Exhibit 99.1

IESI-BFC Ltd.

Consolidated Balance Sheets

September 30, 2009 and December 31, 2008 (unaudited — stated in accordance with accounting principles generally accepted in the United States of America and in thousands of U.S. dollars)

	September		December 31,
	30, 2009		2008
ASSETS
CURRENT
Cash and cash equivalents	$	9,025	$	11,938
Accounts receivable		119,265		107,767
Other receivables		547		228
Prepaid expenses		19,323		19,597
Restricted cash (Note 8)		—		82
		148,160		139,612
OTHER RECEIVABLES		1,302		394
FUNDED LANDFILL POST-CLOSURE COSTS (Note 13)		7,902		6,115
INTANGIBLES (Note 9)		105,514		119,898
GOODWILL (Note 10)		627,706		617,832
LANDFILL DEVELOPMENT ASSETS		6,803		8,589
DEFERRED FINANCING COSTS (Note 11)		8,307		9,936
CAPITAL ASSETS		429,203		408,681
LANDFILL ASSETS		659,296		621,862
	$	1,994,193	$	1,932,919
LIABILITIES
CURRENT
Accounts payable	$	55,006	$	54,134
Accrued charges (Note 12)		65,739		55,509
Dividends payable		21,786		2,337
Income taxes payable		10,045		1,387
Deferred revenues		13,044		10,800
Current portion of long-term debt		—		38,380
Landfill closure and post-closure costs (Note 13)		7,668		7,210
		173,288		169,757
LONG-TERM DEBT		646,849		835,210
LANDFILL CLOSURE AND POST-CLOSURE COSTS (Note 13)		65,694		50,857
OTHER LIABILITIES		12,516		15,045
DEFERRED INCOME TAXES		73,872		64,348
		972,219		1,135,217
COMMITMENTS AND CONTINGENCIES (Note 19)
EQUITY (Note 14)
NON-CONTROLLING INTEREST		231,638		230,452
SHAREHOLDERS’ EQUITY		790,336		567,250
		1,021,974		797,702
	$	1,994,193	$	1,932,919

IESI-BFC Ltd. — Third Quarter 2009 — 34

IESI-BFC Ltd.

Consolidated Statements of Operations and Comprehensive Income

For the periods ended September 30, 2009 and 2008 (unaudited – stated in accordance with accounting principles generally accepted in the United States of America and in thousands of U.S. dollars, except net income per share or trust unit amounts)

	Three months ended						Nine months ended
	2009			2008			2009			2008
REVENUES	$	268,411		$	282,235		$	746,004		$	803,197
EXPENSES
OPERATING		156,195			169,209			435,969			484,501
SELLING, GENERAL AND ADMINISTRATION		33,272			32,301			95,949			92,709
AMORTIZATION		41,946			46,928			120,702			135,297
OPERATING INCOME		36,998			33,797			93,384			90,690
INTEREST ON LONG-TERM DEBT		7,851			13,367			26,246			40,111
NET GAIN ON SALE OF CAPITAL AND LANDFILL ASSETS		(13	)		(265	)		(128	)		(351	)
NET FOREIGN EXCHANGE LOSS (GAIN)		61			3			238			(617	)
NET LOSS (GAIN) ON FINANCIAL INSTRUMENTS (Note 17)		305			98			(866	)		3,623
CONVERSION COSTS		93			2,216			208			2,216
OTHER EXPENSES		44			31			109			88
INCOME BEFORE INCOME TAXES		28,657			18,347			67,577			45,620
INCOME TAX EXPENSE (RECOVERY) (Note 16)
Current		4,106			1,419			10,849			6,255
Deferred		5,442			654			12,875			(5,675	)
		9,548			2,073			23,724			580
NET INCOME		19,109			16,274			43,853			45,040
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment		13,813			1,905			21,985			42,749
Commodity swaps designated as cash flow hedges, net of tax		(70	)		—			283			—
COMPREHENSIVE INCOME	$	32,852		$	18,179		$	66,121		$	87,789
NET INCOME — CONTROLLING INTEREST	$	16,793		$	13,636		$	38,331		$	37,739
NET INCOME — NON-CONTROLLING INTEREST	$	2,316		$	2,638		$	5,522		$	7,301
COMPREHENSIVE INCOME — CONTROLLING INTEREST	$	28,837		$	18,179		$	57,795		$	87,789
COMPREHENSIVE INCOME — NON-CONTROLLING INTEREST	$	4,015		$	—		$	8,326		$	—
Net income per weighted average share or trust unit, basic	$	0.20		$	0.24		$	0.54		$	0.66
Net income per weighted average share or trust unit, diluted	$	0.20		$	0.24		$	0.53		$	0.66
Weighted average number of shares or trust units outstanding (thousands), basic		82,294			57,569			71,102			57,569
Weighted average number of shares or trust units outstanding (thousands), diluted		93,431			68,706			82,239			68,706

IESI-BFC Ltd. — Third Quarter 2009 — 35

IESI-BFC Ltd.

Consolidated Statements of Cash Flows

For the periods ended September 30, 2009 and 2008 (unaudited – stated in accordance with accounting principles generally accepted in the United States of America and in thousands of U.S. dollars)

	Three months ended						Nine months ended
	2009			2008			2009			2008
NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES
OPERATING
Net income	$	19,109		$	16,274		$	43,853		$	45,040
Items not affecting cash
Restricted share expense		390			954			1,081			954
Write-off of landfill development assets		—			22			77			935
Accretion of landfill closure and post-closure costs		805			771			2,322			2,326
Amortization of intangibles		7,164			8,123			21,673			24,236
Amortization of capital assets		18,890			19,805			55,894			58,102
Amortization of landfill assets		15,892			19,000			43,135			52,959
Interest on long-term debt (deferred financing costs)		676			846			2,221			2,819
Net gain on sale of capital and landfill assets		(13	)		(265	)		(128	)		(351	)
Net loss (gain) on financial instruments		305			98			(866	)		3,623
Deferred income taxes		5,442			654			12,875			(5,675	)
Landfill closure and post-closure expenditures		(2,609	)		(485	)		(4,964	)		(1,108	)
Changes in non-cash working capital items		10,546			4,079			15,476			(14,690	)
Cash generated from operating activities		76,597			69,876			192,649			169,170
INVESTING
Acquisitions (Note 7)		(1,521	)		(2,023	)		(22,161	)		(56,511	)
Restricted cash withdrawals		—			742			82			1,532
Investment in other receivables		(120	)		—			(1,398	)		—
Proceeds from other receivables		129			72			354			371
Funded landfill post-closure costs		(278	)		(551	)		(659	)		(1,137	)
Purchase of capital assets		(20,530	)		(24,070	)		(58,370	)		(61,398	)
Purchase of landfill assets		(7,631	)		(18,507	)		(29,505	)		(40,681	)
Proceeds from the sale of capital and landfill assets		217			807			3,820			1,348
Investment in landfill development assets		(316	)		(3,470	)		(755	)		(5,202	)
Cash utilized in investing activities		(30,050	)		(47,000	)		(108,592	)		(161,678	)
FINANCING
Recovery (payment) of deferred financing costs		98			(2,210	)		(400	)		(3,134	)
Proceeds from long-term debt		26,041			55,511			142,815			199,702
Repayment of long-term debt		(50,564	)		(41,766	)		(396,948	)		(105,690	)
Common shares issued, net of issue costs		(420	)		—			209,264			(3	)
Purchase of restricted shares		—			(3,912	)		(172	)		(3,912	)
Dividends and distributions paid to share or unitholders and dividends paid to participating preferred shareholders		(20,542	)		(29,947	)		(39,182	)		(91,967	)
Cash utilized in financing activities		(45,387	)		(22,324	)		(84,623	)		(5,004	)
Effect of foreign currency translation on cash and cash equivalents		(3,265	)		(783	)		(2,347	)		(1,465	)
NET CASH (OUTFLOW) INFLOW		(2,105	)		(231	)		(2,913	)		1,023
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD OR YEAR		11,130			13,155			11,938			11,901
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	9,025		$	12,924		$	9,025		$	12,924
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash and cash equivalents are comprised of:
Cash	$	8,056		$	12,920		$	8,056		$	12,920
Cash equivalents		969			4			969			4
	$	9,025		$	12,924		$	9,025		$	12,924
Cash paid during the period for:
Income taxes	$	8		$	264		$	2,570		$	9,688
Interest	$	8,096		$	9,189		$	27,709		$	31,683

IESI-BFC Ltd. — Third Quarter 2009 — 36

IESI-BFC Ltd.

Consolidated Statements of Equity and Mezzanine Equity

For the three months ended September 30, 2009 and 2008 (unaudited — stated in accordance with accounting principles generally accepted in the United States of America and in thousands of U.S. dollars)

														Accumulated
														other
														comprehen-			Non-
									Contributed					sive (loss)			controlling
	Common shares			Restricted shares			Treasury shares		surplus		Deficit			income			interest			Equity
Balance at June 30, 2009	$	1,082,492		$	(3,928	)	$	—	$	1,324	$	(216,447	)	$	(83,484	)	$	230,146		$	1,010,103
Net income												16,793						2,316			19,109
Dividends												(18,546	)					(2,523	)		(21,069	)
Common shares issued net of issue costs and related tax effect (Note 14)		(302	)																		(302	)
Restricted share expense										390											390
Foreign currency translation adjustment															12,104			1,709			13,813
Commodity swaps designated as cash flow hedges, net of tax															(60	)		(10	)		(70	)
Balance at September 30, 2009	$	1,082,190		$	(3,928	)	$	—	$	1,714	$	(218,200	)	$	(71,440	)	$	231,638		$	1,021,974

							Accumulated
							other
							comprehen-
	Mezzanine						sive (loss)
	equity			Deficit			income			Equity
Balance at June 30, 2008	$	1,435,515		$	(485,943	)	$	(91,168	)	$	(577,111	)
Net income					16,274						16,274
Dividends					(29,947	)					(29,947	)
Fair value adjustments to trust units, participating preferred shares (“PPSs”) and treasury units		(349,340	)		349,340						349,340
Foreign currency translation adjustment		(13,663	)					1,905			1,905
Balance at September 30, 2008	$	1,072,512		$	(150,276	)	$	(89,263	)	$	(239,539	)

IESI-BFC Ltd. — Third Quarter 2009 — 37

IESI-BFC Ltd.

