Date: July 29, 2009
Source: IESI-BFC Ltd.
IESI-BFC Ltd. (the "Company") (TSX: BIN) (NYSE: BIN) reported financial results for the three and six months ended June 30, 2009. All amounts are in thousands of U.S. dollars, with the exception of per share or trust unit and participating preferred share ("PPS") amounts, unless otherwise stated.
Management Commentary
Revenue totalled $253.7 million in the quarter compared with $277.6 million in the year ago period. Holding foreign currency exchange ("FX") constant with the comparative period, revenue in the second quarter would have totalled $267.9 million. Operating income was $31.3 million compared with $31.3 million in the second quarter of 2008 and would have been $34.3 million, holding FX constant, representing an increase of 9.5% over the year ago period. Operating income before amortization, or EBITDA(A), for the quarter was $72.5 million, or 28.6% of revenue, compared to $77.0 million, or 27.7% of revenue, in the second quarter of 2008. Holding FX constant, EBITDA(A) for the second quarter of 2009 would have been $77.5 million.
Net income in the quarter was $15.1 million, or $0.18 per share on a weighted average diluted basis of 81.9 million shares. Before the impact of foreign currency translation, net income in the quarter was $16.8 million or $0.20 per share. In the period a year ago, the Company reported net income of $17.4 million, or $0.25 on a weighted average diluted basis of 68.7 million shares. The 19.2% second quarter increase in our weighted average diluted share count is due to equity offerings completed in March 2009 and June 2009.
Organic growth for the three months ended June 30, 2009 increased 0.7% in Canada (consisting of a 3.3% core price increase, partially offset by decreases of 1.1% in volume, 1.1% in fuel surcharges and 0.4% in recycling and other pricing) and decreased 7.4% in the U.S. (consisting of a 2.4% core price increase offset by decreases of 4.4% in volume, 3.0% in fuel surcharges and 2.4% in recycling and other pricing).
"We are very pleased with the results of our second quarter which continued to demonstrate the positive impact of our market-focused growth strategies," said Keith Carrigan, Vice Chairman and Chief Executive Officer, IESI-BFC Ltd. "In spite of the recessionary climate, we increased our operating margins and achieved an improvement in EBITDA(A) over the same quarter a year ago, excluding the impact of foreign currency translation. Additionally, we achieved an increase in revenues in Canada in the quarter, before the impact of foreign exchange. While it remains a challenging operating environment, we saw encouraging signs in our markets that suggest a stabilization of waste volumes on a sequential basis."
Mr. Carrigan continued, "With a debt-to-EBITDA(A) ratio below 2.3 times on a consolidated basis and our strong free cash flow(B) profile, we are well positioned to create shareholder value by continuing to grow organically and through strategic acquisitions, while also paying a quarterly dividend."
For the six months ended June 30, 2009, revenue was $477.6 million, compared with revenues of $521.0 million in the year ago period. Holding FX constant, year-to-date revenue would have been $508.9 million. Operating income was $56.4 million compared with $56.9 million in the same period in 2008. Year-to-date operating income would have been $62.4 million, an increase of 9.6% over 2008, holding FX constant. EBITDA(A) for the year-to-date period was $135.1 million compared to $145.3 million in 2008 and would have been $145.9 million holding FX constant.
For the six months ended June 30, 2009, net income was $24.7 million, or $0.32 per weighted average diluted share, compared with $28.8 million or $0.42 per share in the year ago period.
Financial and Other Highlights
For the Three and Six Months Ended June 30, 2009
- For the quarter, core price increased 3.3% in Canada and 2.4% in the U.S.
- For the quarter, volumes decreased (1.1%) in Canada and (4.4%) in the U.S.
- Year to date, core price increased 3.5% in Canada and 2.6% in the U.S.
- Year to date, volumes decreased (1.6%) in Canada and (4.4%) in the U.S.
- Raised gross common share proceeds of $149,500 through a U.S. public offering in June 2009
- Raised gross common share proceeds of $72,397 through a bought deal offering in Canada in March 2009
- Applied the net proceeds from both offerings, approximately $209,700, to reduce U.S. long-term debt advances
- Secured a 10 year expansion permit at our Lachenaie landfill
- At June 30, 2009, our funded debt to EBITDA(A) ratios, calculated in accordance with our Canadian and U.S. long-term debt facilities, are 1.90 and 2.64 times, respectively.
Change in Reporting Currency and Generally Accepted Accounting Principles
In connection with our listing on the New York Stock Exchange ("NYSE") and U.S. public offering, we have elected to report our financial results in U.S. dollars. Accordingly, all comparative financial information contained in this press release has been recast from thousands of Canadian to U.S. dollars, unless otherwise stated.
Electing to report our financial position and results of operations in U.S. dollars reduces fluctuations in our reported amounts as a significant portion of our assets, liabilities and operations are resident or conducted in the U.S., in U.S. dollars.
We have also elected to report our financial results in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") to improve the comparability of our financial information with our peers, who are predominantly U.S. publicly listed companies.
