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 March 31, 2008
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, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

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

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

Yes  ¨     No  þ

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

As of April 11, 2008:   66,407,072 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, 2007 and March 31, 2008	1
	Condensed Consolidated Statements of Income for the three months ended March 31, 2007 and 2008	2
	Condensed Consolidated Statements of Stockholders’ Equity and Comprehensive Income for the three months ended March 31, 2008	3
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2007 and 2008	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	25
Item 4.	Controls and Procedures	27
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 6.	Exhibits	30
Signatures		31
Exhibit Index		32

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, 2007			March 31, 2008
ASSETS
Current assets:
Cash and equivalents	$	10,298		$	9,505
Accounts receivable, net of allowance for doubtful accounts of $4,387 and $3,716 at December 31, 2007 and March 31, 2008, respectively		123,882			116,193
Deferred income taxes		14,732			15,552
Prepaid expenses and other current assets		21,953			15,512
Total current assets		170,865			156,762
Property and equipment, net		865,330			870,316
Goodwill		811,049			824,929
Intangible assets, net		93,957			109,376
Restricted assets		19,300			20,090
Other assets, net		21,457			21,512
	$	1,981,958		$	2,002,985
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	59,912		$	51,194
Book overdraft		8,835			5,239
Accrued liabilities		69,578			76,185
Deferred revenue		44,074			44,343
Current portion of long-term debt and notes payable		13,315			13,473
Total current liabilities		195,714			190,434
Long-term debt and notes payable		719,518			744,514
Other long-term liabilities		38,053			45,517
Deferred income taxes		223,308			227,197
Total liabilities		1,176,593			1,207,662
Commitments and contingencies (Note 12)
Minority interests		30,220			30,751
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; 67,052,135 and 66,397,922 shares issued and outstanding at December 31, 2007 and March 31, 2008, respectively		670			664
Additional paid-in capital		254,284			229,151
Retained earnings		524,481			547,599
Accumulated other comprehensive loss		(4,290	)		(12,842	)
Total stockholders’ equity		775,145			764,572
	$	1,981,958		$	2,002,985

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 March 31,
	2007			2008
Revenues	$	218,951		$	250,300
Operating expenses:
Cost of operations		128,869			149,132
Selling, general and administrative		23,910			27,090
Depreciation and amortization		19,590			23,223
Loss on disposal of assets		160			57
Operating income		46,422			50,798
Interest expense, net		(7,818	)		(9,319	)
Other income (expense), net		51			(12	)
Income before income taxes and minority interests		38,655			41,467
Minority interests		(2,840	)		(3,373	)
Income from operations before income taxes		35,815			38,094
Income tax provision		(13,435	)		(14,976	)
Net income	$	22,380		$	23,118
Basic earnings per common share	$	0.33		$	0.35
Diluted earnings per common share	$	0.32		$	0.34
Shares used in calculating basic income per share		68,465,359			66,789,398
Shares used in calculating diluted income per share		70,583,096			68,121,953

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

Three months ended March 31, 2008

(Unaudited)

(In thousands, except share amounts)

				STOCKHOLDERS’ EQUITY
	Comprehensive Income			Common Stock						Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Retained Earnings		Total
				Shares			Amount
Balances at December 31, 2007					67,052,135		$	670		$	254,284		$	(4,290	)	$	524,481	$	775,145
Vesting of restricted stock					198,204			2			(2	)		-			-		-
Cancellation of restricted stock					(64,343	)		(1	)		(1,932	)		-			-		(1,933	)
Stock-based compensation					-			-			2,065			-			-		2,065
Exercise of stock options and warrants					253,197			3			5,121			-			-		5,124
Excess tax benefit associated with equity-based compensation					-			-			1,101			-			-		1,101
Repurchase of common stock					(1,041,271	)		(10	)		(31,517	)		-			-		(31,527	)
Issuance of common stock warrants to consultants					-			-			31			-			-		31
Amounts reclassified into earnings, net of taxes					-			-			-			483			-		483
Change in fair value of interest rate swaps, net of taxes					-			-			-			(9,035	)		-		(9,035	)
Net income	$	23,118			-			-			-			-			23,118		23,118
Other comprehensive loss		(13,950	)		-			-			-			-			-		-
Income tax effect of other comprehensive loss		5,398			-			-			-			-			-		-
Comprehensive income	$	14,566			-			-			-			-			-		-
Balances at March 31, 2008					66,397,922		$	664		$	229,151		$	(12,842	)	$	547,599	$	764,572

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)

	Three months ended March 31,
	2007			2008
Cash flows from operating activities:
Net income	$	22,380		$	23,118
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on disposal of assets		160			57
Depreciation		18,558			21,827
Amortization of intangibles		1,032			1,396
Deferred income taxes, net of acquisitions		2,852			7,989
Minority interests		2,840			3,373
Amortization of debt issuance costs		482			486
Stock-based compensation		1,663			2,065
Interest income on restricted assets		(107	)		(170	)
Closure and post-closure accretion		253			333
Excess tax benefit associated with equity-based compensation		(2,260	)		(1,101	)
Net change in operating assets and liabilities, net of acquisitions		13,061			5,220
Net cash provided by operating activities		60,914			64,593
Cash flows from investing activities:
Payments for acquisitions, net of cash acquired		(35,860	)		(32,327	)
Capital expenditures for property and equipment		(36,147	)		(24,108	)
Proceeds from disposal of assets		215			301
Increase in restricted assets, net of interest income		(581	)		(621	)
Decrease (increase) in other assets		(517	)		96
Net cash used in investing activities		(72,890	)		(56,659	)
Cash flows from financing activities:
Proceeds from long-term debt		21,000			80,500
Principal payments on notes payable and long-term debt		(23,616	)		(57,487	)
Change in book overdraft		-			(3,596	)
Proceeds from option and warrant exercises		6,513			5,124
Excess tax benefit associated with equity-based compensation		2,260			1,101
Distributions to minority interest holders		(2,352	)		(2,842	)
Payments for repurchase of common stock		(5,414	)		(31,527	)
Debt issuance costs		(100	)		-
Net cash used in financing activities		(1,709	)		(8,727	)
Net decrease in cash and equivalents		(13,685	)		(793	)
Cash and equivalents at beginning of period		34,949			10,298
Cash and equivalents at end of period	$	21,264		$	9,505
Non-cash financing activity:
Liabilities assumed and notes payable issued to sellers of businesses acquired	$	6,624		$	4,978

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”) for the three month periods ended March 31, 2007 and 2008.  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, 2007 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, income taxes, allocation of acquisition purchase price and asset impairments.  An additional area that involves estimation is when the Company estimates the amount of potential exposure it may have with respect to litigation, claims and assessments in accordance with Financial Accounting Standards Board (“FASB”) Statement No. 5, Accounting for Contingencies. Actual results for all estimates could differ materially from the estimates and assumptions that the Company uses in the preparation of its condensed consolidated financial statements. 

Interim results are not necessarily indicative of results for a full year.  The information included in this Quarterly Report on Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto included in the Company’s 2007 Annual Report on Form 10-K. 

2.NEW ACCOUNTING STANDARDS 

SFAS 141(R).  In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (“SFAS 141(R)”).  SFAS 141(R) will have a material impact on the Company as it establishes principles and requirements for how the Company:  (a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination.  SFAS 141(R) requires contingent consideration to be recognized at its fair value on the acquisition date and, for certain arrangements, changes in fair value to be recognized in earnings until settled.  SFAS 141(R) also requires acquisition-related transaction and restructuring costs to be expensed rather than treated as part of the cost of the acquisition.  SFAS 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.  

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 accordance with 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.  Effective January 1, 2008, the Company adopted SFAS 157 as it relates to financial assets and liabilities.  The new disclosures required by SFAS 157 are included in Note 9. 

FSP 157-2.  In February 2008, the FASB issued FASB Staff Position No. 157-2, Effective Date of FASB Statement No. 157 (“FSP 157-2”), which delays the effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities.  Therefore, the Company has delayed application of SFAS 157 to its nonfinancial assets and nonfinancial liabilities, which include assets and liabilities acquired in connection with a business combination, goodwill, intangible assets and asset retirement obligations recognized in connection with final capping, closure and post-closure landfill obligations, until January 1, 2009.  The Company is currently evaluating the impact of SFAS 157 for nonfinancial assets and liabilities on the Company's 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)

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 did not adopt the fair value option permitted under this statement.

SFAS 160.  In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements - an Amendment of ARB No. 51 (“SFAS 160”), which establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary.  SFAS 160 clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements.  SFAS 160 also requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest.  It also requires disclosure, on the face of the consolidated statement of income, of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest.  SFAS 160 also provides guidance when a subsidiary is deconsolidated and requires expanded disclosures in the consolidated financial statements that clearly identify and distinguish between the interests of the parent’s owners and the interests of the noncontrolling owners of a subsidiary.  SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008.  The Company is currently evaluating the impact this statement will have on its financial position and results of operations.

SFAS 161.  In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (“SFAS 161”), which amends and expands the disclosure requirements of FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities (“SFAS 133”), with the intent to provide users of financial statements with an enhanced understanding of:  (a) how and why an entity uses derivative instruments; (b) how derivative instruments and related hedged items are accounted for under SFAS 133 and its related interpretations; and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows.  SFAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative instruments.  This statement applies to all entities and all derivative instruments.  SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. 

