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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the fiscal year ended December 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT
OF 1934
 For the transition period from  to
 Commission File Number 1-14705
 ALLIED WASTE INDUSTRIES, INC.
  Delaware
    
    88-0228636(State or other jurisdiction of incorporation or organization)
    
    (IRS Employer Identification Number)18500 North Allied WayPhoenix, Arizona
    
    85054(Address of principal executive offices)
    
    (Zip Code)
 Registrants telephone number, including area code: (480) 627-2700
 Securities registered pursuant to Section 12(b) of the Act:
 Title of each class
    
    Name of each exchange on which registeredCommon Stock, $.01 par value
    
    New York Stock ExchangeSeries D Senior Mandatory Convertible Preferred
    
    New York Stock Exchange
 Securities registered pursuant to Section 12(g) of the Act:  None
 þ o
 o þ
 þ o
 o
  Large accelerated filer þ    
Accelerated filer o

  Non-accelerated filer   o
(Do not check if a smaller reporting company)

  Smaller Reporting Company o
 o þ




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##### 



TABLE OF CONTENTS
 PART IItem 1. Business
    
    
    1Item 1A. Risk Factors
    
    
    10Item 1B. Unresolved Staff Comments
    
    
    19Item 2. Properties
    
    
    19Item 3. Legal Proceedings
    
    
    20Item 4. Submission of Matters to a Vote of Security Holders
    
    
    24PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
    
    
    25Item 6. Selected Financial Data
    
    
    26Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    28Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    56Item 8. Financial Statements and Supplementary Data
    
    
    57Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
    
    
    120Item 9A. Controls and Procedures
    
    
    120Item 9B. Other Information
    
    
    120PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    120Item 11. Executive Compensation
    
    
    120Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
    
    
    121Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    121Item 14. Principal Accounting Fees and Services
    
    
    121PART IVItem 15. Exhibits, Financial Statement Schedule
    
    
    121Signatures
    
    
    173EX-10.122EX-10.123EX-10.124EX-10.125EX-10.126EX-10-127EX-10.128EX-12.1EX-14EX-21EX-23.1EX-31.1EX-31.2EX-32




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PART I
 
 Item 1. Business
 Overview
     
    
    People:we are a company where the best people want to work
 
    
    Customers:we are a recognized leader in service quality as defined by what our customers
value
 
    
    Efficiency: we execute through durable enterprise standards and processes with industry
leading efficiency
 
    
    Innovation:we innovate to create new service opportunities based on changing customer
needs and to improve operational processes
  1




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Business Strategy
  Vertical integration.
  Best practices.
 2




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Focus on customer service excellence
 Market growth and optimization.
 Maintaining financial capacity and infrastructure for future growth.
   Operations
  
 3




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Collection
 
    
    Commercial.We provide containerized non-hazardous solid waste disposal services to a
wide variety of commercial and industrial customers. Commercial revenue represents
approximately 36.2% of our collection revenue. We provide customers with containers that
are designed to be lifted mechanically and emptied into a collection vehicles compaction
hopper. Our commercial containers generally range in size from 1 to 8 cubic yards.
Commercial contract terms generally are for multiple years and commonly have renewal
options.
    
    Residential.We perform residential collection services under individual monthly
subscriptions directly to households or under exclusive contracts with municipal
governments that allow us to service all or a portion of the homes in the municipalities at
established rates. Residential revenue represents approximately 28.4% of our collection
revenue, approximately 40% of which is subscription revenue and approximately 60% of which
is municipal revenue. Municipal contracts generally are for multiple years and commonly
have renewal options. We seek to obtain municipal contracts that enhance the efficiency and
profitability of our operations as a result of the density of collection customers within a
given area. Prior to the end of the term of most municipal contracts, we will attempt to
renegotiate the contract, and if unable to do so, will generally re-bid the contract on a
sealed bid basis. We also make residential collection service arrangements directly with
households. We seek to enter into residential service arrangements where the route density
is high, thereby creating additional economic benefit. Residential collection fees are
either paid by the municipalities out of tax revenues or service charges, or are paid
directly by the residents who receive the service. We generally provide small containers
to our customers that are lifted either mechanically or manually and emptied into the
collection vehicle. The collection vehicle collects the waste from many customers before
traveling to a transfer station or landfill for disposal.
    
    Roll-off.We provide roll-off collection services to a wide variety of commercial and
industrial customers as well as residential customers. Roll-off revenue represents
approximately 30.4% of our collection revenue, of which approximately 29% is comprised of
temporary roll-off (construction & demolition, residential and commercial) and 71% is
permanent roll-off (industrial). We provide customers with containers that are designed to
be lifted mechanically and loaded onto the collection vehicle. Our roll-off containers
generally range in size from 20 to 40 cubic yards. The collection vehicle returns to the
transfer station or landfill after collecting the container from each customer.
    
    Recycling collection.Recycling collection services include curbside collection of
recyclable materials for residential customers and commercial and industrial collection of
recyclable materials. Recycling collection revenue represents approximately 5.0% of our
total collection revenue. We generally charge recycling fees based on the service sought by
the customer. The customer pays for the cost of removing, sorting and transferring
recyclable materials downstream in the recycling process.
 Transfer stations
 4




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Landfills.
  Recycling commodity.
 Organization, Sales and Marketing
   5




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Sales and Customer Service
   6




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Employees
  Competition
   Environmental and Other Regulations
    The Resource Conservation and Recovery Act of 1976, as amended (RCRA).
 7




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The Federal Water Pollution Control Act of 1972, as amended (the Clean Water Act).
 The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended
(CERCLA)
 The Clean Air Act of 1970, as amended (the Clean Air Act).
 The Occupational Safety and Health Act of 1970, as amended (OSHA).
 Future federal legislation.
 8




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State regulation.
   Liability Insurance and Bonding
   Corporate Governance
   9




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www.alliedwaste.com
  www.alliedwaste.com.
 
 Item 1A. Risk Factors
  The waste industry is highly competitive and includes large companies and municipalities that may
have greater financial and operational resources, flexibility to reduce prices and other
competitive advantages that could make it difficult for us to compete effectively.
  Price increases may not be adequate to offset the impact of inflation on our costs and/or may cause
us to lose volume.
  Downturns in the U.S. economy have had and may have an adverse impact on our operating results.
  10




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Adverse weather conditions may limit our operations and increase the costs of collection and
disposal.
  We currently have matters pending with the Internal Revenue Service (IRS), which could result in
large cash expenditures and could have a material adverse impact on our operating results and cash
flows.
     11




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Income Taxes,
 Increases in the cost of fuel or oil for any extended period of time will increase our operating
expenses.
   Fluctuations in prices for recycled commodities that we sell to customers may adversely affect our
revenues, operating income and cash flows .
  We may be subject to influences of the workforce, including work stoppages, which could increase
our operating costs and disrupt our operations .
   12




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We may not realize all of the expected benefits from our business development plan.
   We are subject to costly environmental regulations that may affect our operating margins, restrict
our operations and subject us to additional liability.
    We may be unable to obtain required permits or to expand existing permitted capacity of our
landfills, which could decrease our revenues and increase our costs.
  13




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We may have potential environmental liabilities that are not covered by our insurance .
  Despite our efforts, we may incur additional hazardous substances liability in excess of amounts
presently known and accrued.
  We cannot assure you that we will continue to operate our landfills at currently estimated volumes
due to the use of alternatives to landfill disposal caused by state requirements or voluntary
initiatives.
 .
 14




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If we are unable to execute our business strategy, our waste disposal expenses could increase
significantly.
  The solid waste industry is a capital-intensive industry and the amount we spend on capital
expenditures may increase, which could require us to issue additional equity or debt to fund our
operations or impair our ability to grow our business.
    15




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We
may not be successful in continuing to service or repay our indebtedness, which could have an adverse affect
on our business, financial condition and results of operations.
   Covenants in our debt instruments may limit our ability to operate our business and any failure by
us to comply with such covenants may accelerate our obligation to repay the underlying debt.
   A downgrade in our bond ratings could adversely affect our liquidity by increasing the cost of debt
and financial assurance instruments.
  16




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Changes in interest rates may negatively affect our results of operations.
  If we are unable to obtain necessary financial assurances, it could negatively impact our liquidity
and capital resources.
  Our goodwill may become impaired, which could result in a material non-cash charge to our results
of operations.
  Currently pending or future litigation or governmental proceedings could result in material adverse
consequences, including judgments or settlements.
  Our business would be harmed if we lose the services of our key personnel.
  17




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Businesses we acquire may have undisclosed liabilities and we may be unable to integrate these
businesses successfully .
   The possibility of disposal site developments, expansion projects or pending acquisitions not being
completed or certain other events could result in a material charge against our earnings .
   If we inadequately accrue for landfill capping, closure and post-closure costs, our results of
operations and financial condition may be adversely affected.
  18




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We are required to make accounting and tax-related estimates and judgments in the ordinary course
of business .
  The introduction of new accounting rules, laws or regulations could adversely impact our results of
operations.
  Our obligation to fund multi-employer pension plans to which we contribute may have an adverse
impact on us.
  
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
   19




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Item 3. Legal Proceedings
    Securities 
  Landfill permitting 
  20




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Environmental 
 Landfill Accounting
  21




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22




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Tax 
  Risk management companies
      23




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Exchange of partnership interests
  Methane gas .
  
 Item 4. Submission of Matters to a Vote of Security Holders
  24




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PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
 Price Range of Common Stock
  High
    
    LowYear Ended December 31, 2007:First Quarter
    
    $
    13.22
    
    
    $
    12.23Second Quarter
    
    
    14.00
    
    
    
    12.41Third Quarter
    
    
    13.97
    
    
    
    11.90Fourth Quarter
    
    
    13.15
    
    
    
    10.75Year Ended December 31, 2006:First Quarter
    
    $
    12.24
    
    
    $
    8.53Second Quarter
    
    
    14.26
    
    
    
    10.66Third Quarter
    
    
    11.27
    
    
    
    9.78Fourth Quarter
    
    
    13.50
    
    
    
    11.19
  Dividend Policy
 Long-term Debt
 Purchases of Equity Securities by Our Company and Affiliates
  Recent Sales of Unregistered Securities
  Performance Graph
  25




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December 31,2002
    
    2003
    
    2004
    
    2005
    
    2006
    
    2007Allied Waste Industries, Inc.
    
    $
    10.00
    
    
    $
    13.88
    
    
    $
    9.28
    
    
    $
    8.74
    
    
    $
    12.29
    
    
    $
    11.02Index
    
    
    100.00
    
    
    
    138.88
    
    
    
    92.80
    
    
    
    87.40
    
    
    
    122.90
    
    
    
    110.20Dow Jones Waste & Disposal
Services Index
    
    
    62.19
    
    
    
    82.56
    
    
    
    84.03
    
    
    
    87.46
    
    
    
    105.64
    
    
    
    108.69Index
    
    
    100.00
    
    
    
    132.75
    
    
    
    135.12
    
    
    
    140.63
    
    
    
    169.87
    
    
    
    174.77Standard and
Poors 500 Stock Index
    
    
    879.82
    
    
    
    1,111.92
    
    
    
    1,211.92
    
    
    
    1,248.29
    
    
    
    1,418.30
    
    
    
    1,468.36Index
    
    
    100.00
    
    
    
    126.38
    
    
    
    137.75
    
    
    
    141.88
    
    
    
    161.20
    
    
    
    166.89
 
 Item 6. Selected Financial Data
  26




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Year Ended December 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003Statement of Operations Data(1):Revenues
    
    $
    6,068.7
    
    
    $
    5,908.5
    
    
    $
    5,612.2
    
    
    $
    5,396.5
    
    
    $
    5,264.1Cost of operations
    
    
    3,787.1
    
    
    
    3,786.4
    
    
    
    3,654.6
    
    
    
    3,428.8
    
    
    
    3,235.8Selling, general and administrative
expenses
    
    
    631.9
    
    
    
    587.3
    
    
    
    510.2
    
    
    
    544.7
    
    
    
    471.7Depreciation and amortization
    
    
    553.5
    
    
    
    557.7
    
    
    
    543.6
    
    
    
    547.1
    
    
    
    534.1Loss from divestitures and asset
impairments(2)
    
    
    40.5
    
    
    
    22.5
    
    
    
    
    
    
    
    
    
    
    
    Operating income
    
    
    1,055.7
    
    
    
    954.6
    
    
    
    903.8
    
    
    
    875.9
    
    
    
    1,022.5Interest expense and other(3)
    
    
    538.4
    
    
    
    563.4
    
    
    
    583.1
    
    
    
    752.5
    
    
    
    826.1Income from continuing operations before
income taxes
    
    
    517.3
    
    
    
    391.2
    
    
    
    320.7
    
    
    
    123.4
    
    
    
    196.4Income tax expense
    
    
    207.1
    
    
    
    235.3
    
    
    
    131.1
    
    
    
    70.6
    
    
    
    86.6Minority interests ss
    
    
    0.4
    
    
    
    0.1
    
    
    
    (0.2
    )
    
    
    (2.7
    )
    
    
    1.9Income from continuing operations
    
    $
    309.8
    
    
    $
    155.8
    
    
    $
    189.8
    
    
    $
    55.5
    
    
    $
    107.9Basic EPS:Continuing operations
    
    $
    0.74
    
    
    $
    0.32
    
    
    $
    0.42
    
    
    $
    0.11
    
    
    $
    (2.37
    )Weighted average common shares
    
    
    368.8
    
    
    
    356.7
    
    
    
    326.9
    
    
    
    315.0
    
    
    
    203.8Diluted EPS:Continuing operations
    
    $
    0.71
    
    
    $
    0.32
    
    
    $
    0.42
    
    
    $
    0.11
    
    
    $
    (2.37
    )Weighted average common and common
equivalent shares
    
    
    443.0
    
    
    
    359.3
    
    
    
    330.1
    
    
    
    319.7
    
    
    
    203.8Statement of Cash Flows Data(1):Cash flows from operating activities
    
    $
    1,066.2
    
    
    $
    852.3
    
    
    $
    717.6
    
    
    $
    686.1
    
    
    $
    779.7Cash flows used for investing activities
(including asset purchases and sales, and
capital expenditures)
    
    
    (582.7
    )
    
    
    (601.6
    )
    
    
    (672.5
    )
    
    
    (524.9
    )
    
    
    (235.8
    )Cash flows used for financing activities
(including debt repayments)
    
    
    (334.8
    )
    
    
    (223.8
    )
    
    
    (67.4
    )
    
    
    (543.0
    )
    
    
    (296.2
    )Cash (used for) provided by discontinued
operations
    
    
    (11.9
    )
    
    
    11.1
    
    
    
    10.4
    
    
    
    5.1
    
    
    
    17.8Balance Sheet Data(1):Cash and cash equivalents
    
    $
    230.9
    
    
    $
    94.1
    
    
    $
    56.1
    
    
    $
    68.0
    
    
    $
    444.7Working capital (deficit)
    
    
    (1,088.9
    )
    
    
    (478.5
    )
    
    
    (650.0
    )
    
    
    (827.4
    )
    
    
    (278.2
    )Property and equipment, net
    
    
    4,430.4
    
    
    
    4,258.7
    
    
    
    4,176.1
    
    
    
    4,032.0
    
    
    
    3,923.4Goodwill, net
    
    
    8,020.0
    
    
    
    8,126.0
    
    
    
    8,184.2
    
    
    
    8,201.9
    
    
    
    8,312.9Total assets
    
    
    13,948.7
    
    
    
    13,811.0
    
    
    
    13,661.3
    
    
    
    13,539.2
    
    
    
    13,860.9Total debt
    
    
    6,642.9
    
    
    
    6,910.6
    
    
    
    7,091.7
    
    
    
    7,757.0
    
    
    
    8,234.1Stockholders equity (4)
    
    
    3,904.2
    
    
    
    3,598.9
    
    
    
    3,439.4
    
    
    
    2,604.9
    
    
    
    2,517.7Total debt to total capitalization
(including preferred stock)
    
    
    63
    %
    
    
    66
    %
    
    
    67
    %
    
    
    75
    %
    
    
    77
    %
 
 (1)
    
    During 2007, 2004 and 2003, we sold or held for sale certain operations that met the
criteria for reporting as discontinued operations. The selected financial data for all prior
periods have been reclassified to include these operations as discontinued operations.(2)
    
    Loss from divestitures and asset impairments include asset sales completed as a
result of our market rationalization focus and are not included in discontinued operations
($13.4 million loss in 2007 and $7.6 million loss in 2006). The 2007 amount also includes
asset impairments of $27.1 million, of which $24.5 million related to asset impairments of a
landfill in our Midwestern region that until recently, was managed by a third party according
to a partnership agreement. The 2006 amount also includes $9.7 million of landfill asset
impairments resulting from managements decision to discontinue development and operations of
the sites and a $5.2 million charge related to the relocation of our operations support
center.(3)
    
    Includes costs incurred to extinguish debt for the years ended December 31, 2007,
2006, 2005, 2004 and 2003 of $59.6 million, $41.3 million, $62.6 million, $156.2 million and
$108.1 million, respectively.(4)
    
    In 2006, we recorded an after-tax charge of $57.4 million to stockholders equity
relating to the adoption of SFAS No.158, Employers Accounting for Defined Benefit Pension and
Other Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106 and 132(R)(SFAS
158). 27




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Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion should be read in conjunction with our audited consolidated financial
statements and the notes thereto, included elsewhere herein. Please note that unless otherwise
specifically indicated, discussion of our results relate to our continuing operations. This
discussion may contain forward-looking statements that anticipate results based upon assumptions as
to future events that may not prove to be accurate. See Disclosure Regarding Forward-Looking
Statements below.
 Executive Summary
   Property and Equipment
    28




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Subsequent events 
    30




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Results of Operations
  Statement of Operations Data:
 Year Ended December 31,2007
    
    
    2006
    
    
    2005Revenues
    
    $
    6,068.7
    
    
    
    100.0
    %
    
    $
    5,908.5
    
    
    
    100.0
    %
    
    $
    5,612.2
    
    
    
    100.0
    %Cost of operations
    
    
    3,787.1
    
    
    
    62.4
    
    
    
    3,786.4
    
    
    
    64.1
    
    
    
    3,654.6
    
    
    
    65.1Selling, general and
administrative expenses
    
    
    631.9
    
    
    
    10.4
    
    
    
    587.3
    
    
    
    9.9
    
    
    
    510.2
    
    
    
    9.1Depreciation and amortization
    
    
    553.5
    
    
    
    9.1
    
    
    
    557.7
    
    
    
    9.4
    
    
    
    543.6
    
    
    
    9.7Loss from divestitures and asset
impairments
    
    
    40.5
    
    
    
    0.7
    
    
    
    22.5
    
    
    
    0.4
    
    
    
    
    
    
    
    Operating income
    
    
    1,055.7
    
    
    
    17.4
    
    
    
    954.6
    
    
    
    16.2
    
    
    
    903.8
    
    
    
    16.1Interest expense and other
    
    
    538.4
    
    
    
    8.9
    
    
    
    563.4
    
    
    
    9.6
    
    
    
    583.1
    
    
    
    10.4Income from continuing operations
before income taxes
    
    
    517.3
    
    
    
    8.5
    
    
    
    391.2
    
    
    
    6.6
    
    
    
    320.7
    
    
    
    5.7Income tax expense
    
    
    207.1
    
    
    
    3.4
    
    
    
    235.3
    
    
    
    4.0
    
    
    
    131.1
    
    
    
    2.3Minority interests
    
    
    0.4
    
    
    
    0.0
    
    
    
    0.1
    
    
    
    0.0
    
    
    
    (0.2
    )
    
    
    0.0Income from continuing operations
    
    
    309.8
    
    
    
    5.1
    
    
    
    155.8
    
    
    
    2.6
    
    
    
    189.8
    
    
    
    3.4Discontinued operations, net of tax
    
    
    (36.2
    )
    
    
    (0.6
    )
    
    
    5.1
    
    
    
    0.1
    
    
    
    14.8
    
    
    
    0.2Cumulative effect of change in
accounting principle, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.8
    )
    
    
    0.0Net income
    
    
    273.6
    
    
    
    4.5
    
    
    
    160.9
    
    
    
    2.7
    
    
    
    203.8
    
    
    
    3.6Dividends on preferred stock
    
    
    (37.5
    )
    
    
    (0.6
    )
    
    
    (42.9
    )
    
    
    0.7
    
    
    
    (52.0
    )
    
    
    0.9Net income available to common
shareholders
    
    $
    236.1
    
    
    
    3.9
    
    
    $
    118.0
    
    
    
    2.0
    %
    
    $
    151.8
    
    
    
    2.7
    %
 Revenues.
  Revenues by service line (in millions):
 Year Ended December 31,2007
    
    
    2006
    
    
    2005CollectionResidential
    
    $
    1,201.6
    
    
    $
    1,190.0
    
    
    $
    1,172.2Commercial
    
    
    1,535.5
    
    
    
    1,457.0
    
    
    
    1,356.7Roll-off (1)
    
    
    1,290.3
    
    
    
    1,304.5
    
    
    
    1,223.8Recycling
    
    
    210.2
    
    
    
    189.8
    
    
    
    186.4Total Collection
    
    
    4,237.6
    
    
    
    4,141.3
    
    
    
    3,939.1DisposalLandfill
    
    
    832.7
    
    
    
    839.2
    
    
    
    798.4Transfer
    
    
    436.0
    
    
    
    423.1
    
    
    
    420.7Total Disposal
    
    
    1,268.7
    
    
    
    1,262.3
    
    
    
    1,219.1Recycling  Commodity
    
    
    257.2
    
    
    
    212.2
    
    
    
    219.7Other(2)
    
    
    305.2
    
    
    
    292.7
    
    
    
    234.3Total Revenues
    
    $
    6,068.7
    
    
    $
    5,908.5
    
    
    $
    5,612.2
 
 (1)
    
    Consists of revenue generated from commercial, industrial and residential customers
from waste collected in roll-off containers that are loaded onto collection vehicles.(2)
    
    Consists primarily of revenue from our National Accounts business where the work has
been subcontracted, revenue generated from transporting waste via railway or truck and revenue
from liquid waste disposal. 31




---



##### Table of Contents



Revenues by region (1) (in millions, except percentages):
 Year Ended December 31,2007
    
    
    2006
    
    
    2005Midwestern
    
    $
    1,236.4
    
    
    
    20.4
    %
    
    $
    1,210.3
    
    
    
    20.4
    %
    
    $
    1,175.2
    
    
    
    20.9
    %Northeastern
    
    
    1,258.3
    
    
    
    20.7
    
    
    
    1,256.6
    
    
    
    21.3
    
    
    
    1,247.2
    
    
    
    22.2Southeastern
    
    
    965.1
    
    
    
    15.9
    
    
    
    965.5
    
    
    
    16.3
    
    
    
    900.8
    
    
    
    16.1Southwestern
    
    
    1,027.4
    
    
    
    16.9
    
    
    
    991.6
    
    
    
    16.8
    
    
    
    939.6
    
    
    
    16.7Western
    
    
    1,435.3
    
    
    
    23.7
    
    
    
    1,351.2
    
    
    
    22.9
    
    
    
    1,265.4
    
    
    
    22.6Other(2)
    
    
    146.2
    
    
    
    2.4
    
    
    
    133.3
    
    
    
    2.3
    
    
    
    84.0
    
    
    
    1.5Total Revenues
    
    $
    6,068.7
    
    
    
    100.0
    %
    
    $
    5,908.5
    
    
    
    100.0
    %
    
    $
    5,612.2
    
    
    
    100.0
    %
 
 (1)
    
    See discussion in Note 17, Segment Reporting, to our consolidated financial
statements.(2)
    
    Amounts relate primarily to our subsidiaries that provide services throughout the
organization and not on a regional basis. Cost of operations labor and related benefits transfer and disposal costs maintenance and repairs transportation and subcontractor costs, fuel, disposal and franchise fees and taxes landfill operating costs, risk management, cost of goods sold, other,
  Year Ended December 31,2007
    
    
    2006
    
    
    2005Labor and related benefits
    
    $
    1,078.9
    
    
    
    17.8
    %
    
    $
    1,092.0
    
    
    
    18.5
    %
    
    $
    1,090.1
    
    
    
    19.4
    %Transfer and disposal costs
    
    
    452.5
    
    
    
    7.5
    
    
    
    475.3
    
    
    
    8.0
    
    
    
    471.9
    
    
    
    8.4Maintenance and repairs
    
    
    482.5
    
    
    
    8.0
    
    
    
    491.5
    
    
    
    8.3
    
    
    
    485.5
    
    
    
    8.7Transportation and subcontractor costs
    
    
    505.8
    
    
    
    8.3
    
    
    
    507.4
    
    
    
    8.6
    
    
    
    446.6
    
    
    
    8.0Fuel
    
    
    308.7
    
    
    
    5.1
    
    
    
    291.6
    
    
    
    4.9
    
    
    
    235.8
    
    
    
    4.2Disposal and franchise fees and taxes
    
    
    362.0
    
    
    
    6.0
    
    
    
    365.5
    
    
    
    6.2
    
    
    
    347.7
    
    
    
    6.2Landfill operating costs
    
    
    162.1
    
    
    
    2.7
    
    
    
    148.0
    
    
    
    2.5
    
    
    
    147.6
    
    
    
    2.6Risk management
    
    
    154.1
    
    
    
    2.5
    
    
    
    166.0
    
    
    
    2.8
    
    
    
    171.0
    
    
    
    3.0Cost of goods sold
    
    
    73.9
    
    
    
    1.2
    
    
    
    54.3
    
    
    
    0.9
    
    
    
    45.2
    
    
    
    0.8Other
    
    
    206.6
    
    
    
    3.3
    
    
    
    194.8
    
    
    
    3.4
    
    
    
    213.2
    
    
    
    3.8Total cost of operations
    
    $
    3,787.1
    
    
    
    62.4
    %
    
    $
    3,786.4
    
    
    
    64.1
    %
    
    $
    3,654.6
    
    
    
    65.1
    %
 Selling, general and administrative expenses.
 32




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##### Table of Contents



Year Ended December 31,2007
    
    
    2006
    
    
    2005Salaries
    
    $
    396.4
    
    
    
    6.5
    %
    
    $
    358.7
    
    
    
    6.1
    %
    
    $
    319.6
    
    
    
    5.7
    %Rent and office costs
    
    
    39.2
    
    
    
    0.6
    
    
    
    40.3
    
    
    
    0.7
    
    
    
    40.2
    
    
    
    0.7Professional fees
    
    
    64.8
    
    
    
    1.1
    
    
    
    56.9
    
    
    
    1.0
    
    
    
    50.7
    
    
    
    0.9Provision for doubtful accounts
    
    
    19.9
    
    
    
    0.3
    
    
    
    18.3
    
    
    
    0.3
    
    
    
    17.8
    
    
    
    0.3Other
    
    
    111.6
    
    
    
    1.9
    
    
    
    113.1
    
    
    
    1.8
    
    
    
    81.9
    
    
    
    1.5Total selling, general and administrative
expenses
    
    $
    631.9
    
    
    
    10.4
    %
    
    $
    587.3
    
    
    
    9.9
    %
    
    $
    510.2
    
    
    
    9.1
    %
 Depreciation and amortization. Critical Accounting
Judgments and Estimates Organization and Summary of Significant Accounting Policies
  Year Ended December 31,2007
    
    
    2006
    
    
    2005Depreciation of fixed assets
    
    $
    323.2
    
    
    
    5.3
    %
    
    $
    311.5
    
    
    
    5.3
    %
    
    $
    298.1
    
    
    
    5.3
    %Landfill and other amortization
    
    
    230.3
    
    
    
    3.8
    
    
    
    246.2
    
    
    
    4.1
    
    
    
    245.5
    
    
    
    4.4Total depreciation and amortization
    
    $
    553.5
    
    
    
    9.1
    %
    
    $
    557.7
    
    
    
    9.4
    %
    
    $
    543.6
    
    
    
    9.7
    %
 Landfill disposal capacity and operating lives. Critical Accounting Judgments and Estimates Organization and Summary
of Significant Accounting Policies
 33




---



##### Table of Contents



ProbablePermitted
    
    ExpansionDisposal
    
    Disposal
    
    Total DisposalCapacity
    
    Capacity
    
    CapacityBalance as of December 31, 2006
    
    
    2,527.3
    
    
    
    278.1
    
    
    
    2,805.4Acquisitions, divestitures and closures
    
    
    63.0
    
    
    
    1.1
    
    
    
    64.1Additions to probable expansion disposal capacity
    
    
    
    
    
    
    28.5
    
    
    
    28.5Net change to permitted disposal capacity
    
    
    50.1
    
    
    
    (33.9
    )
    
    
    16.2Disposal capacity consumed
    
    
    (73.2
    )
    
    
    
    
    
    
    (73.2
    )Changes in engineering estimates (1)
    
    
    68.5
    
    
    
    14.0
    
    
    
    82.5Balance as of December 31, 2007
    
    
    2,635.7
    
    
    
    287.8
    
    
    
    2,923.5
 
 (1)
    
    Relates primarily to increased density of waste at our landfills resulting from
improved operational procedures, optimization of daily cover materials and improved
utilization of compaction equipment.  At December 31, 2007
    
    At December 31, 2006Number of Sites
    
    Percent of Total
    
    Number of Sites
    
    Percent of Total0 to 5 years
    
    
    23
    
    
    
    14
    %
    
    
    31
    
    
    
    19
    %5 to 10 years
    
    
    8
    
    
    
    5
    
    
    
    8
    
    
    
    510 to 20 years
    
    
    42
    
    
    
    26
    
    
    
    47
    
    
    
    2920 to 40 years
    
    
    48
    
    
    
    30
    
    
    
    38
    
    
    
    2340+ years
    
    
    40
    
    
    
    25
    
    
    
    39
    
    
    
    24Total
    
    
    161
    
    
    
    100
    %
    
    
    163
    
    
    
    100
    %
 Interest expense and other
 Year Ended December 31,2007
    
    
    2006
    
    
    2005Interest expense and otherInterest expense, gross
    
    $
    486.5
    
    
    $
    526.2
    
    
    $
    519.8Interest income
    
    
    (5.9
    )
    
    
    (4.2
    )
    
    
    (3.0
    )Interest capitalized for development projects
    
    
    (19.2
    )
    
    
    (17.2
    )
    
    
    (14.1
    )Accretion of debt and amortization of debt issuance costs
    
    
    20.5
    
    
    
    21.8
    
    
    
    22.7Costs incurred to early extinguish debt
    
    
    59.6
    
    
    
    41.3
    
    
    
    62.6Interest expense allocated to discontinued operations
    
    
    (3.1
    )
    
    
    (4.5
    )
    
    
    (4.9
    )Total interest expense and other from continuing operations
    
    $
    538.4
    
    
    $
    563.4
    
    
    $
    583.1
 Years Ended December 31, 2007 and 2006
 Revenues
  Reported revenues in 2006
    
    $
    5,908.5Core business organic growthIncrease from average base per unit price change
    
    
    306.9Increase from fuel recovery fees
    
    
    25.4Decrease from net volume change
    
    
    (191.6
    )Net divested revenues and adjustments
    
    
    (11.6
    )Increase in recycling and other
    
    
    31.1Reported revenues in 2007
    
    $
    6,068.7
 34




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##### Table of Contents



Cost of operations
  Selling, general and administrative expenses
 Depreciation and amortization.
 Loss from divestitures and asset impairments
 35




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##### Table of Contents



Interest expense and other
 Income tax expense.
 Discontinued operations
 Dividends on preferred stock.
 Years Ended December 31, 2006 and 2005
 Revenues
 36




---



##### Table of Contents



Reported revenues in 2005
    
    $
    5,612.2Core business organic growthIncrease from average base per unit price change
    
    
    197.9Increase from fuel recovery fees
    
    
    99.3Increase from net volume change
    
    
    54.8Net divested revenues and adjustments
    
    
    (57.6
    )Increase in recycling and other
    
    
    1.9Reported revenues in 2006
    
    $
    5,908.5
   Cost of operations
   37




---



##### Table of Contents



Selling, general and administrative expenses
 Depreciation and amortization.
 Loss from divestitures and asset impairments
 Interest expense and other
 Income tax expense.
 Discontinued operations
 Dividends on preferred stock.
 38




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##### Table of Contents



Liquidity and Capital Resources
     39




---



##### Table of Contents



Years Ended December 31,2007
    
    
    2006
    
    
    2005Operating Activities:Net income
    
    $
    273.6
    
    
    $
    160.9
    
    
    $
    203.8Discontinued operations, net of tax
    
    
    36.2
    
    
    
    (5.1
    )
    
    
    (14.8
    )Non-cash expenses (1)
    
    
    794.1
    
    
    
    811.2
    
    
    
    702.1Change in working capital (2)
    
    
    (15.7
    )
    
    
    (78.8
    )
    
    
    (132.4
    )Capping, closure, post-closure and environmental expenditures, net of
accretion
    
    
    (22.0
    )
    
    
    (35.9
    )
    
    
    (41.1
    )Cash provided by operating activities from continuing operations
    
    
    1,066.2
    
    
    
    852.3
    
    
    
    717.6Investing Activities:Proceeds from divestitures less the cost of acquisitions, net of cash
divested/acquired (3)
    
    
    80.7
    
    
    
    50.4
    
    
    
    0.9Proceeds from sale of fixed assets
    
    
    25.8
    
    
    
    21.7
    
    
    
    20.2Capital expenditures, excluding acquisitions
    
    
    (670.0
    )
    
    
    (661.1
    )
    
    
    (685.6
    )Capitalized interest
    
    
    (19.2
    )
    
    
    (17.2
    )
    
    
    (14.1
    )Change in deferred acquisition costs, notes receivable and other
    
    
    
    
    
    
    4.6
    
    
    
    6.1Cash used for investing activities from continuing operations
    
    
    (582.7
    )
    
    
    (601.6
    )
    
    
    (672.5
    )Financing Activities:Net proceeds from sale of Series D preferred stock
    
    
    
    
    
    
    
    
    
    
    580.8Proceeds from long-term debt, net of issuance costs
    
    
    1,502.2
    
    
    
    1,239.3
    
    
    
    3,043.5Payments of long-term debt
    
    
    (1,914.1
    )
    
    
    (1,438.4
    )
    
    
    (3,740.2
    )Payment of preferred stock dividends
    
    
    (37.5
    )
    
    
    (48.3
    )
    
    
    (48.9
    )Net receipts from restricted trust
    
    
    90.7
    
    
    
    
    
    
    
    Net proceeds from sale of common stock, exercise of stock options and
other
    
    
    23.9
    
    
    
    23.6
    
    
    
    97.4Cash used for financing activities from continuing operations
    
    
    (334.8
    )
    
    
    (223.8
    )
    
    
    (67.4
    )Cash (used for) provided by discontinued operations
    
    
    (11.9
    )
    
    
    11.1
    
    
    
    10.4Increase (decrease) in cash and cash equivalents
    
    $
    136.8
    
    
    $
    38.0
    
    
    $
    (11.9
    )
 
 (1)
    
    Consists principally of provisions for depreciation and amortization, stock-based
compensation expense, allowance for doubtful accounts, accretion of debt and amortization of
debt issuance costs, write-off of deferred debt issuance costs, non-cash reduction in
acquisition accruals, non-cash asset impairments and loss on divestitures, non-cash gain on
sale of fixed assets, deferred income taxes and cumulative effect of change in accounting
principle, net of tax.(2)
    
    Includes the net change in checks outstanding related to our primary disbursement
account of $13.1 million, $47.3 million and $21.9 million at December 31, 2007, 2006 and 2005,
respectively, which was previously classified with financing activities, See Note 1,
Organization and Summary of Significant Accounting Policies.(3)
    
    During 2007, we acquired solid waste operations representing approximately $34.5
million ($34.5 million, net of intercompany eliminations) in annual revenues and sold
operations representing approximately $150.7 million ($132.2 million, net of intercompany
eliminations) in annual revenues. During 2006, we acquired solid waste operations representing
approximately $8.3 million ($8.2 million, net of intercompany eliminations) in annual revenues
and sold operations representing approximately $116.2 million ($103.6 million, net of
intercompany eliminations) in annual revenues. During 2005, we acquired solid waste
operations representing approximately $19.5 million ($19.5 million, net of intercompany
eliminations) in annual revenues and sold operations representing approximately $16.4 million
($16.4 million, net of intercompany eliminations) in annual revenues.  40




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##### Table of Contents



Sources of cash:
    
    2007
    
    
    2006
    
    
    2005Cash provided by continuing operations
    
    $
    1,066.2
    
    
    $
    852.3
    
    
    $
    717.6Net proceeds from issuance of common stock and exercise of
stock options
    
    
    23.9
    
    
    
    23.6
    
    
    
    97.4Net proceeds from issuance of preferred stock
    
    
    
    
    
    
    
    
    
    
    580.8Decrease in cash balance
    
    
    
    
    
    
    
    
    
    
    11.9Net receipts from restricted trust
    
    
    90.7
    
    
    
    
    
    
    
