 	 	 	 	 	 





22







 


BFI CANADA LTD. 


 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 


 For the years ended December 31, 2008 and December 31, 2007

(in thousands, except per share or trust unit amounts, unless otherwise stated) 



 Future income tax liabilities  


In
accordance with U.S. GAAP, domestic and foreign income or loss before income taxes and non-controlling interest and domestic and foreign income taxes is required disclosure. The
components of each prepared on a U.S. GAAP basis for the three months ended March 31, are as follows: 



										
	 	 
	 	2009 	 	2008 	 
	 	 Income before income taxes
	 	 	 	 	 	 	 
	 	 	 Canada
	 	$	12,593	 	$	12,480	 
	 	 	 U.S.
	 	 	5,960	 	 	(9,091	)
	 	 	 	 	 	 	 
	 	 
	 	$	18,553	 	$	3,389	 
	 	 	 	 	 	 	 
	 	 Current income tax expense
	 	 	 	 	 	 	 
	 	 	 Canada
	 	$	1,784	 	$	763	 
	 	 	 U.S.
	 	 	1,334	 	 	1,065	 
	 	 	 	 	 	 	 
	 	 
	 	 	3,118	 	 	1,828	 
	 	 Future income tax expense (recovery)
	 	 	 	 	 	 	 
	 	 	 Canada
	 	 	2,261	 	 	(1,492	)
	 	 	 U.S.
	 	 	1,170	 	 	(8,316	)
	 	 	 	 	 	 	 
	 	 
	 	 	3,431	 	 	(9,808	)
	 	 	 	 	 	 	 
	 	 
	 	$	6,549	 	$	(7,980	)
	 	 	 	 	 	 	 






The
Company recognizes interest related to uncertain tax positions and penalties to current income tax expense. Interest and penalties related to uncertain tax positions amounted to $nil at
March 31, 2009 and March 31, 2008. The total amount of interest and penalties accrued in respect of uncertain tax positions at March 31, 2009 and December 31, 2008 was $nil
and $nil, respectively. 


The
Company is subject to federal, provincial and state income taxes and files tax returns in multiple jurisdictions. Tax years open to audit range from 2000 to 2008 in Canada and from 1997 to 2008 in
the U.S. 


The
Company does not tax effect its foreign currency translation adjustment. 



23







 


BFI CANADA LTD. 


 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 


 For the years ended December 31, 2008 and December 31, 2007

(in thousands, except per share or trust unit amounts, unless otherwise stated) 



 Equity  


The
following table presents Canadian to U.S. GAAP reconciliation items which impact various components of shareholders' equity (deficiency) and non-controlling interest. 



													
	 	 
	 	Note 	 	March 31,

2009 	 	December 31,

2008 	 
	 	 Common shares
	 	 	 	 	 	 	 	 	 
	 	 	 Stated in accordance with Canadian GAAP
	 	 	 	$	1,096,673	 	$	1,006,772	 
	 	 	 Permanent difference realized upon conversion
	 	E	 	 	(86,147	)	 	(86,147	)
	 	 	 	 	 	 	 	 	 
	 	 	 Stated in accordance with U.S. GAAP
	 	 	 	$	1,010,526	 	$	920,625	 
	 	 Restricted shares
	 	 	 	 	 	 	 	 	 
	 	 	 Stated in accordance with Canadian and U.S. GAAP
	 	 	 	$	(3,985	)	$	(3,985	)
	 	 Treasury shares
	 	 	 	 	 	 	 	 	 
	 	 	 Stated in accordance with Canadian and U.S. GAAP
	 	 	 	$	—	 	$	—	 
	 	 Contributed surplus/paid in capital
	 	 	 	 	 	 	 	 	 
	 	 	 Stated in accordance with Canadian and U.S. GAAP
	 	 	 	$	1,089	 	$	675	 
	 	 Deficit
	 	 	 	 	 	 	 	 	 
