10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

    (Mark One)

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

For the fiscal year ended December 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 No. 1-31507

WASTE CONNECTIONS, INC.

(Exact name of registrant as specified in its charter)

Delaware	94-3283464
(State or other jurisdiction	(I.R.S. Employer Identification No.)
of incorporation or organization)
35 Iron Point Circle
Suite 200
Folsom, California	95630
(Address of principal executive offices)	(Zip Code)

(916) 608-8200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Common Stock, par value $.01 per share	New York Stock Exchange
(Title of each class)	(Name of each exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes þNo ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ¨No þ

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 þNo ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

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

As of June 30, 2008, the aggregate market value of voting and non-voting common stock held by non-affiliates of the registrant, based on the closing sales price for the registrant’s common stock, as reported on the New York Stock Exchange, was $2,102,628,497.

Number of shares of common stock outstanding as of January 23, 2009: 79,856,318

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement for the 2009 Annual Meeting of Stockholders are incorporated by reference into Part III hereof.

WASTE CONNECTIONS, INC.

ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

Item No.			Page
PART I
	1.	BUSINESS	1
	1A.	RISK FACTORS	14
	1B.	UNRESOLVED STAFF COMMENTS	20
	2.	PROPERTIES	20
	3.	LEGAL PROCEEDINGS	21
	4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	22
PART II
	5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	23
	6.	SELECTED FINANCIAL DATA	25
	7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	27
	7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	42
	8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	45
	9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	86
	9A.	CONTROLS AND PROCEDURES	86
	9B.	OTHER INFORMATION	86
PART III
	10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	87
	11.	EXECUTIVE COMPENSATION	87
	12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	87
	13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	87
	14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	87
PART IV
	15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	88
SIGNATURES			89
SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS			90
EXHIBIT INDEX			91

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PART I

ITEM 1. BUSINESS

Our Company

Waste Connections, Inc. is 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 serve approximately 1.8 million residential, commercial and industrial customers from 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 December 31, 2008, we owned or operated a network of 135solid waste collection operations, 52transfer stations, 34recycling operations and 37active landfills. In addition, we provided intermodal services for the rail haul movement of solid waste and cargo containers in the Pacific Northwest through a network of six intermodal facilities.

We are a leading provider of solid waste services in most of our markets. We have focused on secondary markets mostly in the Western and Southern U.S. because we believe that those areas offer:

● opportunities to enter into exclusive arrangements;

● more competitive barriers to entry;

● less competition from larger solid waste services companies;

● projected economic and population growth rates that will contribute to the growth of our business; and

● a number of independent solid waste services companies suitable for acquisition.

Our senior management team has extensive experience in operating, acquiring and integrating solid waste services businesses, and we intend to continue to focus our efforts on balancing internal and acquisition-based growth. We anticipate that a part of our future growth will come from acquiring additional solid waste collection, transfer and disposal businesses and, therefore, we expect that additional acquisitions could continue to affect period-to-period comparisons of our operating results.

Waste Connections, Inc. is a Delaware corporation organized in 1997.

Our Operating Strategy

Our operating strategy seeks to improve financial returns and deliver superior stockholder value creation within the solid waste industry. We seek to avoid highly competitive, large urban markets and instead target markets where we can provide non-integrated or integrated solid waste services under exclusive arrangements or where we can operate on an integrated basis while attaining high market share. The key components of our operating strategy, which are tailored to the competitive and regulatory factors that affect our markets, are as follows:

Control the Waste Stream. 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 is often more important to our profitability and growth than owning or operating landfills. In addition, contracts in some Western U.S. markets dictate the disposal facility to be used. The large size of many western states increases the cost of interstate and long haul disposal, heightening the effects of regulations that direct waste disposal, which may make it more difficult for a landfill to obtain the disposal volume necessary to operate profitably. In markets with these characteristics, we believe that landfill ownership or vertical integration is not as critical to our success.

Provide Vertically Integrated Services. In markets where we believe that owning landfills is a strategic element to a collection operation because of competitive and regulatory factors, we generally focus on providing integrated services, from collection through disposal of solid waste in landfills that we own or operate.

Manage on a Decentralized Basis. We manage our operations on a decentralized basis. This places decision-making authority close to the customer, enabling us to identify and address customers’ needs quickly in a cost-effective manner. We believe that decentralization provides a low-overhead, highly efficient operational structure that allows us to expand into geographically contiguous markets and operate in relatively small communities that larger competitors may not find attractive. We believe that this structure gives us a strategic competitive advantage, given the relatively rural nature of much of the Western and Southern U.S., and makes us an attractive buyer to many potential acquisition candidates.

1

We currently deliver our services from approximately 147operating locations grouped into three regions. We manage and evaluate our business on the basis of the regions’ geographic characteristics, interstate waste flow, revenue base, employee base, regulatory structure and acquisition opportunities. Each region has a regional vice president and a regional controller, reporting directly to our corporate management. These regional officers are responsible for operations and accounting in their regions and supervise their regional staff.

Each operating location has a district or site manager who has autonomous service and decision-making authority for his or her operations and is responsible for maintaining service quality, promoting safety, implementing marketing programs and overseeing day-to-day operations, including contract administration. Local managers also help identify acquisition candidates and are responsible for integrating acquired businesses into our operations and obtaining the permits and other governmental approvals required for us to operate.

Implement Operating Standards. We develop company-wide operating standards, which are tailored for each of our markets based on industry norms and local conditions. We implement cost controls and employee training and safety procedures and establish a sales and marketing plan for each market. By internalizing the waste stream of acquired operations, we can further increase operating efficiencies and improve capital utilization. We use a wide-area information system network, implement financial controls and consolidate certain accounting, personnel and customer service functions. While regional and district management operate with a high degree of autonomy, our senior officers monitor regional and district operations and require adherence to our accounting, purchasing, marketing and internal control policies, particularly with respect to financial matters. Our executive officers regularly review the performance of regional officers, district managers and operations. We believe we can improve the profitability of existing and newly acquired operations by establishing operating standards, closely monitoring performance and streamlining certain administrative functions.

Our Growth Strategy

We tailor the components of our growth strategy to the markets in which we operate and into which we hope to expand.

Obtain Additional Exclusive Arrangements. Our operations include market areas where we have exclusive arrangements, including franchise agreements, municipal contracts and governmental certificates, under which we are the exclusive service provider for a specified market. These exclusive rights and contractual arrangements create a barrier to entry that is usually obtained through the acquisition of a company with such exclusive rights or contractual arrangements or by a competitive bid.

We devote significant resources to securing additional franchise agreements and municipal contracts through competitive bidding and by acquiring other companies. In bidding for franchises and municipal contracts and evaluating acquisition candidates holding governmental certificates, our management team draws on its experience in the waste industry and knowledge of local service areas in existing and target markets. Our district management and sales and marketing personnel maintain relationships with local governmental officials within their service areas, maintain, renew and renegotiate existing franchise agreements and municipal contracts, and secure additional agreements and contracts while targeting acceptable financial returns. Our sales and marketing personnel also expand our presence into areas adjacent to or contiguous with our existing markets, and market additional services to existing customers. We believe our ability to offer comprehensive rail haul disposal services in the Pacific Northwest improves our competitive position in bidding for such contracts in that region.

Generate Internal Growth. To generate continued internal revenue growth, our district management and sales and marketing personnel focus on increasing market penetration in our current and adjacent markets, soliciting new residential, commercial and industrial customers in markets where such customers have the option to choose a particular waste collection service and marketing upgraded or additional services (such as compaction or automated collection) to existing customers. We also focus on raising prices and instituting surcharges, when appropriate, to offset cost increases. Where possible, we intend to leverage our franchise-based platforms to expand our customer base beyond our exclusive market territories. As customers are added in existing markets, our revenue per routed truck increases, which generally increases our collection efficiencies and profitability. In markets in which we have exclusive contracts, franchises and certificates, we expect internal volume growth generally to track population and business growth.

Expand Through Acquisitions. We intend to expand the scope of our operations by continuing to acquire solid waste companies in new markets and in existing or adjacent markets that are combined with or “tucked in” to our existing operations. We focus our acquisition efforts on markets that we believe provide significant growth opportunities for a well-capitalized market entrant and where we can create economic and operational barriers to entry by new competitors. This focus typically highlights markets in which we can either: (1) provide waste collection services under franchises, exclusive contracts or other arrangements; or (2) gain a leading market position and provide vertically integrated collection and disposal services. We believe that our experienced management, decentralized operating strategy, financial strength, size and public company status make us an attractive buyer to certain solid waste collection and disposal acquisition candidates. We have developed an acquisition discipline based on a set of financial, market and management criteria to evaluate opportunities. Once an acquisition is closed, we seek to integrate it while minimizing disruption to the ongoing operations of both Waste Connections and the acquired business.

2

In new markets, we often use an initial acquisition as an operating base and seek to strengthen the acquired operation’s presence in that market by providing additional services, adding new customers and making “tuck-in” acquisitions of other solid waste companies in that market or adjacent markets. We believe that many suitable “tuck-in” acquisition opportunities exist within our current and targeted market areas that may provide us with opportunities to increase our market share and route density.

The U.S. solid waste services industry experienced significant consolidation during the 1990s. The consolidation trend has continued, most notably with the recent merger between Republic Services, Inc. and Allied Waste Industries, Inc. The solid waste services industry remains regional in nature with acquisition opportunities available in selected markets. Some of the remaining independent landfill and collection operators lack the capital resources, management skills and/or technical expertise necessary to comply with stringent environmental and other governmental regulations and compete with larger, more efficient, integrated operators. In addition, many of the remaining independent operators may wish to sell their businesses to achieve liquidity in their personal finances or as part of their estate planning. Due to the prevalence of exclusive arrangements, we believe the Western markets contain the largest and most attractive number of acquisition opportunities. In addition, the recent merger between Republic Services, Inc. and Allied Waste Industries, Inc. will result in additional acquisition opportunities through governmentally-mandated divestitures.  For example, on February 6, 2009, we entered into an Asset Purchase Agreement with Republic Services in connection with the sale of certain assets Republic Services was required to divest pursuant to a court order issued in connection with the merger between Republic Services and Allied.  For additional information, see Part II, Item 9B of this Annual Report on Form 10-K.

During the year ended December 31, 2007, we completed 15 acquisitions, none of which individually or in the aggregate accounted for greater than 10% of our total assets. On November 3, 2008, we completed the acquisition of all of the outstanding capital stock of Harold LeMay Enterprises, Incorporated for an aggregate purchase price of $210.9 million, which amount includes the assumption of $18.3 million of indebtedness. During the year ended December 31, 2008, we completed 14 other acquisitions and acquired the remaining 49% interest in Pierce County Recycling, Composting and Disposal, LLC and Pierce County Landfill Management, Inc. (“PCRCD”), none of which individually or in the aggregate accounted for greater than 10% of our total assets.

SOLID WASTE SERVICES

Residential, Commercial and Industrial Collection Services

We serve approximately 1.8 million residential, commercial and industrial customers from operations in 23 states. Our services are generally provided under one of the following arrangements: (1) governmental certificates; (2) exclusive franchise agreements; (3) exclusive municipal contracts; (4) residential subscriptions; (5) residential contracts; or (6) commercial and industrial service agreements.

Governmental certificates, exclusive franchise agreements and exclusive municipal contracts grant us rights to provide services within specified areas at established rates. Governmental certificates, or G Certificates, are unique to the State of Washington. The Washington Utilities and Transportation Commission, or the WUTC, awards G Certificates to solid waste collection service providers in unincorporated areas and electing municipalities. These certificates typically grant the holder the exclusive and perpetual right to provide specific residential, commercial and/or industrial waste services in a defined territory at specified rates subject to divestiture and/or cancellation by the WUTC on specified limited grounds. Franchise agreements typically provide an exclusive period of seven years or longer for a specified territory. These arrangements specify a broad range of services to be provided, establish rates for the services and often give the service provider a right of first refusal to extend the term of the agreement. Municipal contracts typically provide a shorter service period and a more limited scope of services than franchise agreements and generally require competitive bidding at the end of the contract term. We do not expect that the loss of any current contracts in negotiation for renewal or contracts likely to terminate in 2009 will have a material adverse effect on our revenues or cash flows. No single contract or customer accounted for more than 5% of our total revenues for the years ended December 31, 2007 and 2008.

We provide residential solid waste services, other than those we perform under exclusive arrangements, under contracts with homeowners’ associations, apartment owners, mobile home park operators or on a subscription basis with individual households. We set base residential fees on a contract basis primarily based on route density, the frequency and level of service, the distance to the disposal or processing facility, weight and type of waste collected, type of equipment and containers furnished, the cost of disposal or processing and prices charged by competitors in that market for similar services. Collection fees are paid either by the municipalities from tax revenues or directly by the residents receiving the services. We provide 20- to 96-gallon carts to residential customers. 

3

We provide commercial and industrial services, other than those we perform under exclusive arrangements, under customer service agreements generally ranging from one to five years in duration. We determine fees under these agreements by such factors as collection frequency, level of service, route density, the type, volume and weight of the waste collected, type of equipment and containers furnished, the distance to the disposal or processing facility, the cost of disposal or processing and prices charged by competitors in our collection markets for similar services. Collection of larger volumes of commercial and industrial waste streams generally helps improve our operating efficiencies, and consolidation of these volumes allows us to negotiate more favorable disposal prices. We provide one- to ten-cubic yard containers to commercial customers and ten- to 50-cubic yard containers to industrial customers. For an additional fee, we install on the premises of large volume customers stationary compactors that compact waste prior to collection.

Landfill Disposal Services

We own solid waste landfills to achieve vertical integration in markets where the economic and regulatory environments make landfill ownership attractive. Where our operations are vertically integrated, we eliminate third-party disposal costs and generally realize higher margins and stronger operating cash flows. The fees charged at disposal facilities, which are known as tipping fees, are based on market factors and take into account the type and weight or volume of solid waste deposited and the type and size of the vehicles used to transport waste.

Our landfill facilities consisted of the following at December 31, 2008:

Owned and operated landfills	27
Operated landfills under limited-term operating agreements	7
Operated landfills under life-of-site agreements	3
	37

We own landfills in California, Colorado, Illinois, Kansas, Kentucky, Minnesota, Mississippi, Nebraska, New Mexico, Oklahoma, Oregon, Tennessee and Washington. In addition, we operate, but do not own, landfills in California, Mississippi, Nebraska and New Mexico. With the exception of two landfills located in Mississippi and Colorado, which only accept construction and demolition waste, all landfills that we own or operate are municipal solid waste landfills.

Under landfill operating agreements, the owner of the property, generally a municipality, usually owns the permit and we operate the landfill for a contracted term, which may be the life of the landfill. Where the contracted term is not the life of the landfill, the property owner is generally responsible for final capping, closure and post-closure obligations. We are responsible for all final capping, closure and post-closure obligations at the three operated landfills for which we have life-of-site agreements. Our operating contracts for which the contracted term is less than the life of the landfill have expiration dates from 2009 to 2018. One contract expiring in 2009 represents estimated annual revenues of $2.4 million and is not expected to be renewed. For all other operated landfills under limited-term operating agreements, we intend to seek renewal of these contracts prior to, or upon, their expiration.

