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, 2007

or

¨	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.)

35 Iron Point Circle, 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 ¨

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

Large accelerated filer þ Accelerated filer £ Non-accelerated filer £

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

Yes ¨ No þ

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

As of July 13, 2007: 68,044,778 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 - December 31, 2006 and June 30, 2007	1
	Condensed Consolidated Statements of Income for the three and six months ended June 30, 2006 and 2007	2
	Condensed Consolidated Statements of Stockholders’ Equity and Comprehensive Income for the six months ended June 30, 2007	3
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2006 and 2007	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
Item 3.  Quantitative and Qualitative Disclosures about Market Risk		25
Item 4.  Controls and Procedures		26
PART II - OTHER INFORMATION
Item 1.  Legal Proceedings		27
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds		28
Item 4.  Submission of Matters to a Vote of Security Holders		29
Item 6.  Exhibits		30
Signatures		31

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share amounts)

		December 31, 2006		June 30, 2007
Current assets:
Cash and equivalents	$	34,949	$	9,971
Accounts receivable, net of allowance for doubtful accounts of $3,489 and $3,811 at December 31, 2006 and June 30, 2007, respectively		100,269		113,442
Deferred income taxes		9,373		11,203
Prepaid expenses and other current assets		15,642		16,275
Total current assets		160,233		150,891
Property and equipment, net		736,428		791,117
Goodwill		750,397		765,557
Intangible assets, net		86,098		85,529
Restricted assets		15,917		16,928
Other assets, net		24,818		23,215
	$	1,773,891	$	1,833,237
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	53,010	$	54,412
Book overdraft		-		5,838
Accrued liabilities		57,810		59,339
Deferred revenue		32,161		38,312
Current portion of long-term debt and notes payable		6,884		6,657
Total current liabilities		149,865		164,558
Long-term debt and notes payable		637,308		635,852
Other long-term liabilities		16,712		29,303
Deferred income taxes		205,532		208,425
Total liabilities		1,009,417		1,038,138
Commitments and contingencies (Note 11)
Minority interests		27,992		28,690
Stockholders’ 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; 150,000,000 shares authorized; 68,266,038 and 68,037,246 shares issued and outstanding at December 31, 2006 and June 30, 2007, respectively		455		680
Additional paid-in capital		310,229		289,713
Retained earnings		422,731		473,046
Accumulated other comprehensive income		3,067		2,970
Total stockholders’ equity		736,482		766,409
	$	1,773,891	$	1,833,237

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,
		2006			2007			2006			2007
Revenues	$	206,970		$	241,084		$	397,139		$	460,035
Operating expenses:
Cost of operations		126,574			141,574			239,637			270,443
Selling, general and administrative		20,621			24,790			40,422			48,700
Depreciation and amortization		18,736			20,930			36,968			40,520
Loss on disposal of assets		236			32			154			192
Operating income		40,803			53,758			79,958			100,180
Interest expense		(6,619	)		(8,295	)		(14,113	)		(16,113	)
Other income (expense), net		11			365			(3,982	)		417
Income before income taxes and minority interests		34,195			45,828			61,863			84,484
Minority interests		(3,317	)		(4,130	)		(6,028	)		(6,970	)
Income from continuing operations before income taxes		30,878			41,698			55,835			77,514
Income tax provision		(11,678	)		(16,432	)		(20,912	)		(29,868	)
Net income	$	19,200		$	25,266		$	34,923		$	47,646
Basic earnings per common share	$	0.28		$	0.37		$	0.51		$	0.70
Diluted earnings per common share	$	0.27		$	0.36		$	0.49		$	0.67
Shares used in calculating basic income per share		67,761,623			68,592,474			68,130,920			68,529,546
Shares used in calculating diluted income per share		70,327,836			70,625,086			70,854,725			70,606,846

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

Page 2

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME

Six months ended June 30, 2007

(Unaudited)

(In thousands, except share amounts)

				STOCKHOLDERS’ EQUITY
				Common Stock
		Comprehensive Income			Shares			Amount			Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Total
Balances at December 31, 2006					68,266,038		$	455		$	310,229		$	3,067		$	422,731		$	736,482
Stock split					-			228			-			-			(228	)		-
Vesting of restricted stock					101,187			1			(1	)		-			-			-
Cancellation of unvested restricted stock					-			-			(1,428	)		-			-			(1,428	)
Stock-based compensation					-			-			3,134			-			-			3,134
Exercise of stock options and warrants					1,360,451			13			21,069			-			-			21,082
Excess tax benefit associated with equity-based compensation					-			-			8,534			-			-			8,534
Repurchase of common stock					(1,690,430	)		(17	)		(51,877	)		-			-			(51,894	)
Issuance of common stock warrants to consultants					-			-			53			-			-			53
Cumulative change from adoption of accounting policy					-			-			-			-			2,897			2,897
Amounts reclassified into earnings, net of taxes					-			-			-			(1,390	)		-			(1,390	)
Change in fair value of interest rate swaps, net of taxes					-			-			-			1,293			-			1,293
Net income	$	47,646			-			-			-			-			47,646			47,646
Other comprehensive loss		(137	)		-			-			-			-			-			-
Income tax effect of other comprehensive loss		40			-			-			-			-			-			-
Comprehensive income	$	47,549			-			-			-			-			-			-
Balances at June 30, 2007					68,037,246		$	680		$	289,713		$	2,970		$	473,046		$	766,409

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

Page 3

WASTE CONNECTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Six months ended June 30,
	2006			2007
Cash flows from operating activities:
Net income	$	34,923		$	47,646
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on disposal of assets		154			192
Depreciation		34,946			38,459
Amortization of intangibles		2,022			2,061
Deferred income taxes, net of acquisitions		6,026			3,741
Minority interests		6,028			6,970
Amortization of debt issuance costs		5,271			961
Stock-based compensation		1,576			3,134
Interest income on restricted assets		(288	)		(261	)
Closure and post-closure accretion		300			522
Excess tax benefit associated with equity-based compensation		(5,501	)		(8,534	)
Net change in operating assets and liabilities, net of acquisitions		10,539			12,387
Net cash provided by operating activities		95,996			107,278
Cash flows from investing activities:
Payments for acquisitions, net of cash acquired		(34,838	)		(40,591	)
Capital expenditures for property and equipment		(49,038	)		(64,509	)
Proceeds from disposal of assets		313			559
Increase in restricted assets, net of interest income		(617	)		(750	)
Increase in other assets		(236	)		(485	)
Net cash used in investing activities		(84,416	)		(105,776	)
Cash flows from financing activities:
Proceeds from long-term debt		631,997			42,000
Principal payments on notes payable and long-term debt		(569,619	)		(45,668	)
Change in book overdraft		(5,333	)		5,838
Proceeds from option and warrant exercises		24,916			21,082
Excess tax benefit associated with equity-based compensation		5,501			8,534
Distributions to minority interest holders		(4,900	)		(6,272	)
Payments for repurchase of common stock		(87,744	)		(51,894	)
Debt issuance costs		(6,185	)		(100	)
Net cash used in financing activities		(11,367	)		(26,480	)
Net increase (decrease) in cash and equivalents		213			(24,978	)
Cash and equivalents at beginning of period		7,514			34,949
Cash and equivalents at end of period	$	7,727		$	9,971
Non-cash financing activity:
Liabilities assumed and notes payable issued to sellers of businesses acquired	$	1,172		$	7,199

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

Page 4

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands, except share, per share 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”) as of June 30, 2007 and for the three and six month periods ended June 30, 2006 and 2007.  In the opinion of management, the accompanying balance sheets and related interim statements of income, cash flows and stockholders’ equity include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with U.S. generally accepted accounting principles.  The Company’s condensed consolidated balance sheet as of December 31, 2006 was derived from audited financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles.  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, deferred taxes, effective tax rate, allocation of acquisition purchase price and asset impairments.  Other areas that involve estimation are the amount of potential exposure the Company may have with respect to litigation, claims and assessments in accordance with SFAS No. 5, Accounting for Contingencies, and the potential outcome of future tax consequences of events that have been recognized in our financial statements or tax returns. Actual results and outcomes may differ from management’s estimates and assumptions. 

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 and the financial statements and notes thereto included in the Company’s 2006 Annual Report on Form 10-K. 

2.NEW ACCOUNTING STANDARDS 

FSP EITF 00-19-2.  In December 2006, the Financial Accounting Standards Board (the “FASB”) issued FASB Staff Position EITF 00-19-2, Accounting for Registration Payment Arrangements (“FSP EITF 00-19-2”), which provides guidance on the accounting for registration payment arrangements. FSP EITF 00-19-2 specifies that the contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement, whether issued as a separate agreement or included as a provision of a financial instrument or other agreement, should be separately recognized and measured in accordance with FASB Statement No. 5, Accounting for Contingencies.  The adoption of FSP EITF 00-19-2 on January 1, 2007 did not have an impact on the Company’s financial position or results of operations. 

SFAS 157.  In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS 157”), which defines fair value, establishes a framework for measuring fair value in U.S. generally accepted accounting principles, and expands disclosures about fair value measurements.  SFAS 157 applies under other existing accounting pronouncements that require or permit fair value measurements, as the FASB previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute.  Accordingly, SFAS 157 does not require any new fair value measurements.  However, the application of this statement may change the current practice for fair value measurements.  SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years.  The Company is currently evaluating the impact this statement will have on its financial position and results of operations. 

SFAS 159.  In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment of FASB Statement No. 115 (“SFAS 159”). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS 159 permits all entities to choose, at specified election dates, to measure eligible items at fair value (the “fair value option”).  A business entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date.  Upfront costs and fees related to items for which the fair value option is elected are recognized in earnings as incurred and not deferred.  SFAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities.  SFAS 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007.  The Company is currently evaluating the impact this statement will have on its financial position and results of operations. 

Page 5

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands, except share, per share and per ton amounts)

3.STOCK-BASED COMPENSATION

A summary of outstanding restricted stock and restricted stock units under the 2002 Restricted Stock Plan and the Second Amended and Restated 2004 Equity Incentive Plan at December 31, 2006 and June 30, 2007, and changes during the six month period ended June 30, 2007, is presented below:

	Unvested Shares
Outstanding at December 31, 2006		568,940
Granted		420,602
Forfeited		(11,606	)
Vested		(150,453	)
Outstanding at June 30, 2007		827,483

The weighted average grant date fair value per share for the 420,602 shares of common stock underlying restricted stock units granted during the six month period ended June 30, 2007 was $29.03. During the six months ended June 30, 2007, the Company's stock-based compensation expense from restricted stock and restricted stock units was $2,804. 

4.LANDFILL ACCOUNTING

At June 30, 2007, the Company owned 25 landfills, and operated, but did not own, three landfills under life-of-site operating agreements and eight landfills under limited-term operating agreements.  The Company’s landfills have site costs with a net book value of $439,015 at June 30, 2007.  With the exception of three owned landfills that only accept construction and demolition waste, all landfills that the Company owns or operates are municipal solid waste landfills.  For the Company’s eight landfills operated under limited-term operating agreements, the owner of the property (generally a municipality) usually owns the permit and is generally responsible for final capping, closure and post-closure obligations.  The Company is responsible for all final capping, closure and post-closure liabilities for the three landfills that it operates under life-of-site operating agreements. 

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

Page 6

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands, except share, per share and per ton amounts)

Based on remaining permitted capacity as of June 30, 2007, 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 approximately 50 years.  The Company is currently seeking to expand permitted capacity at five 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 54 years, with lives ranging from 6 to 206 years. 