Page 6

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 activity related to restricted stock and restricted stock units under the 2002 Restricted Stock Plan and the 2004 Equity Incentive Plan, as of December 31, 2007, and changes during the three month period ended March 31, 2008, is presented below: 

	Unvested Shares
Outstanding at December 31, 2007		804,748
Granted		375,599
Forfeited		(23,770	)
Vested		(198,204	)
Outstanding at March 31, 2008		958,373

The weighted average grant date fair value per share for the 375,599 shares of common stock underlying restricted stock units granted during the three month period ended March 31, 2008 was $28.91.  During the three months ended March 31, 2007 and 2008, the Company's stock-based compensation expense from restricted stock and restricted stock units was $1,499 and $1,899, respectively. 

4.LANDFILL ACCOUNTING

At March 31, 2008, the Company owned 26 landfills, and operated, but did not own, three landfills under life-of-site operating agreements and seven landfills under limited-term operating agreements.  The Company’s landfills have site costs with a net book value of $489,553 at March 31, 2008.  With the exception of two 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 seven 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. 

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

Based on remaining permitted capacity as of March 31, 2008, 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 46 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 52 years, with lives ranging from 2 to 206 years. 

Page 7

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

During the three months ended March 31, 2007 and 2008, the Company expensed approximately $4,505 and $5,287, respectively, or an average of $2.55 and $2.68 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 2008 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 three months ended March 31, 2007 and 2008, the Company expensed approximately $253 and $333, respectively, or an average of $0.14 and $0.17 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, 2007 to March 31, 2008:

Final capping, closure and post-closure liability at December 31, 2007	$	17,853
Adjustments to final capping, closure and post-closure liabilities		1,278
Liabilities incurred		458
Accretion expense		333
Closure payments		(251)
Final capping, closure and post-closure liability at March 31, 2008	$	19,671

The Company recorded adjustments in its final capping, closure and post-closure liabilities due to revisions in cost estimates and changes in the timing of capping events at an owned landfill, partially offset by an increase in airspace at a landfill where an expansion is being pursued.  The Company performs its annual review of its cost and capacity estimates in the first quarter of each year. 

At March 31, 2008, $17,865 of the Company’s restricted assets balance was for purposes of settling future final capping, closure and post-closure liabilities. 

Page 8

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, 2007			March 31, 2008
Revolver under Credit Facility, bearing interest ranging from 3.22% to 7.25%*	$	479,000		$	506,000
2026 Convertible Senior Notes, bearing interest at 3.75%		200,000			200,000
2001 Wasco Bonds, bearing interest from 7.0% to 7.25%*		11,285			10,800
California Tax-Exempt Bonds, bearing interest ranging from 1.10% to 3.44%*		33,225			33,225
Notes payable to sellers in connection with acquisitions, bearing interest at 5.5% to 7.5%*		3,994			3,165
Notes payable to third parties, bearing interest at 6.0% to 11.0%*		5,329			4,797
		732,833			757,987
Less – current portion		(13,315	)		(13,473	)
	$	719,518		$	744,514

*  Interest rates in the table above represent the range of interest rates incurred during the three month period ended March 31, 2008. 

6.ACQUISITIONS

Acquisitions are accounted for under the purchase method of accounting.  The results of operations of the acquired businesses have been included in the Company’s consolidated financial statements from their respective acquisition dates. 

During the three months ended March 31, 2007, the Company acquired three non-hazardous solid waste collection, transfer and disposal businesses.  Aggregate consideration for the acquisitions consisted of $35,247 in cash (net of cash acquired), common stock warrants valued at $15 and the assumption of debt totaling $4,165.  During the three months ended March 31, 2007, the Company paid or adjusted $613 of acquisition-related liabilities accrued at December 31, 2006. 

During the three months ended March 31, 2008, the Company acquired five non-hazardous solid waste collection and recycling businesses.  Aggregate consideration for the acquisitions consisted of $31,988 in cash (net of cash acquired), common stock warrants valued at $30 and the assumption of debt totaling $2,140.  During the three months ended March 31, 2008, the Company paid or adjusted $339 of acquisition-related liabilities accrued at December 31, 2007. 

The purchase prices have been allocated to the identified intangible assets and tangible assets acquired and liabilities assumed based on their estimated fair values at the dates of acquisition, with any residual amounts allocated to goodwill.  Substantially all of the goodwill is expected to be deductible for tax purposes.  The purchase price allocations are considered preliminary until the Company is no longer waiting for information that it has arranged to obtain and that is known to be available or obtainable.  Although the time required to obtain the necessary information will vary with circumstances specific to an individual acquisition, the “allocation period” for finalizing purchase price allocations does not exceed one year from the consummation of a business combination. 

Page 9

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

As of March 31, 2008, the Company had six acquisitions for which purchase price allocations were preliminary, mainly as a result of pending working capital valuations.  The Company believes the potential changes to its preliminary purchase price allocations will not have a material impact on its financial condition, results of operations or cash flows. 

A summary of the purchase price allocations for acquisitions consummated in the three months ended March 31, 2007 and preliminary purchase price allocations for acquisitions consummated in the three months ended March 31, 2008 are as follows: 

	2007 Acquisitions			2008 Acquisitions
Acquired Assets:
Accounts receivable	$	2,988		$	1,309
Prepaid expenses and other current assets		86			273
Property and equipment		27,056			4,721
Goodwill		11,058			13,879
Long-term franchise agreements and contracts		-			15,915
Other intangibles		390			869
Non-competition agreements		308			30
Assumed Liabilities:
Accounts payable		(86	)		(49	)
Accrued liabilities		(897	)		(1,728	)
Debt and long-term liabilities assumed		(4,165	)		(2,140	)
Deferred revenue		(1,476	)		(582	)
Deferred income taxes		-			(479	)
Total consideration, net	$	35,262		$	32,018

The acquisitions completed during the three months ended March 31, 2007 and 2008, were not material to the Company's results of operations. 

Page 10

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

7.INTANGIBLE ASSETS 

Intangible assets, exclusive of goodwill, consisted of the following at March 31, 2008: 

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Amortizable intangible assets:
Long-term franchise agreements and contracts	$	78,173	$	(10,139	)	$	68,034
Non-competition agreements		9,732		(4,607	)		5,125
Other		17,932		(5,563	)		12,369
		105,837		(20,309	)		85,528
Nonamortized intangible assets:
Indefinite-lived intangible assets		23,848		-			23,848
Intangible assets, exclusive of goodwill	$	129,685	$	(20,309	)	$	109,376

The weighted-average amortization periods of long-term franchise agreements and contracts, non-competition agreements and other intangibles acquired during the three months ended March 31, 2008 are 40 years, 7 years and 7 years, respectively. 

8.NET INCOME PER SHARE INFORMATION

The following table sets forth the calculation of the numerator and denominator used in the computation of basic and diluted net income per common share for the three months ended March 31, 2007 and 2008: 

	Three Months ended March 31,
	2007		2008
Numerator:
Net income for basic and diluted earnings per share	$	22,380	$	23,118
Denominator:
Basic shares outstanding		68,465,359		66,789,398
Dilutive effect of stock options and warrants		1,833,779		1,189,879
Dilutive effect of restricted stock		283,958		142,676
Diluted shares outstanding		70,583,096		68,121,953

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 months ended March 31, 2007 and 2008 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. 

Page 11

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

For the three months ended March 31, 2007 and 2008, stock options and warrants to purchase 750 and 31,702 shares of common stock, respectively, were excluded from the computation of diluted earnings per share as they were anti-dilutive. 

9.     FAIR VALUE OF FINANCIAL INSTRUMENTS

As discussed in Note 2, effective January 1, 2008, the Company adopted SFAS 157 as it relates to financial assets and liabilities that are being measured and reported at fair value on a recurring basis.  Although the adoption of SFAS 157 did not materially impact its financial condition, results of operations, or cash flows, the Company is now required to provide additional disclosures as part of its financial statements.  In accordance with FSP 157-2, the Company deferred adoption of SFAS 157 as it relates to nonfinancial assets and liabilities measured at fair value on a nonrecurring basis. 

SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosure about fair value measurements.  This statement is intended to enable the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values.  The statement requires that assets and liabilities carried at fair value be classified and disclosed in a three-tier fair value hierarchy.  These tiers include:  Level 1, defined as quoted market prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; model-based valuation techniques for which all significant assumptions are observable in the market; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3, defined as unobservable inputs that are not corroborated by market data. 

The Company's financial assets and liabilities recorded at fair value on a recurring basis include derivative instruments and certain investments included in restricted assets.  The Company’s derivative instruments are pay-fixed, receive-variable interest rate swaps.  The Company’s restricted assets measured at fair value are invested in fixed-income securities.  The Company utilizes the market approach to measure fair value for both its interest rate swaps and its restricted assets measured at fair value.  The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

The Company’s assets and liabilities measured at fair value on a recurring basis subject to the disclosure requirements of SFAS 157 at March 31, 2008, were as follows: 

	Fair Value Measurements at Reporting Date Using
	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs  (Level 2)
Interest rate swap derivative instruments – liability position	$	(20,949	)	$	-	$	(20,949	)
Restricted assets	$	5,456		$	5,456	$	-

Page 12

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

10.    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 months ended March 31, 2007 and 2008 is as follows: 

	Three months ended March 31,
	2007			2008
Net income	$	22,380		$	23,118
Unrealized loss on interest rate swaps, net of tax benefit of $873 and $5,398 for the three months ended March 31, 2007 and 2008, respectively		(1,416	)		(8,552	)
Comprehensive income	$	20,964		$	14,566

The components of other comprehensive loss and related tax effects for the three months ended March 31, 2007 and 2008 are as follows:

	Three months ended March 31, 2007
	Gross				Tax effect				Net of tax
Amounts reclassified into earnings		$	(1,421	)		$	550			$	(871	)
Changes in fair value of interest rate swaps			(868	)			323				(545	)
		$	(2,289	)		$	873			$	(1,416	)
	Three months ended March 31, 2008
	Gross				Tax effect				Net of tax
Amounts reclassified into earnings		$	788			$	(305	)		$	483
Changes in fair value of interest rate swaps			(14,738	)			5,703				(9,035	)
		$	(13,950	)		$	5,398			$	(8,552	)

The estimated net amount of the existing unrealized losses as of March 31, 2008 (based on the interest rate yield curve at that date) included in accumulated other comprehensive loss expected to be reclassified into pre-tax earnings within the next 12 months is $8,858.  The timing of actual amounts reclassified into earnings is dependent on future movements in interest rates. 