    Net proceeds from divestitures, net of acquisitions
    
    
    80.7
    
    
    
    50.4
    
    
    
    0.9Proceeds from the sale of fixed assets
    
    
    25.8
    
    
    
    21.7
    
    
    
    20.2Total
    
    $
    1,287.3
    
    
    $
    948.0
    
    
    $
    1,428.8
 Uses of cash:
    
    2007
    
    
    2006
    
    
    2005Capital expenditures
    
    $
    670.0
    
    
    $
    661.1
    
    
    $
    685.6Debt repayments, net of debt proceeds
    
    
    390.0
    
    
    
    187.4
    
    
    
    666.8Debt issuance costs
    
    
    21.9
    
    
    
    11.7
    
    
    
    29.9Increase in cash balance
    
    
    136.8
    
    
    
    38.0
    
    
    
    Payment of preferred stock cash dividends
    
    
    37.5
    
    
    
    48.3
    
    
    
    48.9Other non-operating net cash outflows (inflows)
    
    
    31.1
    
    
    
    1.5
    
    
    
    (2.4
    )Total
    
    $
    1,287.3
    
    
    $
    948.0
    
    
    $
    1,428.8
 Capital expenditures.
  2007
    
    
    2006
    
    
    2005Vehicles, containers and heavy equipment
    
    $
    346.4
    
    
    $
    361.4
    
    
    $
    370.1Landfill development
    
    
    266.1
    
    
    
    247.2
    
    
    
    264.7Other (1)
    
    
    57.5
    
    
    
    52.5
    
    
    
    50.8Total capital expenditures, excluding acquisitions
    
    $
    670.0
    
    
    $
    661.1
    
    
    $
    685.6
 
 (1)
    
    Includes land and improvements, buildings and improvements, and furniture and office
equipment. Financing activities. Debt Covenants
 Significant financing events in 2007.
 41




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##### Table of Contents



Contractual Obligations and Commitments
  December 31, 2007
    
    
    December 31, 2006Ending
    
    
    Effective
    
    
    Annual
    
    
    Ending
    
    
    Effective
    
    
    AnnualDebt
    
    
    Interest
    
    
    Interest
    
    
    Debt
    
    
    Interest
    
    
    InterestDebt Instrument
    
    Balance
    
    
    Rate (1)
    
    
    Expense
    
    
    Balance
    
    
    Rate (1)
    
    
    ExpenseRevolving credit facility (2)
    
    $
    
    
    
    
    6.98
    %
    
    $
    11.5
    
    
    $
    
    
    
    
    8.81
    %
    
    $
    19.62005 Term loans
    
    
    806.7
    
    
    
    6.75
    
    
    
    70.0
    
    
    
    1,105.0
    
    
    
    7.34
    
    
    
    88.3Senior secured notes
    
    
    4,399.8
    
    
    
    7.20
    
    
    
    341.4
    
    
    
    4,644.6
    
    
    
    7.60
    
    
    
    363.1Senior unsecured notes
    
    
    400.0
    
    
    
    7.55
    
    
    
    30.2
    
    
    
    400.0
    
    
    
    7.55
    
    
    
    30.2Senior subordinated
convertible debenture
    
    
    230.0
    
    
    
    4.34
    
    
    
    10.0
    
    
    
    230.0
    
    
    
    4.34
    
    
    
    10.0Receivables secured loan
    
    
    393.7
    
    
    
    6.37
    
    
    
    17.2
    
    
    
    230.0
    
    
    
    6.02
    
    
    
    13.1Other
    
    
    412.7
    
    
    
    6.21
    
    
    
    24.9
    
    
    
    301.0
    
    
    
    6.95
    
    
    
    22.8Total
    
    $
    6,642.9
    
    
    
    6.96
    
    
    $
    505.2
    
    
    $
    6,910.6
    
    
    
    7.37
    
    
    $
    547.1
 
 (1) Includes the effect of our interest costs incurred, amortization of deferred debt
issuance costs and premiums or discounts.(2) Reflects weighted average interest rate and excludes fees. There were no borrowings
outstanding at December 31, 2007 
    and 2006; the rate presented is the average of the Adjusted
LIBOR rate and the ABR plus applicable margins.
  42




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##### Table of Contents



Contractual Obligations
    
    2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    Thereafter
    
    
    TotalRecorded obligations:Long-term debt principal (1)
    
    $
    555.9
    
    
    $
    1.0
    
    
    $
    374.1
    
    
    $
    675.3
    
    
    $
    0.5
    
    
    $
    5,097.2
    
    
    $
    6,704.0Long-term debt interest (1)
    
    
    435.6
    
    
    
    435.1
    
    
    
    422.8
    
    
    
    390.1
    
    
    
    369.8
    
    
    
    1,715.3
    
    
    
    3,768.7Capital lease principal
    
    
    1.6
    
    
    
    1.4
    
    
    
    1.3
    
    
    
    1.0
    
    
    
    0.7
    
    
    
    6.3
    
    
    
    12.3Capital lease interest
    
    
    1.0
    
    
    
    0.9
    
    
    
    0.7
    
    
    
    0.7
    
    
    
    0.6
    
    
    
    1.9
    
    
    
    5.8Capping, closure and post-
closure obligations
    
    
    73.2
    
    
    
    62.9
    
    
    
    73.2
    
    
    
    68.0
    
    
    
    54.9
    
    
    
    3,035.0
    
    
    
    3,367.2Income tax uncertainties
    
    
    380.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    380.7Other long-term liabilities
    
    
    102.2
    
    
    
    65.9
    
    
    
    43.7
    
    
    
    33.1
    
    
    
    24.4
    
    
    
    98.2
    
    
    
    367.5Unrecorded obligations:Operating leases
    
    
    40.3
    
    
    
    34.9
    
    
    
    28.5
    
    
    
    23.8
    
    
    
    19.8
    
    
    
    106.4
    
    
    
    253.7Purchase obligations:(2)
Royalties
    
    
    3.2
    
    
    
    6.4
    
    
    
    8.2
    
    
    
    8.7
    
    
    
    9.3
    
    
    
    169.0
    
    
    
    204.8Disposal related
    
    
    101.6
    
    
    
    65.3
    
    
    
    40.9
    
    
    
    35.3
    
    
    
    31.3
    
    
    
    59.3
    
    
    
    333.7Other
    
    
    63.0
    
    
    
    13.0
    
    
    
    11.9
    
    
    
    9.2
    
    
    
    9.1
    
    
    
    241.4
    
    
    
    347.6Total cash contractual
obligations
    
    $
    1,758.3
    
    
    $
    686.8
    
    
    $
    1,005.3
    
    
    $
    1,245.2
    
    
    $
    520.4
    
    
    $
    10,530.0
    
    
    $
    15,746.0
 
 (1)
    
    Amount represents scheduled principal and interest due (excluding discounts).
Scheduled interest payment obligations are calculated using stated coupons for fixed debt and
interest rates effective as of December 31, 2007 for variable rate debt.(2)
    
    Purchase obligations consist primarily of (i) disposal related agreements which
include fixed or minimum royalty payments, host agreements, and take-or-pay and put-or-pay
agreements and (ii) other obligations including, committed capital expenditures and consulting
services arrangements. Debt covenants. Long-term
Debt
  Prepayments
 Financial assurances.
 43




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##### Table of Contents



LandfillClosure/
    
    
    Contract
    
    
    Risk/Casualty
    
    
    Collateral forPost-Closure
    
    
    Performance
    
    
    Insurance
    
    
    Obligations
    
    
    TotalInsurance policies
    
    $
    680.5
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    680.5Surety bonds
    
    
    644.9
    
    
    
    492.5
    
    
    
    
    
    
    
    
    
    
    
    1,137.4Trust deposits
    
    
    85.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    85.5Letters of credit (1)
    
    
    385.3
    
    
    
    90.4
    
    
    
    245.7
    
    
    
    141.0
    
    
    
    862.4Total
    
    $
    1,796.2
    
    
    $
    582.9
    
    
    $
    245.7
    
    
    $
    141.0
    
    
    $
    2,765.8
 
 (1)
    
    These amounts were issued under the 2005 Revolver, the Incremental Revolving
Letter of Credit and the Institutional Letter of Credit Facility under our 2005 Credit
Facility.  Off-Balance Sheet Financing
  Interest Rate Risk Management
   44




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##### Table of Contents



Contingencies
 Income Taxes, Commitments and Contingencies
 Related Party Transactions
 Related Party Transactions
 Critical Accounting Judgments and Estimates
   Landfill accounting
   
    
    Landfill development costs that are capitalized as an asset.
 
    
    Landfill retirement obligations relating to our capping, closure and post-closure
liabilities which result in a corresponding landfill retirement asset.
  Landfill Development Costs
 Site permit.
   
    
    Changes in legislative or regulatory requirements may cause changes in the landfill site
permitting process. These changes could make it more difficult and/or costly to obtain a
landfill permit.
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##### Table of Contents




    
    Studies performed could be inaccurate which could result in the revocation of a permit and
changes to accounting assumptions. Conditions could exist that were not identified in the
study, which make the location not feasible for a landfill and could result in the revocation
of a permit. Revocation of a permit could impair the recorded value of the landfill asset.
 
    
    Actions by neighboring parties, private citizen groups or others to oppose our efforts to
obtain, maintain or expand permits could result in revocation or suspension of a permit, which
could adversely impact the economic viability of the landfill and could impair the recorded
value of the landfill. As a result of opposition to our obtaining a permit, improved technical
information as a project progresses, or changes in the anticipated economics associated with a
project, we may decide to reduce the scope of or abandon a project which could result in an
asset impairment.
 Technical landfill design.
  
    
    Changes in legislative or regulatory requirements may require changes in the landfill
technical design. These changes could make it more difficult and/or costly to meet new design
standards.
 
    
    Technical design requirements, as approved, may need modifications at some future point in
time.
 
    
    Technical designs could be inaccurate and could result in increased construction costs or
difficulty in obtaining a permit.
 Landfill disposal capacity.
  
    
    Estimates of future disposal capacity may change as a result of changes in legislative or
regulatory design requirements.
 
    
    The density of waste may vary due to variations in operating conditions, including waste
compaction practices, site design, climate and the nature of the waste.
 
    
    Capacity is defined in cubic yards but waste received is measured in tons. The number of
tons/cubic yard varies by type of waste.
 Development costs.
 46




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
    
    Actual future costs of construction materials and third party labor could differ from the
costs we have estimated because of the impact from general economic conditions on the
availability of the required materials and labor. Technical designs could be altered due to
unexpected operating conditions, regulatory changes or legislative changes.
 Landfill development asset amortization.
   
    
    Changes in our future development cost estimates or our disposal capacity will normally
result in a change in our amortization rates and will impact amortization expense
prospectively. An unexpected significant increase in estimated costs or reduction in disposal
capacity could affect the ongoing economic viability of the landfill and result in an asset
impairment.
  Landfill Retirement Obligations
  Landfill capping.
  
    
    Changes in legislative or regulatory requirements including changes in capping, closure
activities or post-closure monitoring activities, types and quantities of materials used, or
term of post-closure care could cause changes in our cost estimates.
 Closure and post-closure monitoring.
 47




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##### Table of Contents



Landfill retirement obligation liability/asset.
      
    
    Actual timing of disposal capacity utilization could differ from projected timing, causing
differences in timing of when amortization and accretion expense is recognized for capping,
closure and post-closure liabilities.
 
    
    Changes in inflation rates could impact our actual future costs and our total liabilities.
 
    
    Changes in our capital structure or market conditions could result in changes to the
credit-adjusted risk-free rate used to discount the liabilities, which could cause changes in
future recorded liabilities, assets and expense.
 
    
    Changes in the landfill retirement obligation due to changes in the anticipated waste flow,
cost estimates or the timing of expenditures for closed landfills and fully incurred but
unpaid capping events are recorded in results of operations prospectively. This could result
in unanticipated increases or decreases in expense.
 
    
    Amortization rates could change in the future based on the evaluation of new facts and
circumstances relating to landfill capping design, post-closure monitoring requirements, or
the inflation or discount rate.
  Disposal capacity.
 48




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
    
    We have control of and access to the land where the expansion permit is being sought.
 
    
    All geological and other technical siting criteria for a landfill have been met, or an
exception from such requirements has been received (or can reasonably be expected to be
received).
 
    
    The political process has been assessed and there are no identified impediments that cannot
be resolved.
 
    
    We are actively pursuing the expansion permit and have an expectation that the final local,
state and federal permits will be received within the next five years.
 
    
    Senior operations management approval has been obtained.
   
    
    We may be unsuccessful in obtaining permits for probable expansion disposal capacity
because of the failure to obtain the final local, state or federal permits or due to other
unknown reasons. If we are unsuccessful in obtaining permits for probable expansion disposal
capacity, or the disposal capacity for which we obtain approvals is less than what was
estimated, both costs and disposal capacity will change, which will generally increase the
rates we charge for landfill amortization and capping, closure and post-closure accruals. An
unexpected decrease in disposal capacity could also cause an asset impairment.
 Environmental Liabilities
   
    
    Actual settlement of these liabilities could differ from estimates due to a number of
uncertainties, such as the extent of contamination at a particular site, the final remedy, the
financial viability of other potentially responsible parties and the final apportionment of
responsibility among the potentially responsible parties.
 
    
    Actual amounts could differ from the estimated liability as a result of changes in
estimated future litigation costs to pursue the matter to ultimate resolution including both
legal and remedial costs.
 
    
    An unanticipated environmental liability that arises could result in a material charge to
operating expense.
 49




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##### Table of Contents




    
    We have determined that the recorded liability for environmental matters as of December 31,
2007 and 2006 of approximately $189.6 million and $217.0 million, respectively, represents the
most probable outcome of these matters. Cash paid for environmental matters during 2007 and
2006 was $21.0 million and $20.1 million, respectively.
 
    
    We do not expect that adjustments to estimates, which are reasonably possible in the near
term and that may result in changes to recorded amounts, will have a material effect on our
consolidated liquidity, financial position or results of operations. However, based on our
review of the variability inherent in these estimates, we believe it is reasonably possible
that the ultimate outcome of environmental matters, excluding capping, closure and
post-closure costs, could result in approximately $17.2 million of additional liability. Due
to the nature of these matters, the cash flow impact would not be immediate and would most
likely occur over a period greater than five years.
 Self-insurance Liabilities and Related Costs
     
    
    Incident rates, including frequency and severity, could increase or decrease during a year
causing our current and future actuarially determined obligations to increase or decrease.
 
    
    The settlement costs to discharge our obligations, including legal and health care costs,
could increase or decrease causing current estimates of our self-insurance liability to
change.
 Loss Contingencies
   50




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
    
    Actual costs can vary from our estimates for a variety of reasons including differing
interpretations of laws, opinions on culpability and assessments of the amount of damages.
 
    
    Loss contingency assumptions involve judgments that are inherently subjective and generally
involve business matters that are by their nature unpredictable. If a loss contingency
results in an adverse judgment or is settled for significant amounts, it could have a material
adverse impact on our liquidity, financial position and result of operations in the period or
periods in which such judgment or settlement occurs.
 Asset Impairment
 Valuation methodology.
  
    
    If events or changes in circumstances occur, including reductions in anticipated cash flows
generated by our operations or determinations to divest assets, certain assets could be
impaired which would result in a non-cash charge to earnings.
 Evaluation criteria.
  
    
    Our most significant asset impairment exposure, other than goodwill (see discussion below)
relates to our landfills. A significant reduction in our estimated disposal capacity as a
result of unanticipated events such as regulatory developments or density changes could
trigger an impairment charge.
 Recognition criteria.
 Goodwill Recoverability
 Valuation methodology.
  
    
    The estimated fair value of our reporting units could change with changes in our capital
structure, cost of debt, interest rates, actual capital expenditure levels, ability to perform
at levels that were forecasted, or our market capitalization. For example, a reduction in
long-term growth assumptions could reduce the estimated fair value of the reporting units to
below their carrying value, which would trigger an impairment charge. Similarly, an increase
in our weighted average cost of capital could trigger an impairment charge.
 51




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Evaluation criteria.
 Recognition criteria.
  
    
    In the past, we have incurred non-cash losses on sales of business units driven primarily
by the goodwill allocated to the business units divested. If similar divestitures are made in
the future, we could incur additional non-cash losses.
  
    
    At December 31, 2007 and 2006, we had recorded goodwill of $8.0 billion and $8.1 billion,
respectively, all of which was considered to be recoverable from future operations based on
estimated future discounted cash flow.
 Income Taxes
   Accounting for
Uncertainty in Income Taxes  an Interpretation of FASB Statement No. 109
  
    
    The balance sheet classification and amount of the income tax accounts established relating
to acquisitions are based on certain assumptions that could possibly change based on the
ultimate outcome of certain tax matters. As these tax accounts were established in purchase
accounting, future changes relating to these amounts will result in an adjustment to goodwill
through December 31, 2008. Effective January 1, 2009, such adjustments will be charged or
credited to earnings pursuant to SFAS 141(R), Business Combinations.
 
    
    Changes in estimated realizability of deferred tax assets could result in adjustments to
income tax expense.
 
    
    We are currently under examination or administrative review by various state and federal
taxing authorities for certain tax years. The Internal Revenue Code (IRC) and income tax
regulations are a complex set of rules that we are required to interpret and apply to our
transactions. Positions taken in tax years under examination or subsequent years are subject
to challenge. Accordingly, we may have exposure for additional tax liabilities arising from
these audits if any positions taken and benefited under FIN 48 are disallowed by the taxing
authorities.
 52




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##### Table of Contents




    
    As of December 31, 2007, we have federal and state net operating loss, capital loss and
minimum tax credit carryforwards with an after tax benefit totaling $213 million most of which
will expire if not used. Valuation allowances have been established for the possibility that
certain of the state carryforwards may not be used. Also, as of December 31, 2007, we had
unrecognized tax benefits of $528 million.
 Defined Benefit Pension Plans
     
    
    Changes in the plans investment mix and performance of the equity and bond markets and of
fund managers could impact the amount of pension income or expense recorded, the funded status
of the plan and the need for future cash contributions.
 Assumptions.
     2007
    
    2006Discount rate
    
    
    6.25
    %
    
    
    6.00
    %Average rate of compensation increase
    
    
    5.00
    %
    
    
    5.00
    %
 53




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##### Table of Contents



2007
    
    2006
    
    2005Discount rate
    
    
    6.00
    %
    
    
    5.75
    %
    
    
    6.00
    %Average rate of compensation increase
    
    
    5.00
    %
    
    
    5.00
    %
    
    
    5.00
    %Expected return on plan assets
    
    
    8.25
    %
    
    
    8.50
    %
    
    
    8.50
    %
  
    
    Our assumed discount rate is sensitive to changes in market-based interest rates. A
decrease in the discount rate will increase our related benefit plan obligation.
 
    
    Our annual pension expense would be impacted if the actual return on plan assets varies
from the expected returns.
 Employers Accounting for Defined
Benefit Pension and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106
and 132(R)
 New Accounting Standards
 Organization and
Summary of Significant Accounting Policies
 Disclosure Regarding Forward Looking Statements
 .
 
    
    our business and financial plans or strategies, and the projected or anticipated
benefits or other consequences of such plans or strategies;
    
    our expectations regarding our capital expenditures for 2008; and
    
    our expected interest savings in connection with the refinancing of portions of our
2005 Credit Facility and the payment of our 8.50% senior notes with the proceeds of the
issuance of our 6.875% senior notes due 2017.
  
    
    the general political and economic conditions in the United States, negative changes in
which could (a) make it more difficult for us to predict economic trends, (b) cause a
decline in the demand for our services (particularly in the commercial and industrial
sectors), (c) cause a decline in the price of commodities sold by us or (d) increase
competitive pressure on pricing;
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
    
    the overall competitive nature of the waste management industry, which could cause
pressure on pricing and the loss of business;
    
    our ability or inability to successfully identify and integrate acquired businesses and
any liabilities associated with acquired businesses, which could impact our costs;
    
    our ability or inability to implement market development initiatives, pass on increased
costs to customers, execute operational improvement plans and divest under-performing
assets, and to realize the anticipated benefits of these initiatives;
    
    our ability or inability to generate revenue growth and offset the impact of inflation
and business growth on our costs through price increases, including the potential impact
of price increases on volumes;
    
    changes in capital availability or costs, which, among other things, could affect our
financial results due to our variable interest rate debt;
    
    severe weather conditions, which could impair our financial results by causing
increased costs, reduced operational efficiency or disruptions to our operations;
    
    our ability to operate our business as we desire, which may be limited by restrictive
covenants in our debt agreements, our ability to obtain required permits on a timely basis
(or at all), regulatory requirements and other factors;
    
    compliance with existing and future legal and regulatory requirements, including
limitations or bans on disposal of certain types of wastes or on the transportation of
waste, which could limit our ability to conduct or grow our business, increase our costs
to operate or require additional capital expenditures;
    
    changes in site remediation requirements or our estimates of the costs to comply with
existing requirements, which could increase our costs, including costs for final capping,
closure, post-closure and other remediation obligations;
    
    the outcome of existing and any future legal proceedings, including any litigation,
audit or investigation brought by or before any governmental body, which could result in
increased costs or restrictions on our ability to operate;
    
    environmental liabilities in excess of our insurance, if any;
    
    increases in the costs in commodity, insurance, oil and fuel prices that make it more
expensive to operate our business, including our ability or inability to reduce the impact
of any such cost increases through cost reduction initiatives and other methods;
    
    workforce factors, including potential increases in our costs if we are required to
provide additional funding to any multi-employer pension plan to which we contribute and
the negative impact on our operations of union organizing campaigns, work stoppages or
labor shortages;
    
    the negative effect that trends toward requiring recycling, waste reduction at the
source and prohibiting the disposal of certain types of wastes could have on volumes of
waste going to landfills and waste-to-energy facilities;
    
    changes by the Financial Accounting Standards Board or other accounting regulatory
bodies to generally accepted accounting principles or policies;
    
    acts of war, riots or terrorism, including the events taking place in the Middle East,
the current military action in Iraq and the continuing war on terrorism, as well as
actions taken or to be taken by the United States or other governments as a result of
further acts or threats of terrorism, and the impact of these acts on economic, financial
and social conditions in the United States; and
    
    the timing and occurrence (or non-occurrence) of transactions and events which may be
subject to circumstances beyond our control.
  55




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Item 7A. Quantitative and Qualitative Disclosures About Market Risk
 Interest rate risk.
 Long-term Debt
 Fuel prices.
  Commodities prices.
 56




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data
 Report of Independent Registered Public Accounting Firm
    
    
    58Consolidated Balance Sheets as of December 31, 2007 and 2006
    
    
    60Consolidated Statements of Operations for each of the Three Years in the Period ended
December 31, 2007
    
    
    61Consolidated Statements of Stockholders Equity for each of the Three Years in the
Period ended December 31, 2007
    
    
    62Consolidated Statements of Cash Flows for each of the Three Years in the Period ended
December 31, 2007
    
    
    63Notes to Consolidated Financial Statements
    
    
    64
 57




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Report of Independent Registered Public Accounting Firm
 
 Internal Control  Integrated Framework
   58




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ALLIED WASTE INDUSTRIES, INC.
 
 CONSOLIDATED BALANCE SHEETS
 (in millions, except per share amounts)
 December 31,2007
    
    
    2006ASSETSCurrent Assets Cash and cash equivalents
    
    $
    230.9
    
    
    $
    94.1Restricted cash
    
    
    26.1
    
    
    
    Accounts receivable, net of allowance of $21.2 and $18.4
    
    
    691.0
    
    
    
    687.5Prepaid and other current assets
    
    
    81.9
    
    
    
    93.6Deferred income taxes
    
    
    128.3
    
    
    
    172.5Total current assets
    
    
    1,158.2
    
    
    
    1,047.7Property and equipment, net
    
    
    4,430.4
    
    
    
    4,258.7Goodwill
    
    
    8,020.0
    
    
    
    8,126.0Other assets, net
    
    
    340.1
    
    
    
    378.6Total assets
    
    $
    13,948.7
    
    
    $
    13,811.0LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities Current portion of long-term debt
    
    $
    557.3
    
    
    $
    236.6Accounts payable
    
    
    496.8
    
    
    
    494.4Current portion of accrued capping, closure, post-closure and environmental costs
    
    
    96.0
    
    
    
    95.8Accrued interest
    
    
    99.6
    
    
    
    106.9Other accrued liabilities
    
    
    757.7
    
    
    
    369.8Unearned revenue
    
    
    239.7
    
    
    
    229.2Total current liabilities
    
    
    2,247.1
    
    
    
    1,532.7Long-term debt, less current portion
    
    
    6,085.6
    
    
    
    6,674.0Deferred income taxes
    
    
    400.3
    
    
    
    357.3Accrued capping, closure, post-closure and environmental costs, less current portion
    
    
    771.4
    
    
    
    760.3Other long-term obligations
    
    
    538.6
    
    
    
    886.8Minority interests
    
    
    1.5
    
    
    
    1.0Commitments and ContingenciesStockholders Equity Series D senior mandatory convertible preferred stock, $0.10 par value,
2.8 million shares authorized, 2.4 million shares issued and outstanding, liquidation
preference of $250.00 per share, net of $19.2 million of issuance costs
    
    
    580.8
    
    
    
    580.8Common stock; $0.01 par value; 525 million authorized shares; 370.4 million
and 367.9 million shares issued and outstanding
    
    
    3.7
    
    
    
    3.7Additional paid-in capital
    
    
    2,843.3
    
    
    
    2,802.0Accumulated other comprehensive loss
    
    
    (29.5
    )
    
    
    (57.4
    )Retained earnings
    
    
    505.9
    
    
    
    269.8Total stockholders equity
    
    
    3,904.2
    
    
    
    3,598.9Total liabilities and stockholders equity
    
    $
    13,948.7
    
    
    $
    13,811.0
  60




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ALLIED WASTE INDUSTRIES, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (in millions, except per share amounts)
 Years Ended December 31,2007
    
    
    2006
    
    
    2005Revenues
    
    $
    6,068.7
    
    
    $
    5,908.5
    
    
    $
    5,612.2Cost of operations (exclusive of depreciation and amortization
shown below)
    
    
    3,787.1
    
    
    
    3,786.4
    
    
    
    3,654.6Selling, general and administrative expenses
    
    
    631.9
    
    
    
    587.3
    
    
    
    510.2Depreciation and amortization
    
    
    553.5
    
    
    
    557.7
    
    
    
    543.6Loss from divestitures and asset impairments
    
    
    40.5
    
    
    
    22.5
    
    
    
    Operating income
    
    
    1,055.7
    
    
    
    954.6
    
    
    
    903.8Interest expense and other
    
    
    538.4
    
    
    
    563.4
    
    
    
    583.1Income from continuing operations before income taxes
    
    
    517.3
    
    
    
    391.2
    
    
    
    320.7Income tax expense
    
    
    207.1
    
    
    
    235.3
    
    
    
    131.1Minority interests
    
    
    0.4
    
    
    
    0.1
    
    
    
    (0.2
    )Income from continuing operations
    
    
    309.8
    
    
    
    155.8
    
    
    
    189.8(Loss) income from discontinued operations, net of tax
    
    
    (36.2
    )
    
    
    5.1
    
    
    
    14.8Cumulative effect of change in accounting principle, net of tax
    
    
    
    
    
    
    
    
    
    
    (0.8
    )Net income
    
    
    273.6
    
    
    
    160.9
    
    
    
    203.8Dividends on preferred stock
    
    
    (37.5
    )
    
    
    (42.9
    )
    
    
    (52.0
    )Net income available to common shareholders
    
    $
    236.1
    
    
    $
    118.0
    
    
    $
    151.8Basic EPS:Continuing operations
    
    $
    0.74
    
    
    $
    0.32
    
    
    $
    0.42Discontinued operations
    
    
    (0.10
    )
    
    
    0.01
    
    
    
    0.04Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    (0.00
    )Net income available to common shareholders
    
    $
    0.64
    
    
    $
    0.33
    
    
    $
    0.46Weighted average common shares
    
    
    368.8
    
    
    
    356.7
    
    
    
    326.9Diluted EPS:Continuing operations
    
    $
    0.71
    
    
    $
    0.32
    
    
    $
    0.42Discontinued operations
    
    
    (0.08
    )
    
    
    0.01
    
    
    
    0.04Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    (0.00
    )Net income available to common shareholders
    
    $
    0.63
    
    
    $
    0.33
    
    
    $
    0.46Weighted average common and common equivalent shares
    
    
    443.0
    
    
    
    359.3
    
    
    
    330.1
  61




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ALLIED WASTE INDUSTRIES, INC.
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 (in millions)
 AccumulatedAdditional
    
    
    Other
    
    
    
    
    
    
    TotalPreferred
    
    
    Common
    
    
    Paid-In
    
    
    Comprehensive
    
    
    Retained
    
    
    StockholdersStock
    
    
    Stock
    
    
    Capital
    
    
    Loss
    
    
    Earnings
    
    
    EquityBalance as of December 31, 2004
    
    $
    333.1
    
    
    $
    3.2
    
    
    $
    2,338.0
    
    
    $
    (69.4
    )
    
    $
    
    
    
    $
    2,604.9Common stock issued, net
    
    
    
    
    
    
    0.1
    
    
    
    100.5
    
    
    
    
    
    
    
    
    
    
    
    100.6Stock options
    
    
    
    
    
    
    
    
    
    
    2.2
    
    
    
    
    
    
    
    
    
    
    
    2.2Issuance of Series D mandatory
convertible preferred stock
    
    
    580.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    580.8Dividends paid on Series C mandatory
convertible preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21.6
    )
    
    
    (21.6
    )Dividends paid on Series D mandatory
convertible preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (30.4
    )
    
    
    (30.4
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    203.8
    
    
    
    203.8Other comprehensive income, net of tax:Net gain deferred on hedging derivatives
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.3
    
    
    
    
    
    
    
    1.3Employee benefits plan liability adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2.2
    )
    
    
    
    
    
    
    (2.2
    )Balance as of December 31, 2005
    
    $
    913.9
    
    
    $
    3.3
    
    
    $
    2,440.7
    
    
    $
    (70.3
    )
    
    $
    151.8
    
    
    $
    3,439.4Common stock issued for stock awards and
other, net
    
    
    
    
    
    
    
    
    
    
    18.1
    
    
    
    
    
    
    
    
    
    
    
    18.1Stock-based compensation, net
    
    
    
    
    
    
    
    
    
    
    10.5
    
    
    
    
    
    
    
    
    
    
    
    10.5Conversion of Series C mandatory convertible
preferred stock into common stock
    
    
    (333.1
    )
    
    
    0.4
    
    
    
    332.7
    
    
    
    
    
    
    
    
    
    
    
    Dividends paid on Series C mandatory
convertible preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5.4
    )
    
    
    (5.4
    )Dividends paid on Series D mandatory
convertible preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37.5
    )
    
    
    (37.5
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    160.9
    
    
    
    160.9Other comprehensive income, net of tax:Employee benefits plan liability adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    70.3
    
    
    
    
    
    
    
    70.3Adjustment to initially apply SFAS 158
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (57.4
    )
    
    
    
    
    
    
    (57.4
    )Balance as of December 31, 2006
    
    $
    580.8
    
    
    $
    3.7
    
    
    $
    2,802.0
    
    
    $
    (57.4
    )
    
    $
    269.8
    
    
    $
    3,598.9Common stock issued for stock awards and
other, net
    
    
    
    
    
    
    
    
    
    
    19.7
    
    
    
    
    
    
    
    
    
    
    
    19.7Stock-based compensation, net
    
    
    
    
    
    
    
    
    
    
    21.6
    
    
    
    
    
    
    
    
    
    
    
    21.6Dividends paid on Series D mandatory
convertible preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37.5
    )
    
    
    (37.5
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    273.6
    
    
    
    273.6Other comprehensive income, net of tax:Employee benefits plan liability adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27.9
    
    
    
    
    
    
    
    27.9Balance as of December 31, 2007
    
    $
    580.8
    
    
    $
    3.7
    
    
    $
    2,843.3
    
    
    $
    (29.5
    )
    
    $
    505.9
    
    
    $
    3,904.2
 Comprehensive Income 
 Year ended December 31,2007
    
    
    2006
    
    
    2005Net income
    
    $
    273.6
    
    
    $
    160.9
    
    
    $
    203.8Other comprehensive income, net of tax:Net gain deferred on hedging derivatives
    
    
    
    
    
    
    
    
    
    
    1.3Employee benefits plan liability adjustment
    
    
    27.9
    
    
    
    70.3
    
    
    
    (2.2
    )$
    301.5
    
    
    $
    231.2
    
    
    $
    202.9
  62




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in millions)
 Years Ended December 31,2007
    
    
    2006
    
    
    2005Operating activities Net income
    
    $
    273.6
    
    
    $
    160.9
    
    
    $
    203.8Discontinued operations, net of tax
    
    
    36.2
    
    
    
    (5.1
    )
    
    
    (14.8
    )Adjustments to reconcile net income to cash provided by operating
activities from continuing operations Provisions for:Depreciation and amortization
    
    
    553.5
    
    
    
    557.7
    
    
    
    543.6Stock-based compensation expense
    
    
    21.6
    
    
    
    10.5
    
    
    
    5.6Doubtful accounts
    
    
    19.9
    
    
    
    18.3
    
    
    
    17.7Accretion of debt and amortization of debt issuance costs
    
    
    20.5
    
    
    
    21.8
    
    
    
    22.7Deferred income tax expense
    
    
    161.4
    
    
    
    202.5
    
    
    
    117.2Gain on sale of fixed assets
    
    
    (20.8
    )
    
    
    (9.9
    )
    
    
    (3.5
    )Non-cash reduction in acquisition and environmental accruals
    
    
    (10.1
    )
    
    
    (16.3
    )
    
    
    (21.6
    )Loss from divestitures and asset impairments
    
    
    40.5
    
    
    
    22.5
    
    
    
    5.9Write-off of deferred debt issuance costs
    
    
    7.6
    
    
    
    4.1
    
    
    
    13.7Cumulative effect of change in accounting principle, net of tax
    
    
    
    
    
    
    
    
    
    
    0.8Change in operating assets and liabilities, excluding the effects
of acquisitions Accounts receivable, prepaid expenses, inventories and other assets
    
    
    (14.0
    )
    
    
    (35.5
    )
    
    
    (48.0
    )Accounts payable, accrued liabilities, unearned income and other
    
    
    (1.7
    )
    
    
    (43.3
    )
    
    
    (84.4
    )Capping, closure and post-closure accretion
    
    
    53.2
    
    
    
    48.8
    
    
    
    49.8Capping, closure, post-closure and environmental expenditures
    
    
    (75.2
    )
    
    
    (84.7
    )
    
    
    (90.9
    )Cash provided by operating activities from continuing operations
    
    
    1,066.2
    
    
    
    852.3
    
    
    
    717.6Investing activities Cost of acquisitions, net of cash acquired
    
    
    (85.6
    )
    
    
    (10.7
    )
    
    
    (8.0
    )Proceeds from divestitures, net of cash divested
    
    
    166.3
    
    
    
    61.1
    
    
    
    8.9Proceeds from sale of fixed assets
    
    
    25.8
    
    
    
    21.7
    
    
    
    20.2Capital expenditures, excluding acquisitions
    
    
    (670.0
    )
    
    
    (661.1
    )
    
    
    (685.6
    )Capitalized interest
    
    
    (19.2
    )
    
    
    (17.2
    )
    
    
    (14.1
    )Change in deferred acquisition costs, notes receivable and other
    
    
    
    
    
    
    4.6
    
    
    
    6.1Cash used for investing activities from continuing operations
    
    
    (582.7
    )
    
    
    (601.6
    )
    
    
    (672.5
    )Financing activities Net proceeds from sale of Series D preferred stock
    
    
    
    
    
    
    
    
    
    
    580.8Proceeds from long-term debt, net of issuance costs
    
    
    1,502.2
    
    
    
    1,239.3
    
    
    
    3,043.5Payments of long-term debt
    
    
    (1,914.1
    )
    
    
    (1,438.4
    )
    
    
    (3,740.2
    )Payments of preferred stock dividends
    
    
    (37.5
    )
    
    
    (48.3
    )
    
    
    (48.9
    )Net receipts from restricted trust
    
    
    90.7
    
    
    
    
    
    
    
    Net proceeds from sale of common stock, exercise of stock options
and other
    
    
    23.9
    
    
    
    23.6
    
    
    
    97.4Cash used for financing activities from continuing operations
    
    
    (334.8
    )
    
    
    (223.8
    )
    
    
    (67.4
    )Discontinued operations (Used for) provided by operating activities
    
    
    (9.2
    )
    
    
    18.1
    
    
    
    20.9Used for investing activities
    
    
    (2.7
    )
    
    
    (7.0
    )
    
    
    (10.5
    )Cash (used for) provided by discontinued operations
    
    
    (11.9
    )
    
    
    11.1
    
    
    
    10.4Increase (decrease) in cash and cash equivalents
    
    
    136.8
    
    
    
    38.0
    
    
    
    (11.9
    )Cash and cash equivalents, beginning of year
    
    
    94.1
    
    
    
    56.1
    
    
    
    68.0Cash and cash equivalents, end of year
    
    $
    230.9
    
    
    $
    94.1
    
    
    $
    56.1
  63




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Organization and Summary of Significant Accounting Policies
  Principles of consolidation and presentation 
 Consolidation of
Variable Interest Entities  an interpretation of ARB No. 51
 Reclassifications 
  Managements estimates and assumptions 
  Cash and cash equivalents 
   64




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Restricted cash 
  Concentration of credit risk 
  Trade and other receivables and receivable realization allowance 
  Property and equipment 
   65




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Goodwill and intangible assets 
 st Goodwill and Other Intangible Assets
   Landfill accounting 
  66




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      Accounting for Impairment or Disposal of Long-Lived
Assets The Treatment of Certain
Site Restoration/Environmental Exit Costs When Testing a Long-Lived Asset for Impairment
 Landfill asset amortization .
   