Foreign Currency Exchange Rates
Our consolidated financial position and operating results have been translated to U.S. dollars applying the following foreign currency exchange rates:
2009 2008
----------------------------------------------------------------------------
Conso- Consolidated Consolidated
lidated Statement of Consolidated Statement of
Balance Operations and Balance Operations and
Sheet Comprehensive Income Sheet Comprehensive Income
----------------------------------------------------------------------------
Cumulative Cumulative
Current Average Average Current Average Average
----------------------------------------------------------------------------
December 31 $ 0.817 $ 0.937
March 31 $ 0.794 $ 0.803 $ 0.803 $ 0.973 $ 0.996 $ 0.996
June 30 $ 0.860 $ 0.857 $ 0.829 $ 0.982 $ 0.990 $ 0.993
Financial Highlights
(in thousands of U.S. dollars, except per weighted average share or trust
unit amounts, unless otherwise stated)
Three months ended June 30 Six months ended June 30
----------------------------------------------------------------------------
2009 2008 2009 2008
----------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
Operating results
Revenues $ 253,700 $ 277,613 $ 477,593 $ 520,962
Operating expenses 148,597 168,745 279,774 315,292
Selling, general
and administrative
("SG&A") 32,600 31,881 62,677 60,408
Amortization 41,154 45,658 78,756 88,369
----------------------------------------------------------------------------
Operating income 31,349 31,329 56,386 56,893
Interest on
long-term debt 8,766 13,015 18,395 26,744
Net loss (gain) on
sale of capital
and landfill
assets 19 (126) (115) (86)
Net foreign
exchange loss
(gain) 93 1 177 (620)
Net (gain) loss on
financial
instruments (1,701) (5,485) (1,171) 3,525
Conversion costs 115 - 115 -
Other expenses 35 26 65 57
----------------------------------------------------------------------------
Income before
income taxes 24,022 23,898 38,920 27,273
Income tax expense
(recovery) 8,917 6,454 14,176 (1,493)
----------------------------------------------------------------------------
Net income $ 15,105 $ 17,444 $ 24,744 $ 28,766
----------------------------------------------------------------------------
Net income per
weighted average
share or trust
unit, basic $ 0.19 $ 0.25 $ 0.33 $ 0.42
Net income per
weighted average
share or trust
unit, diluted $ 0.18 $ 0.25 $ 0.32 $ 0.42
Weighted average
number of shares
or trust units
outstanding
(thousands), basic 70,809 57,569 65,414 57,569
Weighted average
number of shares
or trust units
outstanding
(thousands),
diluted 81,946 68,706 76,551 68,706
Replacement and
growth
expenditures
Replacement
capital and
landfill purchases
("replacement
expenditures") $ 16,983 $ 19,946 $ 29,772 $ 29,372
Growth capital and
landfill purchases
("growth
expenditures") 22,234 17,701 29,942 30,130
----------------------------------------------------------------------------
Total replacement
and growth
expenditures $ 39,217 $ 37,647 $ 59,714 $ 59,502
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating and free
cash flow(B)
Cash generated
from operating
activities $ 66,456 $ 56,003 $ 116,052 $ 99,294
Free cash flow(B) $ 21,476 $ 25,115 $ 52,100 $ 56,668
Free cash flow(B)
per weighted
average share or
trust unit
outstanding,
diluted $ 0.26 $ 0.37 $ 0.68 $ 0.82
Dividends and
distributions
Dividends and
distributions
declared (shares
or trust units) $ 17,495 $ 25,908 $ 31,014 $ 51,965
Dividends declared
(participating
preferred shares
("PPSs")) 2,381 5,013 4,617 10,055
----------------------------------------------------------------------------
Total dividends
and distributions
declared $ 19,876 $ 30,921 $ 35,631 $ 62,020
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total dividends or
distributions
declared per
weighted average
share or trust
unit, diluted $ 0.24 $ 0.45 $ 0.47 $ 0.90
Foreign Currency Exchange Impact on Consolidated Results
The following tables have been prepared to assist readers in assessing the impact of FX on select consolidated results for the three and six months ended June 30, 2009.
----------------------------------------------------------------------------
Three months ended
----------------------------------------------------------------------------
June 30, June 30, June 30, June 30, June 30,
2008 2009 2009 2009 2009
----------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
(organic,
acquisition (holding FX
and constant
other non- with the
(as operating comparative (as
reported) changes) period) (FX impact) reported)
----------------------------------------------------------------------------
Consolidated
Statement of
Operations
Revenues $ 277,613 $ (9,676) $ 267,937 $ (14,237) $ 253,700
Operating
expenses 168,745 (12,813) 155,932 (7,335) 148,597
SG&A 31,881 2,587 34,468 (1,868) 32,600
Amortization 45,658 (2,430) 43,228 (2,074) 41,154
----------------------------------------------------------------------------
Operating
income 31,329 2,980 34,309 (2,960) 31,349
Interest on
long-term debt 13,015 (3,880) 9,135 (369) 8,766
Net (gain)
loss on sale
of capital and
landfill
assets (126) 147 21 (2) 19
Net foreign
exchange loss 1 92 93 - 93
Net gain on
financial
instruments (5,485) 3,778 (1,707) 6 (1,701)
Conversion
costs - 138 138 (23) 115
Other expenses 26 9 35 - 35
----------------------------------------------------------------------------
Income before
income taxes 23,898 2,696 26,594 (2,572) 24,022
----------------------------------------------------------------------------
Net income tax
expense 6,454 3,358 9,812 (895) 8,917
----------------------------------------------------------------------------
Net income $ 17,444 $ (662) $ 16,782 $ (1,677) $ 15,105
----------------------------------------------------------------------------
----------------------------------------------------------------------------
EBITDA(A) $ 76,987 $ 550 $ 77,537 $ (5,034) $ 72,503
Free cash
flow(B) $ 25,114 $ (865) $ 24,249 $ (2,773) $ 21,476
----------------------------------------------------------------------------
Six months ended
----------------------------------------------------------------------------
June 30, June 30, June 30, June 30, June 30,
2008 2009 2009 2009 2009
----------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
(organic,
acquisition (holding FX
and constant
other non- with the
(as operating comparative (as
reported) changes) period) (FX impact) reported)
----------------------------------------------------------------------------
Consolidated
Statement of
Operations
Revenues $ 520,962 $ (12,080) $ 508,882 $ (31,289) $ 477,593
Operating
expenses 315,292 (19,322) 295,970 (16,196) 279,774
SG&A 60,408 6,572 66,980 (4,303) 62,677
Amortization 88,369 (4,816) 83,553 (4,797) 78,756
----------------------------------------------------------------------------
Operating
income 56,893 5,486 62,379 (5,993) 56,386
Interest on
long-term debt 26,744 (7,368) 19,376 (981) 18,395
Net gain on
sale of
capital and
landfill
assets (86) (48) (134) 19 (115)
Net foreign
exchange
(gain) loss (620) 790 170 7 177
Net loss
(gain) on
financial
instruments 3,525 (4,683) (1,158) (13) (1,171)
Conversion
costs - 138 138 (23) 115
Other expenses 57 8 65 - 65
----------------------------------------------------------------------------
Income before
income taxes 27,273 16,649 43,922 (5,002) 38,920
----------------------------------------------------------------------------
Net income tax
expense (1,493) 17,379 15,886 (1,710) 14,176
----------------------------------------------------------------------------
Net income $ 28,766 $ (730) $ 28,036 $ (3,292) $ 24,744
----------------------------------------------------------------------------
----------------------------------------------------------------------------
EBITDA(A) $ 145,262 $ 670 $ 145,932 $ (10,790) $ 135,142
Free cash
flow(B) $ 56,668 $ 1,125 $ 57,793 $ (5,693) $ 52,100
Conversion
Pursuant to the plan of arrangement, the conversion of the BFI Canada Income Fund (the "Fund") trust structure to a corporation resulted in unitholder's of the Fund receiving one common share of BFI Canada Ltd., predecessor to IESI-BFC Ltd. ("IESI-BFC"), 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 IESI-BFC 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 remain outstanding and exchangeable into common shares of IESI-BFC on a one for one basis, instead of trust units of the Fund. These exchanges did not constitute a change of control such that the consolidated financial statements have been prepared applying continuity of interests accounting. With the exception of the December 31, 2008 consolidated balance sheet, the comparativefigures presented herein are those of the Fund.
