10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

Or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to _______________

Commission file number 1-31507

WASTE CONNECTIONS, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)

94-3283464
(I.R.S. Employer Identification No.)

2295 Iron Point Road, Suite 200, Folsom, CA 95630
(Address of principal executive offices) (Zip code)

(916) 608-8200
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

þ Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock:

As of July 14, 2011: 113,034,161 shares of common stock

WASTE CONNECTIONS, INC.
FORM 10-Q

TABLE OF CONTENTS

	Page
PART I — FINANCIAL INFORMATION (unaudited)
Item 1. Financial Statements
Condensed Consolidated Balance Sheets		1
Condensed Consolidated Statements of Income		2
Condensed Consolidated Statements of Equity and Comprehensive Income		3
Condensed Consolidated Statements of Cash Flows		5
Notes to Condensed Consolidated Financial Statements		6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		33
Item 3. Quantitative and Qualitative Disclosures About Market Risk		53
Item 4. Controls and Procedures		55
PART II — OTHER INFORMATION
Item 1. Legal Proceedings		56
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		56
Item 6. Exhibits		56
Signatures		57
Exhibit Index		58
Exhibit 10.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share amounts)

	June 30,			December 31,
	2011			2010
ASSETS
Current assets:
Cash and equivalents	$	16,951		$	9,873
Accounts receivable, net of allowance for doubtful accounts of $4,728 and $5,084 at June 30, 2011 and December 31, 2010, respectively		174,974			152,156
Deferred income taxes		16,231			20,130
Prepaid expenses and other current assets		28,449			33,402
Total current assets		236,605			215,561
Property and equipment, net		1,361,804			1,337,476
Goodwill		1,104,823			927,852
Intangible assets, net		455,841			381,475
Restricted assets		28,185			30,441
Other assets, net		26,630			23,179
	$	3,213,888		$	2,915,984
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	82,293		$	85,252
Book overdraft		10,478			12,396
Accrued liabilities		105,920			99,075
Deferred revenue		61,720			54,157
Current portion of long-term debt and notes payable		2,693			2,657
Total current liabilities		263,104			253,537
Long-term debt and notes payable		1,135,976			909,978
Other long-term liabilities		50,018			47,637
Deferred income taxes		364,900			334,414
Total liabilities		1,813,998			1,545,566
Commitments and contingencies (Note 15)
Equity:
Preferred stock: $0.01 par value per share; 7,500,000 shares authorized; none issued and outstanding		—			—
Common stock: $0.01 par value per share; 250,000,000 shares authorized; 113,034,132 and 113,950,081 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively		1,130			1,139
Additional paid-in capital		473,142			509,218
Accumulated other comprehensive loss		(1,428	)		(3,095	)
Retained earnings		922,798			858,887
Total Waste Connections’ equity		1,395,642			1,366,149
Noncontrolling interest in subsidiaries		4,248			4,269
Total equity		1,399,890			1,370,418
	$	3,213,888		$	2,915,984

The accompanying notes are an integral part of these condensed consolidated financial statements.

Page 1

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except share and per share amounts)

	Three months ended June 30,						Six months ended June 30,
	2011			2010			2011			2010
Revenues	$	390,184		$	330,477		$	721,652		$	638,018
Operating expenses:
Cost of operations		221,872			187,346			408,938			364,336
Selling, general and administrative		41,169			36,353			80,007			72,011
Depreciation		36,939			33,464			69,975			64,908
Amortization of intangibles		5,673			3,598			9,650			7,184
Loss (gain) on disposal of assets		(267	)		365			(292	)		622
Operating income		84,798			69,351			153,374			128,957
Interest expense		(11,087	)		(9,161	)		(19,920	)		(21,423	)
Interest income		143			165			276			318
Loss on extinguishment of debt		—			(9,734	)		—			(10,193	)
Other income (expense), net		(245	)		(169	)		149			469
Income before income tax provision		73,609			50,452			133,879			98,128
Income tax provision		(29,004	)		(19,815	)		(52,481	)		(39,678	)
Net income		44,605			30,637			81,398			58,450
Less: Net income attributable to noncontrolling interests		(192	)		(237	)		(446	)		(477	)
Net income attributable to Waste Connections	$	44,413		$	30,400		$	80,952		$	57,973
Earnings per common share attributable to Waste Connections’ common stockholders:
Basic	$	0.39		$	0.26		$	0.71		$	0.50
Diluted	$	0.39		$	0.26		$	0.71		$	0.49
Shares used in the per share calculations:
Basic		113,509,668			116,243,700			113,514,439			116,401,140
Diluted		114,308,710			117,482,751			114,354,979			117,747,552
Cash dividends per common share	$	0.075		$	—		$	0.15		$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

Page 2

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY AND COMPREHENSIVE INCOME

SIX MONTHS ENDED JUNE 30, 2011

(Unaudited)

(In thousands, except share amounts)

				Waste Connections’ Equity
													Accumulated
										Additional			Other
	Comprehensive			Common Stock						Paid-In			Comprehensive			Retained			Noncontrolling
	Income			Shares			Amount			Capital			Loss			Earnings			Interests			Total
Balances at December 31, 2010					113,950,081		$	1,139		$	509,218		$	(3,095	)	$	858,887		$	4,269		$	1,370,418
Vesting of restricted stock units					521,069			5			(5	)		—			—			—			—
Tax withholdings related to net share settlements of restricted stock units					(179,375	)		(2	)		(5,269	)		—			—			—			(5,271	)
Equity-based compensation					—			—			5,962			—			—			—			5,962
Exercise of stock options and warrants					202,756			2			2,774			—			—			—			2,776
Excess tax benefit associated with equity-based compensation					—			—			2,829			—			—			—			2,829
Repurchase of common stock					(1,460,399	)		(14	)		(42,367	)		—			—			—			(42,381	)
Cash dividends on common stock					—			—			—			—			(17,041	)		—			(17,041	)
Amounts reclassified into earnings, net of taxes					—			—			—			848			—			—			848
Changes in fair value of swaps, net of taxes					—			—			—			819			—			—			819
Distributions to noncontrolling interests					—			—			—			—			—			(675	)		(675	)
Fair value of noncontrolling interest associated with business acquired					—			—			—			—			—			208			208
Net income	$	81,398			—			—			—			—			80,952			446			81,398
Other comprehensive income		2,688			—			—			—			—			—			—			—
Income tax effect of other comprehensive income		(1,021	)		—			—			—			—			—			—			—
Comprehensive income		83,065			—			—			—			—			—			—			—
Comprehensive income attributable to noncontrolling interests		(446	)		—			—			—			—			—			—			—
Comprehensive income attributable to Waste Connections	$	82,619			—			—			—			—			—			—			—
Balances at June 30, 2011					113,034,132		$	1,130		$	473,142		$	(1,428	)	$	922,798		$	4,248		$	1,399,890

The accompanying notes are an integral part of these condensed consolidated financial statements.

Page 3

WASTE CONNECTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY AND COMPREHENSIVE INCOME
SIX MONTHS ENDED JUNE 30, 2010
(Unaudited)
(In thousands, except share amounts)

				Waste Connections’ Equity
													Accumulated
										Additional			Other
	Comprehensive			Common Stock						Paid-In			Comprehensive			Retained		Noncontrolling
	Income			Shares			Amount			Capital			Loss			Earnings		Interests		Total
Balances at December 31, 2009					117,898,624		$	786		$	625,173		$	(4,892	)	$	732,738	$	3,231	$	1,357,036
Vesting of restricted stock units					487,037			3			(3	)		—			—		—		—
Tax withholdings related to net share settlements of restricted stock units					(168,561	)		(1	)		(3,599	)		—			—		—		(3,600	)
Equity-based compensation					—			—			5,625			—			—		—		5,625
Exercise of stock options and warrants					1,426,681			10			17,764			—			—		—		17,774
Excess tax benefit associated with equity-based compensation					—			—			6,423			—			—		—		6,423
Repurchase of common stock					(3,736,611	)		(25	)		(83,640	)		—			—		—		(83,665	)
Reacquisition of equity component resulting from conversion of 2026 Convertible Senior Notes					—			—			(2,295	)		—			—		—		(2,295	)
Issuance of shares in connection with conversion of 2026 Convertible Senior Notes					32,859			—			—			—			—		—		—
Amounts reclassified into earnings, net of taxes					—			—			—			4,310			—		—		4,310
Changes in fair value of swaps, net of taxes					—			—			—			(7,354	)		—		—		(7,354	)
Net income	$	58,450			—			—			—			—			57,973		477		58,450
Other comprehensive loss		(4,934	)		—			—			—			—			—		—		—
Income tax effect of other comprehensive loss		1,890			—			—			—			—			—		—		—
Comprehensive income		55,406			—			—			—			—			—		—		—
Comprehensive income attributable to noncontrolling interests		(477	)		—			—			—			—			—		—		—
Comprehensive income attributable to Waste Connections	$	54,929			—			—			—			—			—		—		—
Balances at June 30, 2010					115,940,029		$	773		$	565,448		$	(7,936	)	$	790,711	$	3,708	$	1,352,704

The accompanying notes are an integral part of these condensed consolidated financial statements.

Page 4

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Six months ended June 30,
	2011			2010
Cash flows from operating activities:
Net income	$	81,398		$	58,450
Adjustments to reconcile net income to net cash provided by operating activities:
Loss (gain) on disposal of assets		(292	)		622
Depreciation		69,975			64,908
Amortization of intangibles		9,650			7,184
Deferred income taxes, net of acquisitions		23,106			7,737
Loss on redemption of 2026 Convertible Senior Notes, net of make-whole payment		—			2,255
Amortization of debt issuance costs		540			1,090
Amortization of debt discount		—			1,245
Equity-based compensation		5,962			5,625
Interest income on restricted assets		(245	)		(271	)
Closure and post-closure accretion		967			880
Excess tax benefit associated with equity-based compensation		(2,829	)		(6,423	)
Net change in operating assets and liabilities, net of acquisitions		1,744			422
Net cash provided by operating activities		189,976			143,724
Cash flows from investing activities:
Payments for acquisitions, net of cash acquired		(216,062	)		(3,849	)
Capital expenditures for property and equipment		(46,562	)		(50,495	)
Proceeds from disposal of assets		1,862			4,925
Decrease (increase) in restricted assets, net of interest income		2,501			(813	)
Decrease (increase) in other assets		(2,764	)		39
Net cash used in investing activities		(261,025	)		(50,193	)
Cash flows from financing activities:
Proceeds from long-term debt		427,500			281,000
Principal payments on notes payable and long-term debt		(286,202	)		(308,860	)
Change in book overdraft		(1,918	)		(2,172	)
Proceeds from option and warrant exercises		2,776			17,774
Excess tax benefit associated with equity-based compensation		2,829			6,423
Payments for repurchase of common stock		(42,381	)		(83,665	)
Payments for cash dividends		(17,041	)		—
Tax withholdings related to net share settlements of restricted stock units		(5,271	)		(3,600	)
Distributions to noncontrolling interests		(675	)		—
Debt issuance costs		(1,490	)		—
Net cash provided by (used in) financing activities		78,127			(93,100	)
Net increase in cash and equivalents		7,078			431
Cash and equivalents at beginning of period		9,873			9,639
Cash and equivalents at end of period	$	16,951		$	10,070
Non-cash financing activity:
Liabilities assumed and notes payable issued to sellers of businesses acquired	$	107,794		$	858

The accompanying notes are an integral part of these condensed consolidated financial statements.

Page 5

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

1. BASIS OF PRESENTATION AND SUMMARY

The accompanying condensed consolidated financial statements relate to Waste Connections, Inc. and its subsidiaries (“WCI” or the “Company”) for the three and six month periods ended June 30, 2011 and 2010. In the opinion of management, the accompanying balance sheets and related interim statements of income, cash flows and equity and comprehensive income include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with U.S. generally accepted accounting principles (“GAAP”). Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Examples include accounting for landfills, self-insurance, income taxes, allocation of acquisition purchase price and asset impairments. An additional area that involves estimation is when the Company estimates the amount of potential exposure it may have with respect to litigation, claims and assessments in accordance with the accounting guidance on contingencies. Actual results for all estimates could differ materially from the estimates and assumptions that the Company uses in the preparation of its condensed consolidated financial statements.

Interim results are not necessarily indicative of results for a full year. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

2. RECLASSIFICATION

Certain amounts reported in the Company’s prior period’s financial statements have been reclassified to conform with the 2011 presentation.

3. NEW ACCOUNTING STANDARDS

Fair Value Measurement. In May 2011, the Financial Accounting Standards Board (“FASB”) issued additional guidance on fair value disclosures. This guidance contains certain updates to the measurement guidance as well as enhanced disclosure requirements. The most significant change in disclosures is an expansion of the information required for “Level 3” measurements including enhanced disclosure for: (1) the valuation processes used by the reporting entity; and (2) the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs, if any. This guidance is effective for interim and annual periods beginning on or after December 15, 2011, with early adoption prohibited. This guidance will only impact the Company’s “Level 3” disclosures.

Presentation of Comprehensive Income. In June 2011, the FASB issued guidance on the presentation of comprehensive income. This guidance eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. The guidance allows two presentation alternatives: (1) present items of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income; or (2) in two separate, but consecutive, statements of net income and other comprehensive income. This guidance is effective as of the beginning of a fiscal year that begins after December 15, 2011. Early adoption is permitted, but full retrospective application is required under both sets of accounting standards. This Company is currently evaluating which presentation alternative it will utilize.

Page 6

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

4. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments consist primarily of cash and equivalents, trade receivables, restricted assets, trade payables, debt instruments, interest rate swaps and fuel hedges. As of June 30, 2011 and December 31, 2010, the carrying values of cash, trade receivables, restricted assets, and trade payables are considered to be representative of their respective fair values. The carrying values of the Company’s debt instruments, excluding certain notes as listed in the table below, approximate their fair values as of June 30, 2011 and December 31, 2010, based on current borrowing rates for similar types of borrowing arrangements. The carrying values and fair values of the Company’s debt instruments where the carrying values do not approximate their fair values as of June 30, 2011 and December 31, 2010, are as follows:

	Carrying Value at				Fair Value* at
	June 30,		December 31,		June 30,		December 31,
	2011		2010		2011		2010
6.22% Senior Notes due 2015	$	175,000	$	175,000	$	194,548	$	198,300
3.30% Senior Notes due 2016	$	100,000	$	—	$	100,698	$	—
4.00% Senior Notes due 2018	$	50,000	$	—	$	50,285	$	—
5.25% Senior Notes due 2019	$	175,000	$	175,000	$	188,598	$	191,316
4.64% Senior Notes due 2021	$	100,000	$	—	$	100,359	$	—

* Fair value based on quotes of bonds with similar ratings in similar industries

For details on the fair value of the Company’s interest rate swaps and fuel hedges, refer to Note 12.

5. LANDFILL ACCOUNTING

At June 30, 2011, the Company owned 35 landfills, and operated, but did not own, four landfills under life-of-site operating agreements and five landfills under limited-term operating agreements. The Company’s landfills had site costs with a net book value of $743,189 at June 30, 2011. With the exception of two owned landfills that only accept construction and demolition and other non-putrescible waste, all landfills that the Company owns or operates are municipal solid waste landfills. For the Company’s landfills operated under limited-term operating agreements and life-of-site operating agreements, the owner of the property (generally a municipality) usually owns the permit and the Company operates the landfill for a contracted term. Where the contracted term is not the life of the landfill, the property owner is generally responsible for final capping, closure and post-closure obligations. The Company is responsible for all final capping, closure and post-closure liabilities at three of the four landfills that it operates under life-of-site operating agreements.

The Company’s internal and third-party engineers perform surveys at least annually to estimate the remaining disposal capacity at its landfills. Many of the Company’s existing landfills have the potential for expanded disposal capacity beyond the amount currently permitted. The Company’s landfill depletion rates are based on the remaining disposal capacity, considering both permitted and probable expansion airspace, at the landfills it owns, and certain landfills it operates, but does not own, under life-of-site agreements. Expansion airspace consists of additional disposal capacity being pursued through means of an expansion that is not actually permitted. Expansion airspace that meets certain criteria is included in the estimate of total landfill airspace. The Company’s landfill depletion rates are based on the terms of the operating agreements at its operated landfills that have capitalized expenditures.

Based on remaining permitted capacity as of June 30, 2011, and projected annual disposal volumes, the average remaining landfill life for the Company’s owned landfills and landfills operated under life-of-site operating agreements is estimated to be approximately 40 years. As of June 30, 2011, the Company is seeking to expand permitted capacity at seven of its owned landfills and one landfill that it operates under a life-of-site operating agreement, and considers the achievement of these expansions to be probable. Although the Company cannot be certain that all future expansions will be permitted as designed, the average remaining life, when considering remaining permitted capacity, probable expansion capacity and projected annual disposal volume, of the Company’s owned landfills and landfills operated under life-of-site operating agreements is 50 years, with lives ranging from 1 to 189 years.

Page 7

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

During the six months ended June 30, 2011 and 2010, the Company expensed $19,552 and $18,590, respectively, or an average of $2.94 and $3.04 per ton consumed, respectively, related to landfill depletion at owned landfills and landfills operated under life-of-site agreements.

The Company reserves for final capping, closure and post-closure maintenance obligations at the landfills it owns and landfills it operates under life-of-site operating agreements. The Company calculates the net present value of its final capping, closure and post-closure commitments by estimating the total obligation in current dollars, inflating the obligation based upon the expected date of the expenditure and discounting the inflated total to its present value using a credit-adjusted risk-free rate. Any changes in expectations that result in an upward revision to the estimated undiscounted cash flows are treated as a new liability and are inflated and discounted at rates reflecting current market conditions. Any changes in expectations that result in a downward revision (or no revision) to the estimated undiscounted cash flows result in a liability that is inflated and discounted at rates reflecting the market conditions at the time the cash flows were originally estimated. This policy results in the Company’s capping, closure and post-closure liabilities being recorded in “layers.” At January 1, 2011, the Company decreased its discount rate assumption for purposes of computing 2011 “layers” for final capping, closure and post-closure obligations from 6.5% to 5.75%, in order to reflect the Company’s long-term cost of borrowing as of the end of 2010. The Company’s inflation rate assumption is 2.5% for the years ending December 31, 2010 and 2011. The resulting final capping, closure and post-closure obligations are recorded on the balance sheet along with an offsetting addition to site costs which is amortized to depletion expense as the landfills’ airspace is consumed. Interest is accreted on the recorded liability using the corresponding discount rate. During the six months ended June 30, 2011 and 2010, the Company expensed $967 and $880, respectively, or an average of $0.15 and $0.14 per ton consumed, respectively, related to final capping, closure and post-closure accretion expense.

The following is a reconciliation of the Company’s final capping, closure and post-closure liability balance from December 31, 2010 to June 30, 2011:

Final capping, closure and post-closure liability at December 31, 2010	$	28,537
Adjustments to final capping, closure and post-closure liabilities		(1,281	)
Liabilities incurred		1,029
Accretion expense		967
Closure payments		(354	)
Final capping, closure and post-closure liability at June 30, 2011	$	28,898

The adjustments to final capping, closure and post-closure liabilities primarily consisted of an increase in estimated airspace at one of the Company’s landfills at which an expansion is being pursued. The Company performs its annual review of its cost and capacity estimates in the first quarter of each year.

At June 30, 2011, $25,839 of the Company’s restricted assets balance was for purposes of securing its performance of future final capping, closure and post-closure obligations.

Page 8

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

6. LONG-TERM DEBT

Long-term debt consists of the following:

	June 30,			December 31,
	2011			2010
Revolver under credit facility, bearing interest ranging from 0.81% to 3.25%*	$	487,500		$	511,000
2015 Notes, bearing interest at 6.22%		175,000			175,000
2016 Notes, bearing interest at 3.30%		100,000			—
2018 Notes, bearing interest at 4.00%		50,000			—
2019 Notes, bearing interest at 5.25%		175,000			175,000
2021 Notes, bearing interest at 4.64%		100,000			—
Tax-exempt bonds, bearing interest ranging from 0.10% to 0.42%*		39,345			39,420
Notes payable to sellers in connection with acquisitions, bearing interest at 2.50% to 10.35%*		8,874			9,159
Notes payable to third parties, bearing interest at 6.7% to 10.9%*		2,950			3,056
		1,138,669			912,635
Less — current portion		(2,693	)		(2,657	)
	$	1,135,976		$	909,978

* Interest rates in the table above represent the range of interest rates incurred during the six month period ended June 30, 2011.

On April 1, 2011, the Company entered into a Second Supplement to Master Note Purchase Agreement with certain accredited institutional investors (the “Second Supplement”), pursuant to which the Company issued and sold to the investors on that date $250,000 of senior uncollateralized notes at fixed interest rates with interest payable in arrears semi-annually on October 1 and April 1 beginning on October 1, 2011 in a private placement. Of these notes, $100,000 will mature on April 1, 2016 with an annual interest rate of 3.30% (the “2016 Notes”), $50,000 will mature on April 1, 2018 with an annual interest rate of 4.00% (the “2018 Notes”), and $100,000 will mature on April 1, 2021 with an annual interest rate of 4.64% (the “2021 Notes”). The 2016 Notes, 2018 Notes and 2021 Notes are uncollateralized obligations and rank equally in right of payment with the 2015 Notes, the 2019 Notes and obligations under the Company’s credit facility. The 2016 Notes, 2018 Notes and 2021 Notes are subject to representations, warranties, covenants and events of default. Upon the occurrence of an event of default, payment of the 2016 Notes, 2018 Notes and 2021 Notes may be accelerated by the holders of the respective notes. The 2016 Notes, 2018 Notes and 2021 Notes may also be prepaid by the Company at any time at par plus a make-whole amount determined in respect of the remaining scheduled interest payments on the respective notes, using a discount rate of the then current market standard for United States treasury bills plus 0.50%. In addition, the Company will be required to offer to prepay the 2016 Notes, 2018 Notes and 2021 Notes upon certain changes in control.

The Company may issue additional series of senior uncollateralized notes pursuant to the terms and conditions of the Master Note Agreement, provided that the purchasers of the outstanding notes, including the 2016 Notes, 2018 Notes and 2021 Notes, shall not have any obligation to purchase any additional notes issued pursuant to the Master Note Agreement and the aggregate principal amount of the outstanding notes and any additional notes issued pursuant to the Master Note Agreement shall not exceed $750,000. The Company currently has $600,000 of Notes outstanding under the Master Note Agreement.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

The Company used the proceeds from the sale of the 2016 Notes, 2018 Notes, and 2021 Notes to fund a portion of the purchase price for the acquisition of Hudson Valley Waste Holding, Inc., which is described in Note 7.

On July 11, 2011, the Company and certain of its subsidiaries entered into a new Amended and Restated Credit Agreement (the “new credit agreement”) with Bank of America, N.A. and the other banks and lending institutions party thereto, as lenders, Bank of America, N.A., as administrative agent, and J.P. Morgan Chase Bank, N.A. and Wells Fargo Bank, National Association, as co-syndication agents.

The Company’s new credit agreement is comprised of a $1,200,000 revolving credit facility which matures on July 11, 2016. The Company has the ability under the new credit agreement to increase commitments under the revolving credit facility from $1,200,000 to $1,500,000, subject to conditions including that no default, as defined in the new credit agreement, has occurred, although no existing lender has any obligation to increase its commitment. The Company used proceeds from the new credit agreement in order to refinance its previous $845,000 credit facility, which had a maturity of September 27, 2012.

Under the new credit agreement, there is no maximum amount of standby letters of credit that can be issued; however, the issuance of standby letters of credit reduces the amount of total borrowings available. The new credit agreement requires the Company to pay a commitment fee ranging from 0.200% per annum to 0.350% per annum of the unused portion of the facility. The borrowings under the new credit agreement bear interest, at the Company’s option, at either the base rate plus the applicable base rate margin on base rate loans, or the LIBOR rate plus the applicable LIBOR margin on LIBOR loans. The base rate for any day is a fluctuating rate per annum equal to the highest of: (1) the federal funds rate plus one half of one percent (0.500%); (2) the LIBOR rate plus one percent (1.000%), and (3) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.” The LIBOR rate is determined by the administrative agent pursuant to a formula in the new credit agreement. The applicable margins under the new credit agreement vary depending on the Company’s leverage ratio, as defined in the credit agreement, and range from 1.150% per annum to 2.000% per annum for LIBOR loans and 0.150% per annum to 1.000% per annum for base rate loans. The interest rate applicable under the new credit agreement is currently the LIBOR rate plus 1.400% per annum, a 0.775% per annum increase in the corresponding interest rate under the Company’s previous credit facility. The borrowings under the new credit agreement are not collateralized.

The new credit agreement contains representations and warranties and places certain business, financial and operating restrictions on the Company relating to, among other things, indebtedness, liens and other encumbrances, investments, mergers and acquisitions, asset sales, sale and leaseback transactions, and dividends, distributions and redemptions of capital stock. The new credit agreement requires that the Company maintain specified financial ratios. The Company expects to use the new credit agreement for acquisitions, capital expenditures, working capital, standby letters of credit and general corporate purposes.

7. ACQUISITIONS

On April 1, 2011, the Company completed the acquisition of a 100% interest in Hudson Valley Waste Holding, Inc., and its wholly-owned subsidiary, County Waste and Recycling Service, Inc. (collectively, “County Waste”). As part of this acquisition, the Company acquired a 50% interest in Russell Sweepers, LLC, a provider of sweeper services, resulting in a 50% noncontrolling interest that was recognized at fair value on the purchase date. The operations include six collection operations, three transfer stations and one recycling facility across six markets: Orange County, New York; Greater Albany, New York; Springfield, Massachusetts; Fulton County, New York; Warrant and Washington Counties, New York; and Greene, Columbia and Ulster Counties, New York. The Company paid $299,000 for the purchased operations plus amounts paid for the purchase of accounts receivable and other prepaid assets and estimated working capital, which amounts are subject to post-closing adjustments. No other consideration, including

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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contingent consideration, was transferred by the Company to acquire these operations. Total revenues for the three months ended June 30, 2011, generated from the County Waste operations and included within consolidated revenues were $31,655. Total pre-tax earnings for the three months ended June 30, 2011, generated from the County Waste operations and included within consolidated income before income taxes were $3,063. In addition to the County Waste acquisition, the Company acquired five individually immaterial non-hazardous solid waste collection businesses during the six months ended June 30, 2011. During the six months ended June 30, 2010, the Company acquired 10 individually immaterial non-hazardous solid waste collection and recycling businesses. The acquisitions completed during the six months ended June 30, 2011 and 2010, were not material to the Company’s results of operations, either individually or in the aggregate. As a result, pro forma financial information has not been provided. The results of operations of the acquired businesses have been included in the Company’s consolidated financial statements from their respective acquisition dates. The Company expects these acquired businesses to contribute towards the achievement of the Company’s strategy to expand through acquisitions.

The following table summarizes the consideration transferred to acquire these businesses and the amounts of identified assets acquired, liabilities assumed and noncontrolling interests associated with businesses acquired at the acquisition date for acquisitions consummated in the six months ended June 30, 2011 and 2010:

	2011			2010
	Acquisitions			Acquisitions
Fair value of consideration transferred:
Cash	$	215,962		$	3,849
Debt assumed*		84,737			281
		300,699			4,130
Recognized amounts of identifiable assets acquired, liabilities assumed and noncontrolling interests associated with businesses acquired:
Accounts receivable		8,801			468
Other current assets		940			157
Property and equipment		52,428			802
Long-term franchise agreements and contracts		2,608			175
Customer lists		40,793			851
Indefinite-lived intangibles		41,215			—
Accounts payable		(6,218	)		—
Accrued liabilities		(1,143	)		(527	)
Noncontrolling interests		(208	)		—
Deferred revenue		(5,231	)		(50	)
Deferred taxes		(10,257	)		—
Total identifiable net assets		123,728			1,876
Goodwill	$	176,971		$	2,254

* Debt paid at close of acquisition.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

The goodwill is attributable to the synergies and ancillary growth opportunities expected to arise after the Company’s acquisition of these businesses. Goodwill acquired during the six months ended June 30, 2011 and 2010 totalling $11,947 and $2,254, respectively, is expected to be deductible for tax purposes.

The fair value of acquired working capital related to five acquisitions completed during the last 12 months is provisional pending receipt of information from the acquiree to support the fair value of the assets acquired and liabilities assumed. Any adjustments recorded relating to finalizing the working capital for these five acquisitions are not expected to be material to the Company’s financial position.

The gross amount of trade receivables due under contracts acquired during the period ended June 30, 2011, is $9,461, of which $660 is expected to be uncollectible. The gross amount of trade receivables due under contracts acquired during the period ended June 30, 2010, is $474, of which $6 is expected to be uncollectible. The Company did not acquire any other class of receivable as a result of the acquisition of these businesses.

A reconciliation of the Fair value of consideration transferred, as disclosed in the table above, to Payments for acquisitions, net of cash acquired, as reported in the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2011 and 2010, is as follows:

	2011		2010
	Acquisitions		Acquisitions
Cash consideration transferred	$	215,962	$	3,849
Payment of contingent consideration		100		—
Payments for acquisitions, net of cash acquired	$	216,062	$	3,849

During the six month periods ended June 30, 2011 and 2010, the Company incurred $1,094 and $395, respectively, of acquisition-related costs. These expenses are included in Selling, general and administrative expenses in the Company’s Condensed Consolidated Statements of Income.

8. INTANGIBLE ASSETS

Intangible assets, exclusive of goodwill, consisted of the following at June 30, 2011:

	Gross Carrying		Accumulated			Net Carrying
	Amount		Amortization			Amount
Amortizable intangible assets:
Long-term franchise agreements and contracts	$	192,334	$	(28,926	)	$	163,408
Customer lists		103,677		(23,151	)		80,526
Non-competition agreements		9,414		(6,205	)		3,209
Other		21,236		(2,672	)		18,564
		326,661		(60,954	)		265,707
Nonamortized intangible assets:
Indefinite-lived intangible assets		190,134		—			190,134
Intangible assets, exclusive of goodwill	$	516,795	$	(60,954	)	$	455,841

The weighted-average amortization period of long-term franchise agreements and contracts acquired during the six months ended June 30, 2011 was 25.8 years. The weighted-average amortization period of customer lists acquired during the six months ended June 30, 2011 was 7.0 years.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

Intangible assets, exclusive of goodwill, consisted of the following at December 31, 2010:

	Gross Carrying		Accumulated			Net Carrying
	Amount		Amortization			Amount
Amortizable intangible assets:
Long-term franchise agreements and contracts	$	190,489	$	(25,255	)	$	165,234
Customer lists		62,885		(17,867	)		45,018
Non-competition agreements		9,414		(5,982	)		3,432
Other		21,236		(2,364	)		18,872
		284,024		(51,468	)		232,556
Nonamortized intangible assets:
Indefinite-lived intangible assets		148,919		—			148,919
Intangible assets, exclusive of goodwill	$	432,943	$	(51,468	)	$	381,475

The weighted-average amortization period of long-term franchise agreements and contracts acquired during the year ended December 31, 2010 was 9.1 years. The weighted-average amortization period of customer lists acquired during the year ended December 31, 2010 was 6.4 years.

Estimated future amortization expense for the next five years of amortizable intangible assets is as follows:

For the year ending December 31, 2011	$	20,801
For the year ending December 31, 2012	$	21,879
For the year ending December 31, 2013	$	20,311
For the year ending December 31, 2014	$	19,579
For the year ending December 31, 2015	$	18,978

9. SEGMENT REPORTING

The Company’s revenues are derived from one industry segment, which includes the collection, transfer, recycling and disposal of non-hazardous solid waste. No single contract or customer accounted for more than 10% of the Company’s total revenues at the consolidated or reportable segment level during the periods presented.

The Company manages its operations through three geographic operating segments, which are also the Company’s reportable segments. Each operating segment is responsible for managing several vertically integrated operations, which are comprised of districts. In April 2011, as a result of the County Waste acquisition described in Note 7, the Company realigned its reporting structure and changed its three geographic operating segments from Western, Central and Southern to Western, Central and Eastern. As part of this realignment, the states of Arizona, Louisiana, New Mexico and Texas, which were previously part of the Southern region, are now included in the Central region. Also as part of this realignment, the state of Michigan, which was previously part of the Central region, is now included in the Eastern region (previously referred to as the Southern region). Additionally, the states of New York and Massachusetts, which the Company now operates in as a result of the County Waste acquisition, are included in the Eastern region. The segment information presented herein reflects the realignment of these districts. Under the current orientation, the Company’s Western Region is comprised of operating locations in California, Idaho, Montana, Nevada, Oregon, Washington and western Wyoming; the Company’s Central Region is comprised of operating locations in Arizona, Colorado, Kansas, Louisiana, Minnesota, Nebraska, New Mexico, Oklahoma, South Dakota, Texas, Utah and eastern Wyoming; and the Company’s Eastern Region is comprised of operating locations in Alabama, Illinois, Iowa, Kentucky, Massachusetts, Michigan, Mississippi, New York, North Carolina, South Carolina and Tennessee.

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WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

The Company’s Chief Operating Decision Maker (“CODM”) evaluates operating segment profitability and determines resource allocations based on operating income before depreciation, amortization and gain (loss) on disposal of assets. Operating income before depreciation, amortization and gain (loss) on disposal of assets is not a measure of operating income, operating performance or liquidity under GAAP and may not be comparable to similarly titled measures reported by other companies. The Company’s management uses operating income before depreciation, amortization and gain (loss) on disposal of assets in the evaluation of segment operating performance as it is a profit measure that is generally within the control of the operating segments. A reconciliation of operating income before depreciation, amortization and gain (loss) on disposal of assets to income before income tax provision is included at the end of this Note 9.

Summarized financial information concerning the Company’s reportable segments for the three and six months ended June 30, 2011 and 2010, is shown in the following tables:

								Operating Income
								Before Depreciation,
Three Months								Amortization and
Ended	Gross		Intercompany			Net		Gain (Loss) on
June 30, 2011	Revenues		Revenues(b)			Revenues		Disposal of Assets(c)
Western	$	213,162	$	(25,611	)	$	187,551	$	57,835
Central		124,004		(13,489	)		110,515		39,662
Eastern		110,054		(17,936	)		92,118		26,713
Corporate(a)		—		—			—		2,933
	$	447,220	$	(57,036	)	$	390,184	$	127,143

								Operating Income
								Before Depreciation,
Three Months								Amortization and
Ended	Gross		Intercompany			Net		Gain (Loss) on
June 30, 2010	Revenues		Revenues(b)			Revenues		Disposal of Assets(c)
Western	$	199,335	$	(23,373	)	$	175,962	$	53,792
Central		110,289		(13,307	)		96,982		32,860
Eastern		71,022		(13,489	)		57,533		18,309
Corporate(a)		—		—			—		1,817
	$	380,646	$	(50,169	)	$	330,477	$	106,778

								Operating Income
								Before Depreciation,
Six Months								Amortization and
Ended	Gross		Intercompany			Net		Gain (Loss) on
June 30, 2011	Revenues		Revenues(b)			Revenues		Disposal of Assets(c)
Western	$	410,628	$	(48,511	)	$	362,117	$	112,288
Central		235,963		(25,051	)		210,912		75,086
Eastern		179,769		(31,146	)		148,623		43,677
Corporate(a)		—		—			—		1,656
	$	826,360	$	(104,708	)	$	721,652	$	232,707

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WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

								Operating Income
								Before Depreciation,
Six Months								Amortization and
Ended	Gross		Intercompany			Net		Gain (Loss) on
June 30, 2010	Revenues		Revenues(b)			Revenues		Disposal of Assets(c)
Western	$	387,849	$	(44,885	)	$	342,964	$	104,238
Central		208,928		(24,215	)		184,713		61,003
Eastern		135,938		(25,597	)		110,341		34,694
Corporate(a)		—		—			—		1,736
	$	732,715	$	(94,697	)	$	638,018	$	201,671

(a)	Corporate functions include accounting, legal, tax, treasury, information technology, risk management, human resources, training and other administrative functions.
(b)	Intercompany revenues reflect each segment’s total intercompany sales, including intercompany sales within a segment and between segments. Transactions within and between segments are generally made on a basis intended to reflect the market value of the service.
(c)	For those items included in the determination of operating income before depreciation, amortization and gain (loss) on disposal of assets, the accounting policies of the segments are the same as those described in the Company’s most recent Annual Report on Form 10-K.

Total assets for each of the Company’s reportable segments at June 30, 2011 and December 31, 2010, based on region alignments as of those dates, were as follows:

	June 30,		December 31,
	2011		2010
Western	$	1,364,307	$	1,378,920
Central		1,024,309		654,854
Eastern		767,484		818,648
Corporate		57,788		63,562
Total Assets	$	3,213,888	$	2,915,984

The following tables show changes in goodwill during the six months ended June 30, 2011 and 2010, by reportable segment:

	Western		Central		Eastern			Total
Balance as of December 31, 2010	$	313,038	$	305,774	$	309,040		$	927,852
Goodwill transferred		—		111,806		(111,806	)		—
Goodwill acquired		—		1,366		175,605			176,971
Goodwill divested		—		—		—			—
Balance as of June 30, 2011	$	313,038	$	418,946	$	372,839		$	1,104,823

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

	Western		Central			Eastern			Total
Balance as of December 31, 2009	$	291,781	$	313,366		$	301,563		$	906,710
Goodwill transferred		20,295		(20,295	)		—			—
Goodwill acquired		682		1,523			49			2,254
Goodwill divested		—		(64	)		(1,111	)		(1,175	)
Balance as of June 30, 2010	$	312,758	$	294,530		$	300,501		$	907,789

During the first quarter of 2010, the Company realigned certain of the Company’s districts between operating segments. This realignment resulted in the reallocation of goodwill among its segments which is reflected in the “Goodwill transferred” line item in the above table.

The Company has no accumulated impairment losses associated with goodwill.

A reconciliation of the Company’s primary measure of segment profitability (operating income before depreciation, amortization and gain (loss) on disposal of assets for reportable segments) to Income before income tax provision in the Condensed Consolidated Statements of Income is as follows:

	Three months ended						Six months ended
	June 30,						June 30,
	2011			2010			2011			2010
Operating income before depreciation, amortization and gain (loss) on disposal of assets	$	127,143		$	106,778		$	232,707		$	201,671
Depreciation		(36,939	)		(33,464	)		(69,975	)		(64,908	)
Amortization of intangibles		(5,673	)		(3,598	)		(9,650	)		(7,184	)
Gain (loss) on disposal of assets		267			(365	)		292			(622	)
Interest expense		(11,087	)		(9,161	)		(19,920	)		(21,423	)
Interest income		143			165			276			318
Loss on extinguishment of debt		—			(9,734	)		—			(10,193	)
Other income (expense), net		(245	)		(169	)		149			469
Income before income tax provision	$	73,609		$	50,452		$	133,879		$	98,128

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WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

The following table shows, for the periods indicated, the Company’s total reported revenues by service line and with intercompany eliminations:

	Three months ended						Six months ended
	June 30,						June 30,
	2011			2010			2011			2010
Collection	$	275,170		$	238,108		$	514,607		$	467,178
Disposal and transfer		133,722			116,217			243,282			216,917
Intermodal, recycling and other		38,328			26,321			68,471			48,620
		447,220			380,646			826,360			732,715
Less: intercompany elimination		(57,036	)		(50,169	)		(104,708	)		(94,697	)
Total revenues	$	390,184		$	330,477		$	721,652		$	638,018

10. DERIVATIVE FINANCIAL INSTRUMENTS

The Company recognizes all derivatives on the balance sheet at fair value. All of the Company’s derivatives have been designated as cash flow hedges; therefore, the effective portion of the changes in the fair value of derivatives will be recognized in accumulated other comprehensive loss until the hedged item is recognized in earnings. The ineffective portion of the changes in the fair value of derivatives will be immediately recognized in earnings. The Company classifies cash inflows and outflows from derivatives within operating activities in the Condensed Consolidated Statements of Cash Flows.

One of the Company’s objectives for utilizing derivative instruments is to reduce its exposure to fluctuations in cash flows due to changes in the variable interest rates of certain borrowings issued under its credit facility. The Company’s strategy to achieve that objective involves entering into interest rate swaps that are specifically designated to the Company’s credit facility and accounted for as cash flow hedges.

At June 30, 2011, the Company’s derivative instruments included one interest rate swap agreement as follows:

			Fixed			Variable
	Notional		Interest			Interest Rate
Date Entered	Amount		Rate Paid*			Received	Effective Date	Expiration Date
March 2009	$	175,000		2.85	%	1-month LIBOR	February 2011	February 2014

* Plus applicable margin.

Another of the Company’s objectives for utilizing derivative instruments is to reduce its exposure to fluctuations in cash flows due to changes in the price of diesel fuel. The Company’s strategy to achieve that objective involves entering into fuel hedges that are specifically designated to certain forecasted diesel fuel purchases and accounted for as cash flow hedges.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

At June 30, 2011, the Company’s derivative instruments included two fuel hedge agreements as follows:

			Diesel
			Rate
	Notional		Paid
	Amount		Fixed
	(in gallons		(per		Diesel Rate Received		Expiration
Date Entered	per month)		gallon)		Variable	Effective Date	Date
December 2008		400,000	$	2.950	DOE Diesel Fuel Index*	January 2011	December 2011
December 2008		400,000	$	3.030	DOE Diesel Fuel Index*	January 2012	December 2012

* If the national U.S. on-highway average price for a gallon of diesel fuel (“average price”), as published by the Department of Energy, exceeds the contract price per gallon, the Company receives the difference between the average price and the contract price (multiplied by the notional number of gallons) from the counterparty. If the average price is less than the contract price per gallon, the Company pays the difference to the counterparty.

The fair values of derivative instruments designated as cash flow hedges as of June 30, 2011, are as follows:

Derivatives Designated as Cash	Asset Derivatives			Liability Derivatives
Flow Hedges	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Interest rate swaps		$		Accrued liabilities(a)	$	(4,352	)
				Other long-term liabilities		(4,518	)
Fuel hedges	Prepaid expenses and other current assets(b)		4,429
	Other assets, net		2,137
Total derivatives designated as cash flow hedges		$	6,566		$	(8,870	)

(a)	Represents the estimated amount of the existing unrealized losses on interest rate swaps as of June 30, 2011 (based on the interest rate yield curve at that date), included in accumulated other comprehensive loss expected to be reclassified into pre-tax earnings within the next 12 months. The actual amounts reclassified into earnings are dependent on future movements in interest rates.
(b)	Represents the estimated amount of the existing unrealized gains on fuel hedges as of June 30, 2011 (based on the forward DOE diesel fuel index curve at that date), included in accumulated other comprehensive loss expected to be reclassified into pre-tax earnings within the next 12 months. The actual amounts reclassified into earnings are dependent on future movements in diesel fuel prices.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

The fair values of derivative instruments designated as cash flow hedges as of December 31, 2010, are as follows:

Derivatives Designated as Cash	Asset Derivatives			Liability Derivatives
Flow Hedges	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Interest rate swaps				Accrued liabilities	$	(4,988	)
				Other long-term liabilities		(4,734	)
Fuel hedges	Prepaid expenses and other current assets	$	2,469
	Other assets, net		2,261
Total derivatives designated as cash flow hedges		$	4,730		$	(9,722	)

The following tables summarizes the impact of the Company’s cash flow hedges on the results of operations, comprehensive income and accumulated other comprehensive loss (“AOCL”) as of and for the three and six months ended June 30, 2011 and 2010:

Derivatives	Amount of Gain or (Loss) Recognized in AOCL on							Amount of (Gain) or Loss Reclassified from AOCL into
Designated as Cash	Derivatives,						Statement of Income	Earnings, Net of Tax (Effective
Flow Hedges	Net of Tax (Effective Portion)(a)						Classification	Portion) (b),(c)
	Three Months Ended June 30,							Three Months Ended June 30,
	2011			2010				2011			2010
Interest rate swaps	$	(1,655	)	$	(3,080	)	Interest expense	$	985		$	1,431
Fuel hedges		(449	)		(1,269	)	Cost of operations		(792	)		257
Total	$	(2,104	)	$	(4,349	)		$	193		$	1,688

	Amount of Gain or (Loss)							Amount of (Gain) or Loss
Derivatives	Recognized in AOCL on							Reclassified from AOCL into
Designated as Cash	Derivatives,						Statement of Income	Earnings, Net of Tax (Effective
Flow Hedges	Net of Tax (Effective Portion)(a)						Classification	Portion) (b),(c)
	Six Months Ended June 30,							Six Months Ended June 30,
	2011			2010				2011			2010
Interest rate swaps	$	(1,614	)	$	(5,435	)	Interest expense	$	2,142		$	2,869
Fuel hedges		2,433			(1,919	)	Cost of operations		(1,294	)		1,441
Total	$	819		$	(7,354	)		$	848		$	4,310

(a)	In accordance with the derivatives and hedging guidance, the effective portions of the changes in fair values of interest rate swaps and fuel hedges have been recorded in equity as a component of AOCL. As the critical terms of the interest rate swaps match the underlying debt being hedged, no ineffectiveness is recognized on these swaps and, therefore, all unrealized changes in fair value are recorded in AOCL. Because changes in the actual price of diesel fuel and changes in the DOE index price do not offset exactly each reporting period, the Company assesses whether the fuel hedges are highly effective using the cumulative dollar offset approach.
(b)	Amounts reclassified from AOCL into earnings related to realized gains and losses on interest rate swaps are recognized when interest payments or receipts occur related to the swap contracts, which correspond to when interest payments are made on the Company’s hedged debt.
(c)	Amounts reclassified from AOCL into earnings related to realized gains and losses on fuel hedges are recognized when settlement payments or receipts occur related to the hedge contracts, which correspond to when the underlying fuel is consumed.