    
    We have control of and access to the land where the expansion permit is being sought.
 67




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
    
    All geological and other technical siting criteria for a landfill have been met, or an
exception from such requirements has been received (or can reasonably be expected to be
received).
 
    
    The political process has been assessed and there are no identified impediments that cannot
be resolved.
 
    
    We are actively pursuing the expansion permit and have an expectation that the final local,
state and federal permits will be received within the next five years.
 
    
    Senior operations management approval has been obtained.
   Capping, closure and post-closure .
  Accounting for Asset Retirement Obligations
  68




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    Landfill maintenance costs .
 Financial assurance costs .
 Environmental costs 
  Environmental Remediation Liabilities
  69




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Asset impairments 
  
    
    A significant decrease in the market price of an asset or asset group;
    
    A significant adverse change in the extent or manner in which an asset or asset group
is being used or in its physical condition;
    
    A significant adverse change in legal factors or in the business climate that could
affect the value of an asset or asset group, including an adverse action or assessment by
a regulator;
    
    An accumulation of costs significantly in excess of the amount originally expected for
the acquisition or construction of a long-lived asset;
    
    Current period operating or cash flow losses combined with a history of operating or
cash flow losses or a projection or forecast that demonstrates continuing losses
associated with the use of a long-lived asset or asset group; or
    
    A current expectation that, more likely than not, a long-lived asset or asset group
will be sold or otherwise disposed of significantly before the end of its previously
estimated useful life.
  Self-insurance 
   Business combinations 
  70




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Recently issued accounting pronouncements.
 Acquisition accruals .
  Contingent liabilities 
 Accounting for
Contingencies Reasonable Estimation of the Amount of
a Loss.
 Accumulated other comprehensive loss 
  Revenue recognition 
  71




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Income taxes 
   Accounting for Uncertainty in Income
Taxes  an Interpretation of FASB Statement No. 109
 Employee benefit plans
    Stock-based compensation plans
 Share-Based
Payment
 72




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Accounting for Stock Issued to Employees Accounting for Stock-Based
Compensation Stock Plans
  Leases 
  Operating leases . Commitments
and Contingencies
 Capital leases . Long-term Debt
 73




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Fair value of financial instruments 
 Disclosures About Fair Value of Financial
Instruments
 Long-term Debt
 Change in accounting principle 
 Accounting for Conditional Asset Retirement Obligations
 an interpretation of FASB Statement No. 143
 Recently issued accounting pronouncements 
 Business Combinations Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statementsan amendment of ARB No. 51
 74




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Fair Value Option for Financial Assets and
Financial Liabilities Including an amendment of FASB Statement No. 115
 Employers Accounting for Defined Benefit Pension
and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106 and 132(R)
 Fair Value Measurements
 How Taxes Collected and Remitted
to Governmental Authorities Should Be Presented in the Income Statement
 75




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Accounting for Uncertainty in Income Taxes  an
Interpretation of FASB Statement No. 109 .
 2. Acquisitions and Divestitures
 Acquisitions 
  2007 (1)
    
    2006
    
    2005Number of businesses acquired
    
    
    16
    
    
    
    4
    
    
    
    11Total consideration (in millions)
    
    $
    88.0
    
    
    $
    12.6
    
    
    $
    12.4
 
 (1)
    
    $61.7 million related to collection operations, two transfer stations and a landfill
we acquired in our Western region during the first quarter of 2007.  Divestitures 
  Assets held for sale 
  Discontinued operations 
  76




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Accounts receivable, net
    
    $
    13.9Other current assets
    
    
    0.9Property and equipment, net
    
    
    95.3Total assets
    
    $
    110.1Current liabilities
    
    $
    21.3Long-term liabilities
    
    
    9.2Total liabilities
    
    $
    30.5
  2007
    
    
    2006
    
    
    2005Revenues (1)
    
    $
    50.9
    
    
    $
    122.6
    
    
    $
    126.5Income before tax
    
    $
    2.5
    
    
    $
    8.3
    
    
    $
    9.4Gain (loss) on divestiture
    
    
    (32.6
    )
    
    
    
    
    
    
    15.3Income tax expense
    
    
    6.1
    
    
    
    3.2
    
    
    
    9.9Discontinued operations, net of tax
    
    $
    (36.2
    )
    
    $
    5.1
    
    
    $
    14.8
 
 (1)
    
    Includes revenue from divisions not part of the disposal group, which were treated
as intercompany revenues prior to the divestiture, of $1.5 million, $2.3 million and $3.9
million for the years ended December 31, 2007, 2006 and 2005 respectively.   Allocation of Interest to Discontinued Operations
 77




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 3. Property and Equipment
  Property and EquipmentBalance at
    
    
    
    
    
    
    Sales
    
    
    Acquisitions,
    
    
    
    
    
    
    Balance atDecember 31,
    
    
    Capital
    
    
    and
    
    
    Net of
    
    
    
    
    
    
    December 31,2006
    
    
    Additions
    
    
    Retirements
    
    
    Divestitures
    
    
    Other(1)
    
    
    2007Land and improvements
    
    $
    473.1
    
    
    $
    15.1
    
    
    $
    (13.0
    )
    
    $
    10.4
    
    
    $
    0.6
    
    
    $
    486.2Land held for permitting as
landfills
    
    
    95.1
    
    
    
    22.1
    
    
    
    (0.5
    )
    
    
    (0.1
    )
    
    
    (18.8
    )
    
    
    97.8Landfills
    
    
    4,155.5
    
    
    
    244.0
    
    
    
    
    
    
    
    25.8
    
    
    
    36.4
    
    
    
    4,461.7Buildings and improvements
    
    
    504.3
    
    
    
    30.3
    
    
    
    (3.1
    )
    
    
    9.4
    
    
    
    (4.1
    )
    
    
    536.8Vehicles and equipment
    
    
    2,192.3
    
    
    
    285.9
    
    
    
    (116.8
    )
    
    
    (4.6
    )
    
    
    (2.0
    )
    
    
    2,354.8Containers and compactors
    
    
    952.1
    
    
    
    60.5
    
    
    
    (21.5
    )
    
    
    2.3
    
    
    
    0.2
    
    
    
    993.6Furniture and office equipment
    
    
    53.2
    
    
    
    12.1
    
    
    
    (3.9
    )
    
    
    
    
    
    
    3.1
    
    
    
    64.5Total
    
    $
    8,425.6
    
    
    $
    670.0
    
    
    $
    (158.8
    )
    
    $
    43.2
    
    
    $
    15.4
    
    
    $
    8,995.4
 Accumulated Depreciation and AmortizationBalance at
    
    
    Depreciation and
    
    
    Sales
    
    
    Acquisitions,
    
    
    
    
    
    
    Balance atDecember 31,
    
    
    Amortization
    
    
    and
    
    
    Net of
    
    
    
    
    
    
    December 31,2006
    
    
    Expense
    
    
    Retirements
    
    
    Divestitures
    
    
    Other(1)
    
    
    2007Land and improvements
    
    $
    (36.6
    )
    
    $
    (5.9
    )
    
    $
    0.3
    
    
    $
    
    
    
    $
    (0.1
    )
    
    $
    (42.3
    )Landfills
    
    
    (2,046.1
    )
    
    
    (229.5
    )
    
    
    
    
    
    
    3.1
    
    
    
    4.3
    
    
    
    (2,268.2
    )Buildings and improvements
    
    
    (166.3
    )
    
    
    (25.1
    )
    
    
    2.4
    
    
    
    
    
    
    
    0.1
    
    
    
    (188.9
    )Vehicles and equipment
    
    
    (1,245.8
    )
    
    
    (208.4
    )
    
    
    111.5
    
    
    
    9.0
    
    
    
    (2.2
    )
    
    
    (1,335.9
    )Containers and compactors
    
    
    (633.3
    )
    
    
    (78.9
    )
    
    
    21.1
    
    
    
    1.2
    
    
    
    
    
    
    
    (689.9
    )Furniture and office equipment
    
    
    (38.8
    )
    
    
    (4.9
    )
    
    
    3.9
    
    
    
    
    
    
    
    
    
    
    
    (39.8
    )Total
    
    $
    (4,166.9
    )
    
    $
    (552.7
    )
    
    $
    139.2
    
    
    $
    13.3
    
    
    $
    2.1
    
    
    $
    (4,565.0
    )Property and equipment, net
    
    $
    4,258.7
    
    
    $
    117.3
    
    
    $
    (19.6
    )
    
    $
    56.5
    
    
    $
    17.5
    
    
    $
    4,430.4
 
 (1)
    
    Primarily consists of $19.2 million capitalized interest and $2.7 million relating
to changes in landfill retirement obligation assets for recognition of and adjustments to
capping, closure and post-closure costs (see Note 8, Landfill Accounting). Property and EquipmentBalance at
    
    
    
    
    
    
    Sales
    
    
    Acquisitions,
    
    
    
    
    
    
    Balance atDecember 31,
    
    
    Capital
    
    
    and
    
    
    Net of
    
    
    
    
    
    
    December 31,2005
    
    
    Additions
    
    
    Retirements
    
    
    Divestitures
    
    
    Other (1)
    
    
    2006Land and improvements
    
    $
    464.5
    
    
    $
    18.3
    
    
    $
    (5.7
    )
    
    $
    (2.1
    )
    
    $
    (1.9
    )
    
    $
    473.1Land held for permitting as
landfills
    
    
    114.0
    
    
    
    6.5
    
    
    
    
    
    
    
    (7.1
    )
    
    
    (18.3
    )
    
    
    95.1Landfills
    
    
    3,873.3
    
    
    
    240.7
    
    
    
    (0.2
    )
    
    
    12.2
    
    
    
    29.5
    
    
    
    4,155.5Buildings and improvements
    
    
    499.6
    
    
    
    27.7
    
    
    
    (5.7
    )
    
    
    (12.6
    )
    
    
    (4.7
    )
    
    
    504.3Vehicles and equipment
    
    
    2,003.0
    
    
    
    282.9
    
    
    
    (75.3
    )
    
    
    (20.0
    )
    
    
    1.7
    
    
    
    2,192.3Containers and compactors
    
    
    901.0
    
    
    
    78.5
    
    
    
    (18.3
    )
    
    
    (9.0
    )
    
    
    (0.1
    )
    
    
    952.1Furniture and office equipment
    
    
    52.3
    
    
    
    6.5
    
    
    
    (5.2
    )
    
    
    (0.4
    )
    
    
    
    
    
    
    53.2Total
    
    $
    7,907.7
    
    
    $
    661.1
    
    
    $
    (110.4
    )
    
    $
    (39.0
    )
    
    $
    6.2
    
    
    $
    8,425.6
 Accumulated Depreciation and AmortizationBalance at
    
    
    Depreciation and
    
    
    Sales
    
    
    Acquisitions,
    
    
    
    
    
    
    Balance atDecember 31,
    
    
    Amortization
    
    
    and
    
    
    Net of
    
    
    
    
    
    
    December 31,2005
    
    
    Expense
    
    
    Retirements
    
    
    Divestitures
    
    
    Other (1)
    
    
    2006Land and improvements
    
    $
    (31.0
    )
    
    $
    (5.8
    )
    
    $
    0.2
    
    
    $
    0.1
    
    
    $
    (0.1
    )
    
    $
    (36.6
    )Landfills
    
    
    (1,800.8
    )
    
    
    (245.3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,046.1
    )Buildings and improvements
    
    
    (148.1
    )
    
    
    (26.1
    )
    
    
    4.8
    
    
    
    2.9
    
    
    
    0.2
    
    
    
    (166.3
    )Vehicles and equipment
    
    
    (1,135.8
    )
    
    
    (194.2
    )
    
    
    71.9
    
    
    
    15.3
    
    
    
    (3.0
    )
    
    
    (1,245.8
    )Containers and compactors
    
    
    (576.9
    )
    
    
    (81.0
    )
    
    
    17.5
    
    
    
    7.0
    
    
    
    0.1
    
    
    
    (633.3
    )Furniture and office equipment
    
    
    (39.0
    )
    
    
    (4.4
    )
    
    
    4.2
    
    
    
    0.3
    
    
    
    0.1
    
    
    
    (38.8
    )Total
    
    $
    (3,731.6
    )
    
    $
    (556.8
    )
    
    $
    98.6
    
    
    $
    25.6
    
    
    $
    (2.7
    )
    
    $
    (4,166.9
    )Property and equipment, net
    
    $
    4,176.1
    
    
    $
    104.3
    
    
    $
    (11.8
    )
    
    $
    (13.4
    )
    
    $
    3.5
    
    
    $
    4,258.7
 
 (1)
    
    Primarily consists of $17.2 million capitalized interest, $9.7 million landfill
asset impairments, $11.4 million reclassification of landfill cover from land held for
landfills and $7.4 million relating to changes in landfill retirement obligation assets for
recognition of and adjustments to capping, closure and post-closure costs (see Note 8,
Landfill Accounting) as well as a $5.2 million charge related to the relocation of our
operations support center. 78




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ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 4. Goodwill
  Balance at
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance atDecember 31,
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    December 31,2006
    
    
    Acquisitions
    
    
    Divestitures(1)
    
    
    Adjustments(2)
    
    
    2007Midwestern
    
    $
    2,156.4
    
    
    $
    0.3
    
    
    $
    (29.1
    )
    
    $
    (2.9
    )
    
    $
    2,124.7Northeastern
    
    
    1,762.9
    
    
    
    
    
    
    
    
    
    
    
    (2.4
    )
    
    
    1,760.5Southeastern
    
    
    1,579.0
    
    
    
    
    
    
    
    (70.0
    )
    
    
    (2.1
    )
    
    
    1,506.9Southwestern
    
    
    1,372.9
    
    
    
    1.4
    
    
    
    
    
    
    
    (1.9
    )
    
    
    1,372.4Western
    
    
    1,254.8
    
    
    
    1.8
    
    
    
    
    
    
    
    (1.1
    )
    
    
    1,255.5Total
    
    $
    8,126.0
    
    
    $
    3.5
    
    
    $
    (99.1
    )
    
    $
    (10.4
    )
    
    $
    8,020.0
 Balance at
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance atDecember 31,
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    December 31,2005
    
    
    Acquisitions
    
    
    Divestitures(1)
    
    
    Adjustments(2)
    
    
    2006Midwestern
    
    $
    2,169.1
    
    
    $
    
    
    
    $
    (6.2
    )
    
    $
    (6.5
    )
    
    $
    2,156.4Northeastern
    
    
    1,796.5
    
    
    
    
    
    
    
    (25.8
    )
    
    
    (7.8
    )
    
    
    1,762.9Southeastern
    
    
    1,584.0
    
    
    
    
    
    
    
    
    
    
    
    (5.0
    )
    
    
    1,579.0Southwestern
    
    
    1,316.9
    
    
    
    0.8
    
    
    
    
    
    
    
    55.2
    
    
    
    1,372.9Western
    
    
    1,317.7
    
    
    
    
    
    
    
    
    
    
    
    (62.9
    )
    
    
    1,254.8Total
    
    $
    8,184.2
    
    
    $
    0.8
    
    
    $
    (32.0
    )
    
    $
    (27.0
    )
    
    $
    8,126.0
 
 (1)
    
    See Note 2, Acquisitions and Divestitures.(2)
    
    Includes income tax related adjustments associated with the acquisition of BFI in
1999. Amounts for 2006 also include reallocation among regions related to refinements to the
regional organization structure in 2006. 5. Other Assets
  2007
    
    
    2006Deferred financing costs
    
    $
    76.3
    
    
    $
    77.0Funded status of defined benefit pension plan
    
    
    57.9
    
    
    
    11.6Landfill closure deposits
    
    
    47.2
    
    
    
    35.8Insurance recoveries
    
    
    24.2
    
    
    
    34.5Notes receivable
    
    
    21.2
    
    
    
    17.1Other
    
    
    113.3
    
    
    
    202.6Total
    
    $
    340.1
    
    
    $
    378.6
  6. Other Liabilities
 Other accrued liabilities 
  2007
    
    
    2006Accrued income taxes (1)
    
    $
    395.9
    
    
    $
    1.8Current portion of self-insurance claim liabilities
    
    
    94.8
    
    
    
    87.6Accrued payroll
    
    
    90.9
    
    
    
    97.0Accrued landfill taxes, hosting fees and royalties
    
    
    35.8
    
    
    
    35.0Accrued franchise and sales taxes
    
    
    30.7
    
    
    
    33.3Accrued property taxes
    
    
    16.2
    
    
    
    15.1Current portion of non-recurring acquisition accruals
    
    
    2.7
    
    
    
    6.6Other
    
    
    90.7
    
    
    
    93.4Total
    
    $
    757.7
    
    
    $
    369.8
 
 (1)
    
    Includes $380.7 million related to income tax uncertainties. See Note 9, Income
Taxes. 79




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Other long-term obligations 
  2007
    
    
    2006Income tax uncertainties (1)
    
    $
    261.7
    
    
    $
    559.3Self-insurance claim liabilities
    
    
    189.3
    
    
    
    207.0Non-recurring acquisition accruals
    
    
    21.8
    
    
    
    22.4Pension liability (2)
    
    
    11.6
    
    
    
    16.8Other
    
    
    54.2
    
    
    
    81.3Total
    
    $
    538.6
    
    
    $
    886.8
 
 (1)
    
    See Note 9, Income Taxes.(2)
    
    See Note 10, Employee Benefit Plans. Self-Insurance 
  2007
    
    
    2006Gross insurance claim liabilities, beginning of year
    
    $
    294.6
    
    
    $
    294.1Less amount due from insurers
    
    
    34.5
    
    
    
    35.7Net insurance claim liabilities, beginning of year
    
    
    260.1
    
    
    
    258.4Claims payments made during the year
    
    
    (239.3
    )
    
    
    (250.2
    )Provision charged to cost of operations
    
    
    239.1
    
    
    
    251.9Net insurance claim liabilities, end of year
    
    
    259.9
    
    
    
    260.1Plus amount due from insurers
    
    
    24.2
    
    
    
    34.5Gross insurance claim liabilities, end of year
    
    
    284.1
    
    
    
    294.6Less current portion
    
    
    94.8
    
    
    
    87.6Long-term portion
    
    $
    189.3
    
    
    $
    207.0
 80




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 7. Long-term Debt
  Debt Balance at
    
    
    Effective Interest RateDecember 31,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,2007
    
    
    2006
    
    
    2007
    
    
    20062005 Revolver due 2012, ABR borrowings*
    
    $
    
    
    
    $
    
    
    
    
    7.75
    %
    
    
    9.75
    %2005 Revolver due 2012, Adjusted LIBOR
borrowings*
    
    
    
    
    
    
    
    
    
    
    6.20
    
    
    
    7.862005 Term Loan due 2014
    
    
    806.7
    
    
    
    1,105.0
    
    
    
    6.75
    
    
    
    7.34Receivables secured loan
    
    
    393.7
    
    
    
    230.0
    
    
    
    6.37
    
    
    
    6.026.375% senior notes due 2008
    
    
    161.0
    
    
    
    157.9
    
    
    
    8.34
    
    
    
    8.348.50% senior notes due 2008
    
    
    
    
    
    
    750.0
    
    
    
    
    
    
    
    8.786.50% senior notes due 2010
    
    
    350.0
    
    
    
    350.0
    
    
    
    6.76
    
    
    
    6.765.75% senior notes due 2011
    
    
    400.0
    
    
    
    400.0
    
    
    
    6.00
    
    
    
    6.006.375% senior notes due 2011
    
    
    275.0
    
    
    
    275.0
    
    
    
    6.63
    
    
    
    6.639.25% senior notes due 2012
    
    
    
    
    
    
    250.9
    
    
    
    
    
    
    
    9.407.875% senior notes due 2013
    
    
    450.0
    
    
    
    450.0
    
    
    
    8.09
    
    
    
    8.096.125% senior notes due 2014
    
    
    425.0
    
    
    
    425.0
    
    
    
    6.30
    
    
    
    6.307.25% senior notes due 2015
    
    
    600.0
    
    
    
    600.0
    
    
    
    7.43
    
    
    
    7.437.125% senior notes due 2016
    
    
    595.6
    
    
    
    595.1
    
    
    
    7.38
    
    
    
    7.386.875% senior notes due 2017
    
    
    750.0
    
    
    
    
    
    
    
    7.04
    
    
    
    9.25% debentures due 2021
    
    
    96.5
    
    
    
    96.3
    
    
    
    9.47
    
    
    
    9.477.40% debentures due 2035
    
    
    296.7
    
    
    
    294.4
    
    
    
    8.03
    
    
    
    8.034.25% senior subordinated convertible
debentures due 2034
    
    
    230.0
    
    
    
    230.0
    
    
    
    4.34
    
    
    
    4.347.375% senior unsecured notes due 2014
    
    
    400.0
    
    
    
    400.0
    
    
    
    7.55
    
    
    
    7.55Solid waste revenue bond obligations,
principal payable through 2031**
    
    
    397.5
    
    
    
    280.6
    
    
    
    6.12
    
    
    
    6.85Notes payable to a municipality, finance and
commercial companies, and individuals, interest
rates of 2.37% to 11.25%, and principal payable
through 2014, secured by vehicles, equipment,
real estate or accounts receivable **
    
    
    1.2
    
    
    
    2.3
    
    
    
    7.97
    
    
    
    6.00Obligations under capital leases of
vehicles and equipment **
    
    
    12.3
    
    
    
    12.4
    
    
    
    8.78
    
    
    
    8.92Notes payable to individuals and
commercial companies, interest rates of
5.99% to 9.50%, principal payable
through 2010,unsecured **
    
    
    1.7
    
    
    
    5.7
    
    
    
    6.00
    
    
    
    8.07Total debt **
    
    
    6,642.9
    
    
    
    6,910.6
    
    
    
    6.96
    
    
    
    7.37Less: Current portion
    
    
    557.3
    
    
    
    236.6Long-term portion
    
    $
    6,085.6
    
    
    $
    6,674.0
 
 *
    
    Excludes fees**
    
    Reflects weighted average interest rate Refinancings 
   81




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ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    2005 Credit Facility 
    Senior notes and debentures 
 st st
 th th
 82




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  th th
 th th
 th th
 th th
 th th
 st st
 st st
 st st
   83




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Receivables secured loans 
  Accounting for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities  a Replacement of FASB Statement 125
 Senior subordinated notes 
   Senior subordinated convertible debentures 
 Accounting for Derivative Instruments and
Hedging Activities
  84




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   th
 Solid waste revenue bond obligations 
  Future maturities of long-term debt 
  Maturity2008 (1)
    
    $
    557.52009
    
    
    2.42010
    
    
    375.42011
    
    
    676.32012
    
    
    1.2Thereafter
    
    
    5,103.5Gross Principal
    
    
    6,716.3Discount, net
    
    
    (73.4
    )Total Debt
    
    $
    6,642.9
 
 (1)
    
    Includes the receivables secured loan, which is a 364-day liquidity facility with a
maturity date of May 29, 2008 and has a balance of $393.7 million at December 31, 2007.
Although we intend to renew the liquidity facility prior to its maturity date, the outstanding
balance is classified as a current liability because it has a contractual maturity of less
than one year.  Maturity
    
    Principal
    
    
    Interest
    
    
    Total2008
    
    $
    1.6
    
    
    $
    1.0
    
    
    $
    2.62009
    
    
    1.4
    
    
    
    0.9
    
    
    
    2.32010
    
    
    1.3
    
    
    
    0.7
    
    
    
    2.02011
    
    
    1.0
    
    
    
    0.7
    
    
    
    1.72012
    
    
    0.7
    
    
    
    0.6
    
    
    
    1.3Thereafter
    
    
    6.3
    
    
    
    1.9
    
    
    
    8.2$
    12.3
    
    
    $
    5.8
    
    
    $
    18.1
 85




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Fair value of debt
  Balance at
    
    Fair Value at
    
    Balance at
    
    Fair Value atDecember 31,
    
    December 31,
    
    December 31,
    
    December 31,2007
    
    2007
    
    2006
    
    2006Fixed Rate Debt:Principal amount
    
    $
    5,317.8
    
    
    $
    5,308.8
    
    
    $
    5,490.8
    
    
    $
    5,560.6Weighted average interest rate
    
    
    5.92
    %
    
    
    
    
    
    
    7.25
    %Variable Rate Debt:Principal amount
    
    $
    1,325.1
    
    
    $
    1,291.9
    
    
    $
    1,419.8
    
    
    $
    1,423.9Weighted average interest rate(1)
    
    
    6.13
    %
    
    
    
    
    
    
    6.76
    %
 
 (1)
    
    Reflects the rate in effect as of December 31, 2007 and 2006 and includes all
applicable margins. Actual future rates may vary. Debt covenants 
 (1) (1)
 
 (1)
    
    EBITDA, which is a non-GAAP measure, used for covenants is calculated in accordance
with the definition in the 2005 Credit Facility agreement. In this context, EBITDA is used
solely to provide information on the extent to which we are in compliance with debt covenants
and is not comparable to EBITDA used by other companies.    Guarantees 
  86




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ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Guarantors Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others
 Collateral
    Other AlliedBFI
    
    
    Collateral
    
    
    CombinedCondensed Consolidated Balance Sheet (1):Current assets
    
    $
    246.4
    
    
    $
    248.9
    
    
    $
    495.3Property and equipment, net
    
    
    1,056.4
    
    
    
    864.8
    
    
    
    1,921.2Goodwill
    
    
    3,264.4
    
    
    
    3,015.2
    
    
    
    6,279.6Other assets, net
    
    
    185.1
    
    
    
    36.6
    
    
    
    221.7Total assets
    
    $
    4,752.3
    
    
    $
    4,165.5
    
    
    $
    8,917.8Current liabilities
    
    $
    564.8
    
    
    $
    269.6
    
    
    $
    834.4Long-term debt, less current portion
    
    
    4,479.7
    
    
    
    5.6
    
    
    
    4,485.3Other long-term obligations
    
    
    631.8
    
    
    
    96.9
    
    
    
    728.7Due to parent
    
    
    1,111.1
    
    
    
    1,364.5
    
    
    
    2,475.6Total equity (deficit)
    
    
    (2,035.1
    )
    
    
    2,428.9
    
    
    
    393.8Total liabilities and equity (deficit)
    
    $
    4,752.3
    
    
    $
    4,165.5
    
    
    $
    8,917.8
 
 (1)
    
    All transactions between BFI and the Other Allied collateral have been eliminated. Interest expense and other
  87




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Interest expense and other
 Year Ended December 31,2007
    
    
    2006
    
    
    2005Interest expense and otherInterest expense, gross
    
    $
    486.5
    
    
    $
    526.2
    
    
    $
    519.8Interest income
    
    
    (5.9
    )
    
    
    (4.2
    )
    
    
    (3.0
    )Interest capitalized for development projects
    
    
    (19.2
    )
    
    
    (17.2
    )
    
    
    (14.1
    )Accretion of debt and amortization of debt issuance costs
    
    
    20.5
    
    
    
    21.8
    
    
    
    22.7Costs incurred to early extinguish debt
    
    
    59.6
    
    
    
    41.3
    
    
    
    62.6Interest expense allocated to discontinued operations
    
    
    (3.1
    )
    
    
    (4.5
    )
    
    
    (4.9
    )Total interest expense and other from continuing operations
    
    $
    538.4
    
    
    $
    563.4
    
    
    $
    583.1
 Derivative instruments and hedging activities 
   Subsequent events 
  8. Landfill Accounting
  Landfill assets 
  Net Book Value
    
    
    
    
    
    Capping,of Landfills
    
    Landfill
    
    Closure andNet Book Value at
    
    Acquired, net of
    
    Development
    
    Post-Closure
    
    Landfill
    
    
    
    
    
    Net Book Value atDecember 31, 2006
    
    Divestitures
    
    Costs
    
    Accruals (1)
    
    Amortization
    
    Other(1)
    
    December 31, 2007$2,109.4
    
    $
    28.9
    
    
    $
    263.2
    
    
    $
    51.3
    
    
    $
    (229.5
    )
    
    $
    (29.8
    )
    
    $
    2,193.5
 
 (1) Includes an increase in both the landfill retirement obligation and the related
landfill asset resulting from changes in the long-term closure and post-closure costs
associated with one of our landfills in the Midwestern region. We recognized a related pre-tax
impairment charge of $24.5 million during the third quarter of
2007.
 Net Book Value
    
    
    
    
    
    Capping,of Landfills
    
    Landfill
    
    Closure andNet Book Value at
    
    Acquired, net of
    
    Development
    
    Post-Closure
    
    Landfill
    
    
    
    
    
    Net Book Value atDecember 31, 2005
    
    Divestitures
    
    Costs
    
    Accruals
    
    Amortization
    
    Other(1)
    
    December 31, 2006$2,072.5
    
    $
    12.2
    
    
    $
    257.9
    
    
    $
    7.4
    
    
    $
    (245.3
    )
    
    $
    4.7
    
    
    $
    2,109.4
 
 (1)
    
    Relates primarily to capitalized expansion costs transferred to the landfill
amortization base. 88




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ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Capping, closure and post-closure
  2007
    
    
    2006Discounted capping, closure and post-closure liability recorded:Current portion
    
    $
    73.2
    
    
    $
    59.8Non-current portion
    
    
    604.6
    
    
    
    579.3Total
    
    $
    677.8
    
    
    $
    639.1Estimated remaining capping, closure and post-closure costs to be expended:2008
    
    
    
    
    
    $
    73.22009
    
    
    
    
    
    
    62.92010
    
    
    
    
    
    
    73.22011
    
    
    
    
    
    
    68.02012
    
    
    
    
    
    
    54.9Thereafter
    
    
    
    
    
    
    3,035.0Estimated remaining undiscounted capping, closure and post-closure costs to be expended
    
    
    
    
    
    $
    3,367.2Estimated remaining discounted capping, closure and post-closure costs to be expended
    
    
    
    
    
    $
    1,079.6
   Environmental costs -
   Balance at
    
    
    Charges to
    
    
    
    
    
    
    
    
    
    
    Balance at12/31/06
    
    
    Expense
    
    
    Other (1)
    
    
    Payments
    
    
    12/31/07Environmental accruals
    
    $
    217.0
    
    
    $
    
    
    
    $
    (6.4
    )
    
    $
    (21.0
    )
    
    $
    189.6Open landfills capping, closure
and post-closure accruals
    
    
    420.4
    
    
    
    36.2
    
    
    
    22.2
    
    
    
    (26.7
    )
    
    
    452.1Closed landfills capping, closure
and post-closure accruals
    
    
    218.7
    
    
    
    17.0
    
    
    
    17.5
    
    
    
    (27.5
    )
    
    
    225.7Total
    
    $
    856.1
    
    
    $
    53.2
    
    
    $
    33.3
    
    
    $
    (75.2
    )
    
    $
    867.4
 Balance at
    
    
    Charges to
    
    
    
    
    
    
    
    
    
    
    Balance at12/31/05
    
    
    Expense
    
    
    Other (1) (2)
    
    
    Payments
    
    
    12/31/06Environmental accruals
    
    $
    272.5
    
    
    $
    
    
    
    $
    (35.4
    )
    
    $
    (20.1
    )
    
    $
    217.0Open landfills capping, closure
and post-closure accruals
    
    
    413.5
    
    
    
    33.5
    
    
    
    9.9
    
    
    
    (36.5
    )
    
    
    420.4Closed landfills capping, closure
and post-closure accruals
    
    
    200.0
    
    
    
    15.3
    
    
    
    31.5
    
    
    
    (28.1
    )
    
    
    218.7Total
    
    $
    886.0
    
    
    $
    48.8
    
    
    $
    6.0
    
    
    $
    (84.7
    )
    
    $
    856.1
 89




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ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Balance at
    
    
    Charges to
    
    
    
    
    
    
    
    
    
    
    Balance at12/31/04
    
    
    Expense
    
    
    Other (1)
    
    
    Payments
    
    
    12/31/05Environmental accruals
    
    $
    304.4
    
    
    $
    
    
    
    $
    (0.6
    )
    
    $
    (31.3
    )
    
    $
    272.5Open landfills capping, closure
and post-closure accruals
    
    
    403.5
    
    
    
    33.7
    
    
    
    9.0
    
    
    
    (32.7
    )
    
    
    413.5Closed landfills capping, closure
and post-closure accruals
    
    
    218.6
    
    
    
    16.1
    
    
    
    (7.8
    )
    
    
    (26.9
    )
    
    
    200.0Total
    
    $
    926.5
    
    
    $
    49.8
    
    
    $
    0.6
    
    
    $
    (90.9
    )
    
    $
    886.0
 
 (1)
    
    Amounts for open and closed landfills consist primarily of liabilities related to
acquired and divested companies and amounts accrued for capping, closure and post-closure
liabilities and charged to landfill assets during the year.(2)
    
    Includes an environmental adjustment recorded in 2006 due to the selection by a
regulatory agency of a lower cost remediation plan related to a Superfund site, combined with
a reclassification of approximately $27.2 million from environmental to closed site capping,
closure and post-closure. 9. Income Taxes
  Year Ended December 31,2007
    
    
    2006
    
    
    2005Current federal tax provision
    
    $
    14.0
    
    
    $
    7.8
    
    
    $
    2.7Current state tax provision
    
    
    31.7
    
    
    
    24.4
    
    
    
    11.3Deferred tax provision (1)
    
    
    161.4
    
    
    
    203.1
    
    
    
    117.1Total
    
    $
    207.1
    
    
    $
    235.3
    
    
    $
    131.1
 
 (1)
    
    The year ended December 31, 2007 includes $165.4 million of federal deferred income
tax expense offset by $4.0 million of state deferred income tax benefits.  Year Ended December 31,2007
    
    
    2006
    
    
    2005Federal statutory tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State income taxes, net of federal benefit
    
    
    4.2
    
    
    
    6.5
    
    
    
    3.4Interest on uncertain tax matters, net of tax benefit
    
    
    3.4
    
    
    
    10.0
    
    
    
    4.1Tax basis in stock of assets held for sale
    
    
    
    
    
    
    
    
    
    
    (8.0
    )Valuation allowance on state net operating losses
    
    
    0.2
    
    
    
    2.4
    
    
    
    3.4Prior year state matters
    
    
    
    
    
    
    3.4
    
    
    
    Other
    
    
    (2.7
    )
    
    
    2.9
    
    
    
    3.0Effective tax rate
    
    
    40.1
    %
    
    
    60.2
    %
    
    
    40.9
    %
  90




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ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  December 31,2007
    
    
    2006Deferred tax liabilities relating to:Tax-deductible goodwill
    
    $
    (456.3
    )
    
    $
    (418.4
    )Property, equipment and other
    
    
    (208.5
    )
    
    
    (176.5
    )Total deferred tax liabilities
    
    
    (664.8
    )
    
    
    (594.9
    )Deferred tax assets relating to:Environmental, capping, closure and post-closure reserves
    
    
    173.2
    
    
    
    151.8Other reserves
    
    
    80.5
    
    
    
    73.6Capital loss carryforwards
    
    
    18.9
    
    
    
    30.5Net operating loss and minimum tax and other credit carryforwards
    
    
    149.9
    
    
    
    271.6Accrued state tax and interest on uncertain tax matters
    
    
    104.6
    
    
    
    Valuation allowance
    
    
    (134.3
    )
    
    
    (117.4
    )Total deferred tax asset
    
    
    392.8
    
    
    
    410.1Net deferred tax liability
    
    $
    (272.0
    )
    
    $
    (184.8
    )
    Unrecognized tax benefits at January 1, 2007
    
    $
    629Gross increases for tax positions taken prior to January 1, 2007
    
    
    13Gross decreases for tax positions taken prior to January 1, 2007
    
    
    (116
    )Gross increases for tax positions taken in 2007
    
    
    5Gross decreases for tax positions taken in 2007
    
    
    Settlements
    
    
    (3
    )Lapse of statute of limitations
    
    
    Unrecognized tax benefits at December 31, 2007
    
    $
    528
   91




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Risk management companies
      92




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Exchange of partnership interests
 Methane gas .
  10. Employee Benefit Plans
 Defined benefit pension plan 
   93