Consolidated Statements of Equity and Mezzanine Equity

For the nine months ended September 30, 2009 and 2008 (unaudited — stated in accordance with accounting principles generally accepted in the United States of America and in thousands of U.S. dollars)

														Accumulated
														other
														comprehen-			Non-
									Contributed					sive (loss)			controlling
	Common shares		Restricted shares			Treasury shares			surplus		Deficit			income			interest			Equity
Balance at December 31, 2008	$	868,248	$	(3,756	)	$	—		$	633	$	(206,971	)	$	(90,904	)	$	230,452		$	797,702
Net income												38,331						5,522			43,853
Dividends												(49,560	)					(7,140	)		(56,700	)
Common shares issued net of issue costs and related tax effect (Note 14)		213,942																			213,942
Restricted shares purchased				(172	)																(172	)
Restricted share expense										1,081											1,081
Common shares acquired by U.S. long-term incentive plan (“LTIP”)							(1,779	)													(1,779	)
Deferred compensation obligation							1,779														1,779
Foreign currency translation adjustment															19,217			2,768			21,985
Commodity swaps designated as cash flow hedges, net of tax															247			36			283
Balance at September 30, 2009	$	1,082,190	$	(3,928	)	$	—		$	1,714	$	(218,200	)	$	(71,440	)	$	231,638		$	1,021,974

							Accumulated
							other
							comprehen-
	Mezzanine						sive (loss)
	equity			Deficit			income			Equity
Balance at December 31, 2007	$	1,580,137		$	(547,998	)	$	(132,012	)	$	(680,010	)
Net income					45,040						45,040
Dividends					(91,967	)					(91,967	)
Trust units issued net of issue costs and related tax effect					(3	)					(3	)
Trust units acquired by U.S. LTIP					(1,996	)					(1,996	)
Fair value adjustments to trust units, PPSs and treasury units		(446,648	)		446,648						446,648
Foreign currency translation adjustment		(60,977	)					42,749			42,749
Balance at September 30, 2008	$	1,072,512		$	(150,276	)	$	(89,263	)	$	(239,539	)

IESI-BFC Ltd. — Third Quarter 2009 — 38

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

1.	Organization
	IESI-BFC Ltd., formerly BFI Canada Ltd., (the “Corporation”) was incorporated on May 5, 2008 under the provisions of the Business Corporations Act (Ontario). On July 25, 2008, the Corporation sold and transferred its sole outstanding common share to BFI Canada Income Fund (the “Fund”) and issued an additional 99 common shares for cash consideration of ninety-nine Canadian dollars. On August 18th, 2008 the Fund’s Board of Trustees approved a transaction providing for the reorganization of the Fund’s structure from an income trust to a corporation through a plan of arrangement (Note 6). The plan of arrangement was approved by the Fund’s unitholders at a special meeting held on September 25, 2008 and was approved by the Ontario Superior Court of Justice, effective October 1, 2008. The common shares of the Corporation began trading on the Toronto Stock Exchange on October 2, 2008 and the Fund’s trust units were concurrently delisted. On June 5, 2009, the Corporation commenced trading on the New York Stock Exchange (“NYSE”) and closed its U.S. public offering on June 10, 2009. Effective June 30, 2009 the Fund was wound up in accordance with the provisions of the Income Tax Act (Canada).
	The Corporation, through its operating subsidiaries, provides vertically integrated non-hazardous solid waste (“waste”) services to commercial, industrial, municipal and residential customers in Canada and the south and northeast United States (“U.S.”).
2.	Change in Reporting Currency and Generally Accepted Accounting Principles
	In connection with the Corporation’s listing on the NYSE and its U.S. public offering, the Corporation elected, effective January 1, 2009, to report its financial results in U.S. dollars. Accordingly, all comparative financial information contained in these unaudited interim consolidated financial statements has been recast from Canadian to U.S. dollars, unless otherwise stated.
	Electing to report the Corporation’s consolidated financial position and results of operations in U.S. dollars improves comparability of its financial information with its peers and reduces foreign currency fluctuations in the Corporation’s reported amounts as a significant portion of the its assets, liabilities and operations are conducted in the U.S., in U.S. dollars.
	Effective January 1, 2009, the Corporation has also elected to report its financial results in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) to improve comparability of its financial information with its peers. As a result, certain accounting policies disclosed in Note 4 have been updated to reflect the change to U.S. GAAP. These accounting policies had been previously adopted in our supplemental note reconciliation of Canadian to U.S. GAAP which were included in the annual audited financial statements for the year ended December 31, 2008. Although the Corporation has elected to report its results in accordance with U.S. GAAP and in U.S. dollars, the Corporation remains a legally domiciled Canadian entity and its functional currency is Canadian dollars.
	The Corporation’s financial position, results of operations, cash flows and equity are initially consolidated in Canadian dollars. The Corporation’s assets and liabilities are translated from Canadian to U.S. dollars at the foreign currency exchange rate in effect at the consolidated balance sheet date, while the Corporation’s results of operations and cash flows are translated to U.S dollars applying the foreign currency exchange rate in effect during the reporting period. The resulting translation adjustments are included in other comprehensive income or loss.

IESI-BFC Ltd. — Third Quarter 2009 — 39

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

3.	Interim Financial Statements
	The unaudited interim consolidated financial statements (“financial statements”) do not conform in all respects to the requirements of U.S. GAAP for annual financial statements. Accordingly, these financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2008, including the re-filed December 31, 2008 consolidated financial statements which include the retrospective adoption of new accounting policies and a supplemental reconciliation of Canadian to U.S. GAAP (“the most recent audited annual financial statements”). These financial statements have been prepared by management in accordance with U.S. GAAP applicable to interim financial statements and follow the same accounting policies and methods in their application as the most recent audited annual financial statements, except as indicated in Note 5.
4.	Summary of Significant Accounting Policies
	Basis of presentation
	Effective October 1, 2008, the Fund entered into a plan of arrangement (Note 6) which resulted in its structure being converted from a trust to a corporation. Pursuant to the plan of arrangement, unitholders of the Fund received one common share of the Corporation for each trust unit held. The exchange did not constitute a change of control. Accordingly, the financial statements of the Corporation have been prepared applying continuity of interests accounting. Continuity of interest accounting reflects the operating substance of the transaction, despite the change in legal structure, and results in comparative financial information of the Fund being presented as comparative financial information of the Corporation. For the purpose of these financial statements, the term “Company” shall denote the results of operations for the Corporation and the Fund, and their respective subsidiaries, for all periods presented herein.
	Use of estimates
	The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions include the following: estimates of the Company’s allowance for doubtful accounts receivable; realization of deferred income tax assets; future earnings, income tax and other estimates used in the annual test for impairment of goodwill; recoverability assumptions for landfill development assets; the useful life of capital and intangible assets; estimates and assumptions used in the determination of the fair value of contingent acquisition payments; accrued accident claims reserves; projected landfill construction and development costs and estimated permitted airspace capacity consumed in the determination of landfill asset amortization; estimated landfill remediation costs; estimated closure and post-closure costs; various economic estimates used in the development of fair value estimates, including but not limited to interest and inflation rates; share or trust unit based compensation, including a variety of option pricing model estimates; the fair value of financial instruments; and deferred income tax assets and liabilities.
	In June 2009, the Company received a certificate of authorization, permitting the Lachenaie landfill to receive 7.5 million cubic metres of waste over a period of five years at a rate of approximately 1.5 million cubic metres or 1.3 million tonnes of waste annually. The certificate of authorization permits the Lachenaie landfill to continue operating for a total of 10 years. However, the provincial Ministry, at their discretion, may limit the maximum allowable permitted waste received in the last five years of the certificate’s term.

IESI-BFC Ltd. — Third Quarter 2009 — 40

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

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

Landfill development assets

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

Acquisitions

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

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

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

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

IESI-BFC Ltd. — Third Quarter 2009 — 41

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

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

Restricted cash

Restricted cash is an investment that limits the holders’ ability to utilize such amounts and is not available for general operating purposes. Accordingly, restricted cash amounts are classified as restricted cash on the Company’s consolidated balance sheet. Deposits and withdrawals of restricted cash amounts are recorded as an investing activity in the consolidated statement of cash flows.

Deferred financing costs

Deferred financing costs represent fees and costs incurred to secure or amend long-term debt facilities which are deferred and amortized over the term of the underlying debt instrument. Amortization of deferred financing costs is recorded to interest expense in the Company’s statement of operations and comprehensive income.

Capital and landfill assets

The historical cost of acquiring an asset includes the costs necessarily incurred to bring it to the condition and location necessary for its intended use, and includes interest. Interest costs attributable to the construction and development of certain Company-owned landfills and certain capital assets are capitalized to the respective asset. Capitalized amounts are amortized over the asset’s intended useful life.

Share or trust unit based compensation

Share or trust unit based options

Share or trust unit appreciation rights are measured at fair value at the date of grant and re-measured at fair value at each balance sheet date until the date of settlement. The resulting compensation expense is recorded to selling, general and administration expense.

Shares or trust units held by a rabbi trust

Prior to the conversion of the Fund’s trust structure to a corporation (Note 6), trust units of the Fund acquired for the benefit of the Company’s U.S. long-term incentive plan participants and held in a rabbi trust were classified as Mezzanine Equity. The resulting deferred compensation obligation was recorded to accrued charges due to the redemption feature of the trust units. Fair value changes in the deferred compensation obligation were recorded to selling, general and administrative expense.

Financial instruments

Hedges

Gains and losses arising from cash flow hedging relationships which the Company has not designated for hedge accounting are recognized on the Company’s statement of operations and comprehensive income or loss as a net gain or loss on financial instruments.

IESI-BFC Ltd. — Third Quarter 2009 — 42

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

5.	Changes in Accounting Policies
	Business Combinations
	In December 2007, the Financial Accounting Standards Board (“FASB”) issued guidance on business combinations. The guidance establishes the following: principles and requirements for an acquirer to recognize and measure the identifiable assets acquired, liabilities assumed, and any non-controlling interest in the acquiree; how goodwill or a gain from a bargain purchase is recognized and measured in a business combination; and disclosure requirements to enable users of the financial statements to evaluate the nature and financial effects of a business combination. The guidance outlines that acquisition date fair value is the measurement objective for all assets acquired and liabilities assumed. In addition, the guidance requires that all acquisition related and restructuring costs be charged to earnings and requires contingent consideration to be recognized at its fair value on the date of acquisition. Certain contingent consideration arrangements will result in fair value changes being recognized in earnings to the date of final settlement. This statement eliminates adjustments to goodwill for changes in deferred income tax assets and uncertain tax positions after the acquisition accounting measurement period (limited to one year from the date of acquisition). This guidance is effective prospectively for acquisitions that occur on or after January 1, 2009 and accordingly its adoption had no effect on previously reported amounts.
	In April 2009, FASB issued a staff position on the accounting for assets acquired and liabilities assumed in a business combination that arise from contingencies. This guidance amends and clarifies the business combinations standard regarding application issues raised by preparers, auditors, and members of the legal profession on initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination.
	This position requires that an acquirer shall recognize at fair value, at the acquisition date, an asset acquired or a liability assumed in a business combination that arises from a contingency if the acquisition-date fair value of that asset or liability can be determined during the measurement period. If the acquisition-date fair value of the contingency cannot be determined during the measurement period, an asset or a liability shall be recognized at the acquisition date if information available before the end of the measurement period indicates that it is probable that an asset existed or that a liability had been incurred at the acquisition date and the amount of the asset or liability can be reasonably estimated. If these criteria are not met at the acquisition date using information that is available during the measurement period, the acquirer shall not recognize an asset or liability as of the acquisition date. In periods after the acquisition date, the acquirer shall account for an asset or a liability arising from a contingency that does not meet the recognition criteria at the acquisition date in accordance with other applicable GAAP, as appropriate. This guidance is effective prospectively for acquisitions that occur on or after January 1, 2009 and accordingly its adoption had no effect on previously reported amounts.

IESI-BFC Ltd. — Third Quarter 2009 — 43

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

Non-controlling Interests in Consolidated Financial Statements

In December 2007, FASB issued guidance on non-controlling interests in consolidated financial statements. This guidance requires ownership interests in subsidiaries held by parties other than the parent to be clearly identified, labeled, and presented in the consolidated statement of financial position within equity, but separate from parent’s equity. The standard also requires consolidated net income attributable to the parent and to the non-controlling interest to be clearly identified and presented on the face of the consolidated statement of income. While the parent’s control is retained, the standard requires changes in the parent’s ownership interest to be accounted for similarly as an equity transaction. Upon deconsolidation of a subsidiary, any retained non-controlling equity investment in the former subsidiary is initially measured at fair value and the gain or loss on the deconsolidation is measured using the fair value of any non-controlling equity investment rather than the carrying amount of the retained investment. For the Company, this guidance is effective January 1, 2009 and is applied prospectively, except for the presentation and disclosure requirements which are applied retrospectively for all periods presented. The Company has retrospectively reflected the presentation and disclosure requirements in its financial statements and in its re-filed year ended 2008 and 2007 results which include a Canadian to U.S. GAAP reconciliation.

Disclosures about Derivative Instruments and Hedging Activities

In March 2008, FASB issued guidance on disclosures about derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under derivative instruments and hedging activities guidance and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This guidance is intended to enhance the current disclosure framework and requires that objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation. The additional disclosure conveys the purpose of derivative use in terms of the risks that the entity is intending to manage. Also, disclosing the fair values of derivative instruments and their gains and losses in a tabular format and credit-risk-related contingent features and their impact on an entity’s liquidity is required. For the Company, this guidance is effective January 1, 2009 and its adoption did not have a significant impact on the Company’s financial statements.