11.   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 its 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 three months ended March 31, 2007 and 2008, the Company repurchased 184,500 and 1,041,271 shares, respectively, of its common stock under this program at a cost of $5,282 and $31,527, respectively.  As of March 31, 2008, the remaining maximum dollar value of shares available for purchase under the program is approximately $80,217.  The Company’s policy related to repurchases of its common stock is to charge any excess of cost over par value entirely to additional paid-in capital. 

Page 13

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

12.  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 March 31, 2008, the Company had $9,104 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 $9,104 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. 

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 on October 12, 2007, the Court of Appeals issued an opinion reversing and remanding the District Court's decision.  The Company appealed the decision to the Kansas Supreme Court, which granted the Company’s petition for review.  Oral arguments on the matter are scheduled for May 12, 2008.  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. 

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.  On March 19, 2008, the Court granted the Company’s motion to dismiss and provided the plaintiffs leave to file an amended consolidated complaint, which the plaintiffs filed with the Court on April 8, 2008. 

Page 14

WASTE CONNECTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

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 the pending federal and state derivative litigation, nor can it estimate the amount of any losses that might result. 

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 March 31, 2008, 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. 

13.  REVENUE BY SERVICE TYPE

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

	Three months ended March 31,
	2007		2008
Collection	$	160,152	$	186,161
Disposal and transfer		66,641		72,158
Recycling and other		22,224		23,960
Total	$	249,017	$	282,279
Intercompany elimination	$	30,066	$	31,979

Page 15

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,” or “anticipates,” or the negative thereof or comparable terminology, or by discussions of strategy. 

Our business and operations are subject to a variety of risks and uncertainties and, consequently, actual results may differ materially from those projected by any forward-looking statements.  Factors that could cause actual results to differ from those projected include, but are not limited to, the following:  (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) we depend significantly on the services of the members of our senior, regional and district management team, and the departure of any of those persons could cause our operating results to suffer; (6) our financial results are based upon estimates and assumptions that may differ from actual results; (7) efforts by labor unions could divert management attention and adversely affect operating results; (8) our results are vulnerable to economic conditions and seasonal factors affecting the regions in which we operate; (9) we may lose contracts through competitive bidding, early termination or governmental action; (10) we may be subject in the normal course of business to judicial and administrative proceedings that could interrupt our operations, require expensive remediation, result in adverse judgments or settlement and create negative publicity; (11) competition for acquisition candidates, consolidation within the waste industry and economic and market conditions may limit our ability to grow through acquisitions; (12) our growth and future financial performance depend significantly on our ability to integrate acquired businesses into our organization and operations; (13) our acquisitions may not be successful, resulting in changes in strategy, operating losses or a loss on sale of the business acquired; (14) 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; (15) our decentralized decision-making structure could allow local managers to make decisions that adversely affect our operating results; (16) we may incur additional charges related to capitalized expenditures, which would decrease our earnings; (17) each business that we acquire or have acquired may have liabilities that we fail or are unable to discover, including environmental liabilities; (18) liabilities for environmental damage may adversely affect our business and earnings; and (19) 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 16

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

We are an integrated solid waste services company that provides solid waste collection, transfer, disposal and recycling services in mostly 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 five 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 March 31, 2008, we served approximately 1.5 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 128 solid waste collection operations, 48 transfer stations, 29 recycling operations, 34 municipal solid waste landfills and two 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.  Refer to our most recent Annual Report on Form 10-K for a complete description of our critical accounting estimates and assumptions. 

GENERAL

The table below shows for the periods indicated our total reported revenues attributable to services provided (dollars in thousands). 

	Three months ended March 31,
	2007				2008
Collection	$	160,152	64.3	%	$	186,161	65.9	%
Disposal and transfer		66,641	26.8			72,158	25.6
Recycling and other		22,224	8.9			23,960	8.5
Total	$	249,017	100.0	%	$	282,279	100.0	%
Intercompany elimination	$	30,066			$	31,979

Page 17

The disposal tonnage that we received in the three months ended March 31, 2007 and 2008, at all of our landfills during the respective period, is shown below (tons in thousands):

	Three months ended March 31,
	2007				2008
	Number of Sites		Total Tons		Number of Sites		Total Tons
Owned landfills and landfills operated under life-of-site agreements		28		1,769		29		1,972
Operated landfills		8		245		7		222
		36		2,014		36		2,194

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. 

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2008

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 March 31,
	2007			2008
Revenues		100.0	%		100.0	%
Cost of operations		58.9			59.6
Selling, general and administrative		10.9			10.8
Depreciation and amortization		8.9			9.3
Loss on disposal of assets		0.1			-
Operating income		21.2			20.3
Interest expense, net		(3.5	)		(3.7	)
Other income (expense)		-			-
Minority interests		(1.3	)		(1.4	)
Income tax expense		(6.2	)		(6.0	)
Net income		10.2	%		9.2	%

Revenues.  Total revenues increased $31.3 million, or 14.3%, to $250.3 million for the three months ended March 31, 2008, from $219.0 million for the three months ended March 31, 2007.  Acquisitions closed during, or subsequent to, the three months ended March 31, 2007, increased revenues by approximately $13.6 million.  During the three months ended March 31, 2008, increased prices charged to our customers, increased volume in our existing business, and revenues generated from a long-term contract that commenced in March 2007 resulted in net revenue increases of approximately $11.6 million, $1.5 million and $3.4 million, respectively.  Increased recyclable commodity prices and volume during the three months ended March 31, 2008, increased revenues by $2.2 million.  Other revenues decreased by $1.0 million during the three months ended March 31, 2008. 

Page 18

Cost of Operations.  Total cost of operations increased $20.2 million, or 15.7%, to $149.1 million for the three months ended March 31, 2008, from $128.9 million for the three months ended March 31, 2007.  The increase was attributable to operating costs associated with acquisitions closed during, or subsequent to, the three months ended March 31, 2007, operating costs incurred to support a long-term contract that commenced in March 2007, increased diesel fuel expense resulting from higher fuel costs, increased labor expenses resulting from employee pay rate increases, increased employee medical benefit expenses resulting from an increase in medical claims cost and severity, increased franchise taxes, landfill taxes and 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. Our auto and workers’ compensation insurance claims expense was adversely impacted during the three months ended March 31, 2007 as a result of an increase in actuarially projected losses on certain open claims. 

Cost of operations as a percentage of revenues increased 0.7 percentage points to 59.6% for the three months ended March 31, 2008, from 58.9% for the three months ended March 31, 2007.  The increase as a percentage of revenues was primarily attributable to increased diesel fuel expense, operating costs associated with acquisitions closed during, or subsequent to, the three months ended March 31, 2007, a long-term contract that commenced in March 2007, which had operating margins below our company average and increased employee medical benefit expense, partially offset by leveraging existing personnel to support increased collection and disposal volumes, decreased auto and workers’ compensation insurance claims expense, and increased prices charged to our customers being higher, on a percentage basis, than the majority of expense increases recognized subsequent to March 31, 2007. 

SG&A.  SG&A expenses increased $3.2 million, or 13.3%, to $27.1 million for the three months ended March 31, 2008, from $23.9 million for the three months ended March 31, 2007.  The increases in SG&A expenses were primarily the result of additional personnel from acquisitions closed during, or subsequent to, the three months ended March 31, 2007, SG&A costs incurred to support a long-term contract that commenced in March 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 three months ended March 31, 2008, partially offset by decreased bad debt expense, professional fees and payroll tax expense on exercised stock options. 

SG&A expenses as a percentage of revenues decreased 0.1 percentage points to 10.8% for the three months ended March 31, 2008, from 10.9% for the three months ended March 31, 2007. The decrease as a percentage of revenue was primarily attributable to the aforementioned decreases in bad debt expense, professional fees and payroll tax expense, partially offset by increased equity compensation expense and increased bonus compensation expense. 

Depreciation and Amortization.  Depreciation and amortization expense increased $3.6 million, or 18.5%, to $23.2 million for the three months ended March 31, 2008, from $19.6 million for the three months ended March 31, 2007.  The increase was primarily attributable to depreciation and amortization associated with acquisitions closed during, or subsequent to, the three months ended March 31, 2007, additions to our fleet and equipment purchased to support increases in collection and landfill volumes, higher landfill depletion expense due to increased disposal volumes at our landfills and increased landfill construction and closure costs, and depreciation expense resulting from facilities, fleet and equipment purchased to support a long-term contract that commenced in March 2007. 