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     Employers Disclosures about Pensions and Other
Postretirement Benefits
   12/31/06
    
    
    
    
    
    12/31/06
    
    
    
    
    
    12/31/06Balance
    
    AML
    
    Balance
    
    Adjustment
    
    BalancePrior to AML
    
    Adjustment
    
    Post AML
    
    to Initially
    
    Post AML& SFAS 158
    
    Per
    
    Pre-SFAS 158
    
    Apply
    
    & SFAS 158Adjustment
    
    SFAS 87
    
    Adjustment
    
    SFAS 158
    
    AdjustmentPrepaid pension asset
    
    $
    104.1
    
    
    $
    0.4
    
    
    $
    104.5
    
    
    $
    (104.5
    )
    
    $
    Accrued pension
liability
    
    
    (117.8
    )
    
    
    117.8
    
    
    
    
    
    
    
    
    
    
    
    Intangible asset
    
    
    0.7
    
    
    
    (0.7
    )
    
    
    
    
    
    
    
    
    
    
    Non-current asset
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11.6
    
    
    
    11.6Deferred tax asset
    
    
    46.8
    
    
    
    (46.8
    )
    
    
    
    
    
    
    37.8
    
    
    
    37.8AOCI, net of taxes
    
    
    70.3
    
    
    
    (70.3
    )
    
    
    
    
    
    
    55.1
    
    
    
    55.1
 94




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  2007
    
    
    2006Projected benefit obligation at beginning of period
    
    $
    359.3
    
    
    $
    377.4Service cost
    
    
    0.2
    
    
    
    0.2Interest cost
    
    
    21.1
    
    
    
    21.1Curtailment loss
    
    
    
    
    
    
    (0.7
    )Actuarial gain
    
    
    (23.6
    )
    
    
    (22.7
    )Benefits paid
    
    
    (14.9
    )
    
    
    (16.0
    )Projected benefit obligation at end of period
    
    $
    342.1
    
    
    $
    359.3Fair value of plan assets at beginning of period
    
    $
    370.9
    
    
    $
    361.1Actual return on plan assets
    
    
    44.0
    
    
    
    25.8Benefits paid
    
    
    (14.9
    )
    
    
    (16.0
    )Fair value of plan assets at end of period
    
    $
    400.0
    
    
    $
    370.9
  2007
    
    2006Funded status
    
    $
    57.9
    
    
    $
    11.6Non-current asset
    
    $
    57.9
    
    
    $
    11.6
  Net Actuarial
    
    
    Prior Service
    
    
    Tax (Expense)
    
    
    Net of TaxGain
(Loss)
    
    

Credit
    
    
    Benefit
    
    
    AmountBalance, December 31, 2006
    
    $
    (97.7
    )
    
    $
    0.8
    
    
    $
    39.5
    
    
    $
    (57.4
    )Amortization included in net periodic benefit cost
    
    
    5.3
    
    
    
    0.1
    
    
    
    (2.1
    )
    
    
    3.3Net actuarial gain arising during period
    
    
    43.6
    
    
    
    1.0
    
    
    
    (20.0
    )
    
    
    24.6Net change of the year
    
    
    48.9
    
    
    
    1.1
    
    
    
    (22.1
    )
    
    
    27.9Balance, December 31, 2007
    
    $
    (48.8
    )
    
    $
    1.9
    
    
    $
    17.4
    
    
    $
    (29.5
    )
   2007
    
    
    2006
    
    
    2005Service cost
    
    $
    0.2
    
    
    $
    0.2
    
    
    $
    0.6Interest cost
    
    
    21.1
    
    
    
    21.1
    
    
    
    20.7Expected return on plan assets
    
    
    (29.9
    )
    
    
    (29.9
    )
    
    
    (28.2
    )Recognized net actuarial loss
    
    
    5.0
    
    
    
    6.9
    
    
    
    6.8Amortization of prior service cost
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1Curtailment loss
    
    
    
    
    
    
    0.1
    
    
    
    Net periodic benefit cost
    
    $
    (3.5
    )
    
    $
    (1.5
    )
    
    $
    
  2007
    
    2006
    
    2005Actual return on plan assets
    
    $
    44.0
    
    
    $
    25.8
    
    
    $
    39.5Actual rate of return on plan assets
    
    
    11.9
    %
    
    
    7.2
    %
    
    
    11.7
    %
 95




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  2007
    
    2006Discount rate
    
    
    6.25
    %
    
    
    6.00
    %Average rate of compensation increase
    
    
    5.00
    %
    
    
    5.00
    %
  2007
    
    2006
    
    2005Discount rate
    
    
    6.00
    %
    
    
    5.75
    %
    
    
    6.00
    %Average rate of compensation increase
    
    
    5.00
    %
    
    
    5.00
    %
    
    
    5.00
    %Expected return on plan assets
    
    
    8.25
    %
    
    
    8.50
    %
    
    
    8.50
    %
    Target
    
    Percentage of plan assetsallocation
    
    at September 30,2008
    
    2007
    
    2006Equity securities
    
    
    60
    %
    
    
    62
    %
    
    
    59
    %Debt securities
    
    
    40
    %
    
    
    38
    %
    
    
    41
    %Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
  Estimated future payments:2008
    
    $
    13.22009
    
    
    15.02010
    
    
    16.12011
    
    
    16.82012
    
    
    21.92013 through 2017
    
    
    135.0
 96




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 BFI post retirement healthcare plan
  Multi-employer pension plans -
    Supplemental executive retirement plan
   97




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ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  12/31/06
    
    
    
    
    
    12/31/06
    
    
    
    
    
    12/31/06Balance
    
    AML
    
    Balance
    
    Adjustment
    
    BalancePrior to AML
    
    Adjustment
    
    Post AML
    
    to Initially
    
    Post AML && SFAS 158
    
    Per
    
    Pre-SFAS 158
    
    Apply
    
    SFAS 158Adjustment
    
    SFAS 87
    
    Adjustment
    
    SFAS 158
    
    AdjustmentAccrued pension liability
    
    $
    (11.6
    )
    
    $
    1.2
    
    
    $
    (10.4
    )
    
    $
    (1.4
    )
    
    $
    (11.8
    )Intangible asset
    
    
    3.5
    
    
    
    (0.7
    )
    
    
    2.8
    
    
    
    (2.8
    )
    
    
    Deferred tax asset
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.7
    
    
    
    1.7AOCI, net of tax 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.5
    
    
    
    2.5
  2007
    
    
    2006Projected benefit obligation at beginning of period
    
    $
    11.8
    
    
    $
    11.2Service cost
    
    
    0.8
    
    
    
    0.9Interest cost
    
    
    0.7
    
    
    
    0.7Amendments
    
    
    (1.0
    )
    
    
    Curtailment loss
    
    
    (0.1
    )
    
    
    (1.5
    )Actuarial (gain) loss
    
    
    (0.5
    )
    
    
    0.9Benefits paid
    
    
    (0.6
    )
    
    
    (0.4
    )Projected benefit obligation at end of period
    
    $
    11.1
    
    
    $
    11.8Fair value of plan assets at end of period
    
    $
    
    
    
    $
    
  2007
    
    2006Funded status
    
    $
    (11.1
    )
    
    $
    (11.8
    )Current liabilities
    
    $
    (0.5
    )
    
    $
    (0.7
    )Non-current liabilities
    
    
    (10.6
    )
    
    
    (11.1
    )
  2007
    
    
    2006Net actuarial loss
    
    $
    0.4
    
    
    $
    1.1Prior service cost
    
    
    1.6
    
    
    
    3.1Total AOCI before tax benefit
    
    $
    2.0
    
    
    $
    4.2
   2007
    
    
    2006
    
    
    2005Service cost
    
    $
    0.8
    
    
    $
    0.9
    
    
    $
    1.0Interest cost
    
    
    0.7
    
    
    
    0.7
    
    
    
    0.7Recognized net actuarial loss (gain)
    
    
    0.1
    
    
    
    0.1
    
    
    
    (0.2
    )Amortization of prior service cost
    
    
    0.5
    
    
    
    0.8
    
    
    
    1.5Curtailment loss (1)
    
    
    (0.1
    )
    
    
    
    
    
    
    (0.8
    )Net periodic benefit cost
    
    $
    2.0
    
    
    $
    2.5
    
    
    $
    2.2
 
 (1)
    
    The curtailment in 2006 includes a $0.9 million gain related to two participants
leaving the plan offset by a net $0.9 million loss related to a participants early retirement. 98




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ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  2007
    
    2006Discount rate
    
    
    6.25
    %
    
    
    6.00
    %Average rate of compensation increase
    
    
    3.00
    %
    
    
    3.00
    %
  2007
    
    2006
    
    2005Discount rate
    
    
    6.00
    %
    
    
    5.75
    %
    
    
    6.00
    %Average rate of compensation increase
    
    
    3.00
    %
    
    
    3.00
    %
    
    
    3.00
    %
  Estimated future payments:2008
    
    
    0.52009
    
    
    0.52010
    
    
    0.52011
    
    
    0.92012
    
    
    0.92013 through 2017
    
    
    7.6
 Defined contribution plan -
  Incentive plans -
   99




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    11. Preferred Stock
  Series D mandatory convertible preferred stock -
  Applicable Market Value of Common Shares
    
    Conversion RateLess than or equal to $7.90
    
    31.6456:1Between $7.90 and $9.88
    
    31.6456:1 to 25.3165:1Equal to or greater than $9.88
    
    25.3165:1
  Series C mandatory convertible preferred stock -
   100




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ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 12. Common Stock
  2007
    
    
    2006
    
    
    2005Balance at beginning of year
    
    
    367.9
    
    
    
    331.2
    
    
    
    317.5Common stock issued, net
    
    
    0.4
    
    
    
    34.6
    
    
    
    13.4Stock options exercised
    
    
    2.1
    
    
    
    2.1
    
    
    
    0.3Balance at end of year
    
    
    370.4
    
    
    
    367.9
    
    
    
    331.2
 13. Stock Plans
 Employee plans -
   th th
 101




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ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  2005 non-employee director equity compensation plan -
  Stock-based compensation -
  2007
    
    
    2006Stock-based compensation expense by type of award(1):Stock options
    
    $
    7.9
    
    
    $
    8.6Restricted stock awards  employees
    
    
    12.9
    
    
    
    1.4Restricted stock awards  non-employee directors
    
    
    0.8
    
    
    
    0.5Total stock-based compensation expense
    
    $
    21.6
    
    
    $
    10.5Tax effect on stock-based compensation expense
    
    
    (7.9
    )
    
    
    (3.4
    )Net effect on net income available to common shareholders
    
    $
    13.7
    
    
    $
    7.1Effect on earnings per share:Basic
    
    $
    0.04
    
    
    $
    0.02Diluted
    
    
    0.03
    
    
    
    0.02
 
 (1)
    
    Primarily included in selling, general and administrative expenses.  Net income available to common shareholders, as reported
    
    $
    151.8Add: Stock-based compensation expense included in reported net income available to common
shareholders, net of tax
    
    
    5.6Less: Total stock-based employee compensation expense determined under fair value based method,
net of tax
    
    
    (10.0
    )Net income available to common shareholders, pro forma
    
    $
    147.4Basic earnings per share: As reported
    
    $
    0.46Pro forma
    
    
    0.45Diluted earnings per share: As reported
    
    $
    0.46Pro forma
    
    
    0.45
 Valuation assumptions -
  Year Ended December 31,2007
    
    2006
    
    2005Risk free interest rate
    
    
    4.0
    %
    
    
    4.1
    %
    
    
    3.4
    %Expected life (in years)
    
    
    6.5
    
    
    
    6.6
    
    
    
    5.8Expected dividend rate
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Expected volatility
    
    
    41.6
    %
    
    
    42.1
    %
    
    
    51.4
    %
 102




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ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Stock options -
  Weighted
    
    
    Weighted Average
    
    
    AggregateNumber
    
    
    Average
    
    
    Remaining
    
    
    Intrinsicof Shares
    
    
    Exercise
    
    
    Contractual Term
    
    
    Value(in millions)
    
    
    Price
    
    
    (years)
    
    
    (in millions)(1)Outstanding at January 1, 2007
    
    
    19.9
    
    
    $
    11.77Granted
    
    
    3.4
    
    
    
    11.66Exercised
    
    
    (2.0
    )
    
    
    10.44Forfeited or expired
    
    
    (1.3
    )
    
    
    13.66Outstanding at December 31, 2007
    
    
    20.0
    
    
    
    11.82
    
    
    
    6.0
    
    
    $
    14.7Expected to vest at December 31, 2007
    
    
    6.7
    
    
    $
    10.88
    
    
    
    8.9
    
    
    $
    5.4Exercisable at December 31, 2007
    
    
    12.3
    
    
    $
    12.41
    
    
    
    4.2
    
    
    $
    8.5
 
 (1)
    
    Based on our closing common stock price of $11.02 at December 31, 2007.     Number
    
    Weightedof Shares
    
    Average Grant(in millions)
    
    Date Fair ValueNon-vested balance at January 1, 2007
    
    
    6.4
    
    
    $
    5.02Granted
    
    
    3.4
    
    
    
    5.50Vested
    
    
    (1.8
    )
    
    
    5.00Forfeited
    
    
    (0.3
    )
    
    
    5.40Non-vested balance at December 31, 2007
    
    
    7.7
    
    
    
    5.21
 103




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ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Restricted stock awards -
  WeightedWeighted
    
    
    Average
    
    
    AggregateNumber
    
    
    Average
    
    
    Remaining
    
    
    Intrinsicof Shares
    
    
    Grant Date
    
    
    Contractual
    
    
    Value(in millions)
    
    
    Fair Value
    
    
    Term (years)
    
    
    (in millions)(1)Outstanding at January 1, 2007
    
    
    3.4
    
    
    $
    7.32Granted
    
    
    1.3
    
    
    
    11.22Vested
    
    
    (1.0
    )
    
    
    7.48Forfeited
    
    
    (0.1
    )
    
    
    9.22Outstanding at December 31, 2007
    
    
    3.6
    
    
    
    8.60
    
    
    
    2.2
    
    
    $
    39.1Expected to vest at December 31, 2007
    
    
    3.4
    
    
    
    8.54
    
    
    
    2.1
    
    
    $
    29.6
 
 (1)
    
    Based on our closing common stock price of $11.02 at December 31, 2007.During the year ended December 31, 2007, Allied granted approximately 1.2 million restricted stock
units with an estimated total grant-date fair value of $13.0 million. Of this amount, we estimated
the stock-based compensation for the awards not expected to vest was $0.7 million. The weighted
average fair value of restricted stock units granted during the year ended December 31, 2007 was
$11.08 per share.   Non-employee director restricted stock awards -
  104




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ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 14. Net Income Per Common Share
  Year Ended December 31,2007
    
    
    2006
    
    
    2005Basic earnings per share computation:Income from continuing operations
    
    $
    309.8
    
    
    $
    155.8
    
    
    $
    189.8Less: dividends on preferred stock
    
    
    37.5
    
    
    
    42.9
    
    
    
    52.0Income from continuing operations available to
common stockholders
    
    $
    272.3
    
    
    $
    112.9
    
    
    $
    137.8Weighted average common shares outstanding
    
    
    368.8
    
    
    
    356.7
    
    
    
    326.9Basic earnings per share from continuing operations
    
    $
    0.74
    
    
    $
    0.32
    
    
    $
    0.42Diluted earnings per share computation:Income from continuing operations
    
    $
    309.8
    
    
    $
    155.8
    
    
    $
    189.8Less: dividends on preferred stock
    
    
    
    
    
    
    42.9
    
    
    
    52.0Add back: Interest expense on senior subordinated
convertible debentures, net of tax
    
    
    6.0
    
    
    
    
    
    
    
    Income from continuing operations available to
common stockholders
    
    $
    315.8
    
    
    $
    112.9
    
    
    $
    137.8Weighted average common shares outstanding
    
    
    368.8
    
    
    
    356.7
    
    
    
    326.9Dilutive effect of stock awards
    
    
    2.1
    
    
    
    2.6
    
    
    
    3.2Dilutive effect of senior subordinated convertible
Debentures (1)
    
    
    11.3
    
    
    
    
    
    
    
    Dilutive effect of Series D preferred stock (1)
    
    
    60.8
    
    
    
    
    
    
    
    Weighted average common and common equivalent shares
outstanding
    
    
    443.0
    
    
    
    359.3
    
    
    
    330.1Diluted earnings per share from continuing operations
    
    $
    0.71
    
    
    $
    0.32
    
    
    $
    0.42
 
 (1)
    
    Amounts for 2007 include contingently issuable shares associated with our
convertible debentures and preferred stock.  Year Ended December 31,2007
    
    2006
    
    2005Series C preferred stock
    
    
    
    
    
    
    
    
    
    
    38.6Series D preferred stock
    
    
    
    
    
    
    60.8
    
    
    
    54.6Stock options
    
    
    8.1
    
    
    
    10.7
    
    
    
    18.1Senior subordinated convertible debentures
    
    
    
    
    
    
    11.3
    
    
    
    11.3
 15. Commitments and Contingencies
 Litigation -
 , Income Taxes
 105




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ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      106




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ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
       107




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Royalties -
  Disposal Agreements -
  Lease agreements -
  2008
    
    $
    40.32009
    
    
    34.92010
    
    
    28.52011
    
    
    23.82012
    
    
    19.8Thereafter
    
    
    106.4Total
    
    $
    253.7
  Financial assurances -
  108




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  LandfillClosure/
    
    
    Contract
    
    
    Risk/Casualty
    
    
    Collateral forPost-Closure
    
    
    Performance
    
    
    Insurance
    
    
    Obligations
    
    
    TotalInsurance policies
    
    $
    680.5
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    680.5Surety bonds
    
    
    644.9
    
    
    
    492.5
    
    
    
    
    
    
    
    
    
    
    
    1,137.4Trust deposits
    
    
    85.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    85.5Letters of credit (1)
    
    
    385.3
    
    
    
    90.4
    
    
    
    245.7
    
    
    
    141.0
    
    
    
    862.4Total
    
    $
    1,796.2
    
    
    $
    582.9
    
    
    $
    245.7
    
    
    $
    141.0
    
    
    $
    2,765.8
 
 (1)
    
    These amounts were issued under the 2005 Revolver, the Incremental Revolving Letter
of Credit and the Institutional Letter of Credit Facility under our 2005 Credit Facility.  Off-balance sheet arrangements -
  Guarantees -
  . .
 16. Related Party Transactions
  109




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 17. Segment Reporting
  Organization and Summary of Significant Accounting Policies Acquisitions and Divestitures
  Operating IncomeBeforeDepreciation and
    
    
    Depreciation and
    
    
    CapitalRevenues
    
    
    Amortization (1)
    
    
    Amortization
    
    
    Expenditures
    
    
    Total Assets2007:Midwestern (2)
    
    $
    1,236.4
    
    
    $
    345.1
    
    
    $
    125.7
    
    
    $
    143.5
    
    
    $
    3,350.9Northeastern
    
    
    1,258.3
    
    
    
    359.4
    
    
    
    113.9
    
    
    
    126.2
    
    
    
    2,642.6Southeastern
    
    
    965.1
    
    
    
    316.4
    
    
    
    92.2
    
    
    
    110.8
    
    
    
    2,231.3Southwestern
    
    
    1,027.4
    
    
    
    314.0
    
    
    
    96.8
    
    
    
    111.8
    
    
    
    2,316.1Western
    
    
    1,435.3
    
    
    
    497.2
    
    
    
    107.3
    
    
    
    141.1
    
    
    
    2,600.0Total reportable segments
    
    
    5,922.5
    
    
    
    1,832.1
    
    
    
    535.9
    
    
    
    633.4
    
    
    
    13,140.9Other (3)
    
    
    146.2
    
    
    
    
    
    
    
    17.6
    
    
    
    36.6
    
    
    
    807.8Total per financial statements
    
    $
    6,068.7
    
    
    
    
    
    
    $
    553.5
    
    
    $
    670.0
    
    
    $
    13,948.72006:Midwestern (2)
    
    $
    1,210.3
    
    
    $
    353.1
    
    
    $
    126.0
    
    
    $
    138.9
    
    
    $
    3,326.6Northeastern
    
    
    1,256.6
    
    
    
    337.2
    
    
    
    120.2
    
    
    
    140.2
    
    
    
    2,634.1Southeastern
    
    
    965.5
    
    
    
    299.0
    
    
    
    93.9
    
    
    
    100.7
    
    
    
    2,294.0Southwestern (2)
    
    
    991.6
    
    
    
    288.1
    
    
    
    106.4
    
    
    
    110.8
    
    
    
    2,290.9Western
    
    
    1,351.2
    
    
    
    440.9
    
    
    
    104.3
    
    
    
    143.3
    
    
    
    2,484.7Total reportable segments
    
    
    5,775.2
    
    
    
    1,718.3
    
    
    
    550.8
    
    
    
    633.9
    
    
    
    13,030.3Other (3)
    
    
    133.3
    
    
    
    
    
    
    
    6.9
    
    
    
    27.2
    
    
    
    780.7Total per financial statements
    
    $
    5,908.5
    
    
    
    
    
    
    $
    557.7
    
    
    $
    661.1
    
    
    $
    13,811.02005:Midwestern
    
    $
    1,175.2
    
    
    $
    337.1
    
    
    $
    128.0
    
    
    $
    148.2
    
    
    $
    3,327.6Northeastern
    
    
    1,247.2
    
    
    
    318.9
    
    
    
    116.2
    
    
    
    117.3
    
    
    
    2,633.3Southeastern
    
    
    900.8
    
    
    
    264.1
    
    
    
    90.6
    
    
    
    91.5
    
    
    
    2,279.1Southwestern
    
    
    939.6
    
    
    
    262.7
    
    
    
    100.4
    
    
    
    143.0
    
    
    
    2,287.4Western
    
    
    1,265.4
    
    
    
    413.6
    
    
    
    100.2
    
    
    
    144.8
    
    
    
    2,422.1Total reportable segments
    
    
    5,528.2
    
    
    
    1,596.4
    
    
    
    535.4
    
    
    
    644.8
    
    
    
    12,949.5Other (3)
    
    
    84.0
    
    
    
    
    
    
    
    8.2
    
    
    
    40.8
    
    
    
    711.8Total per financial statements
    
    $
    5,612.2
    
    
    
    
    
    
    $
    543.6
    
    
    $
    685.6
    
    
    $
    13,661.3
 
 (1)
    
    See following table for reconciliation to income from continuing operations before
income taxes and minority interest per the consolidated statements of operations.(2)
    
    Operating income before depreciation and amortization for 2007 includes $27.1
million of asset impairments, of which $24.5 million related to a landfill in our Midwestern
region that until recently, was managed by a third party according to a partnership agreement.
Operating income before depreciation and amortization for 2006 includes $8.5 million ($6.5
million in Midwestern and $2.0 million in Southwestern) of asset impairments relating to
management decisions to discontinue the operations or development of certain landfill
facilities. The impairment charges are included in Loss from divestitures and asset
impairments on the consolidated statement of operations.(3)
    
    Amounts relate primarily to our subsidiaries that provide services throughout the
organization and not on a regional basis. 110




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ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Year Ended December 31,2007
    
    
    2006
    
    
    2005Total operating income before depreciation and
amortization for reportable segments
    
    $
    1,832.1
    
    
    $
    1,718.3
    
    
    $
    1,596.4Depreciation and amortization
    
    
    (553.5
    )
    
    
    (557.7
    )
    
    
    (543.6
    )Interest expense
    
    
    (538.4
    )
    
    
    (563.4
    )
    
    
    (583.1
    )Other (1)
    
    
    (222.9
    )
    
    
    (206.0
    )
    
    
    (149.0
    )Income from continuing operations before
income taxes
    
    $
    517.3
    
    
    $
    391.2
    
    
    $
    320.7
 
 (1)
    
    Amounts relate primarily to our subsidiaries which provide services throughout the
organization and not on a regional basis including National Accounts where work has been
subcontracted. Amounts for 2007 include $13.4 million net loss on divestitures, of which $16.2
million related to a landfill sale in the Southeastern region. Amounts for 2006 include $7.6
million from loss on divestitures, $1.2 million of asset impairment relating to managements
decision to discontinue operations at a landfill facility, and $5.2 million impairment charge
related to the relocation of our operations support center. These charges are reported on the
consolidated statement of operations as a part of Loss from divestitures and asset
impairments.   Year Ended December 31,2007
    
    
    2006
    
    
    2005CollectionResidential
    
    $
    1,201.6
    
    
    $
    1,190.0
    
    
    $
    1,172.2Commercial
    
    
    1,535.5
    
    
    
    1,457.0
    
    
    
    1,356.7Roll-off (1)
    
    
    1,290.3
    
    
    
    1,304.5
    
    
    
    1,223.8Recycling
    
    
    210.2
    
    
    
    189.8
    
    
    
    186.4Total Collection
    
    
    4,237.6
    
    
    
    4,141.3
    
    
    
    3,939.1DisposalLandfill
    
    
    832.7
    
    
    
    839.2
    
    
    
    798.4Transfer
    
    
    436.0
    
    
    
    423.1
    
    
    
    420.7Total Disposal
    
    
    1,268.7
    
    
    
    1,262.3
    
    
    
    1,219.1Recycling  Commodity
    
    
    257.2
    
    
    
    212.2
    
    
    
    219.7Other (2)
    
    
    305.2
    
    
    
    292.7
    
    
    
    234.3Total Revenues
    
    $
    6,068.7
    
    
    $
    5,908.5
    
    
    $
    5,612.2
 
 (1)
    
    Consists of revenue generated from commercial, industrial and residential
customers from waste collected in roll-off containers that are loaded onto collection
vehicles.(2)
    
    Consists primarily of revenue from our National Accounts business where the work has
been subcontracted, revenue generated from transporting waste via railway and revenue from
liquid waste disposal. National Accounts revenue included in other revenue represents the
portion of revenue generated from nationwide contracts in markets outside our operating areas,
and as such, the associated waste handling services are subcontracted to local operators.
Consequently, substantially all of this revenue is offset by the corresponding subcontract
costs. 111




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ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Discontinued operations -
  Operating IncomeBefore
    
    
    DepreciationDepreciation and
    
    
    and
    
    
    CapitalRevenues (1)
    
    
    Amortization
    
    
    Amortization
    
    
    Expenditures
    
    
    Total Assets2007Midwestern
    
    $
    15.9
    
    
    $
    4.8
    
    
    $
    1.9
    
    
    $
    2.7
    
    
    $
    Southeastern
    
    
    35.0
    
    
    
    5.9
    
    
    
    2.5
    
    
    
    1.7
    
    
    
    Total reportable segments
    
    $
    50.9
    
    
    $
    10.7
    
    
    $
    4.4
    
    
    $
    4.4
    
    
    $
    2006Midwestern
    
    $
    27.4
    
    
    $
    6.6
    
    
    $
    6.1
    
    
    $
    1.4
    
    
    $
    48.8Southeastern
    
    
    95.2
    
    
    
    17.8
    
    
    
    5.5
    
    
    
    6.8
    
    
    
    83.0Total reportable segments
    
    $
    122.6
    
    
    $
    24.4
    
    
    $
    11.6
    
    
    $
    8.2
    
    
    $
    131.82005Midwestern
    
    $
    29.2
    
    
    $
    6.6
    
    
    $
    3.6
    
    
    $
    4.3
    
    
    $
    52.9Northeastern
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    Southeastern
    
    
    97.3
    
    
    
    18.9
    
    
    
    7.2
    
    
    
    6.0
    
    
    
    82.9Total reportable segments
    
    $
    126.5
    
    
    $
    25.6
    
    
    $
    10.8
    
    
    $
    10.3
    
    
    $
    135.8
 
 (1)
    
    Includes revenue from divisions not part of the disposal group, which were treated
as intercompany revenues prior to the divestiture. Revenue from the Midwestern region includes
$1.2 million, $1.3 million and $2.9 million for the years ended December 31, 2007, 2006 and
2005, respectively. Revenue from the Southeastern region includes $0.3 million, $1.0 million
and $1.0 million for the years ended December 31, 2007, 2006 and 2005, respectively. 18. Selected Quarterly Financial Data (unaudited)
  First
    
    Second
    
    Third
    
    FourthQuarter
    
    Quarter
    
    Quarter
    
    Quarter2007Revenues
    
    $
    1,444.6
    
    
    $
    1,547.5
    
    
    $
    1,556.3
    
    
    $
    1,520.3Income from continuing operations (1)
    
    
    34.3
    
    
    
    91.0
    
    
    
    66.9
    
    
    
    117.6Net income available to common shareholders (1)
    
    
    30.5
    
    
    
    81.9
    
    
    
    17.8
    
    
    
    105.9Basic earnings per common share available to
common shareholders:Income from continuing operations
    
    
    0.07
    
    
    
    0.22
    
    
    
    0.16
    
    
    
    0.29Net income
    
    
    0.08
    
    
    
    0.22
    
    
    
    0.05
    
    
    
    0.28Diluted earnings per common share available to
common shareholders:Income from continuing operations
    
    
    0.07
    
    
    
    0.21
    
    
    
    0.15
    
    
    
    0.27Net income
    
    
    0.08
    
    
    
    0.21
    
    
    
    0.05
    
    
    
    0.262006Revenues
    
    $
    1,408.3
    
    
    $
    1,509.6
    
    
    $
    1,525.1
    
    
    $
    1,465.5Income from continuing operations (2)
    
    
    40.0
    
    
    
    37.0
    
    
    
    70.6
    
    
    
    8.2Net income available to common shareholders (2)
    
    
    26.5
    
    
    
    28.2
    
    
    
    62.9
    
    
    
    0.4Basic earnings per common share available to
common shareholders:Income from continuing operations
    
    
    0.08
    
    
    
    0.08
    
    
    
    0.17
    
    
    
    0.00Net income
    
    
    0.08
    
    
    
    0.08
    
    
    
    0.17
    
    
    
    0.00Diluted earnings per common share available to
common shareholders:Income from continuing operations
    
    
    0.08
    
    
    
    0.08
    
    
    
    0.17
    
    
    
    0.00Net income
    
    
    0.08
    
    
    
    0.08
    
    
    
    0.17
    
    
    
    0.00
 
 (1)
    
    The third quarter of 2007 includes asset impairment charges
of $24.5 million related to changes in the long-term closure and
post-closure costs associated with one of our landfills in the Midwestern
region and $16.1 million loss related to the divestiture of certain
operations in the Southeastern region. Amounts also include
tax benefits of $9.7 million in the second quarter and $7.3 million in the
fourth quarter for the reversal of previously accrued interest expense on uncertain tax
matters and $7.6 million in the fourth quarter primarily relating to state tax adjustments.(2)
    
    The third quarter of 2006 includes an asset impairment charge of $6.5 million associated with our decision
to discontinue development at a landfill in our Midwestern region and $8.0 million loss associated with
divestitures of certain operations in the Northeastern and Midwestern regions.
The fourth quarter of 2006 included income tax of $58.2 million consisting of: $21.5
million of interest charges on previously recorded liabilities under review by the applicable
taxing authorities, $13.4 million in adjustments relating to state tax matters attributable to
prior years, a $12.0 million increase in our valuation allowance for state net operating loss
carry-forwards, and $11.3 million relating primarily to adjustments of state income taxes. 112




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 19. Statements of Cash Flows -
  2007
    
    2006
    
    2005Supplemental disclosures -Interest paid (net of amounts capitalized)
    
    $
    472.8
    
    
    $
    516.5
    
    
    $
    528.5Income taxes paid (net of refunds)
    
    
    36.9
    
    
    
    30.6
    
    
    
    16.2Non-cash transactions -Debt incurred or assumed in acquisitions
    
    $
    
    
    
    $
    0.1
    
    
    $
    3.4Liabilities incurred or assumed in acquisitions
    
    
    14.7
    
    
    
    0.1
    
    
    
    1.6Capital lease obligations incurred
    
    
    1.1
    
    
    
    
    
    
    
    1.5Accrued dividends on preferred stock
    
    
    3.1
    
    
    
    3.1
    
    
    
    8.5Conversion of Series C Preferred Stock
    
    
    
    
    
    
    345.0
    
    
    
    
 20. Condensed Consolidating Financial Statements
 Long-term Debt
 UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEETS
(in millions)
 December 31, 2007Parent
    
    
    Issuer
    
    
    Guarantors
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent Assets Cash and cash equivalents
    
    $
    
    
    
    $
    0.1
    
    
    $
    216.4
    
    
    $
    14.4
    
    
    $
    
    
    
    $
    230.9Restricted cash
    
    
    
    
    
    
    26.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26.1Accounts receivable, net
    
    
    
    
    
    
    
    
    
    
    212.9
    
    
    
    478.1
    
    
    
    
    
    
    
    691.0Prepaid and other current assets
    
    
    
    
    
    
    0.2
    
    
    
    61.7
    
    
    
    59.2
    
    
    
    (39.2
    )
    
    
    81.9Deferred income taxes, net
    
    
    
    
    
    
    
    
    
    
    118.8
    
    
    
    9.5
    
    
    
    
    
    
    
    128.3Total current assets
    
    
    
    
    
    
    26.4
    
    
    
    609.8
    
    
    
    561.2
    
    
    
    (39.2
    )
    
    
    1,158.2Property and equipment, net
    
    
    
    
    
    
    
    
    
    
    4,406.9
    
    
    
    23.5
    
    
    
    
    
    
    
    4,430.4Goodwill
    
    
    
    
    
    
    
    
    
    
    7,947.6
    
    
    
    72.4
    
    
    
    
    
    
    
    8,020.0Investment in subsidiaries
    
    
    2,539.5
    
    
    
    15,434.1
    
    
    
    458.9
    
    
    
    
    
    
    
    (18,432.5
    )
    
    
    Other assets, net
    
    
    5.4
    
    
    
    82.5
    
    
    
    231.1
    
    
    
    1,254.9
    
    
    
    (1,233.8
    )
    
    
    340.1Total assets
    
    $
    2,544.9
    
    
    $
    15,543.0
    
    
    $
    13,654.3
    
    
    $
    1,912.0
    
    
    $
    (19,705.5
    )
    
    $
    13,948.7LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities -Current portion of long-term debt
    
    $
    
    
    
    $
    
    
    
    $
    163.6
    
    
    $
    393.7
    
    
    $
    
    
    
    $
    557.3Accounts payable
    
    
    
    
    
    
    
    
    
    
    492.3
    
    
    
    4.5
    
    
    
    
    
    
    
    496.8Accrued closure, post-closure and
environmental costs
    
    
    
    
    
    
    
    
    
    
    20.9
    
    
    
    75.1
    
    
    
    
    
    
    
    96.0Accrued interest
    
    
    2.1
    
    
    
    75.2
    
    
    
    59.1
    
    
    
    2.4
    
    
    
    (39.2
    )
    
    
    99.6Other accrued liabilities
    
    
    91.8
    
    
    
    
    
    
    
    433.7
    
    
    
    232.2
    
    
    
    
    
    
    
    757.7Unearned revenue
    
    
    
    
    
    
    
    
    
    
    230.9
    
    
    
    8.8
    
    
    
    
    
    
    
    239.7Total current liabilities
    
    
    93.9
    
    
    
    75.2
    
    
    
    1,400.5
    
    
    
    716.7
    
    
    
    (39.2
    )
    
    
    2,247.1Long-term debt, less current portion
    
    
    230.0
    
    
    
    5,169.1
    
    
    
    686.5
    
    
    
    
    
    
    
    
    
    
    
    6,085.6Deferred income taxes
    
    
    
    
    
    
    
    
    
    
    406.2
    
    
    
    (5.9
    )
    
    
    
    
    
    
    400.3Accrued
closure, post-closure and environmental costs
    
    
    
    
    
    
    
    
    
    
    356.1
    
    
    
    415.3
    
    
    
    
    
    
    
    771.4Due to/(from) parent
    
    
    (1,704.0
    )
    
    
    7,815.7
    
    
    
    (6,029.2
    )
    
    
    (82.5
    )
    
    
    
    
    
    
    Other long-term obligations
    
    
    20.8
    
    
    
    
    
    
    
    1,735.0
    
    
    
    19.6
    
    
    
    (1,235.3
    )
    
    
    540.1Stockholders equity
    
    
    3,904.2
    
    
    
    2,483.0
    
    
    
    15,099.2
    
    
    
    848.8
    
    
    
    (18,431.0
    )
    
    
    3,904.2Total liabilities and
stockholders equity
    
    $
    2,544.9
    
    
    $
    15,543.0
    
    
    $
    13,654.3
    
    
    $
    1,912.0
    
    
    $
    (19,705.5
    )
    
    $
    13,948.7
 113




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEETS
(in millions)
 December 31, 2006Non-Parent
    
    
    Issuer
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent Assets Cash and cash equivalents
    
    $
    
    
    
    $
    
    
    
    $
    68.3
    
    
    $
    25.8
    
    
    $
    
    
    
    $
    94.1Accounts receivable, net
    
    
    
    
    
    
    
    
    
    
    317.2
    
    
    