Management's Discussion
(all amounts are in thousands of U.S. dollars, except per share or trust unit, PPS, and foreign currency exchange rate amounts, unless otherwise stated)
Segment Highlights
Three months ended June 30
----------------------------------------------------------------------------
2008 2009 Change 2009 Change
----------------------------------------------------------------------------
(2009
holding (2009 as
FX constant reported
(holding less less
(as FX 2008 as (as 2008 as
reported) constant) reported) reported) reported)
----------------------------------------------------------------------------
Revenues $ 277,613 $ 267,937 $ (9,676) $ 253,700 $ (23,913)
----------------------------------------------------------------------------
Canada $ 99,807 $ 101,425 $ 1,618 $ 87,188 $ (12,619)
U.S. south $ 87,392 $ 83,899 $ (3,493) $ 83,899 $ (3,493)
U.S.
northeast $ 90,414 $ 82,613 $ (7,801) $ 82,613 $ (7,801)
Operating
expenses $ 168,745 $ 155,932 $ (12,813) $ 148,597 $ (20,148)
----------------------------------------------------------------------------
Canada $ 54,226 $ 52,322 $ (1,904) $ 44,987 $ (9,239)
U.S. south $ 55,798 $ 52,015 $ (3,783) $ 52,015 $ (3,783)
U.S.
northeast $ 58,721 $ 51,595 $ (7,126) $ 51,595 $ (7,126)
SG&A $ 31,881 $ 34,468 $ 2,587 $ 32,600 $ 719
----------------------------------------------------------------------------
Canada $ 11,693 $ 13,485 $ 1,792 $ 11,617 $ (76)
U.S. south $ 10,963 $ 11,165 $ 202 $ 11,165 $ 202
U.S.
northeast $ 9,225 $ 9,818 $ 593 $ 9,818 $ 593
EBITDA(A) $ 76,987 $ 77,537 $ 550 $ 72,503 $ (4,484)
----------------------------------------------------------------------------
Canada $ 33,888 $ 35,618 $ 1,730 $ 30,584 $ (3,304)
U.S. south $ 20,631 $ 20,719 $ 88 $ 20,719 $ 88
U.S.
northeast $ 22,468 $ 21,200 $ (1,268) $ 21,200 $ (1,268)
Six months ended June 30
----------------------------------------------------------------------------
2008 2009 Change 2009 Change
----------------------------------------------------------------------------
(2009
holding (2009 as
FX constant reported
(holding less less
(as FX 2008 as (as 2008 as
reported) constant) reported) reported) reported)
----------------------------------------------------------------------------
Revenues $ 520,962 $ 508,882 $ (12,080) $ 477,593 $ (43,369)
----------------------------------------------------------------------------
Canada $ 185,225 $ 189,460 $ 4,235 $ 158,171 $ (27,054)
U.S. south $ 166,882 $ 163,946 $ (2,936) $ 163,946 $ (2,936)
U.S.
northeast $ 168,855 $ 155,476 $ (13,379) $ 155,476 $ (13,379)
Operating
expenses $ 315,292 $ 295,970 $ (19,322) $ 279,774 $ (35,518)
----------------------------------------------------------------------------
Canada $ 100,580 $ 98,071 $ (2,509) $ 81,875 $ (18,705)
U.S. south $ 106,990 $ 99,837 $ (7,153) $ 99,837 $ (7,153)
U.S.
northeast $ 107,722 $ 98,062 $ (9,660) $ 98,062 $ (9,660)
SG&A $ 60,408 $ 66,980 $ 6,572 $ 62,677 $ 2,269
----------------------------------------------------------------------------
Canada $ 21,925 $ 26,058 $ 4,133 $ 21,755 $ (170)
U.S. south $ 20,911 $ 22,298 $ 1,387 $ 22,298 $ 1,387
U.S.
northeast $ 17,572 $ 18,624 $ 1,052 $ 18,624 $ 1,052
EBITDA(A) $ 145,262 $ 145,932 $ 670 $ 135,142 $ (10,120)
----------------------------------------------------------------------------
Canada $ 62,720 $ 65,331 $ 2,611 $ 54,541 $ (8,179)
U.S. south $ 38,981 $ 41,811 $ 2,830 $ 41,811 $ 2,830
U.S.
northeast $ 43,561 $ 38,790 $ (4,771) $ 38,790 $ (4,771)
Revenues
Gross revenue by service type
Three months ended June 30,
2009
----------------------------------------------------------------------------
Canada - stated Canada - U.S. -
in Canadian percentage of percentage of
dollars gross revenues U.S. gross revenues
----------------------------------------------------------------------------
Commercial $ 39,867 33.3% $ 46,130 23.8%
Industrial 19,746 16.5% 26,557 13.7%
Residential 15,933 13.3% 38,908 20.1%
Transfer and
disposal 33,809 28.2% 74,192 38.3%
Recycling and
other 10,512 8.7% 8,048 4.1%
----------------------------------------------------------------------------
Gross revenues 119,867 100.0% 193,835 100.0%
Intercompany (17,477) (27,323)
----------------------------------------------------------------------------
Revenues $ 102,390 $ 166,512
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Six months ended June 30,
2009
----------------------------------------------------------------------------
Canada - stated Canada - U.S. -
in Canadian percentage of percentage of
dollars gross revenues U.S. gross revenues
----------------------------------------------------------------------------
Commercial $ 78,621 36.0% $ 92,025 24.8%
Industrial 36,776 16.8% 51,662 13.9%
Residential 29,818 13.6% 76,833 20.7%
Transfer and
disposal 57,651 26.4% 135,696 36.6%
Recycling and
other 15,759 7.2% 14,631 4.0%
----------------------------------------------------------------------------
Gross revenues 218,625 100.0% 370,847 100.0%
Intercompany (27,839) (51,425)
----------------------------------------------------------------------------
Revenues $ 190,786 $ 319,422
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Gross revenue growth components - expressed in percentages and excluding
foreign currency exchange
Three months ended June Six months ended June
30, 2009 30, 2009
----------------------------------------------------------------------------
Canada U.S. Canada U.S.
