You are here: Home » News » Week of Nov. 13-19, 2007 » Story: 1

Upcoming Events

See More Detail . . .  

Latest News & Events

Headlines

Events

Get the Latest
News Delivered!

BFI Canada Posts Strong Third Quarter

Date: November 12, 2007

Source: BFI Canada Income Fund

BFI Canada Income Fund Announces Results for the Three and Nine Months Ended September 30, 2007

BFI Canada Income Fund (the "Fund") (TSX:BFC.UN) today reported strong financial results for the three and nine months ended September 30, 2007. All amounts are in thousands of Canadian dollars, unless otherwise stated.

Management Commentary

"We continued to advance our growth strategy in the third quarter, resulting in a strong financial performance and an asset base that is well-positioned for the future," said Keith Carrigan, Vice Chairman and Chief Executive Officer. "We achieved revenue growth of 19.3% in the quarter and 16.6% year to date, which drove EBITDA(A) growth of 18.0% in the quarter and 17.4% year to date. Free cash flow available for distribution(B) increased 23.8% in the quarter and 17.8% year to date, resulting in a payout ratio of 65.1% and 76.2% respectively.

"Our performance can be attributed to solid organic growth in our Canadian and U.S. segments, coupled with our successful acquisition activity. Organic Canadian and U.S. segment revenue growth, which excludes acquisitions and fuel and environmental surcharges, was 11.0% and 9.2% quarter over quarter, respectively, and 12.0% and 7.5%, year over year, respectively. Contributions from recent acquisitions, including Winters Bros. Waste Systems, Inc., represented a substantial portion of our growth in the quarter. During the quarter, we are pleased to have also closed six "tuck-in" acquisitions and entered a new market in Canada. We are committed to continuing to create value for our investors, through both internal and external growth initiatives."

Mr. Carrigan continued, "We would like to extend our appreciation to T. Iain Ronald, a Trustee of the Fund since 2002, who retired effective November 11, 2007. Iain served as the first Non-Executive Chairman of the Fund until 2006. We extend our appreciation to Iain for all of his contributions and his continued support. We would also like to welcome back Douglas W. Knight as a Trustee of the Fund, effective November 11, 2007. Doug previously served as a Trustee of the Fund between April 2002 and January 2005. As President of St. Joseph Media, Inc., Doug brings extensive experience as an entrepreneur and consolidator in the media and publishing sector."

Financial Highlights for the Three and Nine Months Ended September 30, 2007 - Total consolidated revenues increased 19.3% and 16.6% to $238.5 million and $666.3 million.

- Total consolidated revenue growth, excluding the impact of foreign currency translation, was 24.1% and 18.4%.

- Total EBITDA(A) growth, excluding the impact of foreign currency translation, was 22.3% and 19.0%.

- Free cash flow available for distribution(B) increased to $48.0 million and $120.9 million or 23.8% and 17.8%.

- The Fund's payout ratio was 65.1% and 76.2%.

- The Fund's payout ratio excluding the effects of the foreign currency hedge was 67.8% and 78.7%.

Other Highlights for the Three and Nine Months Ended September 30, 2007

- Effective August 31, 2007, the Fund acquired Winters Bros. Waste Systems, Inc. ("Winters Bros."), a leading integrated waste services provider based in New York, for total cash consideration, including estimated acquisition and related costs, of $312,515.

- Concurrent with the closing of the Winters Bros. acquisition, the Fund entered into a third amendment to its Amended and Restated Revolving Credit and Term Loan Agreement. The amendment increases the total available capacity by U.S. $320,000 and brings the total available lending under the U.S. revolving credit facility to U.S. $575,000. Including the accordion feature, total available credit under the U.S. long-term debt facility is U.S. $825,000. With the exception of certain modified financial covenants and the maintenance of interest rate swaps, all significant terms, including but not limited to pricing and maturity, under the U.S. revolving credit facility remain unchanged. As a condition of the amendedU.S. long-term debt facility agreement, the Fund's U.S. $160,000 note receivable ("U.S. notes") from IESI was effectively cancelled through a restructuring.

- Effective August 28, 2007, the Fund received all of the necessary permits for the expansion of its Seneca Meadows landfill. Based on current volumes, management expects the operating life of the site to extend through 2023.

- Effective August 31, 2007, the Fund's Calgary landfill received an operating permit which management expects will allow the site to continue accepting waste through 2010.

- Effective April 5, 2007, the Fund closed a 3,100 trust unit offering at $26.10 per trust unit. In addition, the underwriters exercised their over-allotment option to acquire an additional 465 trust units. The Fund applied the net proceeds from the offering, approximately $87,600, against advances from its U.S. revolving credit facility.

- Effective March 21, 2007, the Fund entered into aSecond Amending Agreement to its Fourth Amended and Restated Credit Agreement. The second amendment increases the total committed Canadian segment credit to $150,000 from $80,000 and the total available credit from this facility, subject to lender consent, to $200,000 from $120,000. The maturity date was extended to May 30, 2011 from June 30, 2010, and the maturity date remains subject to one year extensions.

- Effective March 28, 2007, the Fund entered into a new 15 year agreement for variable rate demand solid waste disposal revenue bonds ("IRBs") in the state of Texas. The IRBs are made available, to a maximum of U.S. $24,000 and are available to fund a portion of landfill construction activities, and equipment, vehicle, and container expenditures in the Fund's Texas operations. The IRBs bear interest at a discount to LIBOR. A portion of the Fund's drawings under this facility was used to repay the Fund's U.S. revolving credit facility with the balance used to finance landfill construction activities, and equipment, vehicle, and container expenditures. At September 30, 2007, approximately U.S. $2,600 of cash was restricted for the purpose of financing future activities and expenditures.

