Free Proposed Findings of Uncontroverted Fact - District Court of Federal Claims - federal

PROTECTIVE REFUND CLAIM Case 1:05-cv-00738-TCW Document 36-3 Filed 11/22/2006

Page 1 of 32
OMS No. 1545132

Form 1120X
(Rev December 2004)

Amended U.S. Corporation
Income Tax Return

Dertnt of th Treur
Inteal Revue Sece
Name

~ 7/30/99
7-

For tax year ending

Entr mont an ar.
Emoy Identicaon nur

Pleas
Type

Browni -Perris Industries LL for consoli4atød ou f k a Bro1 . Perris Industries Inc.. SUid1ari .
Number stret. and room or suite no (If a P.O box see Instrons)

or

Print

15880 N Greenwa -Ha den Lo Suite 100

Cit or ton. stte and zip coe
15880 N. Greenway-Hayden Loop. Suite:.

Telephone number (optinal)

Scottsdale AZ 85260 Enter name and adclress usd on oriinal reurn (If same as above wrte "Same ")
Browninq-Ferris Industries. Inc. & Subsidiaries.

480-627-2736

100 .

Scottsdale, AZ 85260

Internal Revenue Service Center ii .
where original return was filed ,. Ogden, iJT

Fil in applicable items and use Part II on the back to explain any changes

mm
1

Income and Deductons (see instructions)
1

(a) As orllnaUy
reported or as
previusl adjuste

incase or ~deerase)explaIn n Part II
180 923

(b) Net change-

(c) Correct amount

Total income (Form 1120 or 1120-A, line 11) "., ., . ..

3 193 59' 494

602
0

3.112.667.892
3 , 2 71. 762 828

2

Total deductions (total of lines 27 and 29c, Form 1120, or lines 23 and 25c, Form 1120-A), , " .. , ". .,,, . , "
Taxable income,. Subtract line 2 from line 1 ,
Tax (Form 1120,

2
3

3 271 762 828

3

.,,, .

," ..

(78.171,334)

(80,923,602
0

(159.094,936

4

line 31, or Form 112o-A, line 27). . .

4
Sa

Payments and Credits (see instructions)

5a Overpayment in prior year allowed as a credit, " .. b Estimated tax payments , " " " " ,., " '" " . ,.., c Refund applied for on Form 4466 " " '" " , . "" . , , d Subtract line 5c frm the sum of lines 5a and 5b, " , , e Tax deposited with Form 7004 '" .. ".." ,,,",.. ". "

0

5b 5c 5d 5e
Sf Sa

90 500,000

0 0 0
0 0

80.000 000 10,500,000

90 500 000 80 000 000

10.500,000

f Credit from Form 2439 , ,,,.. I.."" .. .. ,..., Credit for Federal ta)C on fuels" '" , ., , , , "" " g
6
7 8

"'I ,_ ",. -,

5 447

0

5

447

Tax deposited or paid with (or aftr) the filing of the oriinal return ". ,
Add lines 5d through 6, column (c) , .
"'''.1 "

'" ,

'"'' .".- ."",
,,' ...1
" ,

,.,,,,, "

6

I" '" ."

" ,,,..,,.. '.1"""

,,' ,

". i."

Overpayment, if any, as shown on original return or as later adjuste

,.."" . ."" ..,". ",. . '" '"

7 8

10.505,447
10. 50544 7
0

9

Subtract line 8 from line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9

Tax Due or Overpyment (see instructions)
10 Tax due. Subtract line 9 from line 4, column (c), If

Staes Tresury " , , , "" """ ".,,,.,,,,, ", ",,"" '" "" ",.,,, " ,. , ., , , " ., " , " , " , . , ~ 10
11
Overpayment. Subtract line 4, column (c), from line 9 """" ,." ",.",,,,,,

paying by check, make it payable to the "United

o
o

,." ".."."", .". ~
Rended ~

11

12

Enter the amount of line 11 you want: Credited to 20 estimated ta ~
(other th n taxpayer) is ba 0 II Information of which preparer has any knowlege

12

o

Uncler penalts of perJur, I declare that I have filed an original return ancl that I have examined this amendecl return, Incuding accompanying schedules and statements, a 0 th best of my knowteclge and belief this amenclecl return Is tre correct, and complete. Declration of preparer

Sign Here
Paid Preparer's Use Only
ISA STF FE04298 1

~ Sig ature f offcer

Date Date

l-~~

~ Vice President - Tax
, Title
Preparets SSN or PTIN

Prparer's ~
signature ,

Firm's name (or ~ yours If self-employed) ,
address and zip code

For Priva Act and Paperwk Reducton Ac Notice, see pae 4.
98

Fonn 1120X (Rev. 12-2004)

PROTECTIVE REFU CLAIM
0M1l. 154132

Fo 1120X (Re Oor2O)
~

Amnded U.S. Coon

~d"'T..

Inco Tax Rern

.. U_i-1Nl Pa 2
Ii Ei of CI to Iti in P8 I (En th li numbe to pa 1 fo th It yo are dienln an gi th -i fo ea di Sh ei colB In de Al, 88 Wh To At OI pa 3 01 th 1i)

No
...rr. %I-iri. me. ..

.l'rrb l-ri.. w. tor Cl1dte

--.

Ty or

__.It-ior....

(I.

PO

. bo __)

Pr
480-627-2736

CI or lo. _ an ZI co

1588

Grewa -

~e 1 Q

ToI- (_)

Ca Clonpi3,lIchi-..... _...... ......_ ......... ................ .......... ~ 0
TaIlnm8 ßI 1\ de due to th ca los ni In li cl for rend RD to th Il _en Ju 30.199. PJllto Al1 fa an einan of1hcl In ToIln.

If th cJ Ia du iø e ne op 10 ce a calo ca or a ge ln ci csri -

Scott.dale AZ 85260

Enrnomeltodd-_onoiat_('"",,__'S') 15880 N. Greenway-Hayden Loop, Suitel100, ""_-Feris _tries. Ii. ~ _.idi.ri.. Scottsdale, AZ 85260

wh original re wa fied r Ogde~, UT.

Inl Reue Se Ce lr

Case 1:05-cv-00738-TCW

..
1

Fllin applicle It and us Part lion th ba to exin any chaes ib =ri- Ie) cc_ (oMoi 1""Ne "'_ Inc and Deucons (see Insruons) iidoIocju or"
3: 1'3 5!J l9l
ISO 923 60 3 271 762 828 3 112 661 892 i 271 762 828

Tai In (D 3) ha de du to th ca lo I'ss in li 1 as ex abo.

1

T01IIn (Form 1120 or 1120-A lie 11) .
2
3
(7S .171. 334)

2
(80.923.00

Tol deducs (tol of "nas 27 and 2ll Form 1120,

or lins 23 an 25c, For 1120-A) .. ..
(159.094. no)

.. ..
4
5a
I !I 90 500 000 80 000 000 0 So 000 000 0 0 90 500 000

3

Taxable In. Subli 2 fr lne 1. ..

4 Tax (For 1120,In8 31 or For 112( Hne 27) . . .

Paymnt and Crets (se insions)

5a Ovyment in prr ye allowed as a cntt . b Es ta paymen . . . . . . . . .. " .
5c 5d

o Rend applie fo on Fon 4466 _ _ . _ . . .. ...

Document 36-3

d Subt In 50 fr the sum of Ines Sa and 5b. . .

e Tax depo wi Fon 700 ..
0 0 . ...

.... ..,1I ISa
. . . .. .. ...-

li

10.500,000
0

10,500.000

f Crdtt fr For 2439

. --

'" . ~ . . .

g Ciedtt for Fedella on fuel. .

.-, .

..

. ..
10 50S 447 10 505 ..,

S

Tax deposte or pa wtth (or ii) th filing of the orl nium ..
7
8

...
S

7 8

Ad Unes 5d throh 6. coi-n (e) . . . ... .. .

Overpnt If sny. as sh on orna nil6 or sa late adjus
9
0

--_. .-

..,_n

9

Subli8 fim Øn 7..... . . . ....... .. ... ....... ........ ............. ........
pa by c: ma tt ps to th .Unl

Tax Due or Ov (se instctns)

10 Tax du. Subl line 9 fr lin 4. coumn (0).

If

Filed 11/22/2006

St Ti-ur .. ". ... .."... _ " .. ..... .... .. .. . . . . ~ 110

11 OV Subct On 4, colun (c). fr ine 9 .. ..... . . . . .... .. ........... ~ 11 0

12 Ener th amou of lin 11 yo wa Cn to 21 es lI ~ Re ~ 12 0

SIn

He

_ _ .....iim bo dmyii anbe 1N - _Is'" ~-ils _of__tion-- _. an colo Do of prp..

IJ po_ of po. 1_ _ I "" _on odni ..d tIl "" _1h _.. in øc_ng

~ klJ! j i t. ~d6 ~ ~"" Pxeidet . Tax

Pa

Page 2 of 32
Fa 112i (R.12)
Fonn 1120X (Re. 12-20)

~ Prs =.MI) ,I na (or ~ EIN Aml. Do Ilt 0 C:::'GtPnN _ f an ZI co Ph no. Us On ad

Far Pr __ "- Rs_ _-. _ _..

IS ST F! I

\0 \0

ST....

PROTECTIV REFU CL
PROTEcnVE REFUND CLIM

BROWNG-FERR INUST LLC
BROWNING-FERR INUSTRS, LLC
FOR CONSOLIATED GROUP FIKA

BROWNING-FE INDUSTES, INC. 8& SUBSIDIAS

FOR CONSOLIDATED GROUP FIKA

BROWNG-FERRS INUSTR, INC. 8& SUBIDIAES
EMPLOYE IDENTIFCATION NUER 74-167368
7130/9 FORM LLZ0X EXPLAATION OF CHGES

EMPLOYE IDENCATION NUER 74-1673682

7130/f FORM LLZ0X EXANATION OF CHAGES

INEX OF ATIACHMS

ATTACHNT 1
The bases for the changes reueste in ths clai for red ar se forth below

Case 1:05-cv-00738-TCW

1. Explanon of Ches
The tem "Clait" as us heiei refer to Brown-Feins Indutres, LLC and the meibes
ofits coolidate group as appropiiate. Unless otheiwise indicaw, secon ("§") referce are
to the Intem Revenue Code of i 986 ("IRe", as amenw, as in effect for the ye in iss.