During the six months ended June 30, 2006 and 2007, the Company expensed approximately $8,777 and $9,835, respectively, or an average of $2.52 and $2.53 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 recorded in 2007 assuming a 2.5% inflation rate and a 7.5% discount rate.  The resulting final capping, closure and post-closure obligation is recorded on the balance sheet as an addition to site costs and amortized to depletion expense as the landfill’s airspace is consumed.  Interest is accreted on the recorded liability using the corresponding discount rate.  During the six months ended June 30, 2006 and 2007, the Company expensed approximately $300 and $522, respectively, or an average of $0.09 and $0.13 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, 2006 to June 30, 2007:

Final capping, closure and post-closure liability at December 31, 2006	$11,638
Adjustments to final capping, closure and post-closure liabilities		1,135
Assumption of closure liabilities from acquisitions		2,419
Liabilities incurred		635
Accretion expense		522
Closure expenditures		(83	)
Final capping, closure and post-closure liability at June 30, 2007	$	16,266

The Company recorded adjustments to its final capping, closure and post-closure liabilities due to revisions in cost estimates, a decrease in the expansion airspace at a landfill for which an expansion is being pursued, and estimated increases in annual volume at an owned landfill, causing the remaining life, in years, of the landfill to decrease.  The Company performs its annual review of its engineering cost and capacity estimates in the first quarter of each year. 

At June 30, 2007, $14,790 of the Company’s restricted assets balance was for purposes of settling future final capping, closure and post-closure liabilities. 

Page 7

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands, except share, per share and per ton amounts)

5.LONG-TERM DEBT

Long-term debt consists of the following:

	December 31, 2006			June 30, 2007
Revolver under Credit Facility, bearing interest ranging from 6.2% to 8.25%*	$400,000			$400,000
2026 Senior Convertible Notes, bearing interest at 3.75%	200,000			200,000
2001 Wasco Bonds, bearing interest from 7.0% to 7.25%*		11,740			11,285
California Tax-Exempt Bonds, bearing interest ranging from 3.65% to 3.95%*		20,090			20,030
Notes payable to sellers in connection with acquisitions, bearing interest at 5.5% to 7.5%*		4,867			4,056
Notes payable to third parties, bearing interest at 5.1% to 11.0%*		7,495			7,138
		644,192			642,509
Less - current portion		(6,884	)		(6,657	)
	$	637,308		$	635,852

*  Interest rates in the table above represent the range of interest rates incurred during the six month period ended June 30, 2007. 

6.NET INCOME PER SHARE INFORMATION

The following table sets forth the numerator and denominator used in the computation of basic and diluted net income per common share for the three and six months ended June 30, 2006 and 2007: 

	Three months ended June 30,				Six months ended June 30,
		2006		2007		2006		2007
Numerator:
Net income for basic and diluted earnings per share	$	19,200	$	25,266	$	34,923	$	47,646
Denominator:
Basic shares outstanding		67,761,623		68,592,474		68,130,920		68,529,546
Dilutive effect of 2022 Convertible Subordinated Notes		649,132		-		786,051		-
Dilutive effect of stock options and warrants		1,785,697		1,687,348		1,833,633		1,762,522
Dilutive effective of restricted stock		131,384		345,264		104,121		314,778
Diluted shares outstanding		70,327,836		70,625,086		70,854,725		70,606,846

The Company’s Floating Rate Convertible Subordinated Notes due 2022 (the “2022 Notes”) were convertible, under certain circumstances, into a maximum of 8,137,002 shares of common stock until they were redeemed in May and June 2006.  The 2022 Notes required (subject to certain exceptions) payment of the principal value in cash and net share settle of the conversion value in excess of the principal value of the notes upon conversion.  In accordance with EITF 04-8, The Effect of Contingently Convertible Instruments on Diluted Earnings per Share (“EITF 04-8”), the Company has included the dilutive effect of the conversion value in excess of the principal value of the notes. 

Page 8

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands, except share, per share and per ton amounts)

The Company’s 3.75% Convertible Senior Notes due 2026 (the “2026 Notes”) are convertible, under certain circumstances, into a maximum of 5,882,354 shares of common stock.  The 2026 Notes require (subject to certain exceptions) payment of the principal value in cash and net share settle of the conversion value in excess of the principal value of the notes upon conversion.  In accordance with EITF 04-8, these shares have not been included in the computation of diluted net income per share for the three and six months ended June 30, 2006 and 2007 because the conversion value was not in excess of the principal value of the notes.  In addition, the conversion feature of the 2026 Notes meets all the requirements of EITF 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, to be accounted for as an equity interest and not as a derivative.  Therefore, in the event the 2026 Notes become convertible, a holder electing to convert will receive a cash payment for the principal amount of the debt and net shares of the Company’s common stock equal to the value of the conversion spread, which the Company will account for as a debt repayment with no gain or loss, and the issuance of common stock will be recorded in stockholders’ equity. 

For the three months ended June 30, 2006 and 2007, stock options and warrants to purchase 11,438 and zero shares, respectively, were excluded from the computation of diluted earnings per share as they were anti-dilutive.  For the six months ended June 30, 2006 and 2007, stock options and warrants to purchase 21,188 and 4,608 shares, respectively, were excluded from the computation of diluted earnings per share as they were anti-dilutive. 

7.COMPREHENSIVE INCOME

Comprehensive income includes changes in the fair value of interest rate swaps that qualify for hedge accounting.  The difference between net income and comprehensive income for the three and six months ended June 30, 2006 and 2007 is as follows:

	Three months ended June 30,				Six months ended June 30,
		2006		2007		2006		2007
Net income	$	19,200	$	25,266	$	34,923	$	47,646
Unrealized gain (loss) on interest rate swaps, net of tax expense (benefit) of $727 and $833 for the three months ended June 30, 2006 and 2007, respectively, and $1,957 and $(40) for the six months ended June 30, 2006 and 2007, respectively		1,236		1,319		3,333		(97	)
Comprehensive income	$	20,436	$	26,585	$	38,256	$	47,549

Page 9

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands, except share, per share and per ton amounts)

The components of other comprehensive income and related tax effects for the three and six months ended June 30, 2006 and 2007 are as follows:

	Three months ended June 30, 2006
		Gross			Tax effect			Net of tax
Amounts reclassified into earnings	$	(1,552	)	$	(574	)	$	(978	)
Changes in fair value of interest rate swaps		3,515			1,301			2,214
	$	1,963		$	727		$	1,236
	Three months ended June 30, 2007
		Gross			Tax effect			Net of tax
Amounts reclassified into earnings	$	(837	)	$	(322	)	$	(515	)
Changes in fair value of interest rate swaps		2,989			1,155			1,834
	$	2,152		$	833		$	1,319

	Six months ended June 30, 2006
		Gross			Tax effect			Net of tax
Amounts reclassified into earnings	$	(2,790	)	$	(1,033	)	$	(1,757	)
Changes in fair value of interest rate swaps		8,080			2,990			5,090
	$	5,290		$	1,957		$	3,333
	Six months ended June 30, 2007
		Gross			Tax effect			Net of tax
Amounts reclassified into earnings	$	(2,258	)	$	(868	)	$	(1,390	)
Changes in fair value of interest rate swaps		2,121			828			1,293
	$	(137	)	$	(40	)	$	(97	)

The estimated amount of the existing unrealized gains as of June 30, 2007 (based on the interest rate yield curve at that date) included in accumulated other comprehensive income expected to be reclassified into pre-tax earnings within the next 12 months is $3,328.  The timing of actual amounts reclassified into earnings is dependent on future movements in interest rates. 

8.INCOME TAXES

The Company adopted FASB Interpretation 48, Accounting for Uncertainty in Income Taxes (“FIN 48”), at the beginning of fiscal year 2007.  FIN 48 requires a company to evaluate whether the tax position taken by a company will more likely than not be sustained upon examination by the appropriate taxing authority.  It also provides guidance on how a company should measure the amount of benefit that the company is to recognize in its financial statements.  Under FIN 48, a company should also classify a liability for unrecognized tax benefits as current to the extent the company anticipates making a payment within one year.  As a result of the implementation of FIN 48, the changes to the Company’s reserve for uncertain tax positions was accounted for as a $2,897 adjustment to increase the beginning balance of retained earnings on the Company’s balance sheet.  At the beginning of 2007, the Company had approximately $6,702 of total gross unrecognized tax benefits.  Of this total, $2,618 (net of the federal benefit on state issues) represents the amount of unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in any future periods. 

Page 10

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands, except share, per share and per ton amounts)

The Company and its subsidiaries are subject to U.S. federal income tax as well as to income tax of multiple state jurisdictions.  The Company has concluded all U.S. federal income tax matters for years through 2002.  The 2004 U.S. federal income tax return is currently under examination by the Internal Revenue Service. All material state and local income tax matters have been concluded for years through 2001. 

The Company’s continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense.  The Company had approximately $453 accrued for interest, net of tax, and no accrual for penalties at the beginning of fiscal year 2007.  The Company does not anticipate the total amount of unrecognized tax benefits will significantly change by December 31, 2007. 

During the six months ended June 30, 2007, the Company recorded adjustments to income tax expense resulting from the reconciliation of its current and deferred income tax liability accounts and changes to the geographical apportionment of state income taxes.  The net impact of these adjustments was a decrease in income tax expense of $396. 

9.SHARE REPURCHASE PROGRAM

The Company’s Board of Directors has authorized a common stock repurchase program for the repurchase of up to $500,000 of common stock through December 31, 2008.  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, 2006 and 2007, the Company repurchased 3,501,150 and 1,690,430 shares, respectively, of its common stock under this program at a cost of $87,744 and $51,894, respectively.  Additionally, as a result of the stock split, fractional shares equal to 3,040 whole shares were repurchased at a price of $132.  As of June 30, 2007, the remaining maximum dollar value of shares available for purchase under the program is approximately $170,179.  The Company’s policy related to repurchases of common stock is to charge any excess of cost over par value entirely to additional paid-in capital. 

10.STOCK SPLIT

On February 12, 2007, the Company announced that its Board of Directors had authorized a three-for-two stock split of its common stock, in the form of a 50% stock dividend, payable to stockholders of record as of February 27, 2007.  Shares resulting from the split were issued on March 13, 2007. In connection therewith, the Company transferred $228 from retained earnings to common stock, representing the par value of additional shares issued.  All share and per share amounts for all periods presented have been adjusted to reflect the stock split. 

11.COMMITMENTS AND CONTINGENCIES

The Company’s subsidiary, High Desert Solid Waste Facility, Inc. (formerly known as Rhino Solid Waste, Inc.), 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 claims 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.  The parties have agreed to reschedule the hearing for July 2008 to allow the Company time to explore a possible relocation of the landfill.  At June 30, 2007, the Company had $8,725 of capitalized expenditures related to this landfill development project.  If the Company is not ultimately issued a permit to operate the landfill, the Company will be required to expense in a future period the $8,725 of capitalized expenditures, less the recoverable value of the undeveloped property and other amounts recovered, which would likely have a material adverse effect on the Company’s reported income for that period. 

Page 11

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands, except share, per share and per ton amounts)

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.  On October 3, 2005, landfill opponents filed a suit (Board of Commissioners of Sumner County, Kansas, Tri-County Concerned Citizens and Dalton Holland v. Roderick Bremby, Secretary of the Kansas Department of Health and Environment, et al.) in the District Court of Shawnee County, Kansas (Case No. 05-C-1264), seeking a judicial review of the order, alleging that a site analysis prepared for the Company and submitted to the 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.  On April 7, 2006, the District Court issued an order denying the plaintiffs’ request for judicial review on the grounds that they lack standing to bring the action.  The plaintiffs appealed this decision to the Kansas Court of Appeals.  Oral arguments were held on June 7, 2007, and the Company is awaiting the court’s decision.  While the Company believes that it will prevail in this case, a final adverse determination with respect to the permit would likely have a material adverse effect on the Company’s reported income in the future.  The Company cannot estimate the amount of any such material adverse effect. 

Resourceful Environmental Services, Inc. (“RES”) filed a complaint alleging that Waste Connections, Inc. and Waste Connections of Mississippi, LLC misrepresented their intention concerning the potential purchase of RES (Resourceful Environmental Services, Inc. v. Waste Connections, et al., filed on December 31, 2002 in the Circuit Court of Tippah County, Mississippi, Case No. T-02-308).  Plaintiff sought compensatory damages of $400, and punitive damages of $50,000.  Following a trial in June 2007, the jury rendered a unanimous verdict in favor of the Company and the other defendants.  No further recourse is expected against the Company in this matter. 