The Company measures and records ineffectiveness on the fuel hedges in Cost of operations in the Condensed Consolidated Statements of Income on a monthly basis based on the difference between the DOE index price and the actual price of diesel fuel purchased, multiplied by the notional number of gallons on the contracts. There was no significant ineffectiveness recognized on the fuel hedges during the six months ended June 30, 2011 and 2010.

Page 19

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

See Note 13 for further discussion on the impact of the Company’s hedge accounting to its consolidated Comprehensive income and AOCL.

11. NET INCOME PER SHARE INFORMATION

The following table sets forth the calculation of the numerator and denominator used in the computation of basic and diluted net income per common share attributable to the Company’s common stockholders for the three and six months ended June 30, 2011 and 2010:

	Three months ended				Six months ended
	June 30,				June 30,
	2011		2010		2011		2010
Numerator:
Net income attributable to Waste Connections for basic and diluted earnings per share	$	44,413	$	30,400	$	80,952	$	57,973
Denominator:
Basic shares outstanding		113,509,668		116,243,700		113,514,439		116,401,140
Dilutive effect of stock options and warrants		451,173		924,542		463,899		1,030,239
Dilutive effect of restricted stock		347,869		314,509		376,641		316,173
Diluted shares outstanding		114,308,710		117,482,751		114,354,979		117,747,552

For the three months ended June 30, 2011 and 2010, stock options and warrants to purchase 1,266 and 909 shares of common stock, respectively, were excluded from the computation of diluted earnings per share as they were anti-dilutive. For the six months ended June 30, 2011 and 2010, stock options and warrants to purchase 1,266 and 3,279 shares of common stock, respectively, were excluded from the computation of diluted earnings per share as they were anti-dilutive. The 2026 Notes were not dilutive during the six months ended June 30, 2010. On April 1, 2010, the Company redeemed the aggregate principal amount of its 2026 Notes.

12. FAIR VALUE MEASUREMENTS

The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. These tiers include: Level 1, defined as quoted market prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, model-based valuation techniques for which all significant assumptions are observable in the market, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3, defined as unobservable inputs that are not corroborated by market data.

Page 20

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

The Company’s financial assets and liabilities recorded at fair value on a recurring basis include derivative instruments and restricted assets. The Company’s derivative instruments are pay-fixed, receive-variable interest rate swaps and pay-fixed, receive-variable diesel fuel hedges. The Company’s interest rate swaps are recorded at their estimated fair values based on quotes received from financial institutions that trade these contracts. The Company verifies the reasonableness of these quotes using similar quotes from another financial institution as of each date for which financial statements are prepared. The Company uses a discounted cash flow (“DCF”) model to determine the estimated fair values of the diesel fuel hedges. The assumptions used in preparing the DCF model include: (i) estimates for the forward DOE index curve; and (ii) the discount rate based on risk-free interest rates over the term of the agreements. The DOE index curve used in the DCF model was obtained from financial institutions that trade these contracts. For the Company’s interest rate swap and fuel hedges, the Company also considers the Company’s creditworthiness in its determination of the fair value measurement of these instruments in a net liability position and the banks’ creditworthiness in its determination of the fair value measurement of these instruments in a net asset position. The Company’s restricted assets are valued at quoted market prices in active markets for identical assets, which the Company receives from the financial institutions that hold such investments on its behalf. The Company’s restricted assets measured at fair value are invested primarily in U.S. government and agency securities.

The Company’s assets and liabilities measured at fair value on a recurring basis at June 30, 2011 and December 31, 2010, were as follows:

	Fair Value Measurement at June 30, 2011 Using
				Quoted Prices in		Significant
				Active Markets		Other			Significant
				for Identical		Observable			Unobservable
				Assets		Inputs			Inputs
	Total			(Level 1)		(Level 2)			(Level 3)
Interest rate swap derivative instruments — net liability position	$	(8,870	)	$	—	$	(8,870	)	$	—
Fuel hedge derivative instruments — net asset position	$	6,566		$	—	$	—		$	6,566
Restricted assets	$	28,600		$	28,600	$	—		$	—

	Fair Value Measurement at December 31, 2010 Using
				Quoted Prices in		Significant
				Active Markets		Other			Significant
				for Identical		Observable			Unobservable
				Assets		Inputs			Inputs
	Total			(Level 1)		(Level 2)			(Level 3)
Interest rate swap derivative instruments — net liability position	$	(9,722	)	$	—	$	(9,722	)	$	—
Fuel hedge derivative instruments — net asset position	$	4,730		$	—	$	—		$	4,730
Restricted assets	$	30,791		$	30,791	$	—		$	—

During the six months ended June 30, 2011, there were no fair value measurements of assets or liabilities measured at fair value on a nonrecurring basis subsequent to their initial recognition.

Page 21

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

The following table summarizes the change in the fair value for Level 3 derivatives for the six months ended June 30, 2011:

	Level 3
	Derivatives
Balance as of December 31, 2010	$	4,730
Realized gains included in earnings		(2,088	)
Unrealized gains included in AOCL		3,924
Balance as of June 30, 2011	$	6,566

The following table summarizes the change in the fair value for Level 3 derivatives for the six months ended June 30, 2010:

	Level 3
	Derivatives
Balance as of December 31, 2009	$	(104	)
Realized losses included in earnings		2,324
Unrealized losses included in AOCL		(3,095	)
Balance as of June 30, 2010	$	(875	)

Page 22

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

13. COMPREHENSIVE INCOME

Comprehensive income includes changes in the fair value of interest rate swaps and fuel hedges that qualify for hedge accounting. The components of other comprehensive income (loss) and related tax effects for the three and six month periods ended June 30, 2011 and 2010, are as follows:

	Three months ended June 30, 2011
	Gross			Tax effect			Net of tax
Interest rate swap amounts reclassified into interest expense	$	1,589		$	(604	)	$	985
Fuel hedge amounts reclassified into cost of operations		(1,278	)		486			(792	)
Changes in fair value of interest rate swaps		(2,670	)		1,015			(1,655	)
Changes in fair value of fuel hedges		(724	)		275			(449	)
	$	(3,083	)	$	1,172		$	(1,911	)

	Three months ended June 30, 2010
	Gross			Tax effect			Net of tax
Interest rate swap amounts reclassified into interest expense	$	2,309		$	(878	)	$	1,431
Fuel hedge amounts reclassified into cost of operations		414			(157	)		257
Changes in fair value of interest rate swaps		(4,968	)		1,888			(3,080	)
Changes in fair value of fuel hedges		(2,046	)		777			(1,269	)
	$	(4,291	)	$	1,630		$	(2,661	)

Total comprehensive income for the three months ended June 30, 2011 and 2010 was $42,694 and $27,976, respectively.

Page 23

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

	Six months ended June 30, 2011
	Gross			Tax effect			Net of tax
Interest rate swap amounts reclassified into interest expense	$	3,455		$	(1,313	)	$	2,142
Fuel hedge amounts reclassified into cost of operations		(2,088	)		794			(1,294	)
Changes in fair value of interest rate swaps		(2,603	)		989			(1,614	)
Changes in fair value of fuel hedges		3,924			(1,491	)		2,433
	$	2,688		$	(1,021	)	$	1,667

	Six months ended June 30, 2010
	Gross			Tax effect			Net of tax
Interest rate swap amounts reclassified into interest expense	$	4,628		$	(1,759	)	$	2,869
Fuel hedge amounts reclassified into cost of operations		2,324			(883	)		1,441
Changes in fair value of interest rate swaps		(8,791	)		3,356			(5,435	)
Changes in fair value of fuel hedges		(3,095	)		1,176			(1,919	)
	$	(4,934	)	$	1,890		$	(3,044	)

A rollforward of the amounts included in AOCL, net of taxes, is as follows:

							Accumulated
							Other
				Interest			Comprehensive
	Fuel Hedges			Rate Swaps			Loss
Balance at December 31, 2010	$	2,931		$	(6,026	)	$	(3,095	)
Amounts reclassified into earnings		(1,294	)		2,142			848
Change in fair value		2,433			(1,614	)		819
Balance at June 30, 2011	$	4,070		$	(5,498	)	$	(1,428	)

See Note 10 for further discussion on the Company’s derivative instruments.

Page 24

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

14. STOCKHOLDERS’ EQUITY

Stock-Based Compensation

A summary of activity related to restricted stock units under the Third Amended and Restated 2004 Equity Incentive Plan, as of December 31, 2010, and changes during the six month period ended June 30, 2011, is presented below:

	Unvested
	Shares
Outstanding at December 31, 2010		1,514,459
Granted		495,560
Forfeited		(22,640	)
Vested		(521,069	)
Outstanding at June 30, 2011		1,466,310

The weighted average grant date fair value per share for the shares of common stock underlying the restricted stock units granted during the six month period ended June 30, 2011 was $29.26. During the six months ended June 30, 2011 and 2010, the Company’s stock-based compensation expense from restricted stock units was $5,929 and $5,492, respectively.

Share Repurchase Program

The Company’s Board of Directors has authorized a common stock repurchase program for the repurchase of up to $800,000 of common stock through December 31, 2012. Under the program, stock repurchases may be made in the open market or in privately negotiated transactions from time to time at management’s discretion. The timing and amounts of any repurchases will depend on many factors, including the Company’s capital structure, the market price of the common stock and overall market conditions. During the six months ended June 30, 2011 and 2010, the Company repurchased 1,460,399 and 3,736,611 shares, respectively, of its common stock under this program at a cost of $42,381 and $83,665, respectively. As of June 30, 2011, the remaining maximum dollar value of shares available for repurchase under the program was approximately $108,993. The Company’s policy related to repurchases of its common stock is to charge any excess of cost over par value entirely to additional paid-in capital.

Stock Split

On October 19, 2010, the Company’s Board of Directors declared a three-for-two split of its common stock, in the form of a 50% stock dividend, payable to stockholders of record as of October 29, 2010. Shares resulting from the split were issued on November 12, 2010. In connection therewith, the Company transferred $394 from retained earnings to common stock, representing the par value of additional shares issued. As a result of the stock split, fractional shares equal to 2,479 whole shares were repurchased for $101. All share and per share amounts for all periods presented have been retroactively adjusted to reflect the stock split.

Cash Dividend

On October 19, 2010, the Company’s Board of Directors declared the initiation of a quarterly cash dividend of $0.075 per share, as adjusted for the three-for-two stock split described above. The initial quarterly cash dividend totaling $8,561 was paid on November 12, 2010. The Company also paid a quarterly cash dividend of $0.075 per share on its common stock, totaling $8,515 and $8,526, on March 1, 2011 and May 20, 2011, respectively. On July 19, 2011, the Company announced that its Board of Directors declared a regular quarterly cash dividend of $0.075 per share on the Company’s common stock. The dividend will be paid on August 17, 2011, to stockholders of record on the close of business on August 3, 2011.

Page 25

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

15. COMMITMENTS AND CONTINGENCIES

In the normal course of its business and as a result of the extensive governmental regulation of the solid waste industry, the Company is subject to various judicial and administrative proceedings involving federal, state or local agencies. In these proceedings, an agency may seek to impose fines on the Company or to revoke or deny renewal of an operating permit held by the Company. From time to time, the Company may also be subject to actions brought by special interest or other groups, adjacent landowners or residents in connection with the permitting and licensing of landfills and transfer stations, or alleging environmental damage or violations of the permits and licenses pursuant to which the Company operates.

In addition, the Company is a party to various claims and suits pending for alleged damages to persons and property, alleged violations of certain laws and alleged liabilities arising out of matters occurring during the normal operation of the waste management business. Except as noted in the legal cases described below, as of June 30, 2011, there is no current proceeding or litigation involving the Company or its property that the Company believes could have a material adverse impact on its business, financial condition, results of operations or cash flows.

Chaparral, New Mexico Landfill Permit Litigation

The Company’s subsidiary, High Desert Solid Waste Facility, Inc. (formerly known as Rhino Solid Waste, Inc.) (“HDSWF”), owns undeveloped property in Chaparral, New Mexico, for which it sought a permit to operate a municipal solid waste landfill. After a public hearing, the New Mexico Environment Department (the “Department”) approved the permit for the facility on January 30, 2002. Colonias Development Council (“CDC”), a nonprofit organization, opposed the permit at the public hearing and appealed the Department’s decision to the courts of New Mexico, primarily on the grounds that the Department failed to consider the social impact of the landfill on the community of Chaparral, and failed to consider regional planning issues. On July 18, 2005, in Colonias Dev. Council v. Rhino Envtl. Servs., Inc. (In re Rhino Envtl. Servs.), 2005 NMSC 24, 117 P.3d 939, the New Mexico Supreme Court remanded the matter back to the Department to conduct a limited public hearing on certain evidence that CDC claimed was wrongfully excluded from consideration by the hearing officer, and to allow the Department to reconsider the evidence already proffered concerning the impact of the landfill on the surrounding community’s quality of life. In July 2007, the Department, CDC, the Company and Otero County signed a stipulation requesting a postponement of the limited public hearing to allow the Company time to explore a possible relocation of the landfill to a new site. Since 2007, the Department has issued several postponements orders for the limited public hearing, currently scheduled for November 2011, as HDSWF has continued to evaluate the suitability of a new site. In July 2009, HDSWF purchased approximately 325 acres of undeveloped land comprising a proposed new site from the State of New Mexico. HDSWF filed a formal landfill permit application for the new site with the Department on September 17, 2010, and the Department is evaluating that application. If the Department denies the landfill permit application for the new site, HDSWF intends to actively resume its efforts to enforce the previously issued landfill permit for the original site in Chaparral. At June 30, 2011, the Company had $11,759 of capitalized expenditures related to this landfill development project. If the Company is ultimately issued a permit to operate the landfill at the new site purchased in July 2009, the Company will be required to expense in a future period $10,318 of capitalized expenditures related to the original Chaparral property, less the recoverable value of that undeveloped property and other amounts recovered, which would likely have a material adverse effect on the Company’s results of operations for that period. If the Company instead is ultimately issued a permit to operate the landfill at the original Chaparral property, the Company will be required to expense in a future period $1,441 of capitalized expenditures related to the new site purchased in July 2009, less the recoverable value of that undeveloped property and other amounts recovered. If the Company is not ultimately issued a permit to operate the landfill at either one of the two sites, the Company will be required to expense in a future period the $11,759 of capitalized expenditures, less the recoverable value of the undeveloped properties and other amounts recovered, which would likely have a material adverse effect on the Company’s results of operations for that period.

Page 26

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

Harper County, Kansas Landfill Permit Litigation

The Company opened a municipal solid waste landfill in Harper County, Kansas in January 2006, following the issuance by the Kansas Department of Health and Environment (“KDHE”) of a final permit to operate the landfill. The landfill has operated continuously since that time. On October 3, 2005, landfill opponents filed a suit (Board of Comm’rs of Sumner County, Kansas, Tri-County Concerned Citizens and Dalton Holland v. Roderick Bremby, Sec’y of the Kansas Dep’t of Health and Env’t, et al.) in the District Court of Shawnee County, Kansas, seeking a judicial review of KDHE’s decision to issue the permit, alleging that a site analysis prepared for the Company and submitted to KDHE as part of the process leading to the issuance of the permit was deficient in several respects. The action sought to stay the effectiveness of the permit and to nullify it. The Company intervened in this lawsuit shortly after it was filed. On April 7, 2006, the District Court issued an order denying the plaintiffs’ request for judicial review on the grounds that they lacked standing to bring the action. The plaintiffs appealed that decision to the Kansas Court of Appeals, and on October 12, 2007, the Court of Appeals issued an opinion reversing and remanding the District Court’s decision. The Company appealed the decision to the Kansas Supreme Court, and on July 25, 2008, the Supreme Court affirmed the decision of the Court of Appeals and remanded the case to the District Court for further proceedings on the merits. Plaintiffs filed a second amended petition on October 22, 2008, and the Company filed a motion to strike various allegations contained within the second amended petition. On July 2, 2009, the District Court granted in part and denied in part the Company’s motion to strike. The District Court also set a new briefing schedule, and the parties completed the briefing during the first half of 2010. Oral argument in the case occurred on September 27, 2010. There is no scheduled time limit within which the District Court has to decide this administrative appeal. While the Company believes that it will prevail in this case, the District Court could remand the matter back to KDHE for additional review of its decision or could revoke the permit. An order of remand to KDHE would not necessarily affect the Company’s continued operation of the landfill. Only in the event that a final, materially adverse determination with respect to the permit is received would there likely be a material adverse effect on the Company’s reported results of operations in the future. If as a result of this litigation, after exhausting all appeals, the Company was unable to continue to operate the landfill, the Company estimates that it would be required to record a pre-tax impairment charge of approximately $15,000 to reduce the carrying value of the landfill to its estimated fair value. In addition, the Company estimates the current annual impact to its pre-tax earnings that would result if it was unable to continue to operate the landfill would be approximately $4,000 per year.

El Paso, Texas Labor Union Disputes

One of the Company’s subsidiaries, El Paso Disposal, LP (“EPD”), is a party to administrative proceedings before the National Labor Relations Board (“NLRB”). In these proceedings, the union has alleged various unfair labor practices relating to the parties’ failure to reach agreement on initial labor contracts and the resultant strike by, and the replacement of and a failure to recall, union-represented employees. On April 29, 2009, following a hearing, an administrative law judge issued a recommended Decision and Order finding violations of the National Labor Relations Act by EPD and recommended to the NLRB that EPD take remedial actions, including reinstating certain employees and their previous terms and conditions of employment, refraining from certain conduct, continuing to bargain collectively and providing a “make whole” remedy. EPD filed exceptions to the administrative law judge’s recommendations on June 30, 2009. The matter is currently before the NLRB on review. On July 27, 2009, the NLRB’s regional office in Phoenix, Arizona filed a petition in the United States District Court for the Western District of Texas seeking an injunction to reinstate the replaced employees, order EPD to continue collective bargaining while the NLRB’s review is pending, and to refrain from further alleged unfair labor practices. A hearing on the injunction was held on August 19, 2009; and on October 30, 2009, the District Court granted the NLRB’s requested relief. EPD appealed the District Court’s order to the United States Court of Appeals for the Fifth Circuit, and a hearing on the appeal occurred on August 2, 2010. On November 4, 2010, the Fifth Circuit affirmed the District Court’s injunction order.

Page 27

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

Several related unfair labor practice charges alleging failure to bargain and failure to appropriately recall union-represented employees subsequently were filed against EPD. The charges were heard by an administrative law judge during the week of August 24, 2009. On December 2, 2009, the administrative law judge issued a recommended Decision and Order granting part of the NLRB’s requested relief, while denying part, but the issues were effectively subsumed by the District Court’s injunction. Both EPD and the NLRB’s General Counsel filed exceptions to the administrative law judge’s recommendations with the NLRB. These exceptions also are currently under review by the NLRB.

On January 22, 2010 and March 5, 2010, the union filed new unfair labor practice charges against EPD concerning events relating to the ongoing contract negotiation process. On May 28, 2010, the NLRB issued a complaint against EPD alleging unfair labor practices, including alleged unlawful threats and coercive statements, refusal to provide striking employees with full and unconditional reinstatement, reduction of earning opportunities for striking employees, implementation of new routes for drivers, implementation of a new longevity bonus plan, use of video footage captured by surveillance camera to discipline employees, change to the driver training program, change to the uniform practice and bargaining proposals that were “predictably unacceptable” to the union. EPD filed an answer denying any wrongdoing. Further, EPD believes it has resolved many of these allegations through negotiations with the union. A hearing on this complaint was scheduled for November 2, 2010, but subsequently was postponed indefinitely by the NLRB as a result of a pending comprehensive settlement of outstanding matters between EPD and the union that is more fully described below.

On June 11, 2010, June, 24, 2010, and June 30, 2010, the union filed new unfair labor practice charges alleging that EPD has unlawfully failed to provide relevant information requested by the union, and unilaterally changed terms and working conditions of employment (by unspecified acts) resulting in a reduced size of the bargaining unit, implementing new work schedules, suspending an employee with pay due to an accident, reassigning and/or changing work assignments among bargaining unit employees and intimidating and coercing employees by suspending strikers involved in accidents and by following drivers excessively while performing their duties. The NLRB included these new allegations in its complaint to be heard on November 2, 2010, which was postponed indefinitely by the NLRB because of the pending comprehensive settlement between EPD and the union.

On August 10, 2010, the NLRB filed a petition for contempt and other civil relief before the United States District Court for the Western District of Texas, alleging that EPD violated the District Court’s October 30, 2009 injunction order by failing or refusing to implement the interim relief directed by the court (e.g., to restore changed employment terms, reinstate former strikers to their prior positions, and not commit future purported unfair labor practices). EPD filed an answer denying any wrongdoing. A hearing on the NLRB’s petition was scheduled for November 10, 2010, but was postponed indefinitely by the NLRB because of the pending comprehensive settlement between EPD and the union.

In December 2010, the union ratified a comprehensive settlement reached with EPD as to all outstanding unfair labor practice charges and related liability issues. The settlement has resulted in the indefinite postponement of the NLRB and District Court proceedings described above, pending final administration of the settlement terms. The settlement includes: agreement on collective bargaining agreements for the two EPD bargaining units; withdrawal by the union of all of its unfair labor practice charges; and the payment by EPD of 60% of net back pay, without interest, for all alleged discriminatees for the back pay period in question, which ended in 2009. In May 2011, EPD and the union reached agreement on the backpay amounts for all of the alleged discriminatees. Notwithstanding the settlement, EPD continues to deny that any wrongdoing occurred. The parties have begun to implement the settlement terms, pursuant to which, in December 2010, the union filed a request with the NLRB to withdraw all of its unfair labor practice charges. This request currently is pending before the NLRB regional office in Phoenix, but has not yet been approved. Thus, the pending comprehensive settlement is not yet final.

Page 28

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

Solano County, California Measure E/Landfill Expansion Litigation

The Company and one of its subsidiaries, Potrero Hills Landfill, Inc. (“PHLF”), were named as real parties in interest in an amended complaint captioned Sustainability, Parks, Recycling and Wildlife Legal Defense Fund v. County of Solano, which was filed in the Superior Court of California, County of Solano, on July 9, 2009 (the original complaint was filed on June 12, 2009). This lawsuit seeks to compel Solano County to comply with Measure E, a ballot initiative and County ordinance passed in 1984 that the County has not enforced against PHLF since at least 1992. Measure E directs in part that Solano County shall not allow the importation into the County of any solid waste which originated or was collected outside the County in excess of 95,000 tons per year. PHLF disposes of approximately 670,800 tons of solid waste annually, approximately 562,300 tons of which originate from sources outside of Solano County. The Sustainability, Parks, Recycling and Wildlife Legal Defense Fund (“SPRAWLDEF”) lawsuit also seeks to overturn Solano County’s approval of the use permit for the expansion of the Potrero Hills Landfill and the related Environmental Impact Report (“EIR”), arguing that both violate Measure E and that the EIR violates the California Environmental Quality Act (“CEQA”). Two similar actions seeking to enforce Measure E, captioned Northern California Recycling Association v. County of Solano and Sierra Club v. County of Solano, were filed in the same court on June 10, 2009, and August 10, 2009, respectively. The Northern California Recycling Association (“NCRA”) case does not name the Company or any of its subsidiaries as parties and does not contain any CEQA claims. The Sierra Club case names PHLF as a real party in interest, and seeks to overturn the conditional use permit for the expansion of the landfill on Measure E grounds (but does not raise CEQA claims). These lawsuits follow a previous lawsuit concerning Measure E that NCRA filed against PHLF in the same court on July 22, 2008, prior to the Company’s acquisition of PHLF in April 2009, but which NCRA later dismissed.

In December 2009, the Company and PHLF filed briefs vigorously opposing enforcement of Measure E on Constitutional and other grounds. The Company’s position is supported by Solano County, a co-defendant in the Measure E litigation. It is also supported by the Attorney General of the State of California, the National Solid Wastes Management Association and the California Refuse Recycling Council, each of which filed supporting friend of court briefs or letters. In addition, numerous waste hauling companies in California, Oregon and Nevada have intervened on the Company’s side in the state cases, subsequent to their participation in the federal action challenging Measure E discussed below. A hearing on the merits for all three Measure E state cases was held on February 18, 2010.

On May 12, 2010, the Solano County Superior Court issued a written opinion addressing all three cases. The Court upheld Measure E in part by judicially rewriting the law, and then issued a writ of mandamus directing Solano County to enforce Measure E as rewritten. The Court decided that it could cure the law’s discrimination against out-of-county waste by revising Measure E to only limit the importation of waste into Solano County from other counties in California, but not from other states. In the same opinion, the Court rejected the requests from petitioners in the cases for a writ of administrative mandamus to overturn the permit approved by Solano County in June 2009 for the expansion of PHLF’s landfill, thereby leaving the expansion permit in place. Petitioners Sierra Club and SPRAWLDEF filed motions to reconsider in which they asked the Court to issue a writ of administrative mandamus and void PHLF’s expansion permit. The County, the Company and PHLF opposed the motions to reconsider and a hearing was held on June 25, 2010. On August 30, 2010, the Court denied the motions to reconsider and reaffirmed its ruling denying the petitions for writs to overturn PHLF’s expansion permit.

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WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

In December 2010, the Court entered final judgments and writs of mandamus in the three cases, and Solano County, the Company, PHLF and the waste hauling company intervenors filed notices of appeal, which stayed the judgments and writs pending the outcome of the appeal. Petitioners Sierra Club and SPRAWLDEF cross-appealed the Court’s ruling denying their petitions for writs to overturn PHLF’s expansion permit. The appeals and cross-appeals were consolidated and the parties entered into a briefing schedule by stipulation in February, 2011. PHLF filed its opening brief in March 2011. Sierra Club and SPRAWLDEF filed combined response and opening briefs for their cross-appeals in May 2011. PHLF’s combined reply and response to the cross-appeals is due in July 2011 and all briefing is scheduled to be complete by August 2011.

As part of the final judgments, the Solano County Superior Court retained jurisdiction over any motions for attorneys' fees under California's Private Attorney General statute. Petitioners NCRA, SPRAWLDEF and Sierra Club each filed a bill of costs and a motion for attorney fees totaling $771. The Company vigorously opposed the award of attorney fees. The motions were heard in March 2011. On May 31, 2011, the court issued a final order awarding petitioners $452 in attorneys' fees, $411 of which relates to the SPRAWLDEF and Sierra Club cases in which the Company or PHLF is a named party. The court allocated 50% of the fee amount to PHLF, none of which the Company recorded as a liability at June 30, 2011. The Company intends to appeal this attorneys’ fees order by July 29, 2011. If the Company prevails on the appeals of the three underlying cases, then none of the Petitioners would be entitled to attorneys' fees and costs. If the Company is unsuccessful on these appeals and its future appeals of the attorneys' fees judgment, PHLF and the County would each ultimately be severally liable for $206 in attorneys' fees for the SPRAWLDEF and Sierra Club cases. However, in all three cases, the Company may reimburse the County for any such attorneys' fees under the indemnification provision in PHLF's land use permit.

At this point the Company is not able to determine the likelihood of any outcome in this matter. However, in the event that after all appeals are exhausted the Superior Court’s writ of mandamus enforcing Measure E as rewritten is upheld, the Company estimates that the current annual impact to its pre-tax earnings resulting from the restriction on imports into Solano County would be approximately $6,000 per year. The Company’s estimate could be impacted by various factors, including the County’s allocation of the 95,000 tons per year import restriction among PHLF and the other disposal and composting facilities in Solano County. In addition, if the final rulings on Measure E do not limit the importation of waste into Solano County from other states, the Company could potentially offset a portion of the estimated reduction to its pre-tax earnings by internalizing waste for disposal at PHLF from other states in which the Company operates, or by accepting waste volumes from third party haulers operating outside of California.

In response to the pending three state court actions to enforce Measure E described above, the Company, PHLF and other waste hauling companies in California, Oregon and Nevada that are damaged by Measure E and would be further damaged if Measure E was enforced, filed a federal lawsuit to enjoin Measure E and have it declared unconstitutional. On September 8, 2009, the coalition brought suit in the United States District Court for the Eastern District of California in Sacramento challenging Measure E under the Commerce Clause of the United States Constitution, captioned Potrero Hills Landfill, Inc. et al. v. County of Solano. In response, SPRAWLDEF, Sierra Club and NCRA intervened in the federal case to defend Measure E and filed motions to dismiss the federal suit, or in the alternative, for the court to abstain from hearing the case in light of the pending state court Measure E actions. On December 23, 2009, the federal court abstained and declined to accept jurisdiction over the Company’s case, holding that Measure E raised unique state issues that should be resolved by the pending state court litigation, and granted the motions to dismiss. The Company filed a notice of appeal to the court’s ruling on January 22, 2010, and briefing in the United States Court of Appeals for the Ninth Circuit was completed on November 17, 2010. Oral argument on the appeal took place on April 14, 2011.

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WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

Individual members of SPRAWLDEF were also plaintiffs in a lawsuit filed in the Solano County Superior Court on October 13, 2005, captioned Protect the Marsh, et al. v. County of Solano, et al., challenging the EIR that Solano County certified in connection with its approval of the expansion of the Potrero Hills Landfill on September 13, 2005. A motion to discharge the Superior Court’s writ of mandate directing the County to vacate and set aside its certification of the EIR was heard in August 2009. On November 3, 2009, the Superior Court upheld the County’s certification of the EIR and the related permit approval actions. In response, the plaintiffs in Protect the Marsh filed a notice of appeal to the court’s order on December 31, 2009. On October 8, 2010, the California Court of Appeal dismissed Plaintiffs’ appeal for lack of standing. SPRAWLDEF subsequently filed a petition for review of this decision with the California Supreme Court. On December 21, 2010, the Supreme Court denied the petition, concluding this litigation in favor of the County and the Company.

On December 17, 2010, SPRAWLDEF and one its members filed a petition for writ of mandate in San Francisco Superior Court seeking to overturn the October 2010 approval of the marsh development permit issued by the San Francisco Bay Conservation and Development Commission (“BCDC”) for PHLF’s landfill expansion, alleging that the approval is contrary to the Marsh Act and Measure E. The petition, captioned SPRAWLDEF v. San Francisco Bay Conservation and Development Commission, names BCDC as a respondent and the Company as the real party in interest. Petitioners seek a declaration that the law does not allow BCDC to approve a marsh development permit beyond the footprint and operational levels originally approved for PHLF in 1984, and that the approval violates Measure E. BCDC is preparing the administrative record of its permit decision to be filed with the court and answers to the petition will be due 30 days thereafter. A hearing has not yet been set on the petition. At this point the Company is not able to determine the likelihood of any outcome in this matter.

On June 10, 2011, June Guidotti, a property owner adjacent to PHLF, and SPRAWLDEF and one of its members, each filed administrative petitions for review with the State Water Resources Control Board (“State Board”) seeking to overturn a May 11, 2011 Order No. 2166-(a) approving waste discharge requirements issued by the San Francisco Bay Regional Water Quality Control Board (“Regional Board”) for PHLF’s landfill expansion, alleging that the order is contrary to the State Board’s Title 27 regulations authorizing waste discharge requirements for landfills, and in the case of the SPRAWLDEF petition, further alleging that the Regional Board’s issuance of a Clean Water Act section 401 certification is not supported by an adequate alternatives analysis as required by the federal Clean Water Act. The Regional Board is preparing the administrative record of its decision to issue Order 2166-(a) to be filed with the State Board as well as its response to the petitions for review. It is anticipated that the Regional Board will vigorously defend its actions and seek dismissal of the petitions for review. A hearing date has not yet been set on either petition, and the State Board has held the Guidotti petition in abeyance for now at petitioner’s request. At this point the Company is not able to determine the likelihood of any outcome in this matter.

If as a result of any of the matters described above, after exhausting all appeals, PHLF is unable to secure an expansion permit, and the Superior Court’s writ of mandamus enforcing Measure E as rewritten is ultimately upheld, the Company estimates that it would be required to recognize a pre-tax impairment charge of approximately $39,000 to reduce the carrying value of PHLF to its estimated fair value. If PHLF is unable to secure an expansion permit but Measure E is ultimately ruled to be unenforceable, the Company estimates that it would be required to recognize a pre-tax impairment charge of approximately $24,000 to reduce the carrying value of PHLF to its estimated fair value.

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WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands, except share, per share, per gallon, tonnage and per ton amounts)

El Paso, Texas Breach of Contract/Flow Control Litigation

On November 15, 2010, the Company filed a petition in the County Court at Law No. 3, El Paso County, Texas, captioned Waste Connections, Inc., Camino Real Environmental Center, Inc. and El Paso Disposal, LP v. The City of El Paso, Texas, John F. Cook, in his capacity as El Paso Mayor, and Joyce Wilson, in her capacity as El Paso City Manager (No. 2010-4476), which has since been transferred to the 168th District Court of El Paso County, Texas. The action relates to that certain Solid Waste Disposal and Operating Agreement, dated April 27, 2004, by and among the City of El Paso, Texas (the “City”) and the Company (the “2004 Agreement”), and Ordinance 017380, as adopted by the City Council on August 24, 2010 (the “Ordinance”).

The 2004 Agreement grants the Company and its subsidiaries (Camino Real and El Paso Disposal) the non-exclusive right to do business in the City, and to provide commercial and industrial solid waste collection and disposal services to customers within the territorial and extra-territorial jurisdiction of the City, for a period of ten years from April 27, 2004. In addition, the 2004 Agreement provides that during the ten-year period the City shall not modify solid waste hauler fees for the Company or any of its subsidiaries. The City also agreed in the 2004 Agreement that, until April 27, 2014, it would not provide private roll-off services or otherwise become a competitor to private solid waste companies in providing these services.

The Company believes that the Ordinance violates the law and is contrary to the 2004 Agreement in numerous respects, including because it requires that waste collected within the City’s jurisdiction be hauled only by permitted haulers who enter into franchise agreements with the City, and that such haulers may only dispose of such waste at facilities designated or authorized by the City, a concept also referred to as flow control. The petition seeks to require the City to specifically perform the 2004 Agreement, and to enjoin temporarily and permanently the City’s enforcement of the Ordinance to the extent such enforcement would breach the 2004 Agreement. The lawsuit also seeks a declaratory judgment that: (1) the Ordinance violates the Contracts Clauses of the Texas and United States Constitutions, and constitutes an improper taking and an inverse condemnation under the Texas Constitution; (2) the City and its Mayor and City Manager must prospectively comply with the 2004 Agreement; and (3) the Agreement is valid, enforceable and complies with Texas law. The Company also seeks costs of suit and such other relief at law or in equity to which it may be entitled. The Company is not presently seeking money damages.

The Company and the City have been negotiating, and continue to negotiate, an agreed resolution to their differences. As a result of these efforts, on December 21, 2010, the El Paso City Council approved a series of amendments to the Ordinance to address certain concerns of the Company and other haulers that operate within the City’s jurisdiction. The negotiations continue and on March 29, 2011, an amendment to the ordinance postponed the effective date of the requirement that haulers enter into franchise agreements with the City until September 1, 2011. In addition, on July 19, 2011, the El Paso City Council amended the ordinance to postpone the effective date of its flow control provisions from September 1, 2011 to September 1, 2014. At this point, however, the Company is not able to determine the likelihood of any outcome in this litigation, nor is it able to estimate the amount or range of loss or the impact on the Company or its financial condition in the event of an unfavorable outcome.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form 10-Q are forward-looking in nature, including statements related to our ability to provide adequate cash to fund our operating activities, our ability to draw on our credit facility or raise additional capital, the impact of global economic conditions on our volume, business and results of operations, the effects of landfill special waste projects on volume results, the effects of seasonality on our business and results of operations, demand for recyclable commodities and recyclable commodity pricing, our expectations with respect to capital expenditures, our expectations with respect to our ability to obtain expansions of permitted landfill capacity, our expectations with respect to future dividend payments, our expectations with respect to the outcomes of our legal proceedings and our expectations with respect to the purchase of fuel and fuel prices. These statements can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” or “anticipates,” or the negative thereof or comparable terminology, or by discussions of strategy.

Our business and operations are subject to a variety of risks and uncertainties and, consequently, actual results may differ materially from those projected by any forward-looking statements. Factors that could cause actual results to differ from those projected include, but are not limited to, the following:

• Our acquisitions may not be successful, resulting in changes in strategy, operating losses or a loss on sale of the business acquired;

• A portion of our growth and future financial performance depends on our ability to integrate acquired businesses into our organization and operations;

• Downturns in the worldwide economy adversely affect operating results;

• Our results are vulnerable to economic conditions and seasonal factors affecting the regions in which we operate;

• We may be subject in the normal course of business to judicial, administrative or other third party proceedings that could interrupt or limit our operations, require expensive remediation, result in adverse judgments, settlements or fines and create negative publicity;

• We may be unable to compete effectively with larger and better capitalized companies and governmental service providers;

• We may lose contracts through competitive bidding, early termination or governmental action;

• Price increases may not be adequate to offset the impact of increased costs or may cause us to lose volume;

• Increases in the price of fuel may adversely affect our business and reduce our operating margins;

• Increases in labor and disposal and related transportation costs could impact our financial results;

• Efforts by labor unions could divert management attention and adversely affect operating results;

• We could face significant withdrawal liability if we withdraw from participation in one or more underfunded multiemployer pension plans in which we participate;

• Increases in insurance costs and the amount that we self-insure for various risks could reduce our operating margins and reported earnings;

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• Competition for acquisition candidates, consolidation within the waste industry and economic and market conditions may limit our ability to grow through acquisitions;

• Our indebtedness could adversely affect our financial condition; we may incur substantially more debt in the future;

• Each business that we acquire or have acquired may have liabilities or risks that we fail or are unable to discover, including environmental liabilities;

• Liabilities for environmental damage may adversely affect our financial condition, business and earnings;

• Our accruals for our landfill site closure and post-closure costs may be inadequate;

• The financial soundness of our customers could affect our business and operating results;

• We depend significantly on the services of the members of our senior, regional and district management team, and the departure of any of those persons could cause our operating results to suffer;

• Our decentralized decision-making structure could allow local managers to make decisions that adversely affect our operating results;

• We may incur charges related to capitalized expenditures of landfill development projects, which would decrease our earnings;

• Because we depend on railroads for our intermodal operations, our operating results and financial condition are likely to be adversely affected by any reduction or deterioration in rail service;

• Our financial results are based upon estimates and assumptions that may differ from actual results;

• The adoption of new accounting standards or interpretations could adversely affect our financial results;

• Our financial and operating performance may be affected by the inability to renew landfill operating permits, obtain new landfills and expand existing ones;

• Future changes in laws or renewed enforcement of laws regulating the flow of solid waste in interstate commerce could adversely affect our operating results;

• Fluctuations in prices for recycled commodities that we sell and rebates we offer to customers may cause our revenues and operating results to decline;

• Extensive and evolving environmental, health, safety and employment laws and regulations may restrict our operations and growth and increase our costs;

• Climate change regulations may adversely affect operating results;

• Extensive regulations that govern the design, operation and closure of landfills may restrict our landfill operations or increase our costs of operating landfills;

• Alternatives to landfill disposal may cause our revenues and operating results to decline; and

• Unusually adverse weather conditions may interfere with our operations, harming our operating results.

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These risks and uncertainties, as well as others, are discussed in greater detail in this Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission, or SEC, including our most recent Annual Report on Form 10-K. There may be additional risks of which we are not presently aware or that we currently believe are immaterial which could have an adverse impact on our business. We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances that may change.

OVERVIEW

The solid waste industry is a local and highly competitive business, requiring substantial labor and capital resources. The participants compete for collection accounts primarily on the basis of price and, to a lesser extent, the quality of service, and compete for landfill business on the basis of tipping fees, geographic location and quality of operations. The solid waste industry has been consolidating and continues to consolidate as a result of a number of factors, including the increasing costs and complexity associated with waste management operations and regulatory compliance. Many small independent operators and municipalities lack the capital resources, management, operating skills and technical expertise necessary to operate effectively in such an environment. The consolidation trend has caused solid waste companies to operate larger landfills that have complementary collection routes that can use company-owned disposal capacity. Controlling the point of transfer from haulers to landfills has become increasingly important as landfills continue to close and disposal capacity moves farther from collection markets.

Generally, the most profitable industry operators are those companies that are vertically integrated or enter into long-term collection contracts. A vertically integrated operator will benefit from: (1) the internalization of waste, which is bringing waste to a company-owned landfill; (2) the ability to charge third-party haulers tipping fees either at landfills or at transfer stations; and (3) the efficiencies gained by being able to aggregate and process waste at a transfer station prior to landfilling.

We are an integrated solid waste services company that provides solid waste collection, transfer, disposal and recycling services in mostly exclusive and secondary markets. We also provide intermodal services for the rail haul movement of cargo and solid waste containers in the Pacific Northwest through a network of intermodal facilities. We also treat and dispose of non-hazardous waste that is generated in the exploration and production of oil and natural gas primarily at a facility in Southwest Louisiana. We seek to avoid highly competitive, large urban markets and instead target markets where we can provide either solid waste services under exclusive arrangements, or markets where we can be integrated and attain high market share. In markets where waste collection services are provided under exclusive arrangements, or where waste disposal is municipally funded or available at multiple municipal sources, we believe that controlling the waste stream by providing collection services under exclusive arrangements is often more important to our growth and profitability than owning or operating landfills. As of June 30, 2011, we served more than two million residential, commercial and industrial customers from a network of operations in 29 states: Alabama, Arizona, California, Colorado, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Mexico, New York, North Carolina, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Texas, Utah, Washington and Wyoming. As of that date, we owned or operated a network of 141 solid waste collection operations, 57 transfer stations, seven intermodal facilities, 39 recycling operations, 42 municipal solid waste landfills, two construction and demolition landfills and one exploration and production waste treatment and disposal facility.

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CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements. As described by the SEC, critical accounting estimates and assumptions are those that may be material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and that have a material impact on the financial condition or operating performance of a company. Such critical accounting estimates and assumptions are applicable to our reportable segments. Refer to our most recent Annual Report on Form 10-K for a complete description of our critical accounting estimates and assumptions.

NEW ACCOUNTING PRONOUNCEMENTS

For a description of the new accounting standards that affect us, see Note 3 to our Condensed Consolidated Financial Statements included under Part I, Item 1 of this Quarterly Report on Form 10-Q.

GENERAL

Our revenues are derived from one industry segment, which includes the collection, transfer, recycling and disposal of non-hazardous solid waste. No single contract or customer accounted for more than 10% of our total revenues at the consolidated or reportable segment level during the periods presented. The table below shows for the periods indicated our total reported revenues attributable to services provided (dollars in thousands).

	Three months ended June 30,										Six months ended June 30,
	2011					2010					2011					2010
Collection	$	275,170		61.5	%	$	238,108		62.6	%	$	514,607		62.3	%	$	467,178		63.8	%
Disposal and transfer		133,722		29.9			116,217		30.5			243,282		29.4			216,917		29.6
Intermodal, recycling and other		38,328		8.6			26,321		6.9			68,471		8.3			48,620		6.6
		447,220		100.0	%		380,646		100.0	%		826,360		100.0	%		732,715		100.0	%
Less: intercompany elimination		(57,036	)				(50,169	)				(104,708	)				(94,697	)
Total revenue	$	390,184				$	330,477				$	721,652				$	638,018

Our Chief Operating Decision Maker evaluates performance and determines resource allocations based on several factors, of which the primary financial measure is operating income before depreciation, amortization and gain (loss) on disposal of assets. Operating income before depreciation, amortization and gain (loss) on disposal of assets is not a measure of operating income, operating performance or liquidity under GAAP and may not be comparable to similarly titled measures reported by other companies. Our management uses operating income before depreciation, amortization and gain (loss) on disposal of assets in the evaluation of segment operating performance as it is a profit measure that is generally within the control of the operating segments.

We manage our operations through three geographic operating segments, which are also our reportable segments. Each operating segment is responsible for managing several vertically integrated operations, which are comprised of districts. In April 2011, as a result of the County Waste acquisition (described in Note 7 to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q), we realigned our reporting structure and changed our three geographic operating segments from Western, Central and Southern to Western, Central and Eastern. As part of this realignment, the states of Arizona, Louisiana, New Mexico and Texas, which were previously part of the Southern region, are now included in the Central region. Also as part of this realignment, the state of Michigan, which was previously part of the Central region, is now included in the Eastern region. Additionally, the states of New York and Massachusetts, which we now operate in as a result of the County Waste acquisition, are included in the Eastern region. The segment information presented herein reflects the realignment of these districts. Under the current orientation, our Western Region is comprised of operating locations in California, Idaho, Montana, Nevada, Oregon, Washington and western Wyoming; our Central Region is comprised of operating locations in Arizona, Colorado, Kansas, Louisiana, Minnesota, Nebraska, New Mexico, Oklahoma, South Dakota, Texas, Utah and eastern Wyoming; and our Eastern Region is comprised of operating locations in Alabama, Illinois, Iowa, Kentucky, Massachusetts, Michigan, Mississippi, New York, North Carolina, South Carolina and Tennessee.