2. As Am~w Schwwes

3 IRS Audt Statement (Fonn 3610)

4. IR Examnation Repit (Fonn 886A)

Based on the ches set fort below, Claimant is entitled to a refud of $-0 or such grter

S. Copy

of

Rev. Prc. 200-43 Desgnation

amount as is legally refudale.. In addition, Claimant aser tht it is entitlw to all coiielative
and coputional adjustments and consuetial chaes to any item (includg, but not
limtw to, its alterve mium ta environenta ta, net opng loss deductons and net

Document 36-3

opeati loss caiybacks an caiyveis, capita loss dedctons and caita loss caback and

caiyver, and ta credits and ta crit cabacks an caiyveis) afecng this yea.
Claiant also reue a refd of al related inteest, peties, or additions to ta tht have be
oveipad_ Clt also reues sttuory intert on any overayment as provided by law
(including but not limitw to, the benefit of offetng, inte netg, an the net intert rate of

Filed 11/22/2006

ze on peiiod of oveilaing underyment an oveyment).
Purt to Tre. Reg. § I. I 502-77 A( d), efecve for the taable yea ended July

30, 199 (the "1999 ta ye"), an the Designon filed at Ogden Uta on or about Augu 24,

200, in accrdance with Rev. Pr. 2002-43, BPI Waste Sysem ofNoith Amerca Inc. ("BPI

Page 3 of 32

o

2271

226'1 1

o

Wase") is the duy auori agent of

the conslidaed grup (the "BPI Grup") of

which

fo th mangement of the liabilties and copliance with aplicale reatoiy laws, as shwn

Browng-Fei Inuses, Inc. ("BPI Inc") was the coon pøeit plor to its teition on

on Exhbit 2. In orer to conslidae the liabilties in the conesdig liabiity magement
copanes the BFI Seler contrbut ce notes in an aggga amount of$902,561 ,661 to

Decbe 30,200. BFI Waste fied ief clais for the 1999 ta yea on belfofthe BF!

Grup at Aus Tex on or about Aug 24, 200. The prtecve iefud clam filed helm by

the liabilty manent compaes in exche for (i) Clas B Coon Sto and (ü) the
asption by the liabilty mageen coes of cotigent liabilties in the agga
amount of$901,660,OO7. The abve tracons wer ta-fr exches pu to § 35i.

Claimat for the 199 ta ye is inten to be efecve only in the event th Clait, and not

BFI Wase, is deteied to be the prper agent for the BPI Grup

Pror to the Degnon punt to Rev. Pr. 2002-43, the BFI Grup incui-

Ea of the BFI Seller then sold thei mes of Clas B Coon Stoc to

Case 1:05-cv-00738-TCW

an aggiegae capita

loss of $901,660,00 on the sae by cetan ofits membes (herer

envinmenta an ince cota with considetle exse in the liabilties manged

reerred to as the "BPI Sellers") of Clas B Con Stoc in si liabilty manent

by the respectve liaity mageent copay (herfter iefei to the "Constig
Invess''). Se identities of Consti Invesor at Exhibit 2. The owneilnp of the stock

companes, as shown on ated Exhbit 1, to unlated investo durng the 1999 ta yea.. As a

ret, Claimat is entitled to off ths cata

loss agai caita ga net incoe of

prvidès an equity incetive for the Consti InveslS to aggsively identify and tae

$80,923,602 in the 199 ta ye..

This results in a retion in Claiant's taable incoe for

advantae of cost-savig opprtties in man the liabilties
The agggae amount real by the BFI Sel1eis on the sale of the Clas B
Conuon Stock dung the 199 ta ye

the 1999 tax yea in the amount-of 580,923,60 or such oth prper amount as prvided by law

Document 36-3

In July 30, 199, Alüed Wase Industres Inc. ("Allied") acquired substatialy

was $901,654. The BFI Seller' ta bas in the Clas
the ta basis of

all of the

outstading stok ofBFI Inc.. Pror to the acquiition, BPI Inc. utilized alaige in-hous

B Coon Stok was a substtu bass equa to the su of

the pr wlnch

sta to mage the liabilties aiisig fr its operations. In contr Aled utiliz a sml in-

the BF! Entities contrbuted to the liabilty manageent companes an unuced by the
liality mageent companes' assmption of

house staff and outsuice most of its envinmenta mageent, nsk magement and other

the liabities in acrdance with § 358. As
shown on Exhibit 1, the BPI Sellei' aggte tax basis in the Clas B Common Stok was

exper.
the acqition, BFI Inc. iect.ed the

In July 1999, shorty before the close of

5902,561,661. The liabilties do not re st bas bee they ar excluded uner
§ 357(c)(3) an therefre, § 358(d)(2) aplies. Alteinatively, the liablities are not taen into

Filed 11/22/2006

mageent of its contingt liabilties in a maer consste with Aled's outsurng

approac an to prvide a lega str tht would foster the effecve magement of the

accun under § 358(d) becus such contingent liabilities ar not "liabties" for fedeia1 incoe
ta purose. Coequeny, as shwn on Exbit 1, the BFI SeUei' sales of th Clas B
Common Stock reste in an aggega cata loss of$901,66,Oo-7 in the 1999 ta ye.

liabilties As a relaceent for BFI Inc.'s heavily staed inteal deartments, BFI Inc.

estalied six sepaite liabilty mageent copaes bas on the spfic expere neeed

Page 4 of 32

.. o ..

226271 2

22 i 3

Claiant's deucton of the caita los restig fiom the sae of the Clas B

Common Sto dur the i 999 ta yea by the BFI Grup was disalow by the Interna
the caita loss is

Revenue Service's (the "Serce; examtion te The disaowance of

reflec in Ise 71 of

the Examon Rep dated May 31,2002 ani- Setembe 3,

200.. The dilowance of the caita loss is inco an without mert. Claima hery

l II llllllllll¡ f!!II!! II llllllilllll! l
i !l illllillill !lIIIII ~l 1l!l~lå~IIl11 If

incorporate by reerce al docents, lets, scedes, exlantion, prte an other

coirepondence on th issue sulied to the Serce

II "O~D. N~ ; li'~G=2 ¡¡ ~~ ~H ~-z ~;

~~ _ N " ~ .

Case 1:05-cv-00738-TCW

As a ret of

the chges hern, Claiant's ta liability is i-uc by $-0- or

l II ~~lE!!¡§~~l g~!!l!l ~¡ l.i~al~ij~1 a§~. .
J ij N.~ ~ § ~-. G~ ii~! ~~.;r! .~ i

such giea amowit as is legally redable.

¡II
ail~i
I ~ I~. ei~...ll.

Ii !11!lillll !II!I! I 1!¡il!11 III
~illl~ilfjjli .lil.~ f ~ilU~ i -l~l.~

Document 36-3

i ~.ll l~!.li~ ~l.l~I' i l l~l ii ll

l ll!lllll~1 IIIIl ~ lllll~ll Iii
l ti!lliii1ll l.

li~II'1 iBIElI sleisl ii2 S 8I

, l lllllll' Iii

ii .111. ii If f ~ !I .. I If
ill11 I i~ii.l~~~~~ III

.l

i j~iij~ f iii
ill II i.li.lj~.l.l Iii l

Filed 11/22/2006

i- ~~~~s~~~~~ llllll - l'lfllli ill I
l ~iiiiiiiiil iiiiii' f iiiiiiii' iiiW I I! lllliillijl rllll,l II llJlllliï !II~ l

Page 5 of 32

.. o tv

22621 4

/.'1

BIOWIG-FE INUS, LL for

COIfSOLII' &IOUP Ukl a BIOWI&-FEUI

IIUS me. It SDSIIAS EMLOYE mERCITlOll1Ei 74-16"3&82

llRM 112X EXTION OF CHGE

ATlACB i

EX 2
CouI Ii
FOS Bivl

LI Ma
He It AI~ Po Sl
COMC Bivl Ltd

De otLl Aamed

BP Se Grup

~
He It AI Nebo Pc
TI W~ COCORBivl LI
He It Asia NeI Pc
TI Web COMCOR Ei Ltd

It po CO -i wi cI

Ii

Case 1:05-cv-00738-TCW

BilimiPac, CoIS wi ii _ ii li Asia

Ii.

BF! Ei Sy ofS-.In.

Ridioo _ UId wi c:lc_

II
He It As
NeI Pc
Ti Web.

BFl1I Rive (L.

me.

Tn CO fo Si ii i-

co po Je ie an re le ai ei_
COR BiYi LI.

Document 36-3

ofP1. ~
WI Ca Co. of Ar

BP Bi Sy

Clo CO c: CO an ii __1

- IS wi op Id lI

FOI Bi He It Asia

BrFmiIn. Inle Il

Co li Li Md's '--)(au ge an

Filed 11/22/2006

Page 6 of 32

o

U-

i.s

Case 1:05-cv-00738-TCW

Document 36-3

Filed 11/22/2006

Page 7 of 32
OMB No. 154132
For ta year ending

Form 1120X
(Rev December 2004)

Amended U.S. Corporation
Income Tax Return

Depantent of the Tresury

~ 09/30/97
Entr mont and yer.
Employe ldeUfc:on numbe

Intl Revnu Sece Name

Pleas BPI Waste S stems of North America Inc. Desi ee for Consolidated Grou f k a 41-1696636
Type

Number street and room or suite no, (Ita PObox see instrctions) Browning Ferris rndustries, Inc, and Subsidiaries

or

Print

15880 N. G:i'eenwa -Ha den Loo Suite 100
City or town state and zip ooe
Telephone number (optional)

Scottsdale, AJdzona 85260
Enter name and address use on original return (Ifsame as above wrte .Sarne,")

480-627-2700

Browning-Fe:i:ris Industi:'ies, Inc. & Subsidiai:ies, 757 N. Eldiidge, Houston TX 77079 Internal Revenue Service Center ..
where original retum was flied r Austin, TX

m.
1

Fil in applicable items and use Part II on the back to explain any changes
Income and Deductions (see instructions)
1

(a) As oriinally reported or as

(b) Net changeIncase or ~decrease)-

previousl adjust

explin n Part II
0

(c) Core amount

2

Total income (Form 1120 or 1120-A, line 11), " . ..., , , Total deductions (total of lines 27 and 29c, Form 1120,
or lines 23 and 25c, Form 1120-A) ., . . ... . .... ,.. ,.,..