On October 25, 2006, a purported shareholder derivative complaint captioned Travis v. Mittelstaedt, et al. was filed in the United States District Court for the Eastern District of California, naming certain of the Company’s directors and officers as defendants, and naming the Company as a nominal defendant.  On January 30, 2007, a similar purported derivative action, captioned Pierce and Banister v. Mittelstaedt, et al., was filed in the same federal court as the Travis case. The Travis and Pierce and Banister cases have been consolidated. The consolidated complaint in the action alleges violations of various federal and California securities laws, breach of fiduciary duty, waste, and related claims in connection with the timing of certain stock option grants.  The consolidated complaint names as defendants certain of the Company’s current and former directors and officers, and names the Company as a nominal defendant. On June 22, 2007, the Company and the individual defendants filed motions to dismiss the consolidated action. The motions are pending, and a hearing on the motions is scheduled to occur in September 2007.

On October 30, 2006, the Company was served with another purported shareholder derivative complaint, naming certain of the Company’s current and former directors and officers as defendants, and naming the Company as a nominal defendant.  The suit, captioned Nichols v. Mittelstaedt, et al. and filed in the Superior Court of California, County of Sacramento, contains allegations substantially similar to the consolidated federal action described above.  On April 3, 2007, a fourth purported derivative action, captioned Priest v. Mittelstaedt, et al., was filed in the Superior Court of California, County of Sacramento, and contains allegations substantially similar to the consolidated federal action and the Nichols suit.  The Nichols and Priest suits have been stayed pending the outcome of the consolidated federal action.  The Company has completed a review of its historical stock option granting practices, including all option grants since its initial public offering in May 1998, and reported the results of the review to the Audit Committee of its Board of Directors.  The review identified a small number of immaterial exceptions to non-cash compensation expense attributable to administrative and clerical errors.  These exceptions are not material to the Company’s current and historical financial statements, and the Audit Committee concluded that no further action was necessary.  As with any litigation proceeding, the Company cannot predict with certainty the eventual outcome of this pending litigation, nor can it estimate the amount of any losses that might result. 

Page 12

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands, except share, per share and per ton amounts)

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 other 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 citizens’ groups or 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 above, as of June 30, 2007, there is no current proceeding or litigation involving the Company that the Company believes will have a material adverse impact on its business, financial condition, results of operations or cash flows. 

12.SEGMENT INFORMATION

The following table shows our total reported revenues by service line and intercompany eliminations:

	Three months ended June 30,				Six months ended June 30,
		2006		2007		2006		2007
Collection	$	151,370	$	172,401	$	291,650	$	332,552
Disposal and transfer		66,165		78,569		124,593		145,211
Recycling and other		19,192		22,936		37,324		45,160
Total	$	236,727	$	273,906	$	453,567	$	522,923
Intercompany elimination	$	29,757	$	32,822	$	56,428	$	62,888

13.SUBSEQUENT EVENT

In July 2007, the Company completed a $15,500 tax-exempt bond financing to fund the costs of acquisition of trucks and other solid waste vehicles and equipment and to pay certain costs associated with the issuance of the bonds.  The bonds mature on August 1, 2018, and bear interest at variable rates based on market conditions for California tax-exempt bonds.  The bonds are collateralized by a letter of credit issued by Bank of America under the Company’s credit facility for $15,678. 

Page 13

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.  These statements can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “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:  (1) we may be unable to compete effectively with larger and better capitalized companies and governmental service providers; (2) increases in the price of fuel may adversely affect our business and reduce our operating margins; (3) increases in labor and disposal and related transportation costs could impact our financial results; (4) increases in insurance costs and the amount that we self-insure for various risks could reduce our operating margins and reported earnings; (5) our financial results are based upon estimates and assumptions that may differ from actual results; (6) efforts by labor unions could divert management attention and adversely affect operating results; (7) we may lose contracts through competitive bidding, early termination or governmental action; (8) our results are vulnerable to economic conditions and seasonal factors affecting the regions in which we operate; (9) we may be subject in the normal course of business to judicial and administrative proceedings that could interrupt our operations, require expensive remediation and create negative publicity; (10) competition for acquisition candidates, consolidation within the waste industry and economic and market conditions may limit our ability to grow through acquisitions; (11) our growth and future financial performance depend significantly on our ability to integrate acquired businesses into our organization and operations; (12) our acquisitions may not be successful, resulting in changes in strategy, operating losses or a loss on sale of the business acquired; (13) 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; (14) our intermodal business could be adversely affected by steamship lines diverting business to ports other than those we service, or by heightened security measures or actual or threatened terrorist attacks; (15) we depend significantly on the services of the members of our senior and district management team, and the departure of any of those persons could cause our operating results to suffer; (16) our decentralized decision-making structure could allow local managers to make decisions that adversely affect our operating results; (17) we may incur additional charges related to capitalized expenditures, which would decrease our earnings; (18) the outcome of audits by the Internal Revenue Service may adversely affect us; (19) each business that we acquire or have acquired may have liabilities that we fail or are unable to discover, including environmental liabilities; (20) liabilities for environmental damage may adversely affect our business and earnings; and (21) the adoption of new accounting standards or interpretations could adversely impact our financial results. 

These risks and uncertainties, as well as others, are discussed in greater detail in 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 further from collection markets. 

Page 14

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 (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 secondary markets in the Western and Southern U.S.  We also provide intermodal services for the rail haul movement of cargo containers in the Pacific Northwest through a network of six intermodal facilities.  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, 2007, we served more than one million residential, commercial and industrial customers from a network of operations in 23 states: Alabama, Arizona, California, Colorado, Idaho, Illinois, Iowa, Kansas, Kentucky, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Mexico, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Utah, Washington and Wyoming.  As of that date, we owned or operated a network of 121 solid waste collection operations, 44 transfer stations, 26 recycling operations, 33 municipal solid waste landfills and three construction and demolition landfills. 

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.  There was one change to our critical accounting estimates and assumptions in the six months ended June 30, 2007, which is described below.  Refer to our most recent Annual Report on Form 10-K for a complete description of our critical accounting estimates and assumptions. 

FIN 48.  On July 13, 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, or FIN 48.  FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS No. 109, Accounting for Income Taxes.  FIN 48 requires a company to evaluate whether the tax position taken by a company will more likely than not be sustained upon examination by the appropriate taxing authority.  It also provides guidance on how a company should measure the amount of benefit that the company is to recognize in its financial statements.  FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.  FIN 48 is effective for fiscal years beginning after December 15, 2006.  The impact of our reassessment of our tax positions in accordance with FIN 48 did not have a material impact on the results of operations, financial condition or liquidity.  For additional information regarding the adoption of FIN 48, see Note 8, Income Taxes, of the Notes to Condensed Consolidated Financial Statements in Part I of this Quarterly Report on Form 10-Q. 

Page 15

GENERAL

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,
	2006				2007				2006				2007
Collection	$	151,370	63.9	%	$	172,401	62.9	%	$	291,650	64.3	%	$	332,552	63.6	%
Disposal and transfer		66,165	28.0			78,569	28.7			124,593	27.5			145,211	27.8
Recycling and other		19,192	8.1			22,936	8.4			37,324	8.2			45,160	8.6
Total	$	236,727	100.0	%	$	273,906	100.0	%	$	453,567	100.0	%	$	522,923	100.0	%
Intercompany elimination	$	29,757			$	32,822			$	56,428			$	62,888

The disposal tonnage that we received in the six months ended June 30, 2006 and 2007, at all of our landfills during the respective period, is shown below (tons in thousands):

	Six months ended June 30,
	2006			2007
		Number of Sites	Total Tons		Number of Sites	Total Tons
Owned landfills and landfills operated under life-of-site agreements		27	3,483		28	3,891
Operated landfills		8	535		8	506
		35	4,018		36	4,397

NEW ACCOUNTING PRONOUNCEMENTS

For a description of the new accounting standards that affect us, see Note 2 to our Condensed Consolidated Financial Statements included under Part I, Item 1 of this Quarterly Report on Form 10-Q. 

Page 16

RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2006 AND 2007

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 June 30,					Six months ended June 30,
		2006		2007			2006		2007
Revenues		100.0	%	100.0	%		100.0	%	100.0	%
Cost of operations		61.1		58.7			60.4		58.8
Selling, general and administrative		10.0		10.3			10.2		10.6
Depreciation and amortization		9.1		8.7			9.3		8.8
Loss (gain) on disposal of assets		0.1		-			-		-
Operating income		19.7		22.3			20.1		21.8
Interest expense, net		(3.2	)	(3.4	)		(3.5	)	(3.5	)
Other income (expense)		-		0.1			(1.0	)	0.1
Minority interests		(1.6	)	(1.7	)		(1.5	)	(1.5	)
Income tax expense		(5.6	)	(6.8	)		(5.3	)	(6.5	)
Net income		9.3	%	10.5	%		8.8	%	10.4	%

Revenues.  Total revenues increased $34.1 million, or 16.5%, to $241.1 million for the three months ended June 30, 2007, from $207.0 million for the three months ended June 30, 2006.  Acquisitions closed during, or subsequent to, the three months ended June 30, 2006, increased revenues by approximately $11.9 million.  Operating locations disposed of subsequent to June 30, 2006 contributed $1.3 million of revenues during the three months ended June 30, 2006.  During the three months ended June 30, 2007, increased prices charged to our customers, increased volume in our existing business, and revenues generated from two long-term contracts that commenced in 2007 resulted in net revenue increases of approximately $9.7 million, $5.2 million and $5.8 million respectively.  Increased recyclable commodity prices and volume during the three months ended June 30, 2007, increased revenues by $2.8 million. 

Total revenues increased $62.9 million, or 15.8%, to $460.0 million for the six months ended June 30, 2007, from $397.1 million for the six months ended June 30, 2006.  Acquisitions closed during, or subsequent to, the six months ended June 30, 2006, increased revenues by approximately $25.4 million.  Operating locations disposed of subsequent to June 30, 2006, contributed $2.4 million of revenues during the six months ended June 30, 2006.  During the six months ended June 30, 2007, increased prices charged to our customers, increased volume in our existing business, and revenues generated from two long-term contracts that commenced in 2007 resulted in net revenue increases of approximately $19.5 million, $6.3 million and $8.3 million respectively.  Increased recyclable commodity prices and volume during the six months ended June 30, 2007, increased revenues by $5.4 million.  Other revenues increased by $0.4 million during the six months ended June 30, 2007. 

Cost of Operations.  Total cost of operations increased $15.0 million, or 11.9%, to $141.6 million for the three months ended June 30, 2007, from $126.6 million for the three months ended June 30, 2006.  The increase was attributable to operating costs associated with acquisitions closed during, or subsequent to, the three months ended June 30, 2006, operating costs incurred to support two long-term contracts that commenced in 2007, increased labor expenses resulting from employee pay rate increases, increased employee medical benefit expenses resulting from an increase in medical claims severity, increased vehicle and equipment maintenance and repair costs, and increased franchise taxes, landfill taxes, third party trucking expenses and increased disposal expenses resulting from higher disposal volumes, partially offset by a decrease in auto and workers’ compensation claims under our high deductible insurance program. During the three months ended June 30, 2006, we accrued additional development costs for insurance claims of approximately $3.8 million. The increase was based on actuarially projected losses on open claims determined by our third party administrator’s review and a third party actuarial review of our estimated insurance liability, both of which are updated on a quarterly basis and reviewed by us.

Page 17

Total cost of operations increased $30.8 million, or 12.9 %, to $270.4 million for the six months ended June 30, 2007, from $239.6 million for the six months ended June 30, 2006.  The increase was attributable to operating costs associated with acquisitions closed during, or subsequent to, the six months ended June 30, 2006, operating costs incurred to support two long-term contracts that commenced in 2007, increased labor expenses resulting from employee pay rate increases, increased vehicle and equipment maintenance and repair costs, increased franchise taxes, landfill taxes, third party trucking expenses and increased disposal expenses resulting from higher disposal volumes. 