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Revenues, net of intercompany eliminations, for our reportable segments are shown in the following table for the periods indicated (in thousands):

	Three months ended				Six months ended
	June 30,				June 30,
	2011		2010		2011		2010
Western	$	187,551	$	175,962	$	362,117	$	342,964
Central		110,515		96,982		210,912		184,713
Eastern		92,118		57,533		148,623		110,341
Corporate		—		—		—		—
	$	390,184	$	330,477	$	721,652	$	638,018

Operating income before depreciation, amortization and gain (loss) on disposal of assets for our reportable segments is shown in the following table for the periods indicated (in thousands):

	Three months ended				Six months ended
	June 30,				June 30,
	2011		2010		2011		2010
Western	$	57,835	$	53,792	$	112,288	$	104,238
Central		39,662		32,860		75,086		61,003
Eastern		26,713		18,309		43,677		34,694
Corporate(a)		2,933		1,817		1,656		1,736
	$	127,143	$	106,778	$	232,707	$	201,671

(a) Corporate functions include accounting, legal, tax, treasury, information technology, risk management, human resources, training and other administrative functions.

A reconciliation of Operating income before depreciation, amortization and gain (loss) on disposal of assets to Income before income tax provision is included in Note 9 to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Significant changes in revenue and operating income before depreciation, amortization and gain (loss) on disposal of assets for our reportable segments for the three and six month periods ended June 30, 2011, compared to the three and six month periods ended June 30, 2010, are discussed below:

Segment Revenue

Revenue in our Western segment increased $11.6 million, or 6.6%, to $187.6 million for the three months ended June 30, 2011, from $176.0 million for the three months ended June 30, 2010. For the three months ended June 30, 2011, the components of the increase consisted of volume increases of $2.9 million, net price increases of $4.3 million, recyclable commodity sales increases of $4.1 million and intermodal revenue increases of $0.7 million, partially offset by other revenue decreases of $0.1 million and decreases of $0.3 million from divested operations.

Revenue in our Western segment increased $19.1 million, or 5.6%, to $362.1 million for the six months ended June 30, 2011, from $343.0 million for the six months ended June 30, 2010. For the six months ended June 30, 2011, the components of the increase consisted of volume increases of $0.7 million, net price increases of $8.0 million, recyclable commodity sales increases of $7.9 million, intermodal revenue increases of $2.8 million and other revenue increases of $0.2 million, partially offset by decreases of $0.5 million from divested operations.

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Revenue in our Central segment increased $13.5 million, or 14.0%, to $110.5 million for the three months ended June 30, 2011, from $97.0 million for the three months ended June 30, 2010. For the three months ended June 30, 2011, the components of the increase consisted of revenue acquired from acquisitions closed during, or subsequent to, the three months ended June 30, 2010, of $9.4 million, net price increases of $5.2 million and recyclable commodity sales increases of $0.2 million, partially offset by volume decreases of $1.2 million and other revenue decreases of $0.1 million.

Revenue in our Central segment increased $26.2 million, or 14.2%, to $210.9 million for the six months ended June 30, 2011, from $184.7 million for the six months ended June 30, 2010. For the six months ended June 30, 2011, the components of the increase consisted of revenue acquired from acquisitions closed during, or subsequent to, the six months ended June 30, 2010, of $17.6 million, net price increases of $9.9 million and recyclable commodity sales increases of $0.5 million, partially offset by volume decreases of $1.8 million.

Revenue in our Eastern segment increased $34.6 million, or 60.1%, to $92.1 million for the three months ended June 30, 2011, from $57.5 million for the three months ended June 30, 2010. For the three months ended June 30, 2011, the components of the increase consisted of revenue acquired from acquisitions closed during, or subsequent to, the three months ended June 30, 2010, of $32.5 million, net price increases of $2.3 million and recyclable commodity sales increases of $0.2 million, partially offset by volume decreases of $0.1 million and other revenue decreases of $0.3 million.

Revenue in our Eastern segment increased $38.3 million, or 34.7%, to $148.6 million for the six months ended June 30, 2011, from $110.3 million for the six months ended June 30, 2010. For the six months ended June 30, 2011, the components of the increase consisted of revenue acquired from acquisitions closed during, or subsequent to, the six months ended June 30, 2010, of $33.3 million, net price increases of $4.3 million, volume increases of $0.8 million and recyclable commodity sales increases of $0.3 million, partially offset by other revenue decreases of $0.4 million.

Segment Operating Income before Depreciation, Amortization and Gain (Loss) on Disposal of Assets

Operating income before depreciation, amortization and gain (loss) on disposal of assets in our Western segment increased $4.0 million, or 7.5%, to $57.8 million for the three months ended June 30, 2011, from $53.8 million for the three months ended June 30, 2010. The increase was primarily due to increased revenues, partially offset by increased disposal expenses, increased rail transportation expenses at our intermodal operations, increased franchise fees and taxes on revenues, increased expenses associated with the cost of purchasing recyclable commodities, increased direct and administrative labor expenses, increased diesel fuel expense, increased truck and equipment repair expenses and increased legal expenses.

Operating income before depreciation, amortization and gain (loss) on disposal of assets in our Western segment increased $8.1 million, or 7.7%, to $112.3 million for the six months ended June 30, 2011, from $104.2 million for the six months ended June 30, 2010. The increase was primarily due to increased landfill and recyclable commodity revenues and decreased disposal expenses, partially offset by increased rail transportation expenses at our intermodal operations, increased franchise fees and taxes on revenues, increased expenses associated with the cost of purchasing recyclable commodities, increased direct and administrative labor expenses, increased diesel fuel expense, increased truck and equipment repair expenses and increased legal expenses.

Operating income before depreciation, amortization and gain (loss) on disposal of assets in our Central segment increased $6.8 million, or 20.7%, to $39.7 million for the three months ended June 30, 2011, from $32.9 million for the three months ended June 30, 2010. The increase was primarily due income generated from acquisitions closed during, or subsequent to, the three months ended June 30, 2010 and the following changes at operations owned in comparable periods in 2010 and 2011: increased revenues, partially offset by increased disposal expenses, increased third party trucking and transportation expenses, increased taxes on revenues, increased direct labor expenses and increased diesel fuel expense.

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Operating income before depreciation, amortization and gain (loss) on disposal of assets in our Central segment increased $14.1 million, or 23.1%, to $75.1 million for the six months ended June 30, 2011, from $61.0 million for the six months ended June 30, 2010. The increase was primarily due income generated from acquisitions closed during, or subsequent to, the six months ended June 30, 2010 and the following changes at operations owned in comparable periods in 2010 and 2011: increased revenues, partially offset by increased disposal expenses, increased third party trucking and transportation expenses, increased taxes on revenues, increased direct labor expenses and increased diesel fuel expense.

Operating income before depreciation, amortization and gain (loss) on disposal of assets in our Eastern segment increased $8.4 million, or 45.9%, to $26.7 million for the three months ended June 30, 2011, from $18.3 million for the three months ended June 30, 2010. The increase was primarily due to income generated from acquisitions closed during, or subsequent to, the three months ended June 30, 2010 and the following changes at operations owned in comparable periods in 2010 and 2011: increased revenues, partially offset by increased third party trucking and transportation expenses, increased taxes on revenues, increased direct labor expenses and increased diesel fuel expense.

Operating income before depreciation, amortization and gain (loss) on disposal of assets in our Eastern segment increased $9.0 million, or 25.9%, to $43.7 million for the six months ended June 30, 2011, from $34.7 million for the six months ended June 30, 2010. The increase was primarily due to income generated from acquisitions closed during, or subsequent to, the six months ended June 30, 2010 and the following changes at operations owned in comparable periods in 2010 and 2011: increased revenues, partially offset by increased third party trucking and transportation expenses, increased taxes on revenues, increased direct labor expenses, increased truck, equipment and container repair expenses and increased diesel fuel expense.

Operating income before depreciation, amortization and gain (loss) on disposal of assets at Corporate increased $1.1 million, to $2.9 million for the three months ended June 30, 2011, from $1.8 million for the three months ended June 30, 2010. Our estimated recurring corporate expenses, which can vary from the actual amount of incurred corporate expenses, are allocated to our three geographic operating segments. The increase was primarily attributable to reductions in actuarially projected losses on open auto and workers’ compensation claims incurred prior to 2011, as determined by a third party actuarial review of our estimated insurance liability. The reductions in actuarially projected losses were not allocated to our three geographic operating segments.

Operating income before depreciation, amortization and gain (loss) on disposal of assets at Corporate was unchanged at $1.7 million for the six months ended June 30, 2011 and 2010.

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RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010

The following table sets forth items in our condensed consolidated statements of income as a percentage of revenues for the periods indicated.

	Three months ended						Six months ended
	June 30,						June 30,
	2011			2010			2011			2010
Revenues		100.0	%		100.0	%		100.0	%		100.0	%
Cost of operations		56.9			56.7			56.6			57.1
Selling, general and administrative		10.5			11.0			11.1			11.3
Depreciation		9.5			10.1			9.7			10.2
Amortization of intangibles		1.5			1.1			1.3			1.1
Loss (gain) on disposal of assets		(0.1	)		0.1			0.0			0.1
Operating income		21.7			21.0			21.3			20.2
Interest expense		(2.8	)		(2.8	)		(2.7	)		(3.4	)
Interest income		0.1			0.1			0.0			0.1
Loss on extinguishment of debt		—			(2.9	)		—			(1.6	)
Other income (expense), net		(0.1	)		(0.1	)		0.0			0.1
Income tax provision		(7.5	)		(6.0	)		(7.3	)		(6.2	)
Net income attributable to noncontrolling interests		(0.0	)		(0.1	)		(0.1	)		(0.1	)
Net income attributable to Waste Connections		11.4	%		9.2	%		11.2	%		9.1	%

Revenues. Total revenues increased $59.7 million, or 18.1%, to $390.2 million for the three months ended June 30, 2011, from $330.5 million for the three months ended June 30, 2010.

Acquisitions closed during, or subsequent to, the three months ended June 30, 2010, increased revenues by approximately $41.4 million.

During the three months ended June 30, 2011, the net increase in prices charged to our customers was $11.8 million, consisting of $9.1 million of core price increases and $2.7 million of fuel, materials and environmental surcharges.

Volume increases in our existing business during the three months ended June 30, 2011, increased revenues by approximately $1.7 million. The net increase in volume was primarily attributable to increases in landfill volumes and roll off hauling activity for operations owned in comparable periods, partially offset by declines in commercial hauling activity.

Increased recyclable commodity volumes collected and increased recyclable commodity prices during the three months ended June 30, 2011, increased revenues by $4.5 million. The increase in recyclable commodity prices was primarily due to increased overseas demand for recyclable commodities.

Other revenues increased by $0.3 million during the three months ended June 30, 2011, primarily due to an increase in cargo volume at our intermodal operations.

Total revenues increased $83.7 million, or 13.1%, to $721.7 million for the six months ended June 30, 2011, from $638.0 million for the six months ended June 30, 2010.

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Acquisitions closed during, or subsequent to, the six months ended June 30, 2010, increased revenues by approximately $50.5 million.

During the six months ended June 30, 2011, the net increase in prices charged to our customers was $22.3 million, consisting of $17.9 million of core price increases and $4.4 million of fuel, materials and environmental surcharges.

Volume decreases in our existing business during the six months ended June 30, 2011, decreased revenues by approximately $0.3 million. The net decrease in volume was primarily attributable to declines in commercial hauling activity, partially offset by increases in landfill volumes.

Increased recyclable commodity volumes collected and increased recyclable commodity prices during the six months ended June 30, 2011, increased revenues by $8.6 million. The increase in recyclable commodity prices was primarily due to increased overseas demand for recyclable commodities.

Other revenues increased by $2.6 million during the six months ended June 30, 2011, primarily due to an increase in cargo volume at our intermodal operations.

Cost of Operations. Total cost of operations increased $34.6 million, or 18.4%, to $221.9 million for the three months ended June 30, 2011, from $187.3 million for the three months ended June 30, 2010. The increases were primarily attributable to operating costs associated with acquisitions closed during, or subsequent to, the three months ended June 30, 2010, increased disposal expenses, increased rail transportation expenses at our intermodal operations, increased third party trucking and transportation expenses due to increased waste disposal internalization, increased franchise fees and taxes on revenues due to increased tax rates and increased landfill volumes, increased expenses associated with the cost of purchasing recyclable commodities due to recyclable commodity pricing increases, increased labor expenses, increased diesel fuel expense resulting from higher market prices for fuel, increased truck, equipment and container repair expenses and increased employee medical benefit expenses resulting from increased claims cost and severity partially offset by decreased facility maintenance and repair expenses and decreased workers’ compensation insurance expenses.

Total cost of operations increased $44.6 million, or 12.2%, to $408.9 million for the six months ended June 30, 2011, from $364.3 million for the six months ended June 30, 2010. The increases were primarily attributable to operating costs associated with acquisitions closed during, or subsequent to, the six months ended June 30, 2010, increased rail transportation expenses at our intermodal operations, increased third party trucking and transportation expenses due to increased waste disposal internalization, increased franchise fees and taxes on revenues due to increased tax rates and increased landfill volumes, increased expenses associated with the cost of purchasing recyclable commodities due to recyclable commodity pricing increases, increased labor expenses, increased diesel fuel expense resulting from higher market prices for fuel, increased truck, equipment and container repair expenses and increased employee medical benefit expenses resulting from increased claims cost and severity, partially offset by a decrease in auto and workers’ compensation expense under our high deductible insurance program due to a reduction in projected losses on open claims and decreased leachate disposal expenses.

Cost of operations as a percentage of revenues increased 0.2 percentage points to 56.9% for the three months ended June 30, 2011, from 56.7% for the three months ended June 30, 2010, due primarily to increased diesel fuel expense, increased truck equipment and container repair expenses and increased third party trucking and transportation expenses, partially offset by leveraging existing personnel to support increases in landfill volumes, recyclable commodity revenue and intermodal revenue, decreased facility maintenance and repair expenses and decreased workers’ compensation insurance expenses.

Cost of operations as a percentage of revenues decreased 0.5 percentage points to 56.6% for the six months ended June 30, 2011, from 57.1% for the six months ended June 30, 2010. The decrease as a percentage of revenues was primarily attributable to decreased auto and workers’ compensation expense and leveraging existing personnel to support increases in landfill volumes, recyclable commodity revenue and intermodal revenue, partially offset by increased diesel fuel expense and increased third party trucking and transportation expenses.

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SG&A. SG&A expenses increased $4.8 million, or 13.2%, to $41.2 million for the three months ended June 30, 2011, from $36.4 million for the three months ended June 30, 2010. SG&A expenses increased $8.0 million, or 11.1%, to $80.0 million for the six months ended June 30, 2011, from $72.0 million for the six months ended June 30, 2010. The increases were primarily the result of additional personnel from acquisitions closed during, or subsequent to, the three and six months ended June 30, 2010, increased payroll and payroll-related expenses, increased cash incentive compensation expense and increased direct acquisition expenses.

SG&A expenses as a percentage of revenues decreased 0.5 percentage points to 10.5% for the three months ended June 30, 2011, from 11.0% for the three months ended June 30, 2010. SG&A expenses as a percentage of revenues decreased 0.2 percentage points to 11.1% for the six months ended June 30, 2011, from 11.3% for the six months ended June 30, 2010. The decreases as a percentage of revenues were primarily attributable to leveraging our administrative activities to support increases in landfill volumes, recyclable commodity revenue and intermodal revenue, and acquisitions closed during, or subsequent to, the three and six months ended June 30, 2010 having lower SG&A expenses as a percentage of revenue than our company average.

Depreciation. Depreciation expense increased $3.4 million, or 10.4%, to $36.9 million for the three months ended June 30, 2011, from $33.5 million for the three months ended June 30, 2010. Depreciation expense increased $5.1 million, or 7.8%, to $70.0 million for the six months ended June 30, 2011, from $64.9 million for the six months ended June 30, 2010. The increases were primarily attributable to depreciation and depletion associated with acquisitions closed during, or subsequent to, the three and six months ended June 30, 2010, and increased depreciation expense associated with additions to our fleet and equipment purchased to support our existing operations.

Depreciation expense as a percentage of revenues decreased 0.6 percentage points to 9.5% for the three months ended June 30, 2011, from 10.1% for the three months ended June 30, 2010, due primarily to leveraging existing equipment to service increases in recyclable commodity and intermodal revenue. Depreciation expense as a percentage of revenues decreased 0.5 percentage points to 9.7% for the six months ended June 30, 2011, from 10.2% for the six months ended June 30, 2010, due primarily to leveraging existing equipment to service increases in landfill volumes, recyclable commodity revenue and intermodal revenue.

Amortization of Intangibles. Amortization of intangibles expense increased $2.1 million, or 57.7%, to $5.7 million for the three months ended June 30, 2011, from $3.6 million for the three months ended June 30, 2010. Amortization of intangibles expense increased $2.5 million, or 34.3%, to $9.7 million for the six months ended June 30, 2011, from $7.2 million for the six months ended June 30, 2010. Amortization of intangibles expense as a percentage of revenues increased 0.4 percentage points to 1.5% for the three months ended June 30, 2011, from 1.1% for the three months ended June 30, 2010. Amortization of intangibles expense as a percentage of revenues increased 0.2 percentage points to 1.3% for the six months ended June 30, 2011, from 1.1% for the six months ended June 30, 2010.

The increases were primarily attributable to the amortization of contracts and customer lists acquired during, or subsequent to, the three and six months ended June 30, 2010.

Operating Income. Operating income increased $15.4 million, or 22.3%, to $84.8 million for the three months ended June 30, 2011, from $69.4 million for the three months ended June 30, 2010. Operating income increased $24.4 million, or 18.9%, to $153.4 million for the six months ended June 30, 2011, from $129.0 million for the six months ended June 30, 2010. The increases were primarily attributable to increased revenues, partially offset by increased operating costs, increased SG&A expense, and increased depreciation expense and amortization of intangibles expense.

Operating income as a percentage of revenues increased 0.7 percentage points to 21.7% for the three months ended June 30, 2011, from 21.0% for the three months ended June 30, 2010. The increase as a percentage of revenues was due to the previously described 0.5 percentage point decrease in SG&A expense, 0.6 percentage point decrease in depreciation expense and 0.2 percentage point decrease in loss (gain) on disposal of assets, partially offset by the 0.2 percentage point increase in cost of operations and 0.4 percentage point increase in amortization expense.

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Operating income as a percentage of revenues increased 1.1 percentage points to 21.3% for the six months ended June 30, 2011, from 20.2% for the six months ended June 30, 2010. The increase as a percentage of revenues was due to the previously described 0.5 percentage point decrease in cost of operations, 0.2 percentage point decrease in SG&A expense, 0.5 percentage point decrease in depreciation expense and 0.1 percentage point decrease in loss (gain) on disposal of assets, partially offset by the 0.2 percentage point increase in amortization expense.

Interest Expense. Interest expense increased $1.9 million, or 21.0%, to $11.1 million for the three months ended June 30, 2011, from $9.2 million for the three months ended June 30, 2010. The increase was due to interest expense associated with the April 2011 issuance of our 2016 Notes, 2018 Notes and 2021 Notes, partially offset by a reduction in the fixed interest rate paid on $175 million of interest rate swaps. In February 2011, three interest rate swaps with a combined notional amount of $175 million and fixed interest rate of 4.37% expired and we commenced a new $175 million interest rate swap with a fixed interest rate of 2.85%.

Interest expense decreased $1.5 million, or 7.0%, to $19.9 million for the six months ended June 30, 2011, from $21.4 million for the six months ended June 30, 2010. The decrease was primarily attributable to funding the redemption of our 2026 Notes with borrowings under our credit facility at lower interest rates and a reduction in the amortization of our debt discount and debt issuance costs on the redeemed 2026 Notes and the aforementioned changes in our interest rate swaps, partially offset by the interest expense associated with the April 2011 issuance of our 2016 Notes, 2018 Notes and 2021 Notes.

Loss on Extinguishment of Debt. Loss on extinguishment of debt for the three months ended June 30, 2010, consisted of an expense charge of $9.7 million associated with the redemption of our 2026 Notes. Loss on extinguishment of debt for the six months ended June 30, 2010, consisted of the aforementioned charge for the redemption of our 2026 Notes and a charge of $0.5 million associated with the redemption of our Wasco Bonds.

Income Tax Provision. Income taxes increased $9.2 million, or 46.4%, to $29.0 million for the three months ended June 30, 2011, from $19.8 million for the three months ended June 30, 2010, as a result of increased pre-tax income. Income taxes increased $12.8 million, or 32.3%, to $52.5 million for the six months ended June 30, 2011, from $39.7 million for the six months ended June 30, 2010.

Our effective tax rates for the three months ended June 30, 2011 and 2010, were 39.4% and 39.3%, respectively. Our effective tax rates for the six months ended June 30, 2011 and 2010, were 39.2% and 40.4%, respectively.

During the six months ended June 30, 2010, we recorded a $1.5 million increase in the income tax provision associated with an adjustment in deferred tax liabilities resulting from a voter-approved increase in Oregon state income tax rates and changes to the geographic apportionment of our state income taxes.

LIQUIDITY AND CAPITAL RESOURCES

The following table sets forth certain cash flow information for the six month periods ended June 30, 2011 and 2010 (in thousands):

	Six Months Ended
	June 30,
	2011			2010
Net cash provided by operating activities	$	189,976		$	143,724
Net cash used in investing activities		(261,025	)		(50,193	)
Net cash provided by (used in) financing activities		78,127			(93,100	)
Net increase in cash and equivalents		7,078			431
Cash and equivalents at beginning of period		9,873			9,639
Cash and equivalents at end of period	$	16,951		$	10,070

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Operating Activities Cash Flows

For the six months ended June 30, 2011, net cash provided by operating activities was $190.0 million. For the six months ended June 30, 2010, net cash provided by operating activities was $143.7 million. The $46.3 million net increase in cash provided by operating activities was due primarily to the following:

1) An increase in net income of $22.9 million;

2) An increase in deferred taxes of $15.4 million due primarily to the recognition during the six months ended June 30, 2011 of tax benefits associated with an Internal Revenue Service approved change in our tax method for deducting depreciation expense for certain landfills;

3) An increase in depreciation and amortization expense of $7.5 million; and

4) An increase in cash flows from operating assets and liabilities, net of effects from acquisitions, of $1.3 million to cash provided by operating assets and liabilities of $1.7 million for the six months ended June 30, 2011, from cash provided by operating assets and liabilities of $0.4 million for the six months ended June 30, 2010. The significant components of the $1.7 million in cash inflows from changes in operating assets and liabilities for the six months ended June 30, 2011, include the following:

a) an increase in cash resulting from an increase in accrued liabilities of $9.3 million due primarily to increased current taxes payable, accrued interest expense due to increased debt balances and the timing of interest payments, and increased liabilities for auto and workers’ compensation claims, partially offset by a decrease in accrued cash-based compensation;

b) an increase in cash resulting from a $7.8 million decrease in prepaid expenses and other current assets due primarily to decreases in prepaid income taxes, partially offset by an increase in fuel inventory;

c) an increase in cash resulting from an increase in deferred revenue of $2.3 million due primarily to increased revenues and timing of billing for services; less

d) a decrease in cash resulting from a $14.0 million increase in accounts receivable due to an increase in revenues; less

e) a decrease in cash resulting from a $5.6 million decrease in accounts payable due primarily to the timing of payments.

As of June 30, 2011, we had a working capital deficit of $26.5 million, including cash and equivalents of $17.0 million. Our working capital deficit decreased $11.5 million from $38.0 million at December 31, 2010. To date, we have experienced no loss or lack of access to our cash or cash equivalents; however, we can provide no assurances that access to our cash and cash equivalents will not be impacted by adverse conditions in the financial markets. Our strategy in managing our working capital is generally to apply the cash generated from our operations that remains after satisfying our working capital and capital expenditure requirements, along with stock repurchase and dividend programs, to reduce our indebtedness under our credit facility and to minimize our cash balances.

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Investing Activities Cash Flows

Net cash used in investing activities increased $210.8 million to $261.0 million for the six months ended June 30, 2011, from $50.2 million for the six months ended June 30, 2010. The significant components of the increase include the following:

1) An increase in payments for acquisitions of $212.2 million primarily due to the recent acquisition of County Waste;

2) A decrease in proceeds from the sale of property, plant and equipment of $3.1 million; less

3) A decrease in capital expenditures for property and equipment of $3.9 million due to decreases in expenditures for trucks and equipment, partially offset by an increase in expenditures for buildings and computers.

Financing Activities Cash Flows

Net cash flows provided by financing activities increased $171.2 million to $78.1 million for the six months ended June 30, 2011, from cash flows used in financing activities of $93.1 million for the six months ended June 30, 2010. The significant components of the increase include the following:

1) An increase in net long-term borrowings of $169.2 million due primarily to the issuance of new debt to fund the acquisition of County Waste;

2) A decrease in payments to repurchase our common stock of $41.3 million; less

3) An increase in cash dividends paid of $17.0 million with the initiation of a quarterly cash dividend in November 2010; less

4) A decrease in proceeds from option and warrant exercises of $15.0 million due to a decrease in the number of options and warrants exercised in the six month period ended June 30, 2011; less

5) A decrease in the excess tax benefit associated with equity-based compensation of $3.6 million, which resulted in increased taxable income, recognized by employees, that is tax deductible to us.

Our business is capital intensive. Our capital requirements include acquisitions and fixed asset purchases. We will also make capital expenditures for landfill cell construction, landfill development, landfill closure activities and intermodal facility construction in the future.

Our Board of Directors has authorized a common stock repurchase program for the repurchase of up to $800.0 million of our common stock through December 31, 2012. Under the program, stock repurchases may be made in the open market or in privately negotiated transactions from time to time at management’s discretion. The timing and amounts of any repurchases will depend on many factors, including our capital structure, the market price of the common stock and overall market conditions. As of June 30, 2011 and 2010, we had repurchased in aggregate 36.9 million and 32.3 million shares, respectively, of our common stock at an aggregate cost of $691.0 million and $566.1 million, respectively. As of June 30, 2011, the remaining maximum dollar value of shares available for purchase under the program was approximately $109.0 million.

On October 19, 2010, our Board of Directors declared a three-for-two split of our common stock, in the form of a 50% stock dividend, payable to stockholders of record as of October 29, 2010. Shares resulting from the split were issued on November 12, 2010. All share and per share amounts for all periods presented have been retroactively adjusted to reflect the stock split.

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In addition, on October 19, 2010, our Board of Directors declared the initiation of a quarterly cash dividend of $0.075 per share, as adjusted for the three-for-two stock split described above. The initial quarterly cash dividend totaling $8.6 million was paid on November 12, 2010. We also paid a quarterly cash dividend of $0.075 per share on our common stock, totaling $8.5 million, on each of March 1, 2011 and May 20, 2011. The Board will review the cash dividend periodically, with a long-term objective of increasing the amount of the dividend. We cannot assure you as to the amounts or timing of future dividends.

We made $46.6 million in capital expenditures during the six months ended June 30, 2011. We expect to make capital expenditures of approximately $135 million in 2011 in connection with our existing business. We intend to fund our planned 2011 capital expenditures principally through internally generated funds and borrowings under our credit facility. In addition, we may make substantial additional capital expenditures in acquiring solid waste collection and disposal businesses. If we acquire additional landfill disposal facilities, we may also have to make significant expenditures to bring them into compliance with applicable regulatory requirements, obtain permits or expand our available disposal capacity. We cannot currently determine the amount of these expenditures because they will depend on the number, nature, condition and permitted status of any acquired landfill disposal facilities. We believe that our cash and equivalents, credit facility and the funds we expect to generate from operations will provide adequate cash to fund our working capital and other cash needs for the foreseeable future. However, disruptions in the capital and credit markets could adversely affect our ability to draw on our credit facility or raise other capital. Our access to funds under the credit facility is dependent on the ability of the banks that are parties to the facility to meet their funding commitments. Those banks may not be able to meet their funding commitments if they experience shortages of capital and liquidity or if they experience excessive volumes of borrowing requests within a short period of time.

As of June 30, 2011, we had $487.5 million outstanding under our credit facility, exclusive of outstanding stand-by letters of credit of $84.3 million. As of June 30, 2011, we were in compliance with all applicable covenants in our credit facility.

On July 11, 2011, we, along with certain of our subsidiaries, entered into a new Amended and Restated Credit Agreement (the “new credit agreement”) with Bank of America, N.A. and the other banks and lending institutions party thereto, as lenders, Bank of America, N.A., as administrative agent, and J.P. Morgan Chase Bank, N.A. and Wells Fargo Bank, National Association, as co-syndication agents.

Our new credit agreement is comprised of a $1.2 billion revolving credit facility which matures on July 11, 2016. We have the ability under the new credit agreement to increase commitments under the revolving credit facility from $1.2 billion to $1.5 billion, subject to conditions including that no default, as defined in the new credit agreement, has occurred, although no existing lender has any obligation to increase its commitment. We used proceeds from the new credit agreement in order to refinance our previous $845 million credit facility, which had a maturity of September 27, 2012.

Under the new credit agreement, there is no maximum amount of standby letters of credit that can be issued; however, the issuance of standby letters of credit reduces the amount of total borrowings available. The new credit agreement requires us to pay a commitment fee ranging from 0.200% per annum to 0.350% per annum of the unused portion of the facility. The borrowings under the new credit agreement bear interest, at our option, at either the base rate plus the applicable base rate margin on base rate loans, or the LIBOR rate plus the applicable LIBOR margin on LIBOR loans. The base rate for any day is a fluctuating rate per annum equal to the highest of: (1) the federal funds rate plus one half of one percent (0.500%); (2) the LIBOR rate plus one percent (1.000%), and (3) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.” The LIBOR rate is determined by the administrative agent pursuant to a formula in the new credit agreement. The applicable margins under the new credit agreement vary depending on our leverage ratio, as defined in the credit agreement, and range from 1.150% per annum to 2.000% per annum for LIBOR loans and 0.150% per annum to 1.000% per annum for base rate loans. The interest rate applicable under the new credit agreement is currently the LIBOR rate plus 1.400% per annum, a 0.775% per annum increase in the corresponding interest rate under our previous credit facility. The borrowings under the new credit agreement are not collateralized.

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The new credit agreement contains representations and warranties and places certain business, financial and operating restrictions on us relating to, among other things, indebtedness, liens and other encumbrances, investments, mergers and acquisitions, asset sales, sale and leaseback transactions, and dividends, distributions and redemptions of capital stock. The new credit agreement requires that we maintain specified financial ratios. We expect to use the new credit agreement for acquisitions, capital expenditures, working capital, standby letters of credit and general corporate purposes.

On April 1, 2011, we entered into a Second Supplement to Master Note Purchase Agreement with certain accredited institutional investors, pursuant to which we issued and sold to the investors on that date $250.0 million of senior uncollateralized notes at fixed interest rates with interest payable in arrears semi-annually on October 1 and April 1, beginning on October 1, 2011, in a private placement. Of these notes, $100.0 million will mature on April 1, 2016 with an annual interest rate of 3.30% (the “2016 Notes”), $50.0 million will mature on April 1, 2018 with an annual interest rate of 4.00% (the “2018 Notes”), and $100.0 million will mature on April 1, 2021 with an annual interest rate of 4.64% (the “2021 Notes”). The 2016 Notes, 2018 Notes and 2021 Notes are uncollateralized obligations and rank equally in right of payment with the 2015 Notes, the 2019 Notes and obligations under our credit facility. The 2016 Notes, 2018 Notes and 2021 Notes are subject to representations, warranties, covenants and events of default. Upon the occurrence of an event of default, payment of the 2016 Notes, 2018 Notes and 2021 Notes may be accelerated by the holders of the respective notes. The 2016 Notes, 2018 Notes and 2021 Notes may also be prepaid by us at any time at par plus a make-whole amount determined in respect of the remaining scheduled interest payments on the respective notes, using a discount rate of the then current market standard for United States treasury bills plus 0.50%. In addition, we will be required to offer to prepay the 2016 Notes, 2018 Notes and 2021 Notes upon certain changes in control.

We may issue additional series of senior uncollateralized notes pursuant to the terms and conditions of the Master Note Agreement, provided that the purchasers of the outstanding notes, including the 2016 Notes, 2018 Notes and 2021 Notes, shall not have any obligation to purchase any additional notes issued pursuant to the Master Note Agreement and the aggregate principal amount of the outstanding notes and any additional notes issued pursuant to the Master Note Agreement shall not exceed $750.0 million. We currently have $600.0 million of Notes outstanding under the Master Note Agreement.

We used the proceeds from the sale of the 2016 Notes, 2018 Notes, and 2021 Notes to fund a portion of the purchase price for the acquisition of Hudson Valley Waste Holding, Inc., which is described below.

On April 1, 2011, we completed the acquisition of Hudson Valley Waste Holding, Inc., and its wholly-owned subsidiary, County Waste and Recycling Service, Inc. (collectively, “County Waste”). The operations include six collection operations, three transfer stations and one recycling facility across six markets: Orange County, New York; Greater Albany, New York; Springfield, Massachusetts; Fulton County, New York; Warrant and Washington Counties, New York; and Greene, Columbia and Ulster Counties, New York. We paid $299.0 million for the purchased operations plus amounts paid for the purchase of accounts receivable and other prepaid assets and estimated working capital, which amounts are subject to post-closing adjustments. No other consideration, including contingent consideration, was transferred by us to acquire these operations.

As of June 30, 2011, we had the following contractual obligations (in thousands):

	Payments Due by Period
			Less Than		1 to 3		3 to 5		Over 5
Recorded Obligations	Total		1 Year		Years		Years		Years
Long-term debt	$	1,138,669	$	2,693	$	489,500	$	2,000	$	644,476
Cash interest payments	$	222,966	$	41,384	$	63,890	$	55,525	$	62,167

Long-term debt payments include:

1) $487.5 million in principal payments due September 2012 related to our credit facility. Our credit facility bears interest, at our option, at either the base rate plus the applicable base rate margin (approximately 3.25% at June 30, 2011) on base rate loans, or the Eurodollar rate plus the applicable Eurodollar margin (approximately 0.81% at June 30, 2011) on Eurodollar loans. As of June 30, 2011, our credit facility allowed us to borrow up to $845 million. On July 11, 2011, we entered into a new credit agreement which matures on July 11, 2016. The new credit agreement allows us to borrow up to $1.2 billion. See Note 6 to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion of the new credit facility.

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2)	$175.0 million in principal payments due 2015 related to our 2015 Notes. Holders of the 2015 Notes may require us to purchase their notes in cash at a purchase price of 100% of the principal amount of the 2015 Notes plus accrued and unpaid interest, if any, upon a change in control, as defined in the Master Note Purchase Agreement. The 2015 Notes bear interest at a rate of 6.22%.
3)	$100.0 million in principal payments due 2016 related to our 2016 Notes. Holders of the 2016 Notes may require us to purchase their notes in cash at a purchase price of 100% of the principal amount of the 2016 Notes plus accrued and unpaid interest, if any, upon a change in control, as defined in the Master Note Purchase Agreement. The 2016 Notes bear interest at a rate of 3.30%.
4)	$50.0 million in principal payments due 2018 related to our 2018 Notes. Holders of the 2018 Notes may require us to purchase their notes in cash at a purchase price of 100% of the principal amount of the 2018 Notes plus accrued and unpaid interest, if any, upon a change in control, as defined in the Master Note Purchase Agreement. The 2018 Notes bear interest at a rate of 4.00%.
5)	$175.0 million in principal payments due 2019 related to our 2019 Notes. Holders of the 2019 Notes may require us to purchase their notes in cash at a purchase price of 100% of the principal amount of the 2019 Notes plus accrued and unpaid interest, if any, upon a change in control, as defined in the Master Note Purchase Agreement. The 2019 Notes bear interest at a rate of 5.25%.
6)	$100.0 million in principal payments due 2021 related to our 2021 Notes. Holders of the 2021 Notes may require us to purchase their notes in cash at a purchase price of 100% of the principal amount of the 2021 Notes plus accrued and unpaid interest, if any, upon a change in control, as defined in the Master Note Purchase Agreement. The 2021 Notes bear interest at a rate of 4.64%.
7)	$39.3 million in principal payments related to our tax-exempt bonds, which bear interest at variable rates (between 0.10% and 0.15%) at June 30, 2011. The tax-exempt bonds have maturity dates ranging from 2012 to 2033.
8)	$8.9 million in principal payments related to our notes payable to sellers. Our notes payable to sellers bear interest at rates between 2.50% and 10.35% at June 30, 2011, and have maturity dates ranging from 2012 to 2036.
9)	$3.0 million in principal payments related to our notes payable to third parties. Our notes payable to third parties bear interest at rates between 6.7% and 10.9% at June 30, 2011, and have maturity dates ranging from 2012 to 2019.

The following assumptions were made in calculating cash interest payments:

1) We calculated cash interest payments on the credit facility using the Eurodollar rate plus the applicable Eurodollar margin at June 30, 2011. We assumed the credit facility is paid off when the credit facility in existence at June 30, 2011 matures in September 2012.

2) We calculated cash interest payments on our interest rate swap using the stated interest rate in the swap agreement less the Eurodollar rate through the term of the swap.

On July 11, 2011, we entered into a new credit agreement which matures on July 11, 2016. The following table of contractual obligations reflects our debt balances as of June 30, 2011, taking into account the new maturity date of our new credit agreement. We calculated cash interest payments on the credit facility using the Eurodollar rate plus the applicable Eurodollar margin under the terms of the new credit agreement. We assumed the credit facility is paid off when the credit facility matures in July 2016. (amounts in thousands)

	Payments Due by Period
			Less Than		1 to 3		3 to 5		Over 5
Recorded Obligations	Total		1 Year		Years		Years		Years
Long-term debt	$	1,138,669	$	2,693	$	2,000	$	2,000	$	1,131,976
Cash interest payments	$	277,591	$	46,880	$	90,769	$	77,312	$	62,630

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The total liability for uncertain tax positions at June 30, 2011, was approximately $0.4 million. We are not able to reasonably estimate the amount by which the liability will increase or decrease over time; however, at this time, we do not expect a significant payment related to this liability within the next year.

	Amount of Commitment Expiration Per Period
	(amounts in thousands)
			Less Than		1 to 3		3 to 5		Over 5
Unrecorded Obligations(1)	Total		1 Year		Years		Years		Years
Operating leases	$	73,971	$	10,355	$	18,588	$	13,045	$	31,983

(1) We are party to operating lease agreements. These lease agreements are established in the ordinary course of our business and are designed to provide us with access to facilities at competitive, market-driven prices. These arrangements have not materially affected our financial position, results of operations or liquidity during the six months ended June 30, 2011, nor are they expected to have a material impact on our future financial position, results of operations or liquidity.

We have obtained financial surety bonds, primarily to support our financial assurance needs and landfill operations. We provided customers and various regulatory authorities with surety bonds in the aggregate amounts of approximately $293.3 million and $285.7 million at June 30, 2011 and December 31, 2010, respectively. These arrangements have not materially affected our financial position, results of operations or liquidity during the six months ended June 30, 2011, nor are they expected to have a material impact on our future financial position, results of operations or liquidity.

From time to time, we evaluate our existing operations and their strategic importance to us. If we determine that a given operating unit does not have future strategic importance, we may sell or otherwise dispose of those operations. Although we believe our reporting units would not be impaired by such dispositions, we could incur losses on them.

The disposal tonnage that we received in the six month periods ended June 30, 2011 and 2010, at all of our landfills during the respective period, is shown below (tons in thousands):

	Six months ended June 30,
	2011				2010
	Number of		Total		Number of		Total
	Sites		Tons		Sites		Tons
Owned landfills and landfills operated under life-of-site agreements		39		6,651		37		6,123
Operated landfills		5		256		6		313
		44		6,907		43		6,436

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NON-GAAP FINANCIAL MEAURES

Free Cash Flow

We present free cash flow, a non-GAAP financial measure, supplementally because it is widely used by investors as a valuation and liquidity measure in the solid waste industry. We define free cash flow as net cash provided by operating activities, plus proceeds from disposal of assets, plus or minus change in book overdraft, plus excess tax benefit associated with equity-based compensation, less capital expenditures for property and equipment and distributions to noncontrolling interests. This measure is not a substitute for, and should be used in conjunction with, GAAP liquidity or financial measures. Management uses free cash flow as one of the principal measures to evaluate and monitor the ongoing financial performance of our operations. Other companies may calculate free cash flow differently. Our free cash flow for the six month periods ended June 30, 2011 and 2010, is calculated as follows (amounts in thousands):

	Six months ended
	June 30,
	2011			2010
Net cash provided by operating activities	$	189,976		$	143,724
Less: Change in book overdraft		(1,918	)		(2,172	)
Plus: Proceeds from disposal of assets		1,862			4,925
Plus: Excess tax benefit associated with equity-based compensation		2,829			6,423
Less: Capital expenditures for property and equipment		(46,562	)		(50,495	)
Less: Distributions to noncontrolling interests		(675	)		—
Free cash flow	$	145,512		$	102,405

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Adjusted Operating Income Before Depreciation and Amortization

We present adjusted operating income before depreciation and amortization, a non-GAAP financial measure, supplementally because it is widely used by investors as a performance and valuation measure in the solid waste industry. We define adjusted operating income before depreciation and amortization as operating income, plus depreciation and amortization expense, plus closure and post-closure accretion expense, plus or minus any gain or loss on disposal of assets. We further adjust this calculation to exclude the effects of items management believes impact the ability to assess the operating performance of our business. This measure is not a substitute for, and should be used in conjunction with, GAAP financial measures. Management uses adjusted operating income before depreciation and amortization as one of the principal measures to evaluate and monitor the ongoing financial performance of our operations. Other companies may calculate adjusted operating income before depreciation and amortization differently. Our adjusted operating income before depreciation and amortization for the three and six month periods ended June 30, 2011 and 2010, is calculated as follows (amounts in thousands):

	Three months ended					Six months ended
	June 30,					June 30,
	2011			2010		2011			2010
Operating income	$	84,798		$	69,351	$	153,374		$	128,957
Plus: Depreciation and amortization		42,612			37,062		79,625			72,092
Plus: Closure and post-closure accretion		484			439		967			880
Plus/less: Loss (gain) on disposal of assets		(267	)		365		(292	)		622
Adjustments:
Plus: Acquisition-related transaction costs (a)		423			244		1,094			395
Adjusted operating income before depreciation and amortization	$	128,050		$	107,461	$	234,768		$	202,946

(a) Reflects the addback of acquisition-related costs expensed due to the implementation of new accounting guidance for business combinations effective January 1, 2009.

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Reconciliation of Net Income to Adjusted Net Income and Adjusted Net Income per diluted share

Adjusted net income and adjusted net income per diluted share, both non-GAAP financial measures, are provided supplementally because they are widely used by investors as a valuation measure in the solid waste industry. We provide adjusted net income to exclude the effects of items management believes impact the comparability of operating results between periods. Adjusted net income has limitations due to the fact that it may exclude items that have an impact on our financial condition and results of operations. Adjusted net income and adjusted net income per diluted share are not a substitute for, and should be used in conjunction with, GAAP financial measures. Management uses adjusted net income and adjusted net income per diluted share as one of the principal measures to evaluate and monitor ongoing financial performance of our operations. Other companies may calculate adjusted net income and adjusted net income per diluted share differently.

	Three months ended					Six months ended
	June 30,					June 30,
	2011			2010		2011			2010
Reported net income attributable to Waste Connections	$	44,413		$	30,400	$	80,952		$	57,973
Adjustments:
Loss on extinguishment of debt, net of taxes (a)		—			6,035		—			6,320
Acquisition-related transaction costs, net of taxes (b)		507			151		923			245
Loss (gain) on disposal of assets, net of taxes (c)		(166	)		648		(181	)		808
Impact of deferred tax adjustment (d)		—			—		—			1,547
Adjusted net income attributable to Waste Connections	$	44,754		$	37,234	$	81,694		$	66,893
Diluted earnings per common share attributable to Waste Connections common stockholders:
Reported net income	$	0.39		$	0.26	$	0.71		$	0.49
Adjusted net income	$	0.39		$	0.32	$	0.71		$	0.57

(a)	Reflects the elimination of costs associated with early redemption of outstanding debt.
(b)	Reflects the elimination of acquisition-related costs.
(c)	Reflects the elimination of a loss (gain) on disposal of assets.
(d)	Reflects the elimination of an increase to the income tax provision associated with an adjustment in our deferred tax liabilities primarily resulting from a voter-approved increase in Oregon state income tax rates.

INFLATION

Other than volatility in fuel prices, inflation has not materially affected our operations in recent years. Consistent with industry practice, many of our contracts allow us to pass through certain costs to our customers, including increases in landfill tipping fees and, in some cases, fuel costs. Therefore, we believe that we should be able to increase prices to offset many cost increases that result from inflation in the ordinary course of business. However, competitive pressures or delays in the timing of rate increases under our contracts may require us to absorb at least part of these cost increases, especially if cost increases exceed the average rate of inflation. Management’s estimates associated with inflation have an impact on our accounting for landfill liabilities.

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SEASONALITY

We expect our operating results to vary seasonally, with revenues typically lowest in the first quarter, higher in the second and third quarters and lower in the fourth quarter than in the second and third quarters. This seasonality reflects the lower volume of solid waste generated during the late fall, winter and early spring because of decreased construction and demolition activities during winter months in the U.S. We expect the fluctuation in our revenues between our highest and lowest quarters to be approximately 7% to 10%. In addition, some of our operating costs may be higher in the winter months. Adverse winter weather conditions slow waste collection activities, resulting in higher labor and operational costs. Greater precipitation in the winter increases the weight of collected waste, resulting in higher disposal costs, which are calculated on a per ton basis.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

In the normal course of business, we are exposed to market risk, including changes in interest rates and prices of certain commodities. We use hedge agreements to manage a portion of our risks related to interest rates and fuel prices. While we are exposed to credit risk in the event of non-performance by counterparties to our hedge agreements, in all cases such counterparties are highly rated financial institutions and we do not anticipate non-performance. We do not hold or issue derivative financial instruments for trading purposes. We monitor our hedge positions by regularly evaluating the positions at market and by performing sensitivity analyses over the unhedged fuel and variable rate debt positions.