	 	 	 Stated in accordance with Canadian GAAP
	 	 	 	$	(306,855	)	$	(300,538	)
	 	 	 	 Capitalized financing costs
	 	B	 	 	7,008	 	 	7,305	 
	 	 	 	 Fair value of share or trust unit based compensation
	 	C	 	 	(225	)	 	(204	)
	 	 	 	 Capitalized interest
	 	D	 	 	8,323	 	 	8,433	 
	 	 	 	 Revaluation of trust units and participating preferred shares reclassified to mezzanine equity
	 	E	 	 	86,147	 	 	86,147	 
	 	 	 	 Impact of adjustments on non-controlling interest
	 	F	 	 	(2,798	)	 	(2,775	)
	 	 	 	 	 	 	 	 	 
	 	 Stated in accordance with U.S. GAAP
	 	 	 	$	(208,400	)	$	(201,632	)
	 	 Accumulated other comprehensive income
	 	 	 	 	 	 	 	 	 
	 	 	 Stated in accordance with Canadian GAAP
	 	 	 	$	36,087	 	$	16,197	 
	 	 	 Cumulative foreign currency translation of capitalized financing costs
	 	B	 	 	521	 	 	522	 
	 	 	 Current foreign currency translation of capitalized financing costs
	 	B	 	 	158	 	 	—	 
	 	 	 Cumulative foreign currency translation of capitalized interest
	 	D	 	 	585	 	 	352	 
	 	 	 Current foreign currency translation of capitalized interest
	 	D	 	 	200	 	 	—	 
	 	 	 	 	 	 	 	 	 
	 	 	 Stated in accordance with U.S. GAAP
	 	 	 	$	37,551	 	$	17,071 	 
	 	 Non-controlling interest
	 	 	 	 	 	 	 	 	 
	 	 	 Stated in accordance with Canadian GAAP
	 	 	 	$	243,584	 	$	241,339	 
	 	 	 Cumulative Canadian to U.S. GAAP differences
	 	 	 	 	2,775	 	 	2,286	 
	 	 	 Capitalized financing costs and foreign currency translation adjustment
	 	B	 	 	(20	)	 	(12	)
	 	 	 Fair value of trust unit based compensation
	 	C	 	 	(3	)	 	388	 
	 	 	 Capitalized interest and foreign currency translation adjustment
	 	D	 	 	46	 	 	113	 
	 	 	 	 	 	 	 	 	 
	 	 	 Stated in accordance with U.S. GAAP
	 	 	 	$	246,382	 	$	244,114	 
	 	 	 	 	 	 	 	 	 
	 	 Equity stated in accordance with U.S. GAAP
	 	 	 	$	1,083,163	 	$	976,868	 
	 	 	 	 	 	 	 	 	 





24







 


BFI CANADA LTD. 


 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 


 For the years ended December 31, 2008 and December 31, 2007

(in thousands, except per share or trust unit amounts, unless otherwise stated) 



 Commitments and contingencies  


	(i)
	The
Company leases buildings and equipment under various operating leases. Future lease payments for the next five years ending December 31 and
thereafter are as follows: 





						
	 	 2009
	 	$	7,105	 
	 	 2010
	 	 	5,630	 
	 	 2011
	 	 	4,299	 
	 	 2012
	 	 	4,037	 
	 	 2013
	 	 	3,715	 
	 	 Thereafter
	 	 	17,166	 
	 	 	 	 	 
	 	 
	 	$	41,952	 
	 	 	 	 	 






	(ii)
	The
Company is the successor to a license agreement to use the trade name "BFI" and the related logo, subject to certain restrictions. The agreement was
amended on February 22, 2002, whereby a one-time payment of $2,000 was made on April 25, 2002 in full satisfaction of all royalty obligations under the license agreement
payable through June 1, 2015 (effectively the initial 15-year term). The Company has two additional 10 year extension options at a cost of $600 and $1,500, respectively,
per annum.