Cost of operations as a percentage of revenues decreased 2.4 percentage points to 58.7% for the three months ended June 30, 2007, from 61.1% for the three months ended June 30, 2006.  Cost of operations as a percentage of revenues decreased 1.6 percentage points to 58.8% for the six months ended June 30, 2007, from 60.4% for the three months ended June 30, 2006.  The decreases as a percentage of revenues was primarily attributable to decreased auto and workers’ compensation insurance claims costs, leveraging existing personnel to support increased collection and disposal volumes, and increased prices charged to our customers being higher, on a percentage basis, than the majority of expense increases recognized subsequent to June 30, 2006.  This decrease was partially offset by acquisitions closed during, or subsequent to, the six months ended June 30, 2006, and two long-term contracts that commenced in 2007, which have operating margins below our company average. 

SG&A.  SG&A expenses increased $4.2 million, or 20.2%, to $24.8 million for the three months ended June 30, 2007, from $20.6 million for the three months ended June 30, 2006.  SG&A expenses increased $8.3 million, or 20.5%, to $48.7 million for the six months ended June 30, 2007, from $40.4 million for the six months ended June 30, 2006.  The increases in SG&A expenses were primarily the result of additional personnel from acquisitions closed during, or subsequent to, the six months ended June 30, 2006, SG&A costs incurred to support two long-term contracts that commenced in 2007, increased payroll expense due to increased headcount to support our base operations, increased equity compensation expense, cash compensation increases and increased bonus compensation expense based on the results of operations during the six months ended June 30, 2007. 

SG&A expenses as a percentage of revenues increased 0.3 percentage points to 10.3% for the three months ended June 30, 2007, from 10.0% for the three months ended June 30, 2006.  SG&A expenses as a percentage of revenues increased 0.4 percentage points to 10.6% for the six months ended June 30, 2007, from 10.2% for the six months ended June 30, 2006.  The increases as a percentage of revenue were primarily attributable to increased equity compensation expense and increased bonus compensation expense. 

Depreciation and Amortization.  Depreciation and amortization expense increased $2.2 million, or 11.7%, to $20.9 million for the three months ended June 30, 2007, from $18.7 million for the three months ended June 30, 2006.  Depreciation and amortization expense increased $3.5 million, or 9.6%, to $40.5 million for the six months ended June 30, 2007, from $37.0 million for the six months ended June 30, 2006.  The increases were primarily attributable to depreciation and amortization associated with acquisitions closed during, or subsequent to, the six months ended June 30, 2006, higher landfill depletion expense due to increased disposal volumes at our landfills, and depreciation expense resulting from facilities, fleet and equipment purchased to support two long-term contracts that commenced in 2007. 

Depreciation and amortization expense as a percentage of revenues decreased 0.4 percentage points to 8.7% for the three months ended June 30, 2007, from 9.1% for the three months ended June 30, 2006. Depreciation and amortization expense as a percentage of revenues decreased 0.5 percentage points to 8.8% for the six months ended June 30, 2007, from 9.3% for the six months ended June 30, 2006. The decreases in depreciation and amortization expense as a percentage of revenues were the result of leveraging our existing fleet and equipment to support increases in collection and landfill volumes. 

Page 18

Operating Income. Operating income increased $13.0 million, or 31.8%, to $53.8 million for the three months ended June 30, 2007, from $40.8 million for the three months ended June 30, 2006.  Operating income increased $20.2 million, or 25.3%, to $100.2 million for the six months ended June 30, 2007, from $80.0 million for the six months ended June 30, 2006.  The increases were primarily attributable to increased revenues, offset by increased operating costs, increased SG&A expenses to support the revenue growth and increased depreciation and amortization expenses. 

Operating income as a percentage of revenues increased 2.6 percentage points to 22.3% for the three months ended June 30, 2007, from 19.7% for the three months ended June 30, 2006.  Operating income as a percentage of revenues increased 1.7 percentage points to 21.8% for the six months ended June 30, 2007, from 20.1% for the six months ended June 30, 2006. The increases as a percentage of the revenue were due to the previously described percentage of revenue decreases in cost of operations and depreciation and amortization expenses, partially offset by increased SG&A expense. 

Interest Expense.  Interest expense increased $1.7 million, or 25.3%, to $8.3 million for the three months ended June 30, 2007, from $6.6 million for the three months ended June 30, 2006.  Interest expense increased $2.0 million, or 14.2%, to $16.1 million for the six months ended June 30, 2007, from $14.1 million for the six months ended June 30, 2006.  The increases were attributable to higher average borrowing rates on our credit facility, partially offset by a $1.0 million reduction of interest expense for the three and six months ended June 30, 2006 on our 2022 Notes as a result of the timing of the conversion of the 2022 Notes into common stock by the note holders after we called the notes for redemption, interest income on increased cash balances, lower average debt balances and a reduction in our overall average interest rate resulting from completing our offering of the 2026 Notes on March 20, 2006.  The higher average borrowing rates on our credit facility were the result of $250.0 million of interest rate swap agreements with a weighted-average fixed borrowing cost of 2.55%, existing during the three and six months ended June 30, 2006, expiring in the first quarter of 2007.  Upon the expiration of these interest rate swaps, we commenced $250.0 million of new interest rate swaps with a weighted-average fixed borrowing cost of 4.33%, plus applicable margin. 

Other Income (Expense).  Other income (expense) changed to an income total of $0.4 million for the six months ended June 30, 2007, from an expense total of $4.0 million for the six months ended June 30, 2006.  Other expense in the six months ended June 30, 2006 primarily consisted of $4.2 million of costs associated with the write-off of the unamortized debt issuance costs associated with our 2022 Notes.

Minority Interests.  Minority interests increased $0.8 million, or 24.5%, to $4.1 million for the three months ended June 30, 2007, from $3.3 million for the three months ended June 30, 2006.  Minority interests increased $1.0 million, or 15.6%, to $7.0 million for the six months ended June 30, 2007, from $6.0 million for the six months ended June 30, 2006.  The increases in minority interests were due to increased earnings by our majority-owned subsidiaries. 

Income Tax Provision.  Income taxes increased $4.7 million, or 40.7%, to $16.4 million for the three months ended June 30, 2007, from $11.7 million for the three months ended June 30, 2006.  Income taxes increased $9.0 million, or 42.8%, to $29.9 million for the six months ended June 30, 2007, from $20.9 million for the six months ended June 30, 2006.  Our effective tax rates for the three months ended June 30, 2006 and 2007 were 37.8% and 39.4%, respectively, and 37.5% and 38.5% for the six months ended June 30, 2006 and 2007, respectively.  Our effective tax rate increased in the three and six months ended June 30, 2007, as a result of changes to state apportionment factors and the recognition of interest on uncertain tax positions. 

During the six months ended June 30, 2007, we recorded adjustments to income tax expense resulting from the reconciliation of our current and deferred income tax liability accounts and changes to state apportionment factors.  The net impact of these adjustments was a decrease in the effective tax rate for the six months ended June 30, 2007, of 0.5 percentage points. 

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LIQUIDITY AND CAPITAL RESOURCES

Our business is capital intensive.  Our capital requirements include acquisitions and fixed asset purchases.  We expect that we will also make capital expenditures for landfill cell construction, landfill development, landfill closure activities and intermodal facility construction in the future.  We plan to meet our capital needs through various financing sources, including internally generated funds, and debt and equity financings. 

As of June 30, 2007, we had a working capital deficit of $13.7 million, including cash and equivalents of $10.0 million.  Our working capital decreased $24.1 million from a positive balance of $10.4 million at December 31, 2006.  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 to reduce our indebtedness under our credit facility and to minimize our cash balances.  At June 30, 2007, the outstanding balances of our LIBOR-based debt equaled the outstanding balance of our LIBOR-based interest rate swaps.  We elected not to apply our cash balances to reduce further our indebtedness under our credit facility because doing so would eliminate our ability to apply hedge accounting to our interest rate swaps.  The decrease in our working capital position from December 31, 2006, to June 30, 2007, resulted primarily from a decrease in our cash balances.  The decrease in our cash balances primarily was the result of repurchases of our common stock and funding the purchase price of acquisitions closed with outstanding cash, partially offset by free cash flow generated from our operations. 

For the six months ended June 30, 2007, net cash provided by operating activities was $107.3 million, including $12.4 million provided by working capital for the period.  The primary components of the reconciliation of net income to net cash provided by operating activities for the six months ended June 30, 2007, consist of non-cash expenses, including $40.5 million of depreciation and amortization, $7.0 million of minority interests expense, $1.0 million of debt issuance cost amortization, a $3.7 million increase in net deferred tax liabilities, and $3.1 million of stock compensation expense, less $8.5 million of excess tax benefit from equity-based compensation reclassified to cash flows from financing activities. 

For the six months ended June 30, 2006, net cash provided by operating activities was approximately $96.0 million, including $10.5 million provided by working capital for the period. The primary components of the reconciliation of net income to net cash provided by operating activities for the six months ended June 30, 2006, consist of non-cash expenses, including $37.0 million of depreciation and amortization, $6.0 million of minority interests expense, $5.3 million of debt issuance cost amortization, a $6.0 million increase in net deferred tax liabilities, and $1.6 million of stock compensation expense, less $5.5 million of excess tax benefit from stock option exercises reclassified to cash flows from financing activities. 

For the six months ended June 30, 2007, net cash used in investing activities was $105.8 million.  Of this amount, $40.6 million was used to fund the cash portion of acquisitions and to pay a portion of acquisition costs that were included as a component of accrued liabilities at December 31, 2006.  Cash used for capital expenditures was $64.5 million, which was primarily for investments in fixed assets, consisting of trucks, containers, other equipment and landfill development.  The increase in capital expenditures of $15.5 million for the six months ended June 30, 2007, as compared to the six months ended June 30, 2006, is due primarily to capital expenditures associated with a new long-term contract in California. 

For the six months ended June 30, 2006, net cash used in investing activities was $84.4 million.  Of this, $34.8 million was used to fund the cash portion of acquisitions and to pay a portion of acquisition costs that were included as a component of accrued liabilities at December 31, 2005.  Cash used for capital expenditures was $49.0 million, which was primarily for investments in fixed assets, consisting of trucks, containers, other equipment and landfill development. 

For the six months ended June 30, 2007, net cash used in financing activities was $26.5 million, which included $21.1 million of proceeds from stock option and warrant exercises, a $5.8 million change in book overdraft, and $8.5 million of excess tax benefit from equity-based compensation, less $6.3 million of cash distributions to minority interest holders, $3.7 million of net payments under our various debt arrangements, and $51.9 million of repurchases of our common stock. 

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For the six months ended June 30, 2006, net cash used in financing activities was $11.4 million, which included $62.4 million of net borrowings under our various debt arrangements for the funding of capital expenditures and acquisitions, $24.9 million of proceeds from stock option and warrant exercises, and $5.5 million of excess tax benefit from stock option exercises, less $4.9 million of cash distributions to minority interest holders, $5.3 million change in book overdraft, $6.2 million of debt issuance costs, and $87.7 million of repurchases of our common stock. 

We made $64.5 million in capital expenditures during the six months ended June 30, 2007.  We expect to make capital expenditures of approximately $100.0 million in 2007 in connection with our existing business and approximately $15.5 million associated with the commencement of a new long-term contract in California.  We intend to fund our planned 2007 capital expenditures principally through existing cash, internally generated funds, and borrowings under our existing 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 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. 

As of June 30, 2007, we had $400.0 million outstanding under our senior secured revolving credit facility, exclusive of outstanding stand-by letters of credit of $62.5 million.  As of June 30, 2006 and 2007, we were in compliance with all applicable covenants in our credit facility. 

As of June 30, 2007, we had the following contractual obligations (in thousands):

	Payments Due by Period
Recorded Obligations	Total		Less Than 1 Year		2 to 3 Years		4 to 5 Years		Over 5 Years
Long-term debt	$	642,509	$	6,657	$	17,482	$	603,742	$	14,628

Long-term debt payments include: 

(1)$400.0 million in principal payments due in 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 (8.25% at June 30, 2007) on base rate loans, or the Eurodollar rate plus the applicable Eurodollar margin (approximately 6.2% at June 30, 2007) on Eurodollar loans.  As of June 30, 2007, our credit facility allowed us to borrow up to $750.0 million. 