Useful Life of Intangible Assets

In April 2008, FASB issued guidance on the determination of the useful life of intangible assets, which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under goodwill and other intangibles guidance. The purpose of this guidance is to improve the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset. Accordingly, entities are required to disclose information for a recognized intangible asset that enables users of the financial statements to assess the extent to which the expected future cash flows associated with the asset are affected by the entities intent and/or ability to renew or extend the arrangement. For the Company, this guidance is effective January 1, 2009 and its adoption did not have a significant impact on the Company’s financial statements.

IESI-BFC Ltd. — Third Quarter 2009 — 44

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

Subsequent Events

In May 2009, FASB issued guidance on subsequent events. The guidance provides a general standard of accounting for, and disclosures of, events that occur after the balance sheet date but before financial statements are issued or are available to be issued. The standard requires disclosure of the period through which subsequent events were evaluated, the date when the financial statements were issued or were available for issue, and establishes disclosure standards that a reporting entity should make about events or transactions that occurred after the balance sheet date. For the Company, this guidance is effective June 30, 2009 and its adoption did not have a significant impact on the Company’s financial statements.

Determining Fair Value

In April 2009, FASB issued guidance on determining fair value when the volume and level of activity for the asset or liability have significantly decreased and identifying transactions are not orderly. This guidance also emphasizes that even if there has been a significant decrease in the volume and level of activity for the asset or liability and regardless of the valuation technique(s) used, the objective of a fair value measurement remains unchanged. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. For the Company, this guidance is effective June 30, 2009 and its adoption did not have a significant impact on the Company’s financial statements.

Recognition and Presentation of Other-Than-Temporary Impairments

In April 2009, FASB issued guidance on recognition and presentation of other-than-temporary impairments. This guidance addresses other-than-temporary impairment analysis under existing U.S. GAAP to determine whether the holder of an investment in a debt or equity security for which changes in fair value are not regularly recognized in earnings (such as securities classified as held-to-maturity or available-for-sale) should recognize a loss in earnings when the investment is impaired. An investment is impaired if the fair value of the investment is less than its amortized cost basis.

This guidance amends the other-than-temporary impairment guidance in U.S. GAAP for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. In addition, this guidance does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. For the Company, this guidance is effective June 30, 2009 and its adoption did not have any impact on the Company’s financial statements.

FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles

In June 2009, FASB issued guidance on accounting standards codification and the hierarchy of generally accepted accounting principles. This guidance is the source of authoritative U.S. GAAP recognized by FASB and applied by non-governmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. On the effective date of this guidance, the codification supersedes all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the codification will become non-authoritative.

FASB will not issue new standards in the form of statements, staff positions, or emerging issues task force abstracts. Instead, it will issue accounting standards updates. FASB does not consider accounting standards updates as authoritative in their own right. Accounting standards updates will serve only to update the codification, provide background information about the guidance, and provide the bases for conclusions on the change(s) in the codification.

IESI-BFC Ltd. — Third Quarter 2009 — 45

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

	As originally issued, the hierarchy of generally accepted accounting principles identified the sources of accounting principles and the framework for selecting the principles used in preparing the financial statements of non-governmental entities that are presented in conformity with U.S. GAAP. This guidance arranged these sources of GAAP in a hierarchy for users to apply accordingly. The new guidance characterizes all guidance at the same level of authority. The use of non-authoritative GAAP is permitted when authoritative GAAP is absent.
	For the Company, this guidance is effective September 30, 2009 and its adoption did not have any impact on the Company’s financial statements.
	Fair Value Measurements and Disclosures
	In August 2009, FASB issued guidance on fair value measurements and disclosures. This guidance provides clarification on measuring liabilities at fair value when a quoted price in an active market for an identical liability is not available. The guidance requires that an entity employ one or more valuation techniques using the following: the quoted price of the identical liability when traded as an asset, the quoted price for similar liabilities or similar liabilities when traded as an asset, or other valuation techniques consistent with existing fair value measurement guidance. Other valuation techniques include using a present value technique or a market approach, which is based on the amount at the measurement date that the reporting entity would pay to transfer the identical liability or would receive to enter into the identical liability. The guidance also states that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustments to other inputs relating to the existence of a restriction that prevents the transfer of the liability. For the Company, this guidance is effective September 30, 2009 and its adoption did not have any impact on the Company’s financial statements.
	Consolidation of Variable Interest Entities
	In June 2009, FASB issued guidance which amended the consolidation of variable interest entities standard. This amending guidance requires an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity. This analysis identifies the primary beneficiary of a variable interest entity as the enterprise that has both of the following characteristics: (a) the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance, and (b) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the variable interest entity. Additionally, an enterprise is required to assess whether it has an implicit financial responsibility to ensure that a variable interest entity operates as designed when determining whether it has the power to direct the activities of the variable interest entity that most significantly impact the entity’s economic performance. This guidance requires an enterprise to perform ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity and eliminates the quantitative approach previously required for determining the primary beneficiary of a variable interest entity.
	This guidance also requires enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise’s involvement in a variable interest entity. For the Company, this guidance is effective January 1, 2010 and its adoption is not expected to have any impact on the Company’s financial statements.
6.	Conversion
	Pursuant to a plan of arrangement, the Fund converted from a trust to a corporation which resulted in unitholders of the Fund receiving one common share of the Company for each trust unit held on the effective date of conversion, October 1, 2008. The Class A unit held by IESI Corporation (“IESI”) was redeemed by the Fund for ten Canadian dollars and the Company issued, and IESI subscribed for, 11,137 special voting shares for aggregate cash consideration of ten Canadian dollars. The participating preferred shares (“PPSs”) issued by IESI

IESI-BFC Ltd. — Third Quarter 2009 — 46

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

	remain outstanding and are exchangeable into common shares of the Company on a one for one basis, instead of trust units of the Fund. The financial statements of the Company have been prepared applying continuity of interests accounting. With the exception of the December 31, 2008 consolidated balance sheet, the comparative figures presented herein are those of the Fund.
	Share based compensation arrangements outstanding to the date of conversion, remained in effect post conversion. Share based options to acquire trust units of the Fund were amended to share based options to acquire shares of the Corporation. Similarly, restricted trust unit compensation awards which entitled certain management to trust units of the Fund were changed to entitlements of the Corporation’s shares.
7.	Acquisitions
	For the nine months ended September 30, 2009, the Company acquired all of the solid waste collection assets, including various current assets, and assumed various liabilities of two waste management companies in Canada and three in the U.S., each of which constitutes a business. The Company also acquired selected waste collection assets from one waste management company in Canada.
	For the nine months ended September 30, 2008, the Company acquired all of the solid waste collection assets, including various current assets, and assumed various liabilities of six waste management companies, two in Canada and four in the U.S., each of which constitutes a business.
	The Company considers all of these acquisitions “tuck-ins”. Tuck-ins represent the acquisition of solid waste collection assets and or disposal facilities in markets where the Company has existing operations. Goodwill arising from tuck-in acquisitions is largely attributable to synergies expected by the Company as a result of personnel and operating overhead reductions, disposal advantages or the employment of market focused strategies. Pro forma revenues and net income for the combined companies has not been disclosed as the acquired companies are immaterial individually and in aggregate. The allocation of certain purchase prices are absent final fair value adjustments and adjustments for the payment of contingent consideration for achieving various business performance targets. Final fair value and contingent consideration adjustments that increase or decrease the fair value of certain assets or liabilities will be recorded against the respective purchase price allocation. The results of these acquisitions have been included in the financial statements from their respective closing dates.

IESI-BFC Ltd. — Third Quarter 2009 — 47

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

The aggregate fair value of consideration paid and its allocation to the fair value of net assets acquired is as follows:

	September 30
	2009			2008
Consideration
Cash, including holdbacks	$	20,416		$	40,209
Net assets acquired
Accounts receivable		405			5,355
Intangibles		4,802			11,337
Goodwill		867			10,201
Capital assets		4,269			14,144
Landfill assets		16,027			—
Accounts payable		(1,183	)		(828	)
Landfill closure and post-closure costs		(4,771	)		—
Total net assets acquired	$	20,416		$	40,209
Consideration by segment
Canada	$	1,698		$	15,570
U.S. south		18,718			246
U.S. northeast		—			24,393
Total consideration	$	20,416		$	40,209

	For the nine months ended September 30, 2009, aggregate cash consideration amounting to $20,416 (2008 — $38,407) excludes holdbacks and cash payments due to sellers for achieving various business performance targets.
	For the nine months ended September 30, 2009, contingent consideration payments in respect of acquisitions completed prior to January 1, 2009 totaled $1,745 (2008 — $18,104).
	Goodwill amounting to $867 (2008 — $10,201) is expected to be deductible for tax purposes. For the nine months ended September 30, 2009, goodwill was recorded entirely to the Company’s Canadian segment. For the nine months ended September 30, 2008, goodwill was recorded to the Company’s segments as follows: Canada $2,449, U.S. south $45, U.S. northeast $7,707.
8.	Restricted Cash
	Restricted cash represents cash received from variable rate demand solid waste disposal revenue bond (“IRB”) drawings in advance of incurring the expenditure for which the IRBs are made available. At September 30, 2009, $nil (December 31, 2008 — $82) of cash is restricted to fund a portion of landfill construction activities, and equipment and container expenditures, in the Company’s Texas operations.

IESI-BFC Ltd. — Third Quarter 2009 — 48

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

9. Intangibles

	September 30, 2009
									Weighted
									Average
									Amortization
			Accumulated						Period of
	Cost		Amortization		Net Book Value		Additions		Additions
Customer collection contracts	$	108,328	$	96,635	$	11,693	$	70		3.58
Customer lists		108,855		32,808		76,047		3,613		4.07
Non-competition agreements		13,303		6,075		7,228		437		2.00
Transfer station permits		12,044		2,381		9,663		—		—
Trade-names		2,145		1,262		883		—		—
	$	244,675	$	139,161	$	105,514	$	4,120

The estimated remaining amortization expense for the Company’s intangibles in each of the five succeeding years and thereafter is as follows:

2009	$	6,913
2010		20,878
2011		17,341
2012		15,755
2013		13,578
Thereafter		31,049
	$	105,514

10.	Goodwill
	The following table outlines the changes in goodwill from the beginning of the year to September 30.

	September 30
	2009		2008
Goodwill, beginning of year	$	617,832	$	623,959
Goodwill recognized on acquisitions completed, during the period		867		10,201
Goodwill recognized in respect of prior period acquisitions, during the period		1,745		783
Foreign currency exchange adjustment, during the period		7,262		(4,229	)
Goodwill, end of period	$	627,706	$	630,714

11.	Deferred Financing Costs
	Deferred financing costs represent fees and costs incurred in connection with securing or amending long-term debt facilities. The Company amortizes these costs on a straight-line basis over the term of the related debt, which approximates the effective interest method.

			Accumulated
September 30, 2009	Cost		Amortization	Net Book Value
Deferred financing costs	$	16,626	$8,319	$8,307

			Accumulated
December 31, 2008	Cost		Amortization	Net Book Value
Deferred financing costs	$	16,711	$6,775	$9,936

IESI-BFC Ltd. — Third Quarter 2009 — 49

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

Amortization related to deferred financing costs for the three and nine month periods ended September 30, 2009 amounted to $676 (2008 — $846) and $2,221 (2008 — $2,819), respectively.

