Management Commentary:

We are very pleased with our strong performance in the first quarter, the result of year-over-year improvement in profitability, margins and free cash flow, stated Keith Carrigan, vice chairman and chief executive officer. These milestones were achieved in spite of a difficult economic environment. EBITDA increased 16.7% over the same period last year, while free cash flow grew 22.5%. The EBITDA margin expanded 60 basis points to 28.0%. Core price increased 3.4% in Canada and 2.5% in the US, demonstrating the ongoing value of our services to customers.

Carrigan added, While the economy in 2009 will continue to present challenges, we are well-prepared to meet them. We are confident that our market-focused strategies, combined with the resilience of our diversified business model and positive cash flow, place us in a strong position for the balance of the year.

Financial highlights for the three months ended March 31, 2009:

Excluding the impact of foreign currency translation, revenues declined (1.0%);

EBITDA increased 16.7% to CAD78.0 million;

EBITDA growth, before the impact of foreign currency translation, was 2.7%;

Free cash flow increased 22.5% to CAD37.7 million;

For the quarter, core price increased 3.4% in Canada and 2.5% in the US;

For the quarter, volumes decreased (2.0%) in Canada and (4.2%) in the US;

Other Highlights for the Three Months Ended March 31, 2009:

On March 6, 2009, the company closed its public offering of 8.5 million common shares at CAD9.50 per share for total gross proceeds of CAD80.8 million. The company applied the net proceeds from the public offering, about $61.5 million, to the repayment of outstanding borrowings on its US long-term debt facility;

On March 30, 2009, the company closed the over-allotment option on its public offering of 1.275 million common shares at CAD9.50 per share for total gross proceeds of CAD12.1 million. The company applied the net proceeds from the over-allotment option, about $9.5 million, to the repayment of outstanding borrowings on its US long-term debt facility;

At March 31, 2009, the company’s funded debt to EBITDA ratios, calculated in accordance with its Canadian and US long-term debt facilities, are 1.96 and 3.44 times, respectively.

The increase in Canadian segment gross revenues is due principally to core price and acquisition growth. Core price growth is due in part to the recovery of recycled commodity price declines. The decline in fuel surcharges is attributable to the decline in the comparative cost of diesel fuel, while the decline in volumes is due in large part to lower third party waste volumes accepted at the company’s landfills. Management remains optimistic that most of the volume shortfalls experienced in the first quarter of 2009 will be recovered over the balance of the year. Recycled commodity pricing declines represent the balance of the change.

Excluding the impact of foreign currency exchange, US south segment revenues increased. Core pricing remained strong, with fuel surcharges representing the primary offset to core price growth. Lower construction and demolition volumes and recycled commodity pricing also contributed to the decline in US south segment gross revenues.

Net of the foreign currency exchange impact, gross revenues in the US northeast segment declined. Lower industrial collection, and transfer and disposal volumes accounted for the bulk of the comparative decline, while recycling commodity price declines also contributed to this segments decline. Acquisitions, coupled with price increases, partially offset the aforementioned. Compared to the preceding quarter ended December 31, 2008, the company’s US northeast segment exhibited stabilizing characteristics in the first quarter of 2009. Management is encouraged by this trend and is optimistic about the US northeast segments prospects for the balance of 2009.

Operating expenses for three months ended March 31, 2009:

The decline in Canadian segment operating expenses is due to lower vehicle operating costs, due in large part to a comparative decline in fuel costs, and lower expenses incurred for landfill development initiatives. These declines were partially offset by higher disposal costs. Higher disposal costs are the result of servicing new customers acquired principally through acquisition.

Excluding the impact of foreign currency exchange, operating expenses in the US south declined. The decline in operating expenses is due to lower vehicle operating costs, which is due in large part to lower fuel costs.

Similarly, operating expenses in the US northeast segment also declined when foreign currency exchange is excluded from this segments period over period change. The principal contributor to the operating expense decline is lower disposal volumes and third party transportation costs. Lower disposal volumes are due to the economic slowdown in the region, while lower transportation costs are due to the comparative decline in fuel costs.

SG&A expenses for three months ended March 31, 2009:

The increase in Canadian segment SG&A is primarily attributable to higher salaries. The comparative increase is the result of acquisition and organic growth, additional compensation expense to retain certain executive employees, and additional sales staff.

Excluding the impact of foreign currency exchange, US south segment SG&A expense increased. The increase is due largely to additional sales staff, salary and facility and office costs and is attributable to organic growth.

The entire US northeast segment increase is on account of foreign currency exchange.

Non-controlling interest:

With the early adoption of Canadian Institute of Chartered Accountants (CICA) accounting standard Non-Controlling Interests (section 1602), effective January 1, 2009, the company changed its presentation of non-controlling interests from mezzanine equity to equity on the company’s consolidated balance sheet. Non-controlling interest is no longer deducted in the determination of net income. Instead, net income and each component of other comprehensive income are attributed to shareholders’ equity and non-controlling interest. Adopting this section affects the company’s determination of net income presented in the consolidated statement of operations and comprehensive income, 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.

BFI Canada is a full-service waste management company, which provides non-hazardous solid waste collection and disposal services.