    370.3
    
    
    
    
    
    
    
    687.5Prepaid and other current assets
    
    
    
    
    
    
    0.1
    
    
    
    69.1
    
    
    
    63.7
    
    
    
    (39.3
    )
    
    
    93.6Deferred income taxes, net
    
    
    
    
    
    
    
    
    
    
    163.0
    
    
    
    9.5
    
    
    
    
    
    
    
    172.5Total current assets
    
    
    
    
    
    
    0.1
    
    
    
    617.6
    
    
    
    469.3
    
    
    
    (39.3
    )
    
    
    1,047.7Property and equipment, net
    
    
    
    
    
    
    
    
    
    
    4,237.3
    
    
    
    21.4
    
    
    
    
    
    
    
    4,258.7Goodwill
    
    
    
    
    
    
    
    
    
    
    8,053.6
    
    
    
    72.4
    
    
    
    
    
    
    
    8,126.0Investment in subsidiaries
    
    
    2,334.6
    
    
    
    14,898.3
    
    
    
    423.6
    
    
    
    
    
    
    
    (17,656.5
    )
    
    
    Other assets, net
    
    
    5.6
    
    
    
    81.1
    
    
    
    272.3
    
    
    
    1,217.6
    
    
    
    (1,198.0
    )
    
    
    378.6Total assets
    
    $
    2,340.2
    
    
    $
    14,979.5
    
    
    $
    13,604.4
    
    
    $
    1,780.7
    
    
    $
    (18,893.8
    )
    
    $
    13,811.0LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities -Current portion of long-term debt
    
    $
    
    
    
    $
    
    
    
    $
    6.6
    
    
    $
    230.0
    
    
    $
    
    
    
    $
    236.6Accounts payable
    
    
    
    
    
    
    
    
    
    
    488.7
    
    
    
    5.7
    
    
    
    
    
    
    
    494.4Accrued closure, post-closure and
environmental costs
    
    
    
    
    
    
    
    
    
    
    20.7
    
    
    
    75.1
    
    
    
    
    
    
    
    95.8Accrued interest
    
    
    2.0
    
    
    
    83.6
    
    
    
    58.9
    
    
    
    1.7
    
    
    
    (39.3
    )
    
    
    106.9Other accrued liabilities
    
    
    88.4
    
    
    
    6.1
    
    
    
    54.4
    
    
    
    220.9
    
    
    
    
    
    
    
    369.8Unearned revenue
    
    
    
    
    
    
    
    
    
    
    220.4
    
    
    
    8.8
    
    
    
    
    
    
    
    229.2Total current liabilities
    
    
    90.4
    
    
    
    89.7
    
    
    
    849.7
    
    
    
    542.2
    
    
    
    (39.3
    )
    
    
    1,532.7Long-term debt, less current portion
    
    
    230.0
    
    
    
    5,601.0
    
    
    
    843.0
    
    
    
    
    
    
    
    
    
    
    
    6,674.0Deferred income taxes
    
    
    
    
    
    
    
    
    
    
    362.1
    
    
    
    (4.8
    )
    
    
    
    
    
    
    357.3Accrued closure, post-closure and
environmental costs
    
    
    
    
    
    
    
    
    
    
    333.1
    
    
    
    427.2
    
    
    
    
    
    
    
    760.3Due to/(from) parent
    
    
    (1,598.7
    )
    
    
    6,988.2
    
    
    
    (5,339.8
    )
    
    
    (49.7
    )
    
    
    
    
    
    
    Other long-term obligations
    
    
    19.6
    
    
    
    
    
    
    
    2,003.9
    
    
    
    63.4
    
    
    
    (1,199.1
    )
    
    
    887.8Stockholders equity
    
    
    3,598.9
    
    
    
    2,300.6
    
    
    
    14,552.4
    
    
    
    802.4
    
    
    
    (17,655.4
    )
    
    
    3,598.9Total liabilities and
stockholders equity
    
    $
    2,340.2
    
    
    $
    14,979.5
    
    
    $
    13,604.4
    
    
    $
    1,780.7
    
    
    $
    (18,893.8
    )
    
    $
    13,811.0
 114




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(in millions)
 Year Ended December 31, 2007Non-Parent
    
    
    Issuer
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedRevenues
    
    $
    
    
    
    $
    
    
    
    $
    5,870.6
    
    
    $
    198.1
    
    
    $
    
    
    
    $
    6,068.7Cost of operations
    
    
    
    
    
    
    
    
    
    
    3,606.8
    
    
    
    180.3
    
    
    
    
    
    
    
    3,787.1Selling, general and administrative
expenses
    
    
    28.2
    
    
    
    
    
    
    
    589.6
    
    
    
    14.1
    
    
    
    
    
    
    
    631.9Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    549.0
    
    
    
    4.5
    
    
    
    
    
    
    
    553.5Loss from divestitures and asset
impairments
    
    
    
    
    
    
    
    
    
    
    40.5
    
    
    
    
    
    
    
    
    
    
    
    40.5Operating income (loss)
    
    
    (28.2
    )
    
    
    
    
    
    
    1,084.7
    
    
    
    (0.8
    )
    
    
    
    
    
    
    1,055.7Equity in earnings (losses) of
subsidiaries
    
    
    198.8
    
    
    
    545.2
    
    
    
    31.6
    
    
    
    
    
    
    
    (775.6
    )
    
    
    Interest income (expense) and other
    
    
    (11.2
    )
    
    
    (444.0
    )
    
    
    (83.9
    )
    
    
    0.7
    
    
    
    
    
    
    
    (538.4
    )Intercompany interest income
(expense)
    
    
    149.7
    
    
    
    (133.6
    )
    
    
    (92.0
    )
    
    
    75.9
    
    
    
    
    
    
    
    Management fee income (expense)
    
    
    8.6
    
    
    
    
    
    
    
    (6.9
    )
    
    
    (1.7
    )
    
    
    
    
    
    
    Income (loss) before income taxes
    
    
    317.7
    
    
    
    (32.4
    )
    
    
    933.5
    
    
    
    74.1
    
    
    
    (775.6
    )
    
    
    517.3Income tax (expense) benefit
    
    
    (44.1
    )
    
    
    214.8
    
    
    
    (350.5
    )
    
    
    (27.3
    )
    
    
    
    
    
    
    (207.1
    )Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.4
    )
    
    
    
    
    
    
    (0.4
    )Net income from continuing
operations
    
    
    273.6
    
    
    
    182.4
    
    
    
    583.0
    
    
    
    46.4
    
    
    
    (775.6
    )
    
    
    309.8Discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    (36.2
    )
    
    
    
    
    
    
    
    
    
    
    (36.2
    )Net income
    
    
    273.6
    
    
    
    182.4
    
    
    
    546.8
    
    
    
    46.4
    
    
    
    (775.6
    )
    
    
    273.6Dividends on preferred stock
    
    
    (37.5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37.5
    )Net income available to
common shareholders
    
    $
    236.1
    
    
    $
    182.4
    
    
    $
    546.8
    
    
    $
    46.4
    
    
    $
    (775.6
    )
    
    $
    236.1
 UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(in millions)
 Year Ended December 31, 2006Non-Parent
    
    
    Issuer
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedRevenues
    
    $
    
    
    
    $
    
    
    
    $
    5,686.4
    
    
    $
    222.1
    
    
    $
    
    
    
    $
    5,908.5Cost of operations
    
    
    
    
    
    
    (0.2
    )
    
    
    3,597.5
    
    
    
    189.1
    
    
    
    
    
    
    
    3,786.4Selling, general and administrative
expenses
    
    
    20.9
    
    
    
    
    
    
    
    552.9
    
    
    
    13.5
    
    
    
    
    
    
    
    587.3Depreciation and amortization
    
    
    
    
    
    
    1.0
    
    
    
    548.4
    
    
    
    8.3
    
    
    
    
    
    
    
    557.7Loss from divestitures and asset
impairments
    
    
    
    
    
    
    
    
    
    
    22.5
    
    
    
    
    
    
    
    
    
    
    
    22.5Operating income (loss)
    
    
    (20.9
    )
    
    
    (0.8
    )
    
    
    965.1
    
    
    
    11.2
    
    
    
    
    
    
    
    954.6Equity in earnings (losses) of
subsidiaries
    
    
    87.1
    
    
    
    427.4
    
    
    
    33.3
    
    
    
    
    
    
    
    (547.8
    )
    
    
    Interest income (expense) and other
    
    
    (11.0
    )
    
    
    (473.4
    )
    
    
    (81.8
    )
    
    
    2.8
    
    
    
    
    
    
    
    (563.4
    )Intercompany interest income
(expense)
    
    
    140.9
    
    
    
    (104.0
    )
    
    
    (115.1
    )
    
    
    78.2
    
    
    
    
    
    
    
    Management fee income (expense)
    
    
    8.2
    
    
    
    
    
    
    
    (6.6
    )
    
    
    (1.6
    )
    
    
    
    
    
    
    Income (loss) before income taxes
    
    
    204.3
    
    
    
    (150.8
    )
    
    
    794.9
    
    
    
    90.6
    
    
    
    (547.8
    )
    
    
    391.2Income tax (expense) benefit
    
    
    (43.4
    )
    
    
    232.0
    
    
    
    (390.2
    )
    
    
    (33.7
    )
    
    
    
    
    
    
    (235.3
    )Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.1
    )
    
    
    
    
    
    
    (0.1
    )Net income from continuing
operations
    
    
    160.9
    
    
    
    81.2
    
    
    
    404.7
    
    
    
    56.8
    
    
    
    (547.8
    )
    
    
    155.8Discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    5.1
    
    
    
    
    
    
    
    
    
    
    
    5.1Net income
    
    
    160.9
    
    
    
    81.2
    
    
    
    409.8
    
    
    
    56.8
    
    
    
    (547.8
    )
    
    
    160.9Dividends on preferred stock
    
    
    (42.9
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (42.9
    )Net income available to
common shareholders
    
    $
    118.0
    
    
    $
    81.2
    
    
    $
    409.8
    
    
    $
    56.8
    
    
    $
    (547.8
    )
    
    $
    118.0
 115




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(in millions)
 Year Ended December 31, 2005Non-Parent
    
    
    Issuer
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedRevenues
    
    $
    
    
    
    $
    
    
    
    $
    5,396.2
    
    
    $
    216.0
    
    
    $
    
    
    
    $
    5,612.2Cost of operations
    
    
    
    
    
    
    (0.2
    )
    
    
    3,449.2
    
    
    
    205.6
    
    
    
    
    
    
    
    3,654.6Selling, general and administrative
expenses
    
    
    22.1
    
    
    
    
    
    
    
    474.6
    
    
    
    13.5
    
    
    
    
    
    
    
    510.2Depreciation and amortization
    
    
    
    
    
    
    0.7
    
    
    
    535.9
    
    
    
    7.0
    
    
    
    
    
    
    
    543.6Operating income (loss)
    
    
    (22.1
    )
    
    
    (0.5
    )
    
    
    936.5
    
    
    
    (10.1
    )
    
    
    
    
    
    
    903.8Equity in earnings (losses) of
subsidiaries
    
    
    148.0
    
    
    
    540.4
    
    
    
    25.6
    
    
    
    
    
    
    
    (714.0
    )
    
    
    Interest income (expense) and other
    
    
    (10.9
    )
    
    
    (495.5
    )
    
    
    (82.8
    )
    
    
    6.1
    
    
    
    
    
    
    
    (583.1
    )Intercompany interest income
(expense)
    
    
    122.1
    
    
    
    (111.7
    )
    
    
    (87.1
    )
    
    
    76.7
    
    
    
    
    
    
    
    Management fee income (expense)
    
    
    5.0
    
    
    
    
    
    
    
    (3.5
    )
    
    
    (1.5
    )
    
    
    
    
    
    
    Income (loss) before income taxes
    
    
    242.1
    
    
    
    (67.3
    )
    
    
    788.7
    
    
    
    71.2
    
    
    
    (714.0
    )
    
    
    320.7Income tax (expense) benefit
    
    
    (38.3
    )
    
    
    243.1
    
    
    
    (307.6
    )
    
    
    (28.3
    )
    
    
    
    
    
    
    (131.1
    )Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    0.2Net income from continuing
operations
    
    
    203.8
    
    
    
    175.8
    
    
    
    481.1
    
    
    
    43.1
    
    
    
    (714.0
    )
    
    
    189.8Discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    14.8
    
    
    
    
    
    
    
    
    
    
    
    14.8Cumulative effect of accounting
change, net of tax
    
    
    
    
    
    
    
    
    
    
    (0.8
    )
    
    
    
    
    
    
    
    
    
    
    (0.8
    )Net income
    
    
    203.8
    
    
    
    175.8
    
    
    
    495.1
    
    
    
    43.1
    
    
    
    (714.0
    )
    
    
    203.8Dividends on preferred stock
    
    
    (52.0
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (52.0
    )Net income available to
common shareholders
    
    $
    151.8
    
    
    $
    175.8
    
    
    $
    495.1
    
    
    $
    43.1
    
    
    $
    (714.0
    )
    
    $
    151.8
 116




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(in millions)
 Year Ended December 31, 2007Non-Parent
    
    
    Issuer
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedCash (used for) provided by operating
activities from continuing operations
    
    $
    (23.9
    )
    
    $
    (562.1
    )
    
    $
    1,642.6
    
    
    $
    9.6
    
    
    $
    
    
    
    $
    1,066.2Investing activities Proceeds from divestitures (cost
of acquisitions), net of cash
divested/acquired
    
    
    
    
    
    
    
    
    
    
    80.7
    
    
    
    
    
    
    
    
    
    
    
    80.7Proceeds from sale of fixed assets
    
    
    
    
    
    
    
    
    
    
    25.7
    
    
    
    0.1
    
    
    
    
    
    
    
    25.8Capital expenditures, excluding
acquisitions
    
    
    
    
    
    
    
    
    
    
    (661.7
    )
    
    
    (8.3
    )
    
    
    
    
    
    
    (670.0
    )Capitalized interest
    
    
    
    
    
    
    
    
    
    
    (19.2
    )
    
    
    
    
    
    
    
    
    
    
    (19.2
    )Cash used for investing activities
from continuing operations
    
    
    
    
    
    
    
    
    
    
    (574.5
    )
    
    
    (8.2
    )
    
    
    
    
    
    
    (582.7
    )Financing activities Proceeds from long-term debt,
net of issuance costs
    
    
    
    
    
    
    1,316.9
    
    
    
    1.1
    
    
    
    184.2
    
    
    
    
    
    
    
    1,502.2Payments of long-term debt
    
    
    
    
    
    
    (1,886.9
    )
    
    
    (6.3
    )
    
    
    (20.9
    )
    
    
    
    
    
    
    (1,914.1
    )Payments of preferred stock
dividends
    
    
    (37.5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37.5
    )Net receipts from restricted trust
    
    
    
    
    
    
    90.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    90.7Net proceeds from sale of common
stock, exercise of stock options and
other
    
    
    23.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23.9Intercompany between issuer
and subsidiaries
    
    
    37.5
    
    
    
    1,041.5
    
    
    
    (902.9
    )
    
    
    (176.1
    )
    
    
    
    
    
    
    Cash provided by (used for) financing
activities from continuing operations
    
    
    23.9
    
    
    
    562.2
    
    
    
    (908.1
    )
    
    
    (12.8
    )
    
    
    
    
    
    
    (334.8
    )Cash used for discontinued
operations
    
    
    
    
    
    
    
    
    
    
    (11.9
    )
    
    
    
    
    
    
    
    
    
    
    (11.9
    )Increase (decrease) in cash and cash
equivalents
    
    
    
    
    
    
    0.1
    
    
    
    148.1
    
    
    
    (11.4
    )
    
    
    
    
    
    
    136.8Cash and cash equivalents,
beginning of year
    
    
    
    
    
    
    
    
    
    
    68.3
    
    
    
    25.8
    
    
    
    
    
    
    
    94.1Cash and cash equivalents, end of
year
    
    $
    
    
    
    $
    0.1
    
    
    $
    216.4
    
    
    $
    14.4
    
    
    $
    
    
    
    $
    230.9
 117




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(in millions)
 Year Ended December 31, 2006Non-Parent
    
    
    Issuer
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedCash (used for) provided by operating
activities from continuing operations
    
    $
    (23.6
    )
    
    $
    (524.0
    )
    
    $
    1,348.9
    
    
    $
    51.0
    
    
    $
    
    
    
    $
    852.3Investing activities Proceeds from divestitures (cost of
acquisitions), net of cash divested
/acquired
    
    
    
    
    
    
    
    
    
    
    50.4
    
    
    
    
    
    
    
    
    
    
    
    50.4Proceeds from sale of fixed assets
    
    
    
    
    
    
    
    
    
    
    21.6
    
    
    
    0.1
    
    
    
    
    
    
    
    21.7Capital expenditures, excluding
acquisitions
    
    
    
    
    
    
    
    
    
    
    (653.7
    )
    
    
    (7.4
    )
    
    
    
    
    
    
    (661.1
    )Capitalized interest
    
    
    
    
    
    
    
    
    
    
    (17.2
    )
    
    
    
    
    
    
    
    
    
    
    (17.2
    )Change in deferred acquisition
costs, notes receivable and other
    
    
    
    
    
    
    
    
    
    
    4.6
    
    
    
    
    
    
    
    
    
    
    
    4.6Cash used for investing activities
from continuing operations
    
    
    
    
    
    
    
    
    
    
    (594.3
    )
    
    
    (7.3
    )
    
    
    
    
    
    
    (601.6
    )Financing activities Proceeds from long-term debt,
net of issuance costs
    
    
    
    
    
    
    1,200.2
    
    
    
    0.1
    
    
    
    39.0
    
    
    
    
    
    
    
    1,239.3Payments of long-term debt
    
    
    
    
    
    
    (1,390.9
    )
    
    
    (8.5
    )
    
    
    (39.0
    )
    
    
    
    
    
    
    (1,438.4
    )Payments of preferred stock
dividends
    
    
    (48.3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (48.3
    )Net proceeds from sale of common
stock, exercise of stock options and
other
    
    
    23.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23.6Intercompany between issuer
and subsidiaries
    
    
    48.3
    
    
    
    714.7
    
    
    
    (742.1
    )
    
    
    (20.9
    )
    
    
    
    
    
    
    Cash provided by (used for) financing
activities from continuing operations
    
    
    23.6
    
    
    
    524.0
    
    
    
    (750.5
    )
    
    
    (20.9
    )
    
    
    
    
    
    
    (223.8
    )Cash provided by discontinued
operations
    
    
    
    
    
    
    
    
    
    
    11.1
    
    
    
    
    
    
    
    
    
    
    
    11.1Increase in cash and cash
equivalents
    
    
    
    
    
    
    
    
    
    
    15.2
    
    
    
    22.8
    
    
    
    
    
    
    
    38.0Cash and cash equivalents,
beginning of year
    
    
    
    
    
    
    
    
    
    
    53.1
    
    
    
    3.0
    
    
    
    
    
    
    
    56.1Cash and cash equivalents, end of
year
    
    $
    
    
    
    $
    
    
    
    $
    68.3
    
    
    $
    25.8
    
    
    $
    
    
    
    $
    94.1
 118




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(in millions)
 Year Ended December 31, 2005Non-Parent
    
    
    Issuer
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedCash (used for) provided by operating
activities from continuing operations
    
    $
    (97.5
    )
    
    $
    (1,086.5
    )
    
    $
    1,856.1
    
    
    $
    45.5
    
    
    $
    
    
    
    $
    717.6Investing activities Proceeds from divestitures (cost of
acquisitions), net of cash divested
/acquired
    
    
    
    
    
    
    
    
    
    
    0.9
    
    
    
    
    
    
    
    
    
    
    
    0.9Proceeds from sale of fixed assets
    
    
    
    
    
    
    
    
    
    
    20.2
    
    
    
    
    
    
    
    
    
    
    
    20.2Capital expenditures, excluding
acquisitions
    
    
    
    
    
    
    
    
    
    
    (679.4
    )
    
    
    (6.2
    )
    
    
    
    
    
    
    (685.6
    )Capitalized interest
    
    
    
    
    
    
    
    
    
    
    (14.1
    )
    
    
    
    
    
    
    
    
    
    
    (14.1
    )Change in deferred acquisition
costs, notes receivable and other
    
    
    
    
    
    
    
    
    
    
    6.1
    
    
    
    
    
    
    
    
    
    
    
    6.1Cash used for investing activities
from continuing operations
    
    
    
    
    
    
    
    
    
    
    (666.3
    )
    
    
    (6.2
    )
    
    
    
    
    
    
    (672.5
    )Financing activities Net proceeds from sale of Series D
preferred stock
    
    
    580.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    580.8Proceeds from long-term debt,
net of issuance costs
    
    
    
    
    
    
    2,965.1
    
    
    
    
    
    
    
    78.4
    
    
    
    
    
    
    
    3,043.5Payments of long-term debt
    
    
    
    
    
    
    (3,583.9
    )
    
    
    (98.1
    )
    
    
    (58.2
    )
    
    
    
    
    
    
    (3,740.2
    )Payments of preferred stock
dividends
    
    
    (48.9
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (48.9
    )Net proceeds from sale of common
stock, exercise of stock options and
other
    
    
    97.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    97.4Intercompany between issuer
and subsidiaries
    
    
    (531.8
    )
    
    
    1,705.6
    
    
    
    (1,115.7
    )
    
    
    (58.1
    )
    
    
    
    
    
    
    Cash provided by (used for) financing
activities from continuing operations
    
    
    97.5
    
    
    
    1,086.8
    
    
    
    (1,213.8
    )
    
    
    (37.9
    )
    
    
    
    
    
    
    (67.4
    )Cash provided by discontinued
operations
    
    
    
    
    
    
    
    
    
    
    10.4
    
    
    
    
    
    
    
    
    
    
    
    10.4Increase (decrease) in cash and cash
equivalents
    
    
    
    
    
    
    0.3
    
    
    
    (13.6
    )
    
    
    1.4
    
    
    
    
    
    
    
    (11.9
    )Cash and cash equivalents,
beginning of year
    
    
    
    
    
    
    (0.3
    )
    
    
    66.7
    
    
    
    1.6
    
    
    
    
    
    
    
    68.0Cash and cash equivalents, end of
year
    
    $
    
    
    
    $
    
    
    
    $
    53.1
    
    
    $
    3.0
    
    
    $
    
    
    
    $
    56.1
 119




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
 
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures.
 Changes in Internal Control over Financial Reporting.
 Report on Internal Control over Financial Reporting
  
 Item 9B. Other Information
  2008 Senior Management Incentive Plan
     
    
    Earnings before interest, taxes, depreciation and amortization (EBITDA): 60%
 
    
    For the purposes of the 2008 Senior MIP, EBITDA means the aggregate
EBITDA for the entire company (i.e., including all subsidiaries, divisions, and
organizational levels). EBITDA will be adjusted to remove the impact of (a)
restructuring charges and severance charges to the extent that these were included
in the results of the Operations Support Center (only), and (b) gains and losses
on divestitures, discontinued operations, impairments, and unbudgeted material
acquisitions and divestitures. All adjustments remain at the discretion of the
Compensation Committee.
 
    
    Return on Invested Capital: 20%
 
    
    Return on Invested Capital means Earnings Before Interest and Taxes
(EBIT) for the year less taxes at an assumed rate of 40%, divided by the average
(based on year-end results) Net Tangible Assets (NTA). NTA means (x) total
assets less cash, goodwill, any assets arising out of the pension plans,
derivative assets, deferred income tax assets, and investments in consolidated
subsidiaries, minus (y) liabilities excluding all debt and accrued balances for
insurance reserves, pension plans, interest, closure and post-closure remediation,
derivative liabilities, deferred and other long term income tax obligations and
obligations arising from FIN 48 tax accruals. EBIT and NTA will be adjusted for
the same items as EBITDA.
 
    
    Free Cash Flow: 20%
 
    
    Free Cash Flow means cash flow from operations, less capital
expenditures, plus proceeds from fixed asset sales.
   Estimated Possible Payouts Under the 2008 Senior MIP (1)Name
    
    Threshold
    
    
    Target
    
    
    MaximumJohn J. Zillmer
    
    $
    53,188
    
    
    $
    1,063,750
    
    
    $
    2,127,500Donald W. Slager
    
    
    40,000
    
    
    
    800,000
    
    
    
    1,600,000Peter S. Hathaway
    
    
    30,750
    
    
    
    615,000
    
    
    
    1,230,000Timothy R. Donovan
    
    
    25,000
    
    
    
    500,000
    
    
    
    1,000,000Edward A. Evans
    
    
    22,300
    
    
    
    446,000
    
    
    
    892,000
 
 (1)
    
    The maximum annual incentive that may be paid to any participant under the 2008
Senior MIP cannot exceed the lesser of (a) 200% (230% in the case of the CEO) of the
participants annual base salary, or (b) $3,000,000 ($5,000,000 in the case of the CEO).   
 Part III
 
 Item 10. Directors and Executive Officers of the Registrant
  
 Item 11. Executive Compensation
  120




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
 
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  
 Item 13. Certain Relationships and Related Transactions, and Director Independence
  
 Item 14. Principal Accounting Fees and Services
  
 Part IV
 
 Item 15. Exhibits, Financial Statement Schedule
  1. Financial Statements
  2. Financial Statement Schedule -
  Balance
    
    Charges
    
    
    
    
    
    
    
    
    
    Balanceat
    
    to
    
    Other
    
    Write-offs/
    
    at12/31/06
    
    Expense
    
    Charges
    
    Payments
    
    12/31/07Receivable realization allowance
    
    $
    18.4
    
    
    $
    19.9
    
    
    $
    0.9
    
    
    $
    (18.0
    )
    
    $
    21.2Allowance for deferred tax assets
    
    
    117.4
    
    
    
    16.9
    
    
    
    
    
    
    
    
    
    
    
    134.3
 Balance
    
    Charges
    
    
    
    
    
    
    
    
    
    Balanceat
    
    to
    
    Other
    
    Write-offs/
    
    at12/31/05
    
    Expense
    
    Charges
    
    Payments
    
    12/31/06Receivable realization allowance
    
    $
    17.0
    
    
    $
    18.3
    
    
    $
    0.1
    
    
    $
    (17.0
    )
    
    $
    18.4Allowance for deferred tax assets
    
    
    116.5
    
    
    
    0.9
    
    
    
    
    
    
    
    
    
    
    
    117.4
 Balance
    
    Charges
    
    
    
    
    
    
    
    
    
    Balanceat
    
    to
    
    Other
    
    Write-offs/
    
    at12/31/04
    
    Expense
    
    Charges
    
    Payments
    
    12/31/05Receivable realization allowance
    
    $
    16.7
    
    
    $
    17.8
    
    
    $
    
    
    
    $
    (17.5
    )
    
    $
    17.0Allowance for deferred tax assets
    
    
    107.1
    
    
    
    9.4
    
    
    
    
    
    
    
    
    
    
    
    116.5
 121




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Financial Statements of Browning-Ferris Industries, LLC -
 Long-term Debt
 122




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##### Table of Contents



Financial Statements and Supplementary Data
 Report of Independent Registered Public Accounting Firm
    
    
    124Consolidated Balance Sheets as of December 31, 2007 and 2006
    
    
    125Consolidated Statements of Operations for each of the Three Years in the Period ended December 31, 2007
    
    
    126Consolidated Statements of Members Deficit for each of the Three Years in the Period ended December 31, 2007
    
    
    127Consolidated Statements of Cash Flows for each of the Three Years in the Period ended December 31, 2007
    
    
    128Notes to Consolidated Financial Statements
    
    
    129Financial Statement Schedule
    
    
    158
 123




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Report of Independent Registered Public Accounting Firm
 
 
  
 124




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##### Table of Contents



BROWNING-FERRIS INDUSTRIES, LLC
 
 CONSOLIDATED BALANCE SHEETS
 (in millions)
 December 31,2007
    
    
    2006ASSETSCurrent Assets Cash and cash equivalents
    
    $
    2.7
    
    
    $
    10.1Accounts receivable, net of allowance of $5.2 and $4.2
    
    
    224.6
    
    
    
    191.6Prepaid and other current assets
    
    
    19.1
    
    
    
    28.2Total current assets
    
    
    246.4
    
    
    
    229.9Property and equipment, net
    
    
    1,056.4
    
    
    
    1,020.2Goodwill
    
    
    3,264.4
    
    
    
    3,322.3Other assets, net
    
    
    185.1
    
    
    
    148.0Total assets
    
    $
    4,752.3
    
    
    $
    4,720.4LIABILITIES AND MEMBERS DEFICITCurrent Liabilities Current portion of long-term debt
    
    $
    162.0
    
    
    $
    1.2Accounts payable
    
    
    122.1
    
    
    
    119.9Current portion of accrued capping, closure, post-closure and environmental costs
    
    
    61.0
    
    
    
    62.3Accrued interest
    
    
    61.5
    
    
    
    71.2Other accrued liabilities
    
    
    89.1
    
    
    
    122.2Unearned revenue
    
    
    69.1
    
    
    
    65.5Total current liabilities
    
    
    564.8
    
    
    
    442.3Long-term debt, less current portion
    
    
    4,479.7
    
    
    
    5,183.9Accrued
capping, closure, post-closure and environmental costs, less current portion
    
    
    496.7
    
    
    
    491.9Due to parent
    
    
    1,111.1
    
    
    
    401.6Other long-term obligations
    
    
    133.8
    
    
    
    146.3Minority interests
    
    
    1.3
    
    
    
    1.0Commitments and ContingenciesMembers Deficit Accumulated other comprehensive loss
    
    
    (28.2
    )
    
    
    (54.9
    )Retained deficit
    
    
    (2,006.9
    )
    
    
    (1,891.7
    )Total members deficit
    
    
    (2,035.1
    )
    
    
    (1,946.6
    )Total liabilities and members deficit
    
    $
    4,752.3
    
    
    $
    4,720.4
  125




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BROWNING-FERRIS INDUSTRIES, LLC
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (in millions)
 Year Ended December 31,2007
    
    
    2006
    
    
    2005Revenues
    
    $
    1,806.6
    
    
    $
    1,737.7
    
    
    $
    1,589.0Cost of operations (exclusive of depreciation and
amortization shown below)
    
    
    1,156.6
    
    
    
    1,174.6
    
    
    
    1,042.9Selling, general and administrative expenses
    
    
    186.5
    
    
    
    164.5
    
    
    
    122.3Depreciation and amortization
    
    
    153.2
    
    
    
    139.8
    
    
    
    129.3Operating income from continuing operations
    
    
    310.3
    
    
    
    258.8
    
    
    
    294.5Interest expense and other
    
    
    436.6
    
    
    
    467.3
    
    
    
    471.5Loss before income taxes
    
    
    (126.3
    )
    
    
    (208.5
    )
    
    
    (177.0
    )Income tax benefit
    
    
    (25.1
    )
    
    
    (22.6
    )
    
    
    (56.5
    )Minority interests
    
    
    0.3
    
    
    
    0.2
    
    
    
    (1.0
    )Loss from continuing operations
    
    
    (101.5
    )
    
    
    (186.1
    )
    
    
    (119.5
    )Income from discontinued operations, net of tax
    
    
    6.3
    
    
    
    6.1
    
    
    
    10.9Cumulative effect of change in accounting principle,
net of tax
    
    
    
    
    
    
    
    
    
    
    (0.5
    )Net loss
    
    $
    (95.2
    )
    
    $
    (180.0
    )
    
    $
    (109.1
    )
  126




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BROWNING-FERRIS INDUSTRIES, LLC
 
 CONSOLIDATED STATEMENTS OF MEMBERS DEFICIT
 (in millions)
 AccumulatedOther
    
    
    
    
    
    
    TotalComprehensive
    
    
    Retained
    
    
    MembersLoss
    
    
    Deficit
    
    
    DeficitBalance as of December 31, 2004
    
    $
    (69.4
    )
    
    $
    (1,557.7
    )
    
    $
    (1,627.1
    )Net loss
    
    
    
    
    
    
    (109.1
    )
    
    
    (109.1
    )Distribution to parent
    
    
    
    
    
    
    (14.7
    )
    
    
    (14.7
    )Other comprehensive income, net of tax:Net gain deferred on hedging derivatives
    
    
    1.3
    
    
    
    
    
    
    
    1.3Employee
benefits plan liability adjustment
    
    
    (2.2
    )
    
    
    
    
    
    
    (2.2
    )Balance as of December 31, 2005
    
    
    (70.3
    )
    
    
    (1,681.5
    )
    
    
    (1,751.8
    )Net loss
    
    
    
    
    
    
    (180.0
    )
    
    
    (180.0
    )Distribution to parent
    
    
    
    
    
    
    (30.2
    )
    
    
    (30.2
    )Other comprehensive income, net of tax:Employee benefits plan liability adjustment
    
    
    70.3
    
    
    
    
    
    
    
    70.3Adjustment to initially apply SFAS 158
    
    
    (54.9
    )
    
    
    
    
    
    
    (54.9
    )Balance as of December 31, 2006
    
    
    (54.9
    )
    
    
    (1,891.7
    )
    
    
    (1,946.6
    )Net loss
    
    
    
    
    
    
    (95.2
    )
    
    
    (95.2
    )Distribution to parent
    
    
    
    
    
    
    (20.0
    )
    
    
    (20.0
    )Other comprehensive income, net of tax:Employee benefits plan liability adjustment
    
    
    26.7
    
    
    
    
    
    
    
    26.7Balance as of December 31, 2007
    
    $
    (28.2
    )
    
    $
    (2,006.9
    )
    
    $
    (2,035.1
    )
 Comprehensive Loss 
 Year Ended December 31,2007
    
    
    2006
    
    
    2005Net loss
    
    $
    (95.2
    )
    
    $
    (180.0
    )
    
    $
    (109.1
    )Other comprehensive income, net of tax:Net gain deferred on hedging derivatives
    
    
    
    
    
    
    
    
    
    
    1.3Employee benefits plan liability adjustment
    
    
    26.7
    
    
    
    70.3
    
    
    
    (2.2
    )$
    (68.5
    )
    
    $
    (109.7
    )
    
    $
    (110.0
    )
  127




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BROWNING-FERRIS INDUSTRIES, LLC
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in millions)
 Year Ended December 31,2007
    
    
    2006
    
    
    2005Operating activities Net loss
    
    $
    (95.2
    )
    
    $
    (180.0
    )
    
    $
    (109.1
    )Discontinued operations, net of tax
    
    
    (6.3
    )
    
    
    (6.1
    )
    
    
    (10.9
    )Adjustments to reconcile net loss to cash used for
operating activities from continuing operationsProvisions for:Depreciation and amortization
    
    
    153.2
    
    
    
    139.8
    
    
    
    129.3Doubtful accounts
    
    
    5.5
    
    
    
    3.7
    
    
    
    3.1Accretion of debt and amortization of debt issuance costs
    
    
    17.1
    
    
    
    18.8
    
    
    
    19.3Gain on sale of fixed assets
    
    
    (8.8
    )
    
    
    (4.5
    )
    
    
    (0.8
    )Non-cash reduction in acquisition and environmental accruals
    
    
    (4.1
    )
    
    
    (7.2
    )
    
    
    (25.2
    )Discount on sale of trade receivables
    
    
    11.7
    
    
    
    5.8
    
    
    
    5.0Write-off of deferred debt issuance costs
    
    
    7.5
    
    
    
    4.1
    
    
    
    11.9Cumulative effect of change in accounting principle, net of tax
    
    
    
    
    
    
    
    
    
    
    0.5Change in operating assets and liabilities, excluding the effects
of acquisitionsAccounts receivable, prepaid expenses, inventories and other assets
    
    
    (46.4
    )
    
    
    (39.8
    )
    
    
    (20.5
    )Accounts payable, accrued liabilities, unearned income and other
    
    
    (40.0
    )
    
    
    (16.3
    )
    
    
    (50.7
    )Capping, closure and post-closure accretion
    
    
    33.3
    
    
    
    29.2
    
    
    
    30.2Capping, closure, post-closure and environmental expenditures
    
    
    (48.4
    )
    
    
    (58.2
    )
    
    
    (58.3
    )Cash used for operating activities from continuing operations
    
    
    (20.9
    )
    
    
    (110.7
    )
    
    
    (76.2
    )Investing activities Cost of acquisitions, net of cash acquired
    
    
    (1.2
    )
    
    
    
    
    
    
    (0.7
    )Proceeds from divestitures, net of cash divested
    
    
    71.6
    
    
    
    0.2
    
    
    
    2.9Proceeds from sale of fixed assets
    
    
    6.6
    
    
    
    7.7
    
    
    
    2.5Capital expenditures, excluding acquisitions
    
    
    (184.1
    )
    
    
    (185.9
    )
    
    
    (200.6
    )Capitalized interest
    
    
    (5.7
    )
    
    
    (5.3
    )
    
    
    (4.9
    )Other
    
    
    (0.6
    )
    
    
    
    
    
    
    2.5Cash used for investing activities from continuing operations
    
    
    (113.4
    )
    
    
    (183.3
    )
    
    
    (198.3
    )Financing activities Proceeds from long-term debt, net of issuance costs
    
    
    1,319.4
    
    
    
    1,200.4
    
    
    
    2,083.7Payments of long-term debt
    
    
    (1,887.8
    )
    
    
    (1,395.3
    )
    
    
    (2,783.8
    )Net change in due to/from parent
    
    
    697.3
    
    
    
    475.8
    
    
    
    975.8Cash provided by financing activities from continuing operations
    
    
    128.9
    
    
    
    280.9
    
    
    
    275.7Discontinued operations -Cash provided by (used for) operating activities
    
    
    (2.0
    )
    
    
    9.6
    
    
    
    5.5Cash used for investing activities
    
    
    
    
    
    
    (2.3
    )
    
    
    (2.7
    )Cash provided by financing activities
    
    
    
    
    
    
    3.8
    
    
    
    2.7Cash provided by (used for) discontinued operations
    
    
    (2.0
    )
    
    
    11.1
    
    
    
    5.5Increase (decrease) in cash and cash equivalents
    
    
    (7.4
    )
    
    
    (2.0
    )
    
    
    6.7Cash and cash equivalents, beginning of year
    
    
    10.1
    
    
    
    12.1
    
    
    
    5.4Cash and cash equivalents, end of year
    
    $
    2.7
    
    
    $
    10.1
    
    
    $
    12.1
  128




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BROWNING FERRIS INDUSTRIES, LLC
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Organization and Summary of Significant Accounting Policies
  Long-term Debt,
 Purpose of financial statements -
   Principles of consolidation and presentation -
  Reclassifications -
  Managements estimates and assumptions -
  129




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BROWNING FERRIS INDUSTRIES, LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Cash and cash equivalents -
   Concentration of credit risk -
  Trade and other receivables and receivable realization allowance -
  Property and equipment -
  130




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BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     Goodwill and intangible assets -
 st Goodwill and
Other Intangible Assets
   131




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Other assets -
  Landfill accounting -
      Accounting for Impairment or Disposal of Long-Lived
Assets The Treatment of Certain Site Restoration/Environmental
Exit Costs When Testing a Long-Lived Asset for Impairment
 Landfill asset amortization .
 132




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
    
    We have control of and access to the land where the expansion permit is being sought.
    