Depreciation and amortization expense as a percentage of revenues increased 0.4 percentage points to 9.3% for the three months ended March 31, 2008, from 8.9% for the three months ended March 31, 2007.  The increase in depreciation and amortization expense as a percentage of revenues for the three months ended March 31, 2008 was the result of amortization expense associated with intangible assets acquired during, or subsequent to, the three months ended March 31, 2007, fleet and equipment purchased to support a long-term contract that commenced in March 2007, and increased landfill depletion expense. 

Operating Income.  Operating income increased $4.4 million, or 9.4%, to $50.8 million for the three months ended March 31, 2008, from $46.4 million for the three months ended March 31, 2007.  The increase was 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. 

Page 19

Operating income as a percentage of revenues decreased 0.9 percentage points to 20.3% for the three months ended March 31, 2008, from 21.2% for the three months ended March 31, 2007.  The decrease as a percentage of revenues was due to the previously described percentage of revenue increases in cost of operations and depreciation and amortization expense, partially offset by decreased SG&A expense.

Interest Expense.  Interest expense increased $1.5 million, or 19.2%, to $9.3 million for the three months ended March 31, 2008, from $7.8 million for the three months ended March 31, 2007.  The increase was attributable to higher average borrowing rates on our credit facility and higher average debt balances.  The higher average borrowing rates on our credit facility were the result of the expiration in the first quarter of 2007 of $250.0 million of interest rate swap agreements with a weighted-average fixed borrowing cost of 2.55%, plus applicable margin.  Upon the expiration of these interest rate swaps, we entered into $250.0 million of new interest rate swaps with a weighted-average fixed borrowing cost of 4.33%, plus applicable margin. 

Minority Interests.  Minority interests increased $0.6 million, or 18.8%, to $3.4 million for the three months ended March 31, 2008, from $2.8 million for the three months ended March 31, 2007.  The increase in minority interests was due to increased earnings by our majority-owned subsidiaries. 

Income Tax Provision.  Income taxes increased $1.6 million, or 11.5%, to $15.0 million for the three months ended March 31, 2008, from $13.4 million for the three months ended March 31, 2007. 

Our effective tax rates for the three months ended March 31, 2007 and 2008, were 37.5% and 39.3%, respectively.  During the three months ended March 31, 2007, we recorded adjustments to income tax expense resulting from the reconciliation of our current and deferred income tax liability accounts and changes to the geographical apportionment of our state income taxes.  The net impact of these adjustments was a decrease in the effective tax rate of 1.0 percentage points.  During the three months ended March 31, 2008, changes to the geographical apportionment of our state income taxes resulted in an increase in the effective tax rate of 0.6 percentage points. 

There have been no significant changes to our unrecognized tax benefits for the three months ended March 31, 2008.

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 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 March 31, 2008, we had a working capital deficit of $33.7 million, including cash and equivalents of $9.5 million.  Our working capital deficit increased $8.9 million from a working capital deficit of $24.8 million at December 31, 2007.  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.  The decrease in our working capital position from December 31, 2007, to March 31, 2008, resulted primarily from a decrease in our accounts receivable and prepaid expenses, partially offset by a decrease in current liabilities.  For additional information regarding the changes in our cash balances, see the Condensed Consolidated Statements of Cash Flows in Part I, Item 1 of this Quarterly Report on Form 10-Q. 

For the three months ended March 31, 2008, net cash provided by operating activities was $64.6 million, including $5.2 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 three months ended March 31, 2008, consist of $23.2 million of depreciation and amortization, $8.0 million in deferred income taxes, $3.4 million of minority interests expense, $2.1 million of stock compensation expense and $0.5 million of debt issuance cost amortization, less $1.1 million of excess tax benefit associated with equity-based compensation reclassified to cash flows from financing activities. 

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For the three months ended March 31, 2007, net cash provided by operating activities was $60.9 million, including $13.1 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 three months ended March 31, 2007, consist of $19.6 million of depreciation and amortization, $2.9 million in deferred income taxes, $2.8 million of minority interests expense, $1.7 million of stock compensation expense and $0.5 million of debt issuance cost amortization, less $2.3 million of excess tax benefit from equity-based compensation reclassified to cash flows from financing activities. 

For the three months ended March 31, 2008, net cash used in investing activities was $56.7 million.  Of this amount, $32.3 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, 2007.  Cash used for capital expenditures was $24.1 million, which was primarily for investments in fixed assets, consisting of trucks, containers, other equipment and landfill development.  The decrease in capital expenditures of $12.0 million for the three months ended March 31, 2008, as compared to the three months ended March 31, 2007, is due primarily to capital expenditures incurred during the three months ended March 31, 2007 associated with a new long-term contract in California. 

For the three months ended March 31, 2007, net cash used in investing activities was $72.9 million.  Of this amount, $35.9 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 $36.1 million, which was primarily for investments in fixed assets, consisting of trucks, containers, other equipment and landfill development.  

For the three months ended March 31, 2008, net cash used in financing activities was $8.7 million, which included $5.1 million of proceeds from stock option and warrant exercises, $1.1 million of excess tax benefit associated with equity-based compensation, and $23.0 million of net proceeds under our various debt arrangements, less a $3.6 million change in book overdraft, $2.8 million of cash distributions to minority interest holders, and $31.5 million of repurchases of our common stock. 

For the three months ended March 31, 2007, net cash used in financing activities was $1.7 million, which included $6.5 million of proceeds from stock option and warrant exercises, and $2.3 million of excess tax benefit from equity-based compensation, less $2.4 million of cash distributions to minority interest holders, $2.6 million of net payments under our various debt arrangements, and $5.4 million of repurchases of our common stock. 

We made $24.1 million in capital expenditures during the three months ended March 31, 2008.  We expect to make capital expenditures of approximately $110.0 million in 2008 in connection with our existing business.  We intend to fund our planned 2008 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 March 31, 2008, we had $506.0 million outstanding under our credit facility, exclusive of outstanding stand-by letters of credit of $68.3 million.  As of March 31, 2008, we were in compliance with all applicable covenants in our credit facility. 

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As of March 31, 2008, we had the following contractual obligations (in thousands): 

	Payments Due by Period
Recorded Obligations	Total		Less Than 1 Year		1 to 3 Years		3 to 5 Years		Over 5 Years
Long-term debt	$	757,987	$	13,473	$	6,387	$	709,698	$	28,429

Long-term debt payments include: 

(1)	$506.0 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 (approximately 5.25% at March 31, 2008) on base rate loans, or the Eurodollar rate plus the applicable Eurodollar margin (approximately 3.33% at March 31, 2008) on Eurodollar loans.  As of March 31, 2008, our credit facility allowed us to borrow up to $800.0 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)	$10.8 million in principal payments related to our 2001 Wasco bonds.  Our 2001 Wasco bonds consist of $2.3 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)	$33.2 million in principal payments related to our California tax-exempt bonds.  Our California tax-exempt bonds bear interest at variable rates (2.22% at March 31, 2008) and have maturity dates ranging from 2008 to 2018.
(5)	$3.2 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 March 31, 2008, and have maturity dates ranging from 2009 to 2036.
(6)	$4.8 million in principal payments related to our notes payable to third parties.  Our notes payable to third parties bear interest at rates between 6.0% and 11.0% at March 31, 2008, and have maturity dates ranging from 2008 to 2010.

The total liability for uncertain tax positions under FASB Interpretation No. 48 at March 31, 2008 is approximately $7 million.  We are not able to reasonably estimate the amount by which the liability will increase or decrease over time; however, at this time, we do not expect a significant payment related to these obligations within the next year. 

	Amount of Commitment Expiration Per Period
	(amounts in thousands)
Unrecorded Obligations	Total		Less Than 1 Year		1 to 3 Years		3 to 5 Years		Over 5 Years
Operating leases(1)	$	69,760	$	7,294	$	15,036	$	13,136	$	34,294

(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 months ended March 31, 2008, 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 provided customers and various regulatory authorities with surety bonds in the aggregate amounts of approximately $164.3 million and $163.6 million at December 31, 2007 and March 31, 2008, respectively.  These arrangements have not materially affected our financial position, results of operations or liquidity during the three months ended March 31, 2008, nor are they expected to have a material impact on our future financial position, results of operations or liquidity. 

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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 March 31, 2008, the minority interests holders' pro rata share of the subsidiary's fair market value is estimated to be worth between $93 million and $100 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. 

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 GAAP 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 three months ended March 31, 2007 and 2008, is calculated as follows (amounts in thousands): 

	Three months ended March 31,
	2007			2008
Net cash provided by operating activities	$	60,914		$	64,593
Change in book overdraft		-			(3,596	)
Plus: Proceeds from disposal of assets		215			301
Plus: Excess tax benefit associated with equity-based compensation		2,260			1,101
Less: Capital expenditures for property and equipment		(36,147	)		(24,108	)
Less: Distributions to minority interest holders		(2,352	)		(2,842	)
Free cash flow	$	24,890		$	35,449

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. 

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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 9% 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 March 31, 2008, our derivative instruments consisted of nine 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
November 2007	$	50,000		4.37	%	1-month LIBOR	February 2009	February 2011
November 2007	$	50,000		4.37	%	1-month LIBOR	February 2009	February 2011
November 2007	$	75,000		4.37	%	1-month LIBOR	February 2009	February 2011
November 2007	$	75,000		4.40	%	1-month LIBOR	March 2009	March 2011
November 2007	$	50,000		4.29	%	1-month LIBOR	June 2009	June 2011
November 2007	$	100,000		4.35	%	1-month LIBOR	June 2009	June 2011

* 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, 2007, and March 31, 2008, of $114.8 million and $141.5 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, 2007, and March 31, 2008, would decrease our annual pre-tax income by approximately $1.1 million and $1.4 million, respectively.  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 $2.2 million. 