- For the three months ended September 30, 2007, and excluding the acquisition of Winters Bros., the Fund completed one new market acquisition in the Fund's Canadian segment, and completed six "tuck-in" acquisitions. For the nine months ended September 30, 2007, and excluding the acquisition of Winters Bros., the Fund completed two new market acquisitions, in the Fund's Canadian and U.S south segments, and completed 14 "tuck-in" acquisitions. Aggregate cash consideration, excluding the Winters Bros. acquisition, was approximately $12,500 and $47,500, respectively.

- As previously noted, the Trustees continue to actively work with management to review the Fund's corporate structure in light of changes to the taxation of income trusts as it relates to the Fund's continuous improvement and growth strategy.

Summarized Financial Highlights


                                  Three months ended  Nine months ended
                                       September 30,      September 30,
                                                2007               2007
------------------------------------------------------------------------
------------------------------------------------------------------------
Revenues September 30, 2006       $          199,981  $         571,500
Organic growth and acquisitions
 (includes fuel and environmental
  surcharges)                                 48,279            105,422
Foreign currency exchange impact              (9,747)           (10,594)

------------------------------------------------------------------------
Revenues September 30, 2007       $          238,513  $         666,328
% Revenue growth before foreign
 currency exchange impact                       24.1%              18.4%
Total revenue growth %                          19.3%              16.6%

EBITDA(A) September 30, 2006      $           64,455  $         175,682
Organic growth and acquisitions               14,349             33,459
Foreign currency exchange impact              (2,736)            (2,967)

------------------------------------------------------------------------
EBITDA(A) September 30, 2007      $           76,068  $         206,174

% EBITDA(A) growth before foreign
 currency exchange impact                       22.3%              19.0%
Total EBITDA(A) growth %                        18.0%              17.4%

Free cash flow available for distribution(B) September 30, 2006

                                  $           38,762  $         102,574
Organic growth and acquisitions               10,557             19,705
Foreign currency exchange impact              (1,318)            (1,421)

------------------------------------------------------------------------
Free cash flow available for distribution(B) September 30, 2007

                                  $           48,001  $         120,858
% Free cash flow available for
 distribution(B) growth before foreign
 currency exchange impact                       27.2%              19.2%
Total free cash flow available
 for distribution(B) growth %                   23.8%              17.8%

Free cash flow available for
 distribution(B) without hedge    $           46,039  $         116,966
------------------------------------------------------------------------

Aggregate distributions declared  $           31,227  $          92,099
------------------------------------------------------------------------
Payout ratio with foreign
 currency hedge                                 65.1%              76.2%
------------------------------------------------------------------------
Payout ratio without foreign
 currency hedge                                 67.8%              78.7%
------------------------------------------------------------------------

Foreign Currency Hedge

A significant portion of the Fund's operating results, maintenance capital and landfill expenditures ("maintenance expenditures"), interest on long-term debt, and cash income taxes reported in Canadian dollars, originate in the U.S. Operating expenses, maintenance expenditures, interest on long-term debt, and cash income taxes originating in the U.S. are settled in U.S. dollars generated from U.S. operations which results in a natural cash flow hedge. A portion of the resultant free cash flow available for distribution(B) is hedged by three single rate hedge agreements through February 2008 to purchase 4,500 Canadian dollars monthly at an average foreign currency exchange rate of approximately $1.222.

Financial Highlights

(in thousands, except per weighted average trust unit and participating
 preferred share ("PPS"))

                                Three months ended       Nine months ended
                                      September 30       September 30
---------------------------------------------------------------------------
---------------------------------------------------------------------------

                                 2007        2006        2007         2006
---------------------------------------------------------------------------
---------------------------------------------------------------------------

                           (unaudited) (unaudited) (unaudited)  (unaudited)
---------------------------------------------------------------------------

Operating results
Revenues                    $ 238,513 $   199,981   $ 666,328  $   571,500
Operating expenses            135,740     111,991     380,258      324,433
Selling, general
 and administration
 expenses ("SG&A")         26,705      23,535      79,896       71,385
---------------------------------------------------------------------------

Income before the following
 ("EBITDA(A)")                 76,068      64,455     206,174      175,682
Amortization                   41,490      38,587     120,780      110,831
Interest on long-term debt     10,775       8,767      29,140       24,996
Financing costs                 6,328           -       7,192           79
Net gain on sale of
 capital assets                  (109)        (54)     (1,343)        (409)
Net loss (gain) on
 financial instruments          3,674       3,260      (1,044)        (539)
Net foreign exchange
 (gain) loss                     (302)       (809)     14,802        6,051
Other expenses                      -          28           5          187
---------------------------------------------------------------------------

Income before income taxes
 and non-controlling interest  14,212      14,676      36,642       34,486
---------------------------------------------------------------------------

Income tax expense              2,147       1,792       2,668        6,566
Non-controlling interest        1,962       2,427       5,680        5,345
---------------------------------------------------------------------------

Net income                   $ 10,103 $    10,457    $ 28,294  $    22,575
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Net income per weighted
 average trust unit,
 basic & diluted           $ 0.18 $      0.20      $ 0.50  $      0.42

Trust units and
 PPSs outstanding
Weighted average number of
 trust units outstanding       57,545      53,617      56,227       53,469
Weighted average number of
 PPSs outstanding              11,161      11,774      11,272       11,922
---------------------------------------------------------------------------

Weighted average number
of trust units and PPSs
outstanding                    68,706      65,391      67,499       65,391
---------------------------------------------------------------------------

Aggregate number of
 trust units
 and PPSs outstanding          68,706      65,391      68,706       65,391
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Maintenance and growth
 expenditures
Maintenance expenditures     $ 14,475 $    13,972    $ 44,886  $    40,862
Growth capital and landfill
 expenditures ("growth
 expenditures")                25,210      20,668      58,726       58,817
---------------------------------------------------------------------------