Based on remaining permitted capacity as of December 31, 2008, and projected annual disposal volumes, the average remaining landfill life for our owned and operated landfills and landfills operated, but not owned, under life-of-site agreements, is estimated to be approximately 48 years. Many of our existing landfills have the potential for expanded disposal capacity beyond the amount currently permitted. We monitor the available permitted in-place disposal capacity of our landfills on an ongoing basis and evaluate whether to seek capacity expansion. In making this evaluation, we consider various factors, including the following:

 ● whether the land where the expansion is being sought is contiguous to the current disposal site, and whether we either own it or the property is under an option, purchase, operating or other similar agreement;

 ● whether total development costs, final capping costs, and closure/post-closure costs have been determined;

 ● whether internal personnel have performed a financial analysis of the proposed expansion site and have determined that it has a positive financial and operational impact;

 ● whether internal personnel or external consultants are actively working to obtain the necessary approvals to obtain the landfill expansion permit; and

 ● whether we consider it probable that we will achieve the expansion (for a pursued expansion to be considered probable, there must be no significant known technical, legal, community, business or political restrictions or similar issues existing that could impair the success of the expansion).

We also regularly consider whether it is advisable, in light of changing market conditions and/or regulatory requirements, to seek to expand or change the permitted waste streams or to seek other permit modifications. We are currently seeking to expand permitted capacity at five of our landfills for which we consider expansions to be probable. Although we cannot be certain that all future expansions will be permitted as designed, the average remaining landfill life for our owned and operated landfills and landfills operated, but not owned, under life-of-site agreements is estimated to be approximately 53 years when considering remaining permitted capacity, probable expansion capacity and projected annual disposal volume.

4

The following table reflects estimated landfill capacity and airspace changes, as measured in tons, for owned and operated landfills and landfills operated, but not owned, under life-of-site agreements (in thousands):

	2007									2008
	Permitted			Probable Expansion			Total			Permitted			Probable Expansion			Total
Balance, beginning of year		384,454			30,340			414,794			401,095			28,430			429,525
Acquired landfills		16,088			7,028			23,116			5,100			—			5,100
Permits granted		6,826			(6,826	)		—			7,028			(7,028	)		—
Airspace consumed		(8,238	)		—			(8,238	)		(8,320	)		—			(8,320	)
Pursued expansions		—			—			—			—			15,456			15,456
Changes in engineering estimates		1,965			(2,112	)		(147	)		(4,523	)		—			(4,523	)
Balance, end of year		401,095			28,430			429,525			400,380			36,858			437,238

The estimated remaining operating lives for the landfills we own and landfills we operate under life-of-site agreements, based on remaining permitted and probable expansion capacity and projected annual disposal volume, in years, as of December 31, 2007, and December 31, 2008, are shown in the tables below. The estimated remaining operating lives include assumptions that the operating permits are renewed.

	2007
	0 to 5		6 to 10		11 to 20		21 to 40		41 to 50		51+	Total
Owned and operated landfills		1		—		5		6		2	11		25
Operated landfills under life-of-site agreements		—		—		—		2		—	1		3
		1		—		5		8		2	12		28
	2008
	0 to 5		6 to 10		11 to 20		21 to 40		41 to 50		51+	Total
Owned and operated landfills		1		—		5		7		2	12		27
Operated landfills under life-of-site agreements		—		—		—		2		1	—		3
		1		—		5		9		3	12		30

5

The disposal tonnage that we received in 2007 and 2008 at all of our landfills is shown in the tables below (tons in thousands):

	Three months ended																Twelve months ended December 31, 2007
	March 31, 2007				June 30, 2007				September 30, 2007				December 31, 2007
	Number of Sites		Total Tons		Number of Sites		Total Tons		Number of Sites		Total Tons		Number of Sites		Total Tons
Owned landfills or landfills operated under life-of-site agreements		28		1,769		28		2,122		30		2,211		28		2,136		8,238
Operated landfills		8		245		8		261		7		244		7		234		984
		36		2,014		36		2,383		37		2,455		35		2,370		9,222

																	Twelve months endedDecember 31, 2008
	Three months ended
	March 31, 2008				June 30, 2008				September 30, 2008				December 31, 2008
	Numberof Sites		TotalTons		Numberof Sites		TotalTons		Numberof Sites		TotalTons		Numberof Sites		Total Tons
Owned landfills or landfills operated under life-of-site agreements		29		1,972		29		2,204		29		2,235		30		1,909		8,320
Operated landfills		7		222		7		236		7		236		7		211		905
		36		2,194		36		2,440		36		2,471		37		2,120		9,225

Transfer Station Services

We have an active program to acquire, develop, own and operate transfer stations in markets proximate to our collection operations. Transfer stations receive, compact and load solid waste to be transported to landfills via truck, rail or barge. Transfer stations extend our direct-haul reach and link collection operations with distant disposal facilities. We owned or operated 52 transfer stations at December 31, 2008. Currently, we own transfer stations in California, Colorado, Kansas, Kentucky, Montana, Nebraska, Oklahoma, Oregon, Tennessee and Washington. In addition, we operate, but do not own, transfer stations in Idaho, Kentucky, Nebraska, Tennessee, Washington and Wyoming. We believe that transfer stations benefit us by:

● concentrating the waste stream from a wider area, which increases the volume of disposal at our landfill facilities and gives us greater leverage in negotiating more favorable disposal rates at other landfills;

● improving utilization of collection personnel and equipment; and

● building relationships with municipalities and private operators that deliver waste, which can lead to additional growth opportunities.

Recycling Services

We offer residential, commercial, industrial and municipal customers recycling services for a variety of recyclable materials, including cardboard, office paper, plastic containers, glass bottles and ferrous and aluminum metals. We own or operate 34 recycling processing operations and sell other collected recyclable materials to third parties for processing before resale. The majority of the recyclables we process for sale are paper products and are shipped to customers in Asia. Changes in end market demand can cause fluctuations in the prices for such commodities, which can affect revenue, operating income and cash flows. Sales prices of and demand for paper products declined beginning in the fourth quarter of 2008. Certain of our municipal recycling contracts in Washington specify certain benchmark resale prices for recycled commodities. To the extent the prices we actually receive for the processed recycled commodities collected under those contracts exceed the prices specified in the contracts, we share the excess with the municipality, after recovering any previous shortfalls resulting from actual market prices falling below the prices specified in the contracts. To reduce our exposure to commodity price volatility and 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. We believe that recycling will continue to be an important component of local and state solid waste management plans due to the public’s increasing environmental awareness and expanding regulations that mandate or encourage recycling.

6

INTERMODAL SERVICES

Intermodal logistics is the movement of containers using two or more modes of transportation, usually including a rail or truck segment. In November 2004, we entered the intermodal services business in the Pacific Northwest through the acquisition of Northwest Container Services, Inc., which provides repositioning, storage, maintenance and repair of cargo containers for international shipping companies. We provide these services for containerized cargo primarily to international shipping companies importing and exporting goods through the Pacific Northwest. We also operate two intermodal facilities primarily for the shipment of waste by rail to distant disposal facilities that are not owned or operated by Waste Connections. As of December 31, 2008, we owned or operated six intermodal operations in Washington and Oregon. Our fleet of double-stack railcars provides dedicated direct-line haul services among terminals in Portland, Tacoma and Seattle. We have contracts with the Burlington Northern Santa Fe and Union Pacific railroads for the movement of containers among our six intermodal operations. We also provide our customers container and chassis sales and leasing services.

We intend to further expand our intermodal business through cross-selling efforts with our solid waste services operations. We believe that a significant amount of solid waste is transported currently by truck, rail and barge from primarily the Seattle-Tacoma and Metro Portland areas to remote landfills in Eastern Washington and Eastern Oregon. We believe our ability to market both intermodal and disposal services will enable us to more effectively compete for these volumes.

COMPETITION

The solid waste services industry is highly competitive and requires substantial labor and capital resources. In addition to us, the industry includes: two national, publicly-held solid waste companies – Republic Services, Inc. and Waste Management, Inc.;several regional, publicly-held and privately-owned companies; and several thousand small, local, privately-owned companies. Certain of the markets in which we compete or will likely compete are served by one or more large, national solid waste companies, as well as by numerous regional and local solid waste companies of varying sizes and resources, some of which we believe have accumulated substantial goodwill in their markets. We also compete with operators of alternative disposal facilities, including incinerators, and with counties, municipalities and solid waste districts that maintain their own waste collection and disposal operations. Public sector operators may have financial advantages over us because of their access to user fees and similar charges, tax revenues and tax-exempt financing.

We compete for collection, transfer and disposal volume based primarily on the price and, to a lesser extent, quality of our services. From time to time, competitors may reduce the price of their services in an effort to expand their market shares or service areas or to win competitively bid municipal contracts. These practices may cause us to reduce the price of our services or, if we elect not to do so, to lose business. We provide a significant amount of our residential, commercial and industrial collection services under exclusive franchise and municipal contracts and G Certificates. Exclusive franchises and municipal contracts may be subject to periodic competitive bidding.

The U.S. solid waste services industry has undergone significant consolidation, and we encounter competition in our efforts to acquire collection operations, transfer stations and landfills. We generally compete for acquisition candidates with publicly-owned regional and national waste management companies. Accordingly, it may become uneconomical for us to make further acquisitions or we may be unable to locate or acquire suitable acquisition candidates at price levels and on terms and conditions that we consider appropriate, particularly in markets we do not already serve. Competition in the disposal industry is also affected by the increasing national emphasis on recycling and other waste reduction programs, which may reduce the volume of waste deposited in landfills.

The intermodal services industry is also highly competitive. We compete against other intermodal rail services companies, trucking companies and railroads, many of which have greater financial and other resources than we do. Competition is based primarily on price, reliability and quality of service.

REGULATION

Introduction

Our operations, including landfills, solid waste transportation, transfer stations, vehicle maintenance shops and fueling facilities, are all subject to extensive and evolving federal, state and local environmental laws and regulations, the enforcement of which has become increasingly stringent. The environmental regulations that affect us are administered by the Environmental Protection Agency, or the EPA, and other federal, state and local environmental, zoning, health and safety agencies. The WUTC regulates the portion of our collection business in Washington performed under G Certificates. We currently comply in all material respects with applicable federal, state and local environmental laws, permits, orders and regulations. In addition, we attempt to anticipate future regulatory requirements and plan in advance as necessary to comply with them. We do not presently anticipate incurring any material costs to bring our operations into environmental compliance with existing or expected future regulatory requirements, although we can give no assurance that this will not change in the future.

7

The principal federal, state and local statutes and regulations that apply to our operations are described below. Certain of the statutes described below contain provisions that authorize, under certain circumstances, lawsuits by private citizens to enforce the provisions of the statutes. In addition to penalties, some of those statutes authorize an award of attorneys’ fees to parties that successfully bring such an action. Enforcement actions under these statutes may include both civil and criminal penalties, as well as injunctive relief in some instances.

The Resource Conservation and Recovery Act of 1976, or RCRA

RCRA regulates the generation, treatment, storage, handling, transportation and disposal of solid waste and requires states to develop programs to ensure the safe disposal of solid waste. RCRA divides solid waste into two groups, hazardous and nonhazardous. Wastes are generally classified as hazardous if they either: (1) are specifically included on a list of hazardous wastes; or (2) exhibit certain characteristics defined as hazardous. Household wastes are specifically designated as nonhazardous. Wastes classified as hazardous under RCRA are subject to much stricter regulation than wastes classified as nonhazardous, and businesses that deal with hazardous waste are subject to regulatory obligations in addition to those imposed on handlers of nonhazardous waste. From time to time, our intermodal services business transports hazardous materials in compliance with federal transportation requirements. Some of our ancillary operations, such as vehicle maintenance operations, may generate hazardous wastes. We manage these wastes in substantial compliance with applicable laws.

In October 1991, the EPA adopted the Subtitle D Regulations governing solid waste landfills. The Subtitle D Regulations, which generally became effective in October 1993, include location restrictions, facility design standards, operating criteria, closure and post-closure requirements, financial assurance requirements, groundwater monitoring requirements, groundwater remediation standards and corrective action requirements. In addition, the Subtitle D Regulations require that new landfill sites meet more stringent liner design criteria (typically, composite soil and synthetic liners or two or more synthetic liners) intended to keep leachate out of groundwater and have extensive collection systems to carry away leachate for treatment prior to disposal. Groundwater monitoring wells must also be installed at virtually all landfills to monitor groundwater quality and, indirectly, the effectiveness of the leachate collection system. The Subtitle D Regulations also require, where certain regulatory thresholds are exceeded, that facility owners or operators control emissions of methane gas generated at landfills in a manner intended to protect human health and the environment. Each state is required to revise its landfill regulations to meet these requirements or such requirements will be automatically imposed by the EPA on landfill owners and operators in that state. Each state is also required to adopt and implement a permit program or other appropriate system to ensure that landfills in the state comply with the Subtitle D Regulations. Various states in which we operate or may operate in the future have adopted regulations or programs as stringent as, or more stringent than, the Subtitle D Regulations.

RCRA also regulates underground storage of petroleum and other regulated materials. RCRA requires registration, compliance with technical standards for tanks, release detection and reporting, and corrective action, among other things. Certain of our facilities and operations are subject to these requirements.

The Federal Water Pollution Control Act of 1972, or the Clean Water Act

The Clean Water Act regulates the discharge of pollutants from a variety of sources, including solid waste disposal sites and transfer stations, into waters of the United States. If run-off from our owned or operated transfer stations or run-off or collected leachate from our owned or operated landfills is discharged into streams, rivers or other surface waters, the Clean Water Act would require us to apply for and obtain a discharge permit, conduct sampling and monitoring and, under certain circumstances, reduce the quantity of pollutants in such discharge. Also, virtually all landfills are required to comply with the EPA’s storm water regulations issued in November 1990, which are designed to prevent contaminated landfill storm water run-off from flowing into surface waters. We believe that our facilities comply in all material respects with the Clean Water Act requirements. Various states in which we operate or may operate in the future have been delegated authority to implement the Clean Water Act permitting requirements, and some of these states have adopted regulations that are more stringent than the federal Clean Water Act requirements. For example, states often require permits for discharges that may impact ground water as well as surface water.

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The Comprehensive Environmental Response, Compensation, and Liability Act of 1980, or CERCLA

CERCLA established a regulatory and remedial program intended to provide for the investigation and cleanup of facilities where or from which a release of any hazardous substance into the environment has occurred or is threatened. CERCLA’s primary mechanism for remedying such problems is to impose strict joint and several liability for cleanup of facilities on current owners and operators of the site, former owners and operators of the site at the time of the disposal of the hazardous substances, any person who arranges for the transportation, disposal or treatment of the hazardous substances, and the transporters who select the disposal and treatment facilities, regardless of the care exercised by such persons. CERCLA also imposes liability for the cost of evaluating and remedying any damage to natural resources. The costs of CERCLA investigation and cleanup can be very substantial. Liability under CERCLA does not depend on the existence or disposal of “hazardous waste” as defined by RCRA; it can also be based on the release of even very small amounts of the more than 700 “hazardous substances” listed by the EPA, many of which can be found in household waste. In addition, the definition of “hazardous substances” in CERCLA incorporates substances designated as hazardous or toxic under the federal Clean Water Act, Clear Air Act and Toxic Substances Control Act. If we were found to be a responsible party for a CERCLA cleanup, the enforcing agency could hold us, or any other generator, transporter or the owner or operator of the contaminated facility, responsible for all investigative and remedial costs, even if others were also liable. CERCLA also authorizes the imposition of a lien in favor of the United States on all real property subject to, or affected by, a remedial action for all costs for which a party is liable. Subject to certain procedural restrictions, CERCLA gives a responsible party the right to bring a contribution action against other responsible parties for their allocable shares of investigative and remedial costs. Our ability to obtain reimbursement from others for their allocable shares of such costs would be limited by our ability to find other responsible parties and prove the extent of their responsibility, their financial resources, and other procedural requirements. Various state laws also impose strict joint and several liability for investigation, cleanup and other damages associated with hazardous substance releases.