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We market a variety of recyclable materials, including cardboard, office paper, plastic containers, glass bottles and ferrous and aluminum metals.  We own and operate 29 recycling processing operations and sell other collected recyclable materials to third parties for processing before resale.  Certain of our municipal recycling contracts in the state of Washington specify benchmark resale prices for recycled commodities.  If the prices we actually receive for the processed recycled commodities collected under the contract exceed the prices specified in the contract, we share the excess with the municipality, after recovering any previous shortfalls resulting from actual market prices falling below the prices specified in the contract.  To reduce our exposure to commodity price risk with respect to recycled materials, we have adopted a pricing strategy of charging collection and processing fees for recycling volume collected from third parties.  In the event of a decline in recycled commodity prices, a 10% decrease in average recycled commodity prices from the prices that were in effect at March 31, 2007 and 2008, would have resulted in a decrease in revenues of $0.9 million and $1.1 million, respectively, for the three months ended March 31, 2007 and 2008. 

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Item 4.     Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) as of the end of the fiscal quarter covered by this quarterly report on Form 10-Q.  Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of March 31, 2008, that our disclosure controls and procedures were effective at the reasonable assurance level such that information required to be disclosed in our Exchange Act reports:  (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and (2) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. 

During the quarter ended March 31, 2008, 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, 2007.  Refer to Note 12 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, 2007, except that the Kansas Supreme Court granted our petition for review and oral arguments on the matter have been scheduled for May 12, 2008.  Refer to Note 12 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 Annual Report on Form 10-K for the fiscal year ended December 31, 2007, except that on March 19, 2008, the Court granted our motion to dismiss and provided plaintiffs leave to file an amended consolidated complaint, which the plaintiffs filed with the Court on April 8, 2008.  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 Annual Report on Form 10-K for the fiscal year ended December 31, 2007.  Refer to Note 12 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 12 of the Notes to Condensed Consolidated Financial Statements in Part I of this Quarterly Report on Form 10-Q, as of March 31, 2008, 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 and again on October 23, 2006, we announced that our Board of Directors approved an 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 March 31, 2008, we have repurchased 17.3 million shares of our common stock at a cost of $428.7 million, $419.8 million of which was under the program.  The table below reflects repurchases we have made for the three months ended March 31, 2008 (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
1/1/08 – 1/31/08		-	$	-		-	$	111,744
2/1/08 – 2/29/08		936,573		30.36		936,573		83,312
3/1/08 – 3/31/08		104,698		29.56		104,698		80,217
		1,041,271		30.28		1,041,271

(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 6. Exhibits

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

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SIGNATURES

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

WASTE CONNECTIONS, INC.

Date:  April 23, 2008	BY:	/s/ Ronald J. Mittelstaedt
		Ronald J. Mittelstaedt,
		Chief Executive Officer

Date:  April 23, 2008	BY:	/s/ Worthing F. Jackman
		Worthing F. Jackman,
		Executive Vice President and Chief Financial Officer

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Exhibit Index

Exhibit Number	Description of Exhibits
3.1	Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to the exhibit filed with the Registrant's Form 10-Q filed on July 24, 2007)
3.2	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 Patrick J. Shea, dated as of February 1, 2008
10.2 +	Consultant Incentive Plan
10.3 +	Nonqualified Deferred Compensation Plan, amended and restated as of January 1, 2008 (incorporated by reference to the exhibit filed with the Registrant’s Form 10-K filed on February 11, 2008)
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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EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”), is made and entered into effective as of February 1, 2008 (the “Effective Date”), by and between Waste Connections, Inc., a Delaware corporation (the “Company”), and Patrick J. Shea (the “Employee”) and amends and restates in its entirety that certain Employment Agreement effective as of February 23, 2004 between the Company and the Employee.

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.  From the Effective Date to and through February 22, 2008, the Employee shall continue serving in his current capacity as Corporate Counsel of the Company, reporting directly to the Company's Executive Vice President and General Counsel.  Beginning February 23, 2008, and during the Term, the Employee shall serve as acting General Counsel and Secretary of the Company, reporting directly to the Company's Chairman and Chief Executive Officer, and shall perform such other duties and responsibilities as the Chairman and Chief Executive Officer or the Board of Directors (the "Board") of the Company may reasonably assign to the Employee from time to time; provided, however, that upon the Company’s filing with the Securities and Exchange Commission on or around February 2009 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008, subject to the Board’s approval, the Employee shall from that point forward serve as Vice President, General Counsel and Secretary of the Company. The Employee shall be based at the Company's corporate headquarters in Folsom, California. 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 January 31, 2011 (the “Term”) or until terminated prior to such date when and as provided in Sections 7 and 8.  On each January 31 following the Effective Date, 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.  Commencing on the Effective Date, the Company hereby agrees to pay to the Employee an annual base salary of One Hundred Seventy-Five Thousand Dollars ($175,000); provided, however, that upon the Board’s appointment of Employee as Vice President, General Counsel and Secretary of the Company as described in Section 2, and as of February 1, 2009, the Company hereby agrees to pay to the Employee an annual base salary of Two Hundred Thousand Dollars ($200,000).  When used herein, “Base Salary” shall refer to the base salary described in the preceding sentence that is in effect at that time, and as may be increased from time to time.  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: P. Shea

4.2           Performance Bonus.  For the calendar year commencing January 1, 2008, 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 annual Bonus target will equal forty percent (40%) of the applicable year’s ending 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; provided, however, that upon the Board’s appointment of Employee as Vice President, General Counsel and Secretary of the Company as described in Section 2, the annual Bonus target will equal fifty percent (50%) of the applicable year’s ending Base Salary.  The Bonus shall be paid in accordance with the Company’s bonus plan, as approved by the Board, and, in any event, within two and a half (2 1/2) months after the end of the fiscal year to which the bonus relates.

4.3           2008 Annual Equity Grant.  On or about the Effective Date, the Company will grant Employee three thousand (3,000) Restricted Stock Units under the Company’s Second Amended and Restated 2004 Equity Incentive Plan.  Except as otherwise provided herein, the RSUs will vest and the shares of common stock underlying them will become issuable in a series of five (5) successive equal annual installments upon Employee’s completion of each year of continuous status as an employee over the five (5) year vesting period measured from the grant date.

4.4           Grants of Equity Compensation.  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.

Except as otherwise provided herein, 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.

4.5           Bar Dues and Continuing Education. The Company shall reimburse Employee for dues payable to the State Bar of California and the American Bar Association, or other professional organizations reasonably related to the Employee's duties and shall pay or reimburse the Employee for costs reasonably incurred in attending seminars and conferences to satisfy minimum continuing education requirements of the State Bar of California or to further his expertise in areas relevant to his employment by the Company. The Company recognizes that some conferences may require travel by the Employee and the Company agrees to reimburse Employee for the reasonable costs of travel.

4.6           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 through February 2010, and four (4) weeks for any twelve (12) month period thereafter.  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.

Employment Agreement: P. Shea

2

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.

7.             Termination.

7.1           For Cause.  The Company, by action of the Board, may terminate this Agreement and the Employee’s employment for Cause (as defined below) on delivery to the Employee of a Notice of Termination (as defined in Section 9.1 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;

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(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).  In the event of such a termination without Cause pursuant to this Section 7.2 that constitutes Employee’s Separation From Service (as defined in Section 9.3), then 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 target 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), 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, dental and other health plan insurance for Employee, his wife and children 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 exercisability of any such options and rights shall be extended to the earlier of (A) the expiration of the term of such options and rights or (B) the first (1st) anniversary of the Date of Termination.  The Employee acknowledges that extending the exercisability of any incentive stock options pursuant to this Section 7.2 or Sections 7.3 or 7.4 below, could cause such option to lose its tax-qualified status if it is an incentive stock option under the Internal Revenue Code of 1986, as amended (the “Code”) and agrees that the Company shall have no obligation to compensate the Employee for any additional taxes he incurs as a result.

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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.  In the event of Employee’s termination for Disability pursuant to this Section 7.3 that constitutes Employee’s Separation from Service, then on the Date of Termination, 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, dental and other health plan insurance for Employee, his wife and children 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 exercisability of any such options and rights shall be extended to the earlier of (A) the expiration of the term of such options or rights or (B) the first (1st) 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 exercisability of any such options and rights shall be extended to the earlier of (A) the expiration of the term of such options or rights or (B) the first (1st) 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.

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           Separation from Service.  For all purposes, “Separation from Service” shall mean Employee’s “separation from service” with the Company within the meaning of Section 409A of the Code and the regulations and other guidance promulgated thereunder.

9.4           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.

9.5           Section 409A.  Notwithstanding any provision to the contrary in the Agreement, if Employee is deemed at the time of Employee’s Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the benefits to which Employee is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of Employee’s benefits shall not be provided to Employee prior to the earlier of (A) the expiration of the six-month period measured from the date of Employee’s “separation from service” with the Company (as such term is defined in the Treasury Regulations issued under Section 409A of the Code) or (B) the date of Employee’s death.  Upon the expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Section 9.5 shall be paid in a lump sum to Employee, and any remaining payments due under the Agreement shall be paid as otherwise provided herein.

