Waste Business Journal

Waste Management Beats Expectations for 4Q; Sees Improving Conditions

Date: February 16, 2010

Source: Waste Management, Inc.

Waste Management Announces Fourth Quarter and Full Year 2009 Earnings

• 2010 Capital Allocation Plan to Return up to $1.3 Billion to Shareholders

Waste Management, Inc. (NYSE: WM) today announced financial results for its fourth quarter and for the year ended December 31, 2009. Net income^(a) for the quarter was $315 million, or $0.64 per diluted share, compared with $218 million, or $0.44 per diluted share, for the fourth quarter of 2008. This is an increase in earnings per diluted share of 45%. Revenues for the fourth quarter of 2009 were $3.01 billion compared with $3.11 billion for the same 2008 period. The Company noted several items that impacted results in the 2009 and 2008 fourth quarters. Excluding these items, net income would have been $257 million, or $0.52 per diluted share, in the fourth quarter of 2009 compared with $241 million, or $0.49 per diluted share, in the fourth quarter of 2008.^(b)

For the full year 2009, the Company reported revenues of $11.79 billion compared with $13.39 billion for 2008. Earnings per diluted share were $2.01 for the full year 2009 compared with $2.19 for the full year 2008. During fiscal years 2009 and 2008, several items impacted the full year results. On an as-adjusted basis taking those items into account, earnings per diluted share were $2.00 for the full year 2009 and $2.22 for the full year 2008.^(b)

David P. Steiner, Chief Executive Officer of Waste Management, commented, “We saw encouraging signs of improvement in the fourth quarter. Internal revenue growth from volume declined by 6.4% compared with the prior year period, which was a 250 basis point improvement from the third quarter of 2009. Our commercial and residential business lines continued to demonstrate their strength. Commercial revenue, excluding revenue from our fuel surcharge, increased 1.0% compared with the fourth quarter of 2008. Residential revenue, excluding revenue from our fuel surcharge, performed even better, increasing by 1.5% compared with the prior year period. Our collection and disposal pricing remained strong, with internal revenue growth from yield of 2.7%. Average recycling commodity prices continued to increase each month in the fourth quarter, and have almost doubled from the lows reached in January 2009. And, on the cost side, 2009 savings from the company-wide restructuring we announced in February 2009 exceeded our target of $120 million on an annualized basis.”

Results in the fourth quarter of 2009 included a net benefit of $0.12 per diluted share consisting of an $81 million income tax benefit resulting primarily from the favorable impacts of the carry-back of a capital loss and a revaluation of deferred taxes resulting from reductions in Canadian tax rates; a $20 million reduction in net income from asset impairment charges; and a $3 million reduction in net income from charges related to the restructuring announced in February 2009.

Results in the fourth quarter of 2008 included a decrease of $0.05 per diluted share from a $13 million reduction in net income due to charges related to withdrawal from union-sponsored multi-employer pension plans in Milwaukee, New Jersey and Detroit; a $16 million reduction in net income caused primarily by the accounting effect of a decline in long-term interest rates, which are used to calculate the present value of the Company’s remediation liabilities at its landfills; and a $6 million benefit resulting primarily from favorable tax audit settlements.

Key Highlights for the Fourth Quarter 2009 and the Full Year 2009

• Internal revenue growth from yield from the Company’s collection and disposal operations was 2.7% for the quarter and 2.9% for the full year.

• Internal revenue growth from volume was negative 6.4% for the quarter and negative 8.1% for the full year.

• Revenue declined by 3.3%, or $102 million, in the fourth quarter and declined by 11.9%, or $1,597 million, for the full year.

• Operating expenses declined by 5.0%, or $98 million, in the fourth quarter and declined by 14.5%, or $1,225 million, for the full year.

• Selling, general and administrative expenses decreased by $17 million compared with the fourth quarter of 2008.

• Average recycling commodity prices increased almost 20% in the fourth quarter of 2009 compared with the prior year period. This favorable year-over-year impact contributed $0.04 to earnings per diluted share in the fourth quarter of 2009, compared with the prior year period, which was consistent with the Company’s previously announced range.

• As expected, natural gas markets adversely affected electricity sales prices at some of the Company’s waste-to-energy and landfill-gas-to-energy plants in the fourth quarter of 2009, causing a decline in earnings per diluted share of $0.03 compared with the prior year period.

• Free cash flow was $372 million in the quarter and $1,211 million for the full year.