At June 30, 2011, our derivative instruments included one interest rate swap agreement that effectively fixes the interest rate on the applicable notional amounts of our variable rate debt as follows (dollars in thousands):

			Fixed			Variable
	Notional		Interest			Interest Rate		Expiration
Date Entered	Amount		Rate Paid*			Received	Effective Date	Date
March 2009	$	175,000		2.85	%	1-month LIBOR	February 2011	February 2014

* plus applicable margin.

Under derivatives and hedging guidance, the interest rate swap agreement is considered a cash flow hedge for a portion of our variable rate debt, and we apply hedge accounting to account for this instrument. The notional amount and all other significant terms of the swap agreement are matched to the provisions and terms of the variable rate debt being hedged.

We have performed sensitivity analyses to determine how market rate changes will affect the fair value of our unhedged floating rate debt. Such an analysis is inherently limited in that it reflects a singular, hypothetical set of assumptions. Actual market movements may vary significantly from our assumptions. Fair value sensitivity is not necessarily indicative of the ultimate cash flow or earnings effect we would recognize from the assumed market rate movements. We are exposed to cash flow risk due to changes in interest rates with respect to the unhedged floating rate balances owed at June 30, 2011 and December 31, 2010, of $351.8 million and $325.4 million, respectively, including floating rate debt under our credit facility and floating rate municipal bond obligations. A one percentage point increase in interest rates on our variable-rate debt as of June 30, 2011 and December 31, 2010, would decrease our annual pre-tax income by approximately $3.5 million and $3.3 million, respectively. All of our remaining debt instruments are at fixed rates, or effectively fixed under the interest rate swap agreement described above; therefore, changes in market interest rates under this instrument would not significantly impact our cash flows or results of operations, subject to counterparty default risk.

The market price of diesel fuel is unpredictable and can fluctuate significantly. We purchase approximately 27 million gallons of diesel fuel per year; therefore, a significant increase in the price of fuel could adversely affect our business and reduce our operating margins. To manage a portion of this risk, in 2008, we entered into multiple fuel hedge agreements related to forecasted diesel fuel purchases.

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At June 30, 2011, our derivative instruments included two fuel hedge agreements as follows:

	Notional
	Amount		Diesel
	(in gallons		Rate
	per		Paid		Diesel Rate Received	Effective	Expiration
Date Entered	month)		Fixed		Variable	Date	Date
December 2008		400,000	$	2.950	DOE Diesel Fuel Index*	January 2011	December 2011
December 2008		400,000	$	3.030	DOE Diesel Fuel Index*	January 2012	December 2012

* If the national U.S. on-highway average price for a gallon of diesel fuel (“average price”), as published by the Department of Energy, exceeds the contract price per gallon, we receive the difference between the average price and the contract price (multiplied by the notional number of gallons) from the counterparty. If the average price is less than the contract price per gallon, we pay the difference to the counterparty.

Under derivatives and hedging guidance, both of the fuel hedges are considered cash flow hedges for a portion of our forecasted diesel fuel purchases, and we apply hedge accounting to account for these instruments.

We have performed sensitivity analyses to determine how market rate changes will affect the fair value of our unhedged diesel fuel purchases. Such an analysis is inherently limited in that it reflects a singular, hypothetical set of assumptions. Actual market movements may vary significantly from our assumptions. Fair value sensitivity is not necessarily indicative of the ultimate cash flow or earnings effect we would recognize from the assumed market rate movements. For the year ending December 31, 2011, we expect to purchase approximately 26.8 million gallons of diesel fuel, of which 22.0 million gallons will be purchased at market prices and 4.8 million gallons will be purchased at prices that are fixed under our fuel hedges. During the six month period of July 1, 2011 to December 31, 2011, we expect to purchase approximately 11.0 million gallons of unhedged diesel fuel at market prices; therefore, a $0.10 per gallon increase in the price of fuel over the remaining six months in 2011 would decrease our pre-tax income during this period by approximately $1.1 million.

We market a variety of recyclable materials, including cardboard, office paper, plastic containers, glass bottles and ferrous and aluminum metals. We own and operate 39 recycling processing operations and sell other collected recyclable materials to third parties for processing before resale. Certain of our municipal recycling contracts in the state of Washington specify benchmark resale prices for recycled commodities. If the prices we actually receive for the processed recycled commodities collected under the contract exceed the prices specified in the contract, we share the excess with the municipality, after recovering any previous shortfalls resulting from actual market prices falling below the prices specified in the contract. To reduce our exposure to commodity price risk with respect to recycled materials, we have adopted a pricing strategy of charging collection and processing fees for recycling volume collected from third parties. In the event of a decline in recycled commodity prices, a 10% decrease in average recycled commodity prices from the average prices that were in effect during the six months ended June 30, 2011 and 2010, would have had a $3.4 million and $2.4 million impact on revenues for the six months ended June 30, 2011 and 2010, respectively.

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Item 4. Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) as of the end of the fiscal quarter covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of June 30, 2011, that our disclosure controls and procedures were effective at the reasonable assurance level such that information required to be disclosed in our Exchange Act reports: (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and (2) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

During the quarter ended June 30, 2011, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

Information regarding our legal proceedings can be found in Note 15 of our condensed consolidated financial statements included in Part I, Item 1 of this report and is incorporated herein by reference.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Our Board of Directors has authorized a common stock repurchase program for the repurchase of up to $800 million of our common stock through December 31, 2012. Under the program, stock repurchases may be made in the open market or in privately negotiated transactions from time to time at management’s discretion. The timing and amounts of any repurchases will depend on many factors, including our capital structure, the market price of our common stock and overall market conditions. As of June 30, 2011, we have repurchased approximately 36.9 million shares of our common stock at a cost of $691.0 million. The table below reflects repurchases we have made for the three months ended June 30, 2011 (in thousands, except share and per share amounts):

							Maximum
					Total Number of		Approximate Dollar
					Shares Purchased		Value of Shares that
	Total Number		Average		as Part of Publicly		May Yet Be
	of Shares		Price Paid		Announced		Purchased Under
Period	Purchased		Per Share(1)		Program		the Program
4/1/11 — 4/30/11		—	$	—		—	$	130,761
5/1/11 — 5/31/11		8,179		30.43		8,179		130,512
6/1/11 — 6/30/11		701,215		30.69		701,215		108,993
		709,394		30.69		709,394

(1) This amount represents the weighted average price paid per common share. This price includes a per share commission paid for all repurchases.

Item 6. Exhibits

See Exhibit Index immediately following the signature page of this Quarterly Report on Form 10-Q.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			WASTE CONNECTIONS, INC.
Date: July 22, 2011	BY:	/s/ Ronald J. Mittelstaedt
		Ronald J. Mittelstaedt,
		Chief Executive Officer
Date: July 22, 2011	BY:	/s/ Worthing F. Jackman
		Worthing F. Jackman,
		Executive Vice President and Chief Financial Officer

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Exhibit Number			Description of Exhibits
	3.1		Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to the exhibit filed with the Registrant’s Form 10-Q filed on July 24, 2007)
	3.2		Third Amended and Restated Bylaws of the Registrant, effective May 15, 2009 (incorporated by reference to the exhibit filed with the Registrant’s Form 8-K filed on April 23, 2009)
	10.1	+	Third Amended and Restated 2004 Equity Incentive Plan
	31.1		Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a)
	31.2		Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a)
	32.1		Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350
	101		The following materials from Waste Connections, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2011, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Income; (iii) the Condensed Consolidated Statements of Equity and Comprehensive Income; (iv) the Condensed Consolidated Statements of Cash Flows; and (v) the Notes to Condensed Consolidated Financial Statements, tagged as blocks of text. In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise this Exhibit 101 shall be deemed “furnished” and not “filed.”

+ Management contract or compensatory plan, contract or arrangement.

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EX-10.1

Exhibit 10.1

WASTE CONNECTIONS, INC.
THIRD AMENDED AND RESTATED
2004 EQUITY INCENTIVE PLAN

1. PURPOSE.

The purpose of the Plan is to provide a means for the Company and any Subsidiary, through the grant of Nonqualified Stock Options and/or Restricted Stock or Restricted Stock Units to selected Employees (including officers), Directors and Consultants, to attract and retain persons of ability as Employees, Directors and Consultants, and to motivate such persons to exert their best efforts on behalf of the Company and any Subsidiary.

2. DEFINITIONS.

(a) “Board” means the Company’s Board of Directors.

(b) “Change in Control” means:

(i) any reorganization, liquidation or consolidation of the Company, or any merger or other business combination of the Company with any other corporation, other than any such merger or other combination that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such transaction;

(ii) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company; or

(iii) a transaction or series of related transactions in which any “person” (as defined in Section 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of fifty percent (50%) or more of the Company’s outstanding voting securities (except that for purposes of this definition, “person” shall not include any person (or any person that controls, is controlled by or is under common control with such person) who as of the date of an Option Agreement or a Restricted Stock or Restricted Stock Unit Agreement owns ten percent (10%) or more of the total voting power represented by the outstanding voting securities of the Company, or a trustee or other fiduciary holding securities under any employee benefit plan of the Company, or a corporation that is owned directly or indirectly by the stockholders of the Company in substantially the same percentage as their ownership of the Company).

A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.

(c) “Code” means the Internal Revenue Code of 1986, as amended from time to time.

(d) “Committee” means a committee appointed by the Board in accordance with Section 4(b) of the Plan.

(e) “Company” means Waste Connections, Inc., a Delaware corporation.

(f) “Consultant” means any person, including an advisor, engaged by the Company or a Subsidiary to render consulting services and who is compensated for such services; provided that the term “Consultant” shall not include Directors.

(g) “Continuous Status as an Employee, Director or Consultant” means the individual’s employment as an Employee or relationship as a Consultant is not interrupted or terminated, or, in the case of a Director who is not an Employee, the term means the Director remains a Director of the Company. The Board, in its sole discretion, may determine whether Continuous Status as an Employee, Director or Consultant shall be considered interrupted in the case of (i) any leave of absence approved by the Board, including sick leave, military leave or any other personal leave, or (ii) transfers between locations of the Company or between the Company and a Subsidiary or their successors.

(h) “Director” means a member of the Company’s Board.

(i) “Disability” means permanent and total disability within the meaning of Section 422(c)(6) of the Code.

(j) “Employee” means any person employed by the Company or any Subsidiary of the Company. Any officer of the Company or a Subsidiary is an Employee. A Director is not an Employee unless he or she has an employment relationship with the Company or a Subsidiary in addition to being a Director. Service as a Consultant shall not be sufficient to constitute “employment” by the Company.

(k) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(l) “Fair Market Value” means, as of any date, the value of Stock determined as follows:

(i) If the Stock is listed on any established stock exchange or a national market system, including without limitation the New York Stock Exchange, its Fair Market Value shall be the closing sales price for the Stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the market trading day of the date of determination, or, if the date of determination is not a market trading day, the last market trading day prior to the date of determination, in each case as reported in The Wall Street Journal or such other sources as the Board deems reliable;

(ii) If the Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked prices for the Stock on the market trading day of the date of determination, or, if the date of determination is not a market trading day, the last market trading day prior to the date of determination; or

(iii) In absence of an established market for the Stock, the Fair Market Value thereof shall be determined in good faith by the Board.”

(m) “Nonqualified Stock Options” means Options that are not intended to qualify as incentive stock options within the meaning of Section 422 of the Code.

(n) “Option Agreement” means a written certificate or agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan that apply to Options.

(o) “Optionee” means an Employee, Director or Consultant who holds an outstanding Option.

(p) “Options” means Nonqualified Stock Options.

(q) “Plan” means this Waste Connections, Inc. Third Amended and Restated 2004 Equity Incentive Plan.

(r) “Restricted Stock” means Stock awarded under the Plan in accordance with the terms and conditions set forth in Section 6.

(s) “Restricted Stock Agreement” means a written certificate or award agreement between the Company and a Restricted Stock Participant evidencing a Restricted Stock Award. Each Restricted Stock Agreement shall be subject to the terms and conditions of the Plan that apply to Restricted Stock.

(t) “Restricted Stock Award” means shares of Restricted Stock awarded pursuant to the terms and conditions of the Plan.

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(u) “Restricted Stock Participant” means an Employee, Director or Consultant who holds an outstanding Restricted Stock Award.

(v) “Restricted Stock Unit” means a contractual right to receive Stock under the Plan upon the attainment of designated performance milestones or the completion of a specified period of employment or service with the Corporation or any Subsidiary or upon a specified date or dates following the attainment of such milestones or the completion of such service period.

(w) “Restricted Stock Unit Agreement” means a written agreement between the Company and a Restricted Stock Unit Participant evidencing a Restricted Stock Unit Award. Each Restricted Stock Unit Agreement shall be subject to the terms and conditions of the Plan that apply to Restricted Stock Units.

(x) “Restricted Stock Unit Award” means an award of Restricted Stock Units made pursuant to the terms and conditions of the Plan.

(y) “Restricted Stock Unit Participant” means an Employee, Director or Consultant who holds an outstanding Restricted Stock Unit Award.

(z) “Restriction Period” means a time period, which may or may not be based on performance goals and/or the satisfaction of vesting provisions (which may depend on the Continuous Status as an Employee, Director or Consultant of the applicable Restricted Stock Participant), that applies to, and is established or specified by the Board at the time of, each Restricted Stock Award.

(aa) “Rule 16b-3” means Rule 16b-3 under the Exchange Act or any successor to Rule 16b-3, as amended from time to time.

(bb) “Securities Act” means the Securities Act of 1933, as amended.

(cc) “Stock” means the Common Stock of the Company.

(dd) “Subsidiary” means any corporation that at the time an Option or a Restricted Stock or Restricted Stock Unit Award is granted under the Plan qualifies as a subsidiary of the Company under the definition of “subsidiary corporation” contained in Section 424(f) of the Code, or any similar provision hereafter enacted.

3. SHARES SUBJECT TO THE PLAN.

(a) Stock Available for Awards. Subject to adjustment as provided in Section 9 for changes in Stock, the Stock that may be sold or delivered pursuant to Options, Restricted Stock and/or Restricted Stock Unit Awards shall not exceed 4,775,000 shares. The Company shall reserve for Options, Restricted Stock and/or Restricted Stock Unit Awards 4,775,000 shares of Stock, subject to adjustment as provided in Section 9. If any Option for any reason terminates, expires or is cancelled without having been exercised in full, the Stock not purchased under such Option shall revert to and again become available for issuance under the Plan. Shares of Stock that are issued pursuant to Restricted Stock or Restricted Stock Unit Awards may be either authorized and unissued shares (which will not be subject to preemptive rights) or previously issued shares acquired by the Company or any Subsidiary. Any shares of Stock subject to a Restricted Stock Award that are forfeited shall revert to and again become available for issuance under the Plan. If any Restricted Stock Unit Award terminates or is cancelled for any reason before all the shares of Stock subject to such award vest and become issuable, the shares of Stock which do not vest and become issuable under that Restricted Stock Unit Award shall revert to and again become available for issuance under the Plan.

(b) Annual Award Limit. The maximum number of shares of Stock for which any one person may be granted Options, Restricted Stock and Restricted Stock Units in any one calendar year shall not exceed seventy-five thousand (75,000) shares in the aggregate, subject to adjustment under Section 9.

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4. ADMINISTRATION.

(a) Board’s Power and Responsibilities. The Plan shall be administered by the Board or, at the election of the Board, by a Committee, as provided in subsection (b), or, as to certain functions, by an officer of the Company, as provided in subsection (c). Subject to the Plan, the Board shall:

(i) determine and designate from time to time those Employees, Directors and Consultants to whom Options, Restricted Stock Awards and/or Restricted Stock Unit Awards are to be granted;

(ii) authorize the granting of Options, Restricted Stock Awards and Restricted Stock Unit Awards;

(iii) determine the number of shares subject to each Option, the exercise price of each Option, the time or times when and the manner in which each Option shall be exercisable, and the duration of the exercise period;

(iv) determine the number of shares of Stock to be included in any Restricted Stock Award, the Restriction Period for such Award, and the vesting schedule of such Award over the Restriction Period;

(v) determine the number of shares of Stock to be subject to any Restricted Stock Unit Award, the vesting schedule for those shares of Stock and the date or dates on which the shares of Stock which vest under the Award are actually to be issued;

(vi) construe and interpret the Plan and each Option, Restricted Stock and Restricted Stock Unit Agreement, and establish, amend and revoke rules and regulations for the Plan’s administration, and correct any defect, omission or inconsistency in the Plan or any Option, Restricted Stock or Restricted Stock Unit Agreement in a manner and to the extent it deems necessary or expedient to make the Plan fully effective;

(vii) adopt such procedures and subplans and grant Options and Restricted Stock and Restricted Stock Unit Awards on such terms and conditions as the Board determines necessary or appropriate to permit participation in the Plan by individuals otherwise eligible to so participate who are foreign nationals or employed outside of the United States, or otherwise to conform to applicable requirements or practices of jurisdictions outside of the United States;

(viii) prescribe and approve the form and content of certificates and agreements for use under the Plan;

(ix) establish and administer any terms, conditions, performance criteria, restrictions, limitations, forfeiture, vesting schedule, and other provisions of or relating to any Option or any Restricted Stock or Restricted Stock Unit Award;

(x) grant waivers of terms, conditions, restrictions and limitations under the Plan or applicable to any Option or Restricted Stock or Restricted Stock Unit Award, or accelerate the vesting of any Option or any Restricted Stock or Restricted Stock Unit Award or the issuance of vested Stock under any Restricted Stock Unit Award;

(xi) amend or adjust the terms and conditions of any outstanding Option or any Restricted Stock or Restricted Stock Unit Award and/or adjust the number and/or class of shares of Stock subject to any outstanding Option or any outstanding Restricted Stock or Restricted Stock Unit Award, provided that no such amendment or adjustment shall reduce the exercise price of any Option to a price lower than the Fair Market Value of the Stock covered by such Option on the date the Option was granted;

(xii) at any time and from time to time after the granting of an Option or a Restricted Stock or Restricted Stock Unit Award, specify such additional terms, conditions and restrictions with respect to any such Option or any such Restricted Stock or Restricted Stock Unit Award as may be deemed necessary or appropriate to ensure compliance with any and all applicable laws or rules, including, but not limited to, terms, restrictions and conditions for compliance with applicable securities laws and methods of withholding or providing for the payment of required taxes;

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(xiii) offer to buy out a Restricted Stock or Restricted Stock Unit Award previously granted, based on such terms and conditions as the Board shall establish with and communicate to the Restricted Stock or Restricted Stock Unit Participant at the time such offer is made;

(xiv) to the extent permitted under the applicable Restricted Stock Agreement, permit the transfer of a Restricted Stock Award by one other than the Restricted Stock Participant who received the grant of such Restricted Stock Award; and

(xv) take any and all other actions it deems necessary for the purposes of the Plan.

The Board shall have full discretionary authority in all matters related to the discharge of its responsibilities and the exercise of its authority under the Plan. Decisions and actions by the Board with respect to the Plan and any Option Agreement or any Restricted Stock or Restricted Stock Unit Agreement shall be final, conclusive and binding on all persons having or claiming to have any right or interest in or under the Plan and/or any Option Agreement or Restricted Stock or Restricted Stock Unit Agreement.

(b) Authority to Delegate to Committee. The Board may delegate administration of the Plan to one or more Committees of the Board. Each such Committee shall consist of one or more members appointed by the Board. Subject to the foregoing, the Board may from time to time increase the size of any such Committee and appoint additional members, remove members (with or without cause) and appoint new members in substitution therefor, or fill vacancies, however caused. If the Board delegates administration of the Plan to a Committee, the Committee shall have the same powers theretofore possessed by the Board with respect to the administration of the Plan (and references in this Plan to the Board shall apply to the Committee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish any such Committee at any time and revest in the Board the previously delegated administration of the Plan.

(c) Authority to Delegate to Officers. The Board may delegate administration of Sections 4(a)(i) through 4(a)(v) above to the Chief Executive Officer of the Company; provided, however, that such officer may not grant Options, Restricted Stock Awards and Restricted Stock Unit Awards covering more than 2,250,000 shares of Stock in the aggregate.

(d) Ten Year Grant Period. Notwithstanding the foregoing, no Option or any Restricted Stock or Restricted Stock Unit Award shall be granted after the expiration of ten years from the effective date of the Plan specified in Section 15 below.

(e) Modification of Terms and Conditions through Employment or Consulting Agreements. Notwithstanding the provisions of any Option Agreement or any Restricted Stock or Restricted Stock Unit Agreement, any modifications to the terms and conditions of any Option or any Restricted Stock or Restricted Stock Unit Award permitted by Section 4(a) with respect to any Employee or Consultant may be effected by including the modification in an employment or consulting agreement between the Company or a Subsidiary and the Optionee or the Restricted Stock or Restricted Stock Unit Participant.

(f) Restricted Stock and Restricted Stock Unit Vesting Limitations. Notwithstanding any other provision of this Plan to the contrary, Restricted Stock and Restricted Stock Unit Awards made to Employees or Consultants shall become vested over a period of not less than three years (or, in the case of vesting based upon the attainment of performance-based objectives, over a period of not less than one year) following the date the Restricted Stock or Restricted Stock Unit Award is made, and the Board may not waive such vesting periods on a discretionary basis except in the case of the death, disability or retirement of the Restricted Stock Participant or Restricted Stock Unit Participant, a Change in Control, the terms and conditions of an employment or consulting agreement between the Company or a Subsidiary and the Restricted Stock Participant or Restricted Stock Unit Participant (whether entered into prior to, on or after the Effective Date of this Plan, as provided in Section 15(a) hereof) or pursuant to Section 4(e); provided, however, that, notwithstanding the foregoing, Restricted Stock and Restricted Stock Unit Awards that result in the issuance of an aggregate of up to 5% of the shares of Stock available pursuant to Section 3(a) may be granted to any one or more Employee and/or Consultant without respect to such minimum vesting provisions and restrictions on waiver of this Section 4(f).

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5. TERMS AND CONDITIONS OF OPTIONS.

Each Option granted shall be evidenced by an Option Agreement in substantially the form attached hereto as Annex A or such other form as may be approved by the Board. Each Option Agreement shall include the following terms and conditions and such other terms and conditions as the Board may deem appropriate:

(a) Option Term. Each Option Agreement shall specify the term for which the Option thereunder is granted and shall provide that such Option shall expire at the end of such term. The Board may extend such term; provided that the term of any Option, including any such extensions, shall not exceed five years from the date of grant.

(b) Exercise Price. Each Option Agreement shall specify the exercise price per share, as determined by the Board at the time the Option is granted, which exercise price shall in no event be less than the Fair Market Value when the Option is granted.

(c) Vesting. Each Option Agreement shall specify when it is exercisable. The total number of shares of Stock subject to an Option may, but need not, be allotted in periodic installments (which may, but need not, be equal). An Option Agreement may provide that from time to time during each of such installment periods, the Option may become exercisable (“vest”) with respect to some or all of the shares allotted to that period, and may be exercised with respect to some or all of the shares allotted to such period or any prior period as to which the Option shall have become vested but shall not have been fully exercised. An Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Board deems appropriate.

(d) Payment of Purchase Price on Exercise. Each Option Agreement shall provide that the purchase price of the shares as to which such Option may be exercised shall be paid to the Company at the time of exercise either (i) in cash, or (ii) in the absolute discretion of the Board (which discretion may be exercised in a particular case without regard to any other case or cases), at the time of the grant or thereafter, (A) by the withholding of shares of Stock issuable on exercise of the Option or the delivery to the Company of other Stock owned by the Optionee, provided in either case that the Optionee has owned shares of Stock equal in number to the shares so withheld for a period sufficient to avoid a charge to the Company’s reported earnings, (B) subject to compliance with applicable law, according to a deferred payment or other arrangement (which may include, without limiting the generality of the foregoing, the use of Stock) with the person to whom the Option is granted or to whom the Option is transferred pursuant to Section 5(e), (C) by delivery of a properly executed notice together with irrevocable instructions to a broker providing for the assignment to the Company of the proceeds of a sale or loan with respect to some or all of the Stock being acquired upon the exercise of the Option, including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System (a “cashless exercise”), or (D) in any other form or combination of forms of legal consideration that may be acceptable to the Board.

In the case of any deferred payment arrangement, interest shall be payable at least annually and shall be charged at the minimum rate necessary to avoid the treatment as interest, under any applicable provisions of the Code, of any amounts other than amounts stated to be interest under the deferred payment arrangement, or if less, the maximum rate permitted by law.

(e) Transferability. An Option shall not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of by the Optionee during his or her lifetime, whether by operation of law or otherwise, other than by will or the laws of descent and distribution applicable to the Optionee, and shall not be made subject to execution, attachment or similar process; provided that the Board may in its discretion at the time of approval of the grant of an Option or thereafter permit an Optionee to transfer an Option to a trust or other entity established by the Optionee for estate planning purposes, and may permit further transferability or impose conditions or limitations on any permitted transferability. Otherwise, during the lifetime of an Optionee, an Option shall be exercisable only by such Optionee. In the event any Option is to be exercised by the executors, administrators, heirs or distributees of the estate of a deceased Optionee, or such an Optionee’s beneficiary, in any such case pursuant to the terms and conditions of the Plan and the applicable Option Agreement and in accordance with such terms and conditions as may be specified from time to time by the Board, the Company shall be under no obligation to issue Stock thereunder unless and until the Board is satisfied that the person to receive such Stock is the duly appointed legal representative of the deceased Optionee’s estate or the proper legatee or distributee thereof or the named beneficiary of such Optionee.

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(f) Exercise of Option After Death of Optionee. If an Optionee dies (i) while an Employee, Director or Consultant, or (ii) within three months after termination of the Optionee’s Continuous Status as an Employee, Director or Consultant because of his or her Disability or retirement, his or her Options may be exercised (to the extent that the Optionee was entitled to do so on the date of death or termination) by the Optionee’s estate or by a person who shall have acquired the right to exercise the Options by bequest or inheritance, but only within the period ending on the earlier of (A) one year after the Optionee’s death (or such shorter or longer period specified in the Option Agreement, which period shall not be less than six months), or (B) the expiration date specified in the Option Agreement. If, after the Optionee’s death, the Optionee’s estate or the person who acquired the right to exercise the Optionee’s Options does not exercise the Options within the time specified herein, the Options shall terminate and the shares covered by such Options shall revert to and again become available for issuance under the Plan.

(g) Exercise of Option After Termination of Optionee’s Continuous Status as an Employee, Director or Consultant as a Result of Disability or Retirement. If an Optionee’s Continuous Status as an Employee, Director or Consultant terminates as a result of the Optionee’s Disability or retirement, and the Optionee does not die within the following three months, the Optionee may exercise his or her Options (to the extent that the Optionee was entitled to exercise them on the date of termination), but only within the period ending on the earlier of (i) six months after Disability or retirement (or such longer period specified in the Option Agreement), and (ii) the expiration of the term set forth in the Option Agreement. If, after termination, the Optionee does not exercise his or her Options within the time specified herein, the Options shall terminate, and the shares covered by such Options shall revert to and again become available for issuance under the Plan.

(h) No Exercise of Option After Termination of Optionee’s Continuous Status as an Employee, Director or Consultant Other Than as a Result of Death, Disability or Retirement. If an Optionee’s Continuous Status as an Employee, Director or Consultant terminates other than as a result of the Optionee’s death, Disability or retirement, all right of the Optionee to exercise his or her Options shall terminate on the date of termination of such Continuous Status as an Employee, Director or Consultant. The Options shall terminate on such termination date, and the shares covered by such Options shall revert to and again become available for issuance under the Plan.

(i) Exceptions. Notwithstanding subsections (f), (g) and (h), the Board shall have the authority to extend the expiration date of any outstanding Option in circumstances in which it deems such action to be appropriate, provided that no such extension shall extend the term of an Option beyond the expiration date of the term of such Option as set forth in the Option Agreement.

(j) Company’s Repurchase Right or Option Shares. Each Option Agreement may, but is not required to, include provisions whereby the Company shall have the right to repurchase any and all shares acquired by an Optionee on exercise of any Option granted under the Plan, at such price and on such other terms and conditions as the Board may approve and as may be set forth in the Option Agreement. Such right shall be exercisable by the Company after termination of an Optionee’s Continuous Status as an Employee, Director or Consultant, whenever such termination may occur and whether such termination is voluntary or involuntary, with cause or without cause, without regard to the reason therefor, if any.

6. TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS.

(a) Restricted Stock Award Agreement. Each Restricted Stock Award shall be evidenced by a Restricted Stock Agreement in substantially the form attached hereto as Annex B or such other form as may be approved by the Board. Each Restricted Stock Agreement shall be executed by the Company and the Restricted Stock Participant to whom such Restricted Stock Award has been granted, unless the Restricted Stock Agreement provides otherwise; two or more Restricted Stock Awards granted to a single Restricted Stock Participant may, however, be combined in a single Restricted Stock Agreement. A Restricted Stock Agreement shall not be a precondition to the granting of a Restricted Stock Award; no person shall have any rights under any Restricted Stock Award, however, unless and until the Restricted Stock Participant to whom the Restricted Stock Award shall have been granted (i) shall have executed and delivered to the Company a Restricted Stock Agreement or other instrument evidencing the Restricted Stock Award, unless such Restricted Stock Agreement provides otherwise, (ii) has satisfied the applicable federal, state, local and/or foreign income and employment withholding tax liability with respect to the shares of Stock which vest or become issuable under the Restricted Stock Award, and (iii) has otherwise complied with the applicable terms and conditions of the Restricted Stock Award.

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(b) Restricted Stock Awards Subject to Plan. All Restricted Stock Awards under the Plan shall be subject to all the applicable provisions of the Plan, including the following terms and conditions, and to such other terms and conditions not inconsistent therewith, as the Board shall determine and which are set forth in the applicable Restricted Stock Agreement.

(i) The Restricted Stock subject to a Restricted Stock Award shall entitle the Restricted Stock Participant to receive shares of Restricted Stock, which vest over the Restriction Period. The Board shall have the discretionary authority to authorize Restricted Stock Awards and determine the Restriction Period for each such award.

(ii) Subject to the terms and restrictions of this Section 6 or the applicable Restricted Stock Agreement or as otherwise determined by the Board, upon delivery of Restricted Stock to a Restricted Stock Participant, or upon creation of a book entry evidencing a Restricted Stock Participant’s ownership of shares of Restricted Stock, pursuant to Section 6(f), the Restricted Stock Participant shall have all of the rights of a stockholder with respect to such shares.

(c) Cash Payment. The Board may make any such Restricted Stock Award without the requirement of any cash payment from the Restricted Stock Participant to whom such Restricted Stock Award is made, or may require a cash payment from such a Restricted Stock Participant in an amount no greater than the aggregate Fair Market Value of the Restricted Stock as of the date of grant in exchange for, or as a condition precedent to, the completion of such Restricted Stock Award and the issuance of such shares of Restricted Stock.

(d) Transferability. During the Restriction Period stated in the Restricted Stock Agreement, the Restricted Stock Participant who receives a Restricted Stock Award shall not be permitted to sell, transfer, pledge, assign, encumber or otherwise dispose of such Restricted Stock whether by operation of law or otherwise and shall not be made subject to execution, attachment or similar process. Any attempt by such Restricted Stock Participant to do so shall constitute the immediate and automatic forfeiture of such Restricted Stock Award. Notwithstanding the foregoing, the Restricted Stock Agreement may permit the payment or distribution of a Restricted Stock Participant’s Award (or any portion thereof) after his or her death to the beneficiary most recently named by such Restricted Stock Participant in a written designation thereof filed with the Company, or, in lieu of any such surviving beneficiary, as designated by the Restricted Stock Participant by will or by the laws of descent and distribution. In the event any Restricted Stock Award is to be paid or distributed to the executors, administrators, heirs or distributees of the estate of a deceased Restricted Stock Participant, or such a Restricted Stock Participant’s beneficiary, in any such case pursuant to the terms and conditions of the Plan and the applicable Restricted Stock Agreement and in accordance with such terms and conditions as may be specified from time to time by the Board, the Company shall be under no obligation to issue Stock thereunder unless and until the Board is satisfied that each person to receive such Stock is the duly appointed legal representative of the deceased Restricted Stock Participant’s estate or the proper legatee or distributee thereof or the named beneficiary of such Restricted Stock Participant.

(e) Forfeiture of Restricted Stock. If, during the Restriction Period, the Restricted Stock Participant’s Continuous Status as an Employee, Director or Consultant terminates for any reason, all of such Restricted Stock Participant’s shares of Restricted Stock as to which the Restriction Period has not yet expired shall be forfeited and revert to the Plan, unless the Board has provided otherwise in the Restricted Stock Agreement or in an employment or consulting agreement with the Restricted Stock Participant, or the Board, in its discretion, otherwise determines to waive such forfeiture.

(f) Receipt of Stock Certificates. Each Restricted Stock Participant who receives a Restricted Stock Award shall be issued one or more stock certificates in respect of such shares of Restricted Stock. Any such stock certificates for shares of Restricted Stock shall be registered in the name of the Restricted Stock Participant but shall be appropriately legended and returned to the Company or its agent by the recipient, together with a stock power or other appropriate instrument of transfer, endorsed in blank by the recipient. Notwithstanding anything in the foregoing to the contrary, in lieu of the issuance of certificates for any shares of Restricted Stock during the applicable Restriction Period, a “book entry” (i.e., a computerized or manual entry) may be made in the records of the Company, or its designated agent, as the Board, in its discretion, may deem appropriate, to evidence the ownership of such shares of Restricted Stock in the name of the applicable Restricted Stock Participant. Such records of the Company or such agent shall, absent manifest error, be binding on all Restricted Stock Participants hereunder. The holding of shares of Restricted Stock by the Company or its agent, or the use of book entries to evidence the ownership of shares of Restricted Stock, in accordance with this Section 6(f), shall not affect the rights of Restricted Stock Participants as owners of their shares of Restricted Stock, nor affect the Restriction Period applicable to such shares under the Plan or the Restricted Stock Agreement.

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(g) Dividends. A Restricted Stock Participant who holds outstanding shares of Restricted Stock shall not be entitled to any dividends paid thereon, other than dividends in the form of the Company’s stock.

(h) Expiration of Restriction Period. A Restricted Stock Participant’s shares of Restricted Stock shall become free of the foregoing restrictions on the earlier of a Change in Control or the expiration of the applicable Restriction Period, and the Company shall, subject to Sections 8(a) and 8(b), then deliver stock certificates evidencing such Stock to such Restricted Stock Participant. Such certificates shall be freely transferable, subject to any market black-out periods which may be imposed by the Company from time to time or insider trading policies to which the Restricted Stock Participant may at the time be subject.

(i) Substitution of Restricted Stock Awards. The Board may accept the surrender of outstanding shares of Restricted Stock (to the extent that the Restriction Period or other restrictions applicable to such shares have not yet lapsed) and grant new Restricted Stock Awards in substitution for such Restricted Stock.

7. TERMS AND CONDITIONS OF RESTRICTED STOCK UNIT AWARDS.

(a) Restricted Stock Unit Award Agreement. Each Restricted Stock Unit Award shall be evidenced by a Restricted Stock Unit Agreement in substantially the form attached hereto as Annex C or such other form as may be approved by the Board. Each Restricted Stock Unit Agreement shall be executed by the Company and the Restricted Stock Unit Participant to whom such Restricted Stock Unit Award has been granted, unless the Restricted Stock Unit Agreement provides otherwise; two or more Restricted Stock Unit Awards granted to a single Restricted Stock Unit Participant may, however, be combined in a single Restricted Stock Unit Agreement. A Restricted Stock Unit Agreement shall not be a precondition to the granting of a Restricted Stock Unit Award; however, no person shall be entitled to receive any shares of Stock pursuant to a Restricted Stock Unit Award unless and until the Restricted Stock Unit Participant to whom the Restricted Stock Unit Award shall have been granted (i) shall have executed and delivered to the Company a Restricted Stock Unit Agreement or other instrument evidencing the Restricted Stock Unit Award, unless such Restricted Stock Unit Agreement provides otherwise, (ii) has satisfied the applicable federal, state, local and/or foreign income and employment withholding tax liability with respect to the shares of Stock which vest or become issuable under the Restricted Stock Unit Award and (iii) has otherwise complied with all the other applicable terms and conditions of the Restricted Stock Unit Award.

(b) Restricted Stock Unit Awards Subject to Plan. All Restricted Stock Unit Awards under the Plan shall be subject to all the applicable provisions of the Plan, including the following terms and conditions, and to such other terms and conditions not inconsistent therewith, as the Board shall determine and which are set forth in the applicable Restricted Stock Unit Agreement.

(i) The Restricted Stock Units subject to a Restricted Stock Unit Award shall entitle the Restricted Stock Unit Participant to receive the shares of Stock underlying those Units upon the attainment of designated performance goals or the satisfaction of specified employment or service requirements or upon the expiration of a designated time period following the attainment of such goals or the satisfaction of the applicable service period. The Board shall have the discretionary authority to determine the performance milestones or service period required for the vesting of the Restricted Stock Units and the date or dates when the shares of Stock which vest under those Restricted Stock Units are actually to be issued. The Board may alternatively provide the Restricted Stock Unit Participant with the right to elect the issue date or dates for the shares of Stock which vest under his or her Restricted Stock Unit Award. The issuance of vested shares under the Restricted Stock Unit Award may be deferred to a date following the termination of the Restricted Stock Unit Participant’s employment or service with the Company and its Subsidiaries.

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(ii) The Restricted Stock Unit Participant shall not have any stockholder rights with respect to the shares of Stock subject to his or her Restricted Stock Unit Award until that Award vests and the shares of Stock are actually issued thereunder. However, dividend-equivalent units may, in the sole discretion of the Board, be paid or credited, either in cash or in actual or phantom shares of Stock, on one or more outstanding Restricted Stock Units, subject to such terms and conditions as the Board may deem appropriate.

(iii) An outstanding Restricted Stock Unit Award shall automatically terminate, and no shares of Stock shall actually be issued in satisfaction of that Award, if the performance goals or service requirements established for such Award are not attained or satisfied. The Board, however, shall have the discretionary authority to issue vested shares of Stock under one or more outstanding Restricted Stock Unit Awards as to which the designated performance goals or service requirements have not been attained or satisfied.

(iv) Service requirements for the vesting of Restricted Stock Unit Awards may include service as an Employee, Consultant or non-employee Director.

(c) No Cash Payment. Restricted Stock Unit Awards shall not require any cash payment from the Restricted Stock Unit Participant to whom such Restricted Stock Unit Award is made, either at the time such Award is made or at the time any shares of Stock become issuable under that Award. However, the issuance of such shares shall be subject to the Restricted Stock Unit Participant’s satisfaction of all applicable federal, state, local and/or foreign income and employment withholding taxes.

(d) Transferability. The Restricted Stock Unit Participant who receives a Restricted Stock Unit Award shall not be permitted to sell, transfer, pledge, assign, encumber or otherwise dispose of his or her interest in such Award or the underlying shares of Stock, whether by operation of law or otherwise, and such Award shall not be made subject to execution, attachment or similar process. Any attempt by such Restricted Stock Unit Participant to do so shall constitute the immediate and automatic forfeiture of such Restricted Stock Unit Award. Notwithstanding the foregoing, any shares of Stock which vest under the Restricted Stock Unit Agreement but which remain unissued at the time of the Restricted Stock Unit Participant’s death shall be issued to the beneficiary most recently named by such Restricted Stock Unit Participant in a written designation thereof filed with the Company, or, in lieu of any such surviving beneficiary, as designated by the Restricted Stock Unit Participant by will or by the laws of descent and distribution. In the event such vested shares of Stock are to be issued to the executors, administrators, heirs or distributees of the estate of a deceased Restricted Stock Unit Participant, or his or her designated beneficiary, in any such case pursuant to the terms and conditions of the Plan and the applicable Restricted Stock Unit Agreement and in accordance with such terms and conditions as may be specified from time to time by the Board, the Company shall be under no obligation to effect such issuance unless and until the Board is satisfied that each person to receive such Stock is the duly appointed legal representative of the deceased Restricted Stock Unit Participant’s estate or the proper legatee or distributee thereof or the named beneficiary of such Restricted Stock Unit Participant.

(e) Forfeiture of Restricted Stock Units. If the Restricted Stock Unit Participant’s Continuous Status as an Employee, Director or Consultant terminates for any reason, all of the Restricted Stock Units subject to his or her outstanding Restricted Stock Unit Awards shall, to the extent not vested at that time, be forfeited, and no shares of Stock shall be issued pursuant to those forfeited Restricted Stock Units, unless the Board has provided in the Restricted Stock Unit Agreement or in an employment or consulting agreement with the Restricted Stock Unit Participant that no such forfeiture shall occur, or the Board, in its sole discretion, otherwise determines to waive such forfeiture.

(f) Issuance of Stock Certificates. Each Restricted Stock Unit Participant who becomes entitled to an issuance of shares of Stock following the vesting of his or her Restricted Stock Unit Award shall, subject to Sections 8(a) and 8(b), be issued one or more stock certificates for those shares. Subject to such Sections 8(a) and 8(b), each such stock certificate shall be registered in the name of the Restricted Stock Unit Participant and shall be freely transferable, subject to any market black-out periods which may be imposed by the Company from time to time or insider trading policies to which the Restricted Stock Unit Participant may at the time be subject.

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8. CONDITIONS ON EXERCISE OF OPTIONS AND ISSUANCE OF SHARES.

(a) Securities Law Compliance. The Plan, the grant of Options and Restricted Stock or Restricted Stock Unit Awards thereunder, the exercise of Options thereunder and the obligation of the Company to issue shares of Stock on the exercise of Options, at the expiration of the applicable Restriction Period for Restricted Stock or upon the occurrence of the designated issuance date for shares of Stock subject to vested Restricted Stock Units, shall be subject to all applicable Federal and state laws, rules and regulations and to such approvals by any government or regulatory agency as may be required, in the opinion of the Board. Options may not be exercised, Restricted Stock and Restricted Stock Unit Awards may not be granted, and shares of Stock may not be issued if any such action would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. No Option may be exercised unless (i) a registration statement under the Securities Act shall at the time of exercise of the Option be in effect with respect to the shares issuable upon exercise of the Option or (ii) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. No Stock may be issued in connection with a Restricted Stock or Restricted Stock Unit Award unless (i) a registration statement under the Securities Act shall at the time of issuance of the Stock be in effect with respect to the shares of Stock to be issued or (ii) in the opinion of legal counsel to the Company, the shares of Stock to be issued on expiration of the applicable Restriction Period or upon the designated issuance date for vested Restricted Stock Units may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares hereunder shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to the exercise of any Option and the issuance of any Stock in connection with a Restricted Stock or Restricted Stock Unit Award, the Company may require the Optionee or the Restricted Stock or Restricted Stock Unit Participant to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

(b) Investment Representations. The Company may require any Optionee or a Restricted Stock or Restricted Stock Unit Participant, or any person to whom an Option or Restricted Stock or Restricted Stock Unit Award is transferred, as a condition of exercising such Option or receiving shares of Stock pursuant to such Restricted Stock or Restricted Stock Unit Award, to (A) give written assurances satisfactory to the Company as to such person’s knowledge and experience in financial and business matters or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters, and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Option or receiving such Stock, and (B) to give written assurances satisfactory to the Company stating that such person is acquiring the Stock for such person’s own account and not with any present intention of selling or otherwise distributing the Stock. The foregoing requirements, and any assurances given pursuant to such requirements, shall not apply if (1) the issuance of the Stock has been registered under a then currently effective registration statement under the Securities Act, or (2) counsel for the Company determines as to any particular requirement that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, with the advice of its counsel, place such legends on stock certificates issued under the Plan as the Company deems necessary or appropriate to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Stock.

9. ADJUSTMENTS ON CERTAIN EVENTS.

(a) No Effect on Powers of Board or Shareholders. The existence of the Plan and any Options or any Restricted Stock or Restricted Stock Unit Awards granted hereunder shall not affect in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the capital structure or business of the Company or any of its subsidiaries, any merger or consolidation of the Company or a subsidiary of the Company, any issue of debt, preferred or prior preference stock ahead of or affecting Stock, the authorization or issuance of additional shares of Stock, the dissolution or liquidation of the Company or its subsidiaries, any sale or transfer of all or part of its assets or business or any other corporate act or proceeding.

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(b) Changes in Control.

(i) Options. Each Option Agreement shall provide that in the event that the Company is subject to a Change in Control:

(A) immediately prior thereto all outstanding Options shall be automatically accelerated and become immediately exercisable as to all of the shares of Stock covered thereby, notwithstanding anything to the contrary in the Plan or the Option Agreement; and

(B) the Board may, in its discretion, and on such terms and conditions as it deems appropriate, by resolution adopted by the Board or by the terms of any agreement of sale, merger or consolidation giving rise to the Change in Control, provide that, without Optionee’s consent, the shares subject to an Option may (1) continue as an immediately exercisable Option of the Company (if the Company is the surviving corporation), (2) be assumed as immediately exercisable Options by the surviving corporation or its parent, (3) be substituted by immediately exercisable options granted by the surviving corporation or its parent with substantially the same terms for the Option, or (4) be cancelled after payment to the Optionee of an amount in cash or other consideration delivered to stockholders of the Company in the transaction resulting in a Change in Control of the Company equal to the total number of shares subject to the Option multiplied by the remainder of (i) the amount per share to be received by holders of the Company’s Stock in the sale, merger or consolidation, minus (ii) the exercise price per share of the shares subject to the Option.