(2)$200.0 million in principal payments due in 2026 related to our 2026 Notes.  Holders of the 2026 Notes may require us to purchase their notes in cash at a purchase price of 100% of the principal amount of the 2026 Notes plus accrued and unpaid interest, if any, upon a change in control, as defined in the indenture, or, for the first time, on April 1, 2011.  The 2026 Notes bear interest at a rate of 3.75%. 

(3)$11.3 million in principal payments related to our 2001 Wasco bonds.  Our 2001 Wasco bonds consist of $2.8 million of bonds that bear interest at a rate of 7.0% and mature on March 1, 2012, and $8.5 million of bonds that bear interest at a rate of 7.25% and mature on March 1, 2021. 

(4)$20.0 million in principal payments related to our California tax-exempt bonds.  Our California tax-exempt bonds bear interest at variable rates (3.7% at June 30, 2007) and have maturity dates ranging from 2008 to 2016. 

(5)$4.1 million in principal payments related to our notes payable to sellers.  Our notes payable to sellers bear interest at rates between 5.5% and 7.5% at June 30, 2007, and have maturity dates ranging from 2010 to 2036. 

Page 21

(6)$7.1 million in principal payments related to our notes payable to third parties.  Our notes payable to third parties bear interest at rates between 5.1% and 11.0% at June 30, 2007, and have maturity dates ranging from 2007 to 2010. 

In July 2007, we completed a $15.5 million tax-exempt bond financing to fund the costs of acquisition of trucks and other solid waste vehicles and equipment and to pay certain costs associated with the issuance of the bonds. The bonds mature on August 1, 2018, and bear interest at variable rates based on market conditions for California tax-exempt bonds. The bonds are collateralized by a letter of credit issued by Bank of America under our credit facility for $15.7 million. 

The total liability for uncertain tax positions under FIN 48 at June 30, 2007 is $6.7 million (refer to Note 8 of the Notes to Condensed Consolidated Financial Statements, in Part I of this Quarterly Report on Form 10-Q).  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 these obligations within the next year. 

	Amount of Commitment Expiration Per Period
Unrecorded Obligations	Total		Less Than 1 Year		2 to 3 Years		4 to 5 Years		Over 5 Years
Operating leases(1)	$	47,112	$	6,222	$	10,009	$	8,146	$	22,735

(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 three and six months ended June 30, 2007, nor are they expected to have a material impact on our future financial position, results of operations or liquidity. 

We have obtained stand-by letters of credit and financial surety bonds, primarily to support our financial assurance needs and landfill operations.  We had provided customers and various regulatory authorities with surety bonds in the aggregate amounts of approximately $153.7 million and $168.4 million at December 31, 2006, and June 30, 2007, respectively.  These arrangements have not materially affected our financial position, results of operations or liquidity during the six months ended June 30, 2007, nor are they expected to have a material impact on our future financial position, results of operations or liquidity. 

The minority interests holders of a majority-owned subsidiary of ours have a currently exercisable put option to require us to complete the acquisition of this majority-owned subsidiary by purchasing their minority ownership interests for fair market value.  The put option calculates the fair market value of the subsidiary based on its current operating income before depreciation and amortization, as defined in the put option agreement. The put option does not have a stated termination date.  At June 30, 2007, the minority interests holders' pro rata share of the subsidiary's fair market value is estimated to be worth between $88.4 million and $104.8 million.  Because the put is calculated at fair market value, no amounts have been accrued relative to the put option.  In the event the minority interests holders elect to exercise the put option, we intend to fund the transaction using borrowings from our credit facility. 

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 operations would not be impaired by such dispositions, we could incur losses on them. 

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FREE CASH FLOW

We are providing free cash flow, a non-GAAP financial measure, because it is widely used by investors as a valuation and liquidity measure in the solid waste industry.  This measure should be used in conjunction with U.S. generally accepted accounting principles financial measures.  Management uses free cash flow as one of the principal measures to evaluate and monitor the ongoing financial performance of our operations.  We define free cash flow as net cash provided by operating activities plus proceeds from disposal of assets and excess tax benefit associated with equity-based compensation, plus or minus change in book overdraft, less capital expenditures for property and equipment and distributions to minority interest holders.  Other companies may calculate free cash flow differently.  Our free cash flow for the six months ended June 30, 2006 and 2007, is calculated as follows (amounts in thousands): 

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	Six months ended June 30,
	2006		2007
Net cash provided by operating activities	$	95,996	$	107,278
Change in book overdraft		(5,333)		5,838
Plus: Proceeds from disposal of assets		313		559
Plus: Excess tax benefit associated with equity-based compensation		5,501		8,534
Less: Capital expenditures for property and equipment		(49,038)		(64,509)
Less: Distributions to minority interest holders		(4,900)		(6,272)
Free cash flow	$	42,539	$	51,428

INFLATION

Other than volatility in fuel prices, inflation has not materially affected our operations.  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, such as recent increases in the price of fuel, exceed the average rate of inflation.  Management's estimates associated with inflation have an impact on our accounting for landfill liabilities. 

SEASONALITY

Based on historic trends, 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.  We expect the fluctuation in our revenues between our highest and lowest quarters to be approximately 10% to 12%.  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.  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. 

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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.  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. 

At June 30, 2007, our derivative instruments consisted of three interest rate swap agreements that effectively fix the interest rate on the applicable notional amounts of our variable rate debt as follows (dollars in thousands): 

Date Entered	Notional Amount	Fixed Interest Rate Paid*	Variable Interest Rate Received	Effective Date	Expiration Date
September 2005	$ 175,000	4.33%	1-month LIBOR	February 2007	February 2009
September 2005	$ 75,000	4.34%	1-month LIBOR	March 2007	March 2009
December 2005	$ 150,000	4.76%	1-month LIBOR	June 2006	June 2009

* plus applicable margin. 

All the interest rate swap agreements are considered highly effective as cash flow hedges for a portion of our variable rate debt, and we apply hedge accounting to account for these instruments.  The notional amounts and all other significant terms of the swap agreements 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 market risk sensitive hedge positions and all other 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 December 31, 2006, and June 30, 2007, of $24.1 million and $23.4 million, respectively, including floating rate debt under our credit facility, various floating rate notes payable to third parties and floating rate municipal bond obligations.  A one percent increase in interest rates on our variable-rate debt as of December 31, 2006, and June 30, 2007, would decrease our annual pre-tax income by approximately $0.2 million.  All of our remaining debt instruments are at fixed rates, or effectively fixed under the interest rate swap agreements described above; therefore, changes in market interest rates under these instruments would not significantly impact our cash flows or results of operations. 

Although fuel and energy costs account for a relatively small portion of our total revenues, the market price of diesel fuel is unpredictable and can fluctuate significantly.  We purchase a majority of our fuel at market prices.  A significant increase in the price of fuel could adversely affect our business and reduce our operating margins.  A $0.10 per gallon increase in the price of fuel over a one-year period would decrease our annual pre-tax income by approximately $2.0 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 26 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.  Although there can be no assurance of market recoveries, in the event of a decline in recycled commodity prices, a 10% decrease in average recycled commodity prices from the prices that were in effect at June 30, 2006 and 2007, would have resulted in a decrease in revenues of $1.1 million and $1.8 million, respectively, for the six months ended June 30, 2006 and 2007. 

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Item 4.Controls and Procedures

As required by Rule 13a-15(b) and 15d-15(b) under the Securities Exchange Act of 1934, as amended, 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 Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the fiscal quarter covered by this quarterly report on Form 10-Q.  Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of June 30, 2007, 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 Securities and Exchange Commission’s, or 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, 2007, 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

No material developments have occurred in the legal proceeding involving Colonias Dev. Council v. Rhino Envtl. Servs., Inc. (In re Rhino Envtl. Servs.) described in our annual report on Form 10-K for the fiscal year ended December 31, 2006, except that the parties have agreed to reschedule the hearing to be conducted by the New Mexico Environmental Department for July 2008, to allow us time to explore a possible relocation of the landfill.  Refer to Note 11 of the Notes to Condensed Consolidated Financial Statements in Part I of this Quarterly Report on Form 10-Q for a description of this legal proceeding. 

No material developments have occurred in the legal proceeding involving Board of Commissioners of Sumner County, Kansas, Tri-County Concerned Citizens and Dalton Holland v. Roderick Bremby, Secretary of the Kansas Department of Health and Environment, et al. described in our annual report on Form 10-K for the fiscal year ended December 31, 2006, except that the oral arguments on Plaintiff’s appeal were held on June 7, 2007, and the parties are awaiting a decision.  Refer to Note 11 of the Notes to Condensed Consolidated Financial Statements in Part I of this Quarterly Report on Form 10-Q for a description of this legal proceeding. 

In the legal proceeding involving Resourceful Environmental Services, Inc. v. Waste Connections, et al. described in our annual report on Form 10-K for the fiscal year ended December 31, 2006, a jury trial was held in June 2007 and the jury returned a unanimous verdict in our favor and in favor of the other defendants.  Refer to Note 11 of the Notes to Condensed Consolidated Financial Statements in Part I of this Quarterly Report on Form 10-Q for a description of this legal proceeding. 

No material developments have occurred in the purported derivative actions captioned Travis v. Mittelstaedt, et al. and Pierce and Banister v. Mittelstaedt, et al., described in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2007, except that the actions have been consolidated and the plaintiffs have filed a consolidated complaint. In addition, on June 22, 2007, the Company and the individual defendants filed motions to dismiss the consolidated action. The motions are pending and a hearing on the motions is scheduled to occur in September 2007. No material developments have occurred in the purported derivative actions captioned Nichols v. Mittelstaedt, et al. and Priest v. Mittelstaedt, et al., described in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2007, except that the suits have been stayed pending the outcome of the consolidated federal action. Refer to Note 11 of the Notes to Condensed Consolidated Financial Statements in Part I of this Quarterly Report on Form 10-Q for a description of these legal proceedings. 

In the normal course of our business and as a result of the extensive governmental regulation of the solid waste industry, we are subject to various other judicial and administrative proceedings involving federal, state or local agencies.  In these proceedings, an agency may seek to impose fines on us or to revoke or deny renewal of an operating permit held by us.  From time to time we may also be subject to actions brought by citizens’ groups or 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 we operate. 

In addition, we are 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 above, and in Note 11 of the Notes to Condensed Consolidated Financial Statements in Part I of this Quarterly Report on Form 10-Q, as of June 30, 2007, there is no current proceeding or litigation involving us that we believe will have a material adverse impact on our business, financial condition, results of operations or cash flows. 

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

On May 3, 2004, we announced that our Board of Directors authorized a common stock repurchase program for the repurchase of up to $200 million of our common stock over a two-year period.  On July 25, 2005, we announced that our Board of Directors approved an increase in, and extension of, the common stock repurchase program.  On October 23, 2006, we announced that our Board of Directors authorized an additional increase in, and extension of, the common stock repurchase program.  We are now authorized to purchase up to $500 million of our common stock through December 31, 2008.  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, 2007, we have repurchased 10.1 million shares of our common stock at a cost of $338.8 million, $329.8 million of which was under the program.  The table below reflects repurchases we have made for the three months ended June 30, 2007 (in thousands, except share and per share amounts): 

Period	Total Number of Shares Purchased	Average Price Paid Per Share(1)		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
4/1/07 - 4/30/07	-	$	-	-	$	216,659
5/1/07 - 5/31/07	1,016,590		31.29	1,016,590		184,852
6/1/07 - 6/30/07	486,300		30.17	486,300		170,179
	1,502,890		30.93	1,502,890

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

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Item 4. Submission of Matters to a Vote of Security Holders

Our annual meeting of stockholders was held on May 16, 2007. 