• Capital expenditures were $356 million in the quarter and $1,179 million for the full year.

• The Company returned $302 million to shareholders in the fourth quarter, consisting of $141 million in cash dividends and $161 million in common stock repurchases. For the full year, the Company returned $795 million to shareholders, consisting of $226 million of common stock repurchases and dividends of $569 million.

• The effective tax rate in the quarter was approximately 4.9%. The reduction in the effective tax rate for the quarter is due principally to the favorable impacts of the carry-back of a capital loss, recognition of state net operating losses and tax credits, and revaluation of deferred taxes resulting from reductions in Canadian tax rates. Excluding the impact of these items, the effective tax rate for the fourth quarter of 2009 would have been 36.8%.

Steiner continued, “New business pricing was strong for both our commercial and industrial business lines, and service increases offset service decreases for the second quarter in a row, which are further encouraging signs of improvement in our business. So, as we look to 2010, we expect the rate of decline in volumes to continue to show improvement during the first half of the year, and we expect volumes for the second half of the year to be flat to slightly positive. We forecast that our full year 2010 earnings will increase to a range of $2.09 to $2.13 per diluted share.”^(b)

Steiner concluded, “We are proud of what we accomplished in 2009. During the economic downturn we continued producing strong cash flow and returned a big portion of it to our shareholders. In the fourth quarter, we returned $302 million of cash in the form of dividends and common stock repurchases and for the full year we returned $795 million. For 2010 the Board of Directors has announced its intent to increase our quarterly dividend by 8.6%, to $1.26 per share on an annual basis. The Board of Directors approved a capital allocation plan that authorizes up to $1.3 billion to be returned to shareholders. We expect our dividend payments to be approximately $615 million, which allows for up to $685 million to be allocated to common stock repurchases. We remain committed to our goals of growing earnings, expanding our operating margins, increasing our return on invested capital, generating strong free cash flow and returning cash to our shareholders.”

2010 Outlook

The Company also announced the following with regard to its financial outlook for 2010:

• 2010 earnings per diluted share are expected to be between $2.09 and $2.13.^(b)

• Internal revenue growth on base business from yield is expected to be between 2.5% to 3.0%, which is in line with the Company’s goal of internal revenue growth from yield being at least 50 to 100 basis points above the core Consumer Price Index. Internal revenue growth from volume is expected to decline in a range of 1.0% to 3.0%, a projected 500-700 basis point improvement over the 8.1% decline in the full year 2009.

• Internal revenue growth on base business from yield is expected to be between 2.0% to 3.0%, which is 50 to 100 basis points above the Company’s 2010 outlook for the core Consumer Price Index. Internal revenue growth from volume is expected to decline in a range of 1.0% to 3.0%, a projected 500-700 basis point improvement over the 8.1% decline in the full year 2009.

• 2010 recycling commodity prices are expected to be close to their five-year historical average, which would provide a benefit of between $0.04 and $0.08 per diluted share compared with the prior year. Most of this benefit will be realized during the first half of the year.

• 2010 electricity sales prices at the Company’s waste-to-energy operations are expected to have no net impact on earnings per share in 2010, compared with the prior year. The Company anticipates a $0.01 to $0.03 per diluted share negative impact in the first half of the year offset by a positive $0.01 to $0.03 per diluted share impact in the second half of the year.

• The Company expects to resume annual merit increases after holding wages flat for its exempt employees throughout 2009, which will add approximately $40 million to 2010 costs. The Company is planning to increase information technology expenses by approximately $35 million, primarily in order to upgrade outdated information technology equipment and applications. Interest expense is expected to increase approximately $65 million because of the interest on the $600 million of senior notes issued in November of 2009, and also because the Company anticipates higher fees and rates to renew its revolving credit facility later in 2010.

• The full-year 2010 forecast reflects an expected tax rate of approximately 37.5%.

• Capital expenditures are expected to be approximately $1.2 billion.

• Free cash flow is projected to be in the range of $1.2 billion to $1.3 billion.^(b)

• Expected annual payment of $1.26 per share in cash dividends over the course of the year, at an approximate cost of $615 million. The Company expects to spend up to $685 million on share repurchases. The amount of stock the Company repurchases will depend on a number of items, including any cash it may in the future decide to use to accelerate debt repayment or to increase its business acquisitions and investments beyond budgeted levels. Each dividend must be separately declared by the Board.