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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) that constitutes a “change in control” of the Company (within the meaning of Section 409A of the Code and the Department of Treasury regulations and other guidance promulgated thereunder) shall be deemed a termination of the Employee without Cause, and, in lieu of any benefits payable to the Employee under Section 7.2, 7.3, 7.4 or 8, 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 a termination without Cause that constitutes a Separation from Service provided, however, that such amount shall be payable in a lump sum on the date of such Change in Control (which shall be deemed the Employee’s Date of Termination) and not in installments as provided in Section 7.2.  In addition, on a Change in 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 exercisability of any such options and rights shall be extended to the earlier of (A) the expiration of the term of such options or rights or (B) the first anniversary of the date of such Change in Control, and all RSUs and shares of the Company’s restricted stock issued to the Employee shall immediately vest and become unrestricted and freely transferable.  For the avoidance of doubt, upon payment to the Employee of the benefits provided by this paragraph of this Section 10.1, the Employee shall no longer be entitled to any benefits otherwise payable to the Employee under Section 7.2, 7.3, 7.4 or 8 of this Agreement regardless of the Employee’s termination of employment with the Company.

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 number of shares of Company common stock subject to the Terminated Option been realized by the Employee immediately prior to the transaction resulting in the Change in Control and the Employee 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 clause 10.1(a) above and had immediately exercised, or otherwise received the stock subject to, 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 clause 10.1(b) and receiving a Successor Option under clause 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) during any two (2) year period, 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 in Control, until the first anniversary of the effective date of the Change in 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 (1st) 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 (1st) anniversary of the Date of Termination.  If the Company terminates the Employee without Cause, the Employee may shorten the Restricted Period by the length of any period that the Employee elects to waive his right to receive severance payments under Section 7.2.  For example, if the Employee waives the right to receive all severance payments under Section 7.2, the Restricted Period shall be zero (0) months; if the Employee elects to receive severance payments under Section 7.2 for eight (8) months, the Restricted Period shall be eight (8) months.

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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 (1st) anniversary of the Termination Date or the effective date of such Change in 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.

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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.

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 such party at the address set forth in the records of the Company 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, except for that certain Indemnification Agreement, dated as of August 1, 2006, by and between the Company and the Employee, which shall remain in full force and effect.  This Agreement may not be changed except by an agreement in writing signed by the Company and the Employee.

18.           Waiver.  The waiver of a breach of any provision of this Agreement shall not operate as or 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.

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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.

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.

23.           Due Authorization. The execution of this Agreement has been duly authorized by the Company by all necessary corporate action.

[Signatures appear on the following page]

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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:	_________________________________
Patrick J. Shea		Ronald J. Mittelstaedt,
		Chief Executive Officer
Address:

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EX-10.2

Exhibit 10.2

WASTE CONNECTIONS, INC.

CONSULTANT INCENTIVE PLAN

1. PURPOSE.

The purpose of the Plan is to provide a means for the Company and any Subsidiary, through the grant of Warrants to selected Consultants in connection with business development services rendered by such Consultants relating to acquisitions by the Company or a Subsidiary or other services approved by the Board, to attract and retain persons of ability as Consultants, and to motivate such persons to exert their best efforts on behalf of the Company and any Subsidiary.

2. DEFINITIONS.

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

(b)           “Change in Control” means:

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

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

(iii)        any “person” (as defined in Section 13(d) and 14(d) of 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 definition, “person” shall not include any person (or any person that controls, is controlled by or is under common control with such person) who as of the date of a Warrant Agreement owns ten percent (10%) or more of the total voting power represented by the outstanding voting securities of the Company, or a trustee or other fiduciary holding securities under any employee benefit plan of the Company, or a corporation that is owned directly or indirectly by the stockholders of the Company in substantially the same percentage as their ownership of the Company).

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

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

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

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

(f)           “Consultant” means any natural person, including an advisor, engaged by the Company or a Subsidiary to render business development consulting or other bona fide services to the Company or any Subsidiary as approved by the Board and who is compensated for such services; provided that such services are not in connection with the Company’s sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company’s securities; and provided further that the term “Consultant” shall not include any Officers or Directors.

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

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

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

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

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

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

(j)           “Holder” means a Consultant who holds an outstanding Warrant.

(k)           “Officer” means any officer of the Company or a Subsidiary.

(l)           “Plan” means this Waste Connections, Inc. Consultant Incentive Plan.

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

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

(o)           “Subsidiary” means any corporation that at the time a Warrant is granted under the Plan qualifies as a subsidiary of the Company under the definition of “subsidiary corporation” contained in section 424(f) of the Code, or any similar provision hereafter enacted.

(p)           “Warrant” means a Warrant granted pursuant to this Plan.

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(q)           “Warrant Agreement” means a written agreement between the Company and a Holder evidencing the terms and conditions of an individual Warrant grant.  Each Warrant Agreement shall be subject to the terms and conditions of the Plan.

3. SHARES SUBJECT TO THE PLAN.

Subject to adjustment as provided in section 6 for changes in Stock, the Stock that may be sold pursuant to Warrants shall not exceed in the aggregate 450,000 shares.  Such number of shares shall be reserved for Warrants (subject to adjustment as provided in section 6).  If any Warrant for any reason terminates, expires or is cancelled without having been exercised in full, the Stock not purchased under such Warrant shall revert to and again become available for issuance under the Plan.

4. ADMINISTRATION.

(a)           The Plan shall be administered by the Board or, at the election of the Board, by a Committee, as provided in subsection (b).  Subject to the Plan, the Board shall:

(i)          determine and designate from time to time those Consultants to whom Warrants are to be granted;

(ii)         authorize the granting of Warrants;

(iii)       determine the number of shares subject to each Warrant and the Purchase Price of each Warrant;

(iv)        determine the time or times when and the manner in which each Warrant shall be exercisable and the duration of the exercise period;

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

(vi)        approve forms of Warrant Agreements for use under the Plan; and

(vii)       make such other determinations as it may be authorized to make in the Plan and as it may deem necessary and desirable for the purposes of the Plan.

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

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5. TERMS AND CONDITIONS OF WARRANTS.

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

(a)           WARRANT TERM.  Each Warrant Agreement shall specify the term for which the Warrant thereunder is granted and shall provide that such Warrant shall expire at the end of such term; provided that the Board may extend such term.

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

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

(d)           PAYMENT OF PURCHASE PRICE ON EXERCISE.  Each Warrant Agreement shall provide that the purchase price of the shares as to which such Warrant may be exercised shall be paid to the Company at the time of exercise either (i) in cash or by certified or official bank check, (ii) by “net issue exercise” described in the Warrant Agreement, or (iii) in any other form or combination of forms of legal consideration that may be acceptable to the Board.

(e)           NONTRANSFERABILITY.  A Warrant shall not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of by the Holder during his or her lifetime, whether by operation of law or otherwise, other than by will or the laws of descent and distribution applicable to the Holder, and shall not be made subject to execution, attachment or similar process; provided that the Board may in its discretion at the time of approval of the grant of a Warrant or thereafter permit a Holder to transfer a Warrant to a trust or other entity established by the Holder for estate planning purposes, pursuant to a domestic relations order, or as a gift to certain family members, and may permit further transferability or impose conditions or limitations on any permitted transferability.  Otherwise, during the lifetime of a Holder, a Warrant shall be exercisable only by such Holder.

(f)           CONDITIONS ON EXERCISE OF WARRANTS AND ISSUANCE OF SHARES.

(i)          SECURITIES LAW COMPLIANCE.  The Plan, the grant and exercise of Warrants thereunder and the obligation of the Company to sell and deliver shares of Stock on exercise of Warrants shall be subject to all applicable Federal and state laws, rules and regulations and to such approvals by any government or regulatory agency as may be required, in the opinion of the Board.  Warrants may not be exercised if the issuance of shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed.  In addition, no Warrant may be exercised unless (a) a registration statement under the Securities Act shall at the time of exercise of the Warrant be in effect with respect to the shares of Stock issuable upon exercise of the Warrant or (b) in the opinion of legal counsel to the Company, the shares of Stock issuable upon exercise of the Warrant may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act.  The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares of Stock hereunder shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained.  As a condition to the exercise of any Warrant, the Company may require the Holder to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

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

6. ADJUSTMENTS ON CERTAIN EVENTS.

(a)           CHANGE IN CONTROL.  Each Warrant Agreement shall provide that if the Company is subject to a Change in Control:

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

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

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(b)           STOCK DIVIDENDS, STOCK SPLITS, ETC.  The exercise price shall be subject to adjustment from time to time in the event that the Company shall (i) pay a dividend in, or make a distribution of, shares of Stock (or securities convertible into, exchangeable for or otherwise entitling a holder thereof to receive Stock), or evidences of indebtedness or other property or assets, on outstanding Stock, (ii) subdivide the outstanding shares of Stock into a greater number of shares, (iii) combine the outstanding shares of Stock into a smaller number of shares or (iv) issue any shares of its capital stock in a reclassification of the Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the resulting corporation).  An adjustment made pursuant to this section 6(b) shall, in the case of a dividend or distribution, be made as of the record date therefor and, in the case of a subdivision, combination or reclassification, be made as of the effective date thereof.  In any such case, the total number of shares and the number of shares or other units of such other securities purchasable on exercise of the Warrant immediately prior thereto shall be adjusted so that the Holder shall be entitled to receive at the same aggregate purchase price the number of shares of Stock and the number of shares or other units of such other securities that the Holder would have owned or would have been entitled to receive immediately following the occurrence of any of the events described above had the Warrant been exercised in full immediately prior to the occurrence (or applicable record date) of such event.  If, as a result of any adjustment pursuant to this section 6(b), the Holder shall become entitled to receive shares of two or more classes or series of securities of the Company, the Board shall equitably determine the allocation of the adjusted exercise price between or among shares or other units of such classes or series and shall notify the Holder of such allocation.