The Clean Air Act

The Clean Air Act generally, through state implementation of federal requirements, regulates emissions of air pollutants from certain landfills based on factors such as the date of the landfill construction and tons per year of emissions of regulated pollutants. Larger landfills and landfills located in areas where the ambient air does not meet certain requirements of the Clean Air Act may be subject to even more extensive air pollution controls and emission limitations. In addition, the EPA has issued standards regulating the disposal of asbestos-containing materials. Air permits may be required to construct gas collection and flaring systems and composting operations, and operating permits may be required, depending on the potential air emissions. State air regulatory programs may implement the federal requirements but may impose additional restrictions. For example, some state air programs uniquely regulate odor and the emission of toxic air pollutants.

Climate Change Laws and Regulations

On September 27, 2006, California enacted AB32, the Global Warming Solutions Act of 2006, which established the first statewide program in the United States to limit greenhouse gas, or GHG, emissions and impose penalties for non-compliance. Since then, the California Air Resources Board has taken and plans to take various actions to implement the program, including the approval on December 11, 2008, of an AB32 Scoping Plan summarizing the main GHG-reduction strategies for California.

Because landfill and collection operations emit GHG, our operations in California are subject to regulations issued under AB32. These regulations increase our costs for those operations. If we are unable to pass such higher costs through to our customers, our business, financial condition and operating results could be adversely affected.

Climate change laws and regulations could also affect our non-California operations. For example, California’s AB32 Scoping Plan described above recommends a GHG cap and trade system in conjunction with the Western Climate Initiative, which currently includes seven states and four Canadian provinces. Also, President Barack Obama has stated that he favors reducing GHG to 1990 levels by 2020 and imposing an economy-wide cap-and-trade program to achieve a further 80 percent reduction by 2050.

The Occupational Safety and Health Act of 1970, or the OSH Act

The OSH Act is administered by the Occupational Safety and Health Administration, or OSHA, and many state agencies whose programs have been approved by OSHA. The OSH Act establishes employer responsibilities for worker health and safety, including the obligation to maintain a workplace free of recognized hazards likely to cause death or serious injury, comply with adopted worker protection standards, maintain certain records, provide workers with required disclosures and implement certain health and safety training programs. Various OSHA standards may apply to our operations, including standards concerning notices of hazards, safety in excavation and demolition work, the handling of asbestos and asbestos-containing materials and worker training and emergency response programs.

Flow Control/Interstate Waste Restrictions

Certain permits and approvals and state and local regulations may limit a landfill’s or transfer station’s ability to accept waste that originates from specified geographic areas, import out-of-state waste or wastes originating outside the local jurisdictions or otherwise discriminate against non-local waste. These restrictions, generally known as flow control restrictions, are controversial, and courts have held that some state and local flow control schemes violate constitutional limits on state or local regulation of interstate commerce, while other state and local flow control schemes do not. In 2007, the U.S. Supreme Court upheld a flow control scheme directing waste to be processed at a municipally owned transfer station. This decision may result in certain state and local jurisdictions seeking to enforce flow control restrictions through local legislation or contractually. These actions could limit or prohibit the importation of out-of-state waste or direct that wastes be handled at specified facilities. Such actions could adversely affect our transfer stations and landfills. These restrictions could also result in higher disposal costs for our collection operations. If we were unable to pass such higher costs through to our customers, our business, financial condition and operating results could be adversely affected.

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State and Local Regulations

Each state in which we now operate or may operate in the future has laws and regulations governing the generation, storage, treatment, handling, transportation and disposal of solid waste, occupational safety and health, water and air pollution and, in most cases, the siting, design, operation, maintenance, closure and post-closure maintenance of landfills and transfer stations. State and local permits and approval for these operations may be required and may be subject to periodic renewal, modification or revocation by the issuing agencies. In addition, many states have adopted statutes comparable to, and in some cases more stringent than, CERCLA. These statutes impose requirements for investigation and cleanup of contaminated sites and liability for costs and damages associated with such sites, and some provide for the imposition of liens on property owned by responsible parties.

Many municipalities also have enacted or could enact ordinances, local laws and regulations affecting our operations. These include zoning and health measures that limit solid waste management activities to specified sites or activities, flow control provisions that direct or restrict the delivery of solid wastes to specific facilities, laws that grant the right to establish franchises for collection services and bidding for such franchises, and bans or other restrictions on the movement of solid wastes into a municipality.

Permits or other land use approvals with respect to a landfill, as well as state or local laws and regulations, may specify the quantity of waste that may be accepted at the landfill during a given time period and/or the types of waste that may be accepted at the landfill. Once an operating permit for a landfill is obtained, it generally must be renewed periodically.

There has been an increasing trend at the state and local level to mandate and encourage waste reduction at the source and waste recycling, and to prohibit or restrict the disposal in landfills of certain types of solid wastes, such as yard wastes, leaves, tires, computers and other electronic equipment waste, and painted wood and other construction and demolition debris. The enactment of regulations reducing the volume and types of wastes available for transport to and disposal in landfills could prevent us from operating our facilities at their full capacity.

Some state and local authorities enforce certain federal requirements in addition to state and local laws and regulations. For example, in some states, local or state authorities enforce requirements of RCRA, the OSH Act and parts of the Clean Air Act and the Clean Water Act instead of the EPA or OSHA, as applicable, and in some states such laws are enforced jointly by state or local and federal authorities.

Public Utility Regulation

In some states, public authorities regulate the rates that landfill operators may charge. The adoption of rate regulation or the reduction of current rates in states in which we own or operate landfills could adversely affect our business, financial condition and operating results.

Solid waste collection services in all unincorporated areas of Washington and in electing municipalities in Washington are provided under G Certificates awarded by the WUTC. In association with the regulation of solid waste collection service levels in these areas, the WUTC also reviews and approves rates for regulated solid waste collection and transportation service.

RISK MANAGEMENT, INSURANCE AND FINANCIAL SURETY BONDS

Risk Management

We maintain environmental and other risk management programs that we believe are appropriate for our business. Our environmental risk management program includes evaluating existing facilities and potential acquisitions for environmental law compliance. We do not presently expect environmental compliance costs to increase materially above current levels, but we cannot predict whether future acquisitions will cause such costs to increase. We also maintain a worker safety program that encourages safe practices in the workplace. Operating practices at our operations emphasize minimizing the possibility of environmental contamination and litigation. Our facilities comply in all material respects with applicable federal and state regulations.

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Insurance

We are effectively self-insured for automobile liability, property, general liability, workers’ compensation, employer’s liability claims, and employee group health insurance. Our loss exposure for insurance claims is generally limited to per incident deductibles. Losses in excess of deductible levels are insured subject to policy limits. Under our current insurance program, we carry per incident deductibles of $2 million for automobile liability claims, $1.5 million for workers’ compensation and employer’s liability claims, $1 million ($2 million aggregate) for general liability claims, $25,000 for property claims and $250,000 for employee group health insurance. During the 12-month policy term, our automobile liability policy will pay up to $3 million per incident, after we pay the $2 million per incident deductible. Additionally, we have an umbrella policy with a third-party insurance company for automobile liability, general liability and employer’s liability that will pay, during the policy term, up to $50 million per incident in excess of the $5 million limit for automobile claims and in excess of the $1.5 million limit for employer’s liability claims and will pay up to an aggregate of $50 million in excess of the $2 million aggregate limit for general liability claims. Since workers’ compensation is a statutory coverage limited only by the various state jurisdictions, the umbrella coverage is not applicable. Also, our umbrella policy does not cover property claims, as the insurance limits for these claims are in accordance with the replacement values of the insured property. From time to time, actions filed against us include claims for punitive damages, which are generally excluded from coverage under all of our liability insurance policies.

We carry environmental protection insurance under a three-year (annual for the state of California) policy, expiring in November 2011, with coverage of $10 million per occurrence and a $20 million aggregate limit, after we pay the $250,000 per incident deductible. This insurance policy covers all owned or operated landfills, certain transfer stations and other facilities. Subject to policy terms, insurance coverage is guaranteed for acquired and newly-constructed facilities, but each addition to the policy is underwritten on a site-specific basis and the premium is set according to the conditions found at the site. Our policy provides insurance for new pollution conditions that originate after the commencement of our coverage. Pollution conditions existing prior to the commencement of our coverage, if found, could be excluded from coverage.

Financial Surety Bonds

We use financial surety bonds for a variety of corporate guarantees. The financial surety bonds are primarily used for guaranteeing municipal contract performance and providing financial assurances to meet final capping, landfill closure and post-closure obligations as required under certain environmental regulations. In addition to surety bonds, such guarantees and obligations may also be met through alternative financial assurance instruments, including insurance, letters of credit and restricted asset deposits. At December 31, 2007 and 2008, we had provided customers and various regulatory authorities with surety bonds in the aggregate amount of approximately $112.5 million and $113.3 million, respectively, to secure our landfill final capping, closure and post-closure requirements and $51.8 million and $48.5 million, respectively, to secure performance under collection contracts and landfill operating agreements.

We own a 9.9% interest in a company that, among other activities, issues financial surety bonds to secure final capping, landfill closure and post-closure obligations for companies operating in the solid waste sector, including a portion of our own.

EMPLOYEES

At December 31, 2008, we employed 5,379 full-time employees, of which 573, or approximately 11% of our workforce, were employed under collective bargaining agreements, primarily with the Teamsters Union. These employees are subject to labor agreements that are renegotiated periodically. We have nine collective bargaining agreements covering 420 employees that are set to expire during 2009. We do not expect any significant disruption in our overall business in 2009 as a result of labor negotiations, employee strikes or organizational efforts.

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EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth certain information concerning our executive officers and key employee as of February 6, 2009:

NAME	AGE	POSITIONS
Ronald J. Mittelstaedt (1)	45	Chief Executive Officer and Chairman
Steven F. Bouck	51	President
Darrell W. Chambliss	44	Executive Vice President and Chief Operating Officer
Worthing F. Jackman	44	Executive Vice President and Chief Financial Officer
David M. Hall	51	Senior Vice President – Sales and Marketing
James M. Little	47	Senior Vice President – Engineering and Disposal
Eric M. Merrill	56	Senior Vice President – People, Safety and Development
David G. Eddie	39	Vice President – Corporate Controller
Eric O. Hansen	43	Vice President – Chief Information Officer
Jerri L. Hunt (2)	57	Vice President – Employee Relations
Scott I. Schreiber	52	Vice President – Disposal Operations
Patrick J. Shea	38	Vice President, General Counsel and Secretary
Richard K. Wojahn	51	Vice President – Business Development

(1)	Member of the Executive Committee of the Board of Directors.
(2)	Key employee.

Ronald J. Mittelstaedt has been Chief Executive Officer and a director of Waste Connections since the company was formed, and was elected Chairman in January 1998. Mr. Mittelstaedt also served as President from Waste Connections’ formation through August 2004. Mr. Mittelstaedt has more than 20 years of experience in the solid waste industry. Mr. Mittelstaedt holds a B.A. degree in Business Economics with a finance emphasis from the University of California at Santa Barbara.

Steven F. Bouck has been President of Waste Connections since September 1, 2004. From February 1998 to that date, Mr. Bouck served as Executive Vice President and Chief Financial Officer. Mr. Bouck held various positions with First Analysis Corporation from 1986 to 1998, focusing on financial services to the environmental industry. Mr. Bouck holds B.S. and M.S. degrees in Mechanical Engineering from Rensselaer Polytechnic Institute, and an M.B.A. in Finance from the Wharton School.

Darrell W. Chambliss has been Executive Vice President and Chief Operating Officer of Waste Connections since October 2003. From October 1, 1997 to that date, Mr. Chambliss served as Executive Vice President – Operations. Mr. Chambliss has more than 19 years of experience in the solid waste industry. Mr. Chambliss holds a B.S. degree in Business Administration from the University of Arkansas.

Worthing F. Jackman has been Executive Vice President and Chief Financial Officer of Waste Connections since September 1, 2004. From April 2003 to that date, Mr. Jackman served as Vice President – Finance and Investor Relations. Mr. Jackman held various investment banking positions with Alex. Brown & Sons, now Deutsche Bank Securities, Inc., from 1991 through 2003, including most recently as a Managing Director within the Global Industrial & Environmental Services Group. In that capacity, he provided capital markets and strategic advisory services to companies in a variety of sectors, including solid waste services. Mr. Jackman serves as a director for Quanta Services, Inc. He holds a B.S. degree in Finance from Syracuse University and an M.B.A. from the Harvard Business School.

David M. Hall has been Senior Vice President – Sales and Marketing of Waste Connections since October 2005. From August 1998 to that date, Mr. Hall served as Vice President – Business Development. Mr. Hall has more than 21 years of experience in the solid waste industry with extensive operating and marketing experience in the Western U.S. Mr. Hall received a B.S. degree in Management and Marketing from Missouri State University.

James M. Little has been Senior Vice President – Engineering and Disposal of Waste Connections since February 2009. From September 1999 to that date, Mr. Little served as Vice President – Engineering. Mr. Little held various management positions with Waste Management, Inc. (formerly USA Waste Services, Inc., which acquired Waste Management, Inc. and Chambers Development Co. Inc.) from April 1990 to September 1999, including Regional Environmental Manager and Regional Landfill Manager, and most recently Division Manager in Ohio, where he was responsible for the operations of ten operating companies in the Northern Ohio area. Mr. Little is a certified professional geologist and holds a B.S. degree in Geology from Slippery Rock University.

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Eric M. Merrill has been Senior Vice President – People, Safety and Development of Waste Connections since January 2009. From June 2007 to that date, Mr. Merrill served as Senior Vice President – People, Training and Development. Mr. Merrill joined us in 1998 and since 2000 had served as Regional Vice President – Pacific Northwest Region. Mr. Merrill has over 20 years of experience in the solid waste industry. He holds a B.S. degree in Accounting from the University of Oregon.

David G. Eddie has been Vice President – Corporate Controller of Waste Connections since March 2004. From April 2003 to that date, Mr. Eddie served as Vice President – Public Reporting and Compliance. From May 2001 to March 2003, Mr. Eddie served as Director of Finance. Mr. Eddie served as Corporate Controller for International FiberCom, Inc. from April 2000 to May 2001. From September 1999 to April 2000, Mr. Eddie served as Waste Connections’ Manager of Financial Reporting. From September 1994 to September 1999, Mr. Eddie held various positions, including Audit Manager, for PricewaterhouseCoopers LLP. Mr. Eddie is a Certified Public Accountant and holds a B.S. degree in Accounting from California State University, Sacramento.

Eric O. Hansen has been Vice President – Chief Information Officer of Waste Connections since July 2004. From January 2001 to that date, Mr. Hansen served as Vice President – Information Technology. From April 1998 to December 2000, Mr. Hansen served as Director of Management Information Systems. Mr. Hansen holds a B.S. degree from Portland State University.