The Company has scheduled an investor and analyst conference call for later this morning to discuss the results of today’s earnings announcement. The information in this press release should be read in conjunction with the information on the conference call. The call will begin at 10:00 a.m. Eastern time and is open to the public. To listen to the conference call, which will be broadcast live over the Internet, go to the Waste Management Website at www.wm.com, and select “Earnings Webcast.” You may also listen to the analyst conference call by telephone by contacting the conference call operator 5 to 10 minutes prior to the scheduled start time and asking for the “Waste Management Conference Call — Call ID 49511473.” US/Canada Dial-In Number: (877) 710-6139. Int’l/Local Dial-In Number: (706) 643-7398. For those unable to listen to the live call, a replay will be available 24 hours a day beginning at approximately 1:00 p.m. Eastern time on February 16th through 5:00 p.m. Eastern time on March 2nd. To hear a replay of the call over the Internet, access the Waste Management Website at www.wm.com. To hear a telephonic replay of the call, dial (800) 642-1687 or (706) 645-9291 and enter reservation code 49511473.

Waste Management, Inc., based in Houston, Texas, is the leading provider of comprehensive waste management services in North America. Through its subsidiaries, the Company provides collection, transfer, recycling and resource recovery, and disposal services. It is also a leading developer, operator and owner of waste-to-energy and landfill gas-to-energy facilities in the United States. The Company’s customers include residential, commercial, industrial, and municipal customers throughout North America.

For Further Information:
Waste Management, Inc.
Analysts: Jim Alderson: 713.394.2281
Media: Lynn Brown: 713.394.5093
Web site: www.wm.com.

 

		Quarters Ended December 31,
		2009				2008
Operating revenues		$	3,006			$	3,108
Costs and expenses:
Operating			1,874				1,972
Selling, general and administrative			365				382
Depreciation and amortization			274				297
Restructuring			4				2
(Income) expense from divestitures, asset impairments and unusual items			33				(4	)
			2,550				2,649
Income from operations			456				459
Other income (expense):
Interest expense			(110	)			(114	)
Interest income			3				5
Other, net			(2	)			1
			(109	)			(108	)
Income before income taxes			347				351
Provision for income taxes			16				125
Consolidated net income			331				226
Less : Net income attributable to noncontrolling interests			(16	)			(8	)
Net income attributable to Waste Management, Inc.		$	315			$	218
Basic earnings per common share		$	0.65			$	0.44
Diluted earnings per common share		$	0.64			$	0.44
Basic common shares outstanding			488.5				490.9
Diluted common shares outstanding			491.6				493.4
Cash dividends declared per common share		$	0.29			$	0.27
Note: Prior year information has been reclassified to conform to 2009 presentation.

 

		Quarters Ended
		December 31,
		2009				2008
EPS Calculation:
Net income attributable to Waste Management, Inc.		$	315			$	218
Number of common shares outstanding at end of period			486.1				490.7
Effect of using weighted average common shares outstanding			2.4				0.2
Weighted average basic common shares outstanding			488.5				490.9
Dilutive effect of equity-based compensation awards and other contingently issuable shares			3.1				2.5
Weighted average diluted common shares outstanding			491.6				493.4
Basic earnings per common share		$	0.65			$	0.44
Diluted earnings per common share		$	0.64			$	0.44

 

		Years Ended December 31,
		2009				2008
Operating revenues		$	11,791			$	13,388
Costs and expenses:
Operating			7,241				8,466
Selling, general and administrative			1,364				1,477
Depreciation and amortization			1,166				1,238
Restructuring			50				2
(Income) expense from divestitures, asset impairments and unusual items			83				(29	)
			9,904				11,154
Income from operations			1,887				2,234
Other income (expense):
Interest expense			(426	)			(455	)
Interest income			13				19
Other, net			(1	)			(1	)
			(414	)			(437	)
Income before income taxes			1,473				1,797
Provision for income taxes			413				669
Consolidated net income			1,060				1,128
Less : Net income attributable to noncontrolling interests			(66	)			(41	)
Net income attributable to Waste Management, Inc.		$	994			$	1,087
Basic earnings per common share		$	2.02			$	2.21
Diluted earnings per common share		$	2.01			$	2.19
Basic common shares outstanding			491.2				492.1
Diluted common shares outstanding			493.6				495.4
Cash dividends declared per common share		$	1.16			$	1.08
Note: Prior year information has been reclassified to conform to 2009 presentation.