The estimated remaining amortization expense for the Company’s deferred financing costs in each of the five succeeding years and thereafter is as follows:

2009	$	688
2010		2,761
2011		2,381
2012		355
2013		197
Thereafter		1,925
	$	8,307

12.	Accrued Charges
	Accrued charges are comprised of the following:

	September 30,		December 31,
	2009		2008
Payroll and related costs	$	18,829	$	16,013
Insurance		16,630		13,445
Franchise and royalty fees		4,765		4,250
Interest		4,001		6,190
Environmental surcharges		3,917		2,600
Provincial and state sales taxes		3,272		2,752
Acquisition and related costs		2,024		1,767
Property taxes		1,860		175
Share based compensation		1,281		167
Other		9,160		8,150
Accrued charges	$	65,739	$	55,509

IESI-BFC Ltd. — Third Quarter 2009 — 50

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

13.	Landfill Closure and Post-Closure Costs
	The following tables outline the following: key assumptions used to determine the fair value of landfill closure and post-closure costs; the expected timing of undiscounted landfill closure and post-closure expenditures; and reconcile beginning and ending landfill closure and post-closure costs.

	September 30,
	2009
Fair value of legally restricted assets	$	7,902
Undiscounted closure and post-closure costs	$	408,241
Credit adjusted risk free rates — Canadian segment landfills		5.5% - 9.5	%
Credit adjusted risk free rates — U.S. segment landfills		5.7% - 7.2	%
Expected timing of undiscounted landfill closure and post-closure expenditures 2009	$	7,668
2010		10,138
2011		4,531
2012		10,077
2013		9,522
Thereafter		366,305
	$	408,241

	Three months			Three months
	ended			ended
	September 30,			September 30,
	2009			2008
Landfill closure and post-closure costs, beginning of period	$	71,887		$	63,936
Provision for landfill closure and post-closure costs, during the period		2,656			2,125
Accretion expense, during the period		805			771
Landfill closure and post-closure expenditures, during the period		(2,609	)		(485	)
Revisions to estimated cash flows, during the period		(411	)		—
Foreign currency translation adjustment, during the period		1,034			(517	)
Landfill closure and post-closure costs, end of period	$	73,362		$	65,830

	Nine months			Nine months
	ended			ended
	September 30,			September 30,
	2009			2008
Landfill closure and post-closure costs, beginning of year	$	58,067		$	59,552
Provision for landfill closure and post-closure costs, during the period		12,889			5,951
Accretion expense, during the period		2,322			2,326
Landfill closure and post-closure expenditures, during the period		(4,964	)		(1,108	)
Disposal of landfill closure and post-closure costs, during the period		(1,343	)		—
Landfill closure and post-closure costs acquired, during the period		4,771			—
Foreign currency translation adjustment, during the period		1,620			(891	)
Landfill closure and post-closure costs, end of period	$	73,362		$	65,830

IESI-BFC Ltd. — Third Quarter 2009 — 51

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

14.	Equity
	Common Shares
	On March 6, 2009, the Company closed its public offering of 8,500 common shares for $9.50 Canadian per share, representing total gross Canadian dollar (“C$”) proceeds of C$80,750. The Company applied the net proceeds from the public offering, approximately $61,500, to the repayment of outstanding borrowings under its U.S. long-term debt facility. On March 30, 2009, the Company closed the over-allotment option on its public offering of 1,275 common shares at C$9.50 per share for total gross proceeds of C$12,113 and applied the net proceeds from the over-allotment option, approximately $9,500, to the repayment of outstanding borrowings on its U.S. long-term debt facility. Aggregate equity issue costs amounted to $3,662 and the tax effect thereon totaled $1,376.
	On June 10, 2009, the Company closed its U.S. public offering and over-allotment option of 13,000 and 1,950 common shares, respectively, representing total gross proceeds of $149,500. The Company applied the net proceeds from the U.S. public offering, approximately $138,750, to the repayment of outstanding borrowings under its U.S. long-term debt facility. Aggregate equity issue costs amounted to $11,170 and the related tax effect thereon totaled $3,289.
	Details of common shares for the nine month periods ended September 30 are as follows:

	September 30
	2009			2008
Common shares
Common shares issued and outstanding, beginning of year		57,569			—
Restricted common shares issued and outstanding, beginning of year		(210	)		—
Common shares issued, during the period		24,725			—
Restricted common shares issued, during the period		(15	)		—
Common shares issued and outstanding, end of period		82,069			—

Trust units

Details of trust units (Note 6) for the nine month periods ended September 30 are as follows:

	September 30
	2009		2008
Trust units
Trust units issued and outstanding, beginning of year		—		57,568
Trust units issued on exchange of PPSs, during the period		—		1
Trust units issued and outstanding, end of period		—		57,569

Net income per share or trust unit

The following table reconciles net income for the three and nine month periods ended September 30, 2009 and 2008 and the weighted average number of shares outstanding at September 30, 2009 and trust units outstanding at September 30, 2008 for the purpose of computing basic and diluted net income per share or trust unit.

IESI-BFC Ltd. — Third Quarter 2009 — 52

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

	Three months ended				Nine months ended
	September 30				September 30
	2009		2008		2009		2008
Net income	$	19,109	$	16,274	$	43,853	$	45,040
Net income — attributable to common share or trust unitholders	$	16,793	$	13,636	$	38,331	$	37,739
Weighted average number of shares or trust units, basic		82,294		57,569		71,102		57,569
Dilutive effect of PPSs		11,137		11,137		11,137		11,137
Weighted average number of shares or trust units, diluted		93,431		68,706		82,239		68,706
Net income per weighted average share or trust unit, basic	$	0.20	$	0.24	$	0.54	$	0.66
Net income per weighted average share or trust unit, diluted	$	0.20	$	0.24	$	0.53	$	0.66
Issued and outstanding share based options (thousands)		2,246		2,071		2,246		2,071

	Share based options are anti-dilutive to the calculation of net income per share or trust unit and have been excluded from the calculation.
15.	Share Based Compensation
	Compensation expense (recovery) resulting from fair value changes in share options and recorded to selling, general and administrative expense on the consolidated statement of operations and comprehensive income, for the three and nine months ended September 30, 2009 amounted to $416 and $1,000, respectively (2008 — ($781) and ($1,198), respectively). In addition, as of September 30, 2009, unrecognized compensation cost for share or trust unit based compensation totaled $1,165 (December 31, 2008 — $469). At September 30, 2009, $1,281 (December 31, 2008 — $167) is accrued.
	Restricted share or trust unit expense, recorded to selling, general and administrative expense on the consolidated statement of operations and comprehensive income, for the three and nine months ended September 30, 2009 amounted to $390 and $1,081, respectively (2008 — $954 for both periods).
16.	Income Tax Expense (Recovery)
	The components of domestic and foreign income before income taxes and domestic and foreign income taxes for the three and nine months ended September 30 are as follows:

	Three months ended					Nine months ended
	September 30					September 30
	2009		2008			2009		2008
Income before income taxes
Canada	$	18,817	$	14,217		$	44,089	$	42,573
U.S.		9,840		4,130			23,488		3,047
	$	28,657	$	18,347		$	67,577	$	45,620
Current income tax expense
Canada	$	3,625	$	704		$	8,072	$	3,504
U.S.		481		715			2,777		2,751
		4,106		1,419			10,849		6,255
Deferred income tax expense (recovery)
Canada		1,551		(1,810	)		5,748		(5,149	)
U.S.		3,891		2,464			7,127		(526	)
		5,442		654			12,875		(5,675	)
	$	9,548	$	2,073		$	23,724	$	580

IESI-BFC Ltd. — Third Quarter 2009 — 53

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

	The Company believes its tax positions are defensible. The Company recognizes interest related to uncertain tax positions and penalties to current income tax expense. Interest and penalties related to uncertain tax positions amounted to $nil at September 30, 2009 and September 30, 2008. The total amount of interest and penalties accrued in respect of uncertain tax positions amounted to $nil at September 30, 2009 and December 31, 2008.
	The Company is subject to federal, provincial and state income taxes and files tax returns in multiple jurisdictions. Tax years open to audit range from 2000 to 2008 in Canada and from 1997 to 2008 in the U.S.
	The Company does not tax effect its foreign currency translation adjustment.
17.	Financial Instruments
	The following table categorizes the Company’s derivative financial liabilities and carrying and fair value amounts. All amounts are recorded as other liabilities on the Company’s consolidated balance sheet.

	September 30, 2009				December 31, 2008
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial liabilities
Held for trading
Long-term	$	12,039	$	12,039	$	12,964	$	12,964
Derivatives designated in a hedging relationship
Long-term	$	468	$	468	$	1,891	$	1,891

The following table outlines the hierarchical measurement categories for interest rate and commodity swaps at September 30, 2009:

	September 30, 2009
	Quoted prices in		Significant other		Significant
	active markets for		observable		unobservable
	identical assets		inputs		inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Other liabilities — interest rate swaps	$	—	$	12,039	$	—	$	12,039
Other liabilities — commodity swaps	$	—	$	468	$	—	$	468

Hedge accounting

The Company enters into commodity swaps to reduce its exposure to fluctuations in cash flows due to changes in the price of diesel fuel which it consumes to service its customers. To fulfill the Company’s objective, the Company has entered into cash flow hedges in the U.S., which are specifically tied to various forecasted diesel fuel purchases.

The following table outlines changes in the fair value of commodity swaps and its impact on other comprehensive income, net of the related tax effect, for the nine months ended September 30, 2009 and 2008.

	September 30
	2009		2008
Financial liabilities
Commodity swaps designated as cash flow hedges, net of tax
Other comprehensive loss	$	283	$	—

IESI-BFC Ltd. — Third Quarter 2009 — 54

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

At September 30, 2009, all of the commodity swaps accounted for as cash flow hedges were determined to be highly effective. Accordingly, no amounts have been recorded to net income due to ineffectiveness or otherwise. The first commodity swap commenced in July 2009. Accordingly, the Company will measure and record any ineffectiveness on commodity swaps representing the difference between the underlying index price and the actual price of diesel fuel purchased. Additionally, gains or losses will be reclassified to net income as diesel fuel is consumed. The estimated net amount of the existing unrealized losses on commodity swaps expected to be reclassified to earnings within the next twelve months is $83. The timing of actual amounts reclassified to net income is dependent on future movements in diesel fuel prices.

Interest rate and commodity swaps

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

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

	September 30, 2009
			Payments due
	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Derivative
Interest rate swaps	$	15,443	$	8,534	$	6,909	$	—	$	—
Commodity swaps	$	6,152	$	1,678	$	3,378	$	1,096	$	—

Amounts recorded to net loss (gain) on financial instruments on the Company’s consolidated statement of operations and comprehensive income for the nine month period ended September 30, 2009 total ($866) (2008 – $3,623), in aggregate. The net (gain) loss on financial instruments is comprised of the following fair value changes: funded landfill post-closure costs ($67) (2008 – ($85)), interest rate swaps ($699) (2008 – $2,095), foreign currency exchange agreements $nil (2008 – $1,690), fuel hedges ($100) (2008 — $nil) and OCC hedges $nil (2008 – ($77)).

IESI-BFC Ltd. — Third Quarter 2009 — 55

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

18.	Segmented Reporting
	The Company carries on business through three separate geographic segments: Canada, U.S. south and U.S. northeast. The business segments are vertically integrated and principally include collection and disposal of waste and recyclable products, transfer station operations, material recovery facilities and landfills and landfill gas to energy facilities. The geographic location limits the volume and amount of transactions between each segment.
	The accounting policies applied by the business segments are the same as those described in the summary of significant accounting policies. U.S. corporate selling, general and administration expenses are allocated to the U.S. south and U.S. northeast segments based on various factors, which may include revenues less operating and selling, general and administrative expenses. The Company evaluates segment performance based on revenues, less operating and selling, general and administration expenses.