Our stockholders reelected Ronald J. Mittelstaedt as a Class III director by the votes indicated below:

Total Votes For:	62,668,930
Total Votes Withheld:	1,846,850

Our stockholders reelected Edward E. “Ned” Guillet as a Class III director by the votes indicated below:

Total Votes For:	63,457,267
Total Votes Withheld:	1,058,513

Our stockholders approved the proposal to amend our Amended and Restated Certificate of Incorporation to increase the authorized number of shares of common stock from 100,000,000 to 150,000,000 shares by the votes indicated below:

Total Votes For:	63,013,699
Total Votes Against:	1,466,244
Total Votes Abstained:	35,837
Total Broker Non-Vote:	0

In addition, our stockholders ratified the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year 2007 by the votes indicated below:

Total Votes For:	64,473,959
Total Votes Against:	33,990
Total Votes Abstained:	7,831
Total Broker Non-Vote	0

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Item 6. Exhibits

Exhibit Number	Description of Exhibits
3.1	Amended and Restated Certificate of Incorporation of the Registrant
3.2	Amended and Restated Bylaws of the Registrant (incorporated by reference to the exhibit filed with the Registrant’s Form 10-Q filed on July 22, 2004)
10.1 +	Employment Agreement between the Registrant and Eric Merrill, dated as of June 1, 2007
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

+ Management contract or compensatory plan, contract or arrangement

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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 24, 2007	BY:	/s/ Ronald J. Mittelstaedt
		Ronald J. Mittelstaedt,
		Chief Executive Officer

Date: July 24, 2007	BY:	/s/ Worthing F. Jackman
		Worthing F. Jackman,
		Executive Vice President and Chief Financial Officer

Page 31

EX-3.1

EXHIBIT 3.1

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

WASTE CONNECTIONS, INC.

Waste Connections, Inc., a Corporation organized and existing under the laws of the State of Delaware (the "Corporation"), hereby certifies as follows:

1. The name of the Corporation is Waste Connections, Inc., and the original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on September 9, 1997.

2. This Amended and Restated Certificate of Incorporation has been duly adopted in accordance with Sections 242 and 245 of the Delaware General Corporation Law.

3. The Corporation’s Certificate of Incorporation is hereby restated and further amended to read in its entirety as follows:

ARTICLE I

The name of this Corporation is Waste Connections, Inc.

ARTICLE II

The address of the registered office of this Corporation in the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware, 19808. The Corporation's registered agent at that address is Corporation Service Company.

ARTICLE III

The purpose of this Corporation is to engage in any lawful act or activity for which a Corporation may be organized under the General Corporation Law of Delaware.

ARTICLE IV

This Corporation is to have perpetual existence.

ARTICLE V

A. The Corporation is authorized to issue two classes of stock to be designated, respectively, "Common Stock" and "Preferred Stock". The amount of the total authorized capital stock of the Corporation is 157,500,000 shares, divided into (a) 150,000,000 shares of Common Stock, par value $0.01 per share, and (b) 7,500,000 shares of Preferred Stock, par value $0.01 per share.

B. The Preferred Stock may be issued from time to time in one or more series. Subject to the restrictions prescribed by law, the Board of Directors is authorized to fix by resolution or resolutions the number of shares of any series of Preferred Stock and to determine or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Stock and, within the limits and restrictions stated in any resolution or resolutions of the Board of Directors originally fixing the number of shares constituting any series of Preferred Stock, to increase (but not above the total number of authorized shares of Preferred Stock) or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any such series subsequent to the issue of shares of that series. Different series of Preferred Stock shall not be construed to constitute different classes of shares for the purposes of voting by classes unless expressly provided.

The authority of the Board of Directors with respect to each series of Preferred Stock shall include, but not be limited to, determination of the following: (a) the number of shares constituting that series and the distinctive designation of that series; (b) the dividend rate on the shares of that series, whether dividends shall be cumulative, and if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series; (c) whether that series shall have voting rights in addition to the voting rights provided by law, and if so, the terms of such voting rights; (d) whether that series shall have conversion privileges, and if so, the terms and conditions of such privileges, including provision for adjustment of the conversion rate in such events as the Board of Directors shall determine; (e) whether or not the shares of that series shall be redeemable, and if so, the terms and conditions of such redemption, including the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates; (f) whether that series shall have a sinking fund for the redemption or purchase of shares of that series, and if so, the terms and the amount of such sinking funds; (g) the rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of that series; and (h) any other relative rights, preferences and limitations of that series.

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ARTICLE VI

In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to adopt, amend or repeal from time to time any or all of the Bylaws of this Corporation. Any By-Laws made by the directors under the powers conferred hereby may be amended or repealed by the directors or by the stockholders. Notwithstanding the foregoing and anything contained in this Amended and Restated Certificate of Incorporation to the contrary, the By-Laws shall not be amended or repealed by the stockholders, and no provision inconsistent therewith shall be adopted by the stockholders, without the affirmative vote of the holders of at least 66-2/3% of the voting power of all shares of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

ARTICLE VII

Notwithstanding any other provision contained in this Amended and Restated Certificate of Incorporation and notwithstanding that a lesser percentage may be specified by law, the By-Laws or otherwise, this Article VII and Articles VIII, IX, X and XI of this Amended and Restated Certificate of Incorporation shall not be amended or repealed, and no provision inconsistent therewith or providing for cumulative voting in the election of directors shall be adopted, unless such adoption, amendment or repeal is approved by the affirmative vote of holders of at least 66-2/3% of the voting power of all shares of capital stock of the Corporation entitled to vote generally for the election of directors; provided, however, that the provisions of this Article VII shall not apply unless and until the Corporation shall have completed an IPO.

ARTICLE VIII

The business and affairs of the Corporation shall be managed by and under the direction of the Board of Directors (the "Board"). The Board may exercise all such authority and powers of the Corporation and do all such lawful acts and things as are not by statute or this Amended and Restated Certificate of Incorporation directed or required to be exercised or done by the stockholders.

A. Number of Directors. The number of directors comprising the entire Board shall, at the time of filing of this Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware (the "Effective Time"), be the number of directors then in office and shall thereafter, subject to the right, if any, of holders of Preferred Stock to elect directors under specified circumstances, be such number as may be fixed from time to time exclusively by the Board by action of a majority of the directors then in office provided that in no event shall such number be fewer than three or greater than nine, unless approved by action of not less than two-thirds of the directors then in office. No director need be a stockholder.

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B. Classes and Terms of Directors. The directors shall be divided into three classes: Class I, Class II and Class III. The number of directors comprising each class (assuming no vacancy in any class) shall be as nearly equal in number as possible based upon the number of directors comprising the entire Board. The Board shall, at or before the first meeting of the Board following the Effective Time, designate the class to which each director then serving shall be a member. The initial term of the directors in Class I shall extend until the first annual meeting of stockholders following the end of the Corporation's fiscal year ending December 31, 1998; the initial term of the directors in Class II shall extend until the first annual meeting of stockholders following the end of the Corporation's fiscal year ending December 31, 1999; and the initial term of the directors in Class III shall extend until the first annual meeting of stockholders following the end of the Corporation's fiscal year ending December 31, 2000. At each annual meeting of stockholders, successors to directors of the class whose term expires at such meeting will be elected to serve for three-year terms and until their successors are elected and qualified.

C. Allocation of Directors Among Classes in the Event of Increases or Decreases in the Number of Directors. Subject to the rights of the holder of any class or series of preferred stock then outstanding, in the event of any increase or decrease in the authorized number of directors, (i) each director then serving as such shall nevertheless continue as director of the class of which he is a member until the expiration of his current term or his prior death, retirement or resignation and (ii) the newly created or eliminated directorships resulting from such increase or decrease shall be apportioned by the Board of Directors among the three classes of directors so as to ensure that the number of directors comprising each class (assuming no vacancy in any class) shall be as nearly equal in number as possible based on the number of directors comprising the entire Board. To the extent possible, consistent with the foregoing rule, any newly created directorships shall be added to those classes whose terms of office are to expire at the latest dates following such allocation, and any newly eliminated directorships shall be subtracted from those classes whose terms of office are to expire at the earliest dates following such allocation, unless otherwise provided for from time to time by resolution adopted by a majority of the directors then in office, although less than a quorum.

D. Newly-Created Directorships and Vacancies. Subject to the rights of the holders of any class or series of Preferred Stock then outstanding, newly created directorships resulting from any increase in the number of directors or any vacancies in the Board resulting from death, resignation, retirement, disqualification, removal from office or any other cause may be filled by the Board (and not by the stockholders unless there are no directors then in office), provided that a quorum is then in office and present, or by a majority of the directors then in office, if less than a quorum is then in office, or by the sole remaining director. A director elected to fill a newly created directorship or other vacancy shall hold office for the remainder of the full term of the class of directors in which the new directorship was created or the vacancy occurred and until such director's successor has been elected and qualified.

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E. Removal of Directors. Subject to the rights of the holders of any class or series of Preferred Stock then outstanding, the directors or any director may be removed from office any time, but only for cause, at a meeting called for that purpose, and only by the affirmative vote of the holders of at least 66-2/3% of the voting power of all shares of the Corporation entitled to vote generally in the election of directors, voting together as a single class; provided, however, that the directors or any director may be removed with or without cause, by the affirmative vote of the holders of at least a majority of such voting power, at any time prior to the completion of an IPO.

F. Rights of Holders of Preferred Stock. Notwithstanding the foregoing provisions of this Article VIII, whenever the holders of any one or more classes or series of Preferred Stock issued by the Corporation shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the rights and preferences of such Preferred Stock, and such directors so elected shall not be divided into classes pursuant to this Article VIII unless expressly provided by such rights and preferences.

G. Written Ballot Not Required. The election of directors need not be By written ballot unless the By-Laws of the Corporation shall so provide.

ARTICLE IX

The By-Laws of the Corporation may provide, without limitation, requirements relating to the notice and conduct of annual meetings, special meetings, and the nomination and election of directors of the Corporation.

ARTICLE X

In furtherance and not in limitation of the powers conferred by law or in this Amended and Restated Certificate of Incorporation, the Board (and any committee of the Board) is expressly authorized, to the extent permitted by law, to take such action or actions as the Board or such committee may determine to be reasonably necessary or desirable to (a) encourage any person to enter into negotiations with the Board and management of the Corporation with respect to any transaction which may result in a change in control of the Corporation which is proposed or initiated by such person or (b) contest or oppose any such transaction which the Board or such committee determines to be unfair, abusive or otherwise undesirable with respect to the Corporation and its business, assets or properties or the stockholders of the Corporation, including, without limitation, the adoption of plans or the issuance of rights, options, capital stock, notes, debentures or other evidences of indebtedness or other securities of the Corporation, which rights, options, capital stock, notes, evidences of indebtedness and other securities (i) may be exchangeable for or convertible into cash or other securities on such terms and conditions as may be determined by the Board or such committee and (ii) may provide that any holder or class of holders thereof designated by the Board or any such committee will be treated differently than, and unequally to, all other holders in respect of the terms, conditions, provisions and rights of such securities.

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ARTICLE XI

Subject to the rights, if any, of holders of any class or series of Preferred Stock then outstanding, (i) stockholders are not permitted to call a special meeting of stockholders or to require the Board or officers of the Corporation to call such a special meeting, (ii) a special meeting of stockholders may only be called by a majority of the Board, by the President or by the Chairman of the Board, (iii) the business permitted to be conducted at a special meeting of stockholders shall be limited to matters properly brought before the meeting by or at the direction of the Board, and (iv) any action required or permitted to be taken by the stockholders must be taken at a duly called and convened annual meeting or special meeting of stockholders and cannot be taken by consent in writing; provided, however, that the provisions of the foregoing clause (iv) shall not apply prior to the completion of an IPO.

ARTICLE XII

A director of this Corporation shall not be personally liable to this Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to this Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. Neither the amendment nor repeal of this Article XII, nor the adoption of any provision of the Certificate of Incorporation or Bylaws or of any statute inconsistent with this Article XII, shall eliminate or reduce the effect of this Article XII in respect of any acts or omissions occurring, or any causes of action, suits or claims that, but for this Article XII, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision. If the Delaware General Corporation Law is amended after approval by the stockholders of this Article to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended.