Jerri L. Hunt has been Vice President – Employee Relations of Waste Connections since June 2007. Ms. Hunt previously served as Vice President – Human Resources from May 2002 to June 2007, and as Vice President – Human Resources and Risk Management from December 1999 to April 2002. From 1994 to 1999, Ms. Hunt held various positions with First Union National Bank (including the Money Store, which was acquired by First Union National Bank), most recently Vice President of Human Resources. From 1989 to 1994, Ms. Hunt served as Manager of Human Resources and Risk Management for Browning-Ferris Industries, Inc. Ms. Hunt also served as a Human Resources Supervisor for United Parcel Service from 1976 to 1989. She holds a B.S. degree from California State University, Sacramento, and a Master’s degree in Human Resources from Golden Gate University.

Scott I. Schreiber has been Vice President – Disposal Operations of Waste Connections since February 2009. From October 1998 to that date, Mr. Schreiber served as Director of Landfill Operations. Mr. Schreiber has more than 29 years of experience in the solid waste industry. From September 1993 to September 1998, Mr. Schreiber served as corporate Director of Landfill Development and corporate Director of Environmental Compliance for Allied Waste Industries, Inc. From August 1988 to September 1993, Mr. Schreiber served as Regional Engineer (Continental Region) and corporate Director of Landfill Development for Laidlaw Waste Systems Inc. From June 1979 to August 1988, Mr. Schreiber held several managerial and technical positions in the solid waste and environmental industry. Mr. Schreiber holds a B.S. degree in Chemistry from the University of Wisconsin at Parkside.

Patrick J. Shea has been Vice President, General Counsel and Secretary of Waste Connections since February 2009. From February 2008 to that date, Mr. Shea served as General Counsel and Secretary. He served as Corporate Counsel from February 2004 to February 2008. Mr. Shea practiced corporate and securities law with Brobeck, Phleger & Harrison LLP in San Francisco from 1999 to 2003 and Winthrop, Stimson, Putnam & Roberts (now Pillsbury Winthrop Shaw Pittman LLP) in New York and London from 1995 to 1999. Mr. Shea holds a B.S. degree in Managerial Economics from the University of California at Davis and a J.D. degree from Cornell University.

Richard K. Wojahn has been Vice President – Business Development of Waste Connections since February 2009. From September 2005 to that date, Mr. Wojahn served as Director of Business Development. Mr. Wojahn served as Vice President of Operations for Mountain Jack Environmental Services, Inc. (which was acquired by Waste Connections in September 2005) from January 2004 to September 2005. Mr. Wojahn has more than 25 years of experience in the solid waste industry having held various management positions with Waste Management, Inc. and Allied Waste Industries, Inc. Mr. Wojahn attended Western Illinois University.

AVAILABLE INFORMATION

Our corporate website address is http://www.wasteconnections.com. The information on our website is not incorporated by reference in this annual report on Form 10-K. We make our reports on Forms 10-K, 10-Q and 8-K and any amendments to such reports available on our website free of charge as soon as reasonably practicable after we file them with or furnish them to the Securities and Exchange Commission, or SEC. The public may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC, 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an internet website at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

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ITEM 1A. RISK FACTORS

Certain statements contained in this Annual Report on Form 10-K 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, those listed below and elsewhere in this report. 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.

Risks Related to Our Business

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

A component of our growth strategy involves achieving economies of scale and operating efficiencies by growing through acquisitions. We may not achieve these goals unless we effectively combine the operations of acquired businesses with our existing operations. In addition, we are not always able to control the timing of our acquisitions. Our inability to complete acquisitions within the time frames that we expect may cause our operating results to be less favorable than expected, which could cause our stock price to decline.

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

Even if we are able to make acquisitions on advantageous terms and are able to integrate them successfully into our operations and organization, some acquisitions may not fulfill our objectives in a given market due to factors that we cannot control, such as market position or customer base. As a result, operating margins could be less than we originally anticipated when we made those acquisitions. In addition, we may change our strategy with respect to that market or those businesses and decide to sell the operations at a loss, or keep those operations and recognize an impairment of goodwill and/or intangible assets.

Downturns in the worldwide economy adversely affect operating results.

Weakness in the worldwide economy has had a negative effect on our operating results, including decreases in volume generally associated with the construction industry and declines in recycled commodity prices. In an economic slowdown, we may also experience the negative effects of increased competitive pricing pressure, customer turnover, and reductions in customer service requirements. Worsening economic conditions or a prolonged or recurring recession could adversely affect our operating results and expected seasonal fluctuations. Further, we cannot assure you that an improvement in economic conditions will result in an immediate, if at all positive, improvement in our operating results or cash flows.

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

Our business and financial results would be harmed by downturns in the general economy of the regions in which we operate and other factors affecting those regions, such as state regulations affecting the solid waste services industry and severe weather conditions. 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 in the range of approximately 9% to 11%. 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 the winter months. 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. Because of these factors, we expect operating income to be generally lower in the winter months, and our stock price may be negatively affected by these variations.

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

Our industry is highly competitive and requires substantial labor and capital resources. Some of the markets in which we compete or will likely compete are served by one or more large, national companies, as well as by regional and local companies of varying sizes and resources, some of which we believe have accumulated substantial goodwill in their markets. Some of our competitors may also be better capitalized than we are, have greater name recognition than we do, or be able to provide or be willing to bid their services at a lower price than we may be willing to offer. Our inability to compete effectively could hinder our growth or negatively impact our operating results.

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We also compete with counties, municipalities and solid waste districts that maintain or could in the future choose to maintain their own waste collection and disposal operations, including through the implementation of flow control ordinances or similar legislation. These operators may have financial advantages over us because of their access to user fees and similar charges, tax revenues and tax-exempt financing.

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

We derive a significant portion of our revenues from market areas where we have exclusive arrangements, including franchise agreements, municipal contracts and G Certificates. Many franchise agreements and municipal contracts are for a specified term and are or will be subject to competitive bidding in the future. For example, we have approximately 288 contracts, representing approximately 4.7% of our annual revenues, which are set for expiration or automatic renewal through December 31, 2009. Although we intend to bid on additional municipal contracts and franchise agreements, we may not be the successful bidder. In addition, some of our customers may terminate their contracts with us before the end of the contract term.

Governmental action may also affect our exclusive arrangements. Municipalities may annex unincorporated areas within counties where we provide collection services. As a result, our customers in annexed areas may be required to obtain services from competitors that have been franchised by the annexing municipalities to provide those services. In addition, municipalities in which services are currently provided on a competitive basis may elect to franchise collection services. Unless we are awarded franchises by these municipalities, we will lose customers. Municipalities may also decide to provide services to their residents themselves, on an optional or mandatory basis, causing us to lose customers. Municipalities in Washington may, by law, annex any unincorporated territory, which could remove such territory from an area covered by a G Certificate issued to us by the WUTC. Such occurrences could subject more of our Washington operations to competitive bidding. Moreover, legislative action could amend or repeal the laws governing WUTC regulation, which could harm our competitive position by subjecting more areas to competitive bidding and/or overlapping service. If we are not able to replace revenues from contracts lost through competitive bidding or early termination or from the renegotiation of existing contracts with other revenues within a reasonable time period, our revenues could decline.

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

We seek to secure price increases necessary to offset increased costs, to improve operating margins and to obtain adequate returns on our deployed capital. Contractual, general economic or market-specific conditions may limit our ability to raise prices. As a result of these factors, we may be unable to offset increases in costs, improve operating margins and obtain adequate investment returns through price increases. We may also lose volume to lower-cost competitors.

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

The market price of fuel is volatile and rose substantially in recent years before falling with the general economic downturn in late 2008. We generally purchase diesel fuel at market prices, and such prices have fluctuated significantly. A significant increase in our fuel cost could adversely affect our business and reduce our operating margins and reported earnings. To manage a portion of this risk, in the fourth quarter of 2008, we entered into multiple commodity swap agreements related to forecasted diesel fuel purchases as well as multiple fixed-price fuel purchase contracts. During periods of falling diesel fuel prices, such as the recent drop in fuel prices, our hedge payable positions may increase and it may become more expensive to purchase fuel under our fixed-price fuel purchase contracts than at market prices.

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

Our continued success will depend on our ability to attract and retain qualified personnel. We compete with other businesses in our markets for qualified employees. From time to time, the labor supply is tight in some of our markets. A shortage of qualified employees would require us to enhance our wage and benefits packages to compete more effectively for employees, to hire more expensive temporary employees or to contract for services with more expensive third-party vendors. Labor is one of our highest costs and relatively small increases in labor costs per employee could materially affect our cost structure. If we fail to attract and retain qualified employees, control our labor costs during periods of declining volumes, or recover any increased labor costs through increased prices we charge for our services or otherwise offset such increases with cost savings in other areas, our operating margins could suffer. Disposal and related transportation costs are our second highest cost category. If we incur increased disposal and related transportation costs to dispose of solid waste, and if, in either case, we are unable to pass these costs on to our customers, our operating results would suffer.

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

We participate in various “multiemployer” pension plans administered by employee and union trustees. We make periodic contributions to these plans to allow them to meet their pension benefit obligations to their participants. In the event that we withdraw from participation in one of these plans, then applicable law could require us to make an additional lump-sum contribution to the plan, and we would have to reflect that as an expense in our consolidated statement of operations and as a liability on our consolidated balance sheet. Our withdrawal liability for any multiemployer plan would depend on the extent of the plan’s funding of vested benefits. In the ordinary course of our renegotiation of collective bargaining agreements with labor unions that participate in these plans, we may decide to discontinue participation in a plan, and in that event, we could face a withdrawal liability. Some multiemployer plans in which we participate may have significant underfunded liabilities because of the general economic downturn in the fourth quarter of 2008. Such underfunding could increase the size of our potential withdrawal liability.

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

From time to time, labor unions attempt to organize our employees. Some groups of our employees are represented by unions, and we have negotiated collective bargaining agreements with most of these groups. We are currently engaged in negotiations with other groups of employees represented by unions. Additional groups of employees may seek union representation in the future. Negotiating collective bargaining agreements with these groups could divert management attention and adversely affect operating results. If we are unable to negotiate acceptable collective bargaining agreements, we might have to wait through “cooling off” periods, which are often followed by union-initiated work stoppages, including strikes. Additionally, it is expected that the Employee Free Choice Act will be reintroduced in the new Congress. If reintroduced and enacted in its most recent form, the Employee Free Choice Act would: (1) allow unions to become the representative of previously unrepresented employees by getting so-called “authorization cards” signed by a majority of the employees involved, without requiring the union to go through a secret ballot election; (2) require binding arbitration upon an employer and the union if they were unable to negotiate a first contract within specified timelines; and (3) impose new penalties on employers who violate provisions of the Act. Furthermore, any significant work stoppage or slowdown at ports or by railroad workers could reduce or interrupt the flow of cargo containers through our intermodal facilities. Depending on the type and duration of any labor disruptions, our operating expenses could increase significantly, which could adversely affect our financial condition, results of operations and cash flows.

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

We maintain insurance policies for automobile, general, employer’s, environmental and directors and officers’ liability as well as for employee group health insurance, property insurance and workers’ compensation. We are effectively self-insured for automobile liability, property, general liability, workers’ compensation, employer’s liability and employee group health insurance by carrying high dollar per incident deductibles. We carry umbrella policies for certain types of claims to provide excess coverage over the underlying policies and per incident deductibles. The increased amounts that we self-insure could cause significant volatility in our operating margins and reported earnings based on the occurrence and claim costs of incidents, accidents and injuries. Our insurance accruals are based on claims filed and estimates of claims incurred but not reported and are developed by our management with assistance from our third-party actuary and our third-party claims administrator. To the extent these estimates are inaccurate, we may recognize substantial additional expenses in future periods that would reduce operating margins and reported earnings. From time to time, actions filed against us include claims for punitive damages, which are generally excluded from coverage under all of our liability insurance policies. A punitive damage award could have an adverse effect on our reported earnings in the period in which it occurs. Significant increases in premiums on insurance that we retain also could reduce our margins.

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

Most of our growth since our inception has been through acquisitions. Although we have identified numerous acquisition candidates that we believe are suitable, we may not be able to acquire them at prices or on terms and conditions favorable to us.

Other companies have adopted or may in the future adopt our strategy of acquiring and consolidating regional and local businesses. We expect that increased consolidation in the solid waste services industry will continue to reduce the number of attractive acquisition candidates. Moreover, general economic conditions and the environment for attractive investments may affect the desire of the owners of acquisition candidates to sell their companies. As a result, fewer acquisition opportunities may become available to us, which could cause us to reduce our rate of growth from acquisitions or make acquisitions on less attractive terms than we have in the past, such as at higher purchase prices.

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Additionally, given the continued credit crisis and related turmoil in the global financial system, our ability to access the capital markets may be severely restricted at a time when we would like, or need, to do so. While we expect we will be able to fund some of our acquisitions with our existing resources, additional financing to pursue additional acquisitions may be required. However, if current market conditions continue to persist, or deteriorate further, we may be unable to secure additional financing or any such additional financing may be available to us on unfavorable terms, which could have an impact on our flexibility to pursue additional acquisition opportunities and maintain our desired level of revenue growth in the future. In addition, disruptions in the capital and credit markets, as were experienced during 2008, could adversely affect our ability to draw on our credit facility. Our access to funds under the credit facility is dependent on the ability of the banks that are parties to the facility to meet their funding commitments. Those banks may not be able to meet their funding commitments if they experience shortages of capital and liquidity or if they experience excessive volumes of borrowing requests within a short period of time.

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

As of December 31, 2008, we had $835.5 million of total indebtedness outstanding. We may incur substantial additional debt in the future. The incurrence of substantial additional indebtedness could have important consequences to you. For example, it could:

● increase our vulnerability to general adverse economic and industry conditions;

● limit our ability to obtain additional financing or refinancings at attractive rates;

● require the dedication of a substantial portion of our cash flow from operations to the payment of principal of, and interest on, our indebtedness, thereby reducing the availability of such cash flow to fund our growth strategy, working capital, capital expenditures and other general corporate purposes;

● limit our flexibility in planning for, or reacting to, changes in our business and the industry; and

● place us at a competitive disadvantage relative to our competitors with less debt.

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

It is possible that the corporate entities or sites we have acquired, or which we may acquire in the future, have liabilities in respect of former or existing operations or properties, or otherwise, which we have not been able to identify and assess through our due diligence investigations. As a successor owner, we may be legally responsible for those liabilities that arise from businesses that we acquire. Even if we obtain legally enforceable representations, warranties and indemnities from the sellers of such businesses, they may not cover the liabilities fully or the sellers may not have sufficient funds to perform their obligations. Some environmental liabilities, even if we do not expressly assume them, may be imposed on us under various regulatory schemes and other applicable laws. In addition, our insurance program may not cover such sites and will not cover liabilities associated with some environmental issues that may exist prior to attachment of coverage. A successful uninsured claim against us could harm our financial condition or operating results.

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

We may be liable for any environmental damage that our current or former facilities cause, including damage to neighboring landowners or residents, particularly as a result of the contamination of soil, groundwater or surface water, and especially drinking water, or to natural resources. We may be liable for damage resulting from conditions existing before we acquired these facilities. We may also be liable for any on-site environmental contamination caused by pollutants or hazardous substances whose transportation, treatment or disposal we or our predecessors arranged or conducted. If we were to incur liability for environmental damage, environmental cleanups, corrective action or damage not covered by insurance or in excess of the amount of our coverage, our financial condition or operating results could be materially adversely affected.