4,389,800,149
4,234,964,403
154,835,746
42, 784,657
0

4,389,800,149

2
3

80,923,602 4,315,888,005

3

Taxable income Subtract line 2 from line 1
Tax

...1.1""., "

(80,923,602)

73,912,144

4

(Form 1120, line 31, or Form 1120~A, line 27).. .

4

(18,549,092)
0
0 0 0
0 0 0

24,235,565
0

Payment and Credits (see instructions)
5a Overpayment in prior year allowed as a credit. . " b Estimated tax payments ' "" .1 I,.'" ...".."" ,'.'... ". , c Refund applied for on Form 4466 " , ,.." '-.1 1..1 I.. i d Subtract line 5c from the sum of lines 5a and 5b.. . .,
5a 5b 5c 5d 5e 5f 5g

102,500,670 32,709,291 69,791,379

102/500,670 32,709,291 69,791,379

e Tax deposited with Form 7004 , .' . , , .. . . . , , ,.. '..1 I f Credit from Form 2439" ., , ., , . , , ., . , '.1'. _, . . .,,,. . g Credit for Federal tax on fuels, " 'I" ,. 'i." , " ., .... 'I
6 7 8

Tax deposited or paid with (or after) the filing of the original return
Add lines 5d through 6, column (c) ,. . ., , . . ,. , .. , . .. . '. , ,

I- , "

, '" , '" , '"

,.. ii

6
7

19,079 286

.,. ". " .." ., ,. " ". ,. ., i.." .. , i'..' . Overpayment, if any, as shown on original retum or as later adjusted . , ,. . .1.1. "" I.. "" "

8 9

88,870;665 46,086,008

9

Subtract line 8 from line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

42,784,657

Tax Due or Overpayment (se instructions)
10 Tax due. Subtract line 9 from line 4, column (c),. If paying by check, make it payable to

the "United
11

States Treasury" " . . . .. " " , . ,. ,. , .. " , .. . . , .. , ., " . , .. . ,.. , , ...' .",.",,,,.,.,,,,,,,,,.,.,,,,,,,.... 10

o

11

Overpayment Subtract line 4, column (c), from line 9 '.", ""..."....,.""".,." .".,."

18 549 092

12

Enter the amount of line 11 you want: Credited to 20 esimated ta .. Refunded ..
(oUier than xpayer)::as on II

12

18,549,092

Under penalties of perjury I declre tht I have filed an orginal retum and that I have examined Uiis amended retum, Including accmpanying schedules and sttements, an Uie best of my knwlge and belief, Uils amended retum is tre, corr, and complete Delaration of preparer

Sign Here
Paid Pre parer's Use Only

Information of which preparer has any knowlege.

~ Signature of offcer t: .;d6
slgnature ,

Preparer'$ ~ Date

~ lltle v' p
Preparer's SSN or PTIN

address and zip coe For Privacy Ac and Paperwrk Reduction Act Notice, se page 4.

Firm's name (or ~ yours if self-employed) ,.

Form 1120X (Rev 12-2004)

ISA STF FE04298F 1

104

0M No. 154132

Fonn 1120X (Re 00_2()
~

Amnded U.S. Corporion

Or d l' TNMty IiRenuSe

Income Tax Return

Na
TeI numb (opt)

ii l! li CI to i- In PI I (E \h IN IU fl Jl1 fo th ii yo -

..11l _lH .. 2

Ple
480-627-2700

BPI Waste SvsteaB of Borth Amdca. IDC. Deaicmee for Cc1idate4 Gro f/k/a

Ty or

~ we ind rom or si no.(I. PO box eell'clns) Brii i'errl& InWltriu.

Pint

15880 N. Greenwav-Havden Lo Suite 100

c.Cl...pi3,an~he " .. . . . _ .. .. _ . . .. .. . . .. .. .. . . . . . . .~ ~

~ lI cI II du ti all ~.. ca a co.. ~ 01 a go-i cN ca-

O/, pi 8 giv1I 1n) ee ch. Sl en copu In deL AI _ wiTo At on øn of th i- fo

CI or "" .. and ZIP oo

Scottsdae. Aidzon 85260

~~(la)~_~~~~~~~..~~~.~__..._._.._._......
~.. Ju 10,181 .... ti At I foii-ill oftl ch In Tcá Do --_._._.---_......_.......__..._..__..__._..._---_...._.._...._.-------_.._----_._..._--_..
1!'

Eite neme an adress use on oral re (1f18 as abo wrte -Sa.,

Brownncr-Fenis Indutr'ies. Inc. r. Subsidiaries. 757 N. Ildridcre. Houton TX 77079

Intrnsl Revue Se Ceter li

wher onglnal return wa file ,. Austin, TX

Fil

In applicable it and us Part II on the bak to expin any chnges

T- "" (i S) i-.. du to.. ai ne CI .. ca lnii In 1l 2 -------_.._._----- ---~_...._.._...._._---_.._........__..__.-

..
r-~ju~
1

Income and Deon (see instructions)
4.389,800 149
0

(a/4orna
(b) No chllo-

i-t =ii(cl Co amou
4 389 800 149 4.315 888 005
80 923,602

Case 1:05-cv-00738-TCW

--i-.

1

Tolalincoe (Fonn 1120 or 112o-A,Iine 11),

.,...-:----_._-..-....._..........__...._------_...._..-..._.-..._..-_..._. Fe ii TII (i 4) i- -i li. th -i not op.. -i _.. aI .
...._-_._----_._.-.-._....----_._._.....,_..._---_..__..-_..--_._.__.
i :-.:,':

2
2 4,234.964,403 3

Totdeducons (tol of ines 27 end 29c, Form 1120, or lines 23 and 25c. For 112o-A) ., .... .

3

Taxabl Incoe Subtrct line 2 fr Rne 1 ...
4

154.835,746

(80,923.602 (18.549,092

73,912,144 24,235,565

4 Tsx (For 1120, Ine 31. or For 112o-. One 27\ . . .

42.784,657

__.._..._............_u__.____.....:...._.._...._._..

.. . ......... .

Pament and Creit (see instruons)

Sa Overyment In prir year allo as a credit _ Sa 0 0 0

.._.-------_....._-_....._.._.._-_..._.._._....__..__.._---,~..-..__..._-.......-.....

Document 36-3

b Estimted ta paymnts .... .. . , , .. .. . . . . . 5b 102.500,670 0 102 500 670 c Refnd applie for on Fonn 44ee . . . , . . . . 5c 32.709,291 0 32,709 291 sum of Dnes Sa and Sb.. '5d 69,791,379 0 69,791,379 d Subtct Une5cfrrn the

. .
.._.._..._--_..-.......

._-_..._._.._-_._--.._-_._-...__..._---_..-..-._...~.__._..-_..__.__...._-_._.__._----_..._-'._-'._._.._._._......__......-.__...-_...__.---_.._...._.......

e Tax depited wi For 7004 , " , ' _ Sa 0

g Credit for Fedral ta on fuels,. .. : ',. I5T 0

f Credit fr Fonn 2439 ..!I 0

II Tax deposit or

paid wi (orafer)Uie fiing ofth oriinal return ,..,.,." 8 19 079 286

7 Ad Inss 5d Uiroug 6, column (c) . ,. ., .,., ."'" . .".. . . . . 7 88,870; 665

8 Ovrpent, n any. ai sho on oriin reurn or as laer adjusted . ' .." ., .' 8 46 086.008

9 Subt line 8 frrn line 7 .. . ....... .. .. .. .. . .. .. . .. . ... .. .. .. . . . ." . . .. . . . . .. .. . . 9 42, 784,657

Tax Due or Ovrpnt (se instrctons)

Filed 11/22/2006

10

Tax cl. Sublrct line 9 frm "004, coumn (c)" npang by chck make it payable to th "Unit .~....-". ~ ,. .. .. '.'

St T..ury .
10
11

.--,-+,.
18 549 092

..."

0

--...._.._-_.-.._-_.__..._..-.._._--...._-,--._.._------_._-._.._.__._..'...._-..... . -..-l.---,._..__...__.._.._.___......._______..____.....___...__._.__..__
~~--~.._.:..._---_.......-.._._-_.._-_.._._._-_..._...-..-_.-..--_..........._._....._..._._._,-

11

Ovnu Subtct line 4. column (c), fr lin 9 '"

...... ..' ,....

~

I' . .
.. o VI

12

Entr th amount of line 11 you wa Cr to 20

Rend ~ 12 18,549,092 Urxer i:01.... of pe 1 myknthanbaW, an oi rem en th I ha ØI th eme Ntrn 5n ecny de,. I h.. lid """"od..10 We, _. an: _.. Qan 01.."" - .nd -'RJ bo 01

es ta ~

'"-:------_..._._.__...._---_.__.._._---.._- ---_..__._--_..._......-...._---..-_.__._..._.-...__.._--_.._---_.._.._._.._..-

Sign Here
I Da

~:ß. i HoRd6 ~ i/P
I EI
Pt no

(_ ~1'r\)ba on I -ill 01 wIl: ii_ oa. ankn

Pa

Sl.. 01 olr DaIl_ I~D

Pnparea ~

P!pn1 SS or PTIN

.Ì' 112G",~
Fenn 1120X (Re 12.20)

Fi's name (or ~

Page 8 of 32

Us Only

Pnis ~~~..~\ ' an ZI co

.. ST~'

For Prl Ad

and Pa Reuc Ac -. _ _ 4.