Total maintenance and
 growth expenditures         $ 39,685 $    34,640    $ 103,612 $    99,679
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Operating and free
 cash flow
Cash generated from
 operating activities        $ 56,360 $    51,916   $ 138,621  $   127,515
Free cash flow available
 for distribution(B)         $ 48,001 $    38,762   $ 120,858  $   102,574
Free cash flow available
 for distribution(B) per
 weighted average
 trust unit and PPS          $   0.70 $      0.59   $    1.79  $      1.57

Distributions
Aggregate distributions
 declared on weighted average
 trust units                 $ 26,154 $    23,802   $  76,723  $    69,352
Distributions attributable
 to non-controlling interest    5,073       5,227      15,376       15,231
---------------------------------------------------------------------------

Aggregate distributions
 declared                    $ 31,227 $    29,029   $ 92,099   $    84,583
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Aggregate distributions
 declared per weighted
 average trust unit and PPS  $   0.45 $      0.44   $   1.36   $      1.29

Management's Discussion

(all amounts are in thousands, except per trust unit, PPS, and foreign currency exchange rate amounts)

Foreign Currency Exchange Rates

The Fund reports its financial results in Canadian dollars, and consequently changes in the foreign currency exchange rate between Canada and the U.S. impacts the translated value of the Fund's U.S. operating results to Canadian dollars. The U.S. segments financial position and operating results have been translated to Canadian dollars applying the following U.S. to Canadian dollar foreign exchange rates:



                                      2007                           2006
             ----------------------------- -------------------------------
                                Cumulative                     Cumulative
              Current   Average    average   Current   Average    average
             ----------------------------- -------------------------------

March 31      $ 1.153  $  1.172  $   1.172 $   1.167 $   1.155  $   1.155
June 30       $ 1.063  $  1.098  $   1.135 $   1.115 $   1.122  $   1.138
September 30  $ 0.996  $  1.045  $   1.105 $   1.115 $   1.121  $   1.133


Readers are reminded that a significant portion of the Fund's financial results originate in the U.S. The impact of foreign currency exchange on the Fund's consolidated results is included in the Fund's MD&A for the three and nine months ended September 30, 2007.

Operating Highlights


           Three months ended September 30   Nine months ended September 30
---------------------------------------------------------------------------
---------------------------------------------------------------------------

                2007       2006   $ Change       2007       2006   $ Change
---------------------------------------------------------------------------
Revenues   $ 238,513 $  199,981 $   38,532 $  666,328 $  571,500 $   94,828
---------------------------------------------------------------------------
Canada     $  87,735 $   76,891 $   10,844 $  247,109 $  213,697 $   33,412
U.S. south $  82,278 $   67,183 $   15,095 $  237,211 $  197,024 $   40,187
U.S.
 northeast $  68,500 $   55,907 $   12,593 $  182,008 $  160,779 $   21,229

Operating expenses
           $ 135,740 $  111,991 $   23,749 $  380,258 $  324,433 $   55,825
---------------------------------------------------------------------------
Canada     $  46,022 $   38,712 $    7,310 $  128,743 $  107,992 $   20,751
U.S. south $  51,737 $   44,302 $    7,435 $  152,518 $  132,003 $   20,515
U.S.
 northeast $  37,981 $   28,977 $    9,004 $   98,997 $   84,438 $   14,559
SG&A       $  26,705 $   23,535 $    3,170 $   79,896 $   71,385 $    8,511
---------------------------------------------------------------------------
Canada     $  9,826  $    9,493 $      333 $   29,616 $   27,864 $    1,752
U.S. south $ 10,487  $    8,837 $    1,650 $   30,960 $   26,440 $    4,520
U.S.
 northeast $  6,392  $    5,205 $    1,187 $   19,320 $   17,081 $    2,239
EBITDA(A)  $ 76,068  $   64,455 $   11,613 $  206,174 $  175,682 $   30,492
---------------------------------------------------------------------------
Canada     $ 31,887  $   28,686 $    3,201 $   88,750 $   77,841 $   10,909
U.S. south $ 20,054  $   14,044 $    6,010 $   53,733 $   38,581 $   15,152
U.S.
 northeast $ 24,127  $   21,725 $    2,402 $   63,691 $   59,260 $    4,431

The discussions to follow are in addition to the impact of foreign currency exchange fluctuations as detailed in the Fund's MD&A for the three and nine months ended September 30, 2007.

Revenues - Three and nine months ended September 30

The increase in consolidated revenues for the three months ended is due in part to organic Canadian and U.S. segment growth, where organic growth excludes the impact of fuel and environmental surcharges, acquisitions, and foreign currency translation. Aggregate growth through acquisition and higher fuel and environmental surcharges also contributed to the period over period change.

The increase in consolidated revenues for the nine months ended is due in part to organic Canadian and U.S. segment growth, defined above. Aggregate growth through acquisition also contributed to the period over period change. The unfavourable impact of foreign currency translation was partially offset by higher fuel and environmental surcharges.

Operating expenses - Three and nine months ended September 30

Higher total disposal and labour costs are attributable to higher collected waste volumes and higher costs to service new and existing customers, contracts, and acquisitions for the three and nine months ended. The balance of the total change for both periods is due principally to higher vehicle operating costs and repairs and maintenance expense partially offset by a decline in insurance expense.

Selling, general and administration expenses - Three and nine months ended September 30

Higher total salaries, including long-term incentive plan ("LTIP") accruals, are the primary reason for the period over period increases. Organic and acquisition growth, coupled with additional sales efforts are the primary reasons for the increases in total salaries. Higher facility and office costs and travel expenditures are the primary reason for the balance of change in both periods.