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

We are required to pay capping, closure and post-closure maintenance costs for landfill sites that we own or operate. Our obligations to pay closure or post-closure costs may exceed the amount we have accrued and reserved and other amounts available from funds or reserves established to pay such costs. In addition, the completion or closure of a landfill site does not end our environmental obligations. After completion or closure of a landfill site there exists the potential for unforeseen environmental problems to occur that could result in substantial remediation costs. Paying additional amounts for closure or post-closure costs and/or for environmental remediation could harm our financial condition or operating results.

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

Governmental agencies may, among other things, impose fines or penalties on us relating to the conduct of our business, attempt to revoke or deny renewal of our operating permits, franchises or licenses for violations or alleged violations of environmental laws or regulations, require us to install additional pollution control equipment or require us to remediate potential environmental problems relating to any real property that we or our predecessors ever owned, leased or operated or any waste that we or our predecessors ever collected, transported, disposed of or stored. Individuals or citizens groups may also bring actions against us in connection with our operations. Any adverse outcome in such proceedings could harm our operations and financial results and create negative publicity, which could damage our reputation, competitive position and stock price.

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

As a result of the disruptions in the financial markets and other macro-economic challenges currently affecting the economy of the United States and other parts of the world, our customers may experience cash flow concerns. As a result, if customers’ operating and financial performance deteriorates, or if they are unable to make scheduled payments or obtain credit, customers may not be able to pay, or may delay payment of, accounts receivable owed to us. Any inability of current and/or potential customers to pay us for services may adversely affect our financial condition, results of operations and cash flows.

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

Our success depends significantly on the continued individual and collective contributions of our senior, regional and district management team. Key members of our management have entered into employment agreements, but we may not be able to enforce these agreements. The loss of the services of any member of our senior, regional or district management or the inability to hire and retain experienced management personnel could harm our operating results.

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

We manage our operations on a decentralized basis. Local managers have the authority to make many decisions concerning their operations without obtaining prior approval from executive officers, subject to compliance with general company-wide policies. Poor decisions by local managers could result in the loss of customers or increases in costs, in either case adversely affecting operating results.

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.

We depend on two major railroads for the intermodal services we provide – the Burlington Northern Santa Fe and Union Pacific. Consequently, a reduction in, or elimination of, rail service to a particular market is likely to adversely affect our ability to provide intermodal transportation services to some of our customers. In addition, the railroads are relatively free to adjust shipping rates up or down as market conditions permit when existing contracts expire. Rate increases would result in higher intermodal transportation costs, reducing the attractiveness of intermodal transportation compared to solely trucking or other transportation modes, which could cause a decrease in demand for our services. Our business could also be adversely affected by harsh weather conditions or other factors that hinder the railroads’ ability to provide reliable transportation services.

We may incur additional charges related to capitalized expenditures, which would decrease our earnings.

In accordance with U.S. generally accepted accounting principles, we capitalize some expenditures and advances relating to landfill development projects. We expense indirect costs such as executive salaries, general corporate overhead and other corporate services as we incur those costs. We charge against earnings any unamortized capitalized expenditures and advances (net of any amount that we estimate we will recover, through sale or otherwise) that relate to any operation that is permanently shut down or determined to be impaired and any landfill development project that we do not expect to complete. Any such charges against earnings could decrease our stock price.

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

In preparing our consolidated financial statements in accordance with U.S. generally accepted accounting principles, several estimates and assumptions are made that affect the accounting for and recognition of assets, liabilities, revenues and expenses. These estimates and assumptions must be made because certain information that is used in the preparation of our financial statements is dependent on future events, cannot be calculated with a high degree of precision from data available or is not capable of being readily calculated based on generally accepted methodologies. In some cases, these estimates are particularly difficult to determine and we must exercise significant judgment. The estimates and the assumptions having the greatest amount of uncertainty, subjectivity and complexity are related to our accounting for landfills, self-insurance, intangibles, allocation of acquisition purchase price, income taxes, asset impairments and litigation, claims and assessments. Actual results for all estimates could differ materially from the estimates and assumptions that we use, which could have an adverse effect on our financial condition and results of operations.

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

Our implementation of and compliance with changes in accounting rules and interpretations could adversely affect our operating results or cause unanticipated fluctuations in our results in future periods. The accounting rules and regulations that we must comply with are complex and continually changing. Recent actions and public comments from the SEC have focused on the integrity of financial reporting generally. The Financial Accounting Standards Board, or FASB, has recently introduced several new or proposed accounting standards, or is developing new proposed standards, which would represent a significant change from current industry practices. For example, Statement of Financial Accounting Standards No. 141 (revised 2007), Business Combinations, which became effective for us on January 1, 2009, changes how the purchase price is calculated and fair values are determined in connection with an acquisition and also requires acquisition-related transaction and restructuring costs to be expensed rather than treated as part of the cost of the acquisition. Another example, FASB Staff Position No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement), which became effective for us on January 1, 2009, changes the accounting for convertible debt and requires the liability and equity components to be accounted for separately in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. In addition, many companies’ accounting policies are being subjected to heightened scrutiny by regulators and the public. While we believe that our financial statements have been prepared in accordance with U.S. generally accepted accounting principles, we cannot predict the impact of future changes to accounting principles or our accounting policies on our financial statements going forward.

Risks Related to Our Industry

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

We currently own and/or operate a number of landfills. Our ability to meet our financial and operating objectives may depend in part on our ability to renew landfill operating permits, acquire, lease and expand existing landfills and develop new landfill sites. It has become increasingly difficult and expensive to obtain required permits and approvals to build, operate and expand solid waste management facilities, including landfills and transfer stations. Operating permits for landfills in states where we operate must generally be renewed every five to ten years, although some permits are required to be renewed more frequently. These operating permits often must be renewed several times during the permitted life of a landfill. The permit and approval process is often time consuming, requires numerous hearings and compliance with zoning, environmental and other requirements, is frequently challenged by citizens, public interest and other groups, and may result in the denial of a permit or renewal, the award of a permit or renewal for a shorter duration than we believed was otherwise required by law, or burdensome terms and conditions being imposed on our operations. We may not be able to obtain new landfill sites or expand the permitted capacity of our landfills when necessary. Obtaining new landfill sites is important to our expansion into new, non-exclusive markets. If we do not believe that we can obtain a landfill site in a non-exclusive market, we may choose not to enter that market. Expanding existing landfill sites is important in those markets where the remaining lives of our landfills are relatively short. We may choose to forego acquisitions and internal growth in these markets because increased volumes would further shorten the lives of these landfills. Any of these circumstances could adversely affect our operating results.

Future changes in laws regulating the flow of solid waste in interstate commerce could adversely affect our operating results.

The U.S. Supreme Court has held that states may not regulate the flow of solid waste in interstate commerce if the effect would be to discriminate between interstate and intrastate commerce with respect to private facilities. In 2007, the U.S. Supreme Court upheld a flow control scheme directing waste to be processed at a municipally owned transfer station. If one or more of the municipalities or states in which we dispose of interstate waste takes action that would prohibit or increase the costs of our continued disposal of interstate waste, our operating results could be adversely affected.

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

We provide recycling services to some of our customers. The majority of the recyclables we process for sale are paper products that are shipped to customers in Asia. The sale prices of and demands for recyclable commodities, particularly paper products, are frequently volatile and when they decline, as they did beginning in the fourth quarter of 2008, our revenues, operating results and cash flows will be affected. Our recycling operations offer rebates to suppliers, based on the market prices of commodities we buy to process for resale. Therefore, if we recognize increased revenues resulting from higher prices for recyclable commodities, the rebates we pay to suppliers will also increase, which also may impact our operating results.

Extensive and evolving environmental and health and safety laws and regulations may restrict our operations and growth and increase our costs.

Existing environmental laws and regulations have become more stringently enforced in recent years because of greater public interest in protecting the environment. In addition, our industry is subject to regular enactment of new or amended federal, state and local environmental and health and safety statutes, regulations and ballot initiatives, such as those regulating GHG emissions, as well as judicial decisions interpreting these requirements. These requirements impose substantial capital and operating costs and operational limitations on us and may adversely affect our business. In addition, federal, state and local governments may change the rights they grant to, and the restrictions they impose on, solid waste services companies, and those changes could restrict our operations and growth.

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

Regulations that govern landfill design, operation, closure and financial assurances include the regulations that establish minimum federal requirements adopted by the EPA in October 1991 under Subtitle D of RCRA. If we fail to comply with these regulations or their state counterparts, we could be required to undertake investigatory or remedial activities, curtail operations or close landfills temporarily or permanently. Future changes to these regulations may require us to modify, supplement or replace equipment or facilities at substantial costs. If regulatory agencies fail to enforce these regulations vigorously or consistently, our competitors whose facilities are not forced to comply with the Subtitle D regulations or their state counterparts may obtain an advantage over us. Our financial obligations arising from any failure to comply with these regulations could harm our business and operating results.

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

Our operations could be adversely affected, beyond the normal seasonal variations described above, by unusually long periods of inclement weather, which could interfere with collection, landfill and intermodal operations, reduce the volume of waste generated by our customers, delay the development of landfill capacity, and increase the costs we incur in connection with the construction of landfills and other facilities. Periods of particularly harsh weather may force us to temporarily suspend some of our operations.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

As of December 31, 2008, we owned 135 collection operations, 39 transfer stations, 25 municipal solid waste landfills, two construction and demolition landfills, 34 recycling operations, and fiveintermodal operations and operated, but did not own, an additional 13transfer stations, tenmunicipal solid waste landfills and one intermodal operation. We lease certain of the sites on which these facilities are located. We lease various office facilities, including our corporate offices in Folsom, California, where we occupy approximately 31,000 square feet of space. We have signed a lease for new corporate offices of approximately 54,000 square feet in Folsom, California, which we expect to occupy in February 2009. We own various equipment, including waste collection and transportation vehicles, related support vehicles, double-stack rail cars, carts, containers, chassis and heavy equipment used in landfill and intermodal operations. We believe that our existing facilities and equipment are adequate for our current operations. However, we expect to make additional investments in property and equipment for expansion and replacement of assets in connection with future acquisitions.

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ITEM 3. LEGAL PROCEEDINGS

Our 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 postpone the hearing until November 2009 at the earliest to allow us time to explore a possible relocation of the landfill. At December 31, 2008, we had $9.9 million of capitalized expenditures related to this landfill development project. If we are not ultimately issued a permit to operate the landfill, we will be required to expense in a future period the $9.9 million of capitalized expenditures, less the recoverable value of the undeveloped property and other amounts recovered, which would likely have a material adverse effect on our results of operations for that period.

We opened a municipal solid waste landfill in Harper County, Kansas in January 2006, following the issuance by the Kansas Department of Health and Environment (“KDHE”) of a final permit to operate the landfill. The landfill has operated continuously since that time. On October 3, 2005, landfill opponents filed a suit (Board of Comm’rs of Sumner County, Kansas, Tri-County Concerned Citizens and Dalton Holland v. Roderick Bremby, Sec’y of the Kansas Dep’t of Health and Env’t, et al.) in the District Court of Shawnee County, Kansas, seeking a judicial review of KDHE’s decision to issue the permit, alleging that a site analysis prepared for us 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 lacked standing to bring the action. The plaintiffs appealed this decision to the Kansas Court of Appeals, and on October 12, 2007, the Court of Appeals issued an opinion reversing and remanding the District Court’s decision. We appealed the decision to the Kansas Supreme Court, and on July 25, 2008, the Supreme Court affirmed the decision of the Court of Appeals and remanded the case to the District Court for further proceedings on the merits. Plaintiffs filed a second amended petition on October 22, 2008, and we filed a motion to strike various allegations contained within the second amended petition. The motion to strike was heard before the District Court on January 26, 2009, and the Court took the matter under submission. The outcome of the issues raised in the motion will impact the scope of briefing on the ultimate issue before the District Court. It is anticipated that the briefing will be completed during the 2009 calendar year. While we believe that we will prevail in this case, the District Court could remand the matter back to KDHE for additional review of its decision or could revoke the permit. An order of remand to KDHE would not necessarily affect our continued operation of the landfill. Only in the event that a final adverse determination with respect to the permit is received would there likely be a material adverse effect on our reported income in the future. We 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 our directors and officers as defendants, and naming us 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 historical stock option grants. The consolidated complaint names as defendants certain of our current and former directors and officers, and names us as a nominal defendant. On June 22, 2007, we and the individual defendants filed motions to dismiss the consolidated action. On March 19, 2008, the Court granted our 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.

On October 30, 2006, we were served with another purported shareholder derivative complaint, naming certain of our current and former directors and officers as defendants, and naming us 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 consolidated and captioned In re Waste Connections, Inc. Shareholder Derivative Litigation and stayed pending the outcome of the consolidated federal action.

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In July 2008, the parties reached a preliminary agreement to settle all of these derivative actions, and in August 2008 the consolidated federal action was stayed as a result of the preliminary agreement. Under the terms of the preliminary agreement, we agreed to reaffirm and/or implement certain corporate governance measures and our insurance carrier agreed to pay not more than $3 million to plaintiffs’ counsel to cover plaintiffs’ counsel’s fees and costs, which are subject to court approval. The defendants expressly deny any wrongdoing and will receive a complete release of all claims. The preliminary agreement is subject to standard conditions, including final court approval. There can be no assurance that final court approval will be obtained.

In 2006, we completed a review of our historical stock option granting practices, including all option grants since our initial public offering in May 1998, and reported the results of the review to the Audit Committee of our 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 our current and historical financial statements, and the Audit Committee concluded that no further action was necessary. As with any litigation proceeding, we cannot predict with certainty the eventual outcome of the pending federal and state derivative litigation, nor can we estimate the amount of any losses that might result.

On January 15, 2009, a purported class action complaint captioned Heath Belcher and Denessa Arguello v. Waste Connections, Inc., and Waste Connections of California, Inc. was filed in the United States District Court for the Eastern District of California, naming us and our subsidiary, Waste Connections of California, Inc., as defendants. The complaint alleges violations under the Fair Labor Standards Act related to overtime compensation, and alleges violations under California labor laws related to overtime compensation, unpaid wages, meal and rest breaks, and wage statements. The complaint also alleges violations under the California Unfair Competition Law based on the foregoing alleged violations. The complaint seeks class certification and various forms of relief, including declaratory judgment, statutory penalties, unpaid back wages, liquidated damages, restitution, interest, and attorneys’ fees and costs. We intend to vigorously defend this matter. As with any litigation proceeding, we cannot predict with certainty the eventual outcome of this matter, nor can we estimate the amount of any losses that might result.

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, as of December 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.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of security holders during the fourth quarter of 2008.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is listed on the New York Stock Exchange under the symbol “WCN.” The following table sets forth, for the periods indicated, the high and low prices per share of our common stock, as reported on the New York Stock Exchange. Prices have been adjusted to reflect our three-for-two stock split, in the form of a 50% stock dividend, effective as of March 13, 2007.

	HIGH		LOW
2007
First Quarter	$	31.72	$	27.18
Second Quarter		32.25		29.50
Third Quarter		33.33		29.05
Fourth Quarter		34.17		29.10
2008
First Quarter	$	31.77	$	28.05
Second Quarter		34.93		29.99
Third Quarter		40.74		30.31
Fourth Quarter		36.64		26.54
2009
First Quarter (through January 23, 2009)	$	31.77	$	25.97

As of January 23, 2009, there were 84record holders of our common stock.

We have never paid cash dividends on our common stock and do not currently anticipate paying any cash dividends on our common stock. We have the ability under our senior revolving credit facility to repurchase our common stock and pay dividends subject to us maintaining specified financial ratios.