----------------------------------------------------------------------------
Price
Core price 3.3 2.4 3.5 2.6
Fuel surcharges (1.1) (3.0) (0.8) (2.1)
Recycling and other (0.4) (2.4) (0.6) (2.5)
----------------------------------------------------------------------------
Total price 1.8 (3.0) 2.1 (2.0)
Volume (1.1) (4.4) (1.6) (4.4)
----------------------------------------------------------------------------
Total organic gross
revenue growth
(decline) 0.7 (7.4) 0.5 (6.4)
Acquisitions 1.5 2.1 2.5 2.1
----------------------------------------------------------------------------
Total gross revenue
growth (decline) 2.2 (5.3) 3.0 (4.3)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended
Excluding the impact of foreign currency exchange, the increase in Canadian segment gross revenues is due principally to core price and acquisition growth. Core price growth includes the recovery of recycling and commodity price declines. The decline in fuel surcharges is due to the comparative decrease in fuel costs while the comparative decline attributable to collected volumes is due principally to lower collected industrial waste.
U.S. south segment gross revenues declined. The comparative decline in fuel surcharges was partially offset by core price growth. The decline in fuel surcharges is due to the comparative decline in fuel costs. Lower construction and demolition volumes also contributed to the decline, partially offset by contributions from acquisitions.
Gross revenues in the U.S. northeast segment declined. Lower industrial collection volumes coupled with lower recycling and other pricing are the primary contributors to the decline. Acquisitions, coupled with core price increases partially offset the aforementioned. The balance of the change is attributable to declining fuel surcharges. We are encouraged that our performance in the U.S. northeast segment has stabilized.
Six months ended
Excluding the impact of foreign currency exchange, the increase in Canadian segment gross revenues attributable to core price, acquisition, and fuel surcharges are consistent with the reasons outlined above for the three months ended. The decline in volumes is due in large part to lower third party waste volumes accepted at our landfills. Recycling and other pricing declines represent the balance of the change.
U.S. south segment gross revenues declined. The comparative year to date decline in fuel surcharges outpaced strong core pricing growth. Lower construction and demolition volumes and recycling and other pricing also contributed to the decline, partially offset by contributions from acquisitions.
Gross revenues in our U.S. northeast segment declined. Lower industrial collection, transfer and disposal volumes and recycling commodity prices contributed to the decline year to date. Acquisitions, coupled with core price increases, partially offset the aforementioned.
Operating expenses
Three months ended
Excluding the impact of foreign currency exchange, the decline in Canadian segment operating expenses is due to lower vehicle operating costs, largely due to a decline in comparative fuel costs. Higher labour expense, due in part to acquisitions, partially offset declines in vehicle operating costs.
Lower fuel costs is the primary reason for our U.S. south segment's decline in operating costs, which was partially offset by higher insurance claims costs. Lower disposal, transportation and vehicle operating costs are the primary reasons for the comparative decline in our U.S. northeast segment. Lower disposal costs are due in large part to the economic slow down in this region, while lower transportation and vehicle operating costs are due to the comparative decline in fuel costs.
Six months ended
Foreign currency exchange is the primary reason for the year to date decline in Canadian segment operating costs. Lower fuel costs also contributed to the decline in Canadian segment operating expenses, partially offset by higher labour expense, due in part to acquisitions.
Year to date our U.S. south segment benefited from lower fuel costs resulting in lower vehicle operating costs. The balance of the change is attributable to higher insurance claims costs. Lower year to date operating costs, for our U.S. northeast segment, are consistent with the reasons outlined above for the three months ended.
SG&A expenses
Three months ended
Canadian segment SG&A expense is largely unchanged. However, the impact of foreign currency exchange was almost entirely offset by higher salaries. Higher salaries are due in part to higher sales staffing levels.
Higher professional fees are the primary reasons for the rise in our U.S. south and northeast segment SG&A expense coupled with higher salary expenses due to higher sales staffing levels.
Six months ended
Changes in SG&A expense, for all segments, are consistent with the reasons outlined above for the three months ended, with the exception of an increase resulting from fair value changes in stock options recorded in our Canadian segment.
Non-controlling interest
With the adoption of FASB's Financial Accounting Standard No. 160, "Non-controlling Interests in Consolidated Financial Statements" ("SFAS 160"), which became effective January 1, 2009, we changed the presentation of non-controlling interests from mezzanine equity to equity on our 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 (loss) income are attributed to shareholders' equity and non-controlling interest. Adopting this section affects our determination of net income presented in the consolidated statement of operations and comprehensive (loss) income, the presentation of net income and non-controlling interest in the consolidated statement of cash flows, and the presentation of non-controlling interest in the consolidated statement of equity.
Free cash flow (B)
Purpose and objective
The purpose of presenting this non-GAAP measure is to align our disclosure with other U.S. publicly listed companies in our industry. Investors and analysts use this calculation as a measure of our valuation and liquidity. We use this non-GAAP measure to assess our performance relative to other U.S. publicly listed companies, to assess our primary sources and uses of cash flow, and to assess our ability to sustain our dividend policy.