	Three months ended				Nine months ended
	September 30				September 30
	2009		2008		2009		2008
Revenues
Canada	$	94,644	$	100,965	$	252,815	$	286,190
U.S. south		89,359		87,809		253,305		254,691
U.S. northeast		84,408		93,461		239,884		262,316
	$	268,411	$	282,235	$	746,004	$	803,197
Revenues less operating and selling, general and administration expenses
Canada	$	34,613	$	35,301	$	89,154	$	98,021
U.S. south		21,311		21,055		63,122		60,036
U.S. northeast		23,020		24,369		61,810		67,930
	$	78,944	$	80,725	$	214,086	$	225,987
Amortization
Canada	$	13,674	$	15,908	$	37,925	$	44,895
U.S. south		12,145		12,156		35,808		37,023
U.S. northeast		16,127		18,864		46,969		53,379
	$	41,946	$	46,928	$	120,702	$	135,297

	September 30, 2009
	Canada		U.S. south		U.S. northeast		Total
Goodwill	$	58,455	$	168,203	$	401,048	$	627,706
Capital assets	$	152,785	$	170,099	$	106,319	$	429,203
Landfill assets	$	172,152	$	138,864	$	348,280	$	659,296
Total Assets	$	479,903	$	538,458	$	975,832	$	1,994,193

	December 31, 2008
	Canada		U.S. south		U.S. northeast		Total
Goodwill	$	50,326	$	166,458	$	401,048	$	617,832
Capital assets	$	133,584	$	157,023	$	118,074	$	408,681
Landfill assets	$	152,204	$	124,944	$	344,714	$	621,862
Total Assets	$	428,391	$	509,793	$	994,735	$	1,932,919

IESI-BFC Ltd. — Third Quarter 2009 — 56

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

19.	Commitments and Contingencies
	The Company has an accrued environmental liability of $13,961 recorded in landfill closure and post-closure costs which relates principally to an inactive landfill (hereinafter referred to as “Tantalo”), that the Company assumed as part of the IESI acquisition. The environmental liability consists of remediation and post-closure monitoring totaling $16,585. The initial Tantalo remediation work commenced in 2004, and the post-closure monitoring commenced in 2007. Tantalo is a twenty-six acre landfill that stopped accepting waste in 1976 and has been identified by the State of New York as an “Inactive Hazardous Waste Disposal Site”. During its period of operation, Tantalo received both municipal and industrial waste, some of which has been found to exhibit “hazardous” characteristics as defined by the U.S. Resource Conservation and Recovery Act. Past activities at Tantalo have resulted in the release of hazardous wastes into the groundwater. A remediation program has been developed for Tantalo in conjunction with the New York State Department of Environmental Conservation. The remediation program includes: installation of groundwater barriers, protective liner caps, leachate and gas collection systems, and storm-water drainage controls, as well as methods to accelerate the decontamination process. In addition, IESI purchased a “Cleanup Cost Cap Insurance Policy,” with a ten-year policy period, which provides $25,000 of coverage in excess of the remediation portion of the liability.
	The cost of remediation requires a number of assumptions and estimates which are inherently difficult to estimate, and the outcome may differ materially from current estimates. However, management believes that its experience provides a reasonable basis for estimating the liability. As additional information becomes available, estimates are adjusted as applicable. It is possible that technological, regulatory or enforcement developments, the results of environmental studies, or other factors could necessitate the recording of additional liabilities which could be material. The estimated environmental remediation liabilities have not been reduced for possible recoveries from other potentially responsible third parties.
	The Company leases buildings and equipment under various operating leases. Future lease payments for the next five years and thereafter are as follows:

2010	$	5,451
2011		4,002
2012		3,493
2013		3,162
2014		4,562
Thereafter		9,760
	$	30,430

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

The Company enters into various commitments in the normal course of business. At September 30, 2009 the Company has issued letters of credit amounting to $143,426 (December 31, 2008 — $149,081) and performance bonds totaling $218,129 (December 31, 2008 - $201,418). Letters of credit are made available from the Company’s lenders to its long-term debt facilities. Accordingly, letters of credit are included in the security offered by the Company to its lenders through its long-term debt facilities.

IESI-BFC Ltd. — Third Quarter 2009 — 57

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

	On the acquisition of IESI, the Company assumed various obligations which require the payment of additional amounts for achieving certain negotiated events or business performance targets, including landfill expansion approval or target disposal volumes. The Company is obligated to pay certain sellers various amounts for achieving certain negotiated disposal volumes to a maximum of approximately $10,750. Amounts are accrued monthly, and paid from time to time in accordance with the underlying agreements, until certain threshold negotiated disposal volume targets are achieved, and the maximum obligation is satisfied. Monthly accrued amounts, which are paid up to the date the disposal volume threshold targets are met, reduce the threshold payment by a similar amount. The Company will record an adjustment to the purchase price allocation when the contingency is resolved and consideration is issued or becomes issuable. Landfill permits acquired on the acquisition of IESI were recorded at their fair values. Accordingly, all contingent amounts paid, and all future contingent payments, in respect of certain landfill expansion approvals or fulfilling disposal volume targets, are recorded to goodwill.
	The Company is subject to certain lawsuits and other claims arising in the ordinary course of business. The outcome of these matters is subject to future resolution. Management’s evaluation and analysis of such matters indicates that the resolution thereof will not have a material effect on the Company’s financial statements.
20.	Seasonality
	Revenues are generally higher in spring, summer and autumn months due to higher collected and disposed of waste volumes. Higher collection and disposal revenues are partially offset by higher operating expenses to service and dispose of additional waste volumes and higher landfill asset amortization.
21.	Subsequent Events
	The Company has evaluated all subsequent events through October 29, 2009. The financial statements were issued and were available for issue on October 29, 2009.
22.	Reconciliation of U.S. to Canadian GAAP
	The consolidated financial statements have been prepared in accordance with U.S. GAAP, which differs in certain respects from Canadian generally accepted accounting principles (“Canadian GAAP”). The effects of significant accounting differences and certain disclosure differences on the Company’s financial statements are quantified and described in the following tables and notes for the periods ended September 30, 2009 and 2008. In addition, the Company’s consolidated balance sheets, statements of operations and comprehensive income (loss) and cash flows have been presented in Canadian GAAP and Canadian dollars, the Company’s functional currency.

IESI-BFC Ltd. — Third Quarter 2009 — 58

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

Consolidated Balance Sheet
September 30, 2009 (unaudited — in thousands of U.S. dollars, unless otherwise stated)

										Stated in
										accordance with
	Stated in		Adjustments					Stated in		Canadian GAAP
	accordance with		from U.S. to					accordance with		and in Canadian
	U.S. GAAP		Canadian GAAP			Note		Canadian GAAP		dollars
ASSETS
CURRENT
Cash and cash equivalents	$	9,025	$	—				$	9,025	$	9,677
Accounts receivable		119,265		—					119,265		127,876
Other receivables		547		—					547		587
Prepaid expenses		19,323		—					19,323		20,718
		148,160		—					148,160		158,858
OTHER RECEIVABLES		1,302		—					1,302		1,396
FUNDED LANDFILL POST-CLOSURE COSTS		7,902		—					7,902		8,472
INTANGIBLES		105,514		—					105,514		113,132
GOODWILL		627,706		—					627,706		673,026
LANDFILL DEVELOPMENT ASSETS		6,803		—					6,803		7,294
DEFERRED FINANCING COSTS		8,307		(8,307	)		B		—		—
CAPITAL ASSETS		429,203		(84	)		D		429,119		460,101
LANDFILL ASSETS		659,296		(12,158	)		D		647,138		693,861
	$	1,994,193	$	(20,549	)			$	1,973,644	$	2,116,140
LIABILITIES
CURRENT
Accounts payable	$	55,006	$	—				$	55,006	$	58,977
Accrued charges		65,739		(1,281	)		C		64,458		69,112
Dividends payable		21,786		—					21,786		23,359
Income taxes payable		10,045		—					10,045		10,770
Deferred revenues		13,044		—					13,044		13,986
Landfill closure and post-closure costs		7,668		—					7,668		8,222
		173,288		(1,281	)				172,007		184,426
LONG-TERM DEBT		646,849		—					646,849		693,551
LANDFILL CLOSURE AND POST-CLOSURE COSTS		65,694		—					65,694		70,437
OTHER LIABILITIES		12,516		—					12,516		13,420
DEFERRED INCOME TAXES		73,872		(2,934	)		B		66,475		71,274
				(4,463	)		D
		972,219		(8,678	)				963,541		1,033,108
EQUITY
NON-CONTROLLING INTEREST		231,638		(2,399	)		F		229,239		225,713
SHAREHOLDERS’ EQUITY		790,336		(5,373	)		B		780,864		857,319
				1,281			C
				(7,779	)		D
				2,399			F
		1,021,974		(11,871	)				1,010,103		1,083,032
	$	1,994,193	$	(20,549	)			$	1,973,644	$	2,116,140

IESI-BFC Ltd. — Third Quarter 2009 — 59

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

Consolidated Balance Sheet

December 31, 2008 (in thousands of U.S. dollars, unless otherwise stated)

										accordance with
	Stated in		Adjustments					Stated in		Canadian GAAP
	accordance with		from U.S. to					accordance with		and in Canadian
	U.S. GAAP		Canadian GAAP			Note		Canadian GAAP		dollars
ASSETS
CURRENT
Cash and cash equivalents	$	11,938	$	82			A	$	12,020	$	14,720
Accounts receivable		107,767		—					107,767		131,972
Other receivables		228		—					228		279
Prepaid expenses		19,597		—					19,597		23,998
Restricted cash		82		(82	)		A		—		—
		139,612		—					139,612		170,969
OTHER RECEIVABLES		394		—					394		482
FUNDED LANDFILL POST-CLOSURE COSTS		6,115		—					6,115		7,488
INTANGIBLES		119,898		—					119,898		146,827
GOODWILL		617,832		—					617,832		756,597
LANDFILL DEVELOPMENT ASSETS		8,589		—					8,589		10,518
DEFERRED FINANCING COSTS		9,936		(9,936	)		B		—		—
CAPITAL ASSETS		408,681		(57	)		D		408,624		500,401
LANDFILL ASSETS		621,862		(11,245	)		D		610,617		747,761
	$	1,932,919	$	(21,238	)			$	1,911,681	$	2,341,043
LIABILITIES
CURRENT
Accounts payable	$	54,134	$	—				$	54,134	$	66,293
Accrued charges		55,509		(167	)		C		55,342		67,769
Dividends payable		2,337		—					2,337		2,862
Income taxes payable		1,387		—					1,387		1,699
Deferred revenues		10,800		—					10,800		13,226
Current portion of long-term debt		38,380		—					38,380		47,000
Landfill closure and post-closure costs		7,210		—					7,210		8,829
		169,757		(167	)				169,590		207,678
LONG-TERM DEBT		835,210		—					835,210		1,022,798
LANDFILL CLOSURE AND POST-CLOSURE COSTS		50,857		—					50,857		62,280
OTHER LIABILITIES		15,045		—					15,045		18,424
DEFERRED INCOME TAXES		64,348		(3,545	)		B		56,674		69,403
				(4,129	)		D
		1,135,217		(7,841	)				1,127,376		1,380,583
EQUITY
NON-CONTROLLING INTEREST		230,452		(2,591	)		F		227,861		241,339
SHAREHOLDERS’ EQUITY		567,250		(6,391	)		B		556,444		719,121
				167			C
				(7,173	)		D
				2,591			F
		797,702		(13,397	)				784,305		960,460
	$	1,932,919	$	(21,238	)			$	1,911,681	$	2,341,043

IESI-BFC Ltd. — Third Quarter 2009 — 60

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

Consolidated Statement of Operations and Comprehensive Income (Loss)

For the three months ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except net income per share amounts and where otherwise stated)