ARTICLE XIII

Meetings of stockholders may be held outside the State of Delaware, if the Bylaws so provide. The books of this Corporation may be kept (subject to any provision of law) outside of the State of Delaware. Elections of directors need not be by ballot unless the Bylaws of this Corporation shall so provide.

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IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be signed by Ronald J. Mittelstaedt, its Chairman and Chief Executive Officer, on this 17^th day of May, 2007.

WASTE CONNECTIONS, INC.

By: /s/ Ronald J. Mittelstaedt                       

Name: Ronald J. Mittelstaedt

Title: Chairman and Chief Executive Officer

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EX-10.1

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”), is made and entered into effective as of June 1, 2007, by and between Waste Connections, Inc., a Delaware corporation (the “Company”), and Eric Merrill (the “Employee”). 

The Company desires to engage the services and employment of the Employee for the period provided in this Agreement, and the Employee is willing to accept employment by the Company for such period, on the terms and conditions set forth below. 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions herein, the Company and the Employee agree as follows:

1.        Employment; Acceptance.  The Company hereby employs the Employee and the Employee hereby accepts employment by the Company on the terms and conditions hereinafter set forth. 

2.        Duties and Powers.  The Employee is hereby employed as Senior Vice President - People, Training and Development, and the Employee shall devote Employee’s attention, energies and abilities in that capacity to the proper oversight and operation of the Company’s business, to the exclusion of any other occupation.  As Senior Vice President - People, Training and Development, the Employee shall report to the Chief Executive Officer or his designee, shall be based at the Company’s corporate headquarters in California, and shall be responsible for all human resource functions, personnel training and organizational development.  The Employee shall perform such other duties as the Chief Executive Officer or the Board of Directors (the “Board”) of the Company may reasonably assign to the Employee from time to time.  The Employee shall devote such time and attention to his duties as are reasonably necessary to the proper discharge of his responsibilities hereunder.  The Employee agrees to perform all duties consistent with:  (a) policies established from time to time by the Company; and (b) all applicable legal requirements. 

3.        Term.  The employment of the Employee by the Company pursuant to this Agreement shall continue until the third (3^rd) anniversary thereof (the “Term”) or until terminated prior to such date when and as provided in Section 7.  Commencing June 1, 2008, and on each June 1^st thereafter, this Agreement shall be extended automatically for an additional year, thus extending the Term to three (3) years from each such date, unless either party shall have given the other notice of termination hereof as provided herein. 

4.        Compensation. 

      4.1 Base Salary.  The Company hereby agrees to pay to the Employee an annual base salary of Two Hundred Forty-Five Thousand Dollars ($245,000.00) (“Base Salary”).  Such Base Salary shall be payable in accordance with the Company’s normal payroll practices, and such Base Salary is subject to withholding and social security, unemployment and other taxes.  Increases in Base Salary shall be considered by the Board. 

Employment Agreement: ERIC MERRILL

      4.2 Performance Bonus.  For the calendar year commencing January 1, 2007, and for each calendar year thereafter, the Employee shall be eligible to receive an annual cash bonus (the “Bonus”) based on the Company’s attainment of reasonable financial objectives to be determined annually by the Board.  The maximum annual Bonus will equal forty percent (40%) of the applicable year’s beginning Base Salary and will be payable if the Board determines, in its sole and exclusive discretion, that that year’s financial objectives have been fully met.  The Bonus shall be paid in accordance with the Company’s bonus plan, as approved by the Board. 

      4.3 Grants of Options and Restricted Stock.  Employee shall be entitled to participate in Stock Option, Restricted Stock, Restricted Stock Unit (“RSU”) and other equity incentive plans presently in effect or in effect from time to time in the future on such terms and to such level of participation as the Board or the Compensation Committee of the Board shall determine to be appropriate, bearing in mind the Employee’s position and responsibilities. 

  The terms of any Options, Restricted Stock, RSUs and other equity incentives shall be governed by the relevant plans under which they are issued and described in detail in applicable agreements between the Company and the Employee. 

      4.4 Other Benefits.  The Company shall provide the Employee with a cellular telephone and will pay or reimburse the Employee’s monthly service fee and costs of calls attributable to Company business.  The Employee shall be entitled to paid annual vacation, which shall accrue on the same basis as for other employees of the Company of similar rank, but which shall in no event be less than three (3) weeks for any twelve (12) month period commencing January 1^st of each year.  The Employee also shall be entitled to participate, on the same terms as other employees of the Company participate, in any medical, dental or other health plan, pension plan, profit-sharing plan and life insurance plan that the Company may adopt or maintain, any of which may be changed, terminated or eliminated by the Company at any time in its exclusive discretion. 

5.        Confidentiality.  During the Term of his employment, and at all times thereafter, the Employee shall not, without the prior written consent of the Company, divulge to any third party or use for his own benefit or the benefit of any third party or for any purpose other than the exclusive benefit of the Company, any confidential or proprietary business or technical information revealed, obtained or developed in the course of his employment with the Company and which is otherwise the property of the Company or any of its affiliated corporations, including, but not limited to, trade secrets, customer lists, formulae and processes of manufacture; provided, however, that nothing herein contained shall restrict the Employee’s ability to make such disclosures during the course of his employment as may be necessary or appropriate to the effective and efficient discharge of his duties to the Company. 

6.        Property.  Both during the Term of his employment and thereafter, the Employee shall not remove from the Company’s offices or premises any Company documents, records, notebooks, files, correspondence, reports, memoranda and similar materials or property of any kind unless necessary in accordance with the duties and responsibilities of his employment.  In the event that any such material or property is removed, it shall be returned to its proper file or place of safekeeping as promptly as possible.  The Employee shall not make, retain, remove or distribute any copies, or divulge to any third person the nature or contents of any of the foregoing or of any other oral or written information to which he may have access, except as disclosure shall be necessary in the performance of his assigned duties.  On the termination of his employment with the Company, the Employee shall leave with or return to the Company all originals and copies of the foregoing then in his possession or subject to his control, whether prepared by the Employee or by others. 

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7.        Termination.

      7.1 For Cause.  The Company, by action of the Board, may terminate this Agreement and the Employee’s employment for cause on delivery to the Employee of a Notice of Termination (as defined in Section 9.2 below).  For purposes of this agreement, the term “Cause” shall mean: 

(a)   a material breach by the Employee of any of the terms of this Agreement that is not immediately corrected following written notice of default specifying such breach; 

(b)   conviction of a felony; 

(c)   a breach of any of the provisions of Section 11 below; 

(d)   repeated intoxification with alcohol or drugs while on Company premises during its regular business hours to such a degree that, in the reasonable judgment of the other managers of the Company, the Employee is abusive or incapable of performing his duties and responsibilities under this Agreement; and 

(e)   misappropriation of property belonging to the Company and/or any of its affiliates. 

On such termination for cause, the Employee shall be entitled only to the Employee’s Base Salary through the date of such termination, and shall not be entitled to any other compensation, including, without limitation, any severance compensation.  Without limitation of the foregoing, on termination pursuant to this Section 7.1, the Employee shall forfeit:  (i) his Bonus under Section 4.2 for the year in which such termination occurs; and (ii) all outstanding but unvested options and rights relating to capital stock of the Company, and all RSUs and shares of the Company’s restricted stock issued to the Employee that as of the termination date are still unvested and subject to restrictions on transfer. 

      7.2 Without Cause.  The employment of the Employee may be terminated without Cause at any time by the Company on delivery to the Employee of a written Notice of Termination (as defined in Section 9.1).  On the Date of Termination (as defined in Section 9.2) pursuant to this Section 7.2, the Company shall, in lieu of any payments under Section 4.1 and 4.2 for the remainder of the Term, pay to the Employee an amount equal to the lesser of:  (a) the Employee’s Base Salary for a period of one (1) year from the date of termination, and (b) the Employee’s Base Salary for the remainder of the Term.  In addition, the Employee shall be entitled to the pro-rated maximum Bonus available to the Employee under Section 4.2 for the year in which the termination occurs.  Such payment by the Company shall be paid in accordance with the Company’s normal payroll practices and not as a lump sum payment.  In addition, the Company will pay as incurred the Employee’s expenses, up to Fifteen Thousand Dollars ($15,000.00), associated with career counseling and resume development.  The Company shall also pay to the Employee an amount equal to the Company’s portion (but not the Employee’s portion) of the cost of medical insurance at the rate in effect on the Date of Termination for a period of one (1) year from the Date of Termination.  In addition, on termination of the Employee under this Section 7.2, all of the Employee’s outstanding but unvested options and rights relating to capital stock of the Company shall immediately vest and become exercisable, and all RSUs and shares of the Company’s restricted stock issued to the Employee shall immediately vest and become unrestricted and freely transferable.  The term of any such options and rights shall be extended to the first (1^st) anniversary of the Employee’s termination.  The Employee acknowledges that extending the term of any incentive stock options pursuant to this Section 7.2 or Sections 7.3, 7.4 or 8 below, could cause such option to lose its tax-qualified status if it is an incentive stock option under the Code and agrees that the Company shall have no obligation to compensate the Employee for any additional taxes he incurs as a result.  In addition, any portion of Employee’s relocation expenses otherwise reimbursable to the Company on termination shall be forgiven.

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      7.3 Termination on Disability.  If during the Term the Employee should fail to perform his duties hereunder on account of physical or mental illness or other incapacity which the Company shall in good faith determine renders the Employee incapable of performing his duties hereunder, and such illness or other incapacity shall continue for a period of more than six (6) consecutive months (“Disability”), the Company shall have the right, on written Notice of Termination delivered to the Employee to terminate the Employee’s employment under this Agreement.  During the period that the Employee shall have been incapacitated due to physical or mental illness, the Employee shall continue to receive the full Base Salary provided for in Section 4.1 hereof at the rate then in effect until the Date of Termination pursuant to this Section 7.3.  On the Date of Termination pursuant to this Section 7.3, the Company shall pay to the Employee the payments and other benefits applicable to termination without Cause set forth in Section 7.2 hereof, other than those related to career counseling and resume development.  The Company shall also pay, on behalf of the Employee, an amount equal to the Company’s portion (not the Employee’s portion) of the cost of medical insurance at the rate in effect on the Date of Termination for a period of one (1) year from the Date of Termination.  In addition, on such termination, all of the Employee’s outstanding but unvested options and rights relating to capital stock of the Company shall immediately vest and become exercisable, and all RSUs and shares of the Company’s restricted stock issued to the Employee shall immediately vest and become unrestricted and freely transferable.  The term of any such options and rights shall be extended to the first (1^st) anniversary of the Employee’s termination. 

      7.4 Termination on Death.  If the Employee shall die during the Term, the employment of the Employee shall thereupon terminate.  On the Date of Termination pursuant to this Section 7.4, the Company shall pay to the Employee’s estate the payments and other benefits applicable to termination without Cause set forth in Section 7.2 hereof, other than those related to career counseling and resume development.  In addition, on termination of the Employee under this Section 7.4, all of the Employee’s outstanding but unvested options and rights relating to capital stock of the Company shall immediately vest and become exercisable, and all RSUs and shares of the Company’s restricted stock issued to the Employee shall immediately vest and become unrestricted and freely transferable.  The term of any such options and rights shall be extended to the first anniversary of the Employee’s termination.  The provisions of this Section 7.4 shall not affect the entitlements of the Employee’s heirs, executors, administrators, legatees, beneficiaries or assigns under any employee benefit plan, fund or program of the Company.  If permitted by applicable law and the terms of the applicable equity plans, such payments, options and rights shall be paid to the Merrill Caswell Family Trust.

      7.5 No Limitation on Company’s Right to Terminate.  Any other provision in this Agreement to the contrary notwithstanding, the Company shall have the right, in its absolute discretion, to terminate this Agreement and the Employee’s employment hereunder at any time in accordance with the foregoing provisions of this Section 7, it being the intent and purpose of the foregoing provisions of this Section 7 only to set forth the consequences of termination with respect to severance or other compensation payable to the Employee on termination in the circumstances indicated. 