 

		Years Ended December 31,
		2009				2008
EPS Calculation:
Net income attributable to Waste Management, Inc.		$	994			$	1,087
Number of common shares outstanding at end of period			486.1				490.7
Effect of using weighted average common shares outstanding			5.1				1.4
Weighted average basic common shares outstanding			491.2				492.1
Dilutive effect of equity-based compensation awards and other contingently issuable shares			2.4				3.3
Weighted average diluted common shares outstanding			493.6				495.4
Basic earnings per common share		$	2.02			$	2.21
Diluted earnings per common share		$	2.01			$	2.19

 

		December 31,				December 31,
		2009				2008
		(Unaudited)
Assets
Current assets:
Cash and cash equivalents		$	1,140			$	480
Receivables, net			1,527				1,610
Other			343				245
Total current assets			3,010				2,335
Property and equipment, net			11,541				11,402
Goodwill			5,632				5,462
Other intangible assets, net			238				158
Other assets			733				870
Total assets		$	21,154			$	20,227
Liabilities and Equity
Current liabilities:
Accounts payable, accrued liabilities, and deferred revenues		$	2,152			$	2,201
Current portion of long-term debt			749				835
Total current liabilities			2,901				3,036
Long-term debt, less current portion			8,124				7,491
Other liabilities			3,538				3,515
Total liabilities			14,563				14,042
Equity:
Waste Management, Inc. stockholders’ equity			6,285				5,902
Noncontrolling interests			306				283
Total equity			6,591				6,185
Total liabilities and equity		$	21,154			$	20,227
Note: Prior year information has been reclassified to conform to 2009 presentation.

 

		Years Ended December 31,
		2009				2008
Cash flows from operating activities:
Consolidated net income		$	1,060			$	1,128
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization			1,166				1,238
Other			102				298
Change in operating assets and liabilities, net of effects of acquisitions and divestitures			34				(89	)
Net cash provided by operating activities			2,362				2,575
Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired			(281	)			(280	)
Capital expenditures			(1,179	)			(1,221	)
Proceeds from divestitures of businesses (net of cash divested) and other sales of assets			28				112
Net receipts from restricted trust and escrow accounts, and other			182				206
Net cash used in investing activities			(1,250	)			(1,183	)
Cash flows from financing activities:
New borrowings			1,749				1,525
Debt repayments			(1,335	)			(1,785	)
Common stock repurchases			(226	)			(410	)
Cash dividends			(569	)			(531	)
Exercise of common stock options			20				37
Other, net			(96	)			(92	)
Net cash used in financing activities			(457	)			(1,256	)
Effect of exchange rate changes on cash and cash equivalents			5				(4	)
Increase in cash and cash equivalents			660				132
Cash and cash equivalents at beginning of period			480				348
Cash and cash equivalents at end of period		$	1,140			$	480
Note: Prior year information has been reclassified to conform to 2009 presentation.

 

		Quarters Ended
		December 31,				September 30,				December 31,
		2009				2009				2008
Operating Revenues by Lines of Business
Collection		$	2,005			$	2,024			$	2,071
Landfill			618				666				697
Transfer			337				359				368
Wheelabrator			214				214				229
Recycling			231				202				192
Other			80				61				51
Intercompany (a)			(479	)			(503	)			(500	)
Operating revenues		$	3,006			$	3,023			$	3,108

 

		Quarters Ended
		December 31, 2009								December 31, 2008
						As a % of								As a % of
		Amount				Total Company				Amount				Total Company
Analysis of Change in Year Over Year Revenues
Average yield (i)		$	49				1.5	%		$	(29	)			-0.9	%
Volume			(200	)			-6.4	%			(198	)			-5.9	%
Internal revenue growth			(151	)			-4.9	%			(227	)			-6.8	%
Acquisition			30				1.0	%			32				1.0	%
Divestitures			(3	)			-0.1	%			(20	)			-0.6	%
Foreign currency translation			22				0.7	%			(38	)			-1.1	%
		$	(102	)			-3.3	%		$	(253	)			-7.5	%

 

						As a % of								As a % of
						Related								Related
		Amount				Business				Amount				Business
(i) Average yield
Collection, landfill and transfer		$	65				2.5	%		$	70				2.6	%
Waste-to-energy disposal			7				6.5	%			(1	)			-0.9	%
Collection and disposal			72				2.7	%			69				2.5	%
Recycling commodities			35				17.6	%			(97	)			-29.8	%
Electricity			(18	)			-20.9	%			3				3.5	%
Fuel surcharges and mandated fees			(40	)			-28.6	%			(4	)			-2.7	%
Total		$	49				1.5	%		$	(29	)			-0.9	%