(ii) Restricted Stock Awards. Each Restricted Stock Agreement shall provide that, immediately prior to a Change in Control, all restrictions imposed by the Board on any outstanding Restricted Stock Award shall be automatically canceled, the Restriction Period applicable to all outstanding Restricted Stock Awards shall immediately terminate, and such Restricted Stock Awards shall be fully vested, subject to the Restricted Stock Participant’s satisfaction of all applicable federal, state, local and/or foreign income and employment withholding taxes. Any applicable performance goals shall be deemed achieved at not less than the target level, notwithstanding anything to the contrary in the Plan or the Restricted Stock Agreement.

(iii) Restricted Stock Unit Awards. Each Restricted Stock Unit Agreement shall provide that, immediately upon a Change in Control, the Restricted Stock Units subject to such Agreement shall automatically vest in full, and the shares subject to those vested Restricted Stock Units shall be issued, notwithstanding any deferred issuance date otherwise in effect at the time for such shares, subject to the Restricted Stock Unit Participant’s satisfaction of all applicable federal, state, local and/or foreign income and employment withholding taxes. Accordingly, all performance milestones or service requirements in effect for those Restricted Stock Units shall be deemed to have been fully achieved or completed, notwithstanding anything to the contrary in the Plan or the Restricted Stock Unit Agreement.

(c) Adjustment Of Shares. The aggregate number, class and kind of shares of stock available for issuance under the Plan, the aggregate number, class and kind of shares of stock as to which Restricted Stock or Restricted Stock Unit Awards may be granted, the limitation set forth in Section 4(c) on the number of shares of Stock that may be issued by a single officer under the Plan, the number, class and kind of shares under each outstanding Restricted Stock or Restricted Stock Unit Award, the exercise price of each Option and the number of shares purchasable on exercise of such Option shall be appropriately adjusted by the Board in its discretion to preserve the benefits or potential benefits intended to be made available under the Plan or with respect to any outstanding Options or any outstanding Restricted Stock or Restricted Stock Unit Awards or otherwise necessary to reflect any such change, if the Company shall (i) pay a dividend in, or make a distribution of, shares of Stock (or securities convertible into, exchangeable for or otherwise entitling a holder thereof to receive Stock), or evidences of indebtedness or other property or assets, on outstanding Stock, (ii) subdivide the outstanding shares of Stock into a greater number of shares, (iii) combine the outstanding shares of Stock into a smaller number of shares or (iv) issue any shares of its capital stock in a reclassification of the Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the resulting corporation). An adjustment made pursuant to this Section 9(c) shall, in the case of a dividend or distribution, be made as of the record date therefor and, in the case of a subdivision, combination or reclassification, be made as of the effective date thereof. In case of any adjustment pursuant to this Section 9(c) with respect to an Option, the total number of shares and the number of shares or other units of such other securities

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purchasable on exercise of the Option immediately prior thereto shall be adjusted so that the Optionee shall be entitled to receive at the same aggregate purchase price the number of shares of Stock and the number of shares or other units of such other securities that the Optionee would have owned or would have been entitled to receive immediately following the occurrence of any of the events described above had the Option been exercised in full immediately prior to the occurrence (or applicable record date) of such event. If, as a result of any adjustment pursuant to this Section 9(c), the Optionee shall become entitled to receive shares of two or more classes or series of securities of the Company, the Board shall equitably determine the allocation of the adjusted exercise price between or among shares or other units of such classes or series and shall notify the Optionee of such allocation. Any new or additional shares or securities received by a Restricted Stock Participant shall be subject to the same terms and conditions, including the Restriction Period, as related to the original Restricted Stock Award.

(d) Receipt of Assets Other Than Stock. If at any time, as a result of an adjustment made pursuant to this Section 9, an Optionee or a Restricted Stock or Restricted Stock Unit Participant shall become entitled to receive any shares of capital stock or shares or other units of other securities or property or assets other than Stock, the number of such other shares or units so receivable on any exercise of the Option or expiration of the Restriction Period or the designated issuance date for the securities subject to vested Restricted Stock Units shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares of Stock in this Section 9, and the provisions of this Plan with respect to the shares of Stock shall apply, with necessary changes in points of detail, on like terms to any such other shares or units.

(e) Fractional Shares. All calculations under this Section 9 shall be, in the case of exercise price, rounded up to the nearest cent or, in the case of shares, rounded down to the nearest one-hundredth of a share, but in no event shall the Company be obligated to issue any fractional share.

(f) Inability to Prevent Acts Described in Section 9; Uniformity of Actions Not Required. No Optionee and no Restricted Stock or Restricted Stock Unit Participant shall have or be deemed to have any right to prevent the consummation of the acts described in this Section 9 affecting the number of shares of Stock subject to any Option or any Restricted Stock or Restricted Stock Unit Award held by the Optionee or the Restricted Stock or Restricted Stock Unit Participant. Any actions or determinations by the Board under this Section 9 need not be uniform as to all outstanding Options or outstanding Restricted Stock or Restricted Stock Unit Awards, and need not treat all Optionees or all Restricted Stock or Restricted Stock Unit Participants identically.

10. TAX WITHHOLDING OBLIGATIONS.

(a) General Authorization. The Company is authorized to take whatever actions are necessary and proper to satisfy all obligations of Optionees and Restricted Stock and Restricted Stock Unit Participants (including, for purposes of this Section 10, any other person entitled to exercise an Option or receive shares of Stock pursuant to a Restricted Stock or Restricted Stock Unit Award under the Plan) for the payment of all federal, state, local and/or foreign taxes in connection with any Option grant or exercise, any Restricted Stock Award or any Stock issuance pursuant to a vested Restricted Stock Unit Award (including, but not limited to, actions pursuant to the following Section 10(b)).

(b) Withholding Requirement and Procedure.

(i) Options. Whenever the Company proposes or is required to issue or transfer shares of Stock with respect to an Option, the Company shall have the right to require the grantee to remit to the Company an amount sufficient to satisfy any federal, state and/or local withholding tax requirements prior to the delivery of any certificate or certificates for such shares, including, for each Optionee who is an Employee, the employee portion of the FICA (Social Security and Medicare) taxes. Alternatively, the Company may issue or transfer such shares net of the number of shares sufficient to satisfy the minimum withholding tax requirements. For withholding tax purposes, the shares of Stock shall be valued on the date the withholding obligation is incurred.

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(ii) Restricted Stock. Each Restricted Stock Participant shall, no later than the date as of which the value of the Restricted Stock Award first becomes includible in the gross income of the Restricted Stock Participant for income tax purposes, pay to the Company in cash, or make arrangements satisfactory to the Company regarding payment to the Company of, any taxes of any kind required by law to be withheld with respect to the Stock or other property subject to such Restricted Stock Award, including, for each Restricted Stock Participant who is an Employee, the employee portion of the FICA (Social Security and Medicare) taxes applicable to the shares of Stock or other property. No Stock shall be delivered to a Restricted Stock Participant with respect to a Restricted Stock Award until such payment or arrangement has been made. The Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to such Restricted Stock Participant. Notwithstanding the above, the Board may, in its discretion and pursuant to procedures approved by the Board, permit the Restricted Stock Participant to elect withholding by the Company of Stock or other property otherwise deliverable to such Restricted Stock Participant pursuant to his or her Restricted Stock Award, provided, however, that the amount of any Stock so withheld shall not exceed the amount necessary to satisfy the Company’s required tax withholding obligations using the minimum statutory withholding rates for federal, state and/or local tax purposes, including payroll taxes, that are applicable to supplemental taxable income in full or partial satisfaction of such tax obligations, based on the Fair Market Value of the Stock on the payment date.

(c) Section 83(b) Election. If a Restricted Stock Participant makes an election under Code Section 83(b), or any successor section thereto, to be taxed with respect to a Restricted Stock Award as of the date of transfer of the Restricted Stock rather than as of the date or dates on which the Restricted Stock Participant would otherwise be taxable under Code Section 83(a), such Restricted Stock Participant shall deliver a copy of such election to the Company immediately after filing such election with the Internal Revenue Service. Neither the Company nor any of its affiliates shall have any liability or responsibility relating to or arising out of the filing or not filing of any such election or any defects in its construction.

(d) Restricted Stock Units. Each Restricted Stock Unit Participant shall comply with the following tax withholding requirements:

(i) Income Taxes. The Restricted Stock Unit Participant shall no later than the date as of which the shares of Stock which vest under his or her vested Restricted Stock Unit Award first becomes includible in his or her gross income for income tax purposes, pay to the Company in cash, or make arrangements satisfactory to the Company regarding payment to the Company of, any income taxes required by law to be withheld with respect to the Stock or other property issuable pursuant to such vested Restricted Stock Unit Award.

(ii) Employment Taxes. Any Restricted Stock Unit Participant who is an Employee shall be liable for the payment of the employee portion of the FICA (Social Security and Medicare) taxes applicable to the shares of Stock subject to his or her Restricted Stock Unit Award at the time those shares vest. The FICA taxes shall be based upon the Fair Market Value of the shares of Stock on the date those shares vest under the Restricted Stock Unit Award.

No Stock shall be delivered to a Restricted Stock Unit Participant with respect to a Restricted Stock Unit Award until such income and employment withholding taxes have been collected. The Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to such Restricted Stock Unit Participant. Notwithstanding the above, the Board may, in its discretion and pursuant to procedures approved by the Board, permit the Restricted Stock Unit Participant to satisfy the federal, state and local income withholding taxes applicable to the issued shares of Stock, together with any FICA withholding taxes due at the time of such Stock issuance, by having the Company withhold shares of Stock (based on the Fair Market Value of the Stock on the issuance date) or other property otherwise deliverable to such Restricted Stock Unit Participant in settlement of his or her vested Restricted Stock Unit Award, provided, however, that the amount of any Stock so withheld shall not exceed the amount necessary to satisfy the Company’s required income tax withholding obligations using the minimum statutory withholding rates for federal, state and/or local tax purposes, that are applicable to supplemental taxable income

11. AMENDMENT, TERMINATION OR SUSPENSION OF THE PLAN.

(a) Amendment, Termination or Suspension of Plan. The Board, at any time and from time to time, may terminate, amend or modify the Plan; provided, however, that to the extent necessary and desirable to comply with any applicable law, regulation, or stock exchange rule, the Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as required; provided further, however, that unless otherwise required by law or specifically provided herein, no such termination, amendment or alteration shall be made that would materially impair the previously accrued rights of any Optionee or any Restricted Stock or Restricted Stock Unit Participant with respect to his or her Option or his or her Restricted Stock or Restricted Stock Unit Award without his or her written consent.

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(b) Amendment of Options and Restricted Stock and Restricted Stock Unit Awards. The Board may amend the terms of any Option or any Restricted Stock or Restricted Stock Unit Award previously granted, including any Option Agreement or any Restricted Stock or Restricted Stock Unit Agreement, retroactively or prospectively, but no such amendment shall materially impair the previously accrued rights of any Optionee or any Restricted Stock or Restricted Stock Unit Participant with respect to any such Option or any Restricted Stock or Restricted Stock Unit Award without his or her written consent.

(c) Automatic Termination of Plan. Unless sooner terminated, the Plan shall terminate on the date that the aggregate the total number of shares of Stock subject to the Plan have been issued pursuant to the Plan’s provisions, and no shares covered by a Restricted Stock Award are any longer subject to any Restriction Period.

12. RIGHTS OF EMPLOYEES, DIRECTORS, CONSULTANTS AND OTHER PERSONS.

Neither this Plan nor any Options or Restricted Stock or Restricted Stock Unit Awards shall confer on any Optionee, Restricted Stock or Restricted Stock Unit Participant or other person:

(a) Any rights or claims under the Plan except in accordance with the provisions of the Plan and the applicable agreement;

(b) Any right with respect to continuation of employment by the Company or any Subsidiary or engagement as a Consultant or Director, nor shall they interfere in any way with the right of the Company or any Subsidiary that employs or engages an Optionee or a Restricted Stock or Restricted Stock Unit Participant to terminate that person’s employment or engagement at any time with or without cause.

(c) Any right to be selected to participate in the Plan or to be granted an Option or a Restricted Stock or Restricted Stock Unit Award; or

(d) Any right to receive any bonus, whether payable in cash or in Stock, or in any combination thereof, from the Company or its subsidiaries, nor be construed as limiting in any way the right of the Company or its subsidiaries to determine, in its sole discretion, whether or not it shall pay any employee or consultant bonus, and, if so paid, the amount thereof and the manner of such payment.

13. COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT.

So long as a class of the Company’s equity securities is registered under Section 12 of the Exchange Act, the Company intends that the Plan shall comply in all respects with Rule 16b-3. If during such time any provision of this Plan is found not to be in compliance with Rule 16b-3, that provision shall be deemed to have been amended or deleted as and to the extent necessary to comply with Rule 16b-3, and the remaining provisions of the Plan shall continue in full force and effect without change. All transactions under the Plan during such time shall be executed in accordance with the requirements of Section 16 of the Exchange Act and the applicable regulations promulgated thereunder.

14. LIMITATION OF LIABILITY AND INDEMNIFICATION.

(a) Contractual Liability Limitation. Any liability of the Company or its subsidiaries to any Optionee or any Restricted Stock or Restricted Stock Unit Participant with respect to any Option or any Restricted Stock or Restricted Stock Unit Award shall be based solely on contractual obligations created by the Plan and the Option Agreements and the Restricted Stock or Restricted Stock Unit Agreements outstanding thereunder.

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(b) Indemnification. In addition to such other rights of indemnification as they may have as Directors or officers, Directors and officers to whom authority to act for the Board or the Company is delegated shall be indemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same.

15. MISCELLANEOUS

(a) Effective Date. The effective date of the Plan shall be the date the Plan is approved by the stockholders of the Company or such later date as shall be determined by the Board.

(b) Acceptance of Terms and Conditions of Plan By accepting any benefit under the Plan, each Optionee and each Restricted Stock or Restricted Stock Unit Participant and each person claiming under or through such Optionee or such Restricted Stock or Restricted Stock Unit Participant shall be conclusively deemed to have indicated their acceptance and ratification of, and consent to, all of the terms and conditions of the Plan and any action taken under the Plan by the Company, the Board or the Committee, in any case in accordance with the terms and conditions of the Plan.

(c) No Effect on Other Arrangements. Neither the adoption of the Plan nor anything contained herein shall affect any other compensation or incentive plans or arrangements of the Company or its subsidiaries, or prevent or limit the right of the Company or any subsidiary to establish any other forms of incentives or compensation for their Employees, Directors or Consultants or grant or assume restricted stock or other rights otherwise than under the Plan.

(d) Choice of Law. The Plan shall be governed by and construed in accordance with the laws of the State of California, without regard to such state’s conflict of law provisions, and, in any event, except as superseded by applicable Federal law.

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Annex A

NONQUALIFIED STOCK OPTION AGREEMENT

Dear                     :

Waste Connections, Inc. (the “Company”), pursuant to its Third Amended and Restated 2004 Equity Incentive Plan (the “Plan”), has granted to you an option to purchase shares of the common stock of the Company (“Stock”). This option is not intended to qualify and will not be treated as an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

The grant under this Nonqualified Stock Option Agreement (the “Agreement”) is in connection with and in furtherance of the Company’s compensatory benefit plan for participation of the Company’s Employees, Directors and Consultants. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Plan.

The option granted hereunder is subject to and governed by the following terms and conditions:

1. Award Date:                     

2. Number of Shares Subject to Option:                     

3. Vesting Schedule. Subject to the limitations herein and in the Plan, this option shall become exercisable (vest) as follows:

Number of Shares	Date of Earliest Exercise
(Installment)	(Vesting)

The installments provided for are cumulative. Each such installment that becomes exercisable shall remain exercisable until expiration or earlier termination of the option.

4. Exercise Price.

(a) The exercise price of this option is $               per share.

(b) Payment of the exercise price per share is due in full in cash (including check) on exercise of all or any part of each installment that has become exercisable by you; provided that, if at the time of exercise the Stock is publicly traded and quoted regularly in the Wall Street Journal, payment of the exercise price, to the extent permitted by the Company and applicable statutes and regulations, may be made by having the Company withhold shares of Stock issuable on such exercise, by delivering shares of Stock already owned by you, by cashless exercise described in Section 5(d) of the Plan and complying with its provisions, or by delivering a combination of such forms of payment. Such Stock (i) shall be valued at its Fair Market Value at the close of business on the date of exercise, (ii) if originally acquired from the Company, must have been held for the period required to avoid a charge to the Company’s reported earnings, and (iii) must be owned free and clear of any liens, claims, encumbrances or security interests.

Annex A: Page 1

5. Partial or Early Exercise.

(a) Subject to the provisions of this Agreement, you may elect at any time during your Continuous Status as an Employee, Director or Consultant to exercise this option as to any part or all of the shares subject to this option at any time during the term hereof, including, without limitation, a time prior to the date of earliest exercise (vesting) stated in paragraph 3 hereof; provided that:

(i) a partial exercise of this option shall be deemed to cover first vested shares and then unvested shares next vesting;

(ii) any shares so purchased that shall not have vested as of the date of exercise shall be subject to the purchase option in favor of the Company as described in the Early Exercise Stock Purchase Agreement available from the Company; and

(iii) you shall enter into an Early Exercise Stock Purchase Agreement in the form available from the Company with a vesting schedule that will result in the same vesting as if no early exercise had occurred.

(b) The election provided in this paragraph 5 to purchase shares on the exercise of this option prior to the vesting dates shall cease on termination of your Continuous Status as an Employee, Director or Consultant and may not be exercised from or after the date thereof.

6. Fractional Shares. This option may not be exercised for any number of shares that would require the issuance of anything other than whole shares.

7. Securities Law Compliance. Notwithstanding anything to the contrary herein, this option may not be exercised if the issuance of shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, this option may not be exercised unless (a) a registration statement under the Securities Act shall at the time of exercise of the option be in effect with respect to the shares issuable upon exercise of the option or (b) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares hereunder shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to the exercise of any option, the Company may require the Optionee to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

8. Term. The term of this option commences on the date hereof and, unless sooner terminated as set forth below or in the Plan, terminates on                      (which date shall be no more than five years from the award date in Section 1 of this Agreement). In no event may this option be exercised on or after the date on which it terminates. This option shall terminate prior to the expiration of its term on the date of termination of your Continuous Status as an Employee, Director or Consultant for any reason or for no reason, unless:

(a) such termination is due to your retirement or Disability and you do not die within the three months after such termination, in which event the option shall terminate on the earlier of the termination date set forth above or six months after such termination of your Continuous Status as an Employee, Director or Consultant; or

(b) such termination is due to your death, or such termination is due to your retirement or Disability and you die within three months after such termination, in which event the option shall terminate on the earlier of the termination date set forth above or the first anniversary of your death.

Annex A: Page 2

Notwithstanding any of the foregoing provisions to the contrary however, this option may be exercised following termination of your Continuous Status as an Employee, Director or Consultant only as to that number of shares as to which it shall have been exercisable under Section 2 of this Agreement on the date of such termination.

9. Conditions on Exercise.

(a) This option may be exercised, to the extent specified above, by delivering a notice of exercise (in a form designated by the Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then require pursuant to Section 7 of the Plan.

(b) By exercising this option you agree that the Company (or a representative of the underwriters) may, in connection with an underwritten registration of the offering of any securities of the Company under the Exchange Act, require that you not sell or otherwise transfer or dispose of any shares of Stock or other securities of the Company during such period (not to exceed 180 days) following the effective date (the “Effective Date”) of the registration statement of the Company filed under the Exchange Act as may be requested by the Company or the representative of the underwriters. For purposes of this restriction, you will be deemed to own securities which (A) are owned directly or indirectly by you, including securities held for your benefit by nominees, custodians, brokers or pledgees, (B) may be acquired by you within sixty days of the Effective Date, (C) are owned directly or indirectly, by or for your brothers or sisters (whether by whole or half blood), spouse, ancestors and lineal descendants, or (D) are owned, directly or indirectly, by or for a corporation, partnership, estate or trust of which you are a shareholder, partner or beneficiary, but only to the extent of your proportionate interest therein as a shareholder, partner or beneficiary thereof. You further agree that the Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such period.

10. Adjustments on Certain Events.

(a) In the event that the Company is subject to a Change in Control:

(i) immediately prior thereto this option shall be automatically accelerated and become immediately exercisable as to all of the shares of Stock covered hereby, notwithstanding anything to the contrary in the Plan or this Agreement; and

(ii) the Board may, in its discretion, and on such terms and conditions as it deems appropriate, by resolution adopted by the Board or by the terms of any agreement of sale, merger or consolidation giving rise to the Change in Control, provide that, without Optionee’s consent, the shares subject to this option may (A) continue as an immediately exercisable option of the Company (if the Company is the surviving corporation), (B) be assumed as immediately exercisable options by the surviving corporation or its parent, (C) be substituted by immediately exercisable options granted by the surviving corporation or its parent with substantially the same terms for this option, or (D) be cancelled after payment to Optionee of an amount in cash or other consideration delivered to stockholders of the Company in the transaction resulting in a Change in Control of the Company equal to the total number of shares subject to this option multiplied by the remainder of (1) the amount per share to be received by holders of the Company’s Stock in the sale, merger or consolidation, minus (2) the exercise price per share of the shares subject to this option.

(b) The exercise price shall be subject to adjustment from time to time in the event that the Company shall (i) pay a dividend in, or make a distribution of, shares of Stock (or securities convertible into, exchangeable for or otherwise entitling a holder thereof to receive Stock), or evidences of indebtedness or other property or assets, on outstanding Stock, (ii) subdivide the outstanding shares of Stock into a greater number of shares, (iii) combine the outstanding shares of Stock into a smaller number of shares or (iv) issue any shares of its capital stock in a reclassification of the Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the resulting corporation). An adjustment made pursuant to this Section 10(b) shall, in the case of a dividend or distribution, be made as of the record date therefor and, in the case of a subdivision, combination or reclassification, be made as of the effective date thereof. In any such case, the total number of shares and the number of shares or other units of such other securities purchasable on exercise of the option immediately prior thereto shall be adjusted so that the Optionee shall be entitled to receive at the same aggregate purchase price the number of shares of Stock and the number of shares or other units of such other securities that the Optionee would have owned or would have been entitled to receive immediately following the occurrence of any of the events described above had the option been exercised in full immediately prior to the occurrence (or applicable record date) of such event. If, as a result of any adjustment pursuant to this Section 10(b), the Optionee shall become entitled to receive shares of two or more classes or series of securities of the Company, the Board shall equitably determine the allocation of the adjusted exercise price between or among shares or other units of such classes or series and shall notify the Optionee of such allocation.

Annex A: Page 3

(c) If at any time, as a result of an adjustment made pursuant to this Section 10, the Optionee shall become entitled to receive any shares of capital stock or shares or other units of other securities or property or assets other than Stock, the number of such other shares or units so receivable on any exercise of the option shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares of Stock in this Section 10, and the provisions of this Agreement with respect to the shares of Stock shall apply, with necessary changes in points of detail, on like terms to any such other shares or units.

(d) All calculations under this Section 10 shall be, in the case of exercise price, rounded up to the nearest cent or, in the case of shares subject to this option, rounded down to the nearest one-hundredth of a share, but in no event shall the Company be obligated to issue any fractional share on any exercise of the option.

11. Non-Transferability. This option is generally not transferable, except by will or by the laws of descent and distribution, unless the Company expressly permits a transfer, such as to a trust or other entity for estate planning purposes. Unless the Company approves such a transfer, this option is exercisable during your life only by you.

12. Rights of Optionee. This Agreement is not an employment contract and nothing in this Agreement shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company, or of the Company to continue your employment with the Company. If this option is granted to you in connection with your performance of services as a Consultant, references to employment, Employee and similar terms shall be deemed to include the performance of services as a Consultant; provided that no rights as an Employee shall arise by reason of the use of such terms.

13. Tax Withholding Obligations. Whenever the Company proposes or is required to issue or transfer shares of Stock to you with respect to an Option, the Company shall have the right to require you to remit to the Company an amount sufficient to satisfy any Federal, state or local withholding tax requirements, including your applicable share of any employment taxes, prior to the delivery of any certificate or certificates for such shares. Alternatively, the Company may issue or transfer such shares net of the number of shares sufficient to satisfy the withholding tax requirements. For withholding tax purposes, the shares of Stock shall be valued on the date the withholding obligation is incurred.

14. Notice. Any notice or other communication to be given under or in connection with this Agreement or the Plan shall be given in writing and shall be deemed effectively given on receipt or, in the case of notices from the Company to you, five days after deposit in the United States mail, postage prepaid, addressed to you at the address specified below or at such other address as you may hereafter designate by notice to the Company.

15. Agreement Subject to Plan. This Agreement is subject to all provisions of the Plan, a copy of which is attached hereto and made a part of this Agreement, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of this Agreement and those of the Plan, the provisions of the Plan shall control.

WASTE CONNECTIONS, INC.
By	Ronald J. Mittelstaedt
	Chairman and Chief Executive Officer

Annex A: Page 4

ATTACHMENTS:

Waste Connections, Inc. Third Amended and Restated 2004 Equity Incentive Plan
Notice of Exercise

Annex A: Page 5

The undersigned:

(a) Acknowledges receipt of the foregoing Nonqualified Stock Option Agreement and the attachments referenced therein and understands that all rights and liabilities with respect to the option granted under the Agreement are set forth in such Agreement and the Plan; and

(b) Acknowledges that as of the date of grant set forth in such Agreement, the Agreement sets forth the entire understanding between the undersigned optionee and the Company and its Subsidiaries regarding the acquisition of Stock pursuant to the option and supersedes all prior oral and written agreements on that subject with the exception of (i) the options, if any, previously granted and delivered to the undersigned under stock option plans of the Company, and (ii) the following agreements only:

NONE:	(Initial)
OTHER:

OPTIONEE

Address:

Annex A: Page 6

NOTICE OF EXERCISE

Waste Connections, Inc.
2295 Iron Road, Suite 200
Folsom, CA 95630-8767    Date of Exercise:                     

Ladies and Gentlemen:

This constitutes notice under my Nonqualified Stock Option Agreement that I elect to purchase the number of shares of Common Stock (“Stock”) of Waste Connections, Inc. (the “Company”) for the price set forth below.

Option Agreement dated:
Number of shares as to which option is exercised:
Certificates to be issued in name of:
Total exercise price:	$
Cash payment delivered herewith:	$
Value of _____________shares of ________________common stock delivered herewith:(1)	$

By this exercise, I agree (i) to provide such additional documents as you may require pursuant to the terms of the Waste Connections, Inc. Third Amended and Restated 2004 Equity Incentive Plan or the Option Agreement, and (ii) to provide for the payment by me to you (in the manner designated by you) of your withholding obligation, if any, relating to the exercise of this option.

I hereby represent, warrant and agree with respect to the shares of Stock of the Company that I am acquiring by this exercise of the option (the “Shares”) that, if required by the Company (or a representative of the underwriters) in connection with an underwritten registration of the offering of any securities of the Company under the Securities Act, I will not sell or otherwise transfer or dispose of any shares of Stock or other securities of the Company during such period (not to exceed 180 days) following the effective date of the registration statement of the Company filed under the Securities Act (the “Effective Date”) as may be requested by the Company or the representative of the underwriters. For purposes of this restriction, I will be deemed to own securities that (i) are owned, directly or indirectly by me, including securities held for my benefit by nominees, custodians, brokers or pledgees; (ii) may be acquired by me within sixty days of the Effective Date; (iii) are owned directly or indirectly, by or for my brothers or sisters (whether by whole or half blood), spouse, ancestors and lineal descendants; or (iv) are owned, directly or indirectly, by or for a corporation, partnership, estate or trust of which I am a shareholder, partner or beneficiary, but only to the extent of my proportionate interest therein as a shareholder, partner or beneficiary thereof. I further agree that the Company may impose stop-transfer instructions with respect to securities subject to this restriction until the end of such period.

Very truly yours,

(1) Shares must meet the public trading requirements set forth in the Options Agreement. Shares must be valued in accordance with the terms of the option being exercised, must have been owned for the minimum period required in the Option Agreement, and must be owned free and clear of any liens, claims, encumbrances or security interests. Certificates must be endorsed or accompanied by an executed assignment separate from certificate.

Annex A: Page 7

Annex B

RESTRICTED STOCK AGREEMENT

Dear                     :

Waste Connections, Inc. (the “Company”), pursuant to its Third Amended and Restated 2004 Equity Incentive Plan (the “Plan”) has granted to you an award of Restricted Stock (“Award”) in shares of common stock of the Company (“Stock”). The Restricted Stock will be issued to you subject to restrictions on transfer and otherwise, which will lapse over the Restricted Period, provided that you maintain Continuous Status as an Employee, Director or Consultant.

The grant under this Restricted Stock Agreement (the “Agreement”) is in connection with and in furtherance of the Company’s compensatory benefit plan for participation of the Company’s Employees, Directors and Consultants. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Plan.

The Award granted hereunder is subject to and governed by the following terms and conditions:

1.	Award Date:                    .
2.	Number of Shares Subject to Award:                    .
3.	Purchase Price. The purchase price for each share of Stock awarded by this Agreement is $                    .
4.	Vesting Schedule. The Award of Restricted Stock shall be deemed non-forfeitable and such Stock shall no longer be considered Restricted Stock on the earlier of a Change in Control or the expiration of the Restriction Period on the following dates with respect to the following percentages of the total shares of Restricted Stock awarded, and the Company shall, within a reasonable time and subject to Section 5, deliver stock certificates evidencing such Stock to you:

(a) Schedule of Expiration of Restriction Period. The overall restriction period, which begins on the date of the grant of the Award and ends on the  _____  anniversary of the grant of the Award (the “Restriction Period”), expires in  _____  equal phases:

	Restriction Period Expires with
	Respect to the Following
	Percentage of Total Shares of
Date	Restricted Stock Awarded
On grant		0	%
As of __________, 20__ (first anniversary of grant)		—	%
[As of __________, 20__ (second anniversary of grant)]		[__	%]
[As of __________, 20__ (third anniversary of grant)]		[__	%]
[As of __________, 20__ (fourth anniversary of grant)]		[__	%]

Annex B: Page 1

(b) Forfeiture of Restricted Stock. If, during the Restriction Period, your Continuous Status as an Employee, Director or Consultant terminates for any reason, you will forfeit any shares of Restricted Stock as to which the Restriction Period has not yet expired.

5. Conditions on Awards. Notwithstanding anything to the contrary herein:

(a) Securities Law Compliance. Awards may not be granted and shares of stock may not be issued if either such action would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system on which the Stock may then be listed. In addition, no Stock may be issued unless (a) a registration statement under the Securities Act shall at the time of issuance of the Stock be in effect with respect to the shares of Stock to be issued or (b) in the opinion of legal counsel to the Company, the shares of Stock to be issued on expiration of the applicable Restriction Period may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares hereunder shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to the issuance of any Stock, the Company may require you to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

(b) Investment Representation. The Company may require you, or any person to whom an Award is transferred, as a condition of receiving shares of Stock pursuant to such Award, to (A) give written assurances satisfactory to the Company as to your knowledge and experience in financial and business matters or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters, and that you are capable of evaluating, alone or together with the purchaser representative, the merits and risks of receiving such Stock, and (B) to give written assurances satisfactory to the Company stating that you are acquiring the Stock for your own account and not with any present intention of selling or otherwise distributing the Stock. The foregoing requirements, and any assurances given pursuant to such requirements, shall not apply if (1) the issuance of the Stock has been registered under a then currently effective registration statement under the Securities Act, or (2) counsel for the Company determines as to any particular requirement that such requirement need not be met in the circumstances under the then applicable securities laws.

6. Non-Transferability of Award. During the Restriction Period stated herein, you shall not sell, transfer, pledge, assign, encumber or otherwise dispose of the Restricted Stock whether by operation of law or otherwise and shall not make such Restricted Stock subject to execution, attachment or similar process. Any attempt by you to do so shall constitute the immediate and automatic forfeiture of such Award. Notwithstanding the foregoing, you may designate the payment or distribution of the Award (or any portion thereof) after your death to the beneficiary most recently named by you in a written designation thereof filed with the Company, or, in lieu of any such surviving beneficiary, as designated by you by will or by the laws of descent and distribution. In the event any Award is to be paid or distributed to the executors, administrators, heirs or distributees of your estate, or to your beneficiary, in any such case pursuant to the terms and conditions of the Plan and in accordance with such terms and conditions as may be specified from time to time by the Committee, the Company shall be under no obligation to issue Stock thereunder unless and until the Committee is satisfied that the person or persons to receive such Stock is the duly appointed legal representative of your estate or the proper legatee or distributee thereof or your named beneficiary.

7. Adjustments on Certain Events.

(a) Changes in Control. Immediately prior to a Change in Control, all restrictions imposed by the Committee on any outstanding Award shall be immediately automatically canceled, the Restriction Period shall immediately terminate and the Award shall be fully vested, notwithstanding anything to the contrary in the Plan or the Agreement.

Annex B: Page 2

(b) Adjustment of Shares. The number, class and kind of shares under the Award shall be appropriately adjusted by the Committee in its discretion to preserve the benefits or potential benefits intended to be made available under the Plan or with respect to the Award or otherwise necessary to reflect any such change, if the Company shall (i) pay a dividend in, or make a distribution of, shares of Stock (or securities convertible into, exchangeable for or otherwise entitling a holder thereof to receive Stock), or evidences of indebtedness or other property or assets, on outstanding Stock, (ii) subdivide the outstanding shares of Stock into a greater number of shares, (iii) combine the outstanding shares of Stock into a smaller number of shares or (iv) issue any shares of its capital stock in a reclassification of the Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the resulting corporation). An adjustment made pursuant to this Section 7(b) shall, in the case of a dividend or distribution, be made as of the record date therefor and, in the case of a subdivision, combination or reclassification, be made as of the effective date thereof. Any new or additional shares or securities that you receive are subject to the same terms and conditions, including the Restriction Period, as related to the original Award.

(c) Receipt of Assets other than Stock. If at any time, as a result of an adjustment made pursuant to this Section 7, you shall become entitled to receive any shares of capital stock or shares or other units of other securities or property or assets other than Stock, the number of such other shares or units so receivable on expiration of the Restriction Period shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares of Stock in this Section 7, and the provisions of this Agreement with respect to the shares of Stock shall apply, with necessary changes in points of detail, on like terms to any such other shares or units.

(d) Fractional Shares. All calculations under this Section 7 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be, but in no event shall the Company be obligated to issue any fractional share.

(e) Inability to Prevent Acts Described in Section 7; Uniformity of Actions Not Required. No Restricted Stock Participant shall have or be deemed to have any right to prevent the consummation of the acts described in this Section 7 affecting the number of shares of Stock subject to any Award held by the Restricted Stock Participant. Any actions or determinations by the Committee under this Section 7 need not be uniform as to all outstanding Awards, and need not treat all Restricted Stock Participants identically.

8. Rights of Restricted Stock Participant. This Plan and the Awards shall not confer on you or any other person:

(a) Any rights or claims under the Plan except in accordance with the provisions of the Plan and the applicable agreement;

(b) Any right with respect to continuation of employment or a consulting or directorship arrangement with the Company or any Subsidiary, nor shall they interfere in any way with the right of the Company or any Subsidiary that employs you or engages you as a consultant or director to terminate your employment or consulting or directorship arrangement at any time with or without cause;

(c) Any right to be selected to participate in the Plan or to be granted an Award; or

(d) Any right to receive any bonus, whether payable in cash or in Stock, or in any combination thereof, from the Company or its subsidiaries, nor be construed as limiting in any way the right of the Company or its subsidiaries to determine, in its sole discretion, whether or not it shall pay any employee, consultant or director bonuses, and, if so paid, the amount thereof and the manner of such payment.

Annex B: Page 3

9. Tax Withholding Obligations.

(a) Withholding Requirement and Procedure. You shall (and in no event shall Stock be delivered to you with respect to an Award until), no later than the date as of which the value of the Award first becomes includible in your gross income for income tax purposes, pay to the Company in cash, or make arrangements satisfactory to the Company, as determined in the Committee’s discretion, regarding payment to the Company of, any taxes of any kind required by law to be withheld with respect to the Stock or other property subject to such Award, including your applicable share of any employment taxes, and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to you. Notwithstanding the above, the Committee may, in its discretion and pursuant to procedures approved by the Committee, permit you to elect withholding by the Company of Stock or other property otherwise deliverable to you pursuant to your Award, provided, however, that the amount of any Stock so withheld shall not exceed the amount necessary to satisfy the Company’s required tax withholding obligations using the minimum statutory withholding rates for Federal, state and/or local tax purposes, including payroll taxes, that are applicable to supplemental taxable income in full or partial satisfaction of such tax obligations, based on the Fair Market Value of the Stock on the payment date.

(b) Section 83(b) Election. If you make an election under Code Section 83(b), or any successor section thereto, to be taxed with respect to an Award as of the date of transfer of the Restricted Stock rather than as of the date or dates on which you would otherwise be taxable under Code Section 83(a), you shall deliver a copy of such election to the Company immediately after filing such election with the Internal Revenue Service. Neither the Company nor any of its affiliates shall have any liability or responsibility relating to or arising out of the filing or not filing of any such election or any defects in its construction.

10. Notice. Any notice or other communication to be given under or in connection with this Agreement or the Plan shall be given in writing and shall be deemed effectively given on receipt or, in the case of notices from the Company to you, five days after deposit in the United States mail, postage prepaid, addressed to you at the address specified below or at such other address as you may hereafter designate by notice to the Company.

11. Agreement Subject to Plan. This Agreement is subject to all provisions of the Plan, a copy of which is attached hereto and made a part of this Agreement, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of this Agreement and those of the Plan, the provisions of the Plan shall control.

WASTE CONNECTIONS, INC.
By	Ronald J. Mittelstaedt
	Chairman and Chief Executive Officer

ATTACHMENT:

Waste Connections, Inc. Third Amended and Restated 2004 Equity Incentive Plan

Annex B: Page 4

The undersigned:

(a) Acknowledges receipt of the foregoing Restricted Stock Award Agreement and the attachments referenced therein and understands that all rights and liabilities with respect to the Award granted under the Agreement are set forth in such Agreement and the Plan; and

(b) Acknowledges that as of the date of the Award set forth in such Agreement, the Agreement sets forth the entire understanding between the undersigned participant and the Company and it Subsidiaries regarding the acquisition of Stock pursuant to the Award and supersedes all prior oral and written agreements on that subject.

RESTRICTED STOCK PARTICIPANT

Address:

Annex B: Page 5

Annex C

RESTRICTED STOCK UNIT AGREEMENT

Dear                     :

Waste Connections, Inc. (the “Company”) is pleased to inform you that you have been awarded Restricted Stock Units (the “Award”) under the Company’s Third Amended and Restated 2004 Equity Incentive Plan (the “Plan”). Each Restricted Stock Unit represents the right to receive one share of the Company’s common stock (“Common Stock”) pursuant to the Plan, to the extent vested on the vesting date of that unit. The Award will vest in a series of installments over your period of continued service with the Company as set forth herein. Unlike a typical stock option program, the shares will be issued to you as a bonus for your continued service over the vesting period, without any cash payment required from you. However, you must pay the applicable income and employment withholding taxes (described below) when due.

The award under this Restricted Stock Unit Agreement (the “Agreement”) is in connection with and in furtherance of the Company’s compensatory benefit plan for participation of the Company’s Employees, Directors and Consultants. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Plan.

This Agreement sets the number of shares of the Common Stock subject to your award, the applicable vesting schedule for the issuance of those shares, and the remaining terms and conditions governing your award.

Award Date:                     

Number of Shares Subject to Award:                      shares of Common Stock (the “Shares”)

Vesting Schedule: The Award will vest and become issuable in a series of four (4) successive equal annual installments upon your completion of each year of Continuous Status as an Employee, Director or Consultant over the four (4)-year period measured from the Award Date. However, no Shares with respect to which the Award has vested in accordance with such schedule will actually be issued until you satisfy all applicable income and employment withholding taxes. The Shares subject to the Award that have become vested are referred to as “Vested Award Units.”

Other important features of your Award may be summarized as follows:

1. Forfeitability: Should your Continuous Status as an Employee, Director or Consultant cease for any reason prior to vesting in one or more installments of the Shares subject to your Award, then your Award will be cancelled with respect to the unvested Shares and the number of your Restricted Stock Units will be reduced accordingly, and you will cease to have any right or entitlement to receive any Shares under those cancelled units.

2. Transferability: Prior to your actual receipt of the Shares pursuant to your Award, you may not transfer any interest in your Award or the underlying Shares or pledge or otherwise hedge the sale of those Shares, including (without limitation) any short sale, put or call option or any other instrument tied to the value of those Shares. Any attempt by you to do so will result in an immediate forfeiture of the Restricted Stock Units awarded to you hereunder. However, your right to receive any Shares which have vested under your Restricted Stock Units but which remain unissued at the time of your death may be transferred pursuant to the provisions of your will or the laws of inheritance or to your designated beneficiary following your death. In the event the Shares which vest hereunder are to be issued to the executors, administrators, heirs or distributees of your estate or to your designated beneficiary, the Company shall be under no obligation to effect such issuance unless and until the Committee is satisfied that the person to receive those Shares is the duly appointed legal representative of your estate or the proper legatee or distributee thereof or your named beneficiary.

Annex C: Page 1

Any Shares issued to you pursuant to the terms of this Agreement may not be sold or transferred in contravention of (i) any market black-out periods the Company may impose from time to time or (ii) the Company’s insider trading policies to the extent applicable to you.

3. Adjustments: The number, class and kind of securities subject to your Restricted Stock Units hereunder shall be appropriately adjusted by the Committee in its discretion to preserve the benefits or potential benefits intended to be made available under the Plan or with respect to those Restricted Stock Units or as otherwise necessary to reflect any such change, if the Company shall (i) pay a dividend in, or make a distribution of, shares of Common Stock (or securities convertible into, exchangeable for or otherwise entitling a holder thereof to receive such Common Stock), or evidences of indebtedness or other property or assets, on the outstanding Common Stock, (ii) subdivide the outstanding shares of Common Stock into a greater number of shares, (iii) combine the outstanding shares of Common Stock into a smaller number of shares or (iv) issue any shares of its capital stock in a reclassification of such Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the resulting corporation). An adjustment made pursuant to this section 3 shall, in the case of a dividend or distribution, be made as of the record date therefor and, in the case of a subdivision, combination or reclassification, be made as of the effective date thereof.

4. Federal Income Taxation: You generally will recognize ordinary income for federal income tax purposes on the date the Shares subject to your Award vest, and you must satisfy the income tax withholding obligation applicable to that income. The amount of your taxable income will generally be based on the closing selling price per share of Common Stock on the New York Stock Exchange on the date your Vested Award Units are issued and distributed times the number of Shares which are distributed on that date. This is a general summary of the possible tax consequences of the Award and is not tax advice. You are advised to consult with your own advisor as to the possible tax consequences of this Award.

5. FICA Taxes: You will be liable for the payment of the employee share of the FICA (Social Security and Medicare) taxes applicable to your Award, which liability will generally arise at the time your Award vests. FICA taxes will generally be based on the closing selling price of the shares on the New York Stock Exchange on the date those Shares vest under your Award.

6. Withholding Taxes: You must pay all applicable federal, state and local income and employment withholding taxes when due.

(a) In the Company’s sole discretion, the Company may collect any applicable federal, state and local income and employment withholding taxes with respect to the Award through an automatic Share withholding procedure pursuant to which the Company will withhold a portion of those vested Shares with a fair market value (measured as of the date the withholding obligation arises) equal to the amount of such withholding taxes (the “Share Withholding Method”); provided, however, that the amount of any Shares so withheld shall not exceed the amount necessary to satisfy the Company’s required tax withholding obligations using the minimum statutory withholding rates for federal, state and local tax purposes, including payroll taxes, that are applicable to supplemental taxable income. You shall be notified in writing in the event such Share Withholding Method is no longer available.

Annex C: Page 2

(b) Should any Shares vest under the Award at a time when the Share Withholding Method is not available, then the Company may, in its sole discretion, collect any applicable federal, state and local income and employment withholding taxes from you through any of the following alternatives:

• your delivery of a separate check payable to the Company in the amount of such withholding taxes, or

• the use of the proceeds from a next-day sale of the Shares issued to you; provided and only if (i) such a sale is permissible under the Company’s trading policies governing the sale of Common Stock, (ii) you make an irrevocable commitment, on or before the vesting date for those Shares, to effect such sale of the Shares and (iii) the transaction is not otherwise deemed to constitute a prohibited loan under Section 402 of the Sarbanes-Oxley Act of 2002.

7. Stockholder Rights: You will not have any stockholder rights, including voting rights and actual dividend rights, with respect to the Shares subject to your Award until you become the record holder of those Shares following their actual issuance to you and your satisfaction of the applicable withholding taxes.

8. Dividend Equivalent Rights: Should the Board in its discretion declare an extraordinary cash dividend on the Common Stock at a time when unissued shares of such Common Stock are subject to your Award, then the number of Shares at that time subject to your Award will automatically be increased on the date the dividend is paid by an amount determined in accordance with the following formula, rounded down to the nearest whole share:

X = (A x B)/C, where

X = the additional number of Shares which will become subject to your Award by reason of the extraordinary cash dividend;

A = the number of unissued Shares subject to this Award as of the record date for such dividend;

B = the per Share amount of the cash dividend; and

C = the closing selling price per share of Common Stock on the New York Stock Exchange on the payment date of such dividend.