    All geological and other technical siting criteria for a landfill have been met, or an
exception from such requirements has been received (or can reasonably be expected to be
received).
    
    The political process has been assessed and there are no identified impediments that
cannot be resolved.
    
    We are actively pursuing the expansion permit and have an expectation that the final
local, state and federal permits will be received within the next five years.
    
    Senior operations management approval has been obtained.
   Capping, closure and post-closure .
  Accounting for Asset Retirement Obligations
 133




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     Landfill maintenance costs .
 Financial assurance costs.
 Environmental costs -
   134




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Environmental Remediation Liabilities
   Asset impairments -
  
    
    A significant decrease in the market price of an asset or asset group;
    
    A significant adverse change in the extent or manner in which an asset or asset group
is being used or in its physical condition;
    
    A significant adverse change in legal factors or in the business climate that could
affect the value of an asset or asset group, including an adverse action or assessment by
a regulator;
    
    An accumulation of costs significantly in excess of the amount originally expected for
the acquisition or construction of a long-lived asset;
    
    Current period operating or cash flow losses combined with a history of operating or
cash flow losses or a projection or forecast that demonstrates continuing losses
associated with the use of a long-lived asset or asset group; or
    
    A current expectation that, more likely than not, a long-lived asset or asset group
will be sold or otherwise disposed of significantly before the end of its previously
estimated useful life.
  135




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Self-Insurance -
   Business combinations -
 Recently issued accounting pronouncements.
 Acquisition accruals .
  136




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BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Contingent liabilities -
 Accounting for
Contingencies Reasonable Estimation of the Amount of a
Loss.
 Accumulated other comprehensive loss -
  Revenue recognition -
  Income taxes -
    Accounting for Uncertainty in Income
Taxes  an Interpretation of FASB Statement No. 109
 Accounting for Income Taxes
 137




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Employee benefit plans
    Stock-based compensation plans
 Share-Based Payment
  138




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Accounting for Stock Issued to Employees Accounting for Stock-Based
Compensation
 Related Party Transactions
 Leases -
  Operating leases . Commitments
and Contingencies.
 Capital leases . Long-term Debt
 Fair value of financial instruments -
 Disclosures About Fair Value of Financial
Instruments
 Long-term Debt
 Change in accounting principle -
 Accounting for Conditional Asset
Retirement Obligations  an interpretation of FASB Statement No. 143 Accounting for Asset Retirement
 139




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Obligations
 Recently issued accounting pronouncements -
 Business Combinations Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statementsan amendment of ARB No. 51
 Fair Value Option for Financial Assets and
Financial Liabilities Including an amendment of FASB Statement No. 115
 Employers Accounting for Defined Benefit Pension
and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106 and 132(R)
 140




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Fair Value Measurements
 How Taxes Collected and Remitted
to Governmental Authorities Should Be Presented in the Income Statement
 Accounting for Uncertainty in Income Taxes  an
Interpretation of FASB Statement No. 109 .
 2. Discontinued Operations
  141




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  December 31,2006Accounts receivable, net
    
    $
    8.6Other current assets
    
    
    0.5Property and equipment, net
    
    
    16.9Total assets
    
    $
    26.0Current liabilities
    
    $
    13.7Long-term liabilities
    
    
    1.0Total liabilities
    
    $
    14.7
  Year Ended December 31,2007
    
    
    2006
    
    
    2005Revenues
    
    $
    19.8
    
    
    $
    65.8
    
    
    $
    67.0Income before tax
    
    $
    2.7
    
    
    $
    10.0
    
    
    $
    10.2Gain on divestiture
    
    
    12.4
    
    
    
    
    
    
    
    8.0Income tax expense
    
    
    8.8
    
    
    
    3.9
    
    
    
    7.3Discontinued operations, net of tax
    
    $
    6.3
    
    
    $
    6.1
    
    
    $
    10.9
   Allocation of Interest to Discontinued Operations
 3. Property and Equipment
  2007
    
    
    2006Land and improvements
    
    $
    131.5
    
    
    $
    132.6Land held for permitting as landfills
    
    
    14.9
    
    
    
    13.4Landfills
    
    
    1,300.6
    
    
    
    1,212.2Buildings and improvements
    
    
    100.3
    
    
    
    96.0Vehicles, furniture and equipment
    
    
    518.0
    
    
    
    472.6Containers and compactors
    
    
    195.7
    
    
    
    185.32,261.0
    
    
    
    2,112.1Accumulated depreciation and amortization
    
    
    (1,204.6
    )
    
    
    (1,091.9
    )$
    1,056.4
    
    
    $
    1,020.2
 142




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 4. Goodwill
  2007
    
    
    2006Beginning balance
    
    $
    3,322.3
    
    
    $
    3,391.0Acquisitions
    
    
    
    
    
    
    Divestitures
    
    
    (46.8
    )
    
    
    Adjustments (1)
    
    
    (11.1
    )
    
    
    (68.7
    )Ending balance
    
    $
    3,264.4
    
    
    $
    3,322.3
 
 (1)
    
    2007 amount included primarily income tax related
adjustments associated with the acquisition of BFI in 1999. 2006
amount primarily relates to reclassification of goodwill in connection with entities
distributed to Allied. 5.
Other Accured Liabilities
  2007
    
    
    2006Accrued payroll
    
    $
    16.3
    
    
    $
    17.4Accrued insurance
    
    
    27.1
    
    
    
    35.4Accrued landfill taxes, hosting fees and royalties
    
    
    11.1
    
    
    
    10.2Accrued franchise and sales taxes
    
    
    12.2
    
    
    
    12.6Other
    
    
    22.4
    
    
    
    46.6Total
    
    $
    89.1
    
    
    $
    122.2
 6. Long-term Debt
  143




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BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Debt Balance at
    
    
    Effective Interest RateDecember 31,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Revolving credit facility ABR borrowings*
    
    $
    
    
    
    $
    
    
    
    
    7.75
    %
    
    
    9.75
    %Revolving credit facility Adjusted LIBOR borrowings*
    
    
    
    
    
    
    
    
    
    
    6.20
    
    
    
    7.862005 Term Loan due 2014
    
    
    806.7
    
    
    
    1,105.0
    
    
    
    6.75
    
    
    
    7.346.375% senior notes due 2008
    
    
    161.0
    
    
    
    157.9
    
    
    
    8.34
    
    
    
    8.348.50% senior notes due 2008
    
    
    
    
    
    
    750.0
    
    
    
    
    
    
    
    8.786.50% senior notes due 2010
    
    
    350.0
    
    
    
    350.0
    
    
    
    6.76
    
    
    
    6.766.375% senior notes due 2011
    
    
    275.0
    
    
    
    275.0
    
    
    
    6.63
    
    
    
    6.639.25% senior notes due 2012
    
    
    
    
    
    
    250.9
    
    
    
    
    
    
    
    9.407.875% senior notes due 2013
    
    
    450.0
    
    
    
    450.0
    
    
    
    8.09
    
    
    
    8.097.125% senior notes due 2016
    
    
    595.6
    
    
    
    595.1
    
    
    
    7.38
    
    
    
    7.386.875% senior notes due 2017
    
    
    750.0
    
    
    
    
    
    
    
    7.04
    
    
    
    9.25% debentures due 2021
    
    
    96.5
    
    
    
    96.3
    
    
    
    9.47
    
    
    
    9.477.40% debentures due 2035
    
    
    296.7
    
    
    
    294.4
    
    
    
    8.03
    
    
    
    8.034.25% senior subordinated convertible debentures due 2034
    
    
    230.0
    
    
    
    230.0
    
    
    
    4.34
    
    
    
    4.347.375% senior unsecured notes due 2014
    
    
    400.0
    
    
    
    400.0
    
    
    
    7.55
    
    
    
    7.55Solid waste revenue bond obligations, principal payable
through 2031**
    
    
    225.5
    
    
    
    225.2
    
    
    
    6.32
    
    
    
    6.68Notes payable to individuals, variable interest rate, and
principal payable through 2007, secured by vehicles,
equipment, real estate, or accounts receivable**
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    3.00Obligations under capital leases of vehicles and equipment**
    
    
    3.0
    
    
    
    2.9
    
    
    
    9.53
    
    
    
    9.96Notes payable to a municipal corporation, interest at 6.0%,
principal payable through 2010, unsecured**
    
    
    1.7
    
    
    
    2.2
    
    
    
    6.00
    
    
    
    6.00Total debt**
    
    
    4,641.7
    
    
    
    5,185.1
    
    
    
    7.13
    %
    
    
    7.61
    %Less: Current portion
    
    
    162.0
    
    
    
    1.2Long-term portion
    
    $
    4,479.7
    
    
    $
    5,183.9
 
 *
    
    Excludes fees**
    
    Reflects weighted average interest rate Refinancings -
   2005 Credit Facility -
  144




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    Senior notes and debentures -
 st st
 th th
 th th
 th th
 th th
 145




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 st st
 st st
 st st
   Senior subordinated notes -
   Senior subordinated convertible debentures -
 Accounting for Derivative Instruments
and Hedging Activities
  146




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   th
 Solid waste revenue bond obligations -
  Future maturities of long-term debt
  Maturity2008
    
    $
    162.22009
    
    
    0.82010
    
    
    350.92011
    
    
    275.12012
    
    
    0.1Thereafter
    
    
    3,926.0Gross Principal
    
    
    4,715.1Discount, net
    
    
    (73.4
    )Total Debt
    
    $
    4,641.7
 Fair value of debt
  Balance at
    
    Fair Value at
    
    Balance at
    
    Fair Value atDecember 31,
    
    December 31,
    
    December 31,
    
    December 31,2007
    
    2007
    
    2006
    
    2006Fixed Rate Debt:Principal amount
    
    $
    3,755.4
    
    
    $
    3,773.9
    
    
    $
    4,000.5
    
    
    $
    4,103.8Weighted average interest rate
    
    
    7.07
    %
    
    
    
    
    
    
    7.52
    %Variable Rate Debt:Principal amount
    
    $
    886.3
    
    
    $
    853.0
    
    
    $
    1,184.6
    
    
    $
    1,188.7Weighted average interest rate(1)
    
    
    6.34
    %
    
    
    
    
    
    
    6.97
    %
 
 (1)
    
    Reflects the rate in effect as of December 31, 2007 and 2006 and includes all
applicable margins. Actual future rates may vary. 147




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Debt covenants
   Guarantees -
  Collateral -
   Other AlliedCondensed Consolidated Balance Sheet (1):
    
    BFI
    
    
    Collateral
    
    
    CombinedCurrent assets
    
    $
    246.4
    
    
    $
    248.9
    
    
    $
    495.3Property and equipment, net
    
    
    1,056.4
    
    
    
    864.8
    
    
    
    1,921.2Goodwill
    
    
    3,264.4
    
    
    
    3,015.2
    
    
    
    6,279.6Other assets, net
    
    
    185.1
    
    
    
    36.6
    
    
    
    221.7Total assets
    
    $
    4,752.3
    
    
    $
    4,165.5
    
    
    $
    8,917.8Current liabilities
    
    $
    564.8
    
    
    $
    269.6
    
    
    $
    834.4Long-term debt, less current portion
    
    
    4,479.7
    
    
    
    5.6
    
    
    
    4,485.3Other long-term obligations
    
    
    631.8
    
    
    
    96.9
    
    
    
    728.7Due to parent
    
    
    1,111.1
    
    
    
    1,364.5
    
    
    
    2,475.6Total equity (deficit)
    
    
    (2,035.1
    )
    
    
    2,428.9
    
    
    
    393.8Total liabilities and equity (deficit)
    
    $
    4,752.3
    
    
    $
    4,165.5
    
    
    $
    8,917.8
 
 (1)
    
    All transactions between BFI and the Other Allied collateral have been eliminated. 148




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Interest expense and other
  Derivative instruments and hedging activities -
   Subsequent events -
  7. Employee Benefit Plans
 Defined benefit pension plan -
      149




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 .
  Employers
Disclosures about Pensions and Other Postretirement Benefits
   12/31/06
    
    
    
    
    
    12/31/06
    
    
    
    
    
    12/31/06Balance
    
    AML
    
    Balance
    
    Adjustment
    
    BalancePrior to AML
    
    Adjustment
    
    Post AML
    
    to Initially
    
    Post AML& SFAS 158
    
    Per
    
    Pre-SFAS 158
    
    Apply
    
    & SFAS 158Adjustment
    
    SFAS 87
    
    Adjustment
    
    SFAS 158
    
    AdjustmentPrepaid pension asset
    
    $
    104.1
    
    
    $
    0.4
    
    
    $
    104.5
    
    
    $
    (104.5
    )
    
    $
    Accrued pension
liability
    
    
    (117.8
    )
    
    
    117.8
    
    
    
    
    
    
    
    
    
    
    
    Intangible asset
    
    
    0.7
    
    
    
    (0.7
    )
    
    
    
    
    
    
    
    
    
    
    Non-current asset
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11.6
    
    
    
    11.6Deferred tax asset
    
    
    46.8
    
    
    
    (46.8
    )
    
    
    
    
    
    
    37.8
    
    
    
    37.8AOCI, net of taxes
    
    
    70.3
    
    
    
    (70.3
    )
    
    
    
    
    
    
    55.1
    
    
    
    55.1
  2007
    
    
    2006Projected benefit obligation at beginning of period
    
    $
    359.3
    
    
    $
    377.4Service cost
    
    
    0.2
    
    
    
    0.2Interest cost
    
    
    21.1
    
    
    
    21.1Curtailment loss
    
    
    
    
    
    
    (0.7
    )Actuarial gain
    
    
    (23.6
    )
    
    
    (22.7
    )Benefits paid
    
    
    (14.9
    )
    
    
    (16.0
    )Projected benefit obligation at end of period
    
    $
    342.1
    
    
    $
    359.3Fair value of plan assets at beginning of period
    
    $
    370.9
    
    
    $
    361.1Actual return on plan assets
    
    
    44.0
    
    
    
    25.8Benefits paid
    
    
    (14.9
    )
    
    
    (16.0
    )Fair value of plan assets at end of period
    
    $
    400.0
    
    
    $
    370.9
 150




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  2007
    
    2006Funded status
    
    $
    57.9
    
    
    $
    11.6Non-current asset
    
    $
    57.9
    
    
    $
    11.6
  Net Actuarial
    
    
    Prior Service
    
    
    Tax (Expense)
    
    
    Net of TaxGain
(Loss)
    
    

Cost
(Credit)
    
    
    Benefit
    
    
    AmountBalance, December 31, 2006
    
    $
    (96.6
    )
    
    $
    3.9
    
    
    $
    37.8
    
    
    $
    (54.9
    )Amortization included in net periodic benefit cost
    
    
    5.3
    
    
    
    (0.3
    )
    
    
    2.0
    
    
    
    3.0Net actuarial gain arising during period
    
    
    43.0
    
    
    
    
    
    
    
    19.3
    
    
    
    23.7Net change of the year
    
    
    48.3
    
    
    
    (0.3
    )
    
    
    21.3
    
    
    
    26.7Balance, December 31, 2007
    
    $
    (48.3
    )
    
    $
    3.6
    
    
    $
    16.5
    
    
    $
    (28.2
    )
   2007
    
    
    2006
    
    
    2005Service cost
    
    $
    0.2
    
    
    $
    0.2
    
    
    $
    0.6Interest cost
    
    
    21.1
    
    
    
    21.1
    
    
    
    20.7Expected return on plan assets
    
    
    (29.9
    )
    
    
    (29.9
    )
    
    
    (28.2
    )Recognized net actuarial loss
    
    
    5.0
    
    
    
    6.9
    
    
    
    6.8Amortization of prior service cost
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1Curtailment loss
    
    
    
    
    
    
    0.1
    
    
    
    Net periodic benefit cost
    
    $
    (3.5
    )
    
    $
    (1.5
    )
    
    $
    
  2007
    
    2006
    
    2005Actual return on plan assets
    
    $
    44.0
    
    
    $
    25.8
    
    
    $
    39.5Actual rate of return on plan assets
    
    
    11.9
    %
    
    
    7.2
    %
    
    
    11.7
    %
  2007
    
    2006Discount rate
    
    
    6.25
    %
    
    
    6.00
    %Average rate of compensation increase
    
    
    5.00
    %
    
    
    5.00
    %
  2007
    
    2006
    
    2005Discount rate
    
    
    6.00
    %
    
    
    5.75
    %
    
    
    6.00
    %Average rate of compensation increase
    
    
    5.00
    %
    
    
    5.00
    %
    
    
    5.00
    %Expected return on plan assets
    
    
    8.25
    %
    
    
    8.25
    %
    
    
    8.50
    %
 151




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    Percentage of plan assetsTarget allocation
    
    at September 30,2008
    
    2007
    
    2006Equity securities
    
    
    60
    %
    
    
    62
    %
    
    
    59
    %Debt securities
    
    
    40
    %
    
    
    38
    %
    
    
    41
    %Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
  Estimated future payments:2007
    
    $
    13.22008
    
    
    15.02009
    
    
    16.12010
    
    
    16.82011
    
    
    21.9Thereafter
    
    
    135.0
 BFI Post Retirement Healthcare Plan
  Multi-employer pension plans -
  152




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    Defined contribution plan -
  8. Income Taxes
   153




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  For the Year Ended December 31,2007
    
    
    2006
    
    
    2005Federal statutory tax benefit
    
    $
    (43.8
    )
    
    $
    (73.0
    )
    
    $
    (61.6
    )State taxes, net of federal benefit
    
    
    (3.3
    )
    
    
    (3.6
    )
    
    
    (14.5
    )Puerto Rican Taxes
    
    
    0.7
    
    
    
    0.9
    
    
    
    0.5Subpart F Taxes
    
    
    1.3
    
    
    
    2.3
    
    
    
    4.7Interest on uncertain tax matters, net of tax benefit
    
    
    25.0
    
    
    
    37.1
    
    
    
    13.0Prior year state matters
    
    
    
    
    
    
    13.4
    
    
    
    Other
    
    
    (5.0
    )
    
    
    0.3
    
    
    
    1.4Income tax benefit
    
    $
    (25.1
    )
    
    $
    (22.6
    )
    
    $
    (56.5
    )
      9. Commitments and Contingencies
 Litigation -
  154




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 , Income Taxes
    Royalties -
  Disposal Agreements 
  155




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Lease agreements -
  2008
    
    $
    19.02009
    
    
    16.32010
    
    
    4.82011
    
    
    4.12012
    
    
    3.6Thereafter
    
    
    17.9Total
    
    $
    65.7
  Financial assurances -
   LandfillClosure/
    
    
    Contract
    
    
    Risk/Casualty
    
    
    Collateral forPost-Closure
    
    
    Performance
    
    
    Insurance
    
    
    Obligations
    
    
    TotalInsurance policies
    
    $
    329.6
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    329.6Surety bonds
    
    
    202.1
    
    
    
    175.4
    
    
    
    
    
    
    
    
    
    
    
    377.5Trust deposits
    
    
    53.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53.3Letters of credit (1)
    
    
    122.3
    
    
    
    24.5
    
    
    
    24.2
    
    
    
    94.3
    
    
    
    265.3Total
    
    $
    707.3
    
    
    $
    199.9
    
    
    $
    24.2
    
    
    $
    94.3
    
    
    $
    1,025.7
 
 (1)
  156




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Off-balance sheet arrangements -
  Guarantees -
   10. Related Party Transactions
     157




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##### Table of Contents



BROWNING FERRIS INDUSTRIES, LLC  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    11. Statements of Cash Flows
  2007
    
    2006
    
    2005Supplemental disclosures -Interest paid (net of amounts capitalized)
    
    $
    375.3
    
    
    $
    417.1
    
    
    $
    426.3Non-cash transactions -Capital lease obligations incurred
    
    $
    0.2
    
    
    $
    
    
    
    $
    0.3Non-cash dividend to parent
    
    
    20.0
    
    
    
    30.2
    
    
    
    14.7
 
 Financial Statement Schedule -
  Balance at
    
    Charges to
    
    Write-offs/
    
    Balance at12/31/04
    
    Expense
    
    Payments
    
    12/31/05Receivable realization allowance
    
    $
    4.1
    
    
    $
    3.2
    
    
    $
    (3.7
    )
    
    $
    3.6
 Balance at
    
    Charges to
    
    Write-offs/
    
    Balance at12/31/05
    
    Expense
    
    Payments
    
    12/31/06Receivable realization allowance
    
    $
    3.6
    
    
    $
    3.8
    
    
    $
    (3.2
    )
    
    $
    4.2
 Balance at
    
    Charges to
    
    Write-offs/
    
    Balance at12/31/06
    
    Expense
    
    Payments
    
    12/31/07Receivable realization allowance
    
    $
    4.2
    
    
    $
    6.2
    
    
    $
    (5.2
    )
    
    $
    5.2
 158




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
 3. Exhibits
 Exhibit No.
    
    Description1.1
    
    Underwriting Agreement dated November 16, 2006, among Allied Waste Industries, Inc., the
selling stockholders listed on Schedule B thereto, and UBS Securities LLC. Exhibit 1.1 to
Allieds Report on Form 8-K dated November 22, 2006, is incorporated by reference herein.1.2
    
    Underwriting Agreement dated May 7, 2007 among Allied Waste Industries, Inc., the selling
stockholders listed on Schedule B thereto and Goldman, Sachs & Company. Exhibit 1.1 to
Allieds Report on Form 8-K dated May 10, 2007, is incorporated by reference herein.1.3
    
    Letter Agreement dated May 9, 2007 among Allied Waste Industries, Inc., the selling
stockholders named therein and Goldman, Sachs & Company. Exhibit 1.2 to Allieds Report on
Form 8-K dated May 10, 2007, is incorporated by reference herein.2.1
    
    Amended and Restated Agreement and Plan of Reorganization between Allied Waste Industries,
Inc. and Rabanco Acquisition Company, Rabanco Acquisition Company Two, Rabanco Acquisition
Company Three, Rabanco Acquisition Company Four, Rabanco Acquisition Company Five, Rabanco
Acquisition Company Six, Rabanco Acquisition Company Seven, Rabanco Acquisition Company Eight,
Rabanco Acquisition Company Nine, Rabanco Acquisition Company Ten, Rabanco Acquisition Company
Eleven, and Rabanco Acquisition Company Twelve. Exhibit 2.4 to Allieds Quarterly Report on
Form 10-Q for the quarter ended June 30, 1998 is incorporated herein by reference.2.2
    
    Agreement and Plan of Merger dated as of August 10, 1998 by and among Allied Waste
Industries, Inc., AWIN II Acquisition Corporation and American Disposal Services, Inc. Exhibit
2 to Allieds Report on Form 8-K filed August 21, 1998 is incorporated herein by reference.2.3
    
    Agreement and Plan of Merger dated as of March 7, 1999 by and among Allied Waste Industries,
Inc., AWIN I Acquisition Corporation and Browning-Ferris Industries, Inc. Exhibit 2 to
Allieds Report on Form 8-K filed March 16, 1999 is incorporated herein by reference.3.1
    
    Amended Certificate of Incorporation of Allied. Exhibit 3.1 to the Companys Report on Form
10-K/A for the fiscal year ended December 31, 1996 is incorporated herein by reference.3.1(i)
    
    Amendment to Amended Certificate of Incorporation of Allied dated October 15, 1998. Exhibit
3.4 to the Companys Report on Form 10-Q for the quarter ended September 30, 1998 is
incorporated herein by reference.3.1(ii)
    
    Certificate of Amendment of Restated Certificate of Incorporation of Allied dated January
23, 2003. Exhibit 3.1(ii) to the Companys Report on Form 10-K for the year ended December
31, 2002 is incorporated herein by reference.3.2
    
    Amended and Restated Bylaws of the Company as of December 11, 2007. Exhibit 3.1 to Allieds
Report on Form 8-K filed December 17, 2007 is incorporated herein by reference.3.3
    
    Form of Certificate of Designations of Series D Senior Mandatory Convertible Preferred Stock
of Allied Waste Industries, Inc. Exhibit 2 to Allied Waste Industries, Inc.s Report on Form
8-A dated March 3, 2005 is incorporated herein by reference.
 159




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description4.1
    
    Restated Indenture relating to debt issued by Browning-Ferris Industries, Inc., dated
September 1, 1991, among BFI and First City, Texas-Houston, National Association, as Trustee.
Exhibit 4.22 to Allieds Registration Statement on Form S-4 (No. 333-61744) is incorporated
herein by reference.4.2
    
    First Supplemental Indenture relating to the debt issued by Browning-Ferris Industries, Inc.,
dated July 30, 1999, among Allied, Allied NA, Browning-Ferris Industries, Inc. and Chase Bank
of Texas, National Association, as Trustee. Exhibit 4.23 to Allieds Registration Statement on
Form S-4 (No. 333-61744) is incorporated herein by reference.4.3
    
    Registration Rights Agreement, dated as of November 10, 2003, by and among the Company, the
Guarantors and the initial purchasers, relating to $350 million aggregate principal amount of
6-1/2% Senior Notes due 2010. Exhibit 10.4 to Allieds Report on Form 10-Q for the quarter
ended September 30, 2003 is incorporated herein by reference.4.4
    
    Senior Indenture relating to the 1998 Senior Notes dated as of December 23, 1998, by and
among Allied NA and U.S. Bank Trust National Association, as Trustee, with respect to the 1998
Senior Notes and Exchange Notes. Exhibit 4.1 to Allieds Registration Statement on Form S-4
(No. 333-70709) is incorporated herein by reference.4.5
    
    Eleventh Supplemental Indenture relating to the 6 1/2% Senior Notes due 2010, dated November
10, 2003, among Allied NA, certain guarantors signatory thereto, and U.S. Bank National
Association as Trustee. Exhibit 10.5 to Allieds Report on Form 10-Q for the quarter ended
September 30, 2003 is incorporated herein by reference.4.6
    
    Twelfth Supplemental Indenture governing the 5 3/4% Series A Senior Notes due 2011, dated
January 27, 2004, among Allied Waste North America, Inc., Allied Waste Industries, Inc., the
guarantors party thereto, and U.S. Bank National Association as Trustee. Exhibit 10.58 to
Allied Report on Form 10-K for the year ended December 31, 2003 is incorporated herein by
reference.4.7
    
    Thirteenth Supplemental Indenture governing the 6 1/8% Series A Senior Notes due 2014, dated
January 27, 2004, among Allied Waste North America, Inc., Allied Waste Industries, Inc., the
guarantors party thereto, and U.S. Bank National Association as Trustee. Exhibit 10.59 to
Allied Report on Form 10-K for the year ended December 31, 2003 is incorporated herein by
reference.4.8
    
    Second Amended and Restated Registration Rights Agreement, dated as of December 18, 2003,
between Allied and the purchasers of the Series A Convertible Preferred Stock and related
parties. Exhibit 10.60 to Allied Report on Form 10-K for the year ended December 31, 2003 is
incorporated herein by reference.4.9
    
    Third Amended and Restated Shareholders Agreement, dated as of December 18, 2003, between
Allied and the purchasers of the Series A Senior Convertible Preferred Stock and related
parties. Exhibit 10.61 to Allieds Report on Form 10-K for the year ended December 31, 2003
is incorporated herein by reference.4.10
    
    Registration Rights Agreement, dated as of April 20, 2004, by and among the Company, the
Guarantors and the initial purchasers, relating to $275 million aggregate principal amount of
6 3/8% Senior Notes due 2011. Exhibit 10.20 to Allieds Report on Form 10-Q for the quarter
ended March 31, 2004 is incorporated herein by reference.
 160




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##### Table of Contents



ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description4.11
    
    Registration Rights Agreement, dated as of April 20, 2004, by and among the Company, the
Guarantors and the initial purchasers, relating to $400 million aggregate principal amount of
7 3/8% Senior Notes due 2014. Exhibit 10.21 to Allieds Report on Form 10-Q for the quarter
ended March 31, 2004, is incorporated herein by reference.4.12
    
    Fourteenth Supplemental Indenture governing the 7 3/8% Series A Senior Notes due 2014, dated
April 20, 2004, among Allied Waste North America, Inc., Allied Waste Industries, Inc., the
guarantors party thereto, and U.S. Bank National Association as Trustee. Exhibit 10.22 to
Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by
reference.4.13
    
    Fifteenth Supplemental Indenture governing the 6 3/8% Series A Senior Notes due 2011, dated
April 20, 2004, among Allied Waste North America, Inc., Allied Waste Industries, Inc., the
guarantors party thereto, and U.S. Bank National Association as Trustee. Exhibit 10.23 to
Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by
reference.4.14
    
    Indenture, dated as of April 20, 2004, among Allied Waste Industries, Inc., and U.S. Bank
Trust National Association, as Trustee, regarding the 4 1/4% Senior Subordinated Convertible
Debentures due 2034 of Allied Waste Industries, Inc. Exhibit 10.24 to Allieds Report on Form
10-Q for the quarter ended March 31, 2004 is incorporated herein by reference.4.15
    
    Tenth Supplemental Indenture governing the 7 7/8% Senior Notes due 2013, dated April 9, 2003,
among Allied Waste North America, Inc., Allied Waste Industries, Inc., the guarantors party
thereto, and U.S. Bank National Association as Trustee. Exhibit 10.01 to Allieds Current
Report on Form 8-K dated April 10, 2003 is incorporated by reference.4.16
    
    First Supplemental Indenture, dated as of December 31, 2004, between Browning-Ferris
Industries, Inc., BBCO, and JP Morgan Chase Bank, National Association as trustee. Exhibit
4.33 to Allieds Form 10-K for the year ended December 31, 2004 is incorporated herein by
reference.4.17
    
    Sixteenth Supplemental Indenture, dated as of March 9, 2005, among the Registrant, Allied
Waste North America, Inc., and U.S. Bank National Association, to the Indenture dated as of
December 23, 1998 concerning the issuance of Senior Notes due 2015. Exhibit 1.01 to Allieds
Current Report on Form 8-K dated March 10, 2005 is incorporated herein by reference.4.18
    
    Registration Rights Agreement, dated as of March 9, 2005, among the Registrant, Allied Waste
North America, Inc., J.P. Morgan Securities Inc., UBS Securities LLC, Credit Suisse First
Boston LLC, Wachovia Capital Markets, LLC, Banc of America Securities LLC, BNP Paribas
Securities Corp., Calyon Securities (USA) and Scotia Capital (USA) Inc. concerning the
registration of the 7 1/4% Senior Notes due 2015. Exhibit 1.02 to Allieds Current Report on
Form 8-K dated March 10, 2005 is incorporated herein by reference.4.19
    
    Seventeenth Supplemental Indenture governing the 7 1/8% Senior Notes due 2016, dated May 17,
2006, by and among Allied Waste North America, Inc., Allied Waste Industries, Inc., the
guarantors party thereto and U.S. Bank National Association, as trustee. Exhibit 1.01 to
Allieds Current Report on Form 8-K dated May 17, 2006 is incorporated herein by reference.
 161




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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description4.20
    
    Registration Rights Agreement, dated as of May 17, 2006, by and among Allied Waste North
America, Inc., Allied Waste Industries, Inc., the guarantors party thereto, and the initial
purchasers of the 7 1/8% Senior Notes due 2016. Exhibit 1.02 to Allieds Current Report on
Form 8-K dated May 17, 2006 is incorporated herein by reference.4.21
    
    Form of First Amendment, dated as of December 28, 2006, to the Third Amended and Restated
Shareholders Agreement, dated as of December 18, 2003. Exhibit 10.1 to Allieds Current
Report on Form 8-K dated January 3, 2007 is incorporated herein by reference.4.22
    
    Form of First Amendment, dated as of December 28, 2006, to the Second Amended and Restated
Registration Rights Agreement, dated as of December 18, 2003. Exhibit 10.2 to Allieds
Current Report on Form 8-K dated January 3, 2007 is incorporated herein by reference.10.1
    
    Securities Purchase Agreement dated April 21, 1997 between Apollo Investment Fund III, L.P.,
Apollo Overseas Partners III, L.P., and Apollo (U.K.) Partners III, L.P.; Blackstone Capital
Partners II Merchant Banking Fund L.P., Blackstone Offshore Capital Partners II L.P. and
Blackstone Family Investment Partnership II L.P.; Laidlaw Inc. and Laidlaw Transportation,
Inc.; and Allied Waste Industries, Inc. Exhibit 10.1 to Allieds Report on Form 10-Q for the
quarter ended March 31, 1997 is incorporated herein by reference.10.2+
    
    1994 Amended and Restated Non-Employee Director Stock Option Plan. Exhibit B to Allieds
Definitive Proxy Statement in accordance with Schedule 14A dated April 28, 1994 is
incorporated herein by reference.10.3+
    
    First Amendment to the 1994 Amended and Restated Non-Employee Director Stock Option Plan.
Exhibit 10.2 to Allieds Quarterly Report on Form 10-Q dated August 10, 1995 is incorporated
herein by reference.10.4+
    
    Second Amendment to the 1994 Amended and Restated Non-Employee Director Stock Option Plan of
Allied. Exhibit A to Allieds Definitive Proxy Statement in accordance with Schedule 14A
dated April 25, 1995 is incorporated herein by reference.10.5+
    
    Third Amendment to the 1994 Amended and Restated Non-Employee Director Stock Option Plan
dated January 1, 1998. Exhibit 4.41 to Allieds Quarterly Report on Form 10-Q dated May 15,
2002 is incorporated herein by reference.10.6+
    
    Fourth Amendment to the 1994 Amended and Restated Non-Employee Director Stock Option Plan
dated January 1, 1998. Exhibit 4.42 to Allieds Quarterly Report on Form 10-Q dated May 15,
2002 is incorporated herein by reference.10.7+
    
    Fifth Amendment to the 1994 Amended and Restated Non-Employee Director Stock Option Plan
dated May 26, 1999. Exhibit 4.43 to Allieds Quarterly Report on Form 10-Q dated May 15, 2002
is incorporated herein by reference.10.8+
    
    Sixth Amendment to the 1994 Amended and Restated Non-Employee Director Stock Option Plan,
dated April 3, 2002. Exhibit 1 to Allieds Definitive Proxy Statement in accordance with
Schedule 14A dated April 12, 2002 is incorporated herein by reference.10.9+
    
    Restated 1994 Non-Employee Director Stock Option Plan, dated April 3, 2002. Exhibit 2 to
Allieds Definitive Proxy Statement in accordance with Schedule 14A dated April 12, 2002 is
incorporated herein by reference.
 162




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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description10.10+
    
    Restated 1994 Non-Employee Director Stock Plan effective February 5, 2004. Exhibit 10.17 to
Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by
reference.10.11+
    
    Form of Nonqualified Stock Option Agreement under the Restated 1994 Non-Employee Director
Stock Option Plan. Exhibit 10.61 to Allieds Form 10-K for the year ended December 31, 2004
is incorporated herein by reference.10.12+
    
    1993 Incentive Stock Plan of Allied. Exhibit 10.3 to Allieds Registration Statement on Form
S-1 (No. 33-73110) is incorporated herein by reference.10.13+
    
    Amendment to the 1993 Incentive Stock Plan dated January 1, 1998. Exhibit 4.45 to Allieds
Quarterly Report on Form 10-Q dated May 15, 2002 is incorporated herein by reference.10.14+
    
    Amendment to the Allied Waste Industries, Inc. 1993 Incentive Stock Plan dated June 20,
2000. Exhibit 4.46 to Allieds Quarterly Report on Form 10-Q dated May 15, 2002 is
incorporated herein by reference.10.15+
    
    Amendment to the 1993 Incentive Stock Plan dated December 12, 2002. Exhibit 10.44 to
Allieds Annual Report on Form 10-K, dated March 26, 2003 is incorporated herein by reference.10.16+
    
    Amendment to the 1993 Incentive Stock Plan  2004-1, effective February 5, 2004. Exhibit
10.11 to Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated
herein by reference.10.17+
    
    Amendment to the 1993 Incentive Stock Plan  2004-2, effective February 5, 2004. Exhibit
10.12 to Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated
herein by reference.10.18+
    
    Restated 1993 Incentive Stock Plan effective February 5, 2004. Exhibit 10.13 to Allieds
Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by reference.10.19+
    
    Amended and Restated 1994 Incentive Stock Plan. Exhibit 10.1 to Allieds Quarterly Report on
Form 10-Q dated May 31, 1996 is incorporated herein by reference.10.20+
    
    First Amendment to the Amended and Restated 1994 Incentive Stock Plan dated January 1, 1998.
Exhibit 4.44 to Allieds Quarterly Report on Form 10-Q dated May 15, 2002 is incorporated
herein by reference.10.21+
    
    Second Amendment to the 1994 Incentive Stock Plan dated December 12, 2002. Exhibit 10.46
to Allieds Annual Report on Form 10-K dated March 26, 2003 is incorporated herein by
reference.10.22+
    
    Amendment to the 1994 Incentive Stock Plan  2004-1, effective February 5, 2004. Exhibit
10.14 to Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated
herein by reference.10.23+
    
    Amendment to the 1994 Incentive Stock Plan  2004-2, effective February 5, 2004. Exhibit
10.15 to Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated
herein by reference.10.24+
    
    Restated 1994 Incentive Stock Plan effective February 5, 2004. Exhibit 10.16 to Allieds
Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by reference.
 163




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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description10.25+
    
    Amended and Restated 1991 Incentive Stock Plan. Exhibit 3 to Allieds Definitive Proxy
Statement in accordance with Schedule 14A dated April 18, 2001 is incorporated herein by
reference.10.26+
    
    First Amendment to the 1991 Incentive Stock Plan dated August 8, 2001. Exhibit 4.14 to
Allieds Form 10-K for the year ended December 31, 2001 is incorporated herein by reference.10.27+
    
    Second Amendment to Restated 1991 Incentive Stock Plan dated December 12, 2002. Exhibit
10.49 to Allieds Annual Report on Form 10-K dated March 26, 2003 is incorporated herein by
reference.10.28+
    
    Third Amendment to the 1991 Incentive Stock Plan effective February 5, 2004. Exhibit 10.6 to
Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by
reference.10.29+
    
    Fourth Amendment to the 1991 Incentive Stock Plan effective February 5, 2004. Exhibit 10.7
to Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by
reference.10.30+
    
    Amended and Restated 1991 Incentive Stock Plan effective February 5, 2004. Exhibit 10.8 to
Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by
reference.10.31+
    
    First Amendment to the Amended and Restated 1991 Incentive Stock Plan (As Amended and
Restated effective February 5, 2004). Exhibit 10.03 to Allieds Report on Form 8-K dated
December 10, 2004 is incorporated herein by reference.10.32+
    
    Form of Nonqualified Stock Option Agreement under the Amended and Restated 1991 Incentive
Stock Plan. Exhibit 10.01 to Allieds Report on Form 8-K dated December 10, 2004 is
incorporated herein by reference.10.33+
    
    Form of Performance-Accelerated Restricted Stock Agreement under the Amended and Restated
1991 Incentive Stock Plan. Exhibit 10.62 to Allieds Form 10-K for the year ended December
31, 2004 is incorporated herein by reference.10.34+
    
    Form of the First Amendment to the Performance-Accelerated Restricted Stock Agreement, dated
January 1, 2002, under the Amended and Restated 1991 Incentive Stock Plan. Exhibit 10.63 to
Allieds Form 10-K for the year ended December 31, 2004 is incorporated herein by reference.10.35+
    
    Form of the Second Amendment to the Performance-Accelerated Restricted Stock Agreement,
dated July 1, 2004, under the Amended and Restated 1991 Incentive Stock Plan. Exhibit 10.64
to Allieds Form 10-K for the year ended December 31, 2004 is incorporated herein by
reference.10.36+
    
    Form of Amendment dated December 30, 2005, to Performance-Accelerated Restricted Stock
Agreement under the Amended and Restated 1991 Incentive Stock Plan. Exhibit 10.99 to Allieds
Annual Report on Form 10-K dated December 31, 2005 is incorporated herein by reference.10.37+
    
    Form of Restricted Stock Units Agreement under the Amended and Restated 1991 Incentive Stock
Plan. Exhibit 10.02 to Allieds Report on Form 8-K dated December 10, 2004 is incorporated
herein by reference.
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ALLIED WASTE INDUSTRIES, INC.