	(iii)
	The
Company enters into various commitments in the normal course of business. At March 31, 2009 the Company has issued letters of credit amounting
to $184,839 (December 31, 2008 — $182,565) and performance bonds totaling $238,268 (December 31,
2008 — $246,656). Letters of credit are made available from the Company's lenders to its long-term debt facilities. Accordingly, letters of credit are
included in the security offered by the Company to its lenders through its long-term debt facilities.



	(iv)
	On
the acquisition of IESI, the Company assumed various obligations which require payment of additional amounts for achieving certain negotiated events or
business performance targets, including landfill expansion approval or target disposal volumes. The Company is obligated to pay certain sellers various amounts for achieving certain negotiated
disposal volumes to a maximum of approximately U.S. $12,300. Amounts are accrued monthly, and paid from time to time in accordance with underlying agreements, until certain threshold negotiated
disposal volume targets are achieved, and the maximum obligation is satisfied. Monthly accrued amounts, which are paid up to the date the disposal volume threshold targets are met, reduce the
threshold payment by a similar amount. The Company will record an adjustment to the purchase price allocation when the contingency is resolved and consideration is issued or becomes issuable. Landfill
permits acquired on the acquisition of IESI were recorded at their fair values. Accordingly, all contingent amounts paid, and all future contingent payments, in respect of the receipt of landfill
expansion approval or fulfilling disposal volume targets, are recorded to goodwill.



	(v)
	The
Company is subject to certain lawsuits and other claims arising in the ordinary course of business. The outcome of these matters is subject to future
resolution. Management's evaluation and analysis of such matters indicates that the resolution thereof will not have a material effect on the Company's consolidated financial statements. 




 Financial instruments  


The
following table illustrates the Company's derivative financial liabilities by category, including their carrying and fair value amounts. All amounts are recorded as other liabilities on the
Company's consolidated balance sheet. 



															
	 	 
	 	March 31, 2009 	 	December 31, 2008 	 
	 	 
	 	Carrying Amount 	 	Fair Value 	 	Carrying Amount 	 	Fair Value 	 
	 	 Financial liabilities
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 Held for trading
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 Long-term
	 	$	16,904	 	$	16,904	 	$	15,876	 	$	15,876	 
	 	 Derivatives designated in a hedging relationship
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 Long-term
	 	$	2,102	 	$	2,102	 	$	2,316	 	$	2,316	 






 Hedge accounting  


The
Company enters into commodity swaps to reduce its exposure to fluctuations in cash flows due to changes in the price of diesel fuel which it consumes to service certain fixed price contracts or in
certain segments of its business where the recovery of escalating fuel prices is either difficult or non-existent. To fulfill the Company's objective, the Company has entered into cash
flow hedges specifically tied to various forecasted diesel fuel purchases. 



25







 


BFI CANADA LTD. 


 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 


 For the years ended December 31, 2008 and December 31, 2007

(in thousands, except per share or trust unit amounts, unless otherwise stated) 



The
following table outlines changes in the fair value of commodity swaps and its impact on other comprehensive income, net of the related tax effect. 



										
	 	 
	 	March 31, 	 
	 	 
	 	2009 	 	2008 	 
	 	 Financial liabilities
	 	 	 	 	 	 	 
	 	 Commodity swaps designated as cash flow hedges, net of tax
	 	 	 	 	 	 	 
	 	 	 Other comprehensive loss
	 	 $	(1,387	)	 $
	—

	 






At
March 31, 2009, all of the commodity swaps were determined to be highly effective. Accordingly, no amounts have been recognized in the Company's net income due to ineffectiveness or
otherwise. The first commodity swap becomes effective in July 2009. Accordingly, the Company will measure and record any ineffectiveness on commodity swaps representing the difference between
the underlying index price and the actual price of diesel fuel purchased. Additionally, gains or losses will be reclassified to net income as diesel fuel is consumed. The estimated net amount of the
existing unrealized losses on commodity swaps expected to be reclassified to earnings within the next twelve months is U.S. $462. The timing of actual amounts reclassified to net income is
dependent on future movements in diesel fuel prices. 