The additional Shares resulting from such calculation will be subject to the same terms and conditions as the unissued Shares to which they relate under your Award. The Board has the discretion to determine when a cash dividend shall be considered extraordinary. Your Award will not be adjusted to reflect regular or periodic cash dividends. In order for you to receive a dividend equivalent increase to the number of Shares subject to your Award, you must be in Continuous Status as an Employee, Director or Consultant on the date the extraordinary dividend is actually paid. These dividend equivalent rights and any amounts that may become distributable in respect thereof shall be treated separately from the Restricted Stock Units and the rights arising in connection therewith for purposes of the designation of time and form of payments required by Section 409A of the Code.

9. Change in Control: In the event of a Change in Control, the vesting of the Shares subject to your Award will accelerate in full immediately upon such Change in Control.

Annex C: Page 3

10. Securities Law Compliance: No Shares will be issued pursuant to your Award if such issuance would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system on which the Common Stock may then be listed. In addition, no Shares will be issued unless:

(a) a registration statement under the Securities Act is in effect at that time with respect to the Shares to be issued; or

(b) in the opinion of legal counsel to the Company, those Shares may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance of any Shares hereunder shall relieve the Company of any liability in respect of the failure to issue such Shares as to which such requisite authority shall not have been obtained. As a condition to the issuance of any Shares, the Company may require you to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

Notwithstanding the foregoing, in the event that the Company delays a distribution or payment in settlement of the Award because it reasonably determines that the issuance of shares of Common Stock in settlement of the Award will violate Federal securities laws or other applicable law, such distribution or payment shall be made at the earliest date at which the Company reasonably determines that the making of such distribution or payment will not cause such violation, as required by Treasury Regulation Section 1.409A-2(b)(7)(ii). The Company shall not delay any payment if such delay will result in a violation of Section 409A of the Code.

11. Notice: Any notice or other communication to be given under or in connection with this Agreement or the Plan shall be given in writing and shall be deemed effectively given on receipt or, in the case of notices from the Company to you, five days after deposit in the United States mail, postage prepaid, addressed to you at the address specified below or at such other address as you may hereafter designate by notice to the Company.

12. Remaining Terms: The remaining terms and conditions of your Award are governed by the Plan, and your Award is also subject to all interpretations, amendments, rules and regulations which may from time to time be adopted under the Plan. Along with this Agreement, you also received a copy of the official prospectus summarizing the principal features of the Plan. Please review the plan prospectus carefully so that you fully understand your rights and benefits under your Award and the limitations, restrictions and vesting provisions applicable to the Award. In the event of any conflict between the provisions of this Agreement and those of the Plan, the provisions of the Plan shall be controlling.

13. Limitations: Nothing in this Agreement or the Plan shall confer on you or any other person:

(a) Any rights or claims under the Plan except in accordance with the provisions of the Plan and the applicable Award agreement;

(b) Any right with respect to continuation of employment or a consulting or directorship arrangement with the Company or any Subsidiary, nor shall they interfere in any way with the right of the Company or any Subsidiary that employs you or engages you as a consultant or director to terminate your employment or consulting or directorship arrangement at any time, with or without cause;

(c) Any right to be selected to participate in the Plan or to be granted an Award; or

(d) Any right to receive any bonus, whether payable in cash or in Common Stock, or in any combination

Annex C: Page 4

thereof, from the Company or its Subsidiaries, nor be construed as limiting in any way the right of the Company or its Subsidiaries to determine, in its sole discretion, whether or not it shall pay any employee, consultant or director bonuses, and, if so paid, the amount thereof and the manner of such payment.

14. Section 409A: Notwithstanding anything contained herein to the contrary, this Award agreement is intended to comply with the requirements of Sections 409A(a)(2), (3) and (4) of the Code and the Treasury Regulations and other guidance issued by the Secretary of the Treasury thereunder and this Award and the Plan shall be interpreted in a manner consistent with such intent. To the extent permitted by such Treasury Regulations or other guidance, this Award agreement may be amended to conform to the requirements of Section 409A of the Code.

WASTE CONNECTIONS, INC.
BY:	TITLE: Chairman and Chief Executive Officer

Annex C: Page 5

ACKNOWLEDGMENT

I hereby acknowledge and accept the foregoing terms and conditions of the restricted stock unit award evidenced hereby. I further acknowledge and agree that the foregoing sets forth the entire understanding between the Company and me regarding my entitlement to receive the shares of the Company’s common stock subject to such award and supersedes all prior oral and written agreements on that subject.

SIGNATURE:                                                             

PRINTED NAME:                                                     

DATE:                                         , 20    

KEEP THIS PAGE FOR YOUR RECORDS.

Annex C: Page 6

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHAIRMAN AND CHIEF EXECUTIVE OFFICER

I, Ronald J. Mittelstaedt, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Waste Connections, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 22, 2011

/s/ Ronald J. Mittelstaedt  

Ronald J. Mittelstaedt 

Chairman and Chief Executive Officer 

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Worthing F. Jackman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Waste Connections, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 22, 2011

/s/ Worthing F. Jackman  

Worthing F. Jackman 

Executive Vice President and
Chief Financial Officer 

EX-32.1

Exhibit 32.1

CERTIFICATE OF CHIEF EXECUTIVE OFFICER AND
CHIEF FINANCIAL OFFICER

The undersigned, Ronald J. Mittelstaedt and Worthing F. Jackman, being the duly elected and acting Chief Executive Officer and Chief Financial Officer, respectively, of Waste Connections, Inc., a Delaware corporation (the “Company”), hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the quarterly report of the Company on Form 10-Q for the three months ended June 30, 2011, fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended, and that information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 22, 2011	By:	/s/ Ronald J. Mittelstaedt
		Ronald J. Mittelstaedt
		Chief Executive Officer
Date: July 22, 2011	By:	/s/ Worthing F. Jackman
		Worthing F. Jackman
		Executive Vice President and Chief Financial Officer

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Document and Entity Information (USD $)	6 Months Ended
	Jun. 30, 2011	Jul. 14, 2011	Jun. 30, 2010
Document and Entity Information [Abstract]
Entity Registrant Name	WASTE CONNECTIONS, INC.
Entity Central Index Key	0001057058
Document Type	10-Q
Document Period End Date	Jun. 30, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 2,682,761,147
Entity Common Stock, Shares Outstanding		113,034,161

XML



Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2011

Fair Value of Financial Instruments and Fair Value Measurements [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

4. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments consist primarily of cash and equivalents, trade receivables, restricted assets, trade payables, debt instruments, interest rate swaps and fuel hedges. As of June 30, 2011 and December 31, 2010, the carrying values of cash, trade receivables, restricted assets, and trade payables are considered to be representative of their respective fair values. The carrying values of the Company’s debt instruments, excluding certain notes as listed in the table below, approximate their fair values as of June 30, 2011 and December 31, 2010, based on current borrowing rates for similar types of borrowing arrangements. The carrying values and fair values of the Company’s debt instruments where the carrying values do not approximate their fair values as of June 30, 2011 and December 31, 2010, are as follows:

	Carrying Value at				Fair Value* at
	June 30,		December 31,		June 30,		December 31,
	2011		2010		2011		2010
6.22% Senior Notes due 2015	$	175,000	$	175,000	$	194,548	$	198,300
3.30% Senior Notes due 2016	$	100,000	$	—	$	100,698	$	—
4.00% Senior Notes due 2018	$	50,000	$	—	$	50,285	$	—
5.25% Senior Notes due 2019	$	175,000	$	175,000	$	188,598	$	191,316
4.64% Senior Notes due 2021	$	100,000	$	—	$	100,359	$	—

* Fair value based on quotes of bonds with similar ratings in similar industries

For details on the fair value of the Company’s interest rate swaps and fuel hedges, refer to Note 12.

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Landfill Accounting

6 Months Ended

Jun. 30, 2011

Landfill Accounting [Abstract]

LANDFILL ACCOUNTING

5. LANDFILL ACCOUNTING

At June 30, 2011, the Company owned 35 landfills, and operated, but did not own, four landfills under life-of-site operating agreements and five landfills under limited-term operating agreements. The Company’s landfills had site costs with a net book value of $743,189 at June 30, 2011. With the exception of two owned landfills that only accept construction and demolition and other non-putrescible waste, all landfills that the Company owns or operates are municipal solid waste landfills. For the Company’s landfills operated under limited-term operating agreements and life-of-site operating agreements, the owner of the property (generally a municipality) usually owns the permit and the Company operates the landfill for a contracted term. Where the contracted term is not the life of the landfill, the property owner is generally responsible for final capping, closure and post-closure obligations. The Company is responsible for all final capping, closure and post-closure liabilities at three of the four landfills that it operates under life-of-site operating agreements.

The Company’s internal and third-party engineers perform surveys at least annually to estimate the remaining disposal capacity at its landfills. Many of the Company’s existing landfills have the potential for expanded disposal capacity beyond the amount currently permitted. The Company’s landfill depletion rates are based on the remaining disposal capacity, considering both permitted and probable expansion airspace, at the landfills it owns, and certain landfills it operates, but does not own, under life-of-site agreements. Expansion airspace consists of additional disposal capacity being pursued through means of an expansion that is not actually permitted. Expansion airspace that meets certain criteria is included in the estimate of total landfill airspace. The Company’s landfill depletion rates are based on the terms of the operating agreements at its operated landfills that have capitalized expenditures.

Based on remaining permitted capacity as of June 30, 2011, and projected annual disposal volumes, the average remaining landfill life for the Company’s owned landfills and landfills operated under life-of-site operating agreements is estimated to be approximately 40 years. As of June 30, 2011, the Company is seeking to expand permitted capacity at seven of its owned landfills and one landfill that it operates under a life-of-site operating agreement, and considers the achievement of these expansions to be probable. Although the Company cannot be certain that all future expansions will be permitted as designed, the average remaining life, when considering remaining permitted capacity, probable expansion capacity and projected annual disposal volume, of the Company’s owned landfills and landfills operated under life-of-site operating agreements is 50 years, with lives ranging from 1 to 189 years.

During the six months ended June 30, 2011 and 2010, the Company expensed $19,552 and $18,590, respectively, or an average of $2.94 and $3.04 per ton consumed, respectively, related to landfill depletion at owned landfills and landfills operated under life-of-site agreements.

The Company reserves for final capping, closure and post-closure maintenance obligations at the landfills it owns and landfills it operates under life-of-site operating agreements. The Company calculates the net present value of its final capping, closure and post-closure commitments by estimating the total obligation in current dollars, inflating the obligation based upon the expected date of the expenditure and discounting the inflated total to its present value using a credit-adjusted risk-free rate. Any changes in expectations that result in an upward revision to the estimated undiscounted cash flows are treated as a new liability and are inflated and discounted at rates reflecting current market conditions. Any changes in expectations that result in a downward revision (or no revision) to the estimated undiscounted cash flows result in a liability that is inflated and discounted at rates reflecting the market conditions at the time the cash flows were originally estimated. This policy results in the Company’s capping, closure and post-closure liabilities being recorded in “layers.” At January 1, 2011, the Company decreased its discount rate assumption for purposes of computing 2011 “layers” for final capping, closure and post-closure obligations from 6.5% to 5.75%, in order to reflect the Company’s long-term cost of borrowing as of the end of 2010. The Company’s inflation rate assumption is 2.5% for the years ending December 31, 2010 and 2011. The resulting final capping, closure and post-closure obligations are recorded on the balance sheet along with an offsetting addition to site costs which is amortized to depletion expense as the landfills’ airspace is consumed. Interest is accreted on the recorded liability using the corresponding discount rate. During the six months ended June 30, 2011 and 2010, the Company expensed $967 and $880, respectively, or an average of $0.15 and $0.14 per ton consumed, respectively, related to final capping, closure and post-closure accretion expense.

The following is a reconciliation of the Company’s final capping, closure and post-closure liability balance from December 31, 2010 to June 30, 2011:

Final capping, closure and post-closure liability at December 31, 2010	$	28,537
Adjustments to final capping, closure and post-closure liabilities		(1,281	)
Liabilities incurred		1,029
Accretion expense		967
Closure payments		(354	)
Final capping, closure and post-closure liability at June 30, 2011	$	28,898

The adjustments to final capping, closure and post-closure liabilities primarily consisted of an increase in estimated airspace at one of the Company’s landfills at which an expansion is being pursued. The Company performs its annual review of its cost and capacity estimates in the first quarter of each year.

At June 30, 2011, $25,839 of the Company’s restricted assets balance was for purposes of securing its performance of future final capping, closure and post-closure obligations.

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Long-Term Debt

6 Months Ended

Jun. 30, 2011

Long-Term Debt [Abstract]

LONG-TERM DEBT

6. LONG-TERM DEBT

Long-term debt consists of the following:

	June 30,			December 31,
	2011			2010
Revolver under credit facility, bearing interest ranging from 0.81% to 3.25%*	$	487,500		$	511,000
2015 Notes, bearing interest at 6.22%		175,000			175,000
2016 Notes, bearing interest at 3.30%		100,000			—
2018 Notes, bearing interest at 4.00%		50,000			—
2019 Notes, bearing interest at 5.25%		175,000			175,000
2021 Notes, bearing interest at 4.64%		100,000			—
Tax-exempt bonds, bearing interest ranging from 0.10% to 0.42%*		39,345			39,420
Notes payable to sellers in connection with acquisitions, bearing interest at 2.50% to 10.35%*		8,874			9,159
Notes payable to third parties, bearing interest at 6.7% to 10.9%*		2,950			3,056
		1,138,669			912,635
Less — current portion		(2,693	)		(2,657	)
	$	1,135,976		$	909,978

* Interest rates in the table above represent the range of interest rates incurred during the six month period ended June 30, 2011.

On April 1, 2011, the Company entered into a Second Supplement to Master Note Purchase Agreement with certain accredited institutional investors (the “Second Supplement”), pursuant to which the Company issued and sold to the investors on that date $250,000 of senior uncollateralized notes at fixed interest rates with interest payable in arrears semi-annually on October 1 and April 1 beginning on October 1, 2011 in a private placement. Of these notes, $100,000 will mature on April 1, 2016 with an annual interest rate of 3.30% (the “2016 Notes”), $50,000 will mature on April 1, 2018 with an annual interest rate of 4.00% (the “2018 Notes”), and $100,000 will mature on April 1, 2021 with an annual interest rate of 4.64% (the “2021 Notes”). The 2016 Notes, 2018 Notes and 2021 Notes are uncollateralized obligations and rank equally in right of payment with the 2015 Notes, the 2019 Notes and obligations under the Company’s credit facility. The 2016 Notes, 2018 Notes and 2021 Notes are subject to representations, warranties, covenants and events of default. Upon the occurrence of an event of default, payment of the 2016 Notes, 2018 Notes and 2021 Notes may be accelerated by the holders of the respective notes. The 2016 Notes, 2018 Notes and 2021 Notes may also be prepaid by the Company at any time at par plus a make-whole amount determined in respect of the remaining scheduled interest payments on the respective notes, using a discount rate of the then current market standard for United States treasury bills plus 0.50%. In addition, the Company will be required to offer to prepay the 2016 Notes, 2018 Notes and 2021 Notes upon certain changes in control.

The Company may issue additional series of senior uncollateralized notes pursuant to the terms and conditions of the Master Note Agreement, provided that the purchasers of the outstanding notes, including the 2016 Notes, 2018 Notes and 2021 Notes, shall not have any obligation to purchase any additional notes issued pursuant to the Master Note Agreement and the aggregate principal amount of the outstanding notes and any additional notes issued pursuant to the Master Note Agreement shall not exceed $750,000. The Company currently has $600,000 of Notes outstanding under the Master Note Agreement.

The Company used the proceeds from the sale of the 2016 Notes, 2018 Notes, and 2021 Notes to fund a portion of the purchase price for the acquisition of Hudson Valley Waste Holding, Inc., which is described in Note 7.

On July 11, 2011, the Company and certain of its subsidiaries entered into a new Amended and Restated Credit Agreement (the “new credit agreement”) with Bank of America, N.A. and the other banks and lending institutions party thereto, as lenders, Bank of America, N.A., as administrative agent, and J.P. Morgan Chase Bank, N.A. and Wells Fargo Bank, National Association, as co-syndication agents.

The Company’s new credit agreement is comprised of a $1,200,000 revolving credit facility which matures on July 11, 2016. The Company has the ability under the new credit agreement to increase commitments under the revolving credit facility from $1,200,000 to $1,500,000, subject to conditions including that no default, as defined in the new credit agreement, has occurred, although no existing lender has any obligation to increase its commitment. The Company used proceeds from the new credit agreement in order to refinance its previous $845,000 credit facility, which had a maturity of September 27, 2012.

Under the new credit agreement, there is no maximum amount of standby letters of credit that can be issued; however, the issuance of standby letters of credit reduces the amount of total borrowings available. The new credit agreement requires the Company to pay a commitment fee ranging from 0.200% per annum to 0.350% per annum of the unused portion of the facility. The borrowings under the new credit agreement bear interest, at the Company’s option, at either the base rate plus the applicable base rate margin on base rate loans, or the LIBOR rate plus the applicable LIBOR margin on LIBOR loans. The base rate for any day is a fluctuating rate per annum equal to the highest of: (1) the federal funds rate plus one half of one percent (0.500%); (2) the LIBOR rate plus one percent (1.000%), and (3) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.” The LIBOR rate is determined by the administrative agent pursuant to a formula in the new credit agreement. The applicable margins under the new credit agreement vary depending on the Company’s leverage ratio, as defined in the credit agreement, and range from 1.150% per annum to 2.000% per annum for LIBOR loans and 0.150% per annum to 1.000% per annum for base rate loans. The interest rate applicable under the new credit agreement is currently the LIBOR rate plus 1.400% per annum, a 0.775% per annum increase in the corresponding interest rate under the Company’s previous credit facility. The borrowings under the new credit agreement are not collateralized.

The new credit agreement contains representations and warranties and places certain business, financial and operating restrictions on the Company relating to, among other things, indebtedness, liens and other encumbrances, investments, mergers and acquisitions, asset sales, sale and leaseback transactions, and dividends, distributions and redemptions of capital stock. The new credit agreement requires that the Company maintain specified financial ratios. The Company expects to use the new credit agreement for acquisitions, capital expenditures, working capital, standby letters of credit and general corporate purposes.

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Acquisitions

6 Months Ended

Jun. 30, 2011

Acquisitions [Abstract]

ACQUISITIONS

7. ACQUISITIONS

On April 1, 2011, the Company completed the acquisition of a 100% interest in Hudson Valley Waste Holding, Inc., and its wholly-owned subsidiary, County Waste and Recycling Service, Inc. (collectively, “County Waste”). As part of this acquisition, the Company acquired a 50% interest in Russell Sweepers, LLC, a provider of sweeper services, resulting in a 50% noncontrolling interest that was recognized at fair value on the purchase date. The operations include six collection operations, three transfer stations and one recycling facility across six markets: Orange County, New York; Greater Albany, New York; Springfield, Massachusetts; Fulton County, New York; Warrant and Washington Counties, New York; and Greene, Columbia and Ulster Counties, New York. The Company paid $299,000 for the purchased operations plus amounts paid for the purchase of accounts receivable and other prepaid assets and estimated working capital, which amounts are subject to post-closing adjustments. No other consideration, including contingent consideration, was transferred by the Company to acquire these operations. Total revenues for the three months ended June 30, 2011, generated from the County Waste operations and included within consolidated revenues were $31,655. Total pre-tax earnings for the three months ended June 30, 2011, generated from the County Waste operations and included within consolidated income before income taxes were $3,063. In addition to the County Waste acquisition, the Company acquired five individually immaterial non-hazardous solid waste collection businesses during the six months ended June 30, 2011. During the six months ended June 30, 2010, the Company acquired 10 individually immaterial non-hazardous solid waste collection and recycling businesses. The acquisitions completed during the six months ended June 30, 2011 and 2010, were not material to the Company’s results of operations, either individually or in the aggregate. As a result, pro forma financial information has not been provided. The results of operations of the acquired businesses have been included in the Company’s consolidated financial statements from their respective acquisition dates. The Company expects these acquired businesses to contribute towards the achievement of the Company’s strategy to expand through acquisitions.

The following table summarizes the consideration transferred to acquire these businesses and the amounts of identified assets acquired, liabilities assumed and noncontrolling interests associated with businesses acquired at the acquisition date for acquisitions consummated in the six months ended June 30, 2011 and 2010:

	2011			2010
	Acquisitions			Acquisitions
Fair value of consideration transferred:
Cash	$	215,962		$	3,849
Debt assumed*		84,737			281
		300,699			4,130
Recognized amounts of identifiable assets acquired, liabilities assumed and noncontrolling interests associated with businesses acquired:
Accounts receivable		8,801			468
Other current assets		940			157
Property and equipment		52,428			802
Long-term franchise agreements and contracts		2,608			175
Customer lists		40,793			851
Indefinite-lived intangibles		41,215			—
Accounts payable		(6,218	)		—
Accrued liabilities		(1,143	)		(527	)
Noncontrolling interests		(208	)		—
Deferred revenue		(5,231	)		(50	)
Deferred taxes		(10,257	)		—
Total identifiable net assets		123,728			1,876
Goodwill	$	176,971		$	2,254

* Debt paid at close of acquisition.

The goodwill is attributable to the synergies and ancillary growth opportunities expected to arise after the Company’s acquisition of these businesses. Goodwill acquired during the six months ended June 30, 2011 and 2010 totalling $11,947 and $2,254, respectively, is expected to be deductible for tax purposes.

The fair value of acquired working capital related to five acquisitions completed during the last 12 months is provisional pending receipt of information from the acquiree to support the fair value of the assets acquired and liabilities assumed. Any adjustments recorded relating to finalizing the working capital for these five acquisitions are not expected to be material to the Company’s financial position.

The gross amount of trade receivables due under contracts acquired during the period ended June 30, 2011, is $9,461, of which $660 is expected to be uncollectible. The gross amount of trade receivables due under contracts acquired during the period ended June 30, 2010, is $474, of which $6 is expected to be uncollectible. The Company did not acquire any other class of receivable as a result of the acquisition of these businesses.

A reconciliation of the Fair value of consideration transferred, as disclosed in the table above, to Payments for acquisitions, net of cash acquired, as reported in the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2011 and 2010, is as follows:

	2011		2010
	Acquisitions		Acquisitions
Cash consideration transferred	$	215,962	$	3,849
Payment of contingent consideration		100		—
Payments for acquisitions, net of cash acquired	$	216,062	$	3,849

During the six month periods ended June 30, 2011 and 2010, the Company incurred $1,094 and $395, respectively, of acquisition-related costs. These expenses are included in Selling, general and administrative expenses in the Company’s Condensed Consolidated Statements of Income.

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Intangible Assets

6 Months Ended

Jun. 30, 2011

Intangible Assets [Abstract]

INTANGIBLE ASSETS

8. INTANGIBLE ASSETS

Intangible assets, exclusive of goodwill, consisted of the following at June 30, 2011:

	Gross Carrying		Accumulated			Net Carrying
	Amount		Amortization			Amount
Amortizable intangible assets:
Long-term franchise agreements and contracts	$	192,334	$	(28,926	)	$	163,408
Customer lists		103,677		(23,151	)		80,526
Non-competition agreements		9,414		(6,205	)		3,209
Other		21,236		(2,672	)		18,564
		326,661		(60,954	)		265,707
Nonamortized intangible assets:
Indefinite-lived intangible assets		190,134		—			190,134
Intangible assets, exclusive of goodwill	$	516,795	$	(60,954	)	$	455,841

The weighted-average amortization period of long-term franchise agreements and contracts acquired during the six months ended June 30, 2011 was 25.8 years. The weighted-average amortization period of customer lists acquired during the six months ended June 30, 2011 was 7.0 years.

Intangible assets, exclusive of goodwill, consisted of the following at December 31, 2010:

	Gross Carrying		Accumulated			Net Carrying
	Amount		Amortization			Amount
Amortizable intangible assets:
Long-term franchise agreements and contracts	$	190,489	$	(25,255	)	$	165,234
Customer lists		62,885		(17,867	)		45,018
Non-competition agreements		9,414		(5,982	)		3,432
Other		21,236		(2,364	)		18,872
		284,024		(51,468	)		232,556
Nonamortized intangible assets:
Indefinite-lived intangible assets		148,919		—			148,919
Intangible assets, exclusive of goodwill	$	432,943	$	(51,468	)	$	381,475

The weighted-average amortization period of long-term franchise agreements and contracts acquired during the year ended December 31, 2010 was 9.1 years. The weighted-average amortization period of customer lists acquired during the year ended December 31, 2010 was 6.4 years.

Estimated future amortization expense for the next five years of amortizable intangible assets is as follows:

For the year ending December 31, 2011	$	20,801
For the year ending December 31, 2012	$	21,879
For the year ending December 31, 2013	$	20,311
For the year ending December 31, 2014	$	19,579
For the year ending December 31, 2015	$	18,978

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Segment Reporting

6 Months Ended

Jun. 30, 2011

Segment Reporting [Abstract]

SEGMENT REPORTING

9. SEGMENT REPORTING

The Company’s revenues are derived from one industry segment, which includes the collection, transfer, recycling and disposal of non-hazardous solid waste. No single contract or customer accounted for more than 10% of the Company’s total revenues at the consolidated or reportable segment level during the periods presented.

The Company manages its operations through three geographic operating segments, which are also the Company’s reportable segments. Each operating segment is responsible for managing several vertically integrated operations, which are comprised of districts. In April 2011, as a result of the County Waste acquisition described in Note 7, the Company realigned its reporting structure and changed its three geographic operating segments from Western, Central and Southern to Western, Central and Eastern. As part of this realignment, the states of Arizona, Louisiana, New Mexico and Texas, which were previously part of the Southern region, are now included in the Central region. Also as part of this realignment, the state of Michigan, which was previously part of the Central region, is now included in the Eastern region (previously referred to as the Southern region). Additionally, the states of New York and Massachusetts, which the Company now operates in as a result of the County Waste acquisition, are included in the Eastern region. The segment information presented herein reflects the realignment of these districts. Under the current orientation, the Company’s Western Region is comprised of operating locations in California, Idaho, Montana, Nevada, Oregon, Washington and western Wyoming; the Company’s Central Region is comprised of operating locations in Arizona, Colorado, Kansas, Louisiana, Minnesota, Nebraska, New Mexico, Oklahoma, South Dakota, Texas, Utah and eastern Wyoming; and the Company’s Eastern Region is comprised of operating locations in Alabama, Illinois, Iowa, Kentucky, Massachusetts, Michigan, Mississippi, New York, North Carolina, South Carolina and Tennessee.

The Company’s Chief Operating Decision Maker (“CODM”) evaluates operating segment profitability and determines resource allocations based on operating income before depreciation, amortization and gain (loss) on disposal of assets. Operating income before depreciation, amortization and gain (loss) on disposal of assets is not a measure of operating income, operating performance or liquidity under GAAP and may not be comparable to similarly titled measures reported by other companies. The Company’s management uses operating income before depreciation, amortization and gain (loss) on disposal of assets in the evaluation of segment operating performance as it is a profit measure that is generally within the control of the operating segments. A reconciliation of operating income before depreciation, amortization and gain (loss) on disposal of assets to income before income tax provision is included at the end of this Note 9.

Summarized financial information concerning the Company’s reportable segments for the three and six months ended June 30, 2011 and 2010, is shown in the following tables:

								Operating Income
								Before Depreciation,
Three Months								Amortization and
Ended	Gross		Intercompany			Net		Gain (Loss) on
June 30, 2011	Revenues		Revenues(b)			Revenues		Disposal of Assets(c)
Western	$	213,162	$	(25,611	)	$	187,551	$	57,835
Central		124,004		(13,489	)		110,515		39,662
Eastern		110,054		(17,936	)		92,118		26,713
Corporate(a)		—		—			—		2,933
	$	447,220	$	(57,036	)	$	390,184	$	127,143

								Operating Income
								Before Depreciation,
Three Months								Amortization and
Ended	Gross		Intercompany			Net		Gain (Loss) on
June 30, 2010	Revenues		Revenues(b)			Revenues		Disposal of Assets(c)
Western	$	199,335	$	(23,373	)	$	175,962	$	53,792
Central		110,289		(13,307	)		96,982		32,860
Eastern		71,022		(13,489	)		57,533		18,309
Corporate(a)		—		—			—		1,817
	$	380,646	$	(50,169	)	$	330,477	$	106,778

								Operating Income
								Before Depreciation,
Six Months								Amortization and
Ended	Gross		Intercompany			Net		Gain (Loss) on
June 30, 2011	Revenues		Revenues(b)			Revenues		Disposal of Assets(c)
Western	$	410,628	$	(48,511	)	$	362,117	$	112,288
Central		235,963		(25,051	)		210,912		75,086
Eastern		179,769		(31,146	)		148,623		43,677
Corporate(a)		—		—			—		1,656
	$	826,360	$	(104,708	)	$	721,652	$	232,707

								Operating Income
								Before Depreciation,
Six Months								Amortization and
Ended	Gross		Intercompany			Net		Gain (Loss) on
June 30, 2010	Revenues		Revenues(b)			Revenues		Disposal of Assets(c)
Western	$	387,849	$	(44,885	)	$	342,964	$	104,238
Central		208,928		(24,215	)		184,713		61,003
Eastern		135,938		(25,597	)		110,341		34,694
Corporate(a)		—		—			—		1,736
	$	732,715	$	(94,697	)	$	638,018	$	201,671

(a)	Corporate functions include accounting, legal, tax, treasury, information technology, risk management, human resources, training and other administrative functions.
(b)	Intercompany revenues reflect each segment’s total intercompany sales, including intercompany sales within a segment and between segments. Transactions within and between segments are generally made on a basis intended to reflect the market value of the service.
(c)	For those items included in the determination of operating income before depreciation, amortization and gain (loss) on disposal of assets, the accounting policies of the segments are the same as those described in the Company’s most recent Annual Report on Form 10-K.

Total assets for each of the Company’s reportable segments at June 30, 2011 and December 31, 2010, based on region alignments as of those dates, were as follows:

	June 30,		December 31,
	2011		2010
Western	$	1,364,307	$	1,378,920
Central		1,024,309		654,854
Eastern		767,484		818,648
Corporate		57,788		63,562
Total Assets	$	3,213,888	$	2,915,984

The following tables show changes in goodwill during the six months ended June 30, 2011 and 2010, by reportable segment:

	Western		Central		Eastern			Total
Balance as of December 31, 2010	$	313,038	$	305,774	$	309,040		$	927,852
Goodwill transferred		—		111,806		(111,806	)		—
Goodwill acquired		—		1,366		175,605			176,971
Goodwill divested		—		—		—			—
Balance as of June 30, 2011	$	313,038	$	418,946	$	372,839		$	1,104,823

	Western		Central			Eastern			Total
Balance as of December 31, 2009	$	291,781	$	313,366		$	301,563		$	906,710
Goodwill transferred		20,295		(20,295	)		—			—
Goodwill acquired		682		1,523			49			2,254
Goodwill divested		—		(64	)		(1,111	)		(1,175	)
Balance as of June 30, 2010	$	312,758	$	294,530		$	300,501		$	907,789

During the first quarter of 2010, the Company realigned certain of the Company’s districts between operating segments. This realignment resulted in the reallocation of goodwill among its segments which is reflected in the “Goodwill transferred” line item in the above table.

The Company has no accumulated impairment losses associated with goodwill.

A reconciliation of the Company’s primary measure of segment profitability (operating income before depreciation, amortization and gain (loss) on disposal of assets for reportable segments) to Income before income tax provision in the Condensed Consolidated Statements of Income is as follows:

	Three months ended						Six months ended
	June 30,						June 30,
	2011			2010			2011			2010
Operating income before depreciation, amortization and gain (loss) on disposal of assets	$	127,143		$	106,778		$	232,707		$	201,671
Depreciation		(36,939	)		(33,464	)		(69,975	)		(64,908	)
Amortization of intangibles		(5,673	)		(3,598	)		(9,650	)		(7,184	)
Gain (loss) on disposal of assets		267			(365	)		292			(622	)
Interest expense		(11,087	)		(9,161	)		(19,920	)		(21,423	)
Interest income		143			165			276			318
Loss on extinguishment of debt		—			(9,734	)		—			(10,193	)
Other income (expense), net		(245	)		(169	)		149			469
Income before income tax provision	$	73,609		$	50,452		$	133,879		$	98,128

The following table shows, for the periods indicated, the Company’s total reported revenues by service line and with intercompany eliminations:

	Three months ended						Six months ended
	June 30,						June 30,
	2011			2010			2011			2010
Collection	$	275,170		$	238,108		$	514,607		$	467,178
Disposal and transfer		133,722			116,217			243,282			216,917
Intermodal, recycling and other		38,328			26,321			68,471			48,620
		447,220			380,646			826,360			732,715
Less: intercompany elimination		(57,036	)		(50,169	)		(104,708	)		(94,697	)
Total revenues	$	390,184		$	330,477		$	721,652		$	638,018

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2011

Derivative Financial Instruments [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

10. DERIVATIVE FINANCIAL INSTRUMENTS

The Company recognizes all derivatives on the balance sheet at fair value. All of the Company’s derivatives have been designated as cash flow hedges; therefore, the effective portion of the changes in the fair value of derivatives will be recognized in accumulated other comprehensive loss until the hedged item is recognized in earnings. The ineffective portion of the changes in the fair value of derivatives will be immediately recognized in earnings. The Company classifies cash inflows and outflows from derivatives within operating activities in the Condensed Consolidated Statements of Cash Flows.

One of the Company’s objectives for utilizing derivative instruments is to reduce its exposure to fluctuations in cash flows due to changes in the variable interest rates of certain borrowings issued under its credit facility. The Company’s strategy to achieve that objective involves entering into interest rate swaps that are specifically designated to the Company’s credit facility and accounted for as cash flow hedges.

At June 30, 2011, the Company’s derivative instruments included one interest rate swap agreement as follows:

			Fixed			Variable
	Notional		Interest			Interest Rate
Date Entered	Amount		Rate Paid*			Received	Effective Date	Expiration Date
March 2009	$	175,000		2.85	%	1-month LIBOR	February 2011	February 2014

* Plus applicable margin.

Another of the Company’s objectives for utilizing derivative instruments is to reduce its exposure to fluctuations in cash flows due to changes in the price of diesel fuel. The Company’s strategy to achieve that objective involves entering into fuel hedges that are specifically designated to certain forecasted diesel fuel purchases and accounted for as cash flow hedges.

At June 30, 2011, the Company’s derivative instruments included two fuel hedge agreements as follows:

			Diesel
			Rate
	Notional		Paid
	Amount		Fixed
	(in gallons		(per		Diesel Rate Received		Expiration
Date Entered	per month)		gallon)		Variable	Effective Date	Date
December 2008		400,000	$	2.950	DOE Diesel Fuel Index*	January 2011	December 2011
December 2008		400,000	$	3.030	DOE Diesel Fuel Index*	January 2012	December 2012

* If the national U.S. on-highway average price for a gallon of diesel fuel (“average price”), as published by the Department of Energy, exceeds the contract price per gallon, the Company receives the difference between the average price and the contract price (multiplied by the notional number of gallons) from the counterparty. If the average price is less than the contract price per gallon, the Company pays the difference to the counterparty.

The fair values of derivative instruments designated as cash flow hedges as of June 30, 2011, are as follows:

Derivatives Designated as Cash	Asset Derivatives			Liability Derivatives
Flow Hedges	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Interest rate swaps		$		Accrued liabilities(a)	$	(4,352	)
				Other long-term liabilities		(4,518	)
Fuel hedges	Prepaid expenses and other current assets(b)		4,429
	Other assets, net		2,137
Total derivatives designated as cash flow hedges		$	6,566		$	(8,870	)

(a)	Represents the estimated amount of the existing unrealized losses on interest rate swaps as of June 30, 2011 (based on the interest rate yield curve at that date), included in accumulated other comprehensive loss expected to be reclassified into pre-tax earnings within the next 12 months. The actual amounts reclassified into earnings are dependent on future movements in interest rates.
(b)	Represents the estimated amount of the existing unrealized gains on fuel hedges as of June 30, 2011 (based on the forward DOE diesel fuel index curve at that date), included in accumulated other comprehensive loss expected to be reclassified into pre-tax earnings within the next 12 months. The actual amounts reclassified into earnings are dependent on future movements in diesel fuel prices.

The fair values of derivative instruments designated as cash flow hedges as of December 31, 2010, are as follows:

Derivatives Designated as Cash	Asset Derivatives			Liability Derivatives
Flow Hedges	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Interest rate swaps				Accrued liabilities	$	(4,988	)
				Other long-term liabilities		(4,734	)
Fuel hedges	Prepaid expenses and other current assets	$	2,469
	Other assets, net		2,261
Total derivatives designated as cash flow hedges		$	4,730		$	(9,722	)

The following tables summarizes the impact of the Company’s cash flow hedges on the results of operations, comprehensive income and accumulated other comprehensive loss (“AOCL”) as of and for the three and six months ended June 30, 2011 and 2010:

Derivatives	Amount of Gain or (Loss) Recognized in AOCL on							Amount of (Gain) or Loss Reclassified from AOCL into
Designated as Cash	Derivatives,						Statement of Income	Earnings, Net of Tax (Effective
Flow Hedges	Net of Tax (Effective Portion)(a)						Classification	Portion) (b),(c)
	Three Months Ended June 30,							Three Months Ended June 30,
	2011			2010				2011			2010
Interest rate swaps	$	(1,655	)	$	(3,080	)	Interest expense	$	985		$	1,431
Fuel hedges		(449	)		(1,269	)	Cost of operations		(792	)		257
Total	$	(2,104	)	$	(4,349	)		$	193		$	1,688

	Amount of Gain or (Loss)							Amount of (Gain) or Loss
Derivatives	Recognized in AOCL on							Reclassified from AOCL into
Designated as Cash	Derivatives,						Statement of Income	Earnings, Net of Tax (Effective
Flow Hedges	Net of Tax (Effective Portion)(a)						Classification	Portion) (b),(c)
	Six Months Ended June 30,							Six Months Ended June 30,
	2011			2010				2011			2010
Interest rate swaps	$	(1,614	)	$	(5,435	)	Interest expense	$	2,142		$	2,869
Fuel hedges		2,433			(1,919	)	Cost of operations		(1,294	)		1,441
Total	$	819		$	(7,354	)		$	848		$	4,310

(a)	In accordance with the derivatives and hedging guidance, the effective portions of the changes in fair values of interest rate swaps and fuel hedges have been recorded in equity as a component of AOCL. As the critical terms of the interest rate swaps match the underlying debt being hedged, no ineffectiveness is recognized on these swaps and, therefore, all unrealized changes in fair value are recorded in AOCL. Because changes in the actual price of diesel fuel and changes in the DOE index price do not offset exactly each reporting period, the Company assesses whether the fuel hedges are highly effective using the cumulative dollar offset approach.
(b)	Amounts reclassified from AOCL into earnings related to realized gains and losses on interest rate swaps are recognized when interest payments or receipts occur related to the swap contracts, which correspond to when interest payments are made on the Company’s hedged debt.
(c)	Amounts reclassified from AOCL into earnings related to realized gains and losses on fuel hedges are recognized when settlement payments or receipts occur related to the hedge contracts, which correspond to when the underlying fuel is consumed.

The Company measures and records ineffectiveness on the fuel hedges in Cost of operations in the Condensed Consolidated Statements of Income on a monthly basis based on the difference between the DOE index price and the actual price of diesel fuel purchased, multiplied by the notional number of gallons on the contracts. There was no significant ineffectiveness recognized on the fuel hedges during the six months ended June 30, 2011 and 2010.

See Note 13 for further discussion on the impact of the Company’s hedge accounting to its consolidated Comprehensive income and AOCL.

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Net Income Per Share Information

6 Months Ended

Jun. 30, 2011

Net Income Per Share Information [Abstract]

NET INCOME PER SHARE INFORMATION

11. NET INCOME PER SHARE INFORMATION

The following table sets forth the calculation of the numerator and denominator used in the computation of basic and diluted net income per common share attributable to the Company’s common stockholders for the three and six months ended June 30, 2011 and 2010:

	Three months ended				Six months ended
	June 30,				June 30,
	2011		2010		2011		2010
Numerator:
Net income attributable to Waste Connections for basic and diluted earnings per share	$	44,413	$	30,400	$	80,952	$	57,973
Denominator:
Basic shares outstanding		113,509,668		116,243,700		113,514,439		116,401,140
Dilutive effect of stock options and warrants		451,173		924,542		463,899		1,030,239
Dilutive effect of restricted stock		347,869		314,509		376,641		316,173
Diluted shares outstanding		114,308,710		117,482,751		114,354,979		117,747,552

For the three months ended June 30, 2011 and 2010, stock options and warrants to purchase 1,266 and 909 shares of common stock, respectively, were excluded from the computation of diluted earnings per share as they were anti-dilutive. For the six months ended June 30, 2011 and 2010, stock options and warrants to purchase 1,266 and 3,279 shares of common stock, respectively, were excluded from the computation of diluted earnings per share as they were anti-dilutive. The 2026 Notes were not dilutive during the six months ended June 30, 2010. On April 1, 2010, the Company redeemed the aggregate principal amount of its 2026 Notes.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2011

Fair Value of Financial Instruments and Fair Value Measurements [Abstract]

FAIR VALUE MEASUREMENTS

12. FAIR VALUE MEASUREMENTS

The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. These tiers include: Level 1, defined as quoted market prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, model-based valuation techniques for which all significant assumptions are observable in the market, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3, defined as unobservable inputs that are not corroborated by market data.

The Company’s financial assets and liabilities recorded at fair value on a recurring basis include derivative instruments and restricted assets. The Company’s derivative instruments are pay-fixed, receive-variable interest rate swaps and pay-fixed, receive-variable diesel fuel hedges. The Company’s interest rate swaps are recorded at their estimated fair values based on quotes received from financial institutions that trade these contracts. The Company verifies the reasonableness of these quotes using similar quotes from another financial institution as of each date for which financial statements are prepared. The Company uses a discounted cash flow (“DCF”) model to determine the estimated fair values of the diesel fuel hedges. The assumptions used in preparing the DCF model include: (i) estimates for the forward DOE index curve; and (ii) the discount rate based on risk-free interest rates over the term of the agreements. The DOE index curve used in the DCF model was obtained from financial institutions that trade these contracts. For the Company’s interest rate swap and fuel hedges, the Company also considers the Company’s creditworthiness in its determination of the fair value measurement of these instruments in a net liability position and the banks’ creditworthiness in its determination of the fair value measurement of these instruments in a net asset position. The Company’s restricted assets are valued at quoted market prices in active markets for identical assets, which the Company receives from the financial institutions that hold such investments on its behalf. The Company’s restricted assets measured at fair value are invested primarily in U.S. government and agency securities.

The Company’s assets and liabilities measured at fair value on a recurring basis at June 30, 2011 and December 31, 2010, were as follows:

	Fair Value Measurement at June 30, 2011 Using
				Quoted Prices in		Significant
				Active Markets		Other			Significant
				for Identical		Observable			Unobservable
				Assets		Inputs			Inputs
	Total			(Level 1)		(Level 2)			(Level 3)
Interest rate swap derivative instruments — net liability position	$	(8,870	)	$	—	$	(8,870	)	$	—
Fuel hedge derivative instruments — net asset position	$	6,566		$	—	$	—		$	6,566
Restricted assets	$	28,600		$	28,600	$	—		$	—

	Fair Value Measurement at December 31, 2010 Using
				Quoted Prices in		Significant
				Active Markets		Other			Significant
				for Identical		Observable			Unobservable
				Assets		Inputs			Inputs
	Total			(Level 1)		(Level 2)			(Level 3)
Interest rate swap derivative instruments — net liability position	$	(9,722	)	$	—	$	(9,722	)	$	—
Fuel hedge derivative instruments — net asset position	$	4,730		$	—	$	—		$	4,730
Restricted assets	$	30,791		$	30,791	$	—		$	—

During the six months ended June 30, 2011, there were no fair value measurements of assets or liabilities measured at fair value on a nonrecurring basis subsequent to their initial recognition.

The following table summarizes the change in the fair value for Level 3 derivatives for the six months ended June 30, 2011:

	Level 3
	Derivatives
Balance as of December 31, 2010	$	4,730
Realized gains included in earnings		(2,088	)
Unrealized gains included in AOCL		3,924
Balance as of June 30, 2011	$	6,566

The following table summarizes the change in the fair value for Level 3 derivatives for the six months ended June 30, 2010:

	Level 3
	Derivatives
Balance as of December 31, 2009	$	(104	)
Realized losses included in earnings		2,324
Unrealized losses included in AOCL		(3,095	)
Balance as of June 30, 2010	$	(875	)

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Comprehensive Income

6 Months Ended

Jun. 30, 2011

Stockholders' Equity and Comprehensive Income [Abstract]

COMPREHENSIVE INCOME

13. COMPREHENSIVE INCOME

Comprehensive income includes changes in the fair value of interest rate swaps and fuel hedges that qualify for hedge accounting. The components of other comprehensive income (loss) and related tax effects for the three and six month periods ended June 30, 2011 and 2010, are as follows:

	Three months ended June 30, 2011
	Gross			Tax effect			Net of tax
Interest rate swap amounts reclassified into interest expense	$	1,589		$	(604	)	$	985
Fuel hedge amounts reclassified into cost of operations		(1,278	)		486			(792	)
Changes in fair value of interest rate swaps		(2,670	)		1,015			(1,655	)
Changes in fair value of fuel hedges		(724	)		275			(449	)
	$	(3,083	)	$	1,172		$	(1,911	)

	Three months ended June 30, 2010
	Gross			Tax effect			Net of tax
Interest rate swap amounts reclassified into interest expense	$	2,309		$	(878	)	$	1,431
Fuel hedge amounts reclassified into cost of operations		414			(157	)		257
Changes in fair value of interest rate swaps		(4,968	)		1,888			(3,080	)
Changes in fair value of fuel hedges		(2,046	)		777			(1,269	)
	$	(4,291	)	$	1,630		$	(2,661	)

Total comprehensive income for the three months ended June 30, 2011 and 2010 was $42,694 and $27,976, respectively.