 

		Quarters Ended December 31,								Years Ended December 31,
		2009				2008				2009				2008
Free Cash Flow Analysis (b)
Net cash provided by operating activities		$	720			$	673			$	2,362			$	2,575
Capital expenditures			(356	)			(434	)			(1,179	)			(1,221	)
Proceeds from divestitures of businesses (net of cash divested) and other sales of assets			8				20				28				112
Free cash flow		$	372			$	259			$	1,211			$	1,466
(a)   Intercompany revenues between lines of business are eliminated within the Condensed Consolidated Financial Statements included herein.   (b)   The summary of free cash flows has been prepared to highlight and facilitate understanding of the principal cash flow elements. Free cash flow is not a measure of financial performance under generally accepted accounting principles and is not intended to replace the consolidated statement of cash flows that was prepared in accordance with generally accepted accounting principles.

 

		Quarters Ended
		December 31,				September 30,				December 31,
		2009				2009				2008
Balance Sheet Data
Cash and cash equivalents		$	1,140			$	612			$	480
Debt-to-total capital ratio:
Long-term indebtedness, including current portion		$	8,873			$	8,246			$	8,326
Total equity (a)			6,591				6,521				6,185
Total capital		$	15,464			$	14,767			$	14,511
Debt-to-total capital			57.4	%			55.8	%			57.4	%
Capitalized interest		$	4			$	5			$	4
Acquisition Summary (b)
Gross annualized revenue acquired		$	107			$	53			$	33
Total consideration		$	165			$	82			$	53
Cash paid for acquisitions		$	146			$	64			$	46
Other Operational Data
Internalization of waste, based on disposal costs			68.7	%			69.2	%			68.4	%
Total landfill disposal volumes (tons in millions)			22.3				23.9				25.0
Total waste-to-energy disposal volumes (tons in millions)			1.8				1.8				1.8
Total disposal volumes (tons in millions)			24.1				25.7				26.8
Active landfills			273				274				273
Landfills reporting volume			259				259				260
Amortization and SFAS No. 143 Expenses for Landfills Included in Operating Groups -
Non — SFAS No. 143 amortization expense		$	82.5			$	86.2			$	88.1
Amortization expense related to SFAS No. 143 obligations			(15.8	)			13.8				4.6
Total amortization expense (c)(d)			66.7				100.0				92.7
Accretion and other related expense			17.6				16.9				16.8
Landfill amortization, accretion and other related expense		$	84.3			$	116.9			$	109.5
(a)   As a result of the Company’s adoption of accounting guidance related to noncontrolling interests in consolidated financial statements on January 1, 2009, noncontrolling interests are now reported as a component of Total equity. Prior year information has been reclassified to conform to 2009 presentation.   (b)   Represents amounts associated with business acquisitions consummated during the indicated periods.   (c)   The quarter ended December 31, 2009, as compared with the quarter ended December 31, 2008, reflects a reduction in amortization expense of $26 million, of which $16 million is primarily due the differences in the annual year-end adjustments of the SFAS 143 landfill capping construction and closure/post-closure obligations identified in our annual review process that occurs in the fourth quarter. The remaining decrease is due to lower landfill volumes.   (d)   The quarter ended December 31, 2009, as compared to the quarter ended September 30, 2009, reflects a reduction in amortization expense of $33 million of which $25 million is attributable to year-end adjustments of the SFAS 143 landfill capping construction and closure/post closure obligations as identified in our annual review process that occurs in the fourth quarter. The remaining decrease is due to lower landfill volumes.

 

		Quarter Ended								Quarter Ended
		December 31, 2009								December 31, 2008
		After-tax				Per Share				After-tax				Per Share
		Amount				Amount				Amount				Amount
Adjusted Net income and Diluted Earnings Per Share
Net income and Diluted EPS, as reported		$	315			$	0.64			$	218			$	0.44
Adjustments to Net income and Diluted EPS:
Benefit from income tax related items			(81	)			(0.17	)			(6	)			(0.01	)
Expense from divestitures, asset impairments and unusual items, net			20				0.04				—				—
Restructuring			3				0.01				—				—
Landfill operating costs — changes in risk-free interest rates			—				—				16				0.03
Multi-employer pension withdrawal costs			—				—				13				0.03
Net income and Diluted EPS, as adjusted (a)		$	257			$	0.52			$	241			$	0.49