Free cash flow (B) - cash flow approach
Three months ended June 30 Six months ended June 30
----------------------------------------------------------------------------
2009 2008 Change 2009 2008 Change
----------------------------------------------------------------------------
Cash
generated
from
operating
activities
(per the
statement
of cash
flows) $ 66,456 $ 56,003 $ 10,453 $ 116,052 $ 99,294 $ 16,758
----------------------------------------------------------------------------
Operating
Changes in
non-cash
working
capital
items (6,324) 6,543 (12,867) (4,930) 18,769 (23,699)
Capital
and
landfill
asset
purchases (39,217) (37,647) (1,570) (59,714) (59,502) (212)
Purchase
of
restricted
shares (172) - (172) (172) - (172)
Stock
option
expense
(recovery) 567 376 191 584 (417) 1,001
Conversion
costs 115 - 115 115 - 115
Other
expenses 35 26 9 65 57 8
Financing
Financing
and
landfill
development
costs
(net of
non-cash
portion) (77) (188) 111 (77) (913) 836
Net
realized
foreign
exchange
loss
(gain) 93 1 92 177 (620) 797
----------------------------------------------------------------------------
Free cash
flow(B) $ 21,476 $ 25,114 $ (3,638) $ 52,100 $ 56,668 $ (4,568)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Free cash flow (B) - EBITDA(A) approach
Three months ended June 30 Six months ended June 30
----------------------------------------------------------------------------
2009 2008 Change 2009 2008 Change
----------------------------------------------------------------------------
EBITDA(A) $ 72,503 $76,987 $ (4,484) $ 135,142 $ 145,262 $ (10,120)
----------------------------------------------------------------------------
Restricted
share expense 359 - 359 691 - 691
Stock option
expense
(recovery) 567 376 191 584 (417) 1,001
Purchase of
restricted
shares (172) - (172) (172) - (172)
Capital and
landfill asset
purchases (39,217) (37,647) (1,570) (59,714) (59,502) (212)
Landfill
closure and
post-closure
expenditures (1,129) (379) (750) (2,355) (623) (1,732)
Landfill
closure and
post-closure
cost
accretion
expense 775 777 (2) 1,517 1,555 (38)
Interest on
long-term debt (8,766) (13,015) 4,249 (18,395) (26,744) 8,349
Non-cash
interest
expense 795 1,030 (235) 1,545 1,973 (428)
Current income
tax expense (4,239) (3,015) (1,224) (6,743) (4,836) (1,907)
----------------------------------------------------------------------------
Free cash
flow(B) $ 21,476 $25,114 $ (3,638) $ 52,100 $ 56,668 $ (4,568)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended
Excluding the impact of foreign currency exchange, free cash flow(B) declined comparatively. While we enjoyed increasing EBITDA(A) contributions from our Canadian and U.S. south segments, EBITDA(A) decreased comparatively in the U.S. northeast. On balance, however, EBITDA(A) increased period over period, excluding foreign currency exchange. Contributions from the Canadian and U.S. south segments are attributable to growth through acquisition coupled with declines in vehicle operating costs, driven principally by declines in fuel costs. The decline in U.S. northeast EBITDA(A) contributions is due largely to lower volumes in the region, coupled with lower commodity and other pricing, which is the result of economic weakness. An increase in current income tax expense (excluding foreign currency exchange), coupled with the timing of capital and landfill purchases (excluding foreign currency exchange), is the primary reason for the decline period to period. The increase in current income tax expense is largely attributable to the Canadian segment. The conversion from an income trust to a corporation effectively eliminated the Canadian segments ability to shelter taxable income beyond its available loss carryforwards, which are being eroded at a more vigorous pace since conversion. The timing of contract wins, capital asset purchases to operate an acquired landfill in our U.S. south segment, and working capital adjustments, partially offset by lower growth expenditures in other areas of our business are the primary reasons for our U.S. segment increase in capital and landfill asset purchases period to period. In addition, the timing of landfill closure and post-closure expenditures in our U.S. northeast segment contributed to the comparative increase in spending.
Lower interest on long-term debt (excluding foreign currency exchange) helped soften the aforementioned declines. The decline in interest expense is the result of applying net proceeds from our March and June common share offerings to the repayment of long-term debt coupled with lower dividend levels and lower borrowing costs on variable rate lending in both Canada and the U.S.
Six months ended
For the six months ended, free cash flow(B) increased, excluding the negative impact of foreign currency exchange. An increase in EBITDA(A), excluding foreign currency exchange, coupled with lower interest expense (excluding foreign currency exchange), are the primary reasons for the comparative increase. Higher capital and landfill purchases (excluding foreign currency exchange) and higher current income tax expense (excluding foreign currency exchange), partially offset the higher EBITDA(A) and lower interest expense contributions to free cash flow(B). The reasons for the year to date changes are consistent with those outlined above for the three months ended.
Capital and landfill purchases
Capital and landfill purchases characterized as replacement and growth expenditures are as follows:
Three months ended June 30 Six months ended June 30
----------------------------------------------------------------------------
2009 2008 Change 2009 2008 Change
----------------------------------------------------------------------------
Replacement $ 16,983 $ 19,946 $ (2,963) $ 29,772 $ 29,372 $ 400
Growth 22,234 17,701 4,533 29,942 30,130 (188)
----------------------------------------------------------------------------
Total $ 39,217 $ 37,647 $ 1,570 $ 59,714 $ 59,502 $ 212
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Capital and landfill purchases - replacement
Capital and landfill purchases characterized as "replacement expenditures", represent cash outlays to sustain current cash flows and are funded from free cash flow(B). Replacement expenditures may include some or all of the following: the replacement of existing capital assets, including vehicles, equipment, containers, compactors, furniture, fixtures and computer equipment. Replacement expenditures also include all landfill construction spending for our operating landfills, which is principally comprised of cell construction.
Three months ended
Excluding the impact of foreign currency exchange, replacement expenditures decreased. Both the Canadian and U.S. segment declines are due in large part to the timing of landfill cell construction with the balance attributable to working capital adjustments.
Six months ended
Excluding the impact of foreign currency exchange, replacement expenditures increased. The increase in Canadian segment expenditures is due almost entirely to the timing of cell construction at our Lachenaie landfill. The reasons for the U.S. segment decline are consistent with the reasons outlined above for the three months ended.
Capital and landfill purchases - growth
Capital and landfill purchases characterized as "growth expenditures", represent cash outlays to generate new or future cash flows and are generally funded from free cash flow(B). Growth expenditures may include some or all of the following: vehicles, equipment, containers, compactors, furniture, fixtures and computer equipment to support new contract wins and organic business growth.
Three months ended
Net of foreign currency exchange, growth expenditures increased. In Canada growth expenditures declined slightly while growth expenditures in the U.S. increased. The primary reason for our U.S. segment increase is due to contract wins, capital asset purchases to operate an acquired landfill in our U.S. south segment, and working capital adjustments, partially offset by lower growth expenditures in other areas of our business.
Six months ended
Net of foreign currency exchange, growth expenditures increased. In Canada growth expenditures declined while growth expenditures in the U.S. increased. The Canadian segment decline is due in large part to capital purchased to service new residential contract wins which commenced in 2008. The reasons for the U.S. segment increase are consistent with the reasons outlined above for the three months ended.
Readers are reminded that revenue, EBITDA(A), and cash flow contributions derived from vehicles, equipment and container growth expenditures will materialize over the assets useful life.
Dividends and Distributions
(all amounts are in thousands of U.S. dollars, except per share or trust unit and PPS amounts)
2009
Our expected regular dividend record and payment dates, and payment amounts, are as follows:
Expected regular dividend (payable quarterly)
Dividend
amounts
per share
and PPS -
stated in
Canadian
Record date Payment date dollars
----------------------------------------------------------------------------
March 31, 2009 April 15, 2009 $ 0.125
June 30, 2009 July 15, 2009 0.125
September 30, 2009 October 15, 2009 0.125
December 31, 2009 January 15, 2010 0.125
----------------------------------------------------------------------------
Total $ 0.500
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Our expected special dividend record and payments dates, and payment amounts, payable only in 2009, are as follows:
Expected special dividend schedule (payable quarterly)
Dividend
amounts
per share
and PPS -
stated in
Canadian
Record date Payment date dollars
----------------------------------------------------------------------------
March 31, 2009 April 15, 2009 $ 0.125
June 30, 2009 July 15, 2009 0.125
September 30, 2009 October 15, 2009 0.125
December 17, 2009 December 31, 2009 0.125
----------------------------------------------------------------------------
Total $ 0.500
----------------------------------------------------------------------------
----------------------------------------------------------------------------
2008
In 2008, we declared distributions and dividends to trust unit and participating preferred shareholders of record for the three and six month periods ended June 2008 totalling $30,921 and $62,020, respectively. The declarations represented a monthly Canadian dollar ("C$") payout of fifteen point one five cents per trust unit and PPS.