												Stated in
												accordance with
	Stated in			Adjustments					Stated in			Canadian GAAP
	accordance with			from U.S. to					accordance with			and in Canadian
	U.S. GAAP			Canadian GAAP			Note		Canadian GAAP			dollars
REVENUES	$	268,411		$	—				$	268,411		$	296,718
EXPENSES
OPERATING		156,195			—					156,195			172,600
SELLING, GENERAL AND ADMINISTRATION		33,272			(416	)		C		32,856			36,190
AMORTIZATION		41,946			(295	)		D		41,651			45,893
OPERATING INCOME		36,998			711					37,709			42,035
INTEREST ON LONG-TERM DEBT		7,851			(676	)		B		7,857			8,548
					682			D
FINANCING COSTS		—			(98	)		B		(98	)		(133	)
NET GAIN ON SALE OF CAPITAL AND LANDFILL ASSETS		(13	)		—					(13	)		(11	)
NET FOREIGN EXCHANGE LOSS		61			—					61			65
NET LOSS ON FINANCIAL INSTRUMENTS		305			—					305			400
CONVERSION COSTS		93			—					93			104
OTHER EXPENSES		44			—					44			50
INCOME BEFORE INCOME TAXES		28,657			803					29,460			33,012
INCOME TAX EXPENSE (RECOVERY)
Current		4,106			—					4,106			4,560
Deferred		5,442			275			B		5,577			6,247
					(140	)		D
		9,548			135					9,683			10,807
NET INCOME		19,109			668					19,777			22,205
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment		13,813			(36	)		B,D		13,777			(75,516	)
Commodity swaps designated as cash flow hedges, net of tax		(70	)		—					(70	)		(94	)
COMPREHENSIVE INCOME (LOSS)	$	32,852		$	632				$	33,484		$	(53,405	)
NET INCOME — CONTROLLING INTEREST	$	16,793		$	588				$	17,381		$	19,522
NET INCOME — NON-CONTROLLING INTEREST	$	2,316		$	80				$	2,396		$	2,683
COMPREHENSIVE INCOME (LOSS) — CONTROLLING INTEREST	$	28,837		$	556				$	29,393		$	(46,319	)
COMPREHENSIVE INCOME (LOSS) — NON-CONTROLLING INTEREST	$	4,015		$	76				$	4,091		$	(7,086	)
Net income per weighted average share, basic	$	0.20		$	0.01				$	0.21		$	0.24
Net income per weighted average share, diluted	$	0.20		$	0.01				$	0.21		$	0.24
Weighted average number of shares outstanding (thousands), basic		82,294			(225	)				82,069			82,069
Weighted average number of shares outstanding (thousands), diluted		93,431			(225	)				93,206			93,206

IESI-BFC Ltd. — Third Quarter 2009 — 61

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

Consolidated Statement of Operations and Comprehensive Income (Loss)

For the nine months ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except net income per share amounts and where otherwise stated)

												Stated in
												accordance with
	Stated in			Adjustments					Stated in			Canadian GAAP
	accordance with			from U.S. to					accordance with			and in Canadian
	U.S. GAAP			Canadian GAAP			Note		Canadian GAAP			dollars
REVENUES	$	746,004		$	—				$	746,004		$	872,791
EXPENSES
OPERATING		435,969			—					435,969			510,064
SELLING, GENERAL AND ADMINISTRATION		95,949			(1,000	)		C		94,949			111,086
AMORTIZATION		120,702			(772	)		D		119,930			140,313
OPERATING INCOME		93,384			1,772					95,156			111,328
INTEREST ON LONG-TERM DEBT		26,246			(2,221	)		B		25,614			29,967
					1,589			D
FINANCING COSTS		—			400			B		400			468
NET GAIN ON SALE OF CAPITAL AND LANDFILL ASSETS		(128	)		—					(128	)		(150	)
NET FOREIGN EXCHANGE LOSS		238			—					238			278
NET GAIN ON FINANCIAL INSTRUMENTS		(866	)		—					(866	)		(1,013	)
CONVERSION COSTS		208			—					208			243
OTHER EXPENSES		109			—					109			128
INCOME BEFORE INCOME TAXES		67,577			2,004					69,581			81,407
INCOME TAX EXPENSE (RECOVERY)
Current		10,849			—					10,849			12,693
Deferred		12,875			663			B		13,241			15,491
					(297	)		D
		23,724			366					24,090			28,184
NET INCOME		43,853			1,638					45,491			53,223
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment		21,985			(112	)		B,D		21,873			(111,315	)
Commodity swaps designated as cash flow hedges, net of tax		283			—					283			331
COMPREHENSIVE INCOME (LOSS)	$	66,121		$	1,526				$	67,647		$	(57,761	)
NET INCOME — CONTROLLING INTEREST	$	38,331		$	1,432				$	39,763		$	46,521
NET INCOME — NON-CONTROLLING INTEREST	$	5,522		$	206				$	5,728		$	6,702
COMPREHENSIVE INCOME (LOSS) — CONTROLLING INTEREST	$	57,795		$	1,334				$	59,129		$	(50,488	)
COMPREHENSIVE INCOME (LOSS) — NON-CONTROLLING INTEREST	$	8,326		$	192				$	8,518		$	(7,273	)
Net income per weighted average share, basic	$	0.54		$	0.02				$	0.56		$	0.66
Net income per weighted average share, diluted	$	0.53		$	0.02				$	0.55		$	0.65
Weighted average number of shares outstanding (thousands), basic		71,102			(225	)				70,877			70,877
Weighted average number of shares outstanding (thousands), diluted		82,239			(225	)				82,014			82,014

IESI-BFC Ltd. — Third Quarter 2009 — 62

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

Consolidated Statement of Operations and Comprehensive Income

For the three months ended September 30, 2008 (unaudited — in thousands of U.S. dollars, except net income per trust unit amounts and where otherwise stated)

												Stated in
												accordance with
	Stated in			Adjustments					Stated in			Canadian GAAP
	accordance with			from U.S. to					accordance with			and Canadian
	U.S. GAAP			Canadian GAAP			Note		Canadian GAAP			dollars
REVENUES	$	282,235		$	—				$	282,235		$	293,547
EXPENSES
OPERATING		169,209			—					169,209			176,026
SELLING, GENERAL AND ADMINISTRATION		32,301			1,923			C		34,224			35,577
AMORTIZATION		46,928			(412	)		D		46,516			48,402
OPERATING INCOME		33,797			(1,511	)				32,286			33,542
INTEREST ON LONG-TERM DEBT		13,367			(846	)		B		13,182			13,729
					661			D
FINANCING COSTS		—			2,210			B		2,210			2,262
NET GAIN ON SALE OF CAPITAL AND LANDFILL ASSETS		(265	)		—					(265	)		(271	)
NET FOREIGN EXCHANGE LOSS (GAIN)		3			—					3			(4	)
NET GAIN ON FINANCIAL INSTRUMENTS		98			—					98			140
CONVERSION COSTS		2,216			—					2,216			2,257
OTHER EXPENSES		31			—					31			33
INCOME BEFORE INCOME TAXES		18,347			(3,536	)				14,811			15,396
INCOME TAX EXPENSE (RECOVERY)
Current		1,419			—					1,419			1,502
Deferred		654			(413	)		B		(322	)		(402	)
					(474	)		C
					(89	)		D
		2,073			(976	)				1,097			1,100
NET INCOME		16,274			(2,560	)				13,714			14,296
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment		1,905			(231	)		B		1,431			25,404
					(243	)		D
COMPREHENSIVE INCOME	$	18,179		$	(3,034	)			$	15,145		$	39,700
NET INCOME — CONTROLLING INTEREST	$	13,636		$	(2,145	)			$	11,491		$	11,979
NET INCOME — NON-CONTROLLING INTEREST	$	2,638		$	(415	)			$	2,223		$	2,317
Net income per weighted average trust unit, basic	$	0.24		$	(0.04	)			$	0.20		$	0.21
Net income per weighted average trust unit, diluted	$	0.24		$	(0.04	)			$	0.20		$	0.21
Weighted average number of trust units outstanding (thousands), basic		57,569			(64	)				57,505			57,505
Weighted average number of trust units outstanding (thousands), diluted		68,706			(64	)				68,642			68,642

IESI-BFC Ltd. — Third Quarter 2009 — 63

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

Consolidated Statement of Operations and Comprehensive Income

For the nine months ended September 30, 2008 (unaudited — in thousands of U.S. dollars, except net income per trust unit amounts and where otherwise stated)

												Stated in
												accordance with
Stated in				Adjustments					Stated in			Canadian GAAP
accordance with				from U.S. to					accordance with			and Canadian
U.S. GAAP				Canadian GAAP			Note		Canadian GAAP			dollars
REVENUES	$	803,197		$	—				$	803,197		$	818,156
EXPENSES
OPERATING		484,501			—					484,501			493,525
SELLING, GENERAL AND ADMINISTRATION		92,709			3,091			C		95,800			97,584
AMORTIZATION		135,297			(1,082	)		D		134,215			136,715
OPERATING INCOME		90,690			(2,009	)				88,681			90,332
INTEREST ON LONG-TERM DEBT		40,111			(2,819	)		B		39,070			39,798
					1,778			D
FINANCING COSTS		—			3,134			B		3,134			3,192
NET GAIN ON SALE OF CAPITAL AND LANDFILL ASSETS		(351	)		—					(351	)		(358	)
NET FOREIGN EXCHANGE GAIN		(617	)		—					(617	)		(628	)
NET LOSS ON FINANCIAL INSTRUMENTS		3,623			—					3,623			3,690
CONVERSION COSTS		2,216			—					2,216			2,257
OTHER EXPENSES		88			—					88			90
INCOME BEFORE INCOME TAXES		45,620			(4,102	)				41,518			42,291
INCOME TAX EXPENSE (RECOVERY)
Current		6,255			—					6,255			6,372
Deferred		(5,675	)		(39	)		B		(6,686	)		(6,811	)
					(721	)		C
					(251	)		D
		580			(1,011	)				(431	)		(439	)
NET INCOME		45,040			(3,091	)				41,949			42,730
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment		42,749			(402	)		B		41,919			45,445
					(428	)		D
COMPREHENSIVE INCOME	$	87,789		$	(3,921	)			$	83,868		$	88,175
NET INCOME — CONTROLLING INTEREST	$	37,739		$	(2,590	)			$	35,149		$	35,804
NET INCOME — NON-CONTROLLING INTEREST	$	7,301		$	(501	)			$	6,800		$	6,926
Net income per weighted average trust unit, basic	$	0.66		$	(0.05	)			$	0.61		$	0.62
Net income per weighted average trust unit, diluted	$	0.66		$	(0.05	)			$	0.61		$	0.62
Weighted average number of trust units outstanding (thousands), basic		57,569			(22	)				57,547			57,547
Weighted average number of trust units outstanding (thousands), diluted		68,706			(22	)				68,684			68,684

IESI-BFC Ltd. — Third Quarter 2009 — 64

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

Consolidated Statement of Cash Flows

For the thee months ended September 30, 2009 (unaudited — in thousands of U.S. dollars, unless otherwise stated)