Free Cash Flow Available for Distribution(B)

Change in calculation

Effective July 6, 2007, the Canadian Securities Administrators ("CSA") amended National Policy 41-201 - Income Trusts and Other Indirect Offerings. Amended policy changes, which includes the concept of maintaining productive capacity, has resulted in a change to the Fund's calculation of free cash flow available for distribution(B). The Fund has historically viewed costs to maintain the productive capacity of its limited life landfills as a cost funded from excess free cash flow available for distribution(C). Accordingly, such amounts have not been included in the Funds determination of free cash flow available for distribution(B). Costs incurred to maintain the productive capacity of landfills are included in the Fund's landfill asset amortization rate per tonne and effective July 6, 2007 the Fund has elected to charge these amounts to the calculation of free cash flow available for distribution(B). The impact of this change is reflected through all free cash flow available for distribution(B) amounts disclosed in this press release.

Costs incurred to develop a replacement or new landfill site are deferred until such time as the replacement site is successfully permitted. Upon successful permitting, these costs are included in the Fund's landfill asset amortization rate per tonne and are charged to free cash flow available for distribution(B).

Results

Free cash flow available for distribution(B) totalled $48,001 and $120,858 for the three and nine months ended September 30, 2007 versus $38,762 and $102,574 for the comparative periods, respectively.

Free cash flow available for distribution(B) per weighted average trust unit and PPS for the three and nine months ended September 30, 2007 amounted to $0.70 and $1.79 and is $0.11 and $0.22 higher than the comparative periods, respectively.

Free Cash Flow Available for Distribution(B) - Cash Flow Approach


                         Three months ended              Nine months ended
                               September 30                   September 30
---------------------------------------------------------------------------
                      2007     2006   Change       2007      2006   Change
---------------------------------------------------------------------------

Cash generated
 from operating
 activities (per
 statement of
 cash flows)       $ 56,360 $ 51,916 $ 4,444   $ 138,621 $ 127,515 $ 11,106
---------------------------------------------------------------------------


Operating
Changes in non-
 cash working
 capital items      (6,182)   1,813   (7,995)    18,356    12,114    6,242
Net change in
 landfill closure
 and post-
 closure costs      (2,336)  (1,315)  (1,021)    (7,505)    3,135  (10,640)
Maintenance
 expenditures      (14,475) (13,972)    (503)   (44,886)  (40,862)  (4,024)

Financing
Amortization of
 gain on settlement
 of bond
 forward contracts      56       56        -        168       168        -
Financing and
 deferred costs
 (net of non
 -cash portion)      6,297      (91)   6,388      7,093      (418)   7,511
Effect of foreign
 currency hedges
 to support
 Canadian dollar
 distributions       1,962    1,116      846      3,892     2,967      925
Realized foreign
 exchange gain      (1,374)    (761)    (613)    (2,574)   (2,045)    (529)
Realized foreign
 exchange loss
 on U.S. notes       7,693        -    7,693      7,693         -    7,693
---------------------------------------------------------------------------
Free cash flow
 available for
 distribution(B)  $ 48,001  $ 38,762 $ 9,239  $ 120,858 $ 102,574 $ 18,284
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Free Cash Flow Available for Distribution(B) - Operations Approach


                         Three months ended              Nine months ended
                               September 30                   September 30
---------------------------------------------------------------------------
                      2007     2006   Change       2007      2006   Change
---------------------------------------------------------------------------

EBITDA(A)         $ 76,068 $ 64,455 $ 11,613  $ 206,174 $ 175,682 $ 30,492
---------------------------------------------------------------------------
Amortization of
 capitalized
 landfill asset
 closure and
 post-closure
 costs, including
 revisions to
 estimated cash
 flows              (2,942)  (2,888)     (54)    (7,845)   (6,202)  (1,643)
Interest on
 long-term debt    (10,775)  (8,767)  (2,008)   (29,140)  (24,996)  (4,144)
Management
 transaction
 bonuses (other
 expenses)               -      (28)      28         (5)     (187)     182
Current income
 taxes              (1,893)  (1,210)    (683)    (7,500)   (3,996)  (3,504)
Maintenance
 expenditures      (14,475) (13,972)    (503)   (44,886)  (40,862)  (4,024)
Effect of foreign
 currency hedges
 to support
 Canadian dollar
 distributions       1,962    1,116      846      3,892     2,967      925
Amortization of
 gain on
 settlement of
 bond forward
 contracts              56       56        -        168       168        -
---------------------------------------------------------------------------
Free cash flow
 available for
 distribution(B)  $ 48,001 $ 38,762 $ 9,239   $ 120,858 $ 102,574 $ 18,284
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Maintenance and Growth Expenditures


                           Three months ended            Nine months ended
                                 September 30                 September 30
---------------------------------------------------------------------------
                      2007     2006    Change      2007     2006    Change
---------------------------------------------------------------------------

Total             $ 39,685 $ 34,640 $   5,045  $103,612 $ 99,679 $   3,933
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Maintenance:
Canada            $  4,111  $ 4,530 $    (419) $ 14,147 $ 13,237 $     910
U.S.                10,364    9,442       922    30,739   27,625     3,114
---------------------------------------------------------------------------
Total maintenance $ 14,475 $ 13,972 $     503  $ 44,886 $ 40,862 $   4,024
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Growth:
Canada            $  4,498  $ 4,888 $    (390) $ 16,236 $ 19,658 $  (3,422)
U.S.                20,712   15,780     4,932    42,490   39,159     3,331
---------------------------------------------------------------------------
Total growth      $ 25,210$ 20,668$   4,542$ 58,726$ 58,817 $     (91)
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Maintenance and growth expenditures include amounts accrued in respect of capital and landfill assets received for which payment of such amounts remains outstanding at the end of any period or year.

Maintenance Expenditures

For the three months ended September 30, the Canadian segment decline is due in large part to the timing of expenditures and is not attributable to one specific or collective group of expenditure(s) or asset class. The U.S. segment increase is due principally to a larger business base, which is the result of solid organic and acquisition growth, and increasing costs to purchase maintenance capital.