Long-term debt
Summarized details of our long-term debt facilities at June 30, 2009 are as follows:
Letters of
credit (not
reported as
long-term
debt on the
Available Consolidated Available
lending Facility drawn Balance Sheet) capacity
----------------------------------------------------------------------------
Canadian long-term debt
facilities - stated in
Canadian dollars
Senior secured debentures,
series B $ 58,000 $ 58,000 $ - $ -
Revolving credit facility $ 305,000 $ 179,000 $ 25,013 $ 100,987
U.S. long-term debt
facilities - stated in
U.S. dollars
Term loan $ 195,000 $ 195,000 $ - $ -
Revolving credit facility $ 588,500 $ 151,715 $ 120,097 $ 316,688
IRBs $ 104,000 $ 104,000 $ - $ -
Canadian long-term debt facilities
We drew on our revolving credit facility capacity to repay our C$47,000 senior secured series A debentures which matured on June 26, 2009. Drawing on the revolving credit facility had no impact on our Canadian segments funded debt to EBITDA(A) covenant, as this covenant includes both revolving credit facility drawings and senior secured debenture borrowings. We entered into our fifth amendment to our amended and restated credit facility. The fifth amendment simply recognized the wind-up of the Fund and Ridge Landfill Trust. All significant terms and pricing remained unchanged.
Long-term debt to EBITDA(A)
At June 30, 2009, we are not in default of our Canadian and U.S. long-term debt facility covenants. Readers are reminded that our long-term debt to EBITDA(A) covenants are not subject to foreign currency exchange fluctuations. Holding the foreign currency exchange rate between Canada and the U.S. at parity, results in a long-term debt to EBITDA(A) ratio of 2.28 times. Readers are further reminded that contributions to EBITDA(A) from acquisitions completed within the last twelve months are not included in the foregoing ratio and that we have two revolving credit facilities to support our Canadian and U.S. operations, each of which require financial covenant tests to be prepared independently.
Funded debt to EBITDA(A)
At June 30, 2009, funded long-term debt to EBITDA(A) for Canada and the U.S., as defined and calculated in accordance with the underlying Canadian and U.S. long-term debt facility covenants, is as follows:
June 30, 2009 December 31, 2008
----------------------------------------------------------------------------
Canada U.S. Canada U.S.
----------------------------------------------------------------------------
Funded debt to EBITDA(A) 1.90 2.64 2.10 3.93
Funded debt to EBITDA(A) maximum 2.75 4.00 2.75 4.25
Definitions of EBITDA and free cash flow
(A) All references to "EBITDA" in this press release are to revenues less operating and selling, general and administration expenses on the consolidated statement of operations and comprehensive (loss) income. EBITDA 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 foreign exchange gain or loss, net gain or loss on financial instruments, conversion costs, other expenses, and income taxes". EBITDA is a term used by us that does not have a standardized meaning prescribed by U.S. GAAP and is therefore unlikely to be comparable to similar measures used by other issuers. EBITDA is a measure of our operating profitability, and by definition, excludes certain items as detailed above. These items are viewed by us as either non-cash (in the case of amortization, net gain or loss on financial instruments, net foreign exchange gain or loss, and deferred 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, conversion costs, other expenses, and current income taxes). EBITDA is a useful financial and operating metric for us, our Board of Directors, and our lenders, as it represents a starting point in the determination of free cash flow(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 (B).
Interest on long-term debt - interest on long-term debt is a function of our debt/equity mix and interest rates; as such, it reflects our 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 - proceeds from the sale of capital and landfill assets are either reinvested in additional or replacement capital or landfill assets or used to repay revolving credit facility borrowings.
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(B).
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(B).
Conversion costs - conversion costs represent professional fees incurred on the Fund's conversion from an income trust to a corporation and its eventual wind-up. Conversion costs represent a different class of expense than those included in EBITDA.
Other expenses - other expenses typically represent amounts paid to certain management of acquired companies who are retained by us post acquisition. These expenses 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 our daily operations.
EBITDA should not be construed as a measure of income or of cash flows. The reconciling items between EBITDA and net income are detailed in the consolidated statement of operations and comprehensive (loss) income beginning with operating income before amortization and ending with net income.
(B) We have adopted a measure called "free cash flow" to supplement net income or (loss) as a measure of operating performance. Free cash flow is a term which does not have a standardized meaning prescribed by U.S. GAAP, is prepared before dividends and or distributions declared, and is therefore unlikely to be comparable to similar measures used by other issuers. The objective of presenting this non-GAAP measure is to align our disclosure with disclosures presented by other U.S. publicly listed companies in the waste industry, to assess our primary sources and uses of cash flow, and to assess our ability to sustain our dividend. All references to "free cash flow" in this press release have the meaning set out in this note.
Forward-looking statements
This press release contains forward-looking statements, within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, concerning the business, operations and financial performance and condition of the Company. Forward-looking statements are statements that are not historical facts and that are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward-looking statements. A number of factors could cause actual outcomes and results to differ materially from those estimated, forecast or projected. These factors include those set forth in the Company's Annual Information Form for the year ended December 31, 2008. 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 upon what management believes to be reasonable assumptions, the Company cannot assure shareholders that actual results will be consistent with these forward looking statements, and the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.
About IESI-BFC Ltd.
IESI-BFC Ltd., through its subsidiaries, is one of North America's largest full-service waste management companies, providing non-hazardous solid waste collection and landfill disposal services for commercial, industrial, municipal and residential customers in five provinces and ten U.S. states. Its two brands, IESI and BFI Canada, are leaders in their respective markets and serve over 1.8 million customers with vertically integrated collection and disposal assets. The Company's shares are listed on the New York and Toronto Stock Exchanges under the symbol BIN.
To find out more about IESI-BFC Ltd., visit our website at www.iesi-bfc.com.