												Stated in
												accordance with
	Stated in			Adjustments					Stated in			Canadian GAAP
	accordance with			from U.S. to					accordance with			and Canadian
	U.S. GAAP			Canadian GAAP			Note		Canadian GAAP			dollars
NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES
OPERATING
Net income	$	19,109		$	668				$	19,777		$	22,205
Items not affecting cash
Restricted share expense		390			—					390			431
Accretion of landfill closure and post-closure costs		805			—					805			887
Amortization of intangibles		7,164			—					7,164			7,855
Amortization of capital assets		18,890			—					18,890			20,760
Amortization of landfill assets		15,892			(295	)		D		15,597			17,278
Interest on long-term debt (deferred financing costs)		676			(676	)		B		—			—
Net gain on sale of capital and landfill assets		(13	)		—					(13	)		(11	)
Net loss on financial instruments		305			—					305			400
Deferred income taxes		5,442			135			B,D		5,577			6,247
Landfill closure and post-closure expenditures		(2,609	)		—					(2,609	)		(2,967	)
Changes in non-cash working capital items		10,546			(416	)		C		10,130			(281	)
Cash generated from operating activities		76,597			(584	)				76,013			72,804
INVESTING
Acquisitions		(1,521	)		—					(1,521	)		(1,786	)
Investment in other receivables		(120	)		—					(120	)		(95	)
Proceeds from other receivables		129			—					129			143
Funded landfill post-closure costs		(278	)		—					(278	)		(312	)
Purchase of capital assets		(20,530	)		10			D		(20,520	)		(22,636	)
Purchase of landfill assets		(7,631	)		672			D		(6,959	)		(7,381	)
Proceeds from the sale of capital and landfill assets		217			—					217			124
Investment in landfill development assets		(316	)		—					(316	)		(353	)
Cash utilized in investing activities		(30,050	)		682					(29,368	)		(32,296	)
FINANCING
Recovery of deferred financing costs		98			(98	)		B		—			—
Proceeds from long-term debt		26,041			—					26,041			26,234
Repayment of long-term debt		(50,564	)		—					(50,564	)		(46,603	)
Common shares issued, net of issue costs		(420	)		—					(420	)		(491	)
Dividends paid to shareholders and participating preferred shareholders		(20,542	)		—					(20,542	)		(23,358	)
Cash utilized in financing activities		(45,387	)		(98	)				(45,485	)		(44,218	)
Effect of reporting currency translation on cash and cash equivalents		(3,265	)		—					(3,265	)		448
NET CASH OUTFLOW		(2,105	)		—					(2,105	)		(3,262	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		11,130			—					11,130			12,939
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	9,025		$	—				$	9,025		$	9,677
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash and cash equivalents are comprised of:
Cash	$	8,056		$	—				$	8,056		$	8,638
Cash equivalents		969			—					969			1,039
	$	9,025		$	—				$	9,025		$	9,677
Cash paid during the period for:
Income taxes	$	8		$	—				$	8		$	(83	)
Interest	$	8,096		$	—				$	8,096		$	8,752

IESI-BFC Ltd. — Third Quarter 2009 — 65

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

Consolidated Statement of Cash Flows

For the nine months ended September 30, 2009 (unaudited — in thousands of U.S. dollars, unless otherwise stated)

												Stated in
												accordance with
	Stated in			Adjustments					Stated in			Canadian GAAP
	accordance with			from U.S. to					accordance with			and Canadian
	U.S. GAAP			Canadian GAAP			Note		Canadian GAAP			dollars
NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES
OPERATING
Net income	$	43,853		$	1,638				$	45,491		$	53,223
Items not affecting cash Restricted share expense		1,081			—					1,081			1,264
Write-off of landfill development assets		77			—					77			93
Accretion of landfill closure and post-closure costs		2,322			—					2,322			2,717
Amortization of intangibles		21,673			—					21,673			25,356
Amortization of capital assets		55,894			—					55,894			65,394
Amortization of landfill assets		43,135			(772	)		D		42,363			49,563
Interest on long-term debt (deferred financing costs)		2,221			(2,221	)		B		—			—
Net gain on sale of capital and landfill assets		(128	)		—					(128	)		(150	)
Net gain on financial instruments		(866	)		—					(866	)		(1,013	)
Deferred income taxes		12,875			366			B,D		13,241			15,491
Landfill closure and post-closure expenditures		(4,964	)		—					(4,964	)		(5,808	)
Changes in non-cash working capital items		15,476			(1,000	)		C		14,476			16,937
Cash generated from operating activities		192,649			(1,989	)				190,660			223,067
INVESTING
Acquisitions		(22,161	)		—					(22,161	)		(26,682	)
Restricted cash withdrawals		82			(82	)		A		—			—
Investment in other receivables		(1,398	)		—					(1,398	)		(1,636	)
Proceeds from other receivables		354			—					354			414
Funded landfill post-closure costs		(659	)		—					(659	)		(771	)
Purchase of capital assets		(58,370	)		17			D		(58,353	)		(68,270	)
Purchase of landfill assets		(29,505	)		1,572			D		(27,933	)		(32,680	)
Proceeds from the sale of capital and landfill assets		3,820			—					3,820			4,469
Investment in landfill development assets		(755	)		—					(755	)		(883	)
Cash utilized in investing activities		(108,592	)		1,507					(107,085	)		(126,039	)
FINANCING
Payment of deferred financing costs		(400	)		400			B		—			—
Proceeds from long-term debt		142,815			—					142,815			167,087
Repayment of long-term debt		(396,948	)		—					(396,948	)		(464,411	)
Common shares issued, net of issue costs		209,264			—					209,264			240,454
Purchase of restricted shares		(172	)		—					(172	)		(207	)
Dividends paid to shareholders and participating preferred shareholders		(39,182	)		—					(39,182	)		(45,841	)
Cash utilized in financing activities		(84,623	)		400					(84,223	)		(102,918	)
Effect of reporting currency translation on cash and cash equivalents		(2,347	)		—					(2,347	)		847
NET CASH OUTFLOW		(2,913	)		(82	)				(2,995	)		(5,043	)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		11,938			82			A		12,020			14,720
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	9,025		$	—				$	9,025		$	9,677
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash and cash equivalents are comprised of:
Cash	$	8,056		$	—				$	8,056		$	8,638
Cash equivalents		969			—					969			1,039
	$	9,025		$	—				$	9,025		$	9,677
Cash paid during the period for:
Income taxes	$	2,570		$	—				$	2,570		$	3,007
Interest	$	27,709		$	—				$	27,709		$	32,418

IESI-BFC Ltd. — Third Quarter 2009 — 66

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

Consolidated Statement of Cash Flows

For the thee months ended September 30, 2008 (unaudited — in thousands of U.S. dollars, unless otherwise stated)

												Stated in
												accordance with
	Stated in			Adjustments					Stated in			Canadian GAAP
	accordance with			from U.S. to					accordance with			and Canadian
	U.S. GAAP			Canadian GAAP			Note		Canadian GAAP			dollars
NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES
OPERATING
Net income	$	16,274		$	(2,560	)			$	13,714		$	14,296
Items not affecting cash
Restricted trust unit expense		954			—					954			972
Write-off of landfill development assets		22			—					22			33
Accretion of landfill closure and post-closure costs		771			—					771			803
Amortization of intangibles		8,123			—					8,123			8,461
Amortization of capital assets		19,805			(1	)		D		19,804			20,618
Amortization of landfill assets		19,000			(411	)		D		18,589			19,323
Interest on long-term debt (deferred financing costs)		846			(846	)		B		—			—
Net gain on sale of capital and landfill assets		(265	)		—					(265	)		(271	)
Net loss on financial instruments		98			—					98			140
Deferred income taxes		654			(976	)		B,C,D		(322	)		(402	)
Landfill closure and post-closure expenditures		(485	)		—					(485	)		(502	)
Changes in non-cash working capital items		4,079			1,923			C		6,002			5,909
Cash generated from operating activities		69,876			(2,871	)				67,005			69,380
INVESTING
Acquisitions		(2,023	)		—					(2,023	)		(2,694	)
Restricted cash withdrawals		742			(742	)		A		—			—
Proceeds from other receivables		72			—					72			77
Funded landfill post-closure costs		(551	)		—					(551	)		(568	)
Purchase of capital assets		(24,070	)		—					(24,070	)		(24,953	)
Purchase of landfill assets		(18,507	)		661			D		(17,846	)		(18,424	)
Proceeds from the sale of capital and landfill assets		807			—					807			828
Investment in landfill development assets		(3,470	)		—					(3,470	)		(3,555	)
Cash utilized in investing activities		(47,000	)		(81	)				(47,081	)		(49,289	)
FINANCING
Payment of deferred financing costs		(2,210	)		2,210			B		—			—
Proceeds from long-term debt		55,511			—					55,511			58,221
Repayment of long-term debt		(41,766	)		—					(41,766	)		(43,287	)
Purchase of restricted trust units		(3,912	)		—					(3,912	)		(3,985	)
Distributions and dividends paid to unitholders and participating preferred shareholders		(29,947	)		—					(29,947	)		(31,226	)
Cash utilized in financing activities		(22,324	)		2,210					(20,114	)		(20,277	)
Effect of reporting currency translation on cash and cash equivalents		(783	)		7					(776	)		(260	)
NET CASH OUTFLOW		(231	)		(735	)				(966	)		(446	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		13,155			827			A		13,982			14,242
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	12,924		$	92				$	13,016		$	13,796
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash and cash equivalents are comprised of:
Cash	$	12,920		$	92				$	13,012		$	13,791
Cash equivalents		4			—					4			5
	$	12,924		$	92				$	13,016		$	13,796
Cash paid during the period for:
Income taxes	$	264		$	—				$	264		$	378
Interest	$	9,189		$	—				$	9,189		$	9,622

IESI-BFC Ltd. — Third Quarter 2009 — 67

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

Consolidated Statement of Cash Flows

For the nine months ended September 30, 2008 (unaudited — in thousands of U.S. dollars, unless otherwise stated)

												Stated in
												accordance with
	Stated in			Adjustments					Stated in			Canadian GAAP
	accordance with			from U.S. to					accordance with			and Canadian
	U.S. GAAP			Canadian GAAP			Note		Canadian GAAP			dollars
NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES
OPERATING
Net income	$	45,040		$	(3,091	)			$	41,949		$	42,730
Items not affecting cash Restricted trust unit expense		954			—					954			972
Write-off of landfill development assets		935			—					935			952
Accretion of landfill closure and post-closure costs		2,326			—					2,326			2,369
Amortization of intangibles		24,236			—					24,236			24,687
Amortization of capital assets		58,102			(2	)		D		58,100			59,182
Amortization of landfill assets		52,959			(1,080	)		D		51,879			52,846
Interest on long-term debt (deferred financing costs)		2,819			(2,819	)		B		—			—
Net gain on sale of capital and landfill assets		(351	)		—					(351	)		(358	)
Net loss on financial instruments		3,623			—					3,623			3,690
Deferred income taxes		(5,675	)		(1,011	)		B,C,D		(6,686	)		(6,811	)
Landfill closure and post-closure expenditures		(1,108	)		—					(1,108	)		(1,129	)
Changes in non-cash working capital items		(14,690	)		3,091			C		(11,599	)		(11,815	)
Cash generated from operating activities		169,170			(4,912	)				164,258			167,315
INVESTING
Acquisitions		(56,511	)		—					(56,511	)		(57,563	)
Restricted cash withdrawals		1,532			(1,532	)		A		—			—
Proceeds from other receivables		371			—					371			378
Funded landfill post-closure costs		(1,137	)		—					(1,137	)		(1,158	)
Purchase of capital assets		(61,398	)		—					(61,398	)		(62,542	)
Purchase of landfill assets		(40,681	)		1,778			D		(38,903	)		(39,628	)
Proceeds from the sale of capital and landfill assets		1,348			—					1,348			1,373
Investment in landfill development assets		(5,202	)		—					(5,202	)		(5,299	)
Cash utilized in investing activities		(161,678	)		246					(161,432	)		(164,439	)
FINANCING
Payment of deferred financing costs		(3,134	)		3,134			B		—			—
Proceeds from long-term debt		199,702			—					199,702			203,421
Repayment of long-term debt		(105,690	)		—					(105,690	)		(107,658	)
Trust units issued, net of issue costs		(3	)		—					(3	)		(3	)
Purchase of restricted trust units		(3,912	)		—					(3,912	)		(3,985	)
Distributions and dividends paid to unitholders and participating preferred shareholders		(91,967	)		—					(91,967	)		(93,680	)
Cash utilized in financing activities		(5,004	)		3,134					(1,870	)		(1,905	)
Effect of reporting currency translation on cash and cash equivalents		(1,465	)		5			A		(1,460	)		(534	)
NET CASH INFLOW (OUTFLOW)		1,023			(1,527	)				(504	)		437
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		11,901			1,619			A		13,520			13,359
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	12,924		$	92				$	13,016		$	13,796
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash and cash equivalents are comprised of:
Cash	$	12,920		$	92			A	$	13,012		$	13,791
Cash equivalents		4			—					4			5
	$	12,924		$	92				$	13,016		$	13,796
Cash paid during the period for:
Income taxes	$	9,688		$	—				$	9,688		$	9,868
Interest	$	31,683		$	—				$	31,683		$	32,273