 Interest rate and commodity swaps  


The
Company is subject to credit risk on its interest rate and commodity swaps (collectively the "agreements"). The Company enters, or has entered, into these agreements as a condition of its
U.S. long-term debt facility to fix a portion of its variable rate interest charge on advances and borrowings, to mitigate its exposure to fluctuations in cash flows due to changes
in the price of diesel fuel, and to mitigate the effect of changes in commodity prices on old corrugated cardboard ("OCC"). All foreign currency exchange and OCC agreements have expired. The Company's
corporate treasury function is charged with arranging and approving all agreements. Suitable counterparties identified by the Company's treasury function are approved by the Chair of the Audit
Committee. The Company will only enter into agreements with highly rated and experienced counterparties who have successfully demonstrated that they are capable of executing these arrangements. If the
counterparties' credit rating, prepared by reputable third party rating agencies, is downgraded, the Company's treasury function will review the agreement and assess if its exposure to the
counterparty can be collateralized or if the agreement should be terminated. The Company's treasury function also prepares a report, at least once annually, to the Company's Audit Committee which
outlines key terms of its agreements, fair values, counterparties and each counterparties most recent rating, and where applicable changes to the risks related to each agreement. The Company's maximum
exposure to credit risk is the fair value of interest rate and commodity swaps recorded in other assets and liabilities on the Company's consolidated balance sheet. The Company holds no collateral or
other credit enhancements as security over these agreements. The Company deems the agreements' credit quality to be high in light of the counterparties to the agreements and no amounts are either past
due or impaired. In all instances, the Company's risk management objective is to mitigate its risk exposures to a level consistent with its risk tolerance. 


The
contractual maturities of the Company's derivatives are as follows: 



																	
	 	 
	 	March 31, 2009 
	 	 
	 	 
	 	Payments due 
	 	 
	 	Total 	 	Less than 1

year 	 	1-3 years 	 	4-5 years 	 	After 5 years 
	 	 Derivative
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 Interest rate swaps
	 	$	19,948	 	$	8,615	 	$	10,494	 	$	839	 	$—
	 	 	 Commodity swaps
	 	$	6,572	 	$	1,138	 	$	3,033	 	$	2,401	 	$—








Amounts
recorded to net loss on financial instruments on the Company's consolidated statement of operations and other comprehensive income for the period ended March 31, 2009 total $660
(2008 — $9,047), in aggregate. The net loss on financial instruments is comprised of the following fair value changes: funded landfill post-closure
costs ($98) (2008 — $22), interest rate swaps $562 (2008 — $7,405), foreign currency exchange agreements $nil
(2008 — $1,697), and OCC hedges $nil (2008 — ($77)). 


 Reconciliation of Canadian and U.S. GAAP — Recent Accounting Developments  


 Business Combinations  


In
December 2007, the Financial Accounting Standards Board ("FASB") issued Financial Accounting Standard No. 141(R), "Business Combinations" ("SFAS 141(R)"). The standard
establishes principles and requirements for an acquirer to recognize and measure the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the
acquiree, how goodwill or a gain from a bargain purchase option is recognized and measured in a business combination, and outlines disclosure requirements to enable users of 



26







 


BFI CANADA LTD. 


 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 


 For the years ended December 31, 2008 and December 31, 2007

(in thousands, except per share or trust unit amounts, unless otherwise stated) 



the
financial statements to evaluate the nature and financial effects of a business combination. SFAS 141(R) outlines that the acquisition date fair value is the measurement objective for all
assets acquired and liabilities assumed. SFAS 141(R) requires that all acquisition related and restructuring costs be charged to earnings and requires contingent consideration to be recognized
at its fair value on the date of acquisition. Certain contingent consideration arrangements will result in fair value changes being recognized in earnings until settled. This statement eliminates
adjustments to goodwill for changes in future income tax assets (deferred tax assets) and uncertain tax positions after the acquisition accounting measurement period (limited to one year from the date
of acquisition). SFAS 141(R) is effective prospectively for acquisitions that occur on or after January 1, 2009. 