Performance Graph

The following performance graph compares the total cumulative stockholder returns on our common stock over the past five fiscal years with the total cumulative returns for the S&P 500 Index and a peer group index selected by us. The graph assumes an investment of $100 in our common stock on December 31, 2003, and the reinvestment of all dividends (we have not paid any dividends during the period indicated). This chart has been calculated in compliance with SEC requirements and prepared by Standard & Poor’s Compustat®.

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Comparison of Cumulative Five Year Total Return

This graph and the accompanying text is not “soliciting material,” is not deemed filed with the SEC, and is not to be incorporated by reference in any filing by us under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

Market prices and dividends have been adjusted to give retroactive effect to our three-for-two stock split, effective as of June 24, 2004, and our three-for-two stock split, effective as of March 13, 2007.

	Base Period Dec03		Indexed Returns Years Ending
Company Name / Index			Dec04		Dec05		Dec06		Dec07		Dec08
Waste Connections, Inc.		100	$	136.02	$	136.85	$	165.01	$	184.07	$	188.07
S&P 500 Index		100	$	110.88	$	116.33	$	134.70	$	142.10	$	89.53
Peer Group*		100	$	109.24	$	115.84	$	139.53	$	135.31	$	132.11

*Peer Group Companies: Casella Waste Systems, Inc.; Republic Services, Inc.; Waste Management, Inc. The companies comprising our peer group in this Annual Report on Form 10-K for the year ended December 31, 2008, did not include Allied Waste Industries, Inc. and Waste Industries USA, Inc., which were both included in our peer group in our Annual Report on Form 10-K for the year ended December 31, 2007, because both companies ceased to be publicly traded companies in 2008. Allied Waste Industries, Inc. ceased to be a publicly traded company when it merged with Republic Services, Inc. in December 2008, and Waste Industries USA, Inc. ceased to be a publicly traded company when it went private in May 2008.

THE STOCK PRICE PERFORMANCE INCLUDED IN THIS GRAPH IS NOT NECESSARILY INDICATIVE OF FUTURE STOCK PRICE PERFORMANCE.

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ITEM 6. SELECTED FINANCIAL DATA

This table sets forth our selected financial data for the periods indicated. This data should be read in conjunction with, and is qualified by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 of this Annual Report on Form 10-K and our audited consolidated financial statements, including the related notes and our independent registered public accounting firm’s report and the other financial information included in Item 8 of this Annual Report on Form 10-K. The selected data in this section is not intended to replace the consolidated financial statements included in this report.

	YEARS ENDED DECEMBER 31,
	2004			2005			2006 (a)			2007 (a)			2008(a)
	(in thousands, except share and per share data)
STATEMENT OF OPERATIONS DATA:
Revenues	$	624,544		$	721,899		$	824,354		$	958,541		$	1,049,603
Operating expenses:
Cost of operations		354,901			416,883			492,766			566,089			628,075
Selling, general and administrative		61,223			72,395			84,541			99,565			111,114
Depreciation and amortization		54,630			64,788			74,865			85,628			97,429
Loss (gain) on disposal of assets		2,120			(216	)		796			250			629
Operating income		151,670			168,049			171,386			207,009			212,356
Interest expense		(22,039	)		(23,966	)		(30,110	)		(35,023	)		(38,824	)
Interest income		315			477			1,140			1,593			3,297
Other income (expense), net		(2,817	)		450			(3,759	)		289			(633	)
Income before income tax provision and minority interests		127,129			145,010			138,657			173,868			176,196
Minority interests		(11,520	)		(12,422	)		(12,905	)		(14,870	)		(12,240	)
Income from continuing operations before income taxes		115,609			132,588			125,752			158,998			163,956
Income tax provision		(42,251	)		(48,066	)		(48,329	)		(59,917	)		(58,400	)
Income from continuing operations		73,358			84,522			77,423			99,081			105,556
Loss on discontinued operations, net of tax		(1,087	)		(579	)		—			—			—
Net income	$	72,271		$	83,943		$	77,423		$	99,081		$	105,556
Basic earnings per common share:
Income from continuing operations	$	1.05		$	1.21		$	1.14		$	1.45		$	1.51
Discontinued operations		(0.02	)		(0.01	)		—			—			—
Net income per common share	$	1.03		$	1.20		$	1.14		$	1.45		$	1.51
Diluted earnings per common share:
Income from continuing operations	$	1.02		$	1.17		$	1.10		$	1.42		$	1.48
Discontinued operations		(0.02	)		(0.01	)		—			—			—
Net income per common share	$	1.00		$	1.16		$	1.10		$	1.42		$	1.48
Shares used in calculating basic income per share (b)		69,872,162			70,050,974			68,136,126			68,238,523			70,024,874
Shares used in calculating diluted income per share (b)		74,205,326			72,316,952			70,408,673			69,994,713			71,419,712

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	YEARS ENDED DECEMBER 31,
	2004			2005			2006 (a)		2007 (a)			2008(a)
	(in thousands, except share and per share data)
BALANCE SHEET DATA:
Cash and equivalents	$	3,610		$	7,514		$	34,949	$	10,298		$	265,264
Working capital (deficit)		(12,824	)		(25,625	)		10,368		(24,849	)		213,747
Property and equipment, net		640,730			700,508			736,428		865,330			984,124
Total assets		1,491,483			1,676,307			1,773,891		1,981,958			2,600,640
Long-term debt		489,343			586,104			637,308		719,518			830,758
Total stockholders’ equity		707,522			718,200			736,482		775,145			1,254,727

(a)	For more information regarding this financial data, see the Management’s Discussion and Analysis of Financial Condition and Results of Operations section included in this report. For disclosures associated with the impact of the adoption of new accounting pronouncements and the comparability of this information, see Note 1 of the consolidated financial statements.
(b)	Shares have been adjusted to reflect our three-for-two stock split, paid as a 50% stock dividend, effective as of June 24, 2004, and our three-for-two stock split, paid as a 50% stock dividend, effective as of March 13, 2007.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the “Selected Financial Data,” our consolidated financial statements and the related notes included elsewhere in this report.

Industry 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.

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.

Executive Overview

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 and solid waste containers in the Pacific Northwest through a network of 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.

Operating Results

Revenue in 2008 grew 9.5% as internal growth from operations owned at least 12 months was 3.0%, and acquisitions contributed an additional 6.5% growth in revenue. As shown in the table below, internal growth decreased from 10.4% in 2007, to 3.0% in 2008.

	2007			2008
Price		4.7	%		5.6	%
Volume		4.0	%		(1.9	% )
Intermodal, Recycling and Other		1.7	%		(0.7	% )
Internal Growth		10.4	%		3.0	%

In 2008, the pricing component of our internal growth increased to 5.6% as a result of broad-based pricing initiatives to offset or recover significant cost increases, primarily in fuel and related items. Volume growth was a negative 1.9% for the full year, but volume declines accelerated throughout 2008 as the economic recession worsened. Volume losses for the year peaked in the fourth quarter at 5.8%. Recycling, intermodal and other negatively impacted internal growth by approximately 0.7% in 2008 primarily due to a significant drop in recycled commodity prices during the fourth quarter.

Operating margins decreased from 21.6% in 2007, to 20.2% in 2008. This 1.4 percentage point decrease was primarily attributable to higher fuel prices, which increased fuel costs as a percentage of revenue by approximately 2 percentage points, partially offset by a reduction in insurance expense. We remain intensely focused on reducing our cost structure and controlling capital expenditures given the continuing deterioration in the overall economy.

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Free Cash Flow

Net cash provided by operating activities increased 23.4% to $270.4 million in 2008 from $219.1 million in 2007. Free cash flow, a non-GAAP financial measure (refer to page 42 of this report for a definition and reconciliation of free cash flow), increased 44.2% to $153.2 million in 2008, from $106.2 million in 2007. Free cash flow increased as a percentage of revenue to 14.6% in 2008, from 11.1% in 2007, primarily due to increased earnings, improved accounts receivable turnover, a decrease in tax payments, and a reduction in capital expenditures in light of volume losses due to the weakening economy. We believe our growth in free cash flow reflects the resiliency of our strategy during difficult economic times.

Capital Position

Despite the significant deterioration in the credit and equity markets during 2008, we were able to expand our credit facility by $45.0 million, issue $175.0 million of new senior notes, and complete a common stock offering raising approximately $393.9 million in net proceeds. The successful execution of our financing plan in 2008 positioned us with a strong balance sheet with over $625 million of available capital at year end 2008 to fund additional growth opportunities.  On February 6, 2009, we and some of our subsidiaries entered into an Asset Purchase Agreement with Republic Services, Inc. and some of its subsidiaries and other affiliates (“sellers”) pursuant to which we agreed to purchase from the sellers assets principally used by the sellers in connection with their solid waste collection and disposal business.  The purchase price for the assets is approximately $313.2 million, subject to pre- and post-closing pro-rations and other adjustments.  We anticipate paying for the transaction with available cash and equivalents, together with borrowings on our senior revolving credit facility.  For additional information, see Part II, Item 9B of this Annual Report on Form 10-K.

We maintain a targeted leverage ratio, as defined in our credit facility, between 2.5x and 2.75x of total debt to earnings before interest, taxes, depreciation and amortization, or EBITDA. We deployed $355.2 million during 2008 for acquisitions, $113.5 million for capital expenditures, and $31.5 million for common stock repurchases. As a result of our free cash flow and previously discussed financings and outlays, our leverage ratio remained below our targeted range at year-end 2008 while cash and equivalents increased $255.0 million over the prior year.

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. Based on this definition, we believe the following are our critical accounting estimates.

Insurance liabilities. We maintain insurance policies for automobile, general, employer’s, environmental and directors and officers’ liability as well as for employee group health insurance, property insurance and workers’ compensation. Our insurance accruals are based on claims filed and estimates of claims incurred but not reported and are developed by our management with assistance from our third-party actuary and third-party claims administrator. The insurance accruals are influenced by our past claims experience factors, which have a limited history, and by published industry development factors. If we experience insurance claims or costs above or below our historically evaluated levels, our estimates could be materially affected. The frequency and amount of claims or incidents could vary significantly over time, which could materially affect our self-insurance liabilities. Additionally, the actual costs to settle the self-insurance liabilities could materially differ from the original estimates and cause us to incur additional costs in future periods associated with prior year claims.

Income taxes. We use the liability method to account for income taxes. Accordingly, deferred tax assets and liabilities are determined based on differences between financial reporting and income tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. If our judgment and estimates concerning assumptions made in calculating our expected future income tax rates are incorrect, our deferred tax assets and liabilities would change. Based on our net deferred tax liability balance at December 31, 2008, each 0.1 percentage point change to our expected future income tax rate would change our net deferred tax liability balance and income tax expense by approximately $0.6 million.

Effective January 2007, we adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109, or FIN 48. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS No. 109, Accounting for Income Taxes. FIN 48 requires a company to evaluate whether the tax position taken by a company will more likely than not be sustained upon examination by the appropriate taxing authority. It also provides guidance on how a company should measure the amount of benefit that the company is to recognize in its financial statements. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Our reassessment of our tax positions in accordance with FIN 48 did not have a material impact on our results of operations, financial condition or liquidity. For additional information regarding FIN 48, see Note 13, Income Taxes, of the Notes to Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K.

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Accounting for landfills. We recognize landfill depletion expense as airspace of a landfill is consumed. Our landfill depletion rates are based on the remaining disposal capacity at our landfills, considering both permitted and expansion airspace. Landfill final capping, closure and post-closure liabilities are calculated by estimating the total obligation in current dollars, inflating the obligation based upon the expected date of the expenditure and discounting the inflated total to its present value using a credit-adjusted, risk-free rate. The resulting final capping, closure and post-closure obligation is recorded on the balance sheet as an addition to site costs and amortized as depletion expense as the landfill’s total airspace is consumed. The accounting methods discussed below require us to make certain estimates and assumptions. Changes to these estimates and assumptions could have a material effect on our financial condition and results of operations. Any changes to our estimates are applied prospectively.

Landfill development costs. Landfill development costs include the costs of acquisition, construction associated with excavation, liners, site berms, groundwater monitoring wells and leachate collection systems. We estimate the total costs associated with developing each landfill site to its final capacity. Total landfill costs include the development costs associated with expansion airspace. Expansion airspace is described below. Landfill development costs depend on future events and thus actual costs could vary significantly from our estimates. Material differences between estimated and actual development costs may affect our cash flows by increasing our capital expenditures and thus affect our results of operations by increasing our landfill depletion expense.

Final capping, closure and post-closure obligations. We accrue for estimated final capping, closure and post-closure maintenance obligations at the landfills we own, and the landfills that we operate, but do not own, under life-of-site agreements. We could have additional material financial obligations relating to final capping, closure and post-closure costs at other disposal facilities that we currently own or operate or that we may own or operate in the future. In 2008, we calculated the net present value of our final capping, closure and post closure commitments 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 as depletion expense as the landfill’s total airspace is consumed. Significant reductions in our estimates of the remaining lives of our landfills or significant increases in our estimates of the landfill final capping, closure and post-closure maintenance costs could have a material adverse effect on our financial condition and results of operations. Additionally, changes in regulatory or legislative requirements could increase our costs related to our landfills, resulting in a material adverse effect on our financial condition and results of operations.

We own two landfills for which the prior owners are obligated to reimburse us for certain costs we incur for final capping, closure and post-closure activities on the portion of the landfill utilized by the prior owners. We accrue the prior owner’s portion of the final capping, closure and post-closure obligation within the balance sheet classification of other long-term liabilities, and a corresponding receivable from the prior owner in long-term other assets.

Disposal capacity. Our internal and third-party engineers perform surveys at least annually to estimate the remaining disposal capacity at our landfills. Our landfill depletion rates are based on the remaining disposal capacity, considering both permitted and expansion airspace, at the landfills that we own and at the landfills that we operate, but do not own, under life-of-site agreements. Our landfill depletion rates are based on the term of the operating agreement at our operated landfills that have capitalized expenditures. Expansion airspace consists of additional disposal capacity being pursued through means of expansion but is not actually permitted. Expansion airspace that meets certain internal criteria is included in our estimate of total landfill airspace. The internal criteria we use to determine when expansion airspace may be included as disposal capacity are as follows:

1)	the land where the expansion is being sought is contiguous to the current disposal site, and we either own the expansion property or it is under an option, purchase, operating or other similar agreement;
2)	total development costs, final capping costs, and closure/post-closure costs have been determined;
3)	internal personnel have performed a financial analysis of the proposed expansion site and have determined that it has a positive financial and operational impact;
4)	internal personnel or external consultants are actively working to obtain the necessary approvals to obtain the landfill expansion permit; and
5)	we consider it probable that we will achieve the expansion (for a pursued expansion to be considered probable, there must be no significant known technical, legal, community, business or political restrictions or similar issues existing that could impair the success of the expansion).

We may be unsuccessful in obtaining permits for expansion disposal capacity at our landfills. In such cases, we will charge the previously capitalized development costs to expense. This will adversely affect our operating results and cash flows and could result in greater landfill depletion expense being recognized on a prospective basis.

We periodically evaluate our landfill sites for potential impairment indicators. Our judgments regarding the existence of impairment indicators are based on regulatory factors, market conditions and operational performance of our landfills. Future events could cause us to conclude that impairment indicators exist and that our landfill carrying costs are impaired. Any resulting impairment loss could have a material adverse effect on our financial condition and results of operations.