For the nine months ended September 30, the Canadian and U.S. segment increases are due principally to vehicle expenditures. The primary reasons for the increases are consistent with those outlined above for the U.S. segment for the three months ended.

Maintenance expenditures are generally concentrated in the first three quarters of each year, which may result in the declaration and payment of distributions that are in excess of free cash flow available for distribution(B) for these quarters. The Fund's historical cumulative payout ratio is 82.3% from inceptionto September 30, 2007.

Growth Expenditures

The Canadian segment decrease in growth expenditures for the three months ended is due largely to landfill cell construction, relative to consumption, where comparative net consumption exceeded construction. Higher landfill cell construction and municipal contract wins are the primary reasons for the increase in U.S. segment growth expenditures for the three months ended September 30.

Canadian segment residential contract wins which commenced in the nine months ended September 30, 2006 exceeded those that commenced in nine months ended September 30, 2007 resulting in a decline in comparative period over period growth expenditures. The timing of landfill cell construction expenditures and municipal contract wins are the primary reasons for the U.S. segment increase in growth expenditures.

Distributions

The following table summarizes various details of the Fund's 2007 and 2006 distributions:

---------------------------------------------------------------------------
                                            Nine months ended September 30
---------------------------------------------------------------------------
                                                                Percentage
                                                                  increase
                             Monthly       Annual         Total   in total
                        distribution distribution distributions distribut-
                           per trust    per trust       and PPS   ions and
                            unit and     unit and     dividends  PPS divi-
                 Period PPS dividend PPS dividend      declared      dends
---------------------------------------------------------------------------
2007  January September $     0.1515$     1.8180 $      92,099        8.9%
---------------------------------------------------------------------------
---------------------------------------------------------------------------
2006   August-September $     0.1515$     1.8180 $      19,814
           January-July $     0.1415 $     1.6980 $      64,769
---------------------------------------------------------------------------
Total                                             $      84,583

---------------------------------------------------------------------------
---------------------------------------------------------------------------
Long-term debt
Summarized details of the Fund's long-term debt facilities are as follows:


                                           Letters of credit
                                            (not reported as
                                              long-term debt
                         Facility drawn at            on the      Current
               Available      September 30,     Consolidated    available
                 lending              2007    Balance Sheets)    capacity
---------------------------------------------------------------------------
Canadian
 long-term
 debt
 facilities -
 stated in
 Canadian
 dollars
Senior
 secured
 debentures,
 series A    $    47,000 $          47,000 $               - $          -
Senior
 secured
 debentures,
 series B    $    58,000 $          58,000 $               - $          -
Revolving
 credit
 facility    $   150,000 $          68,000 $          24,691 $     57,309

U.S.
 long-term
 debt
 facilities -
 stated in
 U.S. dollars
Term loan    $   195,000 $         195,000 $               - $          -
Revolving
 credit
 facility    $   575,000 $         335,000 $         158,998 $     81,002
IRBs         $   104,000 $          96,500 $               - $      7,500


Effective August 31, 2007 and concurrent with the closing of the Winters Bros. acquisition, the Fund entered into a third amendment to its Amended and Restated Revolving Credit and Term Loan Agreement. The amendment makes available an additional U.S. $320,000 bringing the total available capacity under the U.S. revolving credit facility to U.S. $575,000. With the exception of certain modified financial covenants and the maintenance of interest rate swaps, all significant terms, including but not limited to pricing and maturity, under the U.S. revolving credit facility remain unchanged. The previous long-term debt facility required IESI to maintain interest rate swaps for not less than 60% of its variable rate interest payable on the term loan, but not more than 50% of the total drawn facility. This condition has been modified and now requires IESI to maintain not less than 40% of total funded debt on a fixed rate basis within 30 days from the third amendment date.

Both the Canadian and U.S. long-term debt facilities have an accordion feature which can increase the available capacity of the Canadian revolving credit facility from $150,000 to $200,000 and can increase the available capacity of the U.S term loan and revolving credit facility from U.S. $770,000, in aggregate, to U.S. $825,000, in aggregate, subject to certain restrictions.

Definitions of EBITDA and free cash flow available for distribution

(A) All references to "EBITDA" in this press release are to "income before the following" on the consolidated statement of operations and comprehensive loss. "Income before the following" excludes some or all of the following: "amortization, interest on long-term debt, financing costs, net gain or loss on sale of capital and landfill assets, net gain or loss on financial instruments, net foreign exchange gain or loss, write-off of deferred financing costs, other expenses, income taxes, and non-controlling interest". EBITDA is a term used by the Fund that does not have a standardized meaning prescribed by Canadian generally accepted accounting principles ("GAAP") and is therefore unlikely to be comparable to similar measures used by other issuers. EBITDA is a measure of the Fund's operating profitability, and by definition, excludes certain items as detailed above. These items are viewed by management as either non-cash (in the case of amortization, certain financing costs, write-off of deferred financing costs, net gain or loss on financial instruments, net foreign exchange gain or loss, and future income taxes) or non-operating (in the case of interest on long-term debt, net gain or loss on sale of capital and landfill assets, certain financing costs, other expenses, current income taxes, and non-controlling interest). EBITDA is a useful financial and operating metric for investors as it represents a starting point in the determination of free cash flow available for distribution(B). The underlying reasons for exclusion of each item are as follows:

Amortization -- as a non-cash item amortization has no impact on the determination of free cash flow available for distribution(B).

Interest on long-term debt -- interest on long-term debt is a function of the Fund's debt/equity mix and interest rates; as such, it reflects the treasury/financing activities of the Fund and represents a different class of expense than those included in EBITDA.

Financing costs -- financing costs are a function of the Fund's treasury/financing activities and represents a different class of expense than those included in EBITDA.

Net gain or loss on sale of capital and landfill assets -- the net gain or loss on sale of capital and landfill assets has no impact on the determination of free cash flow available for distribution(B), because the proceeds were either reinvested in other capital assets or used to repay the Fund's revolving credit facility.