(c)           FURTHER ADJUSTMENTS.   If at any time, as a result of an adjustment made pursuant to this section 6, a Holder shall become entitled to receive any shares of capital stock or shares or other units of other securities or property or assets other than Stock, the number of such other shares or units so receivable on any exercise of the Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares of Stock in this section 6, and the provisions of this Agreement with respect to the shares of Stock shall apply, with necessary changes in points of detail, on like terms to any such other shares or units.

(d)           NO FRACTIONAL SHARES.  All calculations under this section 6 shall be, in the case of purchase price, rounded up to the nearest cent or, in the case of shares, rounded down to the nearest one-hundredth of a share, but in no event shall the Company be obligated to issue any fractional share on any exercise of a Warrant.

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7. AMENDMENT OF THE PLAN.

(a)           The Board may from time to time amend or modify the Plan for any reason; provided that the Company will seek shareholder approval for any change if and to the extent required by applicable law, regulation or rule.

(b)           Rights and obligations under any Warrant granted before amendment of the Plan shall not be altered or impaired by any amendment, unless the Holder consents in writing.

8. TERMINATION OR SUSPENSION OF THE PLAN.

The Board may suspend or terminate the Plan at any time for any reason.  Unless sooner terminated, the Plan shall terminate on the day prior to the tenth anniversary of the date the Plan is adopted by the Board.  No Warrants may be granted under the Plan while the Plan is suspended or after it is terminated.  Rights and obligations under any Warrant granted while the Plan is in effect shall not be altered or impaired by suspension or termination of the Plan, except with the written consent of the Holder.

9. EFFECTIVE DATE OF THE PLAN.

The Plan shall be effective immediately upon its adoption by the Board.

10. WITHHOLDING TAXES.

Whenever the Company proposes or is required to issue or transfer shares of Stock under the Plan, the Company shall have the right to require the grantee to remit to the Company an amount sufficient to satisfy any Federal, state or local withholding tax requirements prior to the delivery of any certificate or certificates for such shares.  Alternatively, the Company may issue or transfer such shares net of the number of shares sufficient to satisfy the minimum withholding tax requirements.  For withholding tax purposes, the shares of Stock shall be valued on the date the withholding obligation is incurred.

11. NO RIGHTS AS STOCKHOLDER.

No Holder, as such, shall have any rights as a stockholder of the Company.

12. NO RIGHTS TO CONTINUED ENGAGEMENT.

The Plan and any Warrants granted under the Plan shall not confer on any Holder any right with respect to continuation of engagement by the Company or any Subsidiary as a Consultant or otherwise, nor shall they interfere in any way with the right of the Company or any Subsidiary that engages a Consultant to terminate the Consultant’s engagement at any time.

13. INDEMNIFICATION.

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

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ANNEX A

NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK PURCHASABLE ON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE ENCUMBERED, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT THEREFOR UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY IN FORM AND SUBSTANCE TO THE CORPORATION AND CONCURRED IN BY THE CORPORATION’S COUNSEL TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR SUCH TRANSACTION COMPLIES WITH RULES PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION UNDER SAID ACT.

Warrant No. ___	Warrant to Purchase
	_________ shares of
	Common Stock (Subject
	to Adjustment)

WARRANT TO PURCHASE COMMON STOCK

of

WASTE CONNECTIONS, INC.

Void after ________________________

This certifies that for value received, _____________ (“Holder”) is entitled, subject to the terms set forth below, at any time or from time to time beginning on _______________ and before 5:00 p.m., Pacific standard time, on _______________________, to purchase from Waste Connections, Inc., a Delaware corporation (the “Company”), up to ____________ fully paid and nonassessable shares of the common stock, par value $0.01 per share, of the Company (the “Common Stock”) as constituted on _______________________ (the “Issue Date”), upon surrender hereof at the principal office of the Company, with the subscription form attached hereto properly completed and duly executed, and simultaneous payment therefor in lawful money of the United States at the price of $______ per share, subject to adjustment as provided in Section 4 hereof (the “Purchase Price”).  The number and character of such shares of Common Stock are also subject to adjustment as provided below.  Such number shall be reduced at such time or times as this Warrant is exercised in part by the number of shares as to which this Warrant is then exercised.  The term “Warrant Stock” shall mean, unless the context otherwise requires, the stock and other securities and property at any time receivable upon the exercise of this Warrant.  The term “warrant” as used herein shall include this Warrant and any warrants delivered in substitution or exchange therefor as provided herein.

1.           Method of Exercise; Payment.  Subject to compliance with the provisions of Section 7 hereof:

A.         Cash Exercise.  This Warrant may be exercised as a whole, or in part from time to time, by the Holder by delivering this Warrant, for cancellation if it is exercised as a whole or for endorsement if it is exercised in part, together with a Subscription in the form appearing at the end hereof properly completed and duly executed by or on behalf of the Holder, to the Company at its office in Folsom, California (or at the office of the agency maintained for such purpose), accompanied by payment in cash or by certified or official bank check payable to the order of the Company, in an aggregate amount equal to the Purchase Price as then adjusted times the number of shares of Warrant Stock as to which this Warrant is then being exercised.  In the event of any such exercise that is partial, the Company shall endorse this Warrant as having been exercised to that extent and return this Warrant to the Holder.  This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the person entitled to receive the shares of Warrant Stock issuable upon such exercise shall be treated for all purposes as the holder of such shares of record as of the close of business on such date.

Annex A - Page 1

B.           Net Issue Exercise.  In lieu of exercising this Warrant pursuant to Section 1.A, Holder may elect to receive shares equal to the value of this Warrant (or the portion thereof being cancelled) by surrender of this Warrant at such office together with notice of such election, in which event the Company shall issue to Holder a number of shares of Warrant Stock computed using the following formula:

X = Y (A-B)

    A

Where X =          the number of shares of Warrant Stock to be issued to Holder.

Y =          the number of shares of Warrant Stock purchasable under this Warrant at the date of such calculation or, if only a portion of this Warrant is being exercised, the portion of this Warrant being cancelled at the date of such calculation.

A =          the fair market value of one share of Warrant Stock purchasable under this Warrant at the date of such calculation.

B =           Purchase Price (as adjusted to the date of such calculations).

For purposes of this Warrant, fair market value of one share of Warrant Stock shall mean:

(1)         The average of the closing price of the Common Stock quoted on the New York Stock Exchange or the closing price quoted on any other national securities exchange or the NASDAQ National Market on which the Common Stock is listed, whichever is applicable, as published in the Western Edition of The Wall Street Journal for the ten trading days prior to the date of determination of fair market value; or

(2)          If the Common Stock is not traded on the New York Stock Exchange or on such other exchange or the NASDAQ National Market, an amount reasonably determined in good faith by the Board of Directors to be the fair market value.

C.           Delivery of Stock Certificates.  The Company will, or will direct its transfer agent to, issue, as soon as practicable after any exercise of this Warrant under Section 1 and in any event within thirty days thereafter, at its expense (including the payment by it of any applicable issue taxes), in the name of and deliver to the Holder, or as the Holder may direct (on payment by the Holder of any applicable transfer taxes) a certificate or certificates for the number of fully paid and nonassessable shares of Warrant Stock as to which this warrant is so exercised.

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2.             Payment of Taxes.  All shares of Warrant Stock issued upon the exercise of this Warrant shall be validly issued, fully paid and nonassessable, and the Company shall pay all taxes and other governmental charges that may be imposed in respect of the issuance or delivery thereof.  The Company shall not be required, however, to pay any tax or other charge imposed in connection with any transfer involved in the issue of any certificate for shares of Warrant Stock in any name other than that of the Holder and, in such case, the Company shall not be required to issue or deliver any stock certificate until such tax or other charge has been paid, or it has been established to the Company’s satisfaction that no tax or other charge is due.

3.            A.          Transfer.  This Warrant and all rights hereunder are generally not transferable except by will or the laws of descent and distribution, unless the Company expressly permits a transfer, such as to a trust or other entity for estate planning purposes, pursuant to a domestic relations order, or as a gift to certain family members.  Unless the Company approves such a transfer, this Warrant is exercisable during the Holder’s life only by the Holder.

B.           Exchange.  At the request of the Holder, the Company shall exchange this Warrant for two or more Warrants of like tenor entitling the Holder to purchase the same aggregate number of shares of Warrant Stock, each new Warrant to represent the right to purchase such number of shares of Warrant Stock as the Holder shall designate at the time of such exchange; provided that the Holder shall not be entitled so to exchange this Warrant or any warrant received in any such exchange on more than an aggregate of five occasions.