 

		Year Ended								Year Ended
		December 31, 2009								December 31, 2008
		After-tax				Per Share				After-tax				Per Share
		Amount				Amount				Amount				Amount
Adjusted Net income and Diluted Earnings Per Share
Net income and Diluted EPS, as reported		$	994			$	2.01			$	1,087			$	2.19
Adjustments to Net income and Diluted EPS:
Tax items			(95	)			(0.19	)			(19	)			(0.03	)
Restructuring			31				0.07				—				—
(Income) expense from divestitures, asset impairments and unusual items, net(b)			50				0.10				(14	)			(0.03	)
Multi-employer pension withdrawal costs			6				0.01				24				0.05
Landfill operating costs — changes in risk-free interest rates			—				—				16				0.03
Labor disruptions			—				—				5				0.01
Net income and Diluted EPS, as adjusted		$	986			$	2.00			$	1,099			$	2.22

 

		Quarter Ended December 31, 2009
		Pre-tax				Tax				Effective
		Income				Expense				Tax Rate (c)
Adjusted effective tax rate
As reported amounts		$	347			$	16				4.9	%
Adjustments to Tax Expense:
Benefit from income tax related items			—				81
Benefit from utilization of state net operating loss and credit carry-forwards			—				30
As adjusted amounts		$	347			$	127				36.8	%
(a)   Increase of 6.1% in Diluted EPS, as adjusted.   (b)   Adjustments in 2009 included SAP abandonment in the first quarter of $30 million.   (c)   The Company calculates its effective tax rate based on actual dollars. Rounding differences occurred when the effective tax rate is calculated using the Pre-tax Income and Tax Expense amounts included in the table above, as these line items have been rounded in millions.

 

		Quarters Ended December 31,
		2009				2008
Adjusted Operating Expenses as a percent of Revenues
As reported:
Operating revenues		$	3,006			$	3,108
Operating expenses		$	1,874			$	1,972
Operating Expenses as a percent of Revenues			62.3	%			63.4	%
Adjustments
Operating revenues		$	—			$	—
Operating expenses (a)		$	—			$	(54	)
As adjusted:
Operating revenues		$	3,006			$	3,108
Operating expenses (b)		$	1,874			$	1,918
Adjusted Operating Expenses as a percent of Revenues (c)			62.3	%			61.7	%

 

		Years Ended December 31,
		2009				2008
Adjusted Operating Expenses as a percent of Revenues
As reported:
Operating revenues		$	11,791			$	13,388
Operating expenses		$	7,241			$	8,466
Operating Expenses as a percent of Revenues			61.4	%			63.2	%
Adjustments
Operating revenues		$	—			$	—
Operating expenses (d)		$	(9	)		$	(80	)
As adjusted:
Operating revenues		$	11,791			$	13,388
Operating expenses (e)		$	7,232			$	8,386
Adjusted Operating Expenses as a percent of Revenues (e)			61.3	%			62.6	%

 

		Scenario 1				Scenario 2
Full Year 2010 Free Cash Flow Reconciliation (f)
Net cash provided by operating activities		$	2,375			$	2,450
Capital expenditures			(1,200	)			(1,200	)
Proceeds from divestitures of businesses (net of cash divested) and other sales of assets			25				50
Free cash flow		$	1,200			$	1,300
(a)   Adjustments in 2008 included: $33 million charge to landfill operating costs associated with changes in risk-free interest rates and $21 million charge related to multi-employer pension withdrawal costs.   (b)   Decrease in Operating Expenses on a dollar basis, as adjusted, of $44 million.   (c)   Increase in Operating Expenses as a percent of revenue, as adjusted, of 60 basis points.   (d)   Adjustments in 2009 include $9 million charge related to multi-employer pension withdrawal costs. Adjustments in 2008 included: $33 million charge to landfill operating costs associated with changes in risk-free interest rates; $39 million charge related to multi-employer pension withdrawal costs and $8 million related to the cost of a labor disruption.   (e)   Decrease in full year 2009 Operating Expenses on a dollar basis, as adjusted, of $1,154 million, or 130 basis points.   (f)   The reconciliation illustrates two scenarios that show our projected Free Cash Flow range. The amounts used in the reconciliation are subject to many variables, some of which are not in our control and therefore are not necessarily indicative of what actual results will be.