Net gain or loss on financial instruments -- as non-cash items, gains or losses on financial instruments have no impact on the determination of free cash flow available for distribution(B).

Net foreign exchange gain or loss -- as non-cash items, foreign exchange gains or losses have no impact on the determination of free cash flow available for distribution(B).

Write-off of deferred financing costs -- as a non-cash item, write-off of deferred financing costs has no impact on the determination of free cash flow available for distribution(B).

Other expenses -- other expenses represent amounts paid to management of the Fund on the closing of the IESI acquisition and are not considered an expense indicative of continuing operations. Accordingly, other expenses represent a different class of expense than those included in EBITDA.

Income taxes -- income taxes are a function of tax laws and rates and are affected by matters which are separate from the daily operations of the Fund.

Non-controlling interest -- non-controlling interest represents a direct non-controlling equity interest in IESI through PPS holdings. Accordingly, non-controlling interest represents a different class of expense than those included in EBITDA.

(B) The Fund has adopted a measurement called "free cash flow available for distribution" to supplement net income as a measure of operating performance. Free cash flow available for distribution is a term which does not have a standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures used by other issuers. The objective of presenting this non-GAAP measure is to calculate the amount which is available for distribution to trust unitholders and participating preferred shareholders. Participating preferred share holdings are presented as non-controlling interest in the consolidated financial statements of the Fund; however, management of the Fund have elected to include the shareholdings of the participating preferred shareholders in the calculation of free cash flow available for distribution as participating preferred shares receive distributions that are economically equivalent to those received by trust unitholders and participating preferred shares are exchangeable on a one-to-one basis for trust units of the Fund. Details of the calculation are included in the "Other Performance Measures -- Free cash flow available for distribution(B)" section of the Fund's MD&A. Free cash flow available for distribution is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to cash flow as a measure of liquidity. All references to "free cash flow available for distribution" in this press release have the meaning set out in this note.

(C) Excess free cash flow available for distribution represents the result of free cash flow available for distribution(B) less distributions declared.

Forward-looking statements

This document may contain forward-looking statements relating to the Fund's operations or to the environment in which it operates, which are based on the Fund's operations, estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict, or are beyond the Fund's control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. These factors include those set forth in the Fund's Annual Information Form for the period ended December 31, 2006. Consequently, readers should not rely on such forward-looking statements. In addition, these forward-looking statements relate to the date on which they are made. Although the forward-looking statements contained herein are based on what management believes to be reasonable assumptions, the Fund cannot assure unitholders that actual results will be consistent with these forward looking statements, and the Fund disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The Fund, through its operating subsidiaries, is one of North America's largest full-service waste management companies, providing non-hazardous solid waste collection and disposal services for commercial, industrial, municipal and residential customers in five Canadian provinces and ten states in the United States. The Fund serves over 1.2 million customers with vertically integrated collection and disposal assets. The Fund's Canadian segment operates under the BFI Canada brand and is Canada's second largest full-service waste management company providing integrated non-hazardous solid waste collection and landfill disposal services in the provinces of British Columbia, Alberta, Manitoba, Ontario and Quebec. The Canadian segment operates one and owns and operates four landfills, carries on solid waste collection operations in 20 markets and operates four transfer collection stations, seven material recovery facilities and one landfill gas to energy facility. The Fund's U.S. operations provide integrated non-hazardous solid waste collection and landfill disposal services in two geographic regions: the south, consisting of various service areas in Texas, Louisiana, Oklahoma, Arkansas, Mississippi and Missouri, and the northeast, consisting of various service areas in New York, New Jersey, Pennsylvania and Maryland. The U.S. south and northeast segments operate in 38 markets and operates 32 transfer stations, 17 landfills and five material recycling facilities. The Fund's units are listed on the Toronto Stock Exchange under the symbol BFC.UN. For more information on the Fund, visit www.bficanada.com.

Management will hold a conference call on November 13, 2007 at 8:30 am (EDT) to discuss results for the three and nine months ended September 30, 2007. To access the call, participants should dial 416-644-3417 or 1-800-732-9307 at approximately 8:20 am (EDT). The conference call will also be webcast live at www.bficanada.com and subsequently archived on the BFI Canada website.

A rebroadcast of the call will be available until midnight on November 27, 2007. To access the rebroadcast, dial 416-640-1917 or 1-877-289-8525 and quote the reservation number 21250205#.



BFI CANADA INCOME FUND
Consolidated Balance Sheets
September 30, 2007 (unaudited) and December 31, 2006
 (in thousands of dollars)
---------------------------------------------------------------------
                                          September 30, December 31,
                                                   2007         2006
---------------------------------------------------------------------
ASSETS
CURRENT

 Cash and cash equivalents               $        13,269  $     9,275
 Accounts receivable                             124,763      102,350
 Due from non-controlling interest                     -        6,638
 Other receivables                                   782        1,737
 Prepaid expenses                                 18,827       11,665
---------------------------------------------------------------------
                                                 157,641      131,665

OTHER RECEIVABLES                                    658        1,517

FUNDED LANDFILL POST-CLOSURE COSTS                 5,517        4,142

INTANGIBLES                                      135,918       77,204

GOODWILL                                         602,746      481,334

DEFERRED COSTS                                     9,193        4,051

DEFERRED FINANCING COSTS                               -        7,015

CAPITAL ASSETS                                   395,595      322,372

LANDFILL ASSETS                                  643,850      730,290

OTHER ASSETS                                       4,603        7,070

FUTURE INCOME TAX ASSETS                           3,639            -
---------------------------------------------------------------------
                                         $     1,959,360  $ 1,766,660
---------------------------------------------------------------------
---------------------------------------------------------------------