~ -GOVERNMENT

L EXHIBIT

I /1.

BROWNG-FERRS INUST, INC. & SUBSIDIA
EMPLOYER IDENTIFICATION NUMER 41-16966 9/30/97 FORM LLZ0X EXLANATION OF CHAGES

BFI WASTE SYSTE OF NORTH AMRICA, INC. DESIGNEE FOR CONSOLIDATED GROUP F/KA
DESIGNEE FOR CONSOLIDATED GROUP FIKA BROWNING-FERRS INUSTRS. INC. & SUBSIDIAES

BFI WASTE SYSTE OF NORTH AMCA, INC.

EMPLOYE IDENTIFICATION NUER 41-1696636 9130/97 FORM iiiOX EXPLAATION OF CHGES

INEX OF ATlACHMENTS

ATlACHM 1
The bas for the chan iequeste in ths clai for red are se fort below.
The tei "Claiant" as used heiein iefers to BFI Waste System of

I . Explantion of Changes

Nort Amerca Inc. an the

2. As Amended Scedules

membes of its conslida group as appi-opiiate. Unles otherwise indicated secon ("§")

Case 1:05-cv-00738-TCW

3. IRS Audt Statement (Foim 3610)

refeience ar to the Interna Revenue Code of 1986 ("IRe", as amended, as in effect for the

4. IR Examtion Reprt (Form 886A)

yea in issue. Based on the chges set foith below, Claiant is entitled to a red of
$18,549,092 or such greate amount as is legaly iefdable. In addition, Claiant aser that it

5. Copy of

7130/99 Claim for Refud (poim 1120X)
is entitled to all corielative and computational adjustments an consequential cha to any

6 Copy

of Rev. PiOC 2002-43 Designtion

item (including, but not limited to, its alteinative mium ta, enVÏonmenta ta, net operating
loss deducons and net opetig loss caiybacks and C8iyovers, caital loss deductons and
capita

Document 36-3

loss caiybacks and cai-yvers, and ta ciedts and tax ciedit caybacks and caivers)

afectg ths year. Claiant alo leqUesS a refud of all related interest, penalties, or additions
to ta tht have bee overpad. Claimat also iequests sttutory inter on any overpayment as

piovided by law (includig, but not limited to, the benefit of offettg, intert netg, and the
net intert iate of zeio on periods of overlapng

undeiayment and oveiayment).

Filed 11/22/2006

Pusuant to Tiea. Reg. § I. i 502-77 A( d), effective for the taxable yea ende

Septembe 30,1997 (the "1997 ta ye, and the Desgntion filed at Ogden, Uta on or about

August 24, 2006, in accidace with Rev. Pro. 2002-43, Claimant is the duly authoiized agent
of the conslidated gl'Up (th "BFI Gioup") of

which Biowng-Feiiis Industries, Inc. ("BFI
Inc.") was the coon paient pror to its teimination on Decber 30, 200.

o

0\
226321 226321 1

Page 9 of 32

Pror to the Deigntion purt to Rev PIoc.. 200-43, the BF I Grup incuire

the liablity magement compaies in exche for (i) Clas B Common Stock, and (ii) the

an aggl'egat capita loss of$901,660,OO7 on the sale by cer of

its member (heiafer

asption by the liabilty manageent copanes of contient liabilities in the aggegae
amount of$901,660,OO7. The above trctons wer ta-ftee exclges pUiSuat to § 351.
Each of

refmed to as the "BFI Selleis'') of Clas B Common Stock in si liability mageent

compaes as shown on atthed Exhibit 1, to unelate investo duing the taable yea ended

the BFI Seller then sold thei sh of Clas B Coon Stock to

July 30, 1999 (the "1999 ta yeal'). Clait is entitled to offet ths cata loss agast capita

environmenta and Inance constats with considerble exper in the liabilties maaged

gan net income of$80,923,602 in the 1999 ta year an as a rest, is entitled to an additiona

by the respectve liabilty maageent company (herfter refeired to the "Consti
Investors"). See identities of Constig Invesors at Exhibit 2. The ownerhip of the stock
provides an equity incetive for the Consulting InVesOI to aggesively identify and tae
advantage of cost-savig opprtuties in maagi th liabilties
The agggate amount reized by the BFI Selleis on the sale of

net opetig loss caryback frm the 1999 tax ye to the 1997 ta yea in the amouit of

Case 1:05-cv-00738-TCW

$80,923, 602 01' such other proper amount as provided by law. Th results in a redcton in

Clait's taable income for the 1997 ta yea in the amouit of$80,923,602 or such other

prper amount as provided by law.

the Class B

In July 30, 199, Allied Waste Inustres, Inc. ("Aled'') acqre substantially

Common Stock dur the 1999 ta ye' was $901,654. The BFI Seller' tax basis in the Clas
B Common Stock was a substitu basis equa to the sum of the ta basis of

al of

the outstadi stoc ofBFI Ine. PrOl'to the acquisition, BFI Inc. utiliz a large in-hous

the proper which

staff to manage the liabilties arsing ftom its opeations. In contrt, Alled utilized a smal in-

the BFI Entities contributed to the liabilty mangement coanies an unuce by the
liabilty magement companes' assumption of

Document 36-3

house st an outsuice most of its envinmenta mangeent, risk magement and othei'

the liabilties in acce with § 358. AI

extise.

shwn on Exbit I, the BFI Seller' agegte tax basis in the Clas B Common Stock was
$902,561,661 The liabilties do not reuc stok basis becuse they are excluded under

In July i 999, shortly befoie the close of the acquition, BFI Inc. rescted the

mageent of its cotingent liailties in a maei consistet with Alled's outurg

§ 357(c)(3) and, thfore, § 3S8(d)(2) applies.. Altevely, the liabilties are not taken into
acunt uner- § 3S8(d) becuse such contient liabilties are not "liabilties" fol' federal income
ta puse. Consuetly, as shown on Exhibit 1, the BFI Seller' sales of

apach and to provide a lega stne th would foste the effve mangeent of the

liabilties. AI a relacent fOI BFI Inc.' s heaviy stffed intena depaitnents, BFI Inc.

the Class B

Filed 11/22/2006

eslised six searat liabilty mangement companes based on the specfic expese neeed

Common Stock reted in an aggte capita loss of$90l,660,007 in the 1m ta yea.
Clait's deducton of the capita loss resti ft the sale of the Class B

for the magement of the liabilties and compliance with aplicable reguory laws, as shown

on Exhbit 2. In orer to conslidate the liabilties into the corrpondig liabilty mangeent

Common Sto durng the i 99 ta ye' by the BFI Group was disalowed by the Internal
Revenue Serce's (the "Service'') examnation tea. Th disalowance of

copanes, the BFI Seler cotiibuted ce notes in an aggegate amount of$90,S6I,661 to

the capita loss is

.. a

Page 10 of 32

--

222\ 2

226l' 3

Case 1:05-cv-00738-TCW

Document 36-3

Filed 11/22/2006

Page 11 of 32

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Case 1:05-cv-00738-TCW

Document 36-3

Filed 11/22/2006

Page 12 of 32
OMB No. 1545-132

Form 1120X
(Rev Decmber 2004)
Deartt oIlhe Treur
Internal Revenue Serce

Amended U.S. Corporation Income Tax Return

For ta year ending

~ 09/30/98
(Entr mo and ear.
Employer lclcatln nuber

Name

Pleas
Type

BFI Waste S stems of North America Ine. Deai ee for Consolidated Grou f k a 41-1696636 Number street and rom or suite no (If a PObox, see Instructions) Browning Perris Industries. Inc and Subsidiaries

or Print

15880 N. G:ieenwa -Ha den Loo Suite 100
City or town, state and zip coe

Telephone number (optinal)

Scottsdale, A:i'izona 85260
Enter name and address used on original return (if Browning-Fen

480-627-2700

same as above wrte .Same,")

is Indust:iies, Inc. & Subsidiai:ies, 757 N. Eld:'idqe, Houston TX 77079

Internal Revenue Service Center il
where original return was filed ,. Austin, TX

Fil in applicable items and use Part II on the back to explain any changes

ID
1

Income and Deuctions (see instructions)
1

(8) As Oriinall reported or as
previousl adjusted

increase or (dectease)explin in Part II

(b) Net change-

(c) COrrect amount

2

Total income (Form 1120 or 1120-A, line 11) ,., ",,", Total deductions (total of lines 27 and 29c, Form 1120, or lines 23 and 25c, Form 1120-A) '" , , .. , ' ,.., , ,.
Taxable income, Subtract line 2 from line 1 . ,-..... ,.. .
Tax (Form 1120, line 31, or Form 1120-A,

4,409,436 882

0

4,409.436,882 3,948,907,315
460,529,567

2
3

3,948,907,315
460,529.567

0
0

3

4

line 27)...

4

66,149,601 46,086,008 100,000,000 54,584,807 91,501,201

(9,711,514)
0
0
0 0

56,438,087

Payments and Credits (see instructions)
5a Overpayment in prior year allowed as a credit ,. , b Estimated tax payments , ,., . ,." 'j ,., " " .., '0' ,.
,,-. . ... ,..

Sa 5b

c d e f 9
6
7 8

Refund applied for on Form 4466 .." "'" .. ., " ,.." , Subtract line 5c from the sum of lines 5a and 5b, , , " Tax deposited with Form 7004 ." , , , , '" ,.,., , , " Credit from Form 2439" ., , , , ., ,',," ,.. I "... '''' ,,".. I Credit for Federal tax on fuels., ., ,., I ...... . i'. .. " .

5c
5d

46,086,008 100,000,000 54,584,807 91,501,201

5e
Sf Sa
'"'''' , ,,,,,...,, i'.

0 0 0

Tax deposited or paid with (or after) the filing of the original return

'"'' ."..