4.             A.          Change in Control.  In the event that the Company is subject to a Change in Control:

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

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

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B.          Stock Dividends, Stock Splits, Etc.  The exercise price shall be subject to adjustment from time to time in the event that the Company shall (i) pay a dividend in, or make a distribution of, shares of Common Stock (or securities convertible into, exchangeable for or otherwise entitling a holder thereof to receive Common Stock), or evidences of indebtedness or other property or assets, on outstanding Common Stock, (ii) subdivide the outstanding shares of Common Stock into a greater number of shares, (iii) combine the outstanding shares of Common Stock into a smaller number of shares or (iv) issue any shares of its capital stock in a reclassification of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the resulting corporation).  An adjustment made pursuant to this Section 4.B shall, in the case of a dividend or distribution, be made as of the record date therefor and, in the case of a subdivision, combination or reclassification, be made as of the effective date thereof.  In any such case, the total number of shares and the number of shares or other units of such other securities purchasable on exercise of this Warrant immediately prior thereto shall be adjusted so that the Holder shall be entitled to receive at the same aggregate purchase price the number of shares of Warrant Stock and the number of shares or other units of such other securities that the Holder would have owned or would have been entitled to receive immediately following the occurrence of any of the events described above had the Warrant been exercised in full immediately prior to the occurrence (or applicable record date) of such event.  If, as a result of any adjustment pursuant to this Section 4.B, the Holder shall become entitled to receive shares of two or more classes or series of securities of the Company, the Board shall equitably determine the allocation of the adjusted exercise price between or among shares or other units of such classes or series and shall notify the Holder of such allocation.

C.          Further Adjustments.  If at any time, as a result of an adjustment made pursuant to this Section 4, the Holder shall become entitled to receive any shares of capital stock or shares or other units of other securities or property or assets other than Warrant Stock, the number of such other shares or units so receivable on any exercise of the Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares of Warrant Stock in this Section 4, and the provisions of this Agreement with respect to the shares of Warrant Stock shall apply, with necessary changes in points of detail, on like terms to any such other shares or units.

D.          No Fractional Shares.  All calculations under this Section 4 shall be, in the case of purchase price, rounded up to the nearest cent or, in the case of shares subject to this warrant, rounded down to the nearest one-hundredth of a share, but in no event shall the Company be obligated to issue any fractional share on any exercise of the Warrant.

E.           Certificate as to Adjustments.  Upon the occurrence of each adjustment or readjustment pursuant to this Section 4, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each Holder of this Warrant a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based.  The Company shall, upon the written request, at any time, of any such Holder, furnish or cause to be furnished to such Holder a like certificate setting forth:  (i) such adjustments and readjustments; (ii) the Purchase Price at the time in effect; and (iii) the number of shares and the amount, if any, of other property that at the time would be received upon the exercise of the Warrant.

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F.           No Dilution or Impairment.  The Company will not by amendment of its Certificate of Incorporation, or through reorganization, consolidation, merger, dissolution, issuance or sale of securities, sale of assets, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder against dilution or other impairment.  Without limiting the generality of the foregoing, the Company (i) will not increase the par value of any shares of Warrant Stock receivable upon the exercise of this Warrant above the amount payable therefor upon such exercise, (ii) will take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares upon the exercise of this Warrant, and (iii) will take no action to amend its Certificate of Incorporation that would change to the detriment of the holders of Common Stock (whether or not any Common Stock be at the time outstanding) the dividend or voting rights of the Company’s Common Stock (as constituted on the Issue Date).

G.           Notices of Record Date.  In case:

(i)           The Company shall take a record of the holders of its Common Stock (or other stock or securities at the time receivable upon the exercise of this Warrant) for the purpose of entitling them to receive any dividend or other distribution or any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, or

(ii)         Of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any split or combination of shares of any class of capital stock of the Company, any consolidation or merger of the Company with or into another corporation, or any conveyance of all or substantially all of the assets of the Company to another corporation, or

(iii)        Of any voluntary dissolution, liquidation or winding-up of the Company,

then, and in each such case, the Company will mail or cause to be mailed to the Holder a notice specifying, as the case may be, (a) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (b) the date on which such reorganization, reclassification, split, combination, consolidation, merger, conveyance, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such stock or securities at the time receivable upon the exercise of this Warrant) shall be entitled to exchange their shares of Common Stock (or such other stock or securities) for securities or other property deliverable upon such reorganization, reclassification, split, combination, consolidation, merger, conveyance, dissolution, liquidation or winding-up.  Such notice shall be mailed at least 90 days prior to the date therein specified.

5.             Loss or Mutilation.  Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of this Warrant, and of indemnity reasonably satisfactory to it, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver in lieu thereof a new warrant of like tenor.

Annex A - Page 5

6.             Reservation of Common Stock.  The Company shall at all times reserve and keep available for issue upon the exercise of this Warrant such number of its authorized but unissued shares of Warrant Stock as will be sufficient to permit the exercise in full of this Warrant.

7.             Investment Intent.  The Holder, by accepting this Warrant, represents and warrants to the Company as follows:

A.          Acquisition for Own Account.  The Holder is acquiring this Warrant for the Holder’s own account, not as a nominee or agent.  The Holder is not obligated to transfer this Warrant to anyone else nor has any agreements or understandings to do so.  The Holder is acquiring this Warrant for investment for an indefinite period and not with a view to any sale or distribution of it, by public or private sale or other disposition, and has no intention of selling, granting any participation in or otherwise distributing or disposing of it.  The Holder does not intend to subdivide the Warrant with anyone.

B.          Restricted Securities.  The Holder is able to bear the economic risk of the Holder’s investment in this Warrant and is aware that the Holder must be prepared to hold this Warrant for an indefinite period and that this Warrant has not been registered under the Act, on the ground that no distribution or public offering of this Warrant is to be effected and this Warrant is being issued by the Company without any public offering within the meaning of Section 4(2) of the Act.

C.          Sophistication.  The Holder is an “accredited investor” as that term is defined in Regulation D under the Act.  The Holder has such knowledge and experience in financial and business matters that the Holder is capable of evaluating the merits and risks of the Holder’s investment in this Warrant.

D.          Agreement to Refrain from Resales.  Without in any way limiting the Holder’s representations herein, the Holder further agrees that the Holder shall not encumber, pledge, hypothecate, sell, assign, transfer or otherwise dispose of this Warrant, unless and until, prior to any proposed encumbrance, pledge, hypothecation, sale, assignment, transfer or other disposition, either (i) a registration statement under the Act with respect thereto shall be then effective (ii)(a) the Holder shall have furnished the Company with a statement of the circumstances of the proposed disposition and an opinion of counsel (obtained at the Holder’s expense) satisfactory to the Company to the effect that such disposition will not require registration under the Act and (b) counsel for the Company shall have concurred in such opinion of counsel and the Company shall have advised the Holder of such concurrence.

E.           Certificates to be Legended.  The Holder understands and agrees that this Warrant and any warrant issued to replace this Warrant will bear a legend on the face thereof (or on the reverse thereof with a reference to such legend on the face thereof) in substantially the form set forth on the first page of this Warrant and any other legend that the Company considers necessary or appropriate to comply with any applicable securities law.

8.             Notices.  All notices and other communications from the Company to the Holder shall be mailed by first-class registered or certified mail, postage prepaid, to the address furnished to the Company in writing by the last Holder who shall have furnished an address to the Company in writing.

Annex A - Page 6

9.             Change; Waiver.  Neither this Warrant nor any term hereof may be changed, waived, discharged or terminated orally but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought.

10.           Attorneys’ Fees.  In the event any party is required to engage the services of attorneys for the purpose of enforcing this Warrant, or any provision hereof, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and any other costs or expenses.

11.           Headings.  The headings in this Warrant are for purposes of convenience in reference only, and shall not be deemed to constitute a part hereof.

12.           Law Governing.  This Warrant shall be construed and enforced in accordance with and governed by the laws of the State of California.

DATED: __________________

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

Annex A - Page 7

ENDORSEMENTS

Exercise Date Number of Shares as to Which Exercised Number of Shares Remaining Available for Exercise Signature of Authorized Officer of the Company

Annex A - Page 8

SUBSCRIPTION FORM

(To be executed only upon exercise of warrant)

The undersigned Holder of this Warrant irrevocably exercises this Warrant for the purchase of _________ shares of Common Stock of Waste Connections, Inc., purchasable with this Warrant, and herewith makes payment therefor, all at the price and on the terms and conditions specified in this Warrant.

Dated: __________________

(signature of Holder)

(Street Address)

(city) (state) (zip Code)

Annex A - Page 9

FORM OF ASSIGNMENT

FOR VALUE RECEIVED the undersigned Holder of this Warrant hereby sells, assigns and transfers unto the Assignee named below all of the rights of the undersigned under the within Warrant, with respect to the number of shares of Common Stock set forth below:

Name of Assignee Address No. of Shares

and does hereby irrevocably constitute and appoint ____________ [Attorney] to make such transfer on the books of Waste Connections, Inc., maintained for the purpose, with full power of substitution in the premises.

Dated:                                           

[Holder]
By:
	Name:
	Title:

Annex A - Page 10

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: April 23, 2008

 /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: April 23, 2008

  /s/ Worthing F. Jackman

Worthing F. Jackman

Executive Vice President and

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATE OF CHIEF EXECUTIVE OFFICER AND

CHIEF FINANCIAL OFFICER

The undersigned, Ronald J. Mittelstaedt and Worthing F. Jackman, being the duly elected and acting Chief Executive Officer and Chief Financial Officer, respectively, of Waste Connections, Inc., a Delaware corporation (the “Company”), hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the quarterly report of the Company on Form 10-Q for the three months ended March 31, 2008, 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: April 23, 2008	By:	/s/ Ronald J. Mittelstaedt
		Ronald J. Mittelstaedt
		Chief Executive Officer
Date: April 23, 2008	By:	/s/ Worthing F. Jackman
		Worthing F. Jackman
		Executive Vice President and Chief Financial Officer