LIABILITIES

CURRENT
 Accounts payable                        $        51,063  $    64,284
 Accrued charges                                  62,889       57,318
 Distribution payable                             10,409        9,907
 Income taxes payable                              2,232        1,280
 Deferred revenues                                15,937       10,212
 Current portion of long-term debt                     -           50
 Landfill closure and post-closure costs           3,827        5,824
---------------------------------------------------------------------

                                                 146,357      148,875

LONG-TERM DEBT                                   797,182      543,454

LANDFILL CLOSURE AND POST-CLOSURE COSTS           59,762       58,711

OTHER LIABILITIES                                  8,619          383

FUTURE INCOME TAX LIABILITIES                     43,694       31,922
---------------------------------------------------------------------
                                               1,055,614      783,345
---------------------------------------------------------------------


NON-CONTROLLING INTEREST                         254,953      282,026

UNITHOLDERS' EQUITY                              648,793      701,289
---------------------------------------------------------------------
                                         $     1,959,360  $ 1,766,660
---------------------------------------------------------------------
---------------------------------------------------------------------

BFI CANADA INCOME FUND
Consolidated Statements of Operations and Comprehensive Loss
For the periods ended September 30, 2007 and September 30, 2006
 (unaudited - in thousands of dollars, except net income per
 trust unit amounts)
-------------------------------------------------------------------------
                                 Three months ended    Nine months ended
-------------------------------------------------------------------------
                                     2007      2006       2007      2006
-------------------------------------------------------------------------
REVENUES                        $ 238,513 $ 199,981  $ 666,328 $ 571,500
-------------------------------------------------------------------------
EXPENSES
 OPERATING                        135,740   111,991    380,258   324,433

 SELLING, GENERAL AND
  ADMINISTRATION                   26,705    23,535     79,896    71,385
-------------------------------------------------------------------------

INCOME BEFORE THE FOLLOWING        76,068    64,455    206,174   175,682

AMORTIZATION                       41,490    38,587    120,780   110,831

INTEREST ON LONG-TERM DEBT         10,775     8,767     29,140    24,996

FINANCING COSTS                     6,328         -      7,192        79

NET GAIN ON SALE OF CAPITAL
 ASSETS                              (109)      (54)    (1,343)     (409)

NET LOSS (GAIN) ON FINANCIAL
 INSTRUMENTS                        3,674     3,260     (1,044)     (539)

NET FOREIGN EXCHANGE (GAIN)
 LOSS                                (302)     (809)    14,802     6,051

OTHER EXPENSES                          -        28          5       187
-------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES AND
 NON-CONTROLLING INTEREST          14,212    14,676     36,642    34,486
-------------------------------------------------------------------------
INCOME TAX EXPENSE (RECOVERY)
 Current                            1,893     1,210      7,500     3,996
 Future                               254       582     (4,832)    2,570
-------------------------------------------------------------------------
                                    2,147     1,792      2,668     6,566
-------------------------------------------------------------------------
INCOME BEFORE NON-CONTROLLING
 INTEREST                          12,065    12,884     33,974    27,920

NON-CONTROLLING INTEREST            1,962     2,427      5,680     5,345
-------------------------------------------------------------------------

NET INCOME                         10,103    10,457     28,294    22,575
-------------------------------------------------------------------------
OTHER COMPREHENSIVE LOSS
 Foreign currency translation
  adjustment                      (41,959)      619    (92,452)  (23,823)
-------------------------------------------------------------------------

COMPREHENSIVE LOSS              $ (31,856)$  11,076  $ (64,158)$  (1,248)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Net income per trust unit,
 basic and diluted              $    0.18 $    0.20  $    0.50 $    0.42

Weighted average number of
 trust units outstanding
 (thousands), basic                57,545    53,617     56,227    53,469

Weighted average number of
 trust units outstanding
 (thousands), diluted              68,706    65,391     67,499    65,391


BFI CANADA INCOME FUND
Consolidated Statements of Cash Flows
For the periods ended September 30, 2007 and September 30, 2006
 (unaudited - in thousands of dollars)
---------------------------------------------------------------------------
                                    Three months ended   Nine months ended
---------------------------------------------------------------------------
                                         2007     2006      2007      2006
---------------------------------------------------------------------------

NET INFLOW (OUTFLOW) OF CASH
RELATED TO THE FOLLOWING ACTIVITIES
OPERATING
 Net income                          $ 10,103 $ 10,457  $ 28,294  $ 22,575
 Items not affecting cash
  Amortization of intangibles           6,260    4,840    16,594    14,565
  Amortization of deferred financing