6 7 8

3

519,979

Add lines 5d through 6, column (c) " . , , , , " . ,

,,

, . " . ,- .. , ~ ' " . " .

, ,

Overpayment, if any, as shown on original retum or as I~ter adjusted ,. , , . -, ."",

". ". .., ,', ,., ",... . , , " '" '"'' , ,.,

95,021,180 28,871,579

9

Subtract line 8 from line 7 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9

66,149,601

Tax Due or Overpayment (see instructions)
10 Tax due. Subtract line 9 from line 4, column (c)" If paying by check, make it payable to the "United
Sttes Treasury" " , , ., " , , " , , " " . , ,. , ., " .,,, """,',,''','' " " , , " , , " , , " , " " " " " , ,,~ 10

o

11

Overpayment. Subtract line 4, column (c), from line 9 .,. , , ., " ." ""'" '" , , "., . ~ 11 9,711,514

12

Enter the amount of line 11 you want: Credited to 20 estimated tax ~ Refunded ~ 12 9, 711, 514
Under penalties of perjury I declare that I have filed an original return and that I have examined thIs amended return. including accmpanying
schedules and sttements. and to the best of my knowledge and belief this amended return is tre. correct and complete Delaration of preparer

Sign Here
Paid Preparer's Use Only
ISA

(other th tapayer) is ba all informatl of which preparer has any knowlege.

Uf
~ Signature of offcer
Preparer s ~

~ Title
Preparets SSN or PTIN

signature r

Firm's name (or ~ yours If self-employed) r address and Zip coe

For Privacy Act and Paperwor Reducon Act Notice se pae 4STF FED4298F 1

Fonn 1120X (Rev 12-2004)

109

Fo 1120X

OM No. 15-132

Amnded U.S. Corpon

(.. Debe 2O) eeri d IM Ti-

Income Tax Return

--pTeI numb (opl)

N..

Fa 1_C-. U4 _ 2
.- Ex 01 Ch to ll In Il I (Ell th Un rube ft pa 1 fo th il yo 81 ct. ii rj lt ll fo ea chng. Sh it copu In det. Al, _ WI To Al an Pl 3 of th in) If ai ch Is du lD . ne oi .. ~ . calo cs or s ge li c: ÇI c.CIci_3,Snichhe.................. ..............._ .... ............... ,,0
Felnc Tax lh 4\ dec -" due 10 a Prr Yea MIlmi. Tax Cr atbI to th ti

Ty or
480-627-2700

BPI _ste SVstu.ø of Borth Alrica. In. De.ique for CCsolid-ted Grc flk./a Number eiet an ro or .u no (If. PObo. te ini) Broing Peris Industries.

Prnt

15880 N. Greenway-Hayden Lo Suite 100

CI or... ..10 an zip c:

Scottsdae, Ai'izona 85260

Ent miR1 an acd.. us on orl re (I -i as .bo Mü -sme i

\I anee Se 30. 1997. Pl re to Atct 1 fe.an exla of th cl In tie
Ine an la

Browninci-Ferxis Indutries. Inc. (, Subsidiaries, 757 N. Eldridcie, Houston TX 77079 Inleal Revenue Se Ceter li where oriial retum wa fied ,. Autin, TX

Fil in applicable item and use Part II on th bak to explain any chnges

Case 1:05-cv-00738-TCW

..

Income and De (se instruns)
1

..~

(0 ,. oi
Ie) ec amoun
4 409 436 882
0

(bNoçh inc ~~)0 0

1

To18linco (Fonn 1120 or 112o- Ine 11) -- ....

4 409 436 882

2

Totl deduct (to of 6nes 27 and 2ge. For 1120.

or lines 23 and 25c For 112o-A) ..
3

~..,.

..

2

3,948,907,315
460,529,567
66,149 601

3,948,907315
460,529,567
56,438,087
46, 086 008
100,000 000 54 584 807

3 4
46 086 008

Taxable inco. Subtct l1e 2 fr line 1 .

--

4
58

Tax (For 1120. line 31. or Fonn 112o-A. line 27) . . .

(9,711514

Pa and Cre (see instrctons)
..
100,000000
54 584 807
0 0 0
0

58 Overayment In prir yer aDow as a crft .

b Estmated la paym. . . . .. . . . .. .

e Refnd applied fo on Fonn 44 ..... . .. .....

Document 36-3

d Subtrct lin 5c frm th sum of fines 58 and 5b. . . .
51

e Tax depoeted wi For 7004
ISa
""'"
...,. "pO

5b Sa 5d 58

91,501,201
0 0

91,501,201

f Creft frm Fonn 2439. .

-" ..
0

9 Credft for Fedral ta on fuels . .

..
..
'H'.'
8

6

Tax depoit or pad wi (or after) th fUlng of th orlna rern

3 519,979

7
."..~

Add Ines 5d through 6, COumn (c) . .. . .

." ..... '. _0_'"

95,021,180
28 871 579

8
8

Ovrpayent If an, as sh on original re or as I;iter adjustd .

- ....
66,149,601

7 8

9

Subtct li 8 frm lin 7 ........ . . . . . . ... . . . . . . . . . . . . .. . . . . . . . .. .. .. . . . . . . . . . . . .

Tax Due or Overp (se Instctions)
10
11

Filed 11/22/2006

10
0

Tax due. Subtr line 8 fr lne4. coumn (e). If

St Ti-ui . . . . .. . . . . . .. . . . . . . . .

pang by chec mak ft paybl to the "Unit " P' 'p" ,. p.'-'..

11
. ..

Ovpant Sub Ibie 4. coum (e). fr lin 8
.-, ,_...

..-.-, . '.,
"
12

9 711 514

12

Enter th amunt of line 11 yo want Crit to 20

esrn ta "

Re "

9,711,514

Sign Here
I Do

=~':,:J: ~~ l:i:.=.~==~:==,==~ ,":'=":::~ (~tolo~_tId__...nyi.a. ~ ~ ~ I J7WtÆ ~ Ul
I == 0
Pl8s SSorPTN
EIN

Pad

Sl _ Do_

=a~

Pr"s

~

Us Only

FIrm's na (or ~?,Woe~) IPcc

_no.
Fo 1120X (Ao 12.20)

Page 13 of 32

o

,. 112C C-. 'WI1

ST Æ0 I

..

For Pr Ad an Pa Reon Ad No _ _ 4-

-_..

iT

BFI WASTE SYSTE OF NORTH AMERCA, INC. DESIGNEE FOR CONSOLIATE GROUP FIKA
BFI WASTE SYSTEMS OF NORTH AMRICA, INC. DESIGN FOR CONSOLIDATED GROUP FIKA

BROWNG-FERRS INUSTR

INC. & SUBIDIAS
EMPLOYER IDENTCATION NUER 41-169
9130/98 FORM LLZ0X EXPLANATION OF CHGES

BROWNG-FES INUST, INC. & SUBIDIARIES

EMPLOYE IDENTCATION NUER 41-169666 9130/9 FORM iiioX EXANATION OF CHGES
OF ATIACBMENTS

INEX

ATIACH 1
The bas for the chges leqUes in th clai for refu aie set fOith below.

Explantion of Chge
The tem "Clait' as used hern refen to BPI Was Systems ofNolth Amerca Inc. and the

2. As Amended Schedes

member ofits conslidated grup as approprate. Unles otheise indicated, seon ("§")
ieference ar to the Inter Revenue Code of 1986 ("IRC"), as amended as in efec for the

Case 1:05-cv-00738-TCW

3. IRS Audt Staent (Foim 3610)

4. IRS Exinon Reprt (Ponn 886A)

yea in issue. Bas on the chages set foith below, Claiant is entitled to a iefud of
$9,711,514 or such grte amount as is legaly refudable In addition, Claimant assets that it

5. Copy

of

7/30/99 Claim fOiRefu(Foim 1120X)
is entitled to all coirative and coputationa adjustments and consequential chages to any
items (including but not limte to, its alteinative mium ta environmenta ta, net opeatg
loss deuctons and net opeating loss caiybacks an caryoveis, capita

6. Copy of

Rev. Proc 2002-43 Designtion

Document 36-3

loss deductons an

caita loss cayback and cayover, and ta crts and ta credit caiybacks and cairyveis)

afecg ths yea.. Clamat also rees a refud of all related inter penties, 01 adtions
to ta tht hae bee oveiaid. Claimant also reuets statutoiy inteiest on any oveipayment as

prvided by law (including, but not limited to, the beefit of offng inteiest netng, an th
net intees iate ofzer on perods of oveilaping uneipayment and oveiayment).
Purt to Tre. Reg. § 1..1502-77A(d), efecve for the tale yea ended July

Filed 11/22/2006

30, 1998 (the "1998 ta yea), and the Designtion fied at Ogden Uta on or abut Augut 24,
200, in acce with Rev. PIOC 2002-43, Claimat is the duy authori aget of

the
conslidated grup (the "BPI Grup") of

which Brown-FeiiÎ8 Indusies, Inc. ("BPI Inc. ")

-

was the common paient prioi to its tenaon on Deber 30, 200.