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Goodwill and indefinite-lived intangible testing. Goodwill and indefinite-lived intangibles are tested for impairment on at least an annual basis in the fourth quarter of the year. In the first step of testing for goodwill impairment, we estimate the fair value of each reporting unit, which we have determined to be our geographic operating segments, and compare the fair value with the carrying value of the net assets assigned to each reporting unit. If the fair value of a reporting unit is greater than the carrying value of the net assets assigned to the reporting unit, then no impairment results. If the fair value is less than its carrying value, then we would perform a second step and determine the fair value of the goodwill. In this second step, the fair value of goodwill is determined by deducting the fair value of a reporting unit’s identifiable assets and liabilities from the fair value of the reporting unit as a whole, as if that reporting unit had just been acquired and the purchase price were being initially allocated. If the fair value of the goodwill is less than its carrying value for a reporting unit, an impairment charge would be recorded to earnings in our Consolidated Statement of Income. In testing indefinite-lived intangibles for impairment, we compare the estimated fair value of each indefinite-lived intangible to its carrying value. If the fair value of the indefinite-lived intangible is less than its carrying value, an impairment charge would be recorded to earnings in our Consolidated Statement of Income.

To determine the fair value of each of our reporting units as a whole and each indefinite-lived intangible asset, we use discounted cash flow analyses, which require significant assumptions and estimates about the future operations of each reporting unit and the future discrete cash flows related to each indefinite-lived intangible asset. Significant judgments inherent in these analyses include the determination of appropriate discount rates, the amount and timing of expected future cash flows and growth rates. The cash flows employed in our 2008 discounted cash flow analyses were based on ten-year financial forecasts, which in turn were based on the 2009 annual budget developed internally by management. These forecasts reflect perpetual revenue growth rates of 5.0% and operating profit margins that were consistent with 2008 results. Our discount rate assumptions are based on an assessment of the Company’s weighted average cost of capital. In assessing the reasonableness of our determined fair values of our reporting units, we evaluate our results against our current market capitalization.

In addition, we would evaluate a reporting unit for impairment if events or circumstances change between annual tests indicating a possible impairment. Examples of such events or circumstances include the following:

● A significant adverse change in legal factors or in the business climate,

● An adverse action or assessment by a regulator,

● A more likely than not expectation that a segment or a significant portion thereof will be sold, or

● The testing for recoverability under Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, of a significant asset group within the segment.

We did not record an impairment charge as a result of our goodwill and indefinite-lived intangibles impairment test in 2008. However, there can be no assurance that goodwill and indefinite-lived intangibles will not be impaired at any time in the future.

Allocation of acquisition purchase price. We allocate acquisition purchase prices to 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.

From time to time, we consummate acquisitions in which we exchange operations we own for operations owned by another solid waste company. These exchange transactions require us to estimate the fair market value of either the operations we receive or the operations we dispose of, whichever is more clearly evident. To the extent that the fair market value of the operations we dispose of differs from the fair market value of the operations we obtain, cash is either paid or received to offset the difference in fair market values. One method we use to estimate the fair value of solid waste companies is based on a multiple of EBITDA. We determine the appropriate EBITDA multiple to be used in the valuation of exchange transactions based on factors such as the size of the transaction, the type and location of markets serviced, the existence of long-term contracts and the EBITDA multiples we have paid in other similar cash-based transactions.

Stock-based compensation. Effective January 2006, we adopted the provisions of SFAS 123(R), Share-Based Payment, for our share-based compensation plans. We previously accounted for these plans under the recognition and measurement principles of APB 25 and related interpretations and disclosure requirements established by SFAS 123, Accounting for Stock-Based Compensation. We adopted SFAS 123(R) using the modified prospective method. Under this method, all share-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the employee’s requisite service period. Prior periods are not restated.

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Consistent with prior years, we used the Black-Scholes option pricing model which requires extensive use of accounting judgment and financial estimation, including estimates of the expected term option holders will retain their vested stock options before exercising them, the estimated volatility of our common stock price over the expected term, and the number of options that will be forfeited prior to the completion of their vesting requirements. Application of alternative assumptions could produce significantly different estimates of the fair value of stock-based compensation and, consequently, the related amounts recognized for the year ended December 31, 2008, in the Consolidated Statements of Income within this report.

General

Our solid waste revenues consist mainly of fees we charge customers for collection, transfer, disposal and recycling services. Our collection business also generates revenues from the sale of recyclable commodities, which have significant variability. A large part of our collection revenues comes from providing residential, commercial and industrial services. We frequently perform these services under service agreements, municipal contracts or franchise agreements with governmental entities. Our existing franchise agreements and all of our existing municipal contracts give us the exclusive right to provide specified waste services in the specified territory during the contract term. These exclusive arrangements are awarded, at least initially, on a competitive bid basis and subsequently on a bid or negotiated basis. We also provide residential collection services on a subscription basis with individual households.

We charge transfer station and landfill customers a tipping fee on a per ton and/or per yard basis for disposing their solid waste at our transfer stations and landfill facilities. Many of our transfer station and landfill customers have entered into one to ten year disposal contracts with us, most of which provide for annual indexed price increases.

We typically determine the prices of our solid waste services by the collection frequency and level of service, route density, volume, weight and type of waste collected, type of equipment and containers furnished, the distance to the disposal or processing facility, the cost of disposal or processing and prices charged by competitors for similar services. The terms of our contracts sometimes limit our ability to pass on price increases. Long-term solid waste collection contracts often contain a formula, generally based on a published price index, that automatically adjusts fees to cover increases in some, but not all, operating costs, or that limit increases to less than 100% of the increase in the applicable price index.

Our revenues from intermodal services consist mainly of fees we charge customers for the movement of cargo containers between our intermodal facilities. We also generate revenue from the storage, maintenance and repair of cargo and solid waste containers and the sale or lease of containers and chassis.

The table below shows for the periods indicated our total reported revenues attributable to services provided in thousands and as percentages of revenues.

	Years Ended December 31,
	2006				2007				2008
Collection	$	602,762	64.2	%	$	693,675	63.8	%	$	787,713	66.4	%
Disposal and transfer		259,190	27.6			298,954	27.5			308,811	26.0
Recycling and other		77,202	8.2			95,212	8.7			89,594	7.6
Total	$	939,154	100.0	%	$	1,087,841	100.0	%	$	1,186,118	100.0	%
Intercompany elimination	$	114,800			$	129,300			$	136,515

Cost of operations includes labor and benefits, tipping fees paid to third-party disposal facilities, vehicle and equipment maintenance, workers’ compensation, vehicle and equipment insurance, insurance and employee group health claims expense, third-party transportation expense, fuel, the cost of materials we purchase for recycling, district and state taxes and host community fees and royalties. Our significant costs of operations in 2008 were labor, third-party disposal and transportation, cost of vehicle and equipment maintenance, taxes and fees, insurance and fuel. We use a number of programs to reduce overall cost of operations, including increasing the use of automated routes to reduce labor and workers’ compensation exposure, utilizing comprehensive maintenance and health and safety programs, and increasing the use of transfer stations to further enhance internalization rates. We carry high-deductible insurance for automobile liability, property, general liability, workers’ compensation, employer’s liability and employer group health claims. If we experience insurance claims or costs above or below our historically evaluated levels, our estimates could be materially affected.

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Selling, general and administrative, or SG&A, expenses include management, sales force, clerical and administrative employee compensation and benefits, legal, accounting and other professional services, bad debt expense and rent expense for our corporate headquarters.

Depreciation expense includes depreciation of equipment and fixed assets over their estimated useful lives using the straight-line method. Depletion expense includes depletion of landfill site costs and total future development costs as remaining airspace of the landfill is consumed. Remaining airspace at our landfills includes both permitted and expansion airspace. Amortization expense includes the amortization of definite-lived intangible assets, consisting primarily of long-term franchise agreements and contracts and non-competition agreements, over their estimated useful lives using the straight-line method. Goodwill and indefinite-lived intangible assets, consisting primarily of certain perpetual rights to provide solid waste collection and transportation services in specified territories, are not amortized.

We capitalize some third-party expenditures related to pending acquisitions or development projects, such as legal, engineering and interest expenses. We expense indirect acquisition costs, such as executive and corporate overhead, public relations and other corporate services, as we incur them. We charge against net income any unamortized capitalized expenditures and advances (net of any portion that we believe we may recover, through sale or otherwise) that may become impaired, such as those that relate to any operation that is permanently shut down and any pending acquisition or landfill development project that we believe will not be completed. We routinely evaluate all capitalized costs, and expense those related to projects that we believe are not likely to succeed. During the year ended December 31, 2008, we capitalized less than $0.1 million of interest related to landfill and facility development projects. At December 31, 2008, we had less than $0.1 million in capitalized expenditures relating to pending acquisitions.

At December 31, 2008, we had $9.9 million in capitalized expenditures for a landfill project in Chaparral, New Mexico, with respect to which we had obtained a permit to operate the landfill; on July 18, 2005, the Supreme Court of New Mexico ordered the New Mexico Environment Department to conduct an additional limited hearing to consider evidence that landfill opponents claim was wrongfully excluded. The parties have agreed to postpone the hearing until November 2009 at the earliest to allow us time to explore a possible relocation of the landfill. If we are not ultimately issued a permit to operate the landfill, we will be required to expense in a future period the capitalized expenditures for this project, less the recoverable value of the applicable property and any other amounts recovered, which would likely have a material adverse effect on our financial position and results of operations for that period.

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Results of Operations

          The following table sets forth items in our consolidated statement of operations in thousands and as a percentage of revenues for the periods indicated:

	Years Ended December 31,
	2006			As a % of 2006 Revenues			2007			As a % of 2007 Revenues			2008			As a % of 2008 Revenues
Revenues	$	824,354			100.0	%	$	958,541			100.0	%	$	1,049,603			100.0	%
Cost of operations		492,766			59.8			566,089			59.1			628,075			59.8
Selling, general and administrative		84,541			10.2			99,565			10.4			111,114			10.6
Depreciation and amortization		74,865			9.1			85,628			8.9			97,429			9.3
Loss on disposal of assets		796			0.1			250			—			629			0.1
Operating income		171,386			20.8			207,009			21.6			212,356			20.2
Interest expense		(30,110	)		(3.6	)		(35,023	)		(3.6	)		(38,824	)		(3.7	)
Interest income		1,140			0.1			1,593			0.1			3,297			0.4
Other income (expense), net		(3,759	)		(0.4	)		289			—			(633	)		(0.1	)
Minority interests		(12,905	)		(1.6	)		(14,870	)		(1.6	)		(12,240	)		(1.2	)
Income tax provision		(48,329	)		(5.9	)		(59,917	)		(6.2	)		(58,400	)		(5.5	)
Net income	$	77,423			9.4	%	$	99,081			10.3	%	$	105,556			10.1	%

Years Ended December 31, 2008 and 2007

          Revenues. Total revenues increased $91.1 million, or 9.5%, to $1.05 billion for the year ended December 31, 2008, from $958.5 million for the year ended December 31, 2007.

          Acquisitions closed during, or subsequent to, the year ended December 31, 2007, increased revenues by approximately $62.1 million.

          During the year ended December 31, 2008, increased prices and surcharges charged to our customers increased revenue by $53.6 million. For 2009, we currently estimate that between $50 million to $55 million of price increases charged to customers will be partially offset by an approximate $20 million decrease in surcharges primarily related to declining fuel costs.

          During the year ended December 31, 2008, revenues generated from a long-term contract that commenced in March 2007 resulted in a net revenue increase of approximately $3.9 million. Volume decreases in our existing business during the year ended December 31, 2008, reduced revenue by approximately $22.2 million. The net decrease in volume was primarily attributable to declines in roll off activity and landfill volumes for landfills owned in the comparable periods. During the first quarter of 2008, our volume growth, net of revenues generated from a long-term contract that commenced in March 2007, was $1.0 million. During the second, third and fourth quarters of 2008, our volume declined by $3.7 million, $5.3 million and $14.2 million, respectively, from the comparable periods in 2007. Our volume decline increased throughout 2008 as a result of the overall economic recession currently affecting the United States. We currently estimate that the economic recession will result in our 2009 volume declining between approximately 3% and 4% from 2008.

          Recyclable commodity revenue was $40.4 million for the year ended December 31, 2008. Reductions in recyclable commodity prices and volumes during the fourth quarter of 2008, partially offset by increased recyclable commodity prices and volume during the first nine months of 2008, reduced revenue by $3.3 million from 2007. During the first, second and third quarters of 2008, our recyclable commodity revenue increased $2.2 million, $1.5 million and $0.2 million, respectively, from the comparable periods in 2007. During the fourth quarter of 2008, our recyclable commodity revenue declined $7.2 million from the comparable period in 2007 due to a sharp decline in commodity pricing resulting from decreased overseas demand for recyclable commodities. We believe this reduction in overseas demand will continue throughout 2009, resulting in our 2009 recyclable commodity revenue declining between 40% and 50% from 2008.

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          Other revenues decreased by $3.1 million during the year ended December 31, 2008.

          Cost of Operations. Total cost of operations increased $62.0 million, or 10.9%, to $628.1 million for the year ended December 31, 2008, from $566.1 million for the year ended December 31, 2007. The increase was attributable to operating costs associated with acquisitions closed during, or subsequent to, the year ended December 31, 2007, operating costs incurred to support a long-term contract that commenced in March 2007, increased diesel fuel expense resulting from higher market prices for fuel and certain operating locations entering into short-term, fixed price, fuel purchase agreements in the second quarter of 2008 that resulted in the purchase of their remaining 2008 fuel volume at prices in excess of market value, 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, increased third party trucking and transportation expenses and increased disposal expenses, partially offset by a decrease in major vehicle and equipment repairs, decreases in auto and workers’ compensation claims under our high deductible insurance program and a reduction in expected development costs recorded in prior years for open auto and workers’ compensation claims. This adjustment to claim development costs was based on changes in estimates of actuarially projected losses on open claims determined by our third party administrator’s review and a third party actuarial review of our estimated insurance liability.

          Cost of operations as a percentage of revenues increased 0.7 percentage points to 59.8% for the year ended December 31, 2008, from 59.1% for the year ended December 31, 2007. The increase as a percentage of revenues was primarily attributable to increased diesel fuel expense and increased employee medical benefit expense, partially offset by decreased major vehicle and equipment repairs expense, increased prices charged to our customers being higher, on a percentage basis, than certain expense increases recognized subsequent to December 31, 2007, and decreased auto and workers’ compensation insurance expense related to current and prior year claims.

          SG&A. SG&A expenses increased $11.5 million, or 11.6%, to $111.1 million for the year ended December 31, 2008, from $99.6 million for the year ended December 31, 2007. The increase in SG&A expenses was primarily the result of additional personnel from acquisitions closed during, or subsequent to, the year ended December 31, 2007, increased payroll expense due to increased headcount to support our base operations, increased medical benefit expense, and increased incentive and equity compensation expenses, partially offset by decreased employee deferred compensation expense resulting from deferred compensation liabilities to employees being reduced as a result of declines in the market value of investments to which employee deferred compensation balances are tracked.

          SG&A expenses as a percentage of revenues increased 0.2 percentage points to 10.6% for the year ended December 31, 2008, from 10.4% for the year ended December 31, 2007. The increase as a percentage of revenues was primarily attributable to increased payroll expense, increased incentive and equity compensation expense, partially offset by decreased employee deferred compensation expense.