---------------------------------------------------------------------------- Management will hold a conference call on Wednesday, July 29, 2009, at 5:00 p.m. (ET) to discuss results for the three and six months ended June 30, 2009. To access the call, participants should dial 416-644-3429 or 1-800-594-3790. The conference call will also be webcast live at www.streetevents.com and www.iesi-bfc.com and subsequently archived on both websites. A rebroadcast of the call will be available until midnight on August 12, 2009. To access the rebroadcast, dial 416-640-1917 or 1-877-289-8525 and quote the reservation number 21310873#. ---------------------------------------------------------------------------- IESI-BFC Ltd. (formerly BFI CANADA LTD.) Consolidated Balance Sheets June 30, 2009 (unaudited) 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) ---------------------------------------------------------------------------- June 30, December 2009 31, 2008 ---------------------------------------------------------------------------- ASSETS CURRENT Cash and cash equivalents $ 11,130 $ 11,938 Accounts receivable 112,022 107,767 Other receivables 477 228 Prepaid expenses 18,287 19,597 Restricted cash - 82 ---------------------------------------------------------------------------- 141,916 139,612 OTHER RECEIVABLES 1,270 394 FUNDED LANDFILL POST-CLOSURE COSTS 6,943 6,115 INTANGIBLES 110,499 119,898 GOODWILL 621,942 617,832 LANDFILL DEVELOPMENT ASSETS 6,500 8,589 DEFERRED FINANCING COSTS 8,988 9,936 CAPITAL ASSETS 416,571 408,681 LANDFILL ASSETS 650,023 621,862 ---------------------------------------------------------------------------- $ 1,964,652 $1,932,919 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- LIABILITIES CURRENT Accounts payable $ 53,997 $ 54,134 Accrued charges 56,264 55,509 Dividends payable 20,092 2,337 Income taxes payable 5,257 1,387 Deferred revenues 11,894 10,800 Current portion of long-term debt - 38,380 Landfill closure and post-closure costs 8,380 7,210 ---------------------------------------------------------------------------- 155,884 169,757 LONG-TERM DEBT 654,586 835,210 LANDFILL CLOSURE AND POST-CLOSURE COSTS 63,507 50,857 OTHER LIABILITIES 12,316 15,045 DEFERRED INCOME TAXES 68,256 64,348 ---------------------------------------------------------------------------- 954,549 1,135,217 ---------------------------------------------------------------------------- COMMITMENTS AND CONTINGENCIES EQUITY NON-CONTROLLING INTEREST 230,146 230,452 SHAREHOLDERS' EQUITY 779,957 567,250 ---------------------------------------------------------------------------- 1,010,103 797,702 ---------------------------------------------------------------------------- $ 1,964,652 $1,932,919 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- IESI-BFC Ltd. (formerly BFI CANADA LTD.) Consolidated Statements of Operations and Comprehensive Income For the periods ended June 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 Six months ended ---------------------------------------------------------------------------- 2009 2008 2009 2008 ---------------------------------------------------------------------------- REVENUES $ 253,700 $ 277,613 $ 477,593 $ 520,962 EXPENSES OPERATING 148,597 168,745 279,774 315,292 SELLING, GENERAL AND ADMINISTRATION 32,600 31,881 62,677 60,408 AMORTIZATION 41,154 45,658 78,756 88,369 ---------------------------------------------------------------------------- OPERATING INCOME 31,349 31,329 56,386 56,893 INTEREST ON LONG-TERM DEBT 8,766 13,015 18,395 26,744 NET LOSS (GAIN) ON SALE OF CAPITAL AND LANDFILL ASSETS 19 (126) (115) (86) NET FOREIGN EXCHANGE LOSS (GAIN) 93 1 177 (620) NET (GAIN) LOSS ON FINANCIAL INSTRUMENTS (1,701) (5,485) (1,171) 3,525 CONVERSION COSTS 115 - 115 - OTHER EXPENSES 35 26 65 57 ---------------------------------------------------------------------------- INCOME BEFORE INCOME TAXES 24,022 23,898 38,920 27,273 INCOME TAX EXPENSE (RECOVERY) Current 4,239 3,015 6,743 4,836 Deferred 4,678 3,439 7,433 (6,329) ---------------------------------------------------------------------------- 8,917 6,454 14,176 (1,493) ---------------------------------------------------------------------------- NET INCOME 15,105 17,444 24,744 28,766 ---------------------------------------------------------------------------- OTHER COMPREHENSIVE INCOME (LOSS) Foreign currency translation adjustment 11,792 (11,690) 8,172 40,844 Commodity swaps designated as cash flow hedges, net of tax 1,467 - 353 - ---------------------------------------------------------------------------- COMPREHENSIVE INCOME $ 28,364 $ 5,754 $ 33,269 $ 69,610 ---------------------------------------------------------------------------- NET INCOME - CONTROLLING INTEREST $ 13,267 $ 14,616 $ 21,538 $ 24,103 NET INCOME - NON-CONTROLLING INTEREST $ 1,838 $ 2,828 $ 3,206 $ 4,663 COMPREHENSIVE INCOME - CONTROLLING INTEREST $ 24,749 $ 5,754 $ 28,958 $ 69,610 COMPREHENSIVE INCOME - NON-CONTROLLING INTEREST $ 3,615 $ - $ 4,311 $ - Net income per weighted average share or trust unit, basic $ 0.19 $ 0.25 $ 0.33 $ 0.42 Net income per weighted average share or trust unit, diluted $ 0.18 $ 0.25 $ 0.32 $ 0.42 Weighted average number of shares or trust units outstanding (thousands), basic 70,809 57,569 65,414 57,569 Weighted average number of shares or trust units outstanding (thousands), diluted 81,946 68,706 76,551 68,706 IESI-BFC Ltd. (formerly BFI CANADA LTD.) Consolidated Statements of Cash Flows For the periods ended June 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 Six months ended 2009 2008 2009 2008 NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES OPERATING Net income $ 15,105 $ 17,444 $ 24,744 $ 28,766 Items not affecting cash Restricted share expense 359 - 691 - Write-off of landfill development assets 77 188 77 913 Accretion of landfill closure and post-closure costs 775 777 1,517 1,555 Amortization of intangibles 7,275 8,111 14,509 16,113 Amortization of capital assets 18,693 19,079 37,004 38,297 Amortization of landfill assets 15,186 18,468 27,243 33,959 Interest on long-term debt (deferred financing costs) 795 1,030 1,545 1,973 Net loss (gain) on sale of capital and landfill assets 19 (126) (115) (86) Net (gain) loss on financial instruments (1,701) (5,485) (1,171) 3,525 Deferred income taxes 4,678 3,439 7,433 (6,329) Landfill closure and post-closure expenditures (1,129) (379) (2,355) (623) Changes in non-cash working capital items 6,324 (6,543) 4,930 (18,769) ---------------------------------------------------------------------------- Cash generated from operating activities 66,456 56,003 116,052 99,294 ---------------------------------------------------------------------------- INVESTING Acquisitions (20,406) (35,513) (20,640) (54,488) Restricted cash withdrawals - 176 82 790 Investment in other receivables (41) - (1,278) - Proceeds from other receivables 113 230 225 299 Funded landfill post-closure costs (302) (198) (381) (586) Purchase of capital assets (25,181) (23,846) (37,840) (37,328) Purchase of landfill assets (14,036) (13,801) (21,874) (22,174) Proceeds from the sale of capital and landfill assets 188 458 3,603 541 Investment in landfill development assets (192) (678) (439) (1,732) ---------------------------------------------------------------------------- Cash utilized in investing activities (59,857) (73,172) (78,542) (114,678) ---------------------------------------------------------------------------- FINANCING Payment of deferred financing costs (190) (924) (498) (924) Proceeds from long-term debt 90,365 79,240 116,774 144,191 Repayment of long-term debt (218,423) (33,432) (346,384) (63,924) Common shares issued, net of issue costs 138,726 (3) 209,684 (3) Purchase of restricted shares (172) - (172) - Dividends and distributions paid to share or unitholders and dividends paid to participating preferred shareholders (16,714) (30,921) (18,640) (62,020) ---------------------------------------------------------------------------- Cash (utilized in) generated from financing activities (6,408) 13,960 (39,236) 17,320 Effect of foreign currency translation on cash and cash equivalents 1,419 257 918 (682) ---------------------------------------------------------------------------- NET CASH INFLOW (OUTFLOW) 1,610 (2,952) (808) 1,254 ---------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD OR YEAR 9,520 16,107 11,938 11,901 ---------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 11,130 $ 13,155 $ 11,130 $ 13,155 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- SUPPLEMENTAL CASH FLOW INFORMATION: Cash and cash equivalents are comprised of: Cash $ 10,046 $ 13,138 $ 10,046 $ 13,138 Cash equivalents 1,084 17 1,084 17 ---------------------------------------------------------------------------- $ 11,130 $ 13,155 $ 11,130 $ 13,155 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Cash paid during the period for: Income taxes $ 2,927 $ 8,065 $ 2,562 $ 9,424 Interest $ 10,102 $ 11,308 $ 19,613 $ 22,494 IESI-BFC Ltd. (formerly BFI CANADA LTD.) Consolidated Statements of Equity and Mezzanine Equity For the three months ended June 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) ---------------------------------------------------------------------------- Common Restricted Contributed shares shares Treasury shares surplus ---------------------------------------------------------------------------- Balance at March 31, 2009 $ 940,582 $ (3,756) $ - $ 965 Net income Dividends Common shares issued net of issue costs and related tax effect 141,910 Restricted shares purchased (172) Restricted share expense 359 Foreign currency translation adjustment Commodity swaps designated as cash flow hedges, net of tax ---------------------------------------------------------------------------- Balance at June 30, 2009 $ 1,082,492 $ (3,928) $ - $ 1,324 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Accumulated other comprehen- Non- sive (loss) controlling Deficit income interest Equity ---------------------------------------------------------------------------- Balance at March 31, 2009 $ (212,219) $ (94,966) $ 228,912 $ 859,518 Net income 13,267 1,838 15,105 Dividends (17,495) (2,381) (19,876) Common shares issued net of issue costs and related tax effect 141,910 Restricted shares purchased (172) Restricted share expense 359 Foreign currency translation adjustment 10,219 1,573 11,792 Commodity swaps designated as cash flow hedges, net of tax 1,263 204 1,467 ---------------------------------------------------------------------------- Balance at June 30, 2009 $ (216,447) $ (83,484) $ 230,146 $ 1,010,103 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Accumulated other Mezzanine comprehen- equity Deficit sive loss Equity ---------------------------------------------------------------------------- Balance at March 31, 2008 $ 1,317,494 $ (368,310) $ (79,478) $ (447,788) Net income 17,444 17,444 Dividends (30,921) (30,921) Trust units issued net of issue costs and related tax effect (3) (3) Fair value adjustments to trust units, PPSs and treasury units 104,153 (104,153) (104,153) Foreign currency translation adjustment 13,868 - (11,690) (11,690) ---------------------------------------------------------------------------- Balance at June 30, 2008 $ 1,435,515 $ (485,943) $ (91,168) $ (577,111) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- IESI-BFC Ltd. (formerly BFI CANADA LTD.) Consolidated Statements of Equity and Mezzanine Equity For the six months ended June 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) ---------------------------------------------------------------------------- Common Restricted Contributed shares shares Treasury shares surplus ---------------------------------------------------------------------------- Balance at December 31, 2008 $ 868,248 $ (3,756) $ - $ 633 Net income Dividends Common shares issued net of issue costs and related tax effect 214,244 Restricted shares purchased (172) Restricted share expense 691 Common shares acquired by U.S. long-term incentive plan ("LTIP") (1,779) Deferred compensation obligation 1,779 Foreign currency translation adjustment Commodity swaps designated as cash flow hedges, net of tax ---------------------------------------------------------------------------- Balance at June 30, 2009 $ 1,082,492 $ (3,928) $ - $ 1,324 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Accumulated other comprehen- Non- sive (loss) controlling Deficit income interest Equity ---------------------------------------------------------------------------- Balance at December 31, 2008 $ (206,971) $ (90,904) $ 230,452 $ 797,702 Net income 21,538 3,206 24,744 Dividends (31,014) (4,617) (35,631) Common shares issued net of issue costs and related tax effect 214,244 Restricted shares purchased (172) Restricted share expense 691 Common shares acquired by U.S. long-term incentive plan ("LTIP") (1,779) Deferred compensation obligation 1,779 Foreign currency translation adjustment 7,113 1,059 8,172 Commodity swaps designated as cash flow hedges, net of tax 307 46 353 ---------------------------------------------------------------------------- Balance at June 30, 2009 $ (216,447) $ (83,484) $ 230,146 $ 1,010,103 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- 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 28,766 28,766 Dividends (62,020) (62,020) 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 (97,308) 97,308 97,308 Foreign currency translation adjustment (47,314) 40,844 40,844 ---------------------------------------------------------------------------- Balance at June 30, 2008 $ 1,435,515 $ (485,943) $ (91,168) $ (577,111) ---------------------------------------------------------------------------- ----------------------------------------------------------------------------
For more information, contact:
Chaya Cooperberg
Director, Investor Relations and Corporate Communications
IESI-BFI Ltd.
(416) 401-7729
chaya.cooperberg@bficanada.com
Sign up to receive our free Weekly News Bulletin