Page 14 of 32

22601

2263 i i

Prior to the Deignon put to Rev Pr, 2002-43, the BFI Grup incwre
for the magement of

the liabilties and coplice with aplicale retoiy laws, as shown

an agegate cata loss of $901,660,00 on the sae by ce ofits memb~ (herer
B Coon Sto in si liilty mangeent

on Exhibit 2 In order to colida the liabilties into the corrnding liabilty manent
copanes the BFI Sell~ contrbute ce notes in an aggte amunt of$902,561,661 to

refcn'ed to as the "BF! Seller") of Clas

companes, as shwn on atched Exbit i, to unlate inve dwig the 199 ta ye.

the liabilty maent coes in exch fo (i) Clas B Common Stok, an (ii) the

Claimat is entitled to off this capita

los ag cata ga net incoe of$80,92,602 in

astion by the liabilty magement coanies of contit liabilties in the agggae
amount of$901,66,007. The abve trtions wer ta-fr exchge pusuat to § 351.

the taable ye ended July 30, 1999 (the "199 ta yem an as a rest, is entitled to an

additiona net operat loss caack fr the 199 ta yea to its taable ye enng

Eah of the BFI Sellers then sold thei sh of Clas B Common Stock to

Case 1:05-cv-00738-TCW

Septeber 30, 1997 (the "1997 ta ye in the amunt of$80,923, 60 or such other

pr

envienta and inurce cotats with considerle exer in the liablities ma
by the reve liabilty mageent company (herer recned to the "Consting
Investors"). See idetities of Consutig Inves at Exbit 2. The ownerp of

amount as prvided by law. .A a rest thereof, Claimat is entled to a crt in the 1998 ta

yea' for piior year minum ta of$9,711,514 or such other prop amount as provided by law,

the sto

consistg of

pror ye altertive mimum ta of$3,325,937 an pror yea unlowed

prvides an eqty incetive for the Consting Investo to aggesively identify and tae
advatage of cost-savig oprtuties in mag the lialities.
The agggate amount reized by the BFI Sellers on the sale of

nonconveitiona sowce ful crit of$6,385,577. 1b reults in axeducton in Claimat's

Document 36-3

taable income in the amount of$9, 711,514 or su other prpe amount as prvided by law
Coon Stok

the Clas B
du the 199 ta ye was $901,654,.

In July 30, 199, Alled Wase Indues, Inc ("Alied") acuire substtially

TheBFI Sell~' ta basis in the Class

al of the outsdin stock of BFI Inc. Prior to the acqtUition, BFI Inc. utlize a large in-house

B Common Stock was a substtute bass equa to the su of the ta bas of the pro which

sta to mange the liabilties arsing frm its options In contrast, Allied uti a sml in-

the BFI Entities contribute to the liabilty mageent copanes an unedce by the
liabilty magement compaes' assuption of

hous stff and outsUice most ofits envionmenta maagement, ri magement and other

the liabilties in acrdce with § 358 As
shown on Exbit i, the BFI Sellcx' agggate ta bas in the Class B Common Stok was

experse

In July 1999, shorty before the clos of the acqsition, BF! Ine iestrcted the

$902,561,661, The liabilties do not redce stock bais becus they an excluded under
§ 357(cX3) and, therefore, § 358(dX2) aplies_ Altenatively, the liabilties aie not taen into

Filed 11/22/2006

mageent of its contiget liabilties in a maner consistt with Aled's outowcin

apac and to provide a legal stct tht would fo the efecve magement of the

acwr uner § 358( d) becuse such contit liabilties aie not "liabilties" for feer income
ta pwp. Consuently, as show on Exbit 1, the BFI Seller' saes of

liabilties. As a relacent for BFI Inc.'s heaviy staed interna depen, BFI Inc.

the Clas B

esablished six sepaiate liabilty magement compaies bas on the spfic expese neeed

Common Stock reted in an agggate caita loss of$901 ,660,007 in the 1999 ta year.

Page 15 of 32

.. .. tv

226l I 2

226l i 3

Clait's dedon oftl capta loss reting fi'Om the sae of

the Class B

Comon Sto duiing the 199 ta yea by the BFI Grup was disallowed by the Inter
the caita los is

Revenue Serce's (the "Serce") exon te The disaowance of

reec in Ise 71 of

the Examtion Reprt dat May 31, 2002 and revse Septebe 3,

2002. The disalowance of the caita loss is incoiiect and without mert. Claian herby

i lI !llll!IIIIIIIIll!1 If 1111II1II 1111.1

j I( ße~i~ ~e l åti~ltl il ~l ~&ëëc! S~E!
I l~l ~llll.!I!I~ ~il'i!1 s~ ~~~~!i~l! _ill l

incorpotes by reerce al docents, leters, schedules explation, prte, an other

correondence on ths issue sulied to the Serce.

_g~fl¡~.~ ¡ s=,..;¡ ¡I ~! ~~~~~. ~~t _. ~.~D~ ÑP , l~~~lõ~ ~~ ~lfta~~ij~~ ø~¡i lI

Case 1:05-cv-00738-TCW

As a result of the ches her Claimat's tax liabilty is reduc by
! 18~! ~Ð~;I'i8;.~~ ~~~~iil ~~ ~¡~al;~la ;(li t

$9,711,514 or suc gieater amoun as is legy refudable

I ~i ~~~~~ ~~ i ~'t.G~5 .1 ~a ~~~~~a G.~ ã

15~llI ... ¡:: I
Ii ¡.jl

oJ 1~i

l I li!llli!l! !II!II ! 1IIIil!l I!I

EIHHil!~

Document 36-3

:lidU

,di ij iJi ii

Ii !!fii;

~liljlt ~~j~J- ~ ~lil~ I IA! j j~l l~lj¡~ ll~ilj ¡ l l~l j~ i ~

all

~ : e If

iil;i ¡¡III
=

l ll!!!lll~1II-ili ~ II ii f Iiii ¡III II !iiil l 1IIIlili
I l lìiillllil illlll i iillllli III

!

Filed 11/22/2006

ij~~jjij~~~ illl!! Iil j~j l jj!jji j~~jjjjj III l
i ~~~~~~~~~~ llllli fll'lff' III I
I l ~~~~~~iiii. ii~iii! f ii~iiii~f i~il i

¡ II IIIIllIIIIJ IJJIIII i'! IIIIIII)! ii,! i

Page 16 of 32

-

VJ

22 I 4

1.5

BF wu sn or Rif lICI IRe.

noCI' 1I1I. DD SIII
EXIT 2

II roB COISLD AO flU.

FORM iiz EXLATION OF CHGE

EIIIEI'l1 II 41.1_

ATlACB i

LI
Couaii IJn

Daptla oflJbl Aa

Case 1:05-cv-00738-TCW

~~. bi
l-Bn~ He &: As
Po S1gl Ji
COMCOR Bi LI. He &: Aø NeI Pel Tl Web

BP Se Grup,

"'

Ro po-clo CO as wi c\od

ii.Fe Ii As Pac,
NeI Pe

Co aa wi haz _ mmit
COCO Bn LI He &: As

la.

BP ii Sy

ofii li
'I Web
COMCR Bnvlme LI

Reed co us wi cIca _

JI
Re &: AI Ne Pe Tl W..
Lid

BFI Ti Rier (L

Document 36-3

Ii
HI '" AI

Tr i- Iefo SuID iele co KUis m- re co

aa oigli..dii co

BP ii Sy

ofPl Ii
Wil Cc Co. of Ar

Cio -i ca CO aad sl __1 COMCO&v-l Fos Eavi CO us wi op IC Ie

Filed 11/22/2006

Ii Bu Ii. wod'. co-i)

Ilen

Cot li Li (1I .. oi

Page 17 of 32

---

.t

I.'

Case 1:05-cv-00738-TCW

Document 36-3

Filed 11/22/2006

Page 18 of 32
OMS No. 154132

Form 1120X
(Rev December 2004)
Deartt of the Treasry

Amended U.S. Corporation Income Tax Return

For tax year ending

~ 07 /30/99
(Enter mont and ar.)
Employer ldentlcaon number

Internal Revene SeMce

Name

Please

BFI Waste S stems of North America Inc. Desi ee for Consolidated Grou f k a 41-1696636/'
Number. s1ret. and room or suite no. (If

Typ
or Print

a p,O box, see instctions) Browning Ferris Industries. Inc.. and Subsidiaries

15880 N. Greenwa -Ha den Lao Suite 100
City or town state, and zip coe

Scottsdale, Arizona 85260
Enter name and address used on oriinal return (If same as above wrte .Same")

Bi:'owninq- Ferris Industries, Inc. & Subsidia:iies,

Internal Revenue Service Center ~
where original return was filed r Ogd.en, DT., ,

11
1

Fil in applicable items and use Part II on the back to explain any changes
Income and Deductions (see instructions)
1
(a) ~ originally

report or as

previOUsl adjusted

(b) Net changeIncrase or ~decrase)explain n Part 11

(e) Correct amount

Total income (Form 1120 or 1120-A, line 11) ". ,. , '., .'

3

193,591.494

(80,923,602 3,112.'667,892
0

2

Total deductions (total of lines 27 and 29c, Form 1120,
or lines 23 and 25c, Form 1120-A). , , . " ,. , .. ,
.... i..

2
3

3,271,762,828
(78,171,334)

3,271,762,828
(159,094,936

3

Taxable income,. Subtract line 2 from line 1 ., . , . " " " " .

(80,923,602
0

4

Tax (Form 1120. line 31, or Form 1120-A, line 27) . . .

4
Sa 5b

Payments and Credits (see instructions)
Sa Overpayment in prior year allowed as a credit, ",' ., ,. b Estimated tax payments" , , , , ." """ , .' ... . .... , c Refund applied for on Form 4466 , .. , ,.. , ,., -,,, ., d Subtract line 5c from the sum of lines 5a and 5b, . , , e Tax deposited with Form 7004 , , , I' . . '" '" , ,. " " f Credit from Form 2439" " . . , " , . . .. .... , '"I'" I' . ,... , ",",, ." '. , " . g Credit for Federal tax on fuels.

5c
5d 5e
Sf

90,500,000 80,000,000 10,500,000
5.447
,,".,"~.""
" , ..,,, , , '" ,

0 0
0

0

90,500,000 80,000,000 10,500,000
5

50

0 0 0

447

6 7 8
9

Tax deposited or paid with (or after) the filing of

the original return
. , , '''' ""

6 7 8
9

Add lines 5d through 6, column (c)

..., '" ,." . '" ." ."

