Surface energy and water budgets for sub-basins of the Mississippi, the Mackenzie and the Amazon rivers were computed on-line with an hourly time scale from ERA-40 (ECMWF 40-yr reanalysis). Results will be compared with budgets computed previously from ERA-15 for the Mississippi, and for the Mackenzie from an earlier version of the operational model, and with observational data for precipitation and streamflow. An assessment will be made of the impact of improvements in the model land-surface physics on the closure of the hydrologic budget in this operational forecast model.