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8.        Termination by Employee.  The Employee may terminate his employment hereunder on written Notice of Termination delivered to the Company setting forth the effective date of termination.  If the Employee terminates his employment hereunder, he shall be entitled to receive, and the Company agrees to pay on the effective date of termination specified in the Notice of Termination, his current Base Salary under Section 4.1 hereof on a prorated basis to such date of termination.  On termination pursuant to this Section 8, the Employee shall forfeit:  (i) his Bonus under Section 4.2 for the year in which such termination occurs; and (ii) all outstanding but unvested options and rights relating to capital stock of the Company, and all RSUs and shares of the Company’s restricted stock issued to the Employee that as of the termination date are still unvested and subject to restrictions on transfer. 

9.        Provisions Applicable to Termination of Employment.

      9.1 Notice of Termination.  Any purported termination of Employee’s employment by the Company pursuant to Section 7 shall be communicated by Notice of Termination to the Employee as provided herein, and shall state the specific termination provisions in this Agreement relied on and set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Employee’s employment (“Notice of Termination”).  If the Employee terminates under Section 8, he shall give the Company a Notice of Termination. 

      9.2 Date of Termination.  For all purposes, “Date of Termination” shall mean, for Disability, thirty (30) days after Notice of Termination is given to the Employee (provided the Employee has not returned to duty on a full-time basis during such 30-day period), or, if the Employee’s employment is terminated by the Company for any other reason or by the Employee, the date on which a Notice of Termination is given. 

      9.3 Benefits on Termination.  On termination of this Agreement by the Company pursuant to Section 7 or by the Employee pursuant to Section 8, all profit-sharing, deferred compensation and other retirement benefits payable to the Employee under benefit plans in which the Employee then participated shall be paid to the Employee in accordance with the provisions of the respective plans. 

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10.      Change In Control.

      10.1 Payments on Change in Control.  Notwithstanding any provision in this Agreement to the contrary, unless the Employee elects in writing to waive this provision, a Change in Control (as defined below) of the Company shall be deemed a termination of the Employee without Cause, and the Employee shall be entitled to receive and the Company agrees to pay to the Employee the same amount determined under Section 7.2 that is payable to the Employee on termination without Cause provided, however, that such amount shall be payable in a lump sum on the Date of Termination and not in installments as provided in Section 7.2.  In addition, on a Change of Control, all of the Employee’s outstanding but unvested options and rights relating to capital stock of the Company shall immediately vest and become exercisable, the term of any such options and rights shall be extended to the first anniversary of the Employee’s termination, and all RSUs and shares of the Company’s restricted stock issued to the Employee shall immediately vest and become unrestricted. 

After a Change in Control, if any previously outstanding option or right (the “Terminated Option”) relating to the Company’s capital stock does not remain outstanding, the successor to the Company or its then Parent (as defined below) shall either: 

(a)   Issue an option, warrant or right, as appropriate (the “Successor Option”), to purchase common stock of such successor or Parent in an amount such that on exercise of the Successor Option the Employee would receive the same number of shares of the successor’s/Parent’s common stock as the Employee would have received had the Employee exercised the Terminated Option immediately prior to the transaction resulting in the Change in Control and received shares of such successor/Parent in such transaction.  The aggregate exercise price for all of the shares covered by such Successor Option shall equal the aggregate exercise price of the Terminated Option; or 

(b)   Pay the Employee a bonus within ten (10) days after the consummation of the Change in Control in an amount agreed to by the Employee and the Company.  Such amount shall be at least equivalent on an after-tax basis to the net after-tax gain that the Employee would have realized if the Employee had been issued a Successor Option under Section 10.1(a) above and had immediately exercised such Successor Option and sold the underlying stock, taking into account the different tax rates that apply to such bonus and to such gain, and such amount shall also reflect other differences to the Employee between receiving a bonus under this Section 10.1(b) and receiving a Successor Option under Section 10.1(a) above. 

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      10.2 Definitions.  For the purposes of this Agreement, a Change in Control shall be deemed to have occurred if:  (i) there shall be consummated (aa) 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, and (bb) 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 (ii) if any “person” (as defined in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), shall become 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 Section 10.2, “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 this 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); or (iii) if during any period of two (2) consecutive years, individuals who at the beginning of such period constituted the entire Board shall cease for any reason to constitute at least one-half (½) of the membership thereof unless the election, or the nomination for election by the Company’s shareholders, of each new director was approved by a vote of at least one-half of the directors then still in office who were directors at the beginning of the period. 

The term “Parent” means a corporation, partnership, trust, limited liability company or other entity that is the ultimate “beneficial owner” (as defined above) of fifty percent (50%) or more of the Company’s outstanding voting securities. 

11.Non-Competition and Non-Solicitation.

      11.1 In consideration of the provisions hereof, for the Restricted Period (as defined below), the Employee will not, except as specifically provided below, anywhere in any county in the State of California or anywhere in any other state in which the Company is engaged in business as of such termination date (the “Restricted Territory”), directly or indirectly, acting individually or as the owner, shareholder, partner or management employee of any entity:  (i) engage in the operation of a solid waste collection, transporting or disposal business, transfer facility, recycling facility, materials recovery facility or solid waste landfill; or (ii) enter the employ as a manager of, or render any personal services to or for the benefit of, or assist in or facilitate the solicitation of customers for, or receive remuneration in the form of management salary, commissions or otherwise from, any business engaged in such activities in such counties; or (iii) receive or purchase a financial interest in, make a loan to, or make a gift in support of, any such business in any capacity, including without limitation, as a sole proprietor, partner, shareholder, officer, director, principal agent or trustee; provided, however, that the Employee may own, directly or indirectly, solely as an investment, securities of any business traded on any national securities exchange or quoted on any NASDAQ market, provided the Employee is not a controlling person of, or a member of a group which controls, such business and further provided that the Employee does not, in the aggregate, directly or indirectly, own two percent (2%) or more of any class of securities of such business.  The term “Restricted Period” shall mean the earlier of:  (i) the maximum period allowed under applicable law; and (ii) (aa) in the case of a Change of Control, until the first anniversary of the effective date of the Change of Control, (bb) in the case of a termination by the Company without Cause pursuant to Section 7.2 and provided the Company has made the payments required under Section 7.2, as the case may be, until the first (1^st) anniversary of the Date of Termination, or (cc) in the case of Termination for Cause by the Company pursuant to Section 7.1 or by the Employee pursuant to Section 8, until the first (1^st) anniversary of the Date of Termination. 

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      11.2 After termination of this Agreement by the Company or the Employee pursuant to Section 7 or 8 or termination of this Agreement upon a Change in Control pursuant to Section 10, the Employee shall not:  (i) solicit any residential or commercial customer of the Company to whom the Company provides service pursuant to a franchise agreement with a public entity in the Restricted Territory; or (ii) solicit any residential or commercial customer of the Company to enter into a solid waste collection account relationship with a competitor of the Company in the Restricted Territory; or (iii) solicit any such public entity to enter into a franchise agreement with any such competitor, or (iv) solicit any officer, employee or contractor of the Company to enter into an employment or contractor agreement with a competitor of the Company or otherwise interfere in any such relationship; or (v) solicit on behalf of a competitor of the Company any prospective customer of the Company in the Restricted Territory that the Employee called on or was involved in soliciting on behalf of the Company during the Term, in each case until the first (1^st) anniversary of the date of such termination or the effective date of such change of control (whichever is later), unless otherwise permitted to do so by Section 11.1. 

      11.3 If the final judgment of a court of competent jurisdiction declares that any term or provision of this Section 11 is invalid or unenforceable, the parties agree that the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration or area of the term or provision, to delete specified words or phrases or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified after the expiration of the time within which the judgment may be appealed. 

12.Indemnification.  As an officer and agent of the Company, the Employee shall be fully indemnified by the Company to the fullest extent permitted by applicable law in connection with his employment hereunder. 

13.Survival of Provisions.  The obligations of the Company under Section 12 of this Agreement, and of the Employee under Section 11 of this Agreement, shall survive both the termination of the Employee’s employment and this Agreement. 

14.No Duty to Mitigate; No Offset.  The Employee shall not be required to mitigate damages or the amount of any payment contemplated by this Agreement, nor shall any such payment be reduced by any earnings that the Employee may receive from any other sources or offset against any other payments made to him or required to be made to him pursuant to this Agreement. 

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15.Assignment; Binding Agreement.  The Company may assign this Agreement to any parent, subsidiary, affiliate or successor of the Company.  This Agreement is not assignable by the Employee and is binding on him and his executors and other legal representatives.  This Agreement shall bind the Company and its successors and assigns and inure to the benefit of the Employee and his heirs, executors, administrators, personal representatives, legatees or devisees.  The Company shall assign this Agreement to any entity that acquires its assets or business. 

16.Notice.  Any written notice under this Agreement shall be personally delivered to the other party or sent by a nationally recognized overnight delivery service or by certified or registered mail, return receipt requested and postage prepaid, to the principal executive office of the Company at the address of the Employee set forth in the records of the Company, as the case may be, or to such other address as either party may from time to time specify by written notice. 

17.Entire Agreement; Amendments.  This Agreement contains the entire agreement of the parties relating to the Employee’s employment and supersedes all oral or written prior discussions, agreements and understandings of every nature between them.  This Agreement may not be changed except by an agreement in writing signed by the Company and the Employee.  This Agreement supercedes and replaces the Employment Agreement between the Company and the Employee dated April 1, 2000. 

18.Waiver.  The waiver of a breach of any provision of this Agreement shall not operate or as be construed to be a waiver of any other provision or subsequent breach of this Agreement. 

19.Governing Law and Jurisdictional Agreement.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California.  The parties irrevocably and unconditionally submit to the jurisdiction and venue of any court, federal or state, situated within Sacramento County, California, for the purpose of any suit, action or other proceeding arising out of, or relating to or in connection with, this Agreement. 

20.Severability.  In case any one or more of the provisions contained in this Agreement is, for any reason, held invalid in any respect, such invalidity shall not affect the validity of any other provision of this Agreement, and such provision shall be deemed modified to the extent necessary to make it enforceable. 

21.Enforcement.  It is agreed that it is impossible to measure fully, in money, the damage which will accrue to the Company in the event of a breach or threatened breach of Sections 5, 6, or 11 of this Agreement, and, in any action or proceeding to enforce the provisions of Sections 5, 6 or 11 hereof, the Employee waives the claim or defense that the Company has an adequate remedy at law and will not assert the claim or defense that such a remedy at law exists.  The Company is entitled to injunctive relief to enforce the provisions of such sections as well as any and all other remedies available to it at law or in equity without the posting of any bond.  The Employee agrees that if the Employee breaches any provision of Section 11, the Company may recover as partial damages all profits realized by the Employee at any time prior to such recovery on the exercise of any warrant, option or right to purchase the Company’s Common Stock and the subsequent sale of such stock, and may also cancel all outstanding such warrants, options and rights. 

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22.Counterparts.  This Agreement may be executed in one or more facsimile or original counterparts, each of which shall be deemed an original and both of which together shall constitute one and the same instrument. 

[Signatures appear on the following page]

Employment Agreement: ERIC MERRILL

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IN WITNESS WHEREOF, this Employment Agreement has been duly executed by or on behalf of the parties hereto as of the date first above written. 

	Waste Connections, Inc.
___________________________________	By:	_________________________________
Eric Merrill		Ronald J. Mittelstaedt,
		Chief Executive Officer
Address:

Employment Agreement: ERIC MERRILL

Page S-1

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 24, 2007	By:	/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 24, 2007	By:	/s/ Worthing F. Jackman
		Worthing F. Jackman
		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, 2007, 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 24, 2007	By:	/s/ Ronald J. Mittelstaedt
		Ronald J. Mittelstaedt
		Chief Executive Officer

Date: July 24, 2007	By:	/s/ Worthing F. Jackman
		Worthing F. Jackman
		Executive Vice President and Chief Financial Officer