Exhibit No.
    
    Description10.38+
    
    Form of Restricted Stock Units Agreement under the Amended and Restated 1991 Incentive Stock
Plan. Exhibit 10.65 to Allieds Form 10-K for the year ended December 31, 2004 is
incorporated herein by reference.10.39+
    
    Form of the Amendment to the Restricted Stock Units Agreement under the Amended and Restated
1991 Incentive Stock Plan. Exhibit 10.66 to Allieds Form 10-K for the year ended December
31, 2004 is incorporated herein by reference.10.40+
    
    Form of Amendment dated December 30, 2005, to Restricted Stock Units Agreement under the
Amended and Restated 1991 Incentive Stock Plan. Exhibit 10.100 to Allieds Form 10-K for the
year ended December 31, 2005 is incorporated herein by reference.10.41+
    
    Form of Nonqualified Stock Option Agreement under the Amended and Restated 1991 Incentive
Stock Plan. Exhibit 10.01 to Allieds Current Report on Form 8-K dated December 30, 2005 is
incorporated herein by reference.10.42+
    
    Form of Restricted Stock Units Agreement under the Amended and Restated 1991 Incentive Stock
Plan. Exhibit 10.02 to Allieds Current Report on Form 8-K dated December 30, 2005 is
incorporated herein by reference.10.43+
    
    Form of Nonqualified Stock Option Agreement under the Amended and Restated 1991 Incentive
Stock Option Plan. Exhibit 10.01 to Allieds Report on Form 8-K dated December 10, 2004 is
incorporated herein by reference.10.44+
    
    2006 Incentive Stock Plan. Exhibit 10.2 to Allieds Form 10-Q for the quarter ended June
30, 2006 is incorporated herein by reference.10.45+
    
    First Amendment to the Allied Waste Industries, Inc., 2006 Incentive Stock Plan dated July
27, 2006. Exhibit 10.1 to Allieds Form 10-Q for the quarter ended September 30, 2006 is
incorporated herein by reference.10.46+
    
    Amended and Restated Allied Waste Industries, Inc., 2006 Incentive Stock Plan dated July 27,
2006. Exhibit 10.2 to Allieds Form 10-Q for the quarter ended September 30, 2006 is
incorporated herein by reference.10.47+
    
    First Amendment to the Amended and Restated Allied Waste Industries, Inc., 2006 Incentive
Stock Plan dated July 27, 2006.10.48+
    
    Form of Nonqualified Stock Option Agreement under the 2006 Incentive Stock Plan. Exhibit
10.3 to Allieds Form 10-Q for the quarter ended September 30, 2006 is incorporated herein by
reference.10.49+
    
    Form of Restricted Stock Agreement under the 2006 Incentive Stock Plan. Exhibit 10.4 to
Allieds Form 10-Q for the quarter ended September 30, 2006 is incorporated herein by
reference.10.50+
    
    Form of Restricted Stock Units Agreement under the 2006 Incentive Stock Plan. Exhibit 10.5
to Allieds Form 10-Q for the quarter ended September 30, 2006 is incorporated herein by
reference.10.51+
    
    2005 Non-Employee Director Equity Compensation Plan.Exhibit 10.7 to Allieds
Report on Form 10-Q for the quarter ended June 30, 2005 is incorporated herein by reference.10.52+
    
    First Amendment to the Allied Waste Industries, Inc. 2005 Non-Employee Director Equity
Compensation Plan. Exhibit 10.02 to Allieds Current Report on Form 8-K dated February 9, 2006
is incorporated herein by reference.
 165




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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description10.53+
    
    Form of Restricted Stock Agreement under the 2005 Non-Employee Director Equity Compensation
Plan. Exhibit 10.2 to Allieds Report on Form 10-Q for the quarter ended March 31, 2005 is
incorporated herein by reference.10.54+
    
    Form of Restricted Stock Units Agreement under the 2005 Non-Employee Director Equity
Compensation Plan. Exhibit 10.3 to Allieds Report on Form 10-Q for the quarter ended March
31, 2005 is incorporated herein by reference.10.55+
    
    Form of Stock Option Agreement under the 2005 Non-Employee Director Equity Compensation
Plan. Exhibit 10.4 to Allieds Report on Form 10-Q for the quarter ended March 31, 2005 is
incorporated herein by reference.10.56+
    
    Form of Restricted Stock Units Agreement under the 2005 Non-Employee Director Equity
Compensation Plan. Exhibit 10.03 to Allieds Current Report on Form 8-K dated December 30,
2005 is incorporated herein by reference.10.57+
    
    Executive Deferred Compensation Plan effective February 5, 2004. Exhibit 10.9 to Allieds
Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by reference.10.58+
    
    2005 Executive Deferred Compensation Plan, effective December 1, 2004. Exhibit 10.71 to
Allieds Form 10-K for the year ended December 31, 2004 is incorporated herein by reference.10.59+
    
    Amendment dated December 29, 2005, to the Executive Deferred Compensation Plan and 2005
Executive Deferred Compensation Plan. Exhibit 10.98 to Allieds Annual Report on Form 10-K
dated December 31, 2005 is incorporated herein by reference.10.60+
    
    Supplemental Executive Retirement Plan effective August 1, 2003. Exhibit 10.10 to Allieds
Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by reference.10.61+
    
    Allied Waste Industries, Inc. Supplemental Executive Retirement Plan, Restated Effective
January 1, 2006. Exhibit 10.03 to Allieds Current Report on Form 8-K dated February 9, 2006
is incorporated herein by reference.10.62+
    
    Amended and Restated Schedule A, dated November 1, 2006, to the Supplemental Executive
Retirement Plan.10.63+
    
    Long-Term Incentive Plan effective January 1, 2004. Exhibit 10.5 to Allieds Report on Form
10-Q for the quarter ended March 31, 2004 is incorporated herein by reference.10.64+
    
    First Amendment to Allied Waste Industries, Inc. Long-Term Incentive Plan. Exhibit 10.9 to
Allieds Report on Form 10-Q for the quarter ended March 31, 2005 is incorporated herein by
reference.10.65+
    
    Form of Award Letter under Allied Waste Industries, Inc. Long-Term Incentive Plan. Exhibit
10.10 to Allieds Report on Form 10-Q for the quarter ended March 31, 2005 is incorporated
herein by reference.10.66+
    
    2005 Senior Management Incentive Plan. Exhibit 10.5 to Allieds Report on Form 10-Q for the
quarter ended March 31, 2005 is incorporated herein by reference.10.67+
    
    Form of Participation Letter under 2005 Senior Management Incentive Plan. Exhibit 10.6 to
Allieds Report on Form 10-Q for the quarter ended March 31, 2005 is incorporated herein by
reference.
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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description10.68+
    
    Summary of Individual Performance Goals under Senior Management Incentive Plan, as approved
on August 1, 2005. Exhibit 10.11 to Allieds Report on Form 10-Q for the quarter ended June
30, 2005 is incorporated herein by reference.10.69+
    
    2005 Transition Plan for Senior and Key Management Employees. Exhibit 10.7 to Allieds
Report on Form 10-Q for the quarter ended March 31, 2005 is incorporated herein by reference.10.70+
    
    Form of Participation Letter under 2005 Transition Plan for Senior and Key Management
Employees. Exhibit 10.8 to Allieds Report on Form 10-Q for the quarter ended March 31, 2005
is incorporated herein by reference.10.71+
    
    2006 Executive Incentive Compensation Plan. Exhibit 10.10 to Allieds Report on Form 10-Q
for the quarter ended June 30, 2006 is incorporated herein by reference.10.72+
    
    2006 Senior Management Incentive Plan. Exhibit 10.01 to Allieds Current Report on Form 8-K
dated February 9, 2006 is incorporated herein by reference.10.73+
    
    Indemnification Agreement  Employees (Specimen Agreement). Exhibit 10.18 to Allieds Report
on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by reference.10.74+
    
    Indemnification Agreement  Employees (List of Covered Persons).10.75+
    
    Indemnification Agreement  Non-Employee Directors (Specimen Agreement). Exhibit 10.19 to
Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by
reference.10.76+
    
    Indemnification Agreement  Non-Employee Directors (List of Covered Persons).10.77+
    
    Executive Employment Agreement between the Company and James E. Gray, effective January 3,
2001.10.78+
    
    Executive Employment Agreement between the Company and Donald W. Slager effective January 1,
2004. Exhibit 10.2 to Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is
incorporated herein by reference.10.79+
    
    Executive Employment Agreement between the Company and Peter S. Hathaway effective January
1, 2004. Exhibit 10.3 to Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is
incorporated herein by reference.10.80+
    
    Executive Employment Agreement between the Company and Steven M. Helm effective January 1,
2004. Exhibit 10.4 to Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is
incorporated herein by reference.10.81+
    
    Separation Agreement and Release between the Company and Steven M. Helm effective August 31,
2006. Exhibit 10.7 to Allieds Report on Form 10-Q for the quarter ended September 30, 2006
is incorporated herein by reference.10.82+
    
    Executive Employment Agreement for Donald A. Swierenga. Exhibit 10.12 to Allieds Report on
Form 10-Q for the quarter ended March 31, 2005 is incorporated herein by reference.10.83+
    
    Executive Employment Agreement between the Company and John J. Zillmer, dated May 27, 2005.
Exhibit 10.01 to Allieds Current Report on Form 8-K dated May 27, 2005 is incorporated herein
by reference.
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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description10.84+
    
    Option Agreement between the Company and John J. Zillmer, dated May 27, 2005. Exhibit 10.02
to Allieds Current Report on Form 8-K dated May 27, 2005 is incorporated herein by reference.10.85+
    
    Restricted Stock Agreement between the Company and John J. Zillmer, dated May 27, 2005.
Exhibit 10.03 to Allieds Current Report on Form 8-K dated May 27, 2005 is incorporated herein
by reference.10.86+
    
    Summary of Performance Goals Under Restricted Stock Agreement between the Company and John
J. Zillmer. Exhibit 10.12 to Allieds Report on Form 10-Q for the quarter ended June 30, 2005
is incorporated herein by reference.10.87+
    
    Indemnity Agreement between the Company and John J. Zillmer, dated May 27, 2005. Exhibit
10.04 to Allieds Current Report on Form 8-K dated May 27, 2005 is incorporated herein by
reference.10.88+
    
    Summary of terms of interim housing arrangements, as approved on August 1, 2005, between the
Company and John J. Zillmer. Exhibit 10.10 to Allieds Report on Form 10-Q for the quarter
ended June 30, 2005 is incorporated herein by reference.10.89+
    
    Summary of Compensatory Elements of Amended and Restated Airplane Policy dated August 1,
2005. Exhibit 10.13 to Allieds Report on Form 10-Q for the quarter ended June 30, 2005 is
incorporated herein by reference.10.90+
    
    Executive Employment Agreement between the Company and John S. Quinn effective November 30,
2001. Exhibit 10.8 to Allieds Report on Form 10-Q for the quarter ended September 30, 2006
is incorporated herein by reference.10.91
    
    Amended and Restated Collateral Trust Agreement, dated April 29, 2003, among Allied NA,
certain of its subsidiaries, and JPMorgan Chase Bank, as Collateral Trustee. Exhibit 10.14 to
Allieds Registration Statement on Form S-4 (No. 333-104451) is incorporated herein by
reference.10.92
    
    Amended and Restated Shared Collateral Pledge Agreement, dated April 29, 2003, among Allied
NA, certain of its subsidiaries, and JP Morgan Chase Bank, as Collateral Trustee. Exhibit
10.13 to Allieds Registration Statement on Form S-4 (No. 333-104451) is incorporated herein
by reference.10.93
    
    Amended and Restated Shared Collateral Security Agreement, dated April 29, 2003, among
Allied NA, certain of its subsidiaries, and JP Morgan Chase Bank, as Collateral Trustee.
Exhibit 10.12 to Allieds Registration Statement on Form S-4 (No. 333-104451) is incorporated
herein by reference.10.94
    
    Amended and Restated Non-Shared Collateral Security Agreement, dated April 29, 2003, among
Allied, Allied NA, certain of its subsidiaries, and JP Morgan Chase Bank, as Collateral Agent.
Exhibit 10.10 to Allieds Registration Statement on Form S-4 (No. 333-104451) is incorporated
herein by reference.10.95
    
    Amended and Restated Non-Shared Collateral Pledge Agreement, dated April 29, 2003, among
Allied, Allied NA, certain of its subsidiaries, and JP Morgan Chase Bank, as Collateral Agent.
Exhibit 10.11 to Allieds Registration Statement on Form S-4 (No. 333-104451) is incorporated
herein by reference.10.96
    
    Credit Agreement dated as of July 21, 1999, as amended and restated as of March 21, 2005.
Exhibit 10.11 to Allieds Report on Form 10-Q for the quarter ended March 31, 2005 is
incorporated herein by reference.
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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description10.97
    
    Amendment dated as of November 14, 2005, to the Credit Agreement dated as of July 21, 1999
as amended and restated as of March 21, 2005, among Allied Waste Industries, Inc., Allied
Waste North America, Inc.; the lenders part thereto; and JPMorgan Chase Bank, N.A., as
administrative agent. Exhibit 10.101 to Allieds Annual Report on Form 10-K dated December
31, 2005 is incorporated herein by reference.10.98
    
    Second amendment dated as of March 30, 2006, to the Credit Agreement dated as of July 21,
1999, as amended and restated as of March 21, 2005, among Allied Waste Industries, Inc.,
Allied Waste North America, Inc., the lenders party thereto, and JPMorgan Chase Bank, N.A., as
administrative agent and collateral agent for the Lenders and as Collateral Trustee for the
Shared Collateral Secured Parties. Exhibit 10.1 to Allieds Report on Form 10-Q for the
quarter ended June 30, 2006 is incorporated herein by reference.10.99
    
    Third amendment dated as of July 26, 2006, to the Credit Agreement dated as of July 21,
1999, as amended and restated as of March 21, 2005, among Allied Waste Industries, Inc.,
Allied Waste North America, Inc., the lenders party thereto, and JPMorgan Chase Bank, N.A., as
administrative agent and collateral agent for the Lenders and as collateral trustee for the
Shared Collateral Secured Parties. Exhibit 10.6 to Allieds Report on Form 10-Q for the
quarter ended September 30, 2006 is incorporated herein by reference.10.100
    
    Exchange Agreement, dated July 31, 2003, by and among Allied Waste Industries, Inc., and the
Parties Listed on Schedule I thereto. Exhibit 1.01 to Allieds Current Report on Form 8-K
dated August 6, 2003 is incorporated by reference.10.101
    
    Receivables Sale Agreement, dated as of March 7, 2003, among Allied Waste North America,
Inc, as originators and Allied Receivables Funding Incorporated as buyer. Exhibit 10.67 to
Allieds Form 10-K for the year ended December 31, 2004 is incorporated herein by reference.10.102
    
    Credit and Security Agreement, dated as of March 7, 2003, among Allied Receivables Funding
Incorporated as borrower, Allied Waste North America, Inc. as servicer, Blue Ridge Asset
Funding Corporation as a lender, Wachovia Bank, National Association as a lender group agent
and Wachovia Bank, National Association as agent. Exhibit 10.68 to Allieds Form 10-K for the
year ended December 31, 2004 is incorporated herein by reference.10.103
    
    Sixth Amendment to Receivables Sale Agreement, effective September 30, 2004. Exhibit 10.69
to Allieds Form 10-K for the year ended December 31, 2004 is incorporated herein by
reference.10.104
    
    Eighth Amendment to the Receivables Sale Agreement, dated May 31, 2005 among Allied Waste
North America, Inc., as originators and Allied Receivables Funding Incorporated as buyer.
Exhibit 10.53 to Allieds Registration Statement on Form S-4 (No. 333-126239) is incorporated
herein by reference.10.105
    
    Participation Agreement between the Company and CoreTrust Purchasing Group LLC, the
exclusive agent, for the purchase by the Company of certain goods and services effective July
1, 2006. Exhibit 10.4 to Allieds Report on Form 10-Q for the quarter ended June 30, 2006 is
incorporated herein by reference.
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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description10.106
    
    Amended and Restated Credit and Security Agreement Dated as of May 30, 2006 among Allied
Receivables Funding Incorporated as borrower, Allied Waste North America, Inc., as servicer,
Variable Funding Capital Company LLC, as a lender, Wachovia Bank National Association, as
agent, liquidity bank and lender group agent, Atlantic Asset Securitization Corp., as a lender
and Calyon New York Branch, as Atlantic group agent and as Atlantic liquidity bank.10.107+
    
    Amended and restated Executive Employment Agreement between the Company and John J. Zillmer
dated March 20, 2007. Exhibit 10.1 to Allieds Report on Form 10-Q for the quarter ended March
31, 2007 is incorporated herein by reference.10.108+
    
    Amended and restated Executive Employment Agreement between the Company and Donald W.
Slager dated March 20, 2007. Exhibit 10.2 to Allieds Report on Form 10-Q for the quarter
ended March 31, 2007 is incorporated herein by reference.10.109+
    
    Amended and restated Executive Employment Agreement between the Company and Peter S.
Hathaway dated March 20, 2007. Exhibit 10.3 to Allieds Report on Form 10-Q for the quarter
ended March 31, 2007 is incorporated herein by reference.10.110+
    
    Amended and restated Executive Employment Agreement between the Company and Edward A. Evans
dated March 20, 2007. Exhibit 10.4 to Allieds Report on Form 10-Q for the quarter ended March
31, 2007 is incorporated herein by reference.10.111+
    
    Amended and restated Executive Employment Agreement between the Company and Timothy R.
Donovan dated February 28, 2007. Exhibit 10.5 to Allieds Report on Form 10-Q for the quarter
ended March 31, 2007 is incorporated herein by reference.10.112+
    
    2007 Senior Management Incentive Plan effective January 1, 2007. Exhibit 10.6 to Allieds
Report on Form 10-Q for the quarter ended March 31, 2007 is incorporated herein by reference.10.113
    
    Loan agreement between Allied Waste North America, Inc. and Mission Economic Development
Corporation for Series 2007A Solid Waste Disposal Revenue Bonds dated April 1, 2007. Exhibit
10.7 to Allieds Report on Form 10-Q for the quarter ended March 31, 2007 is incorporated
herein by reference.10.114
    
    Underwriting Agreement, dated February 26, 2007, among Allied Waste Industries, Inc., Allied
Waste North America, Inc., the guarantors party thereto and UBS Securities LLC, Citigroup
Global Markets Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities Inc., Banc of
America Securities LLC, Deutsche Bank Securities, Inc., Wachovia Capital Markets, LLC, BNP
Paribas Securities Corp., Calyon Securities (USA) Inc., and Scotia Capital (USA) Inc. Exhibit
1.1 to Allieds Current Report on Form 8-K dated February 27, 2007 is incorporated herein by
reference.10.115
    
    Eighteenth Supplemental Indenture governing the 6.875% Senior Notes due 2017, dated March
12, 2007, by and among Allied Waste North America, Inc., Allied Waste Industries, Inc., the
guarantors party thereto and U.S. Bank National Association, as trustee. Exhibit 1.01 to
Allieds Current Report on Form 8-K dated March 13, 2007 is incorporated herein by reference.10.116
    
    Supplemental Indenture to the Eighth Supplemental Indenture governing the 8.50% Senior Notes
due 2008, dated March 12, 2007, by and among Allied Waste North America, Inc., the guarantors
signatory thereto and U.S. Bank National Association, as trustee. Exhibit 1.02 to Allieds
Current Report on Form 8-K dated March 13, 2007 is incorporated herein by reference.
 170




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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description10.117
    
    Fourth Amendment dated as of March 28, 2007, to the Credit Agreement dated as of July 21,
1999, as amended and restated as of March 21, 2005, among Allied Waste Industries, Inc.,
Allied Waste North America, Inc., the lenders party thereto (the Lenders), and JP Morgan Chase
Bank, N.A. as administrative agent and collateral agent for the Lenders and as collateral
trustee for the Shared Collateral Secured Parties. Exhibit 1.01 to Allieds Current Report on
Form 8-K dated March 30, 2007 is incorporated herein by reference.10.118
    
    Fourteenth Amendment to Receivables Sale Agreement, dated as of May 29, 2007, among Allied
Waste North America, Inc, as originators and Allied Receivables Funding Incorporated as buyer.
Exhibit 10.1 to Allieds Report on Form 10-Q for the quarter ended June 30, 2007 is
incorporated herein by reference.10.119
    
    Third Amendment to Amended and Restated Credit and Security Agreement, dated as of May 29,
2007, among Allied Receivables Funding Incorporated as borrower, Allied Waste North America,
Inc. as servicer, Variable Funding Capital Company LLC, as a lender, Wachovia Bank, National
Association as agent, liquidity bank and lender group agent, Atlantic Asset Securitization
LLC, as a lender and Calyon New York Branch, as Atlantic group agent and as Atlantic liquidity
bank. Exhibit 10.2 to Allieds Report on Form 10-Q for the quarter ended June 30, 2007 is
incorporated herein by reference.10.120+
    
    Form of Restricted Stock Units Agreement under the 2006 Incentive Stock Plan for conversion
match restricted stock units awarded under the 2007 Senior Management Incentive Plan and the
2007 Management Incentive Plan. Exhibit 10.3 to Allieds Report on Form 10-Q for the quarter
ended June 30, 2007 is incorporated herein by reference.10.121+
    
    Form of Restricted Stock Units Agreement under the 2006 Incentive Stock Plan for conversion
restricted stock units awarded under the 2007 Senior Management Incentive Plan and the 2007
Management Incentive Plan. Exhibit 10.4 to Allieds Report on Form 10-Q for the quarter ended
June 30, 2007 is incorporated herein by reference.10.122*+
    
    Amended and Restated Allied Waste Industries, Inc., 2006 Incentive Stock Plan effective
October 24, 2007.10.123*+
    
    Amended and Restated Allied Waste Industries, Inc., 2005 Non-Employee Director Equity
Compensation Plan effective January 1, 2008.10.124*+
    
    First Amendment to the Amended and Restated 1993 Incentive Stock Plan (As Amended and
Restated effective February 5, 2004) effective January 1, 2008.10.125*+
    
    First Amendment to the Amended and Restated 1994 Incentive Stock Plan (As Amended and
Restated effective February 5, 2004) effective January 1, 2008.10.126*+
    
    Amended and Restated Allied Waste Industries, Inc., 2005 Executive Deferred Compensation
Plan, effective January 1, 2008.10.127*
    
    Sixteenth Amendment to Receivables Sale Agreement, dated as of October 30, 2007, among
Allied Waste North America, Inc, as originators and Allied Receivables Funding Incorporated as
buyer.10.128*
    
    Fifth Amendment to Amended and Restated Credit and Security Agreement, dated as of October
30, 2007, among Allied Receivables Funding Incorporated as borrower, Allied Waste North
America, Inc. as servicer, Variable Funding Capital Company LLC, as a lender, Wachovia Bank,
National Association as agent, liquidity bank and lender group agent, Atlantic Asset
Securitization LLC, as a lender and Calyon New York Branch, as Atlantic group agent and as
Atlantic liquidity bank.
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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description12.1*
    
    Ratio of earnings to fixed charges and preferred stock dividends.14*
    
    Allied Waste Industries Code of Ethics.21*
    
    Subsidiaries of the Registrant.23.1*
    
    Consent of PricewaterhouseCoopers LLP.31.1*
    
    Section 302 Certifications of John J. Zillmer, Chairman of the Board of Directors and Chief
Executive Officer.31.2*
    
    Section 302 Certifications of Peter S. Hathaway, Executive Vice President and Chief
Financial Officer.32*
    
    Certification Pursuant to 18 U.S.C.§1350 of John J. Zillmer, Chairman of the Board of
Directors and Chief Executive Officer and Peter S. Hathaway, Executive Vice President and
Chief Financial Officer.
 
 *
    
    Filed herewith+
    
    Indicates a management or compensatory plan or arrangement. 172




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Signatures
  ALLIED WASTE INDUSTRIES, INC.Date: February 20, 2008
    By:
    /s/ Peter S. HathawayPeter S. HathawayExecutive Vice President and Chief Financial Officer  Signature
    
    Title
    
    Date/s/ John J. Zillmer

John J. Zillmer
    
    Chairman of the Board of Directors and
Chief Executive Officer 
(Principal Executive Officer)
    
    02/20/08/s/ Peter S. Hathaway

Peter S. Hathaway
    
    Executive Vice President and
Chief Financial Officer 
(Principal
Financial Officer)
    
    02/20/08/s/ Denise R. Danner

Denise R. Danner
    
    Senior Vice President, Controller, and
Chief Accounting Officer 
(Principal
Accounting Officer)
    
    02/20/08/s/ Robert Agate

Robert Agate
    
    Director
    
    02/20/08/s/ Charles H. Cotros

Charles H. Cotros
    
    Director
    
    02/20/08/s/ James W. Crownover

James W. Crownover
    
    Director
    
    02/20/08/s/ William J. Flynn

William J. Flynn
    
    Director
    
    02/20/08/s/ David I. Foley

David I. Foley
    
    Director
    
    02/20/08/s/ Nolan Lehmann

Nolan Lehmann
    
    Director
    
    02/20/08/s/ Leon J. Level

Leon J. Level
    
    Director
    
    02/20/08/s/ James A. Quella

James A. Quella
    
    Director
    
    02/20/08/s/ John M. Trani

John M. Trani
    
    Director
    
    02/20/08
 173




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##### Table of Contents



ALLIED
WASTE INDUSTRIES, INC.   INDEX TO EXHIBITS
 Exhibit No.
    
    Description1.1
    
    Underwriting Agreement dated November 16, 2006, among Allied Waste Industries, Inc., the
selling stockholders listed on Schedule B thereto, and UBS Securities LLC. Exhibit 1.1 to
Allieds Report on Form 8-K dated November 22, 2006, is incorporated by reference herein.1.2
    
    Underwriting Agreement dated May 7, 2007 among Allied Waste Industries, Inc., the selling
stockholders listed on Schedule B thereto and Goldman, Sachs & Company. Exhibit 1.1 to
Allieds Report on Form 8-K dated May 10, 2007, is incorporated by reference herein.1.3
    
    Letter Agreement dated May 9, 2007 among Allied Waste Industries, Inc., the selling
stockholders named therein and Goldman, Sachs & Company. Exhibit 1.2 to Allieds Report on
Form 8-K dated May 10, 2007, is incorporated by reference herein.2.1
    
    Amended and Restated Agreement and Plan of Reorganization between Allied Waste Industries,
Inc. and Rabanco Acquisition Company, Rabanco Acquisition Company Two, Rabanco Acquisition
Company Three, Rabanco Acquisition Company Four, Rabanco Acquisition Company Five, Rabanco
Acquisition Company Six, Rabanco Acquisition Company Seven, Rabanco Acquisition Company Eight,
Rabanco Acquisition Company Nine, Rabanco Acquisition Company Ten, Rabanco Acquisition Company
Eleven, and Rabanco Acquisition Company Twelve. Exhibit 2.4 to Allieds Quarterly Report on
Form 10-Q for the quarter ended June 30, 1998 is incorporated herein by reference.2.2
    
    Agreement and Plan of Merger dated as of August 10, 1998 by and among Allied Waste
Industries, Inc., AWIN II Acquisition Corporation and American Disposal Services, Inc. Exhibit
2 to Allieds Report on Form 8-K filed August 21, 1998 is incorporated herein by reference.2.3
    
    Agreement and Plan of Merger dated as of March 7, 1999 by and among Allied Waste Industries,
Inc., AWIN I Acquisition Corporation and Browning-Ferris Industries, Inc. Exhibit 2 to
Allieds Report on Form 8-K filed March 16, 1999 is incorporated herein by reference.3.1
    
    Amended Certificate of Incorporation of Allied. Exhibit 3.1 to the Companys Report on Form
10-K/A for the fiscal year ended December 31, 1996 is incorporated herein by reference.3.1(i)
    
    Amendment to Amended Certificate of Incorporation of Allied dated October 15, 1998. Exhibit
3.4 to the Companys Report on Form 10-Q for the quarter ended September 30, 1998 is
incorporated herein by reference.3.1(ii)
    
    Certificate of Amendment of Restated Certificate of Incorporation of Allied dated January
23, 2003. Exhibit 3.1(ii) to the Companys Report on Form 10-K for the year ended December
31, 2002 is incorporated herein by reference.3.2
    
    Amended and Restated Bylaws of the Company as of December 11, 2007. Exhibit 3.1 to Allieds
Report on Form 8-K filed December 17, 2007 is incorporated herein by reference.3.3
    
    Form of Certificate of Designations of Series D Senior Mandatory Convertible Preferred Stock
of Allied Waste Industries, Inc. Exhibit 2 to Allied Waste Industries, Inc.s Report on Form
8-A dated March 3, 2005 is incorporated herein by reference.
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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description4.1
    
    Restated Indenture relating to debt issued by Browning-Ferris Industries, Inc., dated
September 1, 1991, among BFI and First City, Texas-Houston, National Association, as Trustee.
Exhibit 4.22 to Allieds Registration Statement on Form S-4 (No. 333-61744) is incorporated
herein by reference.4.2
    
    First Supplemental Indenture relating to the debt issued by Browning-Ferris Industries, Inc.,
dated July 30, 1999, among Allied, Allied NA, Browning-Ferris Industries, Inc. and Chase Bank
of Texas, National Association, as Trustee. Exhibit 4.23 to Allieds Registration Statement on
Form S-4 (No. 333-61744) is incorporated herein by reference.4.3
    
    Registration Rights Agreement, dated as of November 10, 2003, by and among the Company, the
Guarantors and the initial purchasers, relating to $350 million aggregate principal amount of
6-1/2% Senior Notes due 2010. Exhibit 10.4 to Allieds Report on Form 10-Q for the quarter
ended September 30, 2003 is incorporated herein by reference.4.4
    
    Senior Indenture relating to the 1998 Senior Notes dated as of December 23, 1998, by and
among Allied NA and U.S. Bank Trust National Association, as Trustee, with respect to the 1998
Senior Notes and Exchange Notes. Exhibit 4.1 to Allieds Registration Statement on Form S-4
(No. 333-70709) is incorporated herein by reference.4.5
    
    Eleventh Supplemental Indenture relating to the 6 1/2% Senior Notes due 2010, dated November
10, 2003, among Allied NA, certain guarantors signatory thereto, and U.S. Bank National
Association as Trustee. Exhibit 10.5 to Allieds Report on Form 10-Q for the quarter ended
September 30, 2003 is incorporated herein by reference.4.6
    
    Twelfth Supplemental Indenture governing the 5 3/4% Series A Senior Notes due 2011, dated
January 27, 2004, among Allied Waste North America, Inc., Allied Waste Industries, Inc., the
guarantors party thereto, and U.S. Bank National Association as Trustee. Exhibit 10.58 to
Allied Report on Form 10-K for the year ended December 31, 2003 is incorporated herein by
reference.4.7
    
    Thirteenth Supplemental Indenture governing the 6 1/8% Series A Senior Notes due 2014, dated
January 27, 2004, among Allied Waste North America, Inc., Allied Waste Industries, Inc., the
guarantors party thereto, and U.S. Bank National Association as Trustee. Exhibit 10.59 to
Allied Report on Form 10-K for the year ended December 31, 2003 is incorporated herein by
reference.4.8
    
    Second Amended and Restated Registration Rights Agreement, dated as of December 18, 2003,
between Allied and the purchasers of the Series A Convertible Preferred Stock and related
parties. Exhibit 10.60 to Allied Report on Form 10-K for the year ended December 31, 2003 is
incorporated herein by reference.4.9
    