 Non-controlling Interests in Consolidation Financial Statements  


In
December 2007, FASB issued Financial Accounting Standard No. 160, "Non-controlling Interests in Consolidated Financial Statements" ("SFAS 160"). SFAS 160
requires ownership interests in subsidiaries held by parties other than the parent to be clearly identified, labeled, and presented in the consolidated statement of financial position within equity,
but separate from parent's equity. The standard also requires consolidated net income attributable to the parent and to the non-controlling interest to be clearly identified and presented
on the face of the consolidated statement of income. While the parents control is retained, the standard requires changes in the parent's ownership interest to be accounted for similarly as an equity
transaction. Upon deconsolidation of a subsidiary, any retained non-controlling equity investment in the former subsidiary is initially measured at fair value and the gain or loss on the
deconsolidation is measured using the fair value of any non-controlling equity investment rather than the carrying amount of the retained investment. For the Company, SFAS 160 is
effective January 1, 2009 and is applied prospectively, except for the presentation and disclosure requirements which are applied retrospectively for all periods presented. Earlier adoption is
prohibited. The Company has reflected the impact of adopting SFAS 160 on its results in the consolidated financial statements. 


 Disclosures about Derivative Instruments and Hedging Activities  


In
March 2008, FASB issued Financial Accounting Standard No. 161, "Disclosures about Derivative Instruments and Hedging Activities — an amendment of
FASB Statement No. 133" ("SFAS 161"). SFAS 161 changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related
interpretations, and (c) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. SFAS 161 is intended to enhance
the current disclosure framework and requires that objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation. The additional disclosure conveys
the purpose of derivative use in terms of the risks that the entity is intending to manage. Also, disclosing the fair values of derivative instruments and their gains and losses in a tabular format
and credit-risk-related contingent features and their impact on an entity's liquidity is required. For the Company, SFAS 161 is effective January 1, 2009. The
adoption of SFAS 161 does not have a significant impact on the Company's consolidated financial statements. 


 Useful Life of Intangible Assets  


In
April 2008, FASB issued FSP No. 142-3, "Determination of the Useful Life of Intangible Assets", which amends the factors that should be considered in developing renewal or
extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142. The purpose of this guidance is 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. Accordingly, entities are required to disclose information for a
recognized intangible asset that enables users of the financial statements to assess the extent to which the expected future cash flows associated with the asset are affected by the entities intent
and/or ability to renew or extend the arrangement. For the Company, FSP No. 142-3 is effective January 1, 2009. The adoption of FSP
No. 142-3 does not have a significant impact on the Company's consolidated financial statements. 



 The Hierarchy of Generally Accepted Accounting Principles  


In
May 2008, Statement of Financial Accounting Standard No. 162, "The Hierarchy of Generally Accepted Accounting Principles" ("SFAS 162") was issued, which identifies the sources
of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of non-governmental entities that are presented in conformity
with U.S. GAAP. FASB does not expect this standard to change current practice. SFAS 162 will become effective 60 days following the Security and Exchange Commission's approval of
the Public Company Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles". The adoption of
SFAS 162 does not have a material impact on the Company's consolidated financial statements. 



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Exhibit 4.6


BFI CANADA LTD. CONSOLIDATED BALANCE SHEETS March 31, 2009 (unaudited) and December 31, 2008 (in thousands of dollars)

BFI CANADA LTD. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME For the periods ended March 31, 2009 and 2008 (unaudited — in thousands of dollars, except net income per share or trust unit
amounts)

BFI CANADA LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS For the periods ended March 31, 2009 and 2008 (unaudited — in thousands of dollars)



BFI CANADA LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the period ended March 31, 2009 (unaudited — in thousands, except per share or trust unit amounts, unless otherwise stated)


BFI CANADA LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2008 and December 31, 2007 (in thousands, except per share or trust unit amounts, unless otherwise stated)