	Six months ended June 30, 2011
	Gross			Tax effect			Net of tax
Interest rate swap amounts reclassified into interest expense	$	3,455		$	(1,313	)	$	2,142
Fuel hedge amounts reclassified into cost of operations		(2,088	)		794			(1,294	)
Changes in fair value of interest rate swaps		(2,603	)		989			(1,614	)
Changes in fair value of fuel hedges		3,924			(1,491	)		2,433
	$	2,688		$	(1,021	)	$	1,667

	Six months ended June 30, 2010
	Gross			Tax effect			Net of tax
Interest rate swap amounts reclassified into interest expense	$	4,628		$	(1,759	)	$	2,869
Fuel hedge amounts reclassified into cost of operations		2,324			(883	)		1,441
Changes in fair value of interest rate swaps		(8,791	)		3,356			(5,435	)
Changes in fair value of fuel hedges		(3,095	)		1,176			(1,919	)
	$	(4,934	)	$	1,890		$	(3,044	)

A rollforward of the amounts included in AOCL, net of taxes, is as follows:

							Accumulated
							Other
				Interest			Comprehensive
	Fuel Hedges			Rate Swaps			Loss
Balance at December 31, 2010	$	2,931		$	(6,026	)	$	(3,095	)
Amounts reclassified into earnings		(1,294	)		2,142			848
Change in fair value		2,433			(1,614	)		819
Balance at June 30, 2011	$	4,070		$	(5,498	)	$	(1,428	)

See Note 10 for further discussion on the Company’s derivative instruments.

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Current assets:
Cash and equivalents	$ 16,951	$ 9,873
Accounts receivable, net of allowance for doubtful accounts of $4,728 and $5,084 at June 30, 2011 and December 31, 2010, respectively	174,974	152,156
Deferred income taxes	16,231	20,130
Prepaid expenses and other current assets	28,449	33,402
Total current assets	236,605	215,561
Property and equipment, net	1,361,804	1,337,476
Goodwill	1,104,823	927,852
Intangible assets, net	455,841	381,475
Restricted assets	28,185	30,441
Other assets, net	26,630	23,179
Total Assets	3,213,888	2,915,984
Current liabilities:
Accounts payable	82,293	85,252
Book overdraft	10,478	12,396
Accrued liabilities	105,920	99,075
Deferred revenue	61,720	54,157
Current portion of long-term debt and notes payable	2,693	2,657
Total current liabilities	263,104	253,537
Long-term debt and notes payable	1,135,976	909,978
Other long-term liabilities	50,018	47,637
Deferred income taxes	364,900	334,414
Total liabilities	1,813,998	1,545,566
Commitments and contingencies (Note 15)
Equity:
Preferred stock: $0.01 par value per share; 7,500,000 shares authorized; none issued and outstanding	0	0
Common stock: $0.01 par value per share; 250,000,000 shares authorized; 113,034,132 and 113,950,081 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively	1,130	1,139
Additional paid-in capital	473,142	509,218
Accumulated other comprehensive loss	(1,428)	(3,095)
Retained earnings	922,798	858,887
Total Waste Connections' equity	1,395,642	1,366,149
Noncontrolling interest in subsidiaries	4,248	4,269
Total equity	1,399,890	1,370,418
Total Liabilities And Stockholders' Equity	$ 3,213,888	$ 2,915,984

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Stockholder's Equity

6 Months Ended

Jun. 30, 2011

Stockholders' Equity and Comprehensive Income [Abstract]

STOCKHOLDERS' EQUITY

14. STOCKHOLDERS’ EQUITY

Stock-Based Compensation

A summary of activity related to restricted stock units under the Third Amended and Restated 2004 Equity Incentive Plan, as of December 31, 2010, and changes during the six month period ended June 30, 2011, is presented below:

	Unvested
	Shares
Outstanding at December 31, 2010		1,514,459
Granted		495,560
Forfeited		(22,640	)
Vested		(521,069	)
Outstanding at June 30, 2011		1,466,310

The weighted average grant date fair value per share for the shares of common stock underlying the restricted stock units granted during the six month period ended June 30, 2011 was $29.26. During the six months ended June 30, 2011 and 2010, the Company’s stock-based compensation expense from restricted stock units was $5,929 and $5,492, respectively.

Share Repurchase Program

The Company’s Board of Directors has authorized a common stock repurchase program for the repurchase of up to $800,000 of common stock through December 31, 2012. Under the program, stock repurchases may be made in the open market or in privately negotiated transactions from time to time at management’s discretion. The timing and amounts of any repurchases will depend on many factors, including the Company’s capital structure, the market price of the common stock and overall market conditions. During the six months ended June 30, 2011 and 2010, the Company repurchased 1,460,399 and 3,736,611 shares, respectively, of its common stock under this program at a cost of $42,381 and $83,665, respectively. As of June 30, 2011, the remaining maximum dollar value of shares available for repurchase under the program was approximately $108,993. The Company’s policy related to repurchases of its common stock is to charge any excess of cost over par value entirely to additional paid-in capital.

Stock Split

On October 19, 2010, the Company’s Board of Directors declared a three-for-two split of its common stock, in the form of a 50% stock dividend, payable to stockholders of record as of October 29, 2010. Shares resulting from the split were issued on November 12, 2010. In connection therewith, the Company transferred $394 from retained earnings to common stock, representing the par value of additional shares issued. As a result of the stock split, fractional shares equal to 2,479 whole shares were repurchased for $101. All share and per share amounts for all periods presented have been retroactively adjusted to reflect the stock split.

Cash Dividend

On October 19, 2010, the Company’s Board of Directors declared the initiation of a quarterly cash dividend of $0.075 per share, as adjusted for the three-for-two stock split described above. The initial quarterly cash dividend totaling $8,561 was paid on November 12, 2010. The Company also paid a quarterly cash dividend of $0.075 per share on its common stock, totaling $8,515 and $8,526, on March 1, 2011 and May 20, 2011, respectively. On July 19, 2011, the Company announced that its Board of Directors declared a regular quarterly cash dividend of $0.075 per share on the Company’s common stock. The dividend will be paid on August 17, 2011, to stockholders of record on the close of business on August 3, 2011.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2011

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

15. COMMITMENTS AND CONTINGENCIES

In the normal course of its business and as a result of the extensive governmental regulation of the solid waste industry, the Company is subject to various judicial and administrative proceedings involving federal, state or local agencies. In these proceedings, an agency may seek to impose fines on the Company or to revoke or deny renewal of an operating permit held by the Company. From time to time, the Company may also be subject to actions brought by special interest or other groups, adjacent landowners or residents in connection with the permitting and licensing of landfills and transfer stations, or alleging environmental damage or violations of the permits and licenses pursuant to which the Company operates.

In addition, the Company is a party to various claims and suits pending for alleged damages to persons and property, alleged violations of certain laws and alleged liabilities arising out of matters occurring during the normal operation of the waste management business. Except as noted in the legal cases described below, as of June 30, 2011, there is no current proceeding or litigation involving the Company or its property that the Company believes could have a material adverse impact on its business, financial condition, results of operations or cash flows.

Chaparral, New Mexico Landfill Permit Litigation

The Company’s subsidiary, High Desert Solid Waste Facility, Inc. (formerly known as Rhino Solid Waste, Inc.) (“HDSWF”), owns undeveloped property in Chaparral, New Mexico, for which it sought a permit to operate a municipal solid waste landfill. After a public hearing, the New Mexico Environment Department (the “Department”) approved the permit for the facility on January 30, 2002. Colonias Development Council (“CDC”), a nonprofit organization, opposed the permit at the public hearing and appealed the Department’s decision to the courts of New Mexico, primarily on the grounds that the Department failed to consider the social impact of the landfill on the community of Chaparral, and failed to consider regional planning issues. On July 18, 2005, in Colonias Dev. Council v. Rhino Envtl. Servs., Inc. (In re Rhino Envtl. Servs.), 2005 NMSC 24, 117 P.3d 939, the New Mexico Supreme Court remanded the matter back to the Department to conduct a limited public hearing on certain evidence that CDC claimed was wrongfully excluded from consideration by the hearing officer, and to allow the Department to reconsider the evidence already proffered concerning the impact of the landfill on the surrounding community’s quality of life. In July 2007, the Department, CDC, the Company and Otero County signed a stipulation requesting a postponement of the limited public hearing to allow the Company time to explore a possible relocation of the landfill to a new site. Since 2007, the Department has issued several postponements orders for the limited public hearing, currently scheduled for November 2011, as HDSWF has continued to evaluate the suitability of a new site. In July 2009, HDSWF purchased approximately 325 acres of undeveloped land comprising a proposed new site from the State of New Mexico. HDSWF filed a formal landfill permit application for the new site with the Department on September 17, 2010, and the Department is evaluating that application. If the Department denies the landfill permit application for the new site, HDSWF intends to actively resume its efforts to enforce the previously issued landfill permit for the original site in Chaparral. At June 30, 2011, the Company had $11,759 of capitalized expenditures related to this landfill development project. If the Company is ultimately issued a permit to operate the landfill at the new site purchased in July 2009, the Company will be required to expense in a future period $10,318 of capitalized expenditures related to the original Chaparral property, less the recoverable value of that undeveloped property and other amounts recovered, which would likely have a material adverse effect on the Company’s results of operations for that period. If the Company instead is ultimately issued a permit to operate the landfill at the original Chaparral property, the Company will be required to expense in a future period $1,441 of capitalized expenditures related to the new site purchased in July 2009, less the recoverable value of that undeveloped property and other amounts recovered. If the Company is not ultimately issued a permit to operate the landfill at either one of the two sites, the Company will be required to expense in a future period the $11,759 of capitalized expenditures, less the recoverable value of the undeveloped properties and other amounts recovered, which would likely have a material adverse effect on the Company’s results of operations for that period.

Harper County, Kansas Landfill Permit Litigation

The Company opened a municipal solid waste landfill in Harper County, Kansas in January 2006, following the issuance by the Kansas Department of Health and Environment (“KDHE”) of a final permit to operate the landfill. The landfill has operated continuously since that time. On October 3, 2005, landfill opponents filed a suit (Board of Comm’rs of Sumner County, Kansas, Tri-County Concerned Citizens and Dalton Holland v. Roderick Bremby, Sec’y of the Kansas Dep’t of Health and Env’t, et al.) in the District Court of Shawnee County, Kansas, seeking a judicial review of KDHE’s decision to issue the permit, alleging that a site analysis prepared for the Company and submitted to KDHE as part of the process leading to the issuance of the permit was deficient in several respects. The action sought to stay the effectiveness of the permit and to nullify it. The Company intervened in this lawsuit shortly after it was filed. On April 7, 2006, the District Court issued an order denying the plaintiffs’ request for judicial review on the grounds that they lacked standing to bring the action. The plaintiffs appealed that decision to the Kansas Court of Appeals, and on October 12, 2007, the Court of Appeals issued an opinion reversing and remanding the District Court’s decision. The Company appealed the decision to the Kansas Supreme Court, and on July 25, 2008, the Supreme Court affirmed the decision of the Court of Appeals and remanded the case to the District Court for further proceedings on the merits. Plaintiffs filed a second amended petition on October 22, 2008, and the Company filed a motion to strike various allegations contained within the second amended petition. On July 2, 2009, the District Court granted in part and denied in part the Company’s motion to strike. The District Court also set a new briefing schedule, and the parties completed the briefing during the first half of 2010. Oral argument in the case occurred on September 27, 2010. There is no scheduled time limit within which the District Court has to decide this administrative appeal. While the Company believes that it will prevail in this case, the District Court could remand the matter back to KDHE for additional review of its decision or could revoke the permit. An order of remand to KDHE would not necessarily affect the Company’s continued operation of the landfill. Only in the event that a final, materially adverse determination with respect to the permit is received would there likely be a material adverse effect on the Company’s reported results of operations in the future. If as a result of this litigation, after exhausting all appeals, the Company was unable to continue to operate the landfill, the Company estimates that it would be required to record a pre-tax impairment charge of approximately $15,000 to reduce the carrying value of the landfill to its estimated fair value. In addition, the Company estimates the current annual impact to its pre-tax earnings that would result if it was unable to continue to operate the landfill would be approximately $4,000 per year.

El Paso, Texas Labor Union Disputes

One of the Company’s subsidiaries, El Paso Disposal, LP (“EPD”), is a party to administrative proceedings before the National Labor Relations Board (“NLRB”). In these proceedings, the union has alleged various unfair labor practices relating to the parties’ failure to reach agreement on initial labor contracts and the resultant strike by, and the replacement of and a failure to recall, union-represented employees. On April 29, 2009, following a hearing, an administrative law judge issued a recommended Decision and Order finding violations of the National Labor Relations Act by EPD and recommended to the NLRB that EPD take remedial actions, including reinstating certain employees and their previous terms and conditions of employment, refraining from certain conduct, continuing to bargain collectively and providing a “make whole” remedy. EPD filed exceptions to the administrative law judge’s recommendations on June 30, 2009. The matter is currently before the NLRB on review. On July 27, 2009, the NLRB’s regional office in Phoenix, Arizona filed a petition in the United States District Court for the Western District of Texas seeking an injunction to reinstate the replaced employees, order EPD to continue collective bargaining while the NLRB’s review is pending, and to refrain from further alleged unfair labor practices. A hearing on the injunction was held on August 19, 2009; and on October 30, 2009, the District Court granted the NLRB’s requested relief. EPD appealed the District Court’s order to the United States Court of Appeals for the Fifth Circuit, and a hearing on the appeal occurred on August 2, 2010. On November 4, 2010, the Fifth Circuit affirmed the District Court’s injunction order.

Several related unfair labor practice charges alleging failure to bargain and failure to appropriately recall union-represented employees subsequently were filed against EPD. The charges were heard by an administrative law judge during the week of August 24, 2009. On December 2, 2009, the administrative law judge issued a recommended Decision and Order granting part of the NLRB’s requested relief, while denying part, but the issues were effectively subsumed by the District Court’s injunction. Both EPD and the NLRB’s General Counsel filed exceptions to the administrative law judge’s recommendations with the NLRB. These exceptions also are currently under review by the NLRB.

On January 22, 2010 and March 5, 2010, the union filed new unfair labor practice charges against EPD concerning events relating to the ongoing contract negotiation process. On May 28, 2010, the NLRB issued a complaint against EPD alleging unfair labor practices, including alleged unlawful threats and coercive statements, refusal to provide striking employees with full and unconditional reinstatement, reduction of earning opportunities for striking employees, implementation of new routes for drivers, implementation of a new longevity bonus plan, use of video footage captured by surveillance camera to discipline employees, change to the driver training program, change to the uniform practice and bargaining proposals that were “predictably unacceptable” to the union. EPD filed an answer denying any wrongdoing. Further, EPD believes it has resolved many of these allegations through negotiations with the union. A hearing on this complaint was scheduled for November 2, 2010, but subsequently was postponed indefinitely by the NLRB as a result of a pending comprehensive settlement of outstanding matters between EPD and the union that is more fully described below.

On June 11, 2010, June, 24, 2010, and June 30, 2010, the union filed new unfair labor practice charges alleging that EPD has unlawfully failed to provide relevant information requested by the union, and unilaterally changed terms and working conditions of employment (by unspecified acts) resulting in a reduced size of the bargaining unit, implementing new work schedules, suspending an employee with pay due to an accident, reassigning and/or changing work assignments among bargaining unit employees and intimidating and coercing employees by suspending strikers involved in accidents and by following drivers excessively while performing their duties. The NLRB included these new allegations in its complaint to be heard on November 2, 2010, which was postponed indefinitely by the NLRB because of the pending comprehensive settlement between EPD and the union.

On August 10, 2010, the NLRB filed a petition for contempt and other civil relief before the United States District Court for the Western District of Texas, alleging that EPD violated the District Court’s October 30, 2009 injunction order by failing or refusing to implement the interim relief directed by the court (e.g., to restore changed employment terms, reinstate former strikers to their prior positions, and not commit future purported unfair labor practices). EPD filed an answer denying any wrongdoing. A hearing on the NLRB’s petition was scheduled for November 10, 2010, but was postponed indefinitely by the NLRB because of the pending comprehensive settlement between EPD and the union.

In December 2010, the union ratified a comprehensive settlement reached with EPD as to all outstanding unfair labor practice charges and related liability issues. The settlement has resulted in the indefinite postponement of the NLRB and District Court proceedings described above, pending final administration of the settlement terms. The settlement includes: agreement on collective bargaining agreements for the two EPD bargaining units; withdrawal by the union of all of its unfair labor practice charges; and the payment by EPD of 60% of net back pay, without interest, for all alleged discriminatees for the back pay period in question, which ended in 2009. In May 2011, EPD and the union reached agreement on the backpay amounts for all of the alleged discriminatees. Notwithstanding the settlement, EPD continues to deny that any wrongdoing occurred. The parties have begun to implement the settlement terms, pursuant to which, in December 2010, the union filed a request with the NLRB to withdraw all of its unfair labor practice charges. This request currently is pending before the NLRB regional office in Phoenix, but has not yet been approved. Thus, the pending comprehensive settlement is not yet final.

Solano County, California Measure E/Landfill Expansion Litigation

The Company and one of its subsidiaries, Potrero Hills Landfill, Inc. (“PHLF”), were named as real parties in interest in an amended complaint captioned Sustainability, Parks, Recycling and Wildlife Legal Defense Fund v. County of Solano, which was filed in the Superior Court of California, County of Solano, on July 9, 2009 (the original complaint was filed on June 12, 2009). This lawsuit seeks to compel Solano County to comply with Measure E, a ballot initiative and County ordinance passed in 1984 that the County has not enforced against PHLF since at least 1992. Measure E directs in part that Solano County shall not allow the importation into the County of any solid waste which originated or was collected outside the County in excess of 95,000 tons per year. PHLF disposes of approximately 670,800 tons of solid waste annually, approximately 562,300 tons of which originate from sources outside of Solano County. The Sustainability, Parks, Recycling and Wildlife Legal Defense Fund (“SPRAWLDEF”) lawsuit also seeks to overturn Solano County’s approval of the use permit for the expansion of the Potrero Hills Landfill and the related Environmental Impact Report (“EIR”), arguing that both violate Measure E and that the EIR violates the California Environmental Quality Act (“CEQA”). Two similar actions seeking to enforce Measure E, captioned Northern California Recycling Association v. County of Solano and Sierra Club v. County of Solano, were filed in the same court on June 10, 2009, and August 10, 2009, respectively. The Northern California Recycling Association (“NCRA”) case does not name the Company or any of its subsidiaries as parties and does not contain any CEQA claims. The Sierra Club case names PHLF as a real party in interest, and seeks to overturn the conditional use permit for the expansion of the landfill on Measure E grounds (but does not raise CEQA claims). These lawsuits follow a previous lawsuit concerning Measure E that NCRA filed against PHLF in the same court on July 22, 2008, prior to the Company’s acquisition of PHLF in April 2009, but which NCRA later dismissed.

In December 2009, the Company and PHLF filed briefs vigorously opposing enforcement of Measure E on Constitutional and other grounds. The Company’s position is supported by Solano County, a co-defendant in the Measure E litigation. It is also supported by the Attorney General of the State of California, the National Solid Wastes Management Association and the California Refuse Recycling Council, each of which filed supporting friend of court briefs or letters. In addition, numerous waste hauling companies in California, Oregon and Nevada have intervened on the Company’s side in the state cases, subsequent to their participation in the federal action challenging Measure E discussed below. A hearing on the merits for all three Measure E state cases was held on February 18, 2010.

On May 12, 2010, the Solano County Superior Court issued a written opinion addressing all three cases. The Court upheld Measure E in part by judicially rewriting the law, and then issued a writ of mandamus directing Solano County to enforce Measure E as rewritten. The Court decided that it could cure the law’s discrimination against out-of-county waste by revising Measure E to only limit the importation of waste into Solano County from other counties in California, but not from other states. In the same opinion, the Court rejected the requests from petitioners in the cases for a writ of administrative mandamus to overturn the permit approved by Solano County in June 2009 for the expansion of PHLF’s landfill, thereby leaving the expansion permit in place. Petitioners Sierra Club and SPRAWLDEF filed motions to reconsider in which they asked the Court to issue a writ of administrative mandamus and void PHLF’s expansion permit. The County, the Company and PHLF opposed the motions to reconsider and a hearing was held on June 25, 2010. On August 30, 2010, the Court denied the motions to reconsider and reaffirmed its ruling denying the petitions for writs to overturn PHLF’s expansion permit.

In December 2010, the Court entered final judgments and writs of mandamus in the three cases, and Solano County, the Company, PHLF and the waste hauling company intervenors filed notices of appeal, which stayed the judgments and writs pending the outcome of the appeal. Petitioners Sierra Club and SPRAWLDEF cross-appealed the Court’s ruling denying their petitions for writs to overturn PHLF’s expansion permit. The appeals and cross-appeals were consolidated and the parties entered into a briefing schedule by stipulation in February, 2011. PHLF filed its opening brief in March 2011. Sierra Club and SPRAWLDEF filed combined response and opening briefs for their cross-appeals in May 2011. PHLF’s combined reply and response to the cross-appeals is due in July 2011 and all briefing is scheduled to be complete by August 2011.

As part of the final judgments, the Solano County Superior Court retained jurisdiction over any motions for attorneys' fees under California's Private Attorney General statute. Petitioners NCRA, SPRAWLDEF and Sierra Club each filed a bill of costs and a motion for attorney fees totaling $771. The Company vigorously opposed the award of attorney fees. The motions were heard in March 2011. On May 31, 2011, the court issued a final order awarding petitioners $452 in attorneys' fees, $411 of which relates to the SPRAWLDEF and Sierra Club cases in which the Company or PHLF is a named party. The court allocated 50% of the fee amount to PHLF, none of which the Company recorded as a liability at June 30, 2011. The Company intends to appeal this attorneys’ fees order by July 29, 2011. If the Company prevails on the appeals of the three underlying cases, then none of the Petitioners would be entitled to attorneys' fees and costs. If the Company is unsuccessful on these appeals and its future appeals of the attorneys' fees judgment, PHLF and the County would each ultimately be severally liable for $206 in attorneys' fees for the SPRAWLDEF and Sierra Club cases. However, in all three cases, the Company may reimburse the County for any such attorneys' fees under the indemnification provision in PHLF's land use permit.

At this point the Company is not able to determine the likelihood of any outcome in this matter. However, in the event that after all appeals are exhausted the Superior Court’s writ of mandamus enforcing Measure E as rewritten is upheld, the Company estimates that the current annual impact to its pre-tax earnings resulting from the restriction on imports into Solano County would be approximately $6,000 per year. The Company’s estimate could be impacted by various factors, including the County’s allocation of the 95,000 tons per year import restriction among PHLF and the other disposal and composting facilities in Solano County. In addition, if the final rulings on Measure E do not limit the importation of waste into Solano County from other states, the Company could potentially offset a portion of the estimated reduction to its pre-tax earnings by internalizing waste for disposal at PHLF from other states in which the Company operates, or by accepting waste volumes from third party haulers operating outside of California.

In response to the pending three state court actions to enforce Measure E described above, the Company, PHLF and other waste hauling companies in California, Oregon and Nevada that are damaged by Measure E and would be further damaged if Measure E was enforced, filed a federal lawsuit to enjoin Measure E and have it declared unconstitutional. On September 8, 2009, the coalition brought suit in the United States District Court for the Eastern District of California in Sacramento challenging Measure E under the Commerce Clause of the United States Constitution, captioned Potrero Hills Landfill, Inc. et al. v. County of Solano. In response, SPRAWLDEF, Sierra Club and NCRA intervened in the federal case to defend Measure E and filed motions to dismiss the federal suit, or in the alternative, for the court to abstain from hearing the case in light of the pending state court Measure E actions. On December 23, 2009, the federal court abstained and declined to accept jurisdiction over the Company’s case, holding that Measure E raised unique state issues that should be resolved by the pending state court litigation, and granted the motions to dismiss. The Company filed a notice of appeal to the court’s ruling on January 22, 2010, and briefing in the United States Court of Appeals for the Ninth Circuit was completed on November 17, 2010. Oral argument on the appeal took place on April 14, 2011.

Individual members of SPRAWLDEF were also plaintiffs in a lawsuit filed in the Solano County Superior Court on October 13, 2005, captioned Protect the Marsh, et al. v. County of Solano, et al., challenging the EIR that Solano County certified in connection with its approval of the expansion of the Potrero Hills Landfill on September 13, 2005. A motion to discharge the Superior Court’s writ of mandate directing the County to vacate and set aside its certification of the EIR was heard in August 2009. On November 3, 2009, the Superior Court upheld the County’s certification of the EIR and the related permit approval actions. In response, the plaintiffs in Protect the Marsh filed a notice of appeal to the court’s order on December 31, 2009. On October 8, 2010, the California Court of Appeal dismissed Plaintiffs’ appeal for lack of standing. SPRAWLDEF subsequently filed a petition for review of this decision with the California Supreme Court. On December 21, 2010, the Supreme Court denied the petition, concluding this litigation in favor of the County and the Company.

On December 17, 2010, SPRAWLDEF and one its members filed a petition for writ of mandate in San Francisco Superior Court seeking to overturn the October 2010 approval of the marsh development permit issued by the San Francisco Bay Conservation and Development Commission (“BCDC”) for PHLF’s landfill expansion, alleging that the approval is contrary to the Marsh Act and Measure E. The petition, captioned SPRAWLDEF v. San Francisco Bay Conservation and Development Commission, names BCDC as a respondent and the Company as the real party in interest. Petitioners seek a declaration that the law does not allow BCDC to approve a marsh development permit beyond the footprint and operational levels originally approved for PHLF in 1984, and that the approval violates Measure E. BCDC is preparing the administrative record of its permit decision to be filed with the court and answers to the petition will be due 30 days thereafter. A hearing has not yet been set on the petition. At this point the Company is not able to determine the likelihood of any outcome in this matter.

On June 10, 2011, June Guidotti, a property owner adjacent to PHLF, and SPRAWLDEF and one of its members, each filed administrative petitions for review with the State Water Resources Control Board (“State Board”) seeking to overturn a May 11, 2011 Order No. 2166-(a) approving waste discharge requirements issued by the San Francisco Bay Regional Water Quality Control Board (“Regional Board”) for PHLF’s landfill expansion, alleging that the order is contrary to the State Board’s Title 27 regulations authorizing waste discharge requirements for landfills, and in the case of the SPRAWLDEF petition, further alleging that the Regional Board’s issuance of a Clean Water Act section 401 certification is not supported by an adequate alternatives analysis as required by the federal Clean Water Act. The Regional Board is preparing the administrative record of its decision to issue Order 2166-(a) to be filed with the State Board as well as its response to the petitions for review. It is anticipated that the Regional Board will vigorously defend its actions and seek dismissal of the petitions for review. A hearing date has not yet been set on either petition, and the State Board has held the Guidotti petition in abeyance for now at petitioner’s request. At this point the Company is not able to determine the likelihood of any outcome in this matter.

If as a result of any of the matters described above, after exhausting all appeals, PHLF is unable to secure an expansion permit, and the Superior Court’s writ of mandamus enforcing Measure E as rewritten is ultimately upheld, the Company estimates that it would be required to recognize a pre-tax impairment charge of approximately $39,000 to reduce the carrying value of PHLF to its estimated fair value. If PHLF is unable to secure an expansion permit but Measure E is ultimately ruled to be unenforceable, the Company estimates that it would be required to recognize a pre-tax impairment charge of approximately $24,000 to reduce the carrying value of PHLF to its estimated fair value.

El Paso, Texas Breach of Contract/Flow Control Litigation

On November 15, 2010, the Company filed a petition in the County Court at Law No. 3, El Paso County, Texas, captioned Waste Connections, Inc., Camino Real Environmental Center, Inc. and El Paso Disposal, LP v. The City of El Paso, Texas, John F. Cook, in his capacity as El Paso Mayor, and Joyce Wilson, in her capacity as El Paso City Manager (No. 2010-4476), which has since been transferred to the 168th District Court of El Paso County, Texas. The action relates to that certain Solid Waste Disposal and Operating Agreement, dated April 27, 2004, by and among the City of El Paso, Texas (the “City”) and the Company (the “2004 Agreement”), and Ordinance 017380, as adopted by the City Council on August 24, 2010 (the “Ordinance”).

The 2004 Agreement grants the Company and its subsidiaries (Camino Real and El Paso Disposal) the non-exclusive right to do business in the City, and to provide commercial and industrial solid waste collection and disposal services to customers within the territorial and extra-territorial jurisdiction of the City, for a period of ten years from April 27, 2004. In addition, the 2004 Agreement provides that during the ten-year period the City shall not modify solid waste hauler fees for the Company or any of its subsidiaries. The City also agreed in the 2004 Agreement that, until April 27, 2014, it would not provide private roll-off services or otherwise become a competitor to private solid waste companies in providing these services.

The Company believes that the Ordinance violates the law and is contrary to the 2004 Agreement in numerous respects, including because it requires that waste collected within the City’s jurisdiction be hauled only by permitted haulers who enter into franchise agreements with the City, and that such haulers may only dispose of such waste at facilities designated or authorized by the City, a concept also referred to as flow control. The petition seeks to require the City to specifically perform the 2004 Agreement, and to enjoin temporarily and permanently the City’s enforcement of the Ordinance to the extent such enforcement would breach the 2004 Agreement. The lawsuit also seeks a declaratory judgment that: (1) the Ordinance violates the Contracts Clauses of the Texas and United States Constitutions, and constitutes an improper taking and an inverse condemnation under the Texas Constitution; (2) the City and its Mayor and City Manager must prospectively comply with the 2004 Agreement; and (3) the Agreement is valid, enforceable and complies with Texas law. The Company also seeks costs of suit and such other relief at law or in equity to which it may be entitled. The Company is not presently seeking money damages.

The Company and the City have been negotiating, and continue to negotiate, an agreed resolution to their differences. As a result of these efforts, on December 21, 2010, the El Paso City Council approved a series of amendments to the Ordinance to address certain concerns of the Company and other haulers that operate within the City’s jurisdiction. The negotiations continue and on March 29, 2011, an amendment to the ordinance postponed the effective date of the requirement that haulers enter into franchise agreements with the City until September 1, 2011. In addition, on July 19, 2011, the El Paso City Council amended the ordinance to postpone the effective date of its flow control provisions from September 1, 2011 to September 1, 2014. At this point, however, the Company is not able to determine the likelihood of any outcome in this litigation, nor is it able to estimate the amount or range of loss or the impact on the Company or its financial condition in the event of an unfavorable outcome.

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Fair Value Of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2011

Fair Value of Financial Instruments and Fair Value Measurements [Abstract]

Carrying values and fair values of the Company's debt instruments

	Carrying Value at				Fair Value* at
	June 30,		December 31,		June 30,		December 31,
	2011		2010		2011		2010
6.22% Senior Notes due 2015	$	175,000	$	175,000	$	194,548	$	198,300
3.30% Senior Notes due 2016	$	100,000	$	—	$	100,698	$	—
4.00% Senior Notes due 2018	$	50,000	$	—	$	50,285	$	—
5.25% Senior Notes due 2019	$	175,000	$	175,000	$	188,598	$	191,316
4.64% Senior Notes due 2021	$	100,000	$	—	$	100,359	$	—

* Fair value based on quotes of bonds with similar ratings in similar industries

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Landfill Accounting (Tables)

6 Months Ended

Jun. 30, 2011

Landfill Accounting [Abstract]

Reconciliation of the Company's final capping, closure and post-closure liability

Final capping, closure and post-closure liability at December 31, 2010	$	28,537
Adjustments to final capping, closure and post-closure liabilities		(1,281	)
Liabilities incurred		1,029
Accretion expense		967
Closure payments		(354	)
Final capping, closure and post-closure liability at June 30, 2011	$	28,898

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Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2011

Long-Term Debt [Abstract]

Long-term debt

	June 30,			December 31,
	2011			2010
Revolver under credit facility, bearing interest ranging from 0.81% to 3.25%*	$	487,500		$	511,000
2015 Notes, bearing interest at 6.22%		175,000			175,000
2016 Notes, bearing interest at 3.30%		100,000			—
2018 Notes, bearing interest at 4.00%		50,000			—
2019 Notes, bearing interest at 5.25%		175,000			175,000
2021 Notes, bearing interest at 4.64%		100,000			—
Tax-exempt bonds, bearing interest ranging from 0.10% to 0.42%*		39,345			39,420
Notes payable to sellers in connection with acquisitions, bearing interest at 2.50% to 10.35%*		8,874			9,159
Notes payable to third parties, bearing interest at 6.7% to 10.9%*		2,950			3,056
		1,138,669			912,635
Less — current portion		(2,693	)		(2,657	)
	$	1,135,976		$	909,978

* Interest rates in the table above represent the range of interest rates incurred during the six month period ended June 30, 2011.

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Acquisitions (Tables)

6 Months Ended

Jun. 30, 2011

Acquisitions [Abstract]

Consideration transferred and the amounts of identified assets acquired and liabilities assumed at the acquisition date

	2011			2010
	Acquisitions			Acquisitions
Fair value of consideration transferred:
Cash	$	215,962		$	3,849
Debt assumed*		84,737			281
		300,699			4,130
Recognized amounts of identifiable assets acquired, liabilities assumed and noncontrolling interests associated with businesses acquired:
Accounts receivable		8,801			468
Other current assets		940			157
Property and equipment		52,428			802
Long-term franchise agreements and contracts		2,608			175
Customer lists		40,793			851
Indefinite-lived intangibles		41,215			—
Accounts payable		(6,218	)		—
Accrued liabilities		(1,143	)		(527	)
Noncontrolling interests		(208	)		—
Deferred revenue		(5,231	)		(50	)
Deferred taxes		(10,257	)		—
Total identifiable net assets		123,728			1,876
Goodwill	$	176,971		$	2,254

* Debt paid at close of acquisition.

Payments for acquisitions, net of cash acquired, as reported in Condensed Consolidated Statements of Cash Flows

	2011		2010
	Acquisitions		Acquisitions
Cash consideration transferred	$	215,962	$	3,849
Payment of contingent consideration		100		—
Payments for acquisitions, net of cash acquired	$	216,062	$	3,849

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Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2011

Intangible Assets [Abstract]

Intangible assets exclusive of goodwill

	Gross Carrying		Accumulated			Net Carrying
	Amount		Amortization			Amount
Amortizable intangible assets:
Long-term franchise agreements and contracts	$	192,334	$	(28,926	)	$	163,408
Customer lists		103,677		(23,151	)		80,526
Non-competition agreements		9,414		(6,205	)		3,209
Other		21,236		(2,672	)		18,564
		326,661		(60,954	)		265,707
Nonamortized intangible assets:
Indefinite-lived intangible assets		190,134		—			190,134
Intangible assets, exclusive of goodwill	$	516,795	$	(60,954	)	$	455,841

	Gross Carrying		Accumulated			Net Carrying
	Amount		Amortization			Amount
Amortizable intangible assets:
Long-term franchise agreements and contracts	$	190,489	$	(25,255	)	$	165,234
Customer lists		62,885		(17,867	)		45,018
Non-competition agreements		9,414		(5,982	)		3,432
Other		21,236		(2,364	)		18,872
		284,024		(51,468	)		232,556
Nonamortized intangible assets:
Indefinite-lived intangible assets		148,919		—			148,919
Intangible assets, exclusive of goodwill	$	432,943	$	(51,468	)	$	381,475

Estimated future amortization expense of amortizable intangible assets

Estimated future amortization expense for the next five years of amortizable intangible assets is as follows:

For the year ending December 31, 2011	$	20,801
For the year ending December 31, 2012	$	21,879
For the year ending December 31, 2013	$	20,311
For the year ending December 31, 2014	$	19,579
For the year ending December 31, 2015	$	18,978

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Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2011

Segment Reporting [Abstract]

Summary of financial information concerning the Company's reportable segments

								Operating Income
								Before Depreciation,
Three Months								Amortization and
Ended	Gross		Intercompany			Net		Gain (Loss) on
June 30, 2011	Revenues		Revenues(b)			Revenues		Disposal of Assets(c)
Western	$	213,162	$	(25,611	)	$	187,551	$	57,835
Central		124,004		(13,489	)		110,515		39,662
Eastern		110,054		(17,936	)		92,118		26,713
Corporate(a)		—		—			—		2,933
	$	447,220	$	(57,036	)	$	390,184	$	127,143

								Operating Income
								Before Depreciation,
Three Months								Amortization and
Ended	Gross		Intercompany			Net		Gain (Loss) on
June 30, 2010	Revenues		Revenues(b)			Revenues		Disposal of Assets(c)
Western	$	199,335	$	(23,373	)	$	175,962	$	53,792
Central		110,289		(13,307	)		96,982		32,860
Eastern		71,022		(13,489	)		57,533		18,309
Corporate(a)		—		—			—		1,817
	$	380,646	$	(50,169	)	$	330,477	$	106,778

								Operating Income
								Before Depreciation,
Six Months								Amortization and
Ended	Gross		Intercompany			Net		Gain (Loss) on
June 30, 2011	Revenues		Revenues(b)			Revenues		Disposal of Assets(c)
Western	$	410,628	$	(48,511	)	$	362,117	$	112,288
Central		235,963		(25,051	)		210,912		75,086
Eastern		179,769		(31,146	)		148,623		43,677
Corporate(a)		—		—			—		1,656
	$	826,360	$	(104,708	)	$	721,652	$	232,707

								Operating Income
								Before Depreciation,
Six Months								Amortization and
Ended	Gross		Intercompany			Net		Gain (Loss) on
June 30, 2010	Revenues		Revenues(b)			Revenues		Disposal of Assets(c)
Western	$	387,849	$	(44,885	)	$	342,964	$	104,238
Central		208,928		(24,215	)		184,713		61,003
Eastern		135,938		(25,597	)		110,341		34,694
Corporate(a)		—		—			—		1,736
	$	732,715	$	(94,697	)	$	638,018	$	201,671

(a)	Corporate functions include accounting, legal, tax, treasury, information technology, risk management, human resources, training and other administrative functions.
(b)	Intercompany revenues reflect each segment’s total intercompany sales, including intercompany sales within a segment and between segments. Transactions within and between segments are generally made on a basis intended to reflect the market value of the service.
(c)	For those items included in the determination of operating income before depreciation, amortization and gain (loss) on disposal of assets, the accounting policies of the segments are the same as those described in the Company’s most recent Annual Report on Form 10-K.

Total Assets of Company's Reportable segments

	June 30,		December 31,
	2011		2010
Western	$	1,364,307	$	1,378,920
Central		1,024,309		654,854
Eastern		767,484		818,648
Corporate		57,788		63,562
Total Assets	$	3,213,888	$	2,915,984

Changes in goodwill by reportable segment

	Western		Central		Eastern			Total
Balance as of December 31, 2010	$	313,038	$	305,774	$	309,040		$	927,852
Goodwill transferred		—		111,806		(111,806	)		—
Goodwill acquired		—		1,366		175,605			176,971
Goodwill divested		—		—		—			—
Balance as of June 30, 2011	$	313,038	$	418,946	$	372,839		$	1,104,823

	Western		Central			Eastern			Total
Balance as of December 31, 2009	$	291,781	$	313,366		$	301,563		$	906,710
Goodwill transferred		20,295		(20,295	)		—			—
Goodwill acquired		682		1,523			49			2,254
Goodwill divested		—		(64	)		(1,111	)		(1,175	)
Balance as of June 30, 2010	$	312,758	$	294,530		$	300,501		$	907,789

Reconciliation of Company's primary measure of segment profitability to Income before income tax provision

	Three months ended						Six months ended
	June 30,						June 30,
	2011			2010			2011			2010
Operating income before depreciation, amortization and gain (loss) on disposal of assets	$	127,143		$	106,778		$	232,707		$	201,671
Depreciation		(36,939	)		(33,464	)		(69,975	)		(64,908	)
Amortization of intangibles		(5,673	)		(3,598	)		(9,650	)		(7,184	)
Gain (loss) on disposal of assets		267			(365	)		292			(622	)
Interest expense		(11,087	)		(9,161	)		(19,920	)		(21,423	)
Interest income		143			165			276			318
Loss on extinguishment of debt		—			(9,734	)		—			(10,193	)
Other income (expense), net		(245	)		(169	)		149			469
Income before income tax provision	$	73,609		$	50,452		$	133,879		$	98,128

Total revenues by service line

	Three months ended						Six months ended
	June 30,						June 30,
	2011			2010			2011			2010
Collection	$	275,170		$	238,108		$	514,607		$	467,178
Disposal and transfer		133,722			116,217			243,282			216,917
Intermodal, recycling and other		38,328			26,321			68,471			48,620
		447,220			380,646			826,360			732,715
Less: intercompany elimination		(57,036	)		(50,169	)		(104,708	)		(94,697	)
Total revenues	$	390,184		$	330,477		$	721,652		$	638,018

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2011

Derivative Financial Instruments [Abstract]

Company's derivative instruments

			Fixed			Variable
	Notional		Interest			Interest Rate
Date Entered	Amount		Rate Paid*			Received	Effective Date	Expiration Date
March 2009	$	175,000		2.85	%	1-month LIBOR	February 2011	February 2014

* Plus applicable margin.

			Diesel
			Rate
	Notional		Paid
	Amount		Fixed
	(in gallons		(per		Diesel Rate Received		Expiration
Date Entered	per month)		gallon)		Variable	Effective Date	Date
December 2008		400,000	$	2.950	DOE Diesel Fuel Index*	January 2011	December 2011
December 2008		400,000	$	3.030	DOE Diesel Fuel Index*	January 2012	December 2012

* If the national U.S. on-highway average price for a gallon of diesel fuel (“average price”), as published by the Department of Energy, exceeds the contract price per gallon, the Company receives the difference between the average price and the contract price (multiplied by the notional number of gallons) from the counterparty. If the average price is less than the contract price per gallon, the Company pays the difference to the counterparty.

Fair values of derivative instruments designated as cash flow hedges

Derivatives Designated as Cash	Asset Derivatives			Liability Derivatives
Flow Hedges	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Interest rate swaps		$		Accrued liabilities(a)	$	(4,352	)
				Other long-term liabilities		(4,518	)
Fuel hedges	Prepaid expenses and other current assets(b)		4,429
	Other assets, net		2,137
Total derivatives designated as cash flow hedges		$	6,566		$	(8,870	)

(a)	Represents the estimated amount of the existing unrealized losses on interest rate swaps as of June 30, 2011 (based on the interest rate yield curve at that date), included in accumulated other comprehensive loss expected to be reclassified into pre-tax earnings within the next 12 months. The actual amounts reclassified into earnings are dependent on future movements in interest rates.
(b)	Represents the estimated amount of the existing unrealized gains on fuel hedges as of June 30, 2011 (based on the forward DOE diesel fuel index curve at that date), included in accumulated other comprehensive loss expected to be reclassified into pre-tax earnings within the next 12 months. The actual amounts reclassified into earnings are dependent on future movements in diesel fuel prices.

Derivatives Designated as Cash	Asset Derivatives			Liability Derivatives
Flow Hedges	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Interest rate swaps				Accrued liabilities	$	(4,988	)
				Other long-term liabilities		(4,734	)
Fuel hedges	Prepaid expenses and other current assets	$	2,469
	Other assets, net		2,261
Total derivatives designated as cash flow hedges		$	4,730		$	(9,722	)

Impact of cash flow hedges on results of operations, comprehensive income and accumulated other comprehensive loss

Derivatives	Amount of Gain or (Loss) Recognized in AOCL on							Amount of (Gain) or Loss Reclassified from AOCL into
Designated as Cash	Derivatives,						Statement of Income	Earnings, Net of Tax (Effective
Flow Hedges	Net of Tax (Effective Portion)(a)						Classification	Portion) (b),(c)
	Three Months Ended June 30,							Three Months Ended June 30,
	2011			2010				2011			2010
Interest rate swaps	$	(1,655	)	$	(3,080	)	Interest expense	$	985		$	1,431
Fuel hedges		(449	)		(1,269	)	Cost of operations		(792	)		257
Total	$	(2,104	)	$	(4,349	)		$	193		$	1,688

	Amount of Gain or (Loss)							Amount of (Gain) or Loss
Derivatives	Recognized in AOCL on							Reclassified from AOCL into
Designated as Cash	Derivatives,						Statement of Income	Earnings, Net of Tax (Effective
Flow Hedges	Net of Tax (Effective Portion)(a)						Classification	Portion) (b),(c)
	Six Months Ended June 30,							Six Months Ended June 30,
	2011			2010				2011			2010
Interest rate swaps	$	(1,614	)	$	(5,435	)	Interest expense	$	2,142		$	2,869
Fuel hedges		2,433			(1,919	)	Cost of operations		(1,294	)		1,441
Total	$	819		$	(7,354	)		$	848		$	4,310

(a)	In accordance with the derivatives and hedging guidance, the effective portions of the changes in fair values of interest rate swaps and fuel hedges have been recorded in equity as a component of AOCL. As the critical terms of the interest rate swaps match the underlying debt being hedged, no ineffectiveness is recognized on these swaps and, therefore, all unrealized changes in fair value are recorded in AOCL. Because changes in the actual price of diesel fuel and changes in the DOE index price do not offset exactly each reporting period, the Company assesses whether the fuel hedges are highly effective using the cumulative dollar offset approach.
(b)	Amounts reclassified from AOCL into earnings related to realized gains and losses on interest rate swaps are recognized when interest payments or receipts occur related to the swap contracts, which correspond to when interest payments are made on the Company’s hedged debt.
(c)	Amounts reclassified from AOCL into earnings related to realized gains and losses on fuel hedges are recognized when settlement payments or receipts occur related to the hedge contracts, which correspond to when the underlying fuel is consumed.