    Third Amended and Restated Shareholders Agreement, dated as of December 18, 2003, between
Allied and the purchasers of the Series A Senior Convertible Preferred Stock and related
parties. Exhibit 10.61 to Allieds Report on Form 10-K for the year ended December 31, 2003
is incorporated herein by reference.4.10
    
    Registration Rights Agreement, dated as of April 20, 2004, by and among the Company, the
Guarantors and the initial purchasers, relating to $275 million aggregate principal amount of
6 3/8% Senior Notes due 2011. Exhibit 10.20 to Allieds Report on Form 10-Q for the quarter
ended March 31, 2004 is incorporated herein by reference.
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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description4.11
    
    Registration Rights Agreement, dated as of April 20, 2004, by and among the Company, the
Guarantors and the initial purchasers, relating to $400 million aggregate principal amount of
7 3/8% Senior Notes due 2014. Exhibit 10.21 to Allieds Report on Form 10-Q for the quarter
ended March 31, 2004, is incorporated herein by reference.4.12
    
    Fourteenth Supplemental Indenture governing the 7 3/8% Series A Senior Notes due 2014, dated
April 20, 2004, among Allied Waste North America, Inc., Allied Waste Industries, Inc., the
guarantors party thereto, and U.S. Bank National Association as Trustee. Exhibit 10.22 to
Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by
reference.4.13
    
    Fifteenth Supplemental Indenture governing the 6 3/8% Series A Senior Notes due 2011, dated
April 20, 2004, among Allied Waste North America, Inc., Allied Waste Industries, Inc., the
guarantors party thereto, and U.S. Bank National Association as Trustee. Exhibit 10.23 to
Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by
reference.4.14
    
    Indenture, dated as of April 20, 2004, among Allied Waste Industries, Inc., and U.S. Bank
Trust National Association, as Trustee, regarding the 4 1/4% Senior Subordinated Convertible
Debentures due 2034 of Allied Waste Industries, Inc. Exhibit 10.24 to Allieds Report on Form
10-Q for the quarter ended March 31, 2004 is incorporated herein by reference.4.15
    
    Tenth Supplemental Indenture governing the 7 7/8% Senior Notes due 2013, dated April 9, 2003,
among Allied Waste North America, Inc., Allied Waste Industries, Inc., the guarantors party
thereto, and U.S. Bank National Association as Trustee. Exhibit 10.01 to Allieds Current
Report on Form 8-K dated April 10, 2003 is incorporated by reference.4.16
    
    First Supplemental Indenture, dated as of December 31, 2004, between Browning-Ferris
Industries, Inc., BBCO, and JP Morgan Chase Bank, National Association as trustee. Exhibit
4.33 to Allieds Form 10-K for the year ended December 31, 2004 is incorporated herein by
reference.4.17
    
    Sixteenth Supplemental Indenture, dated as of March 9, 2005, among the Registrant, Allied
Waste North America, Inc., and U.S. Bank National Association, to the Indenture dated as of
December 23, 1998 concerning the issuance of Senior Notes due 2015. Exhibit 1.01 to Allieds
Current Report on Form 8-K dated March 10, 2005 is incorporated herein by reference.4.18
    
    Registration Rights Agreement, dated as of March 9, 2005, among the Registrant, Allied Waste
North America, Inc., J.P. Morgan Securities Inc., UBS Securities LLC, Credit Suisse First
Boston LLC, Wachovia Capital Markets, LLC, Banc of America Securities LLC, BNP Paribas
Securities Corp., Calyon Securities (USA) and Scotia Capital (USA) Inc. concerning the
registration of the 7 1/4% Senior Notes due 2015. Exhibit 1.02 to Allieds Current Report on
Form 8-K dated March 10, 2005 is incorporated herein by reference.4.19
    
    Seventeenth Supplemental Indenture governing the 7 1/8% Senior Notes due 2016, dated May 17,
2006, by and among Allied Waste North America, Inc., Allied Waste Industries, Inc., the
guarantors party thereto and U.S. Bank National Association, as trustee. Exhibit 1.01 to
Allieds Current Report on Form 8-K dated May 17, 2006 is incorporated herein by reference.
 176




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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description4.20
    
    Registration Rights Agreement, dated as of May 17, 2006, by and among Allied Waste North
America, Inc., Allied Waste Industries, Inc., the guarantors party thereto, and the initial
purchasers of the 7 1/8% Senior Notes due 2016. Exhibit 1.02 to Allieds Current Report on
Form 8-K dated May 17, 2006 is incorporated herein by reference.4.21
    
    Form of First Amendment, dated as of December 28, 2006, to the Third Amended and Restated
Shareholders Agreement, dated as of December 18, 2003. Exhibit 10.1 to Allieds Current
Report on Form 8-K dated January 3, 2007 is incorporated herein by reference.4.22
    
    Form of First Amendment, dated as of December 28, 2006, to the Second Amended and Restated
Registration Rights Agreement, dated as of December 18, 2003. Exhibit 10.2 to Allieds
Current Report on Form 8-K dated January 3, 2007 is incorporated herein by reference.10.1
    
    Securities Purchase Agreement dated April 21, 1997 between Apollo Investment Fund III, L.P.,
Apollo Overseas Partners III, L.P., and Apollo (U.K.) Partners III, L.P.; Blackstone Capital
Partners II Merchant Banking Fund L.P., Blackstone Offshore Capital Partners II L.P. and
Blackstone Family Investment Partnership II L.P.; Laidlaw Inc. and Laidlaw Transportation,
Inc.; and Allied Waste Industries, Inc. Exhibit 10.1 to Allieds Report on Form 10-Q for the
quarter ended March 31, 1997 is incorporated herein by reference.10.2+
    
    1994 Amended and Restated Non-Employee Director Stock Option Plan. Exhibit B to Allieds
Definitive Proxy Statement in accordance with Schedule 14A dated April 28, 1994 is
incorporated herein by reference.10.3+
    
    First Amendment to the 1994 Amended and Restated Non-Employee Director Stock Option Plan.
Exhibit 10.2 to Allieds Quarterly Report on Form 10-Q dated August 10, 1995 is incorporated
herein by reference.10.4+
    
    Second Amendment to the 1994 Amended and Restated Non-Employee Director Stock Option Plan of
Allied. Exhibit A to Allieds Definitive Proxy Statement in accordance with Schedule 14A
dated April 25, 1995 is incorporated herein by reference.10.5+
    
    Third Amendment to the 1994 Amended and Restated Non-Employee Director Stock Option Plan
dated January 1, 1998. Exhibit 4.41 to Allieds Quarterly Report on Form 10-Q dated May 15,
2002 is incorporated herein by reference.10.6+
    
    Fourth Amendment to the 1994 Amended and Restated Non-Employee Director Stock Option Plan
dated January 1, 1998. Exhibit 4.42 to Allieds Quarterly Report on Form 10-Q dated May 15,
2002 is incorporated herein by reference.10.7+
    
    Fifth Amendment to the 1994 Amended and Restated Non-Employee Director Stock Option Plan
dated May 26, 1999. Exhibit 4.43 to Allieds Quarterly Report on Form 10-Q dated May 15, 2002
is incorporated herein by reference.10.8+
    
    Sixth Amendment to the 1994 Amended and Restated Non-Employee Director Stock Option Plan,
dated April 3, 2002. Exhibit 1 to Allieds Definitive Proxy Statement in accordance with
Schedule 14A dated April 12, 2002 is incorporated herein by reference.10.9+
    
    Restated 1994 Non-Employee Director Stock Option Plan, dated April 3, 2002. Exhibit 2 to
Allieds Definitive Proxy Statement in accordance with Schedule 14A dated April 12, 2002 is
incorporated herein by reference.
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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description10.10+
    
    Restated 1994 Non-Employee Director Stock Plan effective February 5, 2004. Exhibit 10.17 to
Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by
reference.10.11+
    
    Form of Nonqualified Stock Option Agreement under the Restated 1994 Non-Employee Director
Stock Option Plan. Exhibit 10.61 to Allieds Form 10-K for the year ended December 31, 2004
is incorporated herein by reference.10.12+
    
    1993 Incentive Stock Plan of Allied. Exhibit 10.3 to Allieds Registration Statement on Form
S-1 (No. 33-73110) is incorporated herein by reference.10.13+
    
    Amendment to the 1993 Incentive Stock Plan dated January 1, 1998. Exhibit 4.45 to Allieds
Quarterly Report on Form 10-Q dated May 15, 2002 is incorporated herein by reference.10.14+
    
    Amendment to the Allied Waste Industries, Inc. 1993 Incentive Stock Plan dated June 20,
2000. Exhibit 4.46 to Allieds Quarterly Report on Form 10-Q dated May 15, 2002 is
incorporated herein by reference.10.15+
    
    Amendment to the 1993 Incentive Stock Plan dated December 12, 2002. Exhibit 10.44 to
Allieds Annual Report on Form 10-K, dated March 26, 2003 is incorporated herein by reference.10.16+
    
    Amendment to the 1993 Incentive Stock Plan  2004-1, effective February 5, 2004. Exhibit
10.11 to Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated
herein by reference.10.17+
    
    Amendment to the 1993 Incentive Stock Plan  2004-2, effective February 5, 2004. Exhibit
10.12 to Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated
herein by reference.10.18+
    
    Restated 1993 Incentive Stock Plan effective February 5, 2004. Exhibit 10.13 to Allieds
Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by reference.10.19+
    
    Amended and Restated 1994 Incentive Stock Plan. Exhibit 10.1 to Allieds Quarterly Report on
Form 10-Q dated May 31, 1996 is incorporated herein by reference.10.20+
    
    First Amendment to the Amended and Restated 1994 Incentive Stock Plan dated January 1, 1998.
Exhibit 4.44 to Allieds Quarterly Report on Form 10-Q dated May 15, 2002 is incorporated
herein by reference.10.21+
    
    Second Amendment to the 1994 Incentive Stock Plan dated December 12, 2002. Exhibit 10.46
to Allieds Annual Report on Form 10-K dated March 26, 2003 is incorporated herein by
reference.10.22+
    
    Amendment to the 1994 Incentive Stock Plan  2004-1, effective February 5, 2004. Exhibit
10.14 to Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated
herein by reference.10.23+
    
    Amendment to the 1994 Incentive Stock Plan  2004-2, effective February 5, 2004. Exhibit
10.15 to Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated
herein by reference.10.24+
    
    Restated 1994 Incentive Stock Plan effective February 5, 2004. Exhibit 10.16 to Allieds
Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by reference.
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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description10.25+
    
    Amended and Restated 1991 Incentive Stock Plan. Exhibit 3 to Allieds Definitive Proxy
Statement in accordance with Schedule 14A dated April 18, 2001 is incorporated herein by
reference.10.26+
    
    First Amendment to the 1991 Incentive Stock Plan dated August 8, 2001. Exhibit 4.14 to
Allieds Form 10-K for the year ended December 31, 2001 is incorporated herein by reference.10.27+
    
    Second Amendment to Restated 1991 Incentive Stock Plan dated December 12, 2002. Exhibit
10.49 to Allieds Annual Report on Form 10-K dated March 26, 2003 is incorporated herein by
reference.10.28+
    
    Third Amendment to the 1991 Incentive Stock Plan effective February 5, 2004. Exhibit 10.6 to
Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by
reference.10.29+
    
    Fourth Amendment to the 1991 Incentive Stock Plan effective February 5, 2004. Exhibit 10.7
to Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by
reference.10.30+
    
    Amended and Restated 1991 Incentive Stock Plan effective February 5, 2004. Exhibit 10.8 to
Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by
reference.10.31+
    
    First Amendment to the Amended and Restated 1991 Incentive Stock Plan (As Amended and
Restated effective February 5, 2004). Exhibit 10.03 to Allieds Report on Form 8-K dated
December 10, 2004 is incorporated herein by reference.10.32+
    
    Form of Nonqualified Stock Option Agreement under the Amended and Restated 1991 Incentive
Stock Plan. Exhibit 10.01 to Allieds Report on Form 8-K dated December 10, 2004 is
incorporated herein by reference.10.33+
    
    Form of Performance-Accelerated Restricted Stock Agreement under the Amended and Restated
1991 Incentive Stock Plan. Exhibit 10.62 to Allieds Form 10-K for the year ended December
31, 2004 is incorporated herein by reference.10.34+
    
    Form of the First Amendment to the Performance-Accelerated Restricted Stock Agreement, dated
January 1, 2002, under the Amended and Restated 1991 Incentive Stock Plan. Exhibit 10.63 to
Allieds Form 10-K for the year ended December 31, 2004 is incorporated herein by reference.10.35+
    
    Form of the Second Amendment to the Performance-Accelerated Restricted Stock Agreement,
dated July 1, 2004, under the Amended and Restated 1991 Incentive Stock Plan. Exhibit 10.64
to Allieds Form 10-K for the year ended December 31, 2004 is incorporated herein by
reference.10.36+
    
    Form of Amendment dated December 30, 2005, to Performance-Accelerated Restricted Stock
Agreement under the Amended and Restated 1991 Incentive Stock Plan. Exhibit 10.99 to Allieds
Annual Report on Form 10-K dated December 31, 2005 is incorporated herein by reference.10.37+
    
    Form of Restricted Stock Units Agreement under the Amended and Restated 1991 Incentive Stock
Plan. Exhibit 10.02 to Allieds Report on Form 8-K dated December 10, 2004 is incorporated
herein by reference.
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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description10.38+
    
    Form of Restricted Stock Units Agreement under the Amended and Restated 1991 Incentive Stock
Plan. Exhibit 10.65 to Allieds Form 10-K for the year ended December 31, 2004 is
incorporated herein by reference.10.39+
    
    Form of the Amendment to the Restricted Stock Units Agreement under the Amended and Restated
1991 Incentive Stock Plan. Exhibit 10.66 to Allieds Form 10-K for the year ended December
31, 2004 is incorporated herein by reference.10.40+
    
    Form of Amendment dated December 30, 2005, to Restricted Stock Units Agreement under the
Amended and Restated 1991 Incentive Stock Plan. Exhibit 10.100 to Allieds Form 10-K for the
year ended December 31, 2005 is incorporated herein by reference.10.41+
    
    Form of Nonqualified Stock Option Agreement under the Amended and Restated 1991 Incentive
Stock Plan. Exhibit 10.01 to Allieds Current Report on Form 8-K dated December 30, 2005 is
incorporated herein by reference.10.42+
    
    Form of Restricted Stock Units Agreement under the Amended and Restated 1991 Incentive Stock
Plan. Exhibit 10.02 to Allieds Current Report on Form 8-K dated December 30, 2005 is
incorporated herein by reference.10.43+
    
    Form of Nonqualified Stock Option Agreement under the Amended and Restated 1991 Incentive
Stock Option Plan. Exhibit 10.01 to Allieds Report on Form 8-K dated December 10, 2004 is
incorporated herein by reference.10.44+
    
    2006 Incentive Stock Plan. Exhibit 10.2 to Allieds Form 10-Q for the quarter ended June
30, 2006 is incorporated herein by reference.10.45+
    
    First Amendment to the Allied Waste Industries, Inc., 2006 Incentive Stock Plan dated July
27, 2006. Exhibit 10.1 to Allieds Form 10-Q for the quarter ended September 30, 2006 is
incorporated herein by reference.10.46+
    
    Amended and Restated Allied Waste Industries, Inc., 2006 Incentive Stock Plan dated July 27,
2006. Exhibit 10.2 to Allieds Form 10-Q for the quarter ended September 30, 2006 is
incorporated herein by reference.10.47+
    
    First Amendment to the Amended and Restated Allied Waste Industries, Inc., 2006 Incentive
Stock Plan dated July 27, 2006.10.48+
    
    Form of Nonqualified Stock Option Agreement under the 2006 Incentive Stock Plan. Exhibit
10.3 to Allieds Form 10-Q for the quarter ended September 30, 2006 is incorporated herein by
reference.10.49+
    
    Form of Restricted Stock Agreement under the 2006 Incentive Stock Plan. Exhibit 10.4 to
Allieds Form 10-Q for the quarter ended September 30, 2006 is incorporated herein by
reference.10.50+
    
    Form of Restricted Stock Units Agreement under the 2006 Incentive Stock Plan. Exhibit 10.5
to Allieds Form 10-Q for the quarter ended September 30, 2006 is incorporated herein by
reference.10.51+
    
    2005 Non-Employee Director Equity Compensation Plan.Exhibit 10.7 to Allieds
Report on Form 10-Q for the quarter ended June 30, 2005 is incorporated herein by reference.10.52+
    
    First Amendment to the Allied Waste Industries, Inc. 2005 Non-Employee Director Equity
Compensation Plan. Exhibit 10.02 to Allieds Current Report on Form 8-K dated February 9, 2006
is incorporated herein by reference.
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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description10.53+
    
    Form of Restricted Stock Agreement under the 2005 Non-Employee Director Equity Compensation
Plan. Exhibit 10.2 to Allieds Report on Form 10-Q for the quarter ended March 31, 2005 is
incorporated herein by reference.10.54+
    
    Form of Restricted Stock Units Agreement under the 2005 Non-Employee Director Equity
Compensation Plan. Exhibit 10.3 to Allieds Report on Form 10-Q for the quarter ended March
31, 2005 is incorporated herein by reference.10.55+
    
    Form of Stock Option Agreement under the 2005 Non-Employee Director Equity Compensation
Plan. Exhibit 10.4 to Allieds Report on Form 10-Q for the quarter ended March 31, 2005 is
incorporated herein by reference.10.56+
    
    Form of Restricted Stock Units Agreement under the 2005 Non-Employee Director Equity
Compensation Plan. Exhibit 10.03 to Allieds Current Report on Form 8-K dated December 30,
2005 is incorporated herein by reference.10.57+
    
    Executive Deferred Compensation Plan effective February 5, 2004. Exhibit 10.9 to Allieds
Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by reference.10.58+
    
    2005 Executive Deferred Compensation Plan, effective December 1, 2004. Exhibit 10.71 to
Allieds Form 10-K for the year ended December 31, 2004 is incorporated herein by reference.10.59+
    
    Amendment dated December 29, 2005, to the Executive Deferred Compensation Plan and 2005
Executive Deferred Compensation Plan. Exhibit 10.98 to Allieds Annual Report on Form 10-K
dated December 31, 2005 is incorporated herein by reference.10.60+
    
    Supplemental Executive Retirement Plan effective August 1, 2003. Exhibit 10.10 to Allieds
Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by reference.10.61+
    
    Allied Waste Industries, Inc. Supplemental Executive Retirement Plan, Restated Effective
January 1, 2006. Exhibit 10.03 to Allieds Current Report on Form 8-K dated February 9, 2006
is incorporated herein by reference.10.62+
    
    Amended and Restated Schedule A, dated November 1, 2006, to the Supplemental Executive
Retirement Plan.10.63+
    
    Long-Term Incentive Plan effective January 1, 2004. Exhibit 10.5 to Allieds Report on Form
10-Q for the quarter ended March 31, 2004 is incorporated herein by reference.10.64+
    
    First Amendment to Allied Waste Industries, Inc. Long-Term Incentive Plan. Exhibit 10.9 to
Allieds Report on Form 10-Q for the quarter ended March 31, 2005 is incorporated herein by
reference.10.65+
    
    Form of Award Letter under Allied Waste Industries, Inc. Long-Term Incentive Plan. Exhibit
10.10 to Allieds Report on Form 10-Q for the quarter ended March 31, 2005 is incorporated
herein by reference.10.66+
    
    2005 Senior Management Incentive Plan. Exhibit 10.5 to Allieds Report on Form 10-Q for the
quarter ended March 31, 2005 is incorporated herein by reference.10.67+
    
    Form of Participation Letter under 2005 Senior Management Incentive Plan. Exhibit 10.6 to
Allieds Report on Form 10-Q for the quarter ended March 31, 2005 is incorporated herein by
reference.
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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description10.68+
    
    Summary of Individual Performance Goals under Senior Management Incentive Plan, as approved
on August 1, 2005. Exhibit 10.11 to Allieds Report on Form 10-Q for the quarter ended June
30, 2005 is incorporated herein by reference.10.69+
    
    2005 Transition Plan for Senior and Key Management Employees. Exhibit 10.7 to Allieds
Report on Form 10-Q for the quarter ended March 31, 2005 is incorporated herein by reference.10.70+
    
    Form of Participation Letter under 2005 Transition Plan for Senior and Key Management
Employees. Exhibit 10.8 to Allieds Report on Form 10-Q for the quarter ended March 31, 2005
is incorporated herein by reference.10.71+
    
    2006 Executive Incentive Compensation Plan. Exhibit 10.10 to Allieds Report on Form 10-Q
for the quarter ended June 30, 2006 is incorporated herein by reference.10.72+
    
    2006 Senior Management Incentive Plan. Exhibit 10.01 to Allieds Current Report on Form 8-K
dated February 9, 2006 is incorporated herein by reference.10.73+
    
    Indemnification Agreement  Employees (Specimen Agreement). Exhibit 10.18 to Allieds
Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by reference.10.74+
    
    Indemnification Agreement  Employees (List of Covered Persons).10.75+
    
    Indemnification Agreement  Non-Employee Directors (Specimen Agreement). Exhibit 10.19 to
Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is incorporated herein by
reference.10.76+
    
    Indemnification Agreement  Non-Employee Directors (List of Covered Persons).10.77+
    
    Executive Employment Agreement between the Company and James E. Gray, effective January 3,
2001.10.78+
    
    Executive Employment Agreement between the Company and Donald W. Slager effective January 1,
2004. Exhibit 10.2 to Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is
incorporated herein by reference.10.79+
    
    Executive Employment Agreement between the Company and Peter S. Hathaway effective January
1, 2004. Exhibit 10.3 to Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is
incorporated herein by reference.10.80+
    
    Executive Employment Agreement between the Company and Steven M. Helm effective January 1,
2004. Exhibit 10.4 to Allieds Report on Form 10-Q for the quarter ended March 31, 2004 is
incorporated herein by reference.10.81+
    
    Separation Agreement and Release between the Company and Steven M. Helm effective August 31,
2006. Exhibit 10.7 to Allieds Report on Form 10-Q for the quarter ended September 30, 2006
is incorporated herein by reference.10.82+
    
    Executive Employment Agreement for Donald A. Swierenga. Exhibit 10.12 to Allieds Report on
Form 10-Q for the quarter ended March 31, 2005 is incorporated herein by reference.10.83+
    
    Executive Employment Agreement between the Company and John J. Zillmer, dated May 27, 2005.
Exhibit 10.01 to Allieds Current Report on Form 8-K dated May 27, 2005 is incorporated herein
by reference.
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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description10.84+
    
    Option Agreement between the Company and John J. Zillmer, dated May 27, 2005. Exhibit 10.02
to Allieds Current Report on Form 8-K dated May 27, 2005 is incorporated herein by reference.10.85+
    
    Restricted Stock Agreement between the Company and John J. Zillmer, dated May 27, 2005.
Exhibit 10.03 to Allieds Current Report on Form 8-K dated May 27, 2005 is incorporated herein
by reference.10.86 +
    
    Summary of Performance Goals Under Restricted Stock Agreement between the Company and John
J. Zillmer. Exhibit 10.12 to Allieds Report on Form 10-Q for the quarter ended June 30, 2005
is incorporated herein by reference.10.87+
    
    Indemnity Agreement between the Company and John J. Zillmer, dated May 27, 2005. Exhibit
10.04 to Allieds Current Report on Form 8-K dated May 27, 2005 is incorporated herein by
reference.10.88+
    
    Summary of terms of interim housing arrangements, as approved on August 1, 2005, between the
Company and John J. Zillmer. Exhibit 10.10 to Allieds Report on Form 10-Q for the quarter
ended June 30, 2005 is incorporated herein by reference.10.89+
    
    Summary of Compensatory Elements of Amended and Restated Airplane Policy dated August 1,
2005. Exhibit 10.13 to Allieds Report on Form 10-Q for the quarter ended June 30, 2005 is
incorporated herein by reference.10.90+
    
    Executive Employment Agreement between the Company and John S. Quinn effective November 30,
2001. Exhibit 10.8 to Allieds Report on Form 10-Q for the quarter ended September 30, 2006
is incorporated herein by reference.10.91
    
    Amended and Restated Collateral Trust Agreement, dated April 29, 2003, among Allied NA,
certain of its subsidiaries, and JPMorgan Chase Bank, as Collateral Trustee. Exhibit 10.14 to
Allieds Registration Statement on Form S-4 (No. 333-104451) is incorporated herein by
reference.10.92
    
    Amended and Restated Shared Collateral Pledge Agreement, dated April 29, 2003, among Allied
NA, certain of its subsidiaries, and JP Morgan Chase Bank, as Collateral Trustee. Exhibit
10.13 to Allieds Registration Statement on Form S-4 (No. 333-104451) is incorporated herein
by reference.10.93
    
    Amended and Restated Shared Collateral Security Agreement, dated April 29, 2003, among
Allied NA, certain of its subsidiaries, and JP Morgan Chase Bank, as Collateral Trustee.
Exhibit 10.12 to Allieds Registration Statement on Form S-4 (No. 333-104451) is incorporated
herein by reference.10.94
    
    Amended and Restated Non-Shared Collateral Security Agreement, dated April 29, 2003, among
Allied, Allied NA, certain of its subsidiaries, and JP Morgan Chase Bank, as Collateral Agent.
Exhibit 10.10 to Allieds Registration Statement on Form S-4 (No. 333-104451) is incorporated
herein by reference.10.95
    
    Amended and Restated Non-Shared Collateral Pledge Agreement, dated April 29, 2003, among
Allied, Allied NA, certain of its subsidiaries, and JP Morgan Chase Bank, as Collateral Agent.
Exhibit 10.11 to Allieds Registration Statement on Form S-4 (No. 333-104451) is incorporated
herein by reference.10.96
    
    Credit Agreement dated as of July 21, 1999, as amended and restated as of March 21, 2005.
Exhibit 10.11 to Allieds Report on Form 10-Q for the quarter ended March 31, 2005 is
incorporated herein by reference.
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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description10.97
    
    Amendment dated as of November 14, 2005, to the Credit Agreement dated as of July 21, 1999
as amended and restated as of March 21, 2005, among Allied Waste Industries, Inc., Allied
Waste North America, Inc.; the lenders part thereto; and JPMorgan Chase Bank, N.A., as
administrative agent. Exhibit 10.101 to Allieds
Annual Report on Form 10-K dated December 31, 2005 is incorporated herein by reference.10.98
    
    Second amendment dated as of March 30, 2006, to the Credit Agreement dated as of July 21,
1999, as amended and restated as of March 21, 2005, among Allied Waste Industries, Inc.,
Allied Waste North America, Inc., the lenders party thereto, and JPMorgan Chase Bank, N.A., as
administrative agent and collateral agent for the Lenders and as Collateral Trustee for the
Shared Collateral Secured Parties. Exhibit 10.1 to Allieds Report on Form 10-Q for the
quarter ended June 30, 2006 is incorporated herein by reference.10.99
    
    Third amendment dated as of July 26, 2006, to the Credit Agreement dated as of July 21,
1999, as amended and restated as of March 21, 2005, among Allied Waste Industries, Inc.,
Allied Waste North America, Inc., the lenders party thereto, and JPMorgan Chase Bank, N.A., as
administrative agent and collateral agent for the Lenders and as collateral trustee for the
Shared Collateral Secured Parties. Exhibit 10.6 to Allieds Report on Form 10-Q for the
quarter ended September 30, 2006 is incorporated herein by reference.10.100
    
    Exchange Agreement, dated July 31, 2003, by and among Allied Waste Industries, Inc., and the
Parties Listed on Schedule I thereto. Exhibit 1.01 to Allieds Current Report on Form 8-K
dated August 6, 2003 is incorporated by reference.10.101
    
    Receivables Sale Agreement, dated as of March 7, 2003, among Allied Waste North America,
Inc, as originators and Allied Receivables Funding Incorporated as buyer. Exhibit 10.67 to
Allieds Form 10-K for the year ended December 31, 2004 is incorporated herein by reference.10.102
    
    Credit and Security Agreement, dated as of March 7, 2003, among Allied Receivables Funding
Incorporated as borrower, Allied Waste North America, Inc. as servicer, Blue Ridge Asset
Funding Corporation as a lender, Wachovia Bank, National Association as a lender group agent
and Wachovia Bank, National Association as agent. Exhibit 10.68 to Allieds Form 10-K for the
year ended December 31, 2004 is incorporated herein by reference.10.103
    
    Sixth Amendment to Receivables Sale Agreement, effective September 30, 2004. Exhibit 10.69
to Allieds Form 10-K for the year ended December 31, 2004 is incorporated herein by
reference.10.104
    
    Eighth Amendment to the Receivables Sale Agreement, dated May 31, 2005 among Allied Waste
North America, Inc., as originators and Allied Receivables Funding Incorporated as buyer.
Exhibit 10.53 to Allieds Registration Statement on Form S-4 (No. 333-126239) is incorporated
herein by reference.10.105
    
    Participation Agreement between the Company and CoreTrust Purchasing Group LLC, the
exclusive agent, for the purchase by the Company of certain goods and services effective July
1, 2006. Exhibit 10.4 to Allieds Report on Form 10-Q for the quarter ended June 30, 2006 is
incorporated herein by reference.
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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description10.106
    
    Amended and Restated Credit and Security Agreement Dated as of May 30, 2006 among Allied
Receivables Funding Incorporated as borrower, Allied Waste North America, Inc., as servicer,
Variable Funding Capital Company LLC, as a lender, Wachovia Bank National Association, as
agent, liquidity bank and lender group agent, Atlantic Asset Securitization Corp., as a lender
and Calyon New York Branch, as Atlantic group agent and as Atlantic liquidity bank.10.107+
    
    Amended and restated Executive Employment Agreement between the Company and John J. Zillmer
dated March 20, 2007. Exhibit 10.1 to Allieds Report on Form 10-Q for the quarter ended March
31, 2007 is incorporated herein by reference.10.108+
    
    Amended and restated Executive Employment Agreement between the Company and Donald W.
Slager dated March 20, 2007. Exhibit 10.2 to Allieds Report on Form 10-Q for the quarter
ended March 31, 2007 is incorporated herein by reference.10.109+
    
    Amended and restated Executive Employment Agreement between the Company and Peter S.
Hathaway dated March 20, 2007. Exhibit 10.3 to Allieds Report on Form 10-Q for the quarter
ended March 31, 2007 is incorporated herein by reference.10.110+
    
    Amended and restated Executive Employment Agreement between the Company and Edward A. Evans
dated March 20, 2007. Exhibit 10.4 to Allieds Report on Form 10-Q for the quarter ended March
31, 2007 is incorporated herein by reference.10.111+
    
    Amended and restated Executive Employment Agreement between the Company and Timothy R.
Donovan dated February 28, 2007. Exhibit 10.5 to Allieds Report on Form 10-Q for the quarter
ended March 31, 2007 is incorporated herein by reference.10.112+
    
    2007 Senior Management Incentive Plan effective January 1, 2007. Exhibit 10.6 to Allieds
Report on Form 10-Q for the quarter ended March 31, 2007 is incorporated herein by reference.10.113
    
    Loan agreement between Allied Waste North America, Inc. and Mission Economic Development
Corporation for Series 2007A Solid Waste Disposal Revenue Bonds dated April 1, 2007. Exhibit
10.7 to Allieds Report on Form 10-Q for the quarter ended March 31, 2007 is incorporated
herein by reference.10.114
    
    Underwriting Agreement, dated February 26, 2007, among Allied Waste Industries, Inc., Allied
Waste North America, Inc., the guarantors party thereto and UBS Securities LLC, Citigroup
Global Markets Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities Inc., Banc of
America Securities LLC, Deutsche Bank Securities, Inc., Wachovia Capital Markets, LLC, BNP
Paribas Securities Corp., Calyon Securities (USA) Inc., and Scotia Capital (USA) Inc. Exhibit
1.1 to Allieds Current Report on Form 8-K dated February 27, 2007 is incorporated herein by
reference.10.115
    
    Eighteenth Supplemental Indenture governing the 6.875% Senior Notes due 2017, dated March
12, 2007, by and among Allied Waste North America, Inc., Allied Waste Industries, Inc., the
guarantors party thereto and U.S. Bank National Association, as trustee. Exhibit 1.01 to
Allieds Current Report on Form 8-K dated March 13, 2007 is incorporated herein by reference.10.116
    
    Supplemental Indenture to the Eighth Supplemental Indenture governing the 8.50% Senior Notes
due 2008, dated March 12, 2007, by and among Allied Waste North America, Inc., the guarantors
signatory thereto and U.S. Bank National Association, as trustee. Exhibit 1.02 to Allieds
Current Report on Form 8-K dated March 13, 2007 is incorporated herein by reference.
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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description10.117
    
    Fourth Amendment dated as of March 28, 2007, to the Credit Agreement dated as of July 21,
1999, as amended and restated as of March 21, 2005, among Allied Waste Industries, Inc.,
Allied Waste North America, Inc., the lenders party thereto (the Lenders), and JP Morgan Chase
Bank, N.A. as administrative agent and collateral agent for the Lenders and as collateral
trustee for the Shared Collateral Secured Parties. Exhibit 1.01 to Allieds Current Report on
Form 8-K dated March 30, 2007 is incorporated herein by reference.10.118
    
    Fourteenth Amendment to Receivables Sale Agreement, dated as of May 29, 2007, among Allied
Waste North America, Inc, as originators and Allied Receivables Funding Incorporated as buyer.
Exhibit 10.1 to Allieds Report on Form 10-Q for the quarter ended June 30, 2007 is
incorporated herein by reference.10.119
    
    Third Amendment to Amended and Restated Credit and Security Agreement, dated as of May 29,
2007, among Allied Receivables Funding Incorporated as borrower, Allied Waste North America,
Inc. as servicer, Variable Funding Capital Company LLC, as a lender, Wachovia Bank, National
Association as agent, liquidity bank and lender group agent, Atlantic Asset Securitization
LLC, as a lender and Calyon New York Branch, as Atlantic group agent and as Atlantic liquidity
bank. Exhibit 10.2 to Allieds Report on Form 10-Q for the quarter ended June 30, 2007 is
incorporated herein by reference.10.120+
    
    Form of Restricted Stock Units Agreement under the 2006 Incentive Stock Plan for conversion
match restricted stock units awarded under the 2007 Senior Management Incentive Plan and the
2007 Management Incentive Plan. Exhibit 10.3 to Allieds Report on Form 10-Q for the quarter
ended June 30, 2007 is incorporated herein by reference.10.121+
    
    Form of Restricted Stock Units Agreement under the 2006 Incentive Stock Plan for conversion
restricted stock units awarded under the 2007 Senior Management Incentive Plan and the 2007
Management Incentive Plan. Exhibit 10.4 to Allieds Report on Form 10-Q for the quarter ended
June 30, 2007 is incorporated herein by reference.10.122*+
    
    Amended and Restated Allied Waste Industries, Inc., 2006 Incentive Stock Plan effective
October 24, 2007.10.123*+
    
    Amended and Restated Allied Waste Industries, Inc., 2005 Non-Employee Director Equity
Compensation Plan effective January 1, 2008.10.124*+
    
    First Amendment to the Amended and Restated 1993 Incentive Stock Plan (As Amended and
Restated effective February 5, 2004) effective January 1, 2008.10.125*+
    
    First Amendment to the Amended and Restated 1994 Incentive Stock Plan (As Amended and
Restated effective February 5, 2004) effective January 1, 2008.10.126*+
    
    Amended and Restated Allied Waste Industries, Inc., 2005 Executive Deferred Compensation
Plan, effective January 1, 2008.10.127*
    
    Sixteenth Amendment to Receivables Sale Agreement, dated as of October 30, 2007, among
Allied Waste North America, Inc, as originators and Allied Receivables Funding Incorporated as
buyer.10.128*
    
    Fifth Amendment to Amended and Restated Credit and Security Agreement, dated as of October
30, 2007, among Allied Receivables Funding Incorporated as borrower, Allied Waste North
America, Inc. as servicer, Variable Funding Capital Company LLC, as a lender, Wachovia Bank,
National Association as agent, liquidity bank and lender group agent, Atlantic Asset
Securitization LLC, as a lender and Calyon New York Branch, as Atlantic group agent and as
Atlantic liquidity bank.
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ALLIED WASTE INDUSTRIES, INC.
 Exhibit No.
    
    Description12.1*
    
    Ratio of earnings to fixed charges and preferred stock dividends.14*
    
    Allied Waste Industries Code of Ethics.21*
    
    Subsidiaries of the Registrant.23.1*
    
    Consent of PricewaterhouseCoopers LLP.31.1*
    
    Section 302 Certifications of John J. Zillmer, Chairman of the Board of Directors and Chief
Executive Officer.31.2*
    
    Section 302 Certifications of Peter S. Hathaway, Executive Vice President and Chief
Financial Officer.32*
    
    Certification Pursuant to 18 U.S.C.§1350 of John J. Zillmer, Chairman of the Board of
Directors and Chief Executive Officer and Peter S. Hathaway, Executive Vice President and
Chief Financial Officer.*       Filed herewith+       Indicates a management or compensatory plan or arrangement
 187