   costs                                    -      337         -     1,012
  Amortization of capital assets       16,555   14,281    47,996    41,721
  Amortization of landfill assets      18,675   19,129    56,190    53,533
  Net gain on sale of capital assets     (109)     (54)   (1,343)     (409)
  Write-off of deferred costs              31       91        99       418
  Write-off of deferred financing
   costs                                    -        -         -        79
  Accretion of landfill closure and
   post-closure costs                     806      752     2,367     2,196
  Unrealized foreign exchange (gain)
   loss                                (6,621)     (48)    9,683     8,096
  Future income taxes                     254      582    (4,832)    2,570
  Net loss (gain) on financial
   instruments                          3,674    3,260    (1,044)     (539)
  Non-controlling interest              1,962    2,427     5,680     5,345
 Landfill closure and post-closure
  expenditures                         (1,412)  (2,325)   (2,707)  (11,533)
---------------------------------------------------------------------------
                                       50,178   53,729   156,977   139,629
 Changes in non-cash working capital
  items                                 6,182   (1,813)  (18,356)  (12,114)
---------------------------------------------------------------------------
Cash generated from operating
 activities                            56,360   51,916   138,621   127,515
---------------------------------------------------------------------------
INVESTING
 Acquisitions                        (326,083) (16,050) (363,536)  (19,728)
 Investment in other receivables            -        -      (400)   (1,484)
 Proceeds from other receivables          308      313     2,164     1,131
 Funded landfill post-closure costs      (438)    (925)   (1,080)   (2,123)
 Purchase of capital assets           (25,244) (19,867)  (65,641)  (60,195)
 Purchase of landfill assets          (16,510) (14,736)  (42,457)  (39,374)
 Proceeds from the sale of capital
  assets                                  274      341     1,852     1,141
 Investment in deferred costs          (3,058)    (514)   (4,623)   (1,118)
---------------------------------------------------------------------------
Cash utilized in investing
 activities                          (370,751) (51,438) (473,721) (121,750)
---------------------------------------------------------------------------
FINANCING
 Payment of deferred financing costs        -     (277)        -      (998)
 Proceeds from long-term debt         367,880   71,069   513,636   152,137
 Repayment of long-term debt          (22,209) (39,386) (171,460)  (80,370)
 Issuance of trust units, net of
  issuance costs                            -       (1)   87,579       (46)
 Distributions paid to trust
  unitholders and participating
  preferred shareholders              (31,228) (28,375)  (91,597)  (83,929)
---------------------------------------------------------------------------
Cash generated from (utilized in)
 financing activities                 314,443    3,030   338,158   (13,206)
---------------------------------------------------------------------------
Effect of foreign exchange changes
 on foreign cash and cash
 equivalents                              208       13       936       236
---------------------------------------------------------------------------
NET CASH INFLOW(OUTFLOW)                  260    3,521     3,994    (7,205)
CASH AND CASH EQUIVALENTS,
 BEGINNING OF PERIOD OR YEAR           13,009    3,416     9,275    14,142
---------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF
 PERIOD                              $ 13,269 $  6,937  $ 13,269  $  6,937
---------------------------------------------------------------------------
---------------------------------------------------------------------------



BFI CANADA INCOME FUND
Consolidated Statements of Unitholders' Equity
For the periods ended September 30, 2007 and September 30, 2006
 (unaudited - in thousands of dollars)
---------------------------------------------------------------------------
                                  Three months ended     Nine months ended
---------------------------------------------------------------------------
---------------------------------------------------------------------------
                                     2007        2006       2007      2006
---------------------------------------------------------------------------
CONTRIBUTED EQUITY
 Trust units, beginning of
  period or year              $ 1,006,269 $   908,222 $  908,221 $ 891,070
 Issuance of trust units, net
  of issuance costs
  and related tax effect,
  during the period                     -          (1)    89,431       (46)
 Trust units issued on
  exchange of PPSs, during the
  period                                -           -      8,617    17,197
---------------------------------------------------------------------------
 Trust units, end of period     1,006,269     908,221  1,006,269   908,221
---------------------------------------------------------------------------
---------------------------------------------------------------------------
 Class A units, beginning of
  period or year                        -           -          -         -
 Class A units issued, during
  the period                            -           -          -         -
---------------------------------------------------------------------------
 Class A units, end of period           -           -          -         -
---------------------------------------------------------------------------
---------------------------------------------------------------------------
 Treasury units, beginning of
  period or year                        -           -          -         -
 Trust units acquired by the
  U.S. LTIP, during the period          -           -     (1,698)   (1,281)
 Deferred compensation
  obligation, during the
  period                                -           -      1,698     1,281
---------------------------------------------------------------------------
 Treasury units, end of
  period                                -           -          -         -
---------------------------------------------------------------------------
TOTAL CONTRIBUTED EQUITY       1,006,269     908,221   1,006,269   908,221
---------------------------------------------------------------------------

ACCUMULATED NET INCOME
 Accumulated net income,
  beginning of period or year     95,475      66,322      86,947    54,204
 Net income, during the
  period                          10,103      10,457      28,294    22,575
 Transition adjustment,
  during the period                    -           -      (9,663)        -
---------------------------------------------------------------------------
ACCUMULATED NET INCOME, END
 OF PERIOD                       105,578      76,779     105,578    76,779
---------------------------------------------------------------------------
---------------------------------------------------------------------------

ACCUMULATED DISTRIBUTIONS
 Accumulated distributions,
  beginning of period or year   (311,560)   (212,820)   (260,991) (167,270)
 Distributions declared,
  during the period              (26,154)    (23,802)    (76,723)  (69,352)
---------------------------------------------------------------------------
ACCUMULATED DISTRIBUTIONS,
 END OF PERIOD                  (337,714)   (236,622)   (337,714) (236,622)
---------------------------------------------------------------------------
DEFICIT                         (232,136)   (159,843)   (232,136) (159,843)
---------------------------------------------------------------------------
---------------------------------------------------------------------------

ACCUMULATED OTHER
 COMPREHENSIVE LOSS
  Accumulated other
   comprehensive loss,
   beginning
   of period or year             (83,381)    (56,909)    (32,888)  (32,467)
  Foreign currency translation
   adjustment, during the
   period                        (41,959)        619     (92,452)  (23,823)
---------------------------------------------------------------------------
ACCUMULATED OTHER
 COMPREHENSIVE LOSS, END OF
 PERIOD                         (125,340)    (56,290)   (125,340)  (56,290)
---------------------------------------------------------------------------
DEFICIT AND ACCUMULATED OTHER
 COMPREHENSIVE LOSS, END OF
 PERIOD                         (357,476)   (216,133)   (357,476) (216,133)
---------------------------------------------------------------------------
UNITHOLDERS' EQUITY           $  648,793  $  692,088  $  648,793 $ 692,088
---------------------------------------------------------------------------
---------------------------------------------------------------------------

For more information, contact:
BFI Canada Income Fund
Chaya Cooperberg
Director, Investor Relations and Corporate Communications
(416) 401-7729
chaya.cooperberg@bficanada.com.
Web: www.bficanada.com.

Just Released!

Click for details

Focus on Your Market...

Click for details

Updated for 2011!

Click for details