IESI-BFC Ltd. — Third Quarter 2009 — 68

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

The following table reconciles net income reported in accordance with U.S. GAAP to net income reportable in accordance with Canadian GAAP for the three and nine month periods ended September 30, 2009 and 2008:

			Three months ended
	Note		2009			2008
Net income in accordance with U.S. GAAP			$	19,109		$	16,274
Impact on net income from Canadian GAAP adjustments:
Capitalized deferred financing costs, net of income taxes		B		499			(951	)
Share or trust unit based compensation and shares or trust units held in a rabbi trust, net of income taxes		C		416			(1,449	)
Capitalized interest, net of income taxes		D		(247	)		(160	)
Net income in accordance with Canadian GAAP			$	19,777		$	13,714
Basic earnings per share or trust unit in accordance with Canadian GAAP			$	0.21		$	0.20
Diluted earnings per share or trust unit in accordance with Canadian GAAP			$	0.21		$	0.20
Weighted average shares or trust units outstanding (thousands), basic				82,069			57,505
Weighted average shares or trust units outstanding (thousands), diluted				93,206			68,642

			Nine months ended
	Note		2009			2008
Net income in accordance with U.S. GAAP			$	43,853		$	45,040
Impact on net income from Canadian GAAP adjustments:
Capitalized deferred financing costs, net of income taxes		B		1,158			(276	)
Share or trust unit based compensation and shares or trust units held in a rabbi trust, net of income taxes		C		1,000			(2,370	)
Capitalized interest, net of income taxes		D		(520	)		(445	)
Net income in accordance with Canadian GAAP			$	45,491		$	41,949
Basic earnings per share or trust unit in accordance with Canadian GAAP			$	0.56		$	0.61
Diluted earnings per share or trust unit in accordance with Canadian GAAP			$	0.55		$	0.61
Weighted average shares or trust units outstanding (thousands), basic				70,877			57,547
Weighted average shares or trust units outstanding (thousands), diluted				82,014			68,684

Reconciliation of U.S. to Canadian GAAP — Notes

A. Restricted cash

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

IESI-BFC Ltd. — Third Quarter 2009 — 69

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

B. Capitalization of deferred financing costs

Under U.S. GAAP, costs to secure or amend long-term debt facilities are deferred and amortized over the term of the underlying debt instrument. Under Canadian GAAP, the Company has elected to expense all transaction costs, including those related to long-term debt instruments. To comply with Canadian GAAP, the Company decreased deferred financing costs and equity (deficit, non-controlling interest, and accumulated other comprehensive loss) on its consolidated balance sheet and increased financing costs on its consolidated statement of operations and comprehensive income (loss). Amortization of deferred financing costs recorded to interest expense was also reversed.

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

C. Share or trust unit based compensation

Share or trust unit based options

Under U.S. GAAP, share or trust unit appreciation rights are measured at fair value at the date of grant and-remeasured at fair value at each balance sheet date to the date of settlement. The resulting compensation expense is recorded to selling, general and administration expense. Under Canadian GAAP, share or trust unit options with share or trust unit appreciation rights, and the related changes thereto, are recorded to selling, general and administration expense when the quoted market price of the share or trust unit exceeds the exercise price of the option.

Shares or trust units held by a rabbi trust

Prior to the conversion of the Fund’s trust structure to a corporation (Note 6), trust units of the Fund acquired for the benefit of the Company’s U.S. long-term incentive plan participants, and held in a rabbi trust, were classified to Mezzanine Equity. The deferred compensation obligation related to these trust units was recorded to accrued charges due to the redemption feature of the trust units. Increases or decreases to the deferred compensation obligation, resulting from fair value changes in the obligation, were recorded to selling, general and administrative expense. An increase or decrease in accrued compensation obligations resulted in a higher or lower accounting versus tax basis and a higher or lower deferred income tax asset which was recorded to deferred income tax recovery or expense on the Company’s consolidated statement of operations and comprehensive income (loss).

Under Canadian GAAP, trust units of the Fund were recorded to unitholders’ equity. The deferred compensation obligation was also classified to unitholders’ equity and subsequent changes in the fair value of trust units was not recognized in either treasury share or deferred compensation obligations.

IESI-BFC Ltd. — Third Quarter 2009 — 70

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

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

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

Under Canadian GAAP, the decrease in recorded landfill and capital asset amounts, resulting from the capitalization of interest net of amortization under U.S. GAAP, results in a lower accounting versus tax basis and lower deferred income tax liability.

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

Prior to the conversion of the Fund’s trust structure to a corporation (Note 6), trust units were redeemable by their holders at any time. This redemption feature was required for the Fund to retain its Canadian mutual fund trust status. Upon notification of redemption, trust unitholders were entitled to receive a price per trust unit equal to the lesser of: (i) 90% of the average closing market price calculated over the 10 days preceding the surrender date, and (ii) the closing market price on the date of redemption. In accordance with the Fund’s Declaration of Trust, trust units redeemable for cash, in any given month, was limited to C$50, which could have been waived at the discretion of the Fund’s Trustees.

Under U.S. GAAP, issued equity, which was redeemable for cash or other assets and was (a) redeemable at a fixed or determinable price on a fixed or determinable date, (b) redeemable at the option of the holder, or (c) redeemable upon the occurrence of an event that is not solely within the control of the issuer, was classified outside of permanent equity. Accordingly, the Company classified its trust units and participating preferred shares as mezzanine equity and recorded the value of its trust units and participating preferred shares at their maximum redemption amount at each balance sheet date. The increase or decrease resulting from valuing the trust units and participating preferred shares at their maximum redemption amount was recorded to deficit. Trust units and participating preferred shares were classified as Mezzanine Equity, where Mezzanine Equity is classified between Liabilities and Equity on the Company’s consolidated balance sheet. In addition, redemption value adjustments were recorded to Mezzanine Equity and were offset by an adjustment to deficit. Participating preferred shares were ultimately redeemable for trust units of the Fund. Under Canadian GAAP, trust units were recorded as unitholders’ equity and participating preferred shares were recorded as non-controlling interest in the mezzanine equity section of the Company’s consolidated balance sheet. The Company’s shares do not contain the same redemption feature as trust units and, accordingly, are not subject to the same accounting treatment. Accordingly, the redemption amount recorded to mezzanine equity has been reclassified to shareholders’ equity and the presentation under U.S. and Canadian GAAP is aligned. Revaluation of mezzanine equity to the date of conversion has created a permanent difference in common shares and deficit between U.S. and Canadian GAAP amounting to $80,731.

IESI-BFC Ltd. — Third Quarter 2009 — 71

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

F. Non-controlling interest

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

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

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

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

H. Employee future benefits

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

Equity

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

IESI-BFC Ltd. — Third Quarter 2009 — 72

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

		September 30,			December 31,
	Note	2009			2008
Common shares
Stated in accordance with U.S. GAAP		$	1,082,190		$	868,248
Permanent difference realized upon conversion	E		80,731			80,731
Stated in accordance with Canadian GAAP		$	1,162,921		$	948,979
Restricted shares
Stated in accordance with U.S. and Canadian GAAP		$	(3,928	)	$	(3,756	)
Treasury shares
Stated in accordance with U.S. and Canadian GAAP		$	—		$	—
Contributed surplus/paid in capital
Stated in accordance with U.S. and Canadian GAAP		$	1,714		$	633
Deficit
Stated in accordance with U.S. GAAP		$	(218,200	)	$	(206,971	)
Cumulative U.S. to Canadian GAAP differences	B,C,D		(11,151	)		(12,583	)
Revaluation of trust units and participating preferred shares reclassified to mezzanine equity	E		(80,731	)		(80,731	)
Stated in accordance with Canadian GAAP		$	(310,082	)	$	(300,285	)
Accumulated other comprehensive income
Stated in accordance with U.S. GAAP		$	(71,440	)	$	(90,904	)
Cumulative U.S. to Canadian GAAP differences	B,D		1,679			1,777
Stated in accordance with Canadian GAAP		$	(69,761	)	$	(89,127	)
Non-controlling interest
Stated in accordance with U.S. GAAP		$	231,638		$	230,452
Cumulative U.S. to Canadian GAAP differences	F		(2,399	)		(2,591	)
Stated in accordance with Canadian GAAP		$	229,239		$	227,861
Equity stated in accordance with Canadian GAAP		$	1,010,103		$	784,305

Changes in accounting policy

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

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

IESI-BFC Ltd. — Third Quarter 2009 — 73

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

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

Effective January 1, 2009, the Company early adopted CICA accounting standard Non-Controlling Interests (section 1602), which in combination with CICA 1601, replaces Consolidated Financial Statements (section 1600). CICA 1602 establishes standards of accounting for a non-controlling interest in a subsidiary in consolidated financial statements subsequent to a business combination. This section requires retrospective application with certain exceptions. Adopting CICA 1602 changes the Company’s presentation of non-controlling interests from mezzanine equity to equity on the Company’s consolidated balance sheet. Non-controlling interest is no longer deducted in the determination of net income. Instead, net income and each component of other comprehensive income are attributed to shareholders’ equity and non-controlling interest. Adopting this section affects the Company’s determination of net income presented in the consolidated statement of operations and comprehensive income (loss), the presentation of net income and non-controlling interest in the consolidated statement of cash flows, and the presentation of non-controlling interest in the consolidated statement of equity. The effect of adopting CICA 1602 on previously reported Canadian GAAP and Canadian dollar amounts for the year ended December 31, 2008 and nine months ended September 30, 2009 is as follows:

Consolidated Balance Sheets

	December 31,
	2008 - as		Change in			December 31,
	previously		accounting			2008-
	reported		policy			restated
Mezzanine equity
Non-controlling interest	$	241,339	$	(241,339	)	$	—
Equity
Non-controlling interest	$	—	$	241,339		$	241,339

Consolidated Statements of Operations and Comprehensive Income

	Nine months
	ended					Nine months
	September 30,					ended
	2008 - as		Change in			September 30,
	previously		accounting			2008-
	reported		policy			restated
Non-controlling interest	$	6,926	$	(6,926	)	$	—
Net income	$	35,804	$	6,926		$	42,730

Consolidated Statements of Cash Flows

	Nine months
	ended					Nine months
	September 30,					ended
	2008 - as		Change in			September 30,
	previously		accounting			2008-
	reported		policy			restated
Net income	$	35,804	$	6,926		$	42,730
Non-controlling interest	$	6,926	$	(6,926	)	$	—

IESI-BFC Ltd. — Third Quarter 2009 — 74

IESI-BFC Ltd.

Notes to the Consolidated Financial Statements

For the period ended September 30, 2009 (unaudited — in thousands of U.S. dollars, except per share or trust unit amounts and where otherwise stated)

New accounting policies requiring adoption

Financial instruments – recognition and measurement

The CICA issued amendments to Financial Instruments – Recognition and Measurement (section 3855). Amendments to this section prohibit the reclassification of a financial asset from held for trading when the fair value of the embedded derivative in a combined contract cannot be reasonably measured. The guidance also revised the definition of loans and receivables and permits reclassification of financial assets from held for trading and available for sale into loans and receivables when certain conditions have been met. The amendments further provide one method of assessing impairment for all financial assets regardless of classification. For the Company, this guidance is effective for interim and annual financial statements beginning on or after January 1, 2011 and early adoption is permitted. Adopting these amendments is not expected to have any impact on the Company’s financial statements.

Financial instruments – disclosures

In June 2009, the CICA issued amendments to Financial Instruments – Disclosures (section 3862) which requires enhanced disclosures on liquidity risk and new disclosures on fair value measurements for financial instruments. The amendments are effective for annual financial statements related to fiscal years ending after September 30, 2009 and are not expected to have a significant impact on the Company’s financial statements.

IESI-BFC Ltd. — Third Quarter 2009 — 75