          Depreciation and Amortization. Depreciation and amortization expense increased $11.8 million, or 13.8%, to $97.4 million for the year ended December 31, 2008, from $85.6 million for the year ended December 31, 2007. The increase was primarily attributable to depreciation and amortization associated with acquisitions closed during, or subsequent to, the year ended December 31, 2007, additions to our fleet and equipment purchased to support our existing operations, and higher landfill depletion expense due to increased landfill construction and closure costs.

          Depreciation and amortization expense as a percentage of revenues increased 0.4 percentage points to 9.3% for the year ended December 31, 2008, from 8.9% for the year ended December 31, 2007. The increase as a percentage of revenues was the result of amortization expense associated with intangible assets acquired during, or subsequent to, the year ended December 31, 2007, and fleet and equipment purchased to support our existing operations.

          Operating Income. Operating income increased $5.4 million, or 2.6%, to $212.4 million for the year ended December 31, 2008, from $207.0 million for the year ended December 31, 2007. The increase for the year ended December 31, 2008, was primarily attributable to increased revenues, partially offset by increased operating costs, increased SG&A expenses to support the revenue growth and increased depreciation and amortization expenses.

          Operating income as a percentage of revenues decreased 1.4 percentage points to 20.2% for the year ended December 31, 2008, from 21.6% for the year ended December 31, 2007. The decrease as a percentage of revenues was due to the previously described percentage of revenue increases in cost of operations, SG&A, and depreciation and amortization expense.

          Interest Expense. Interest expense increased $3.8 million, or 10.9%, to $38.8 million for the year ended December 31, 2008, from $35.0 million for the year ended December 31, 2007. The increase for the year ended December 31, 2008, was attributable to increased average debt balances, partially offset by reduced average borrowing rates on the portion of our credit facility borrowings not fixed under interest rate swap agreements.

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          Interest Income. Interest income increased $1.7 million, or 107.0%, to $3.3 million for the year ended December 31, 2008, from $1.6 million for the year ended December 31, 2007. The increase for the year ended December 31, 2008, was attributable to higher average cash balances.

          Minority Interests. Minority interests decreased $2.7 million, or 17.7%, to $12.2 million for the year ended December 31, 2008, from $14.9 million for the year ended December 31, 2007. The decrease was due to decreased earnings at PCRCD, primarily resulting from a decrease in revenues associated with reduced disposal volumes, and our acquisition of the remaining 49% interest in PCRCD, effective November 3, 2008. Our minority interests expense would have been $13.7 million for the year ended December 31, 2008, if we had not purchased the remaining 49% interest in PCRCD.

          Income Tax Provision. Income taxes decreased $1.5 million, or 2.5%, to $58.4 million for the year ended December 31, 2008, from $59.9 million for the year ended December 31, 2007.

          Our effective tax rates for the years ended December 31, 2007 and 2008, were 37.7% and 35.6%, respectively. The decrease in the effective tax rate during the year ended December 31, 2008, was due to recording adjustments to reduce income tax expense by $4.9 million, resulting primarily from changes to the geographical apportionment of our state taxes, the reversal of certain tax contingencies for which the statute of limitations expired in 2008, and the reconciliation of the income tax provision to the 2007 federal and state tax returns, which were filed during 2008.

Years Ended December 31, 2007 and 2006

          Revenues. Total revenues increased $134.1 million, or 16.3%, to $958.5 million for the year ended December 31, 2007, from $824.4 million for the year ended December 31, 2006. Acquisitions closed during, or subsequent to, the year ended December 31, 2006, increased revenues by approximately $51.9 million. Operating locations disposed of during the year ended December 31, 2006, contributed $3.6 million of revenues during the year ended December 31, 2006. During the year ended December 31, 2007, increased prices charged to our customers, increased volume in our existing business, and revenues generated from two long-term contracts that commenced in 2007 resulted in net revenue increases of approximately $38.2 million, $12.6 million and $20.2 million, respectively. Increased recyclable commodity prices and volume during the year ended December 31, 2007, increased revenues by $13.0 million. Other revenues increased by $1.8 million during the year ended December 31, 2007.

          Cost of Operations. Total cost of operations increased $73.3 million, or 14.9%, to $566.1 million for the year ended December 31, 2007, from $492.8 million for the year ended December 31, 2006. The increase was attributable to operating costs associated with acquisitions closed during, or subsequent to, the year ended December 31, 2006, operating costs incurred to support two long-term contracts that commenced in 2007, increased diesel fuel prices, increased labor expenses resulting from employee pay rate increases, increased vehicle and equipment maintenance and repair costs, increased franchise taxes, landfill taxes, third party trucking expenses and increased disposal expenses resulting from higher disposal volumes.

          Cost of operations as a percentage of revenues decreased 0.7percentage points to 59.1% for the year ended December 31, 2007, from 59.8% for the year ended December 31, 2006. The decrease as a percentage of revenues was primarily attributable to leveraging existing personnel to support increased collection and disposal volumes, and increased prices charged to our customers being higher, on a percentage basis, than the majority of expense increases recognized subsequent to December 31, 2006. This decrease was partially offset by acquisitions closed during, or subsequent to, the year ended December 31, 2006, and the commencement of a long-term hauling contract in California that commenced in 2007, which had an operating margin below our company average.

          SG&A. SG&A expenses increased $15.1 million, or 17.8%, to $99.6 million for the year ended December 31, 2007, from $84.5 million for the year ended December 31, 2006. The increase in SG&A expenses was primarily the result of additional personnel from acquisitions closed during, or subsequent to, the year ended December 31, 2006, SG&A costs incurred to support two long-term contracts that commenced in 2007, increased payroll expense due to increased headcount to support our base operations, increased equity compensation expense, cash compensation increases and increased bonus compensation expense based on the results of operations during the year ended December 31, 2007.

          SG&A expenses as a percentage of revenues increased 0.2percentage points to 10.4% for the year ended December 31, 2007, from 10.2% for the year ended December 31, 2006. The increase as a percentage of revenues was primarily attributable to increased equity and bonus compensation expense.

          Depreciation and Amortization. Depreciation and amortization expense increased $10.7 million, or 14.4%, to $85.6 million for the year ended December 31, 2007, from $74.9 million for the year ended December 31, 2006. The increase was primarily attributable to depreciation of property and equipment and amortization of intangibles associated with acquisitions closed during, or subsequent to, the year ended December 31, 2006, higher landfill depletion expense due to increased disposal volumes at our landfills, and depreciation expense resulting from facilities, fleet and equipment purchased to support two long-term contracts that commenced in 2007.

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          Depreciation and amortization expense as a percentage of revenues decreased 0.2percentage points to 8.9% for the year ended December 31, 2007, from 9.1% for the year ended December 31, 2006. The decrease as a percentage of revenues was the result of increased prices charged to our customers and leveraging our existing fleet and equipment to support increases in collection and landfill volumes.

          Operating Income. Operating income increased $35.6 million, or 20.8%, to $207.0 million for the year ended December 31, 2007, from $171.4 million for the year ended December 31, 2006. The increase was primarily attributable to increased revenues, partially offset by increased operating costs, increased SG&A expenses to support the revenue growth and increased depreciation and amortization expenses.

          Operating income as a percentage of revenues increased 0.8percentage points to 21.6% for the year ended December 31, 2007, from 20.8% for the year ended December 31, 2006. The increase as a percentage of revenues was due to the previously described decreases in cost of operations and depreciation and amortization expenses as a percentage of revenues, partially offset by increased SG&A expense.

          Interest Expense. Interest expense increased $4.9 million, or 16.3%, to $35.0 million for the year ended December 31, 2007, from $30.1 million for the year ended December 31, 2006. The increase was attributable to higher average borrowing rates on our credit facility, higher average debt balances and a $1.0 million reduction of interest expense for the year ended December 31, 2006 on our Floating Rate Convertible Subordinated Notes due 2022, or 2022 Notes, as a result of the timing of the conversion of the 2022 Notes into common stock by the note holders after we called the notes for redemption, partially offset by a reduction in our average interest rate on debt incurred outside of our credit facility resulting from completing our offering of our 3.75% Convertible Senior Notes due 2026, or 2026 Notes, on March 20, 2006. 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, which we were a party to during the year ended December 31, 2006. 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.

          Other Income (Expense). Other income (expense) changed to an income total of $0.3 million for the year ended December 31, 2007, from an expense total of $3.8 million for the year ended December 31, 2006. Other expense in the year ended December 31, 2006, primarily consisted of $4.2 million of costs associated with the write-off of the unamortized debt issuance costs associated with our 2022 Notes.

          Minority Interests. Minority interests increased $2.0 million, or 15.2%, to $14.9 million for the year ended December 31, 2007, from $12.9 million for the year ended December 31, 2006. The increase in minority interests was due to increased earnings by our majority-owned subsidiaries.

          Income Tax Provision. Income taxes increased $11.6 million, or 24.0%, to $59.9 million for the year ended December 31, 2007, from $48.3 million for the year ended December 31, 2006.

          Our effective tax rates for the years ended December 31, 2006 and 2007, were 38.4% and 37.7%, respectively. The decrease in the effective tax rate during the year ended December 31, 2007, was due to recording adjustments to reduce income tax expense by $2.1 million, resulting from the reconciliation of our current and deferred income tax liability accounts, the reversal of certain tax contingencies that expired in 2007, and the reconciliation of the income tax provision to the 2006 federal tax return, which was filed in September 2007.

          Net Income. Net income increased $21.7 million, or 28.0%, to $99.1 million for the year ended December 31, 2007, from $77.4 million for the year ended December 31, 2006. The increase was primarily attributable to increased operating income partially offset by increased interest expense and increased income tax expense.

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Liquidity and Capital Resources

          The following table sets forth certain cash flow information for the years ended December 31, 2006, 2007 and 2008 (in thousands):

	2006			2007			2008
Net cash provided by operating activities	$	204,234		$	219,069		$	270,409
Net cash used in investing activities		(134,550	)		(235,609	)		(467,647	)
Net cash provided by (used in) financing activities		(42,249	)		(8,111	)		452,204
Net increase (decrease) in cash		27,435			(24,651	)		254,966
Cash at beginning of year		7,514			34,949			10,298
Cash at end of year	$	34,949		$	10,298		$	265,264

          Operating Activities Cash Flows

          For the year ended December 31, 2008, net cash provided by operating activities was $270.4 million. For the year ended December 31, 2007, net cash provided by operating activities was $219.1 million. The $51.3 million net increase in cash attributable to operating activities was primarily due to the following:

1)	An increase in the change in deferred income taxes of $19.5 million due primarily to an increase in tax deductible timing differences for depreciation expense, amortization expense and landfill closure and post-closure expense;
2)	An increase in depreciation and amortization expense of $11.8 million;
3)	An increase of $7.7 million attributable to a decrease in the excess tax benefit associated with equity-based compensation, due to a reduction in stock option exercises resulting in reduced taxable income recognized by employees that is tax deductible by us; and
4)	An increase in cash flows from operating assets and liabilities, net of effects from acquisitions, of $6.3 million to $18.4 million for the year ended December 31, 2008, from $12.1 million for the year ended December 31, 2007. The significant components of the $18.4 million in cash flows from changes in operating assets and liabilities include the following:
	a)	an increase from accounts receivable of $18.8 million, due to improved accounts receivable turnover in 2008,
	b)	a combined increase from accounts payable and accrued liabilities of $6.4 million, due primarily to an increase in accrued interest due to changes in the payment timing for LIBOR-based borrowings and our issuance in 2008 of $175 million of senior unsecured notes due October 1, 2015, which pay interest semi-annually on April 1 and October 1, less,
	c)	a decrease from other long-term liabilities of $6.2 million due primarily to the 2008 expiration of certain accrued tax contingencies and interim capping expenditures at one of our landfills.

          For the year ended December 31, 2007, net cash provided by operating activities was $219.1 million. For the year ended December 31, 2006, net cash provided by operating activities was $204.2 million. The $14.9 million net increase in cash attributable to operating activities was primarily due to the following:

1)	An increase in net income of $21.7 million;
2)	An increase in depreciation and amortization expense of $10.8 million; less
3)	A decrease in the change in deferred income taxes of $14.1 million due primarily due to our receipt in 2006 of written approval from the Internal Revenue Service to exclude probable expansion airspace from our calculation of landfill final capping, closure and post-closure costs for tax purposes, which resulted in the recording of a $11.2 million deferred tax liability in 2006; and
4)	A decrease of $6.4 million attributable to an increase in the excess tax benefit associated with equity-based compensation, due to an increase in stock option exercises resulting in increased taxable income recognized by employees that is tax deductible by us.

          As of December 31, 2008, we had working capital of $213.7 million, including cash and equivalents of $265.3 million. Our working capital increased $238.5 million from a working capital deficit of $24.8 million at December 31, 2007. To date, we have experienced no loss or lack of access to our invested cash or cash equivalents; however, we can provide no assurances that access to our invested cash and cash equivalents will not be impacted by adverse conditions in the financial markets. Our strategy in managing our working capital is generally to apply the cash generated from our operations that remains after satisfying our working capital and capital expenditure requirements to reduce our indebtedness under our credit facility and to minimize our cash balances. Our increased cash and working capital positions at December 31, 2008, were primarily due to the proceeds received from the September 2008 sale of 12,650,000 shares of our common stock in a public offering and issuance in October 2008 of $175 million of senior unsecured notes being in excess of cash used to fund acquisitions closed in the later portion of 2008.

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          Investing Activities Cash Flows

          Net cash used in investing activities increased $232.0 million to $467.6 million for the year ended December 31, 2008, from $235.6 million for the year ended December 31, 2007. The significant components of the increase include the following:

1)	An increase in payments for acquisitions of $245.7 million; less
2)	A decrease in capital expenditures for property and equipment of $10.7 million, due primarily to non-recurring capital expenditures incurred during the year ended December 31, 2007, associated with a new long-term contract in California.

          Net cash used in investing activities increased $101.1 million to $235.6 million for the year ended December 31, 2007, from $134.5 million for the year ended December 31, 2006. The significant components of the increase include the following:

1)	An increase in capital expenditures for property and equipment of $27.7 million, due to the aforementioned expenditures incurred in 2007 associated with a new long-term contract in California and equipment purchases at other operations to support our growth; and
2)	An increase in payments for acquisitions of $70.8 million.

          Financing Activities Cash Flows

          Net cash flows from financing activities increased $460.3 million to a net cash provided by financing activities total of $452.2 million for the year ended December 31, 2008, from a net cash used in financing activities total of $8.1 million for the year ended December 31, 2007. The significant components of the increase include the following:

1)	An increase in proceeds from our common stock offering of $393.9 million, due to the September 2008 sale of 12,650,000 shares of our common stock in a public offering;
2)	An increase in proceeds from long-term debt, net of principal payments, of $20.7 million; less
3)	A decrease in payments to repurchase common stock of $78.8 million, due to our election not to repurchase stock after March 31, 2008, and to use our available capital to fund acquisition opportunities; less
4)	A change in book overdraft of $13.3 million resulting from fluctuations in our outstanding cash balances at banks for which outstanding check balances can be offset; less
5)	A decrease in proceeds from option and warrant exercises of $16.5 million due to a decrease in the number of options and warrants exercised in 2008; and
6)	A decrease in the excess tax benefit associated with equity-based compensation of $7.7 million, due to the aforementioned decrease in options and warrants exercised in 2008.

          Net cash used in financing activities decreased $34.1 million to $8.1 million for the year ended December 31, 2007, from $42.2 million for the year ended December 31, 2006. The significant components of the decrease include the following:

1)	A change in book overdraft of $17.7 million resulting from fluctuations in our outstanding cash balances at banks for which outstanding