'.., ."...""".,,, ,,'..,,
, '"

Overpayment, if any, as shown on original return or as later adjusted " , . ."" '.1.1 """" ,

10,505,447 10,505,447
0

Subtract line 8 from line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tax Due or Overpayment (see instructions)
10 Tax due. Subtract line 9 from line 4, column (c), If paying by check, make it payable to the "United
Staes Treasury" " . . , " , ,., .......,.,,,...,,,,.,,.,,,,.,,,,,,,,.',,, ,. " , "" ,,~ 10

o

11

12

Overpayment" Subtract line 4, column (c). frm line 9 ".,."" ", , . , , " , , , " , , , "" , , , " , .. " .. . ~ Enter the amount of line 11 you want: Credited to 20 estimated tax ~ Refnded ~
(other n taxpayer is b d n all inforation of which preparer has any knowledge

11

12

o o

schedules and statements. to th best of myknowledge and bellef this amended retum is tre corect, and complete. Declaration of preparer

Under penaltes of pe~ury, I declare that i have filed an original ~tum and tht I have examined this amended ~turn, includln9 accompanying

Sign Here
Paid

~ Vp
, Tit
Prepa~ts SSN or PTIN

Preparets
Use Only
ISA

~
Form 1120X (Rev

For Privacy Ac and Paperwork Reduction Act Notice, se page 4.
STF FED429F 1

12-2004)

115

Form 1120X
on pa 3 of th Ins.)

OM No. 1$l132

Amnded U.S. Corpaton

(Ra Deoomb 20)

Oe d.. Trery
If lh c: Is du 10 a ne op lo ca . ca

Incme Tax Return

Na

II Ex of Ch to lil In re for ea ål th liany copulinfr pa 1Al. se Wh yo AU Pa I (Er Sho number In del. fo th il To ar cinglg, and gi th
Qi CIonpi3, an ch Ii.......... ... ......... ......... ............,... .......... ~ 0
ToIln lI 1) tI-- due lD th CSIaIo re In lI cl fo I' "nn-. to

..,Ul(R.u.) Pi 2

--pT8lb1 Inc CIne 3) ha dec du to th C8Io reuea In line 1 as exalne abo.

BPI _ste System of Bort Amica. IDe. De8iane for Coøolidated Gro f/k/.

Ty or

fUr, il. and rom or... no. (lfe P.O bo He ns) Bro Perris Instries.

loss ci or a ge bu cnlt C8ck 88.

Ci or lon stte. and %P co Scottsdae, Arizon 85260 en....on.ddr....i-anoiro(h.me..._ ....'S..., 15880 N. Greenway-Hay,

Prnt

15880 N. Greenway-Hayden Loco SUte 100

th taY8en Ju 30.199. Plea nito AI1 fo anex ofthcl In Totlii

Intal Revue Se Centr li

Br'owninq-Ferds Indutries, Inc. & Subsidiaiies, SC'!tt.sdalt, AZ 85260'

whe oriinal rem wa fled r Ogden:, UT.

Fil in aplicale item and us Part \I on the bak to expin any chges

Case 1:05-cv-00738-TCW

..
(al.orll
ei Po 11 l3 112 '667 892

Income and De (see instcts)
1

~':ju-:
Ie) Cocl imont
3 193 591 494
(80 923 60,
0

i,.~~

1

Totlincome (For 1120 or 1120A, Hne 11) .

2 2
3 271,762,828

Tot deductons (tol 01 lines 27 and 29, For 1120.
3,271 762 828

or lines 23 snd 25e, Form 1120A) .
3

3

Taxble incme. Subtrct line 2 fr Dne 1

e"."'

(78,171,334
0

(80,923,602

(159,094,936:

4

TaxlFon 1120.

line 31. or Form 1120- line 27)...

4
0 0
0

Payment an Crets (see instruons)
90 500,000 80 000 000

Sa Ovment in pr ye allo as a erOOIl, .., .
90,500,000 80,000,000 10,500,000
0

b Esmate tax paymen. , . .. . . . .... . . ,

c Refnd applied fo on Form 4466 .

Document 36-3

d Subtr Bne 5c fr the su 01 Bnes Sa and 5b.

10,500,000
5.447

e Tax depoit wih Fon 700 . . , . . .
51 0

~ ~
.!

f Crell fr For 2439. . ,

9 Crell for Fedeil tax on fuel , , , . . .
Q,I

I5
5.447
8

6 Taxdepoited or pad wit (or aftr) the flBng of

the orinal rem

Ad nnes 5d thro 6, comn (el ." ' . . . , . . ,
7 8
10.505 447 9

10,505447
0

7 8

Overpymen. W any, as sho on orInal re or as la adjus . . '

9 Subtrct Bne8fr ine7 ........................................................

Tax Due or Ovay (see Instnios)

Filed 11/22/2006

10 Tax due Subt lin 9 fr line 4. coumn (el. If paying by ch make II pale to the "united

11 12

0 SlTi-ur..... ........ ,... ,.,......,., ~ :1 Ovym Subt line 4, coumn (c), fr lin 9 ... . .. . . . . .. , . . . " .... ..' __ . . . ~ 1 0 Entr the amount 01 line 11 yo want Cre to 20 -llm ta ~ R8 ~ 12 0 Un.. ~ of pe.. ,_ thli .. ftlo II 0f "'.. an _ I .. _"10 omon -i -iln _poyig

Sign

=-~n..:"'"'~.:~~=l":=k=i- 10 lN - an 00""io - of-i

Her

~s

01

Paid

Plr'l SS or PT

Prres

Us Ony

PreI"1 ii.. rw (or ~ ., Fi'.

yc f~) .,
For 1120X (RI 12-2)

Page 19 of 32

IS '" .. ,

For Prva Ac _ Parw Reuc Ac No _ _ 4-

add1, aDd ZF co

m_.
.. .. 0'

"" 11_ lR.ll-)
: GOVERNMENT

j EXIBIT

, I ~

BFI WASTE SYSTEMS OF NORTH AMRICA,

BROWNG-FERR INUSTR, INC. & SUBSIDIA
EMPLOYER IDENTCATION NUMBER 41-1696636 7/319 FORM LUOX EXPLAATION OF CHAGES

DESIGNEE FOR CONSOLIDATE GROUP FIKA

INC.
BFI WASTE SYSTEM OF NORTH AMRICA,

INC. DESIGNEE FOR CONSOLIDATED GROUP FIKA

BROWNING-FERRS INDUSTRS, INC. & SUBIDIAES

EMLOYER IDENTIFCATION NUMER 41-16966

7130/99 FORM iiiOX EXPLANATION OF CHAGES

INDEX OF A'I ACHMNTS ATTACHMEN 1

i
The ter "Claiant" as us herei refer to BFI Waste Sysem of

Explantion of ~an

The bas foi the chges reuested in ths clai for refud aie set fort beow.
North Amerca Inc. an the

2. As Amended Schedes

Case 1:05-cv-00738-TCW

3. IRS Audit Stateent (Form 3610)

membe of its conslidated grup as apopriate. Unles otherse indicated secon ("§")
reerence ar to the Inter Revenue Code of 1 986 ("IRC"), as amended as in effec foi the

4 IRS Exintion Report (poim 886A)

5 Copy of

Rev. Proc. 2002-43 Designtion

ye in issue. Based on the chges se forth below, Clat is entled to a iefud ofS-O- 01

su greaer amount as is legally refudale. In addtion, Clait aser tht it is entitled to all
cori-ative and computational adjustments an consuential chges to any ite (includ

but not limite to, its altetive mium ta, envinmenta ta net opeati loss dedcton
and net opetig loss canybacks and cayovers, capita loss dedons an capita loss

Document 36-3

Clacks an canyovers, and tax cxi:its and tax credt caiybacks and caovers) afectig
ths year. Claiant also requests a refd of all related interest, peties, or additions to ta that
have be overpaid Claimant alo reuests stary intert on any overpayment as providi:
by law (includ but not lited to, the beefit of offsetg, inter net and the net interest
rate ofzero on peod of overlapping underpayment and overpayment).

Filed 11/22/2006

Pw-st to Tres Reg. § I.lS02-77A(d), effecve for the tale yeaended July
30, 199 (the "1999 ta yea, an the Designtion filed at Ogden Utah on 01 abou Augut 24,

2006, in acce with Rev. Proc. 2002-43, Claimat is the duly authried agent of the
conslidated grup (the "BF! Grup") of

which Brown-Fers Indusies, Inc. ("BFI Inc.")
was the common paient prior to its tention on Deber 30, 200.

Page 20 of 32

.. .. -.

22624 I

22624 I 1

Pior to the Designon puruat to Rev. Pro 2002-43, the BPI Grup in

Each of the BFI SeUm then sold thei sh of Clas B Common Stock to
envionmenta and inurce consultats with consideble expeitise in the liabilties

an aggga cata

loss of$901,66,007 on the sae by ceta of

its membe (he£eier

maed

refened to as the "BFI Seleis") of Class B Common Stock in six liabilty mangeent

by the reve liabilty mageent company (hernaer reei to the "Cnsuti
Inves"). See idetities of Consti Investois at Exhibit 2. The owneisb of the stoc

compaes as shown on atthed Exhibit 1, to unlate inves durg the 1m ta yea. Asa

ret, Claiant is entled to offet ths caita loss aga caita ga net income of

prvides an equity incetive for the Consti InVesOis to aggsively identify an tae

580,923,602 in the 199 ta ye. Ths resuts in a reon in Clait's taable income for

advantage of cost-savi opties in maagig the liabilities.
The agggate amount rezed by the BFI Sellei on the sae of

the 199 ta year in the amount of 580,923,60 or su other prpe amount as prvided by law.

the Clas B

Case 1:05-cv-00738-TCW

In July 30, 1999, Aled Was Induses, Inc. ("Allied") acuied substially

Common Stock dur the 1999 ta year was $901,654. The BFI Seler' ta bais in the Clas
B Coon Sto was a substtute bass equa to the su of the ta bass of

all of

the outandig stok ofBFI Inc. Prior to the acsition, BFI Inc. utiliz a large in-hous

the proper which

st to mage the liilties arsi frm its opertions. In contrt, Aled utiz a sml in-

the BFI Entities contributed to the liailty magement compes and unuce by the

house stafr and outsource most of its envinmenta maagement, risk mangement an other

liabilty magement companes' asption of th liabilties in accrdace with § 358 As
shown on Exhbit 1, the BPI Sellers' agggate ta basis in the Clas B Coon Sto was

expeti.
acquisition, BF I Inc rescted the

In July 1999, shorty before the close of the

$90561,661. Th liabilties do not reuc stock basis beaus they ar excluded uner
§ 357(c)(3) and, therore, § 358(d)(2) aplies. Altevely, the liabilties ar not taen into