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Net Income Per Share Information (Tables)

6 Months Ended

Jun. 30, 2011

Net Income Per Share Information [Abstract]

Basic and Diluted net income per common share

	Three months ended				Six months ended
	June 30,				June 30,
	2011		2010		2011		2010
Numerator:
Net income attributable to Waste Connections for basic and diluted earnings per share	$	44,413	$	30,400	$	80,952	$	57,973
Denominator:
Basic shares outstanding		113,509,668		116,243,700		113,514,439		116,401,140
Dilutive effect of stock options and warrants		451,173		924,542		463,899		1,030,239
Dilutive effect of restricted stock		347,869		314,509		376,641		316,173
Diluted shares outstanding		114,308,710		117,482,751		114,354,979		117,747,552

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) In Thousands, except Share data	Jun. 30, 2011	Dec. 31, 2010
Current assets:
Allowance for doubtful accounts	$ 4,728	$ 5,084
Equity:
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	7,500,000	7,500,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	113,034,132	113,950,081
Common stock, shares outstanding	113,034,132	113,950,081

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2011

Fair Value of Financial Instruments and Fair Value Measurements [Abstract]

Assets and liabilities measured at fair value on a recurring basis

	Fair Value Measurement at June 30, 2011 Using
				Quoted Prices in		Significant
				Active Markets		Other			Significant
				for Identical		Observable			Unobservable
				Assets		Inputs			Inputs
	Total			(Level 1)		(Level 2)			(Level 3)
Interest rate swap derivative instruments — net liability position	$	(8,870	)	$	—	$	(8,870	)	$	—
Fuel hedge derivative instruments — net asset position	$	6,566		$	—	$	—		$	6,566
Restricted assets	$	28,600		$	28,600	$	—		$	—

	Fair Value Measurement at December 31, 2010 Using
				Quoted Prices in		Significant
				Active Markets		Other			Significant
				for Identical		Observable			Unobservable
				Assets		Inputs			Inputs
	Total			(Level 1)		(Level 2)			(Level 3)
Interest rate swap derivative instruments — net liability position	$	(9,722	)	$	—	$	(9,722	)	$	—
Fuel hedge derivative instruments — net asset position	$	4,730		$	—	$	—		$	4,730
Restricted assets	$	30,791		$	30,791	$	—		$	—

Change in the fair value for Level 3 derivatives

	Level 3
	Derivatives
Balance as of December 31, 2010	$	4,730
Realized gains included in earnings		(2,088	)
Unrealized gains included in AOCL		3,924
Balance as of June 30, 2011	$	6,566

	Level 3
	Derivatives
Balance as of December 31, 2009	$	(104	)
Realized losses included in earnings		2,324
Unrealized losses included in AOCL		(3,095	)
Balance as of June 30, 2010	$	(875	)

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Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2011

Stockholders' Equity and Comprehensive Income [Abstract]

Components of other comprehensive income (loss)

	Three months ended June 30, 2011
	Gross			Tax effect			Net of tax
Interest rate swap amounts reclassified into interest expense	$	1,589		$	(604	)	$	985
Fuel hedge amounts reclassified into cost of operations		(1,278	)		486			(792	)
Changes in fair value of interest rate swaps		(2,670	)		1,015			(1,655	)
Changes in fair value of fuel hedges		(724	)		275			(449	)
	$	(3,083	)	$	1,172		$	(1,911	)

	Three months ended June 30, 2010
	Gross			Tax effect			Net of tax
Interest rate swap amounts reclassified into interest expense	$	2,309		$	(878	)	$	1,431
Fuel hedge amounts reclassified into cost of operations		414			(157	)		257
Changes in fair value of interest rate swaps		(4,968	)		1,888			(3,080	)
Changes in fair value of fuel hedges		(2,046	)		777			(1,269	)
	$	(4,291	)	$	1,630		$	(2,661	)

	Six months ended June 30, 2011
	Gross			Tax effect			Net of tax
Interest rate swap amounts reclassified into interest expense	$	3,455		$	(1,313	)	$	2,142
Fuel hedge amounts reclassified into cost of operations		(2,088	)		794			(1,294	)
Changes in fair value of interest rate swaps		(2,603	)		989			(1,614	)
Changes in fair value of fuel hedges		3,924			(1,491	)		2,433
	$	2,688		$	(1,021	)	$	1,667

	Six months ended June 30, 2010
	Gross			Tax effect			Net of tax
Interest rate swap amounts reclassified into interest expense	$	4,628		$	(1,759	)	$	2,869
Fuel hedge amounts reclassified into cost of operations		2,324			(883	)		1,441
Changes in fair value of interest rate swaps		(8,791	)		3,356			(5,435	)
Changes in fair value of fuel hedges		(3,095	)		1,176			(1,919	)
	$	(4,934	)	$	1,890		$	(3,044	)

Amounts included in AOCL

							Accumulated
							Other
				Interest			Comprehensive
	Fuel Hedges			Rate Swaps			Loss
Balance at December 31, 2010	$	2,931		$	(6,026	)	$	(3,095	)
Amounts reclassified into earnings		(1,294	)		2,142			848
Change in fair value		2,433			(1,614	)		819
Balance at June 30, 2011	$	4,070		$	(5,498	)	$	(1,428	)

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Stockholder's Equity (Tables)

6 Months Ended

Jun. 30, 2011

Stockholders' Equity and Comprehensive Income [Abstract]

Summary of activity related to restricted stock units

	Unvested
	Shares
Outstanding at December 31, 2010		1,514,459
Granted		495,560
Forfeited		(22,640	)
Vested		(521,069	)
Outstanding at June 30, 2011		1,466,310

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Fair Value of Financial Instruments (Details) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Carrying values and fair values of the Company's debt instruments
Carrying value of senior notes	$ 1,138,669	$ 912,635
6.22% Senior Notes due 2015 [Member]
Carrying values and fair values of the Company's debt instruments
Carrying value of senior notes	175,000	175,000
Fair value of senior notes	194,548	198,300
3.30% Senior Notes due 2016 [Member]
Carrying values and fair values of the Company's debt instruments
Carrying value of senior notes	100,000	0
Fair value of senior notes	100,698	0
4.00% Senior Notes due 2018 [Member]
Carrying values and fair values of the Company's debt instruments
Carrying value of senior notes	50,000	0
Fair value of senior notes	50,285	0
5.25% Senior Notes due 2019 [Member]
Carrying values and fair values of the Company's debt instruments
Carrying value of senior notes	175,000	175,000
Fair value of senior notes	188,598	191,316
4.64% Senior Notes due 2021 [Member]
Carrying values and fair values of the Company's debt instruments
Carrying value of senior notes	100,000	0
Fair value of senior notes	$ 100,359	$ 0

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Landfill Accounting (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended		12 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2011	Dec. 31, 2010
Reconciliation of the Company's final capping, closure and post-closure liability
Final capping, closure and post-closure liability at December 31, 2010	$ 28,537		$ 28,537
Adjustments to final capping, closure and post-closure liabilities	(1,281)
Liabilities incurred	1,029
Accretion expense	967	880
Closure payments	(354)
Final capping, closure and post-closure liability at June 30, 2011	28,898			28,537
Landfill Accounting (Textuals) [Abstract]
Number of landfills owned and operated by company	35
Number of landfills operated under life of site operating agreements	4
Number of landfills operated under limited-term operating agreements	5
Net book value landfill site costs	743,189
Number of owned landfills that only accept construction and demolition and other non-putrescible waste	2
Responsible for all final capping closure and post closure liabilities of landfills	3
Average remaining landfill life based on permitted capacity and projected annual disposal volumes	40 years
Number of owned landfills the company is seeking to expand	7
Number of landfills operated under life-of-site operating agreements that the company is seeking to expand	1
Average remaining landfill life based on permitted capacity, projected annual disposal volumes and probable expansion capacity	50 years
Life of Company's owned landfills and landfills operated under life of site operating agreements min range	1 year
Life of Company's owned landfills and landfills operated under life of site operating agreements max range	189 years
Landfill depletion expense	19,552	18,590
Average rate per ton consumed related to landfill depletion at owned landfills and landfills operated under life of site agreements	2.94	3.04
Discount rate for purposes of computing layers for final capping, closure and post-closure obligations			5.75%	6.50%
Inflation rate for purposes of computing layers for final capping, closure and post-closure obligations			2.50%	2.50%
Accretion expense	967	880
Average rate per ton consumed related to final capping, closure and post-closure landfill accretion expense	0.15	0.14
Restricted asset balance for purposes of securing our performance of future final capping, closure and post-closure obligations	$ 25,839

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Long-Term Debt (Details) (USD $)	6 Months Ended		6 Months Ended			6 Months Ended		6 Months Ended		6 Months Ended		6 Months Ended		6 Months Ended		6 Months Ended		6 Months Ended		6 Months Ended			6 Months Ended
	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2011 0.81% to 3.25% Revolver under credit facility [Member]	Dec. 31, 2010 0.81% to 3.25% Revolver under credit facility [Member]	Jun. 30, 2011 Senior Notes [Member]	Jun. 30, 2011 6.22% Senior Notes due 2015 [Member]	Dec. 31, 2010 6.22% Senior Notes due 2015 [Member]	Jun. 30, 2011 3.30% Senior Notes due 2016 [Member]	Dec. 31, 2010 3.30% Senior Notes due 2016 [Member]	Jun. 30, 2011 4.00% Senior Notes due 2018 [Member]	Dec. 31, 2010 4.00% Senior Notes due 2018 [Member]	Jun. 30, 2011 5.25% Senior Notes due 2019 [Member]	Dec. 31, 2010 5.25% Senior Notes due 2019 [Member]	Jun. 30, 2011 4.64% Senior Notes due 2021 [Member]	Dec. 31, 2010 4.64% Senior Notes due 2021 [Member]	Jun. 30, 2011 0.10% to 0.42% Tax-exempt bonds [Member]	Dec. 31, 2010 0.10% to 0.42% Tax-exempt bonds [Member]	Jun. 30, 2011 2.50% to 10.35% Notes payable to sellers in connection with acquisitions [Member]	Dec. 31, 2010 2.50% to 10.35% Notes payable to sellers in connection with acquisitions [Member]	Jun. 30, 2011 6.7% to 10.9% Notes payable to third parties [Member]	Dec. 31, 2010 6.7% to 10.9% Notes payable to third parties [Member]	Mar. 31, 2011 Senior Uncollateralized Notes [Member]	Jun. 30, 2011 New credit agreement [Member]	Jun. 30, 2011 New credit agreement [Member] Maximum [Member]	Jun. 30, 2011 New credit agreement [Member] Minimum [Member]	Jun. 30, 2011 Previous credit facility [Member]
Long-term debt
Long-term Debt	$ 1,138,669,000	$ 912,635,000	$ 487,500,000	$ 511,000,000	$ 600,000,000	$ 175,000,000	$ 175,000,000	$ 100,000,000	$ 0	$ 50,000,000	$ 0	$ 175,000,000	$ 175,000,000	$ 100,000,000	$ 0	$ 39,345,000	$ 39,420,000	$ 8,874,000	$ 9,159,000	$ 2,950,000	$ 3,056,000	$ 250,000,000
Less - current portion	(2,693,000)	(2,657,000)
Long-term Debt, Noncurrent	1,135,976,000	909,978,000
Schedule of Long-term Debt Instruments (Textuals) [Abstract]
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum			0.81%													0.10%		2.50%		6.70%
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Maximum			3.25%													0.42%		10.35%		10.90%
Debt Instrument, Interest Rate, Stated Percentage						6.22%		3.30%		4.00%		5.25%		4.64%
Debt Instrument, Maturity Date						2015		2016		2018		2019		2021
Long-term Debt	1,138,669,000	912,635,000	487,500,000	511,000,000	600,000,000	175,000,000	175,000,000	100,000,000	0	50,000,000	0	175,000,000	175,000,000	100,000,000	0	39,345,000	39,420,000	8,874,000	9,159,000	2,950,000	3,056,000	250,000,000
Discount rate of notes	Current market standard for United States treasury bills plus 0.50%
Maximum limit of aggregate principal amount of the Notes outstanding	750,000,000
New credit facility																							1,200,000			845,000
Maximum amount of increase in commitments under the revolving credit facility																							$ 1,500,000
Commitment fee																								0.35%	0.20%
Margins for LIBOR loans																								2.00%	1.15%
Margins for base rate loans																								1.00%	0.15%
Interest rate in addition to LIBOR Rate																							1.40%
Interest rate increase																							0.775%

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Acquisitions (Details) (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Fair value of consideration transferred:
Cash	$ 215,962	$ 3,849
Debt assumed	84,737	281
Total fair value of consideration transferred	300,699	4,130
Recognized amounts of identifiable assets acquired liabilities assumed and noncontrolling interests associated with businesses acquired:
Accounts receivable	8,801	468
Other current assets	940	157
Property and equipment	52,428	802
Long-term franchise agreements and contracts	2,608	175
Customer lists	40,793	851
Indefinite-lived intangibles	41,215
Accounts payable	(6,218)
Accrued liabilities	(1,143)	(527)
Noncontrolling interests	(208)
Deferred revenue	(5,231)	(50)
Deferred taxes	(10,257)
Total identifiable net assets	123,728	1,876
Goodwill	176,971	2,254
Payments for acquisitions, net of cash acquired, as reported in Condensed Consolidated Statements of Cash Flows
Cash consideration transferred	215,962	3,849
Payment of contingent consideration	100
Payments for acquisitions, net of cash acquired	$ 216,062	$ 3,849

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Acquisitions (Details Textual) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2011	Jun. 30, 2010	Mar. 31, 2011
Business Acquisition [Line Items]
Amount paid for purchased operations	$ 215,962	$ 215,962	$ 3,849
Acquisitions (Textuals) [Abstract]
Number of collection operations				6
Number of transfer stations				3
Number Of Recycling Facilities				1
Operations across number of markets				6
Revenue from wholly owned subsidiary	31,655
Total pre-tax earnings from wholly owned subsidiary	3,063
Number of individual businesses acquired		5	10
Fair value of acquired working capital is provisional		5
Goodwill expected to be deductible for tax purposes	11,947	11,947	2,254
Trade receivables acquired in business combination gross contractual amount	9,461	9,461	474
Trade receivables acquired In business combination expected to be uncollectible amount	660	660	6
Third-party acquisition-related costs		1,094	395
Hudson Valley Waste Holding [Member]
Business Acquisition [Line Items]
Amount paid for purchased operations				299,000
Hudson Valley Waste Holding Inc & County Waste and Recycling Service Inc [Member]
Business Acquisition [Line Items]
Acquisition of interest				100.00%
Russell Sweepers LLC [Member]
Business Acquisition [Line Items]
Acquisition of interest				50.00%
Business combination percentage of noncontrolling interest				50.00%

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Intangible Assets (Details) (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Dec. 31, 2010
Amortizable intangible assets:
Finite-lived intangible assets, gross carrying amount	$ 326,661	$ 284,024
Finite-lived intangible assets, accumulated amortization	(60,954)	(51,468)
Finite-lived intangible assets, net carrying amount	265,707	232,556
Nonamortized intangible assets:
Indefinite-lived intangible assets (excluding goodwill)	190,134	148,919
Intangible Assets Gross Exclusive Of Goodwill	516,795	432,943
Intangible Assets Accumulated Amortization Exclusive Of Goodwill	(60,954)	(51,468)
Intangible assets, net, exclusive of goodwill	455,841	381,475
Estimated future amortization expense of amortizable intangible assets
For the year ending December 31, 2011	20,801
For the year ending December 31, 2012	21,879
For the year ending December 31, 2013	20,311
For the year ending December 31, 2014	19,579
For the year ending December 31, 2015	18,978
Long-term franchise agreements and contracts [Member]
Amortizable intangible assets:
Finite-lived intangible assets, gross carrying amount	192,334	190,489
Finite-lived intangible assets, accumulated amortization	(28,926)	(25,255)
Finite-lived intangible assets, net carrying amount	163,408	165,234
Non-competition agreements [Member]
Amortizable intangible assets:
Finite-lived intangible assets, gross carrying amount	9,414	9,414
Finite-lived intangible assets, accumulated amortization	(6,205)	(5,982)
Finite-lived intangible assets, net carrying amount	3,209	3,432
Customer lists [Member]
Amortizable intangible assets:
Finite-lived intangible assets, gross carrying amount	103,677	62,885
Finite-lived intangible assets, accumulated amortization	(23,151)	(17,867)
Finite-lived intangible assets, net carrying amount	80,526	45,018
Other [Member]
Amortizable intangible assets:
Finite-lived intangible assets, gross carrying amount	21,236	21,236
Finite-lived intangible assets, accumulated amortization	(2,672)	(2,364)
Finite-lived intangible assets, net carrying amount	$ 18,564	$ 18,872

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Intangible Assets (Details 1)	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Customer lists [Member]
Finite-Lived Intangible Assets (Textuals) [Abstract]
Weighted average amortization period of acquired intangible assets	7.0	6.4
Long-term franchise agreements and contracts [Member]
Finite-Lived Intangible Assets (Textuals) [Abstract]
Weighted average amortization period of acquired intangible assets	25.8	9.1

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Condensed Consolidated Statements of Income (Unaudited) (USD $) In Thousands, except Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Condensed Consolidated Statements of Income [Abstract]
Revenues	$ 390,184	$ 330,477	$ 721,652	$ 638,018
Operating expenses:
Cost of operations	221,872	187,346	408,938	364,336
Selling, general and administrative	41,169	36,353	80,007	72,011
Depreciation	36,939	33,464	69,975	64,908
Amortization of intangibles	5,673	3,598	9,650	7,184
Loss (gain) on disposal of assets	(267)	365	(292)	622
Operating income	84,798	69,351	153,374	128,957
Interest expense	(11,087)	(9,161)	(19,920)	(21,423)
Interest income	143	165	276	318
Loss on extinguishment of debt		(9,734)		(10,193)
Other income (expense), net	(245)	(169)	149	469
Income before income tax provision	73,609	50,452	133,879	98,128
Income tax provision	(29,004)	(19,815)	(52,481)	(39,678)
Net income	44,605	30,637	81,398	58,450
Less: Net income attributable to noncontrolling interests	(192)	(237)	(446)	(477)
Net income attributable to Waste Connections	$ 44,413	$ 30,400	$ 80,952	$ 57,973
Earnings per common share attributable to Waste Connections' common stockholders:
Basic	$ 0.39	$ 0.26	$ 0.71	$ 0.50
Diluted	$ 0.39	$ 0.26	$ 0.71	$ 0.49
Shares used in the per share calculations:
Basic	113,509,668	116,243,700	113,514,439	116,401,140
Diluted	114,308,710	117,482,751	114,354,979	117,747,552
Cash dividends per common share	$ 0.075		$ 0.15

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Segment Reporting (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Summary of financial information concerning the Company's reportable segments
Gross Revenues	$ 447,220	$ 380,646	$ 826,360	$ 732,715
Intercompany revenues	(57,036)	(50,169)	(104,708)	(94,697)
Net Revenues	390,184	330,477	721,652	638,018
Operating income (loss) before depreciation, amortization and gain (loss) on disposal of assets	127,143	106,778	232,707	201,671
Corporate [Member]
Summary of financial information concerning the Company's reportable segments
Operating income (loss) before depreciation, amortization and gain (loss) on disposal of assets	2,933	1,817	1,656	1,736
Western [Member]
Summary of financial information concerning the Company's reportable segments
Gross Revenues	213,162	199,335	410,628	387,849
Intercompany revenues	(25,611)	(23,373)	(48,511)	(44,885)
Net Revenues	187,551	175,962	362,117	342,964
Operating income (loss) before depreciation, amortization and gain (loss) on disposal of assets	57,835	53,792	112,288	104,238
Central [Member]
Summary of financial information concerning the Company's reportable segments
Gross Revenues	124,004	110,289	235,963	208,928
Intercompany revenues	(13,489)	(13,307)	(25,051)	(24,215)
Net Revenues	110,515	96,982	210,912	184,713
Operating income (loss) before depreciation, amortization and gain (loss) on disposal of assets	39,662	32,860	75,086	61,003
Eastern [Member]
Summary of financial information concerning the Company's reportable segments
Gross Revenues	110,054	71,022	179,769	135,938
Intercompany revenues	(17,936)	(13,489)	(31,146)	(25,597)
Net Revenues	92,118	57,533	148,623	110,341
Operating income (loss) before depreciation, amortization and gain (loss) on disposal of assets	$ 26,713	$ 18,309	$ 43,677	$ 34,694

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Segment Reporting 1 (Details) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Total Assets of Company's Reportable Segments
Total Assets	$ 3,213,888	$ 2,915,984
Corporate [Member]
Total Assets of Company's Reportable Segments
Total Assets	57,788	63,562
Western [Member]
Total Assets of Company's Reportable Segments
Total Assets	1,364,307	1,378,920
Central [Member]
Total Assets of Company's Reportable Segments
Total Assets	1,024,309	654,854
Eastern [Member]
Total Assets of Company's Reportable Segments
Total Assets	$ 767,484	$ 818,648

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Segment Reporting 2 (Details) (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Changes in goodwill by reportable segment
Goodwill, Beginning Balance	$ 927,852	$ 906,710
Goodwill acquired	176,971	2,254
Goodwill divested		(1,175)
Goodwill, Ending Balance	1,104,823	907,789
Western [Member]
Changes in goodwill by reportable segment
Goodwill, Beginning Balance	313,038	291,781
Goodwill transferred		20,295
Goodwill acquired		682
Goodwill divested
Goodwill, Ending Balance	313,038	312,758
Central [Member]
Changes in goodwill by reportable segment
Goodwill, Beginning Balance	305,774	313,366
Goodwill transferred	111,806	(20,295)
Goodwill acquired	1,366	1,523
Goodwill divested		(64)
Goodwill, Ending Balance	418,946	294,530
Eastern [Member]
Changes in goodwill by reportable segment
Goodwill, Beginning Balance	309,040	301,563
Goodwill transferred	(111,806)
Goodwill acquired	175,605	49
Goodwill divested		(1,111)
Goodwill, Ending Balance	$ 372,839	$ 300,501

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Segment Reporting 3 (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Reconciliation of Company's primary measure of segment profitability to Income before income tax provision
Operating income (loss) before depreciation, amortization and gain (loss) on disposal of assets	$ 127,143	$ 106,778	$ 232,707	$ 201,671
Depreciation	(36,939)	(33,464)	(69,975)	(64,908)
Amortization of intangibles	(5,673)	(3,598)	(9,650)	(7,184)
Gain (loss) on disposal of assets	267	(365)	292	(622)
Interest expense	(11,087)	(9,161)	(19,920)	(21,423)
Interest income	143	165	276	318
Loss on extinguishment of debt		(9,734)		(10,193)
Other income (expense), net	(245)	(169)	149	469
Income before income tax provision	$ 73,609	$ 50,452	$ 133,879	$ 98,128

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Segment Reporting 4 (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Total revenues by service line
Gross Revenues	$ 447,220	$ 380,646	$ 826,360	$ 732,715
Less: Intercompany elimination	(57,036)	(50,169)	(104,708)	(94,697)
Total revenues	390,184	330,477	721,652	638,018
Collection [Member]
Total revenues by service line
Gross Revenues	275,170	238,108	514,607	467,178
Disposal and transfer [Member]
Total revenues by service line
Gross Revenues	133,722	116,217	243,282	216,917
Intermodal recycling and other [Member]
Total revenues by service line
Gross Revenues	38,328	26,321	68,471	48,620
Collection disposal transfer Intermodal recycling and other [Member]
Total revenues by service line
Gross Revenues	447,220	380,646	826,360	732,715
Intercompany elimination [Member]
Total revenues by service line
Less: Intercompany elimination	$ (57,036)	$ (50,169)	$ (104,708)	$ (94,697)

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Segment Reporting 5 (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2011
Segment Reporting (Textuals) [Abstract]
Number of industry segment from which Company's revenues are derived	1
Number of contracts or customers accounted for more than 10% of the Company's total revenues at the consolidated or reportable segment level	0
Number of geographic operating segments through which the Company manages its operations	3
Accumulated impairment losses associated with goodwill	$ 0

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Derivative Financial Instruments (Details) (Interest Rate Swap [Member], USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2011
Interest Rate Swap [Member]
Company's derivative instruments of interest rate swap
Date Entered	Mar. 18, 2009
Notional Amount	$ 175,000
Fixed Interest Rate Paid	2.85%
Variable Interest Rate Received	1-month LIBOR
Effective Date	Feb. 01, 2011
Expiration Date	Feb. 03, 2014

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Derivative Financial Instruments 1 (Details) (USD $)	6 Months Ended
	Jun. 30, 2011
Fuel Hedge Agreements One [Member]
Company's Derivative Instruments of Fuel Hedge Agreements
Date Entered	Dec. 18, 2008
Notional Amount (in gallons per month)	400,000
Diesel Rate Paid Fixed (Per gallon)	$ 2.95
Diesel Rate Received Variable	DOE Diesel Fuel Index
Effective Date	Jan. 01, 2011
Expiration Date	Dec. 31, 2011
Fuel Hedge Agreements Two [Member]
Company's Derivative Instruments of Fuel Hedge Agreements
Date Entered	Dec. 18, 2008
Notional Amount (in gallons per month)	400,000
Diesel Rate Paid Fixed (Per gallon)	$ 3.03
Diesel Rate Received Variable	DOE Diesel Fuel Index
Effective Date	Jan. 01, 2012
Expiration Date	Dec. 31, 2012

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Derivative Financial Instruments 2 (Details) (Cash Flow Hedging [Member], USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Fair values of derivative instruments designated as cash flow hedges
Derivatives Designated as cash flow Hedges, Asset derivatives	$ 6,566	$ 4,730
Derivatives Designated as cash flow Hedges, Liability derivatives	(8,870)	(9,722)
Other Assets [Member] | Fuel Hedges [Member]
Fair values of derivative instruments designated as cash flow hedges
Derivatives Designated as cash flow Hedges, Asset derivatives	2,137	2,261
Prepaid expenses and other current assets [Member] | Fuel Hedges [Member]
Fair values of derivative instruments designated as cash flow hedges
Derivatives Designated as cash flow Hedges, Asset derivatives	4,429	2,469
Accrued Liabilities [Member] | Interest Rate Swap [Member]
Fair values of derivative instruments designated as cash flow hedges
Derivatives Designated as cash flow Hedges, Liability derivatives	(4,352)	(4,988)
Other long term liabilities [Member] | Interest Rate Swap [Member]
Fair values of derivative instruments designated as cash flow hedges
Derivatives Designated as cash flow Hedges, Liability derivatives	$ (4,518)	$ (4,734)

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Derivative Financial Instruments 3 (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Derivative Financial Instruments (Textuals) [Abstract]
Interest Rate Swap Agreement	1		1
Fuel Hedge Agreements	2		2
Interest Rate Swap [Member] | Interest Expense [Member]
Summary of Cash Flow Hedges on results of operations, comprehensive income and accumulated other comprehensive loss
Amount of (Gain) or Loss Reclassified from AOCL into Earnings, Net of Tax (Effective portion)			$ 2,142	$ 2,869
Interest Rate Swap [Member] | Interest Expense [Member] | Cash Flow Hedging [Member]
Summary of Cash Flow Hedges on results of operations, comprehensive income and accumulated other comprehensive loss
Amount of (Gain) or Loss Reclassified from AOCL into Earnings, Net of Tax (Effective portion)	985	1,431
Interest Rate Swap [Member] | Cash Flow Hedging [Member]
Summary of Cash Flow Hedges on results of operations, comprehensive income and accumulated other comprehensive loss
Amount of Gain or (Loss) Recognized in AOCL on Derivatives, Net of Tax (Effective Portion)	(1,655)	(3,080)	(1,614)	(5,435)
Fuel Hedges [Member] | Cost of operations [Member]
Summary of Cash Flow Hedges on results of operations, comprehensive income and accumulated other comprehensive loss
Amount of (Gain) or Loss Reclassified from AOCL into Earnings, Net of Tax (Effective portion)			(1,294)	1,441
Fuel Hedges [Member] | Cost of operations [Member] | Cash Flow Hedging [Member]
Summary of Cash Flow Hedges on results of operations, comprehensive income and accumulated other comprehensive loss
Amount of (Gain) or Loss Reclassified from AOCL into Earnings, Net of Tax (Effective portion)	(792)	257
Fuel Hedges [Member] | Cash Flow Hedging [Member]
Summary of Cash Flow Hedges on results of operations, comprehensive income and accumulated other comprehensive loss
Amount of Gain or (Loss) Recognized in AOCL on Derivatives, Net of Tax (Effective Portion)	(449)	(1,269)	2,433	(1,919)
Cash Flow Hedging [Member]
Summary of Cash Flow Hedges on results of operations, comprehensive income and accumulated other comprehensive loss
Amount of Gain or (Loss) Recognized in AOCL on Derivatives, Net of Tax (Effective Portion)	(2,104)	(4,349)	819	(7,354)
Amount of (Gain) or Loss Reclassified from AOCL into Earnings, Net of Tax (Effective portion)	$ 193	$ 1,688	$ 848	$ 4,310

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Condensed Consolidated Statements of Equity and Comprehensive Income (Unaudited) (USD $) In Thousands, except Share data	Total	Comprehensive Income	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Retained Earnings	Noncontrolling Interests
Beginning Balance at Dec. 31, 2009	$ 1,357,036	$ 0	$ 786	$ 625,173	$ (4,892)	$ 732,738	$ 3,231
Beginning Balance, Shares at Dec. 31, 2009			117,898,624
Vesting of restricted stock units			3	(3)
Vesting of restricted stock units, shares			487,037
Tax withholdings related to net share settlements of restricted stock units	(3,600)		(1)	(3,599)
Tax withholdings related to net share settlements of restricted stock units, shares			(168,561)
Equity-based compensation	5,625			5,625
Exercise of stock options and warrants	17,774		10	17,764
Exercise of stock options and warrants, shares			1,426,681
Excess tax benefit associated with equity-based compensation	6,423			6,423
Repurchase of common stock	(83,665)		(25)	(83,640)
Repurchase of common stock, shares	3,736,611		(3,736,611)
Reacquisition of equity component resulting from conversion of 2026 Convertible Senior Notes	(2,295)			(2,295)
Issuance of shares in connection with conversion of 2026 Convertible Senior Notes, Shares			32,859
Amounts reclassified into earnings, net of taxes	4,310				4,310
Changes in fair value of swaps, net of taxes	(7,354)				(7,354)
Less: Net income attributable to noncontrolling interests	477
Net income	58,450	58,450				57,973	477
Other comprehensive income (loss)	(4,934)	(4,934)
Income tax effect of other comprehensive income (loss)	1,890	1,890
Comprehensive income		55,406
Comprehensive income attributable to noncontrolling interests		(477)
Comprehensive income attributable to Waste Connections		54,929
Ending Balance at Jun. 30, 2010	1,352,704	0	773	565,448	(7,936)	790,711	3,708
Ending Balance, Shares at Jun. 30, 2010			115,940,029
Beginning Balance at Dec. 31, 2010	1,370,418		1,139	509,218	(3,095)	858,887	4,269
Beginning Balance, Shares at Dec. 31, 2010	113,950,081		113,950,081
Vesting of restricted stock units			5	(5)
Vesting of restricted stock units, shares			521,069
Tax withholdings related to net share settlements of restricted stock units	(5,271)		(2)	(5,269)
Tax withholdings related to net share settlements of restricted stock units, shares			(179,375)
Equity-based compensation	5,962			5,962
Exercise of stock options and warrants	2,776		2	2,774
Exercise of stock options and warrants, shares			202,756
Excess tax benefit associated with equity-based compensation	2,829			2,829
Repurchase of common stock	(42,381)		(14)	(42,367)
Repurchase of common stock, shares	1,460,399		(1,460,399)
Cash dividends on common stock	(17,041)					(17,041)
Amounts reclassified into earnings, net of taxes	848				848
Changes in fair value of swaps, net of taxes	819				819
Distributions to noncontrolling interests	(675)						(675)
Fair value of noncontrolling interest associated with business acquired	208						208
Less: Net income attributable to noncontrolling interests	446
Net income	81,398	81,398				80,952	446
Other comprehensive income (loss)	2,688	2,688
Income tax effect of other comprehensive income (loss)	(1,021)	(1,021)
Comprehensive income		83,065
Comprehensive income attributable to noncontrolling interests		(446)
Comprehensive income attributable to Waste Connections		82,619
Ending Balance at Jun. 30, 2011	$ 1,399,890		$ 1,130	$ 473,142	$ (1,428)	$ 922,798	$ 4,248
Ending Balance, Shares at Jun. 30, 2011	113,034,132		113,034,132

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Net Income Per Share Information (Details) (USD $) In Thousands, except Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Numerator:
Net income attributable to Waste Connections for basic and diluted earnings per share	$ 44,413	$ 30,400	$ 80,952	$ 57,973
Denominator:
Basic shares outstanding	113,509,668	116,243,700	113,514,439	116,401,140
Dilutive effect of stock options and warrants	451,173	924,542	463,899	1,030,239
Dilutive effect of restricted stock	347,869	314,509	376,641	316,173
Diluted shares outstanding	114,308,710	117,482,751	114,354,979	117,747,552
Net Income Per Share Information (Textuals) [Abstract]
Stock options and warrants to purchase common stock shares	1,266	909	1,266	3,279

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Fair Value Measurements (Details) (Fair Value, Measurements, Recurring [Member], USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Assets and liabilities measured at fair value on a recurring basis
Interest rate swap derivative instruments - net liability position	$ (8,870)	$ (9,722)
Fuel hedge derivative instruments - net asset position	6,566	4,730
Restricted assets	28,600	30,791
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets and liabilities measured at fair value on a recurring basis
Interest rate swap derivative instruments - net liability position	0	0
Fuel hedge derivative instruments - net asset position	0	0
Restricted assets	28,600	30,791
Significant Other Observable Inputs (Level 2) [Member]
Assets and liabilities measured at fair value on a recurring basis
Interest rate swap derivative instruments - net liability position	(8,870)	(9,722)
Fuel hedge derivative instruments - net asset position	0	0
Restricted assets	0	0
Significant Unobservable Inputs (Level 3) [Member]
Assets and liabilities measured at fair value on a recurring basis
Interest rate swap derivative instruments - net liability position	0	0
Fuel hedge derivative instruments - net asset position	6,566	4,730
Restricted assets	$ 0	$ 0

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Fair Value Measurements 1 (Details) (Level 3 Derivatives [Member], USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Level 3 Derivatives [Member]
Change in the fair value for Level 3 derivatives
Beginning balance	$ 4,730	$ (104)
Realized (gains) losses included in earnings	(2,088)	2,324
Unrealized gains (losses) included in AOCL	3,924	(3,095)
Ending balance	$ 6,566	$ (875)

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Comprehensive Income (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Components of other comprehensive income (loss) and related tax effects
Amounts reclassified, Net of tax			$ 848	$ 4,310
Changes in fair value of swaps, net of taxes			819	(7,354)
Other comprehensive income (loss), Total, Gross	(3,083)	(4,291)	2,688	(4,934)
Income tax effect of other comprehensive income (loss)	1,172	1,630	(1,021)	1,890
Other comprehensive income (loss), Total, Net of tax	(1,911)	(2,661)	1,667	(3,044)
Total comprehensive income (Textuals) [Abstract]
Total comprehensive income	42,694	27,976
Interest Rate Swap [Member]
Components of other comprehensive income (loss) and related tax effects
Amounts reclassified, Gross	1,589	2,309	3,455	4,628
Amounts reclassified, Tax effect	(604)	(878)	(1,313)	(1,759)
Amounts reclassified, Net of tax	985	1,431	2,142	2,869
Changes in fair value, Gross	(2,670)	(4,968)	(2,603)	(8,791)
Changes in fair value, Tax effect	1,015	1,888	989	3,356
Changes in fair value of swaps, net of taxes	(1,655)	(3,080)	(1,614)	(5,435)
Fuel Hedges [Member]
Components of other comprehensive income (loss) and related tax effects
Amounts reclassified, Gross	(1,278)	414	(2,088)	2,324
Amounts reclassified, Tax effect	486	(157)	794	(883)
Amounts reclassified, Net of tax	(792)	257	(1,294)	1,441
Changes in fair value, Gross	(724)	(2,046)	3,924	(3,095)
Changes in fair value, Tax effect	275	777	(1,491)	1,176
Changes in fair value of swaps, net of taxes	$ (449)	$ (1,269)	$ 2,433	$ (1,919)

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Comprehensive Income 1 (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Amounts included in AOCL
Balance at December 31, 2010			$ (3,095)
Amounts reclassified into earnings, net of taxes			848	4,310
Change in fair value			819	(7,354)
Balance at June 30, 2011	(1,428)		(1,428)
Interest Rate Swap [Member]
Amounts included in AOCL
Balance at December 31, 2010			(6,026)
Amounts reclassified into earnings, net of taxes	985	1,431	2,142	2,869
Change in fair value	(1,655)	(3,080)	(1,614)	(5,435)
Balance at June 30, 2011	(5,498)		(5,498)
Fuel Hedges [Member]
Amounts included in AOCL
Balance at December 31, 2010			2,931
Amounts reclassified into earnings, net of taxes	(792)	257	(1,294)	1,441
Change in fair value	(449)	(1,269)	2,433	(1,919)
Balance at June 30, 2011	$ 4,070		$ 4,070

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Stockholder's Equity (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended				6 Months Ended
	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Jun. 30, 2011	Jun. 30, 2010	Oct. 29, 2010
Summary of activity related to restricted stock units
Outstanding, Beginning Balance	1,466,310		1,514,459		1,514,459
Granted					495,560
Forfeited					(22,640)
Vested					(521,069)
Outstanding, Ending Balance		1,466,310		1,514,459	1,466,310
Stockholders Equity (Textuals) [Abstract]
Weighted average grant date fair value per share					$ 29.26
Stock-based compensation expense					$ 5,929	$ 5,492
Repurchase of common stock, maximum value					800,000
Repurchase of common stock					1,460,399	3,736,611
Payments for repurchase of common stock					42,381	83,665
Remaining value of common stock authorized under repurchase program					108,993
Percentage of stock dividend payable to stockholders as per three-for-two split of common stock							50.00%
Par value of additional shares issued as a result of stock split					394
Shares repurchased as result of the stock split, shares					2,479
Shares repurchased as result of the stock split, value					101
Cash dividend per share	$ 0.075	$ 0.075	$ 0.075	$ 0.075	$ 0.15
Cash dividends on common stock		$ 8,526	$ 8,515	$ 8,561	$ (17,041)

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Commitments and Contingencies (Details) (USD $) In Thousands, unless otherwise specified	1 Months Ended		6 Months Ended	12 Months Ended
	Dec. 31, 2010	Jul. 31, 2009	Jun. 30, 2011	Jun. 30, 2011	May 31, 2011
Commitments and Contingencies (Textuals) [Abstract]
HDSWF purchased undeveloped land		Approximately 325 acres
Capital expenditures related to landfill development project			$ 11,759	$ 11,759
Capitalized expenditures the Company will be required to expense in future if new site permit approved			10,318	10,318
Capitalized expenditures the Company will be required to expense in future if original site permit approved			1,441	1,441
Capitalized expenditures the Company will be required to expense in future if site permits not approved			11,759	11,759
Pre-tax impairment charge related to Kansas landfill			15,000	15,000
Estimated annual impact on pre-tax earnings if company unable to operate the landfill				4,000
Net back pay, without interest for all alleged discriminatees	60.00%
Maximum limit of import of solid waste			95,000
PHLF annual disposal of solid waste			670,800
Solid waste originated from sources outside of Solano County			562,300
Aggregate settlement fee			771
Court issued tentative order awarding Petitioners attorneys fees					452
Amount of reduced attroney fees in court final order					411
Allocated attorney fees					50.00%
Amount of arrorney fees for which PHLF and County severally liable			206	206
Current annual impact to pre-tax earnings resulting from restriction on imports into Solano County			6,000
Time period to file answer to the petition			30 days
Pre-tax impairment charge related to PHLF			39,000
Expected pre-tax impairment charge related to PHLF if Measure E is ultimately ruled to be unenforceable			$ 24,000

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Cash flows from operating activities:
Net income	$ 81,398	$ 58,450
Adjustments to reconcile net income to net cash provided by operating activities:
Loss (gain) on disposal of assets	(292)	622
Depreciation	69,975	64,908
Amortization of intangibles	9,650	7,184
Deferred income taxes, net of acquisitions	23,106	7,737
Loss on redemption of 2026 Convertible Senior Notes, net of make-whole payment		2,255
Amortization of debt issuance costs	540	1,090
Amortization of debt discount		1,245
Equity-based compensation	5,962	5,625
Interest income on restricted assets	(245)	(271)
Closure and post-closure accretion	967	880
Excess tax benefit associated with equity-based compensation	(2,829)	(6,423)
Net change in operating assets and liabilities, net of acquisitions	1,744	422
Net cash provided by operating activities	189,976	143,724
Cash flows from investing activities:
Payments for acquisitions, net of cash acquired	(216,062)	(3,849)
Capital expenditures for property and equipment	(46,562)	(50,495)
Proceeds from disposal of assets	1,862	4,925
Decrease (increase) in restricted assets, net of interest income	2,501	(813)
Decrease (increase) in other assets	(2,764)	39
Net cash used in investing activities	(261,025)	(50,193)
Cash flows from financing activities:
Proceeds from long-term debt	427,500	281,000
Principal payments on notes payable and long-term debt	(286,202)	(308,860)
Change in book overdraft	(1,918)	(2,172)
Proceeds from option and warrant exercises	2,776	17,774
Excess tax benefit associated with equity-based compensation	2,829	6,423
Payments for repurchase of common stock	(42,381)	(83,665)
Payments for cash dividends	(17,041)
Tax withholdings related to net share settlements of restricted stock units	(5,271)	(3,600)
Distributions to noncontrolling interests	(675)
Debt issuance costs	(1,490)
Net cash provided by (used in) financing activities	78,127	(93,100)
Net increase in cash and equivalents	7,078	431
Cash and equivalents at beginning of period	9,873	9,639
Cash and equivalents at end of period	16,951	10,070
Non-cash financing activity:
Liabilities assumed and notes payable issued to sellers of businesses acquired	$ 107,794	$ 858

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Basis of Presentation and Summary

6 Months Ended

Jun. 30, 2011

Basis of Presentation and Summary [Abstract]

BASIS OF PRESENTATION AND SUMMARY

1. BASIS OF PRESENTATION AND SUMMARY

The accompanying condensed consolidated financial statements relate to Waste Connections, Inc. and its subsidiaries (“WCI” or the “Company”) for the three and six month periods ended June 30, 2011 and 2010. In the opinion of management, the accompanying balance sheets and related interim statements of income, cash flows and equity and comprehensive income include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with U.S. generally accepted accounting principles (“GAAP”). Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Examples include accounting for landfills, self-insurance, income taxes, allocation of acquisition purchase price and asset impairments. An additional area that involves estimation is when the Company estimates the amount of potential exposure it may have with respect to litigation, claims and assessments in accordance with the accounting guidance on contingencies. Actual results for all estimates could differ materially from the estimates and assumptions that the Company uses in the preparation of its condensed consolidated financial statements.

Interim results are not necessarily indicative of results for a full year. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

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Reclassification

6 Months Ended

Jun. 30, 2011

Reclassification [Abstract]

RECLASSIFICATION

2. RECLASSIFICATION

Certain amounts reported in the Company’s prior period’s financial statements have been reclassified to conform with the 2011 presentation.

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New Accounting Standards

6 Months Ended

Jun. 30, 2011

New Accounting Standards [Abstract]

NEW ACCOUNTING STANDARDS

3. NEW ACCOUNTING STANDARDS

Fair Value Measurement. In May 2011, the Financial Accounting Standards Board (“FASB”) issued additional guidance on fair value disclosures. This guidance contains certain updates to the measurement guidance as well as enhanced disclosure requirements. The most significant change in disclosures is an expansion of the information required for “Level 3” measurements including enhanced disclosure for: (1) the valuation processes used by the reporting entity; and (2) the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs, if any. This guidance is effective for interim and annual periods beginning on or after December 15, 2011, with early adoption prohibited. This guidance will only impact the Company’s “Level 3” disclosures.

Presentation of Comprehensive Income. In June 2011, the FASB issued guidance on the presentation of comprehensive income. This guidance eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. The guidance allows two presentation alternatives: (1) present items of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income; or (2) in two separate, but consecutive, statements of net income and other comprehensive income. This guidance is effective as of the beginning of a fiscal year that begins after December 15, 2011. Early adoption is permitted, but full retrospective application is required under both sets of accounting standards. This Company is currently evaluating which presentation alternative it will utilize.