Document 36-3

mangement of

its contingent liabiities in a maer coistent with Aled's outsurng

approh and to prvide a leg stuc th would foste the efecve magement of the

acunt under § 3 58( d) bece suc contigent liabilties are not "liablities" for fed income
ta purse. Consuently, as shown on Exbit i, the BFI Selleis' saes of

liabilties. As a relaceent for BFI InC.'s heavily sted inte deparents, BFI Inc

the Clas B
Common Sto rete in an aggga caita

esblished si septe liabilty magement companes based on the specific experte neeed

loss of $90 1 ,66,007 in the i 99 ta year.
Clait's deducon of the caita loss restig frm the sae of

for the magement of

the liabilties and copliance with aplicale reguatoy laws, as shown

the Cla B
Common Stok dur the 1999 ta yea by the BFI Grup was disaowed by the Inteina
Revene Sevice's (the "Seivice'') examon tea. The disalowance of the caita

on Exhbit 2. In oider to conslidate the liabilties into the coredig liabilty magement

Filed 11/22/2006

companes, the BFI Seller contributed ce notes in an aggga amount of$902,561,661 to

loss is
reect in Issue 71 of

the liabilty mangement copaes in exchge for (i) Class B Common Stock and (ü) the

the Examon Repit daed May 3 1,200 and revse September 3,
200. The disallowance of the capita

asswnon by the libilty magement companes of contingent liabilities in th agegate

loss is incorr an without mert Clait hery

amount of5901,660,00. The above trctons wer ta-fiee exchages purt to § 351.

Page 21 of 32

.. .. 00

226i I 2

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in WA n' OF NOBT IICI, INC.
DESGNE FOB. CONIOLl GlOW fI/ a

BlOWllll''DIlJ; mc;. SUDDII
EMLOYER mEmTJOII JIER 4i~i'961 roll ,,_ DPLATIOr _Il

ATT-i1 Il 1

Sha,. Said ~

ii_ _ Eupo, Ine.
EmTOl.
BFI Tr -(I1n

ll

__,_Ine.
-. or NoAnIn

lI
70118782

bI
2,02
121

. 8FTr _ (l,lno
BF n. -(l,1i
BFI T.. _ (l,1n
BFI Ti _ (!), lno SFI TIM RW (l, in

IlFon iiin

19,1I 'lIll (IS5) 1_ 111 C1lf84)
120120

II

JI
(1,13.00
(2018,00

1I1nw RI (l,Inc

BFI_ SiolNo.i.1n

~1711183

701181 _73

72' 11
841

0,&

BF Ti RIr (L, in

Bi..*~ ii orOlIn

4,84

0,l.1I 72_._ 8'-_
4,H4.06

2.02.02

("0_

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(1,42000)
(101,11l1001

(4,84.00)

BFlT..AiIl.1n

SFI Ti -(l.1n

EntT_

041_ CECO-iIi(NVor 18-1_ _llnl_,in 41_
BFI_8yolNoAnIn 41-11_
-i iiolCII-'1n 0N0

BR_~oINo_1n 41-'_ ___c:_ 7.... ~l_or~lnos0 ~i-In(M 7~1_'

2,ll
101.271,417
1,417 28

84 2,8.i
';1,4 30._

(138 C2Il
(300

BF EM Sy 01 Piin BFI EM Sy orPlIn

lD1..'..O

18.1H

(2,00)
(111100lI
(40.0i,010)

BF En Sy/l or Pi in BF En Syll 01 Pllno

BF EM Sy orPl Jn 8F1 EnSyofPlIn

40,04
4,184

7__, __In..In¡M..) 041_
Ne Mo i._ Cl.in

271,08.4 111128110 40,oooi
4,184180

ii i- orON. lno InWll ii Cø oICo

I!llToll

~ ~

1B,B
11,10
7.4M
60,110

1I0B 18,91

18,011100 (1l1oo 37,1_ CJOG)

I,OB

(8ll,1l

(4.160_)

Bn-l -_Pad in EmT_
BFI _ Gr in

CCCO liilIln (N Voit
BF_ Sy 01

le-l_

1I,I10
7,4,43 188,8,8
310,310

BO,m.B1D

(G11D.OO

BFI _Orup,in

BF1iiii,

In..

--orlnd_ai _ 740'3888

Ne Jo,lno 221711183 BFI_Syor__.1n 41-1_

188,81

(138.00
(21,~I.00)
(1I1BO.ll)

BFI _Oiup Ine. BF_Gr. in BF_0ra1n BFl_Gi in

~"'~or~1n1l0 ~--oiOhIn

31 7.11 21,0
11.20
11111

7.anlO70 21.111.00

1"'110.) (7.42.9 13,1l)

(7.0e)

7~1_' 7011_

BF_0ni,lno
En Tol

~.Iii(M ~"'-,lno(M) -Sl-.in

04128 41-o

1132D

1,8

11,2.20

1,170.170

BFI ~Sy-or-ilno BF En Sy or-itn
BF En 8y or lI In

BFIWI.. ~ oiNo_1i 41-8O
8n...wrlniOI 8e ~iiorO/Inc 74-138 7__,

184
1,87,80

(11,210.00

(183,B2I

(1,87.010)

Cobin_To..

En T_

83 IS

4,8 "_
10,111

11.01._
10811.180

5,I,ff 4,8.lI

-

(11.GDO)

l".8OO

(8.OO

(B,DO)

(tMlOO)

-i
Case 1:05-cv-00738-TCW Document 36-3 Filed 11/22/2006 Page 22 of 32

an Wl Sf UF III' 1lCA i_c.

DUnDG lE nmlS DC. lI SOII

DESGI rui COISLI GllI uta

ElYE DEc:R 1l 41-159663

FORM iiix EXLATiOÑ OF--GE '

A1TACl i

EX 2
Coiiuitig Inven

Mageen

LW
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Dea ofLlIi A._ee
P_ Bnvlei

Com....

BPI Se Oiii.

Case 1:05-cv-00738-TCW

Jn.

ImIs
COMCOR Ilen LI.

Ro po-c1o CO as wi clo

He&:~ Po St Ii
Nels Pe

Indiistdes Ii Asia Pac:

Bro-P
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Ti Wob COMCOREnvi LI

Co ii wi 1i_ iiemoi

BPI El Sy

ofBo Ii

Re co us wI cb ..
Nei Pe
Ti Wob

II
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NèI Pe
TI Wob
COMCOR i! LI.

Document 36-3

Ii
He &: Ai

BPI Tn RM (L.

Tnpolole Si ma1e co tl an re ie co
COMCORBull Lid

ai ai&ï co

ofPl !n

BF En S~

Cl CO. cag CO ai Il WI col

co aaoc wi op 8C la
Po&: Asil EaWo He
W"iD Can ec. of Ar

BnPei
geer an

Filed 11/22/2006

Iidiltle Il Ii.

Co Ii Li (au wos oo)

Page 23 of 32

N

o

is

lOoK I p71838elOvk.htm IO-K

ruble QfCQrite-i.ls

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K
(Mark One)

It ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2005
OR

Case 1:05-cv-00738-TCW

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 For the transition period from _to _
Commission File Number 1-14705

ALLIED WASTE INDUSTRIES, INC.
(Exact name of registrant as specified In Its charter)

Delaware
(State or other jurisdiction of incorporation or organization)

8828636
(IRS Employer Identification Number)

Document 36-3

1588 North Grenway-Hayden Loop, Suite 100
Scottsdale, Arizona
(Address of principal executive offces)

85260
(Zip Code)
Registrant's telephone number, Including area coe: (460) 627-2700
Securities registered pursuant to Section 12(b) of the Act:
Name of Hch exchanae on which i-alare
New York Stock Exchange New York Stock Exchange
New York Stock Exchange

Title 01 øch cl... Common Stock, $.01 par value Series C Senior Mandatory Convertible Preferred Series D Senior Mandatory Convertible Preferred

Filed 11/22/2006

Securities registered pursuant to Section 12(g) ofthe Act:
None (Tite of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, (as defined in Rule 405 of the Securities Act).

Yes ii No 0
Indicate by check mark if the registrant is not required to file report pursuant to Section 13 or Section 15(d) of the Act.

.. tv ..

Yes 0 No ii
Indicate by check mark whether the registrant (1) has filed all report required to be filed by Section 13 or 15(d) of the Securites

Page 24 of 32
Exchange Act of 1934 during the precing 12 months (or for such shorter period that the registrant was required to file such

luble of Conteiits
Related Part Transactions

ruble QrCoutents

In April 2005, the Appeals Offce of the IRS upheld the disallowance of the capillloss deduction. As a result, we paid in late April, for BFI ta years prior to the acquisition, a deficiency to the IRS of $23 millon. In July 2005, we filed a suit for refund in the United likely take a number of years to fully try the States Court of Federal Claims. Based on the complexity of the case, we estimate it will

case and obtain a decision. Furthermore, depending on the circumstances that at

time, the losing part may appeal the decision to

For a description of related part transactions, see Note 15, Related Party Transactions, to our Consolidated Financial Statements included herein.

the Court of Appeals for the Federal Circuit. A settement, however, could occur at any time during the litigation process.

Accounting for Stock Options Granted to Employees
Stock Issued to Employees (APB 25) and the related interpretations, under which no compensation cost is recorded in the to the fair statement of operations for the estimated fair value of stock options issued with an exercise price equalvalue of the

We also received a notifcation from the IRS assessing a penalty of $5,4 milion and interest of $12,8 milion relating to the asserted $23 milion deficiency. In December 2005, the IRS agreed to suspend the collection of this penalty and interest until a decision is rendered on our suit for refund.

We currently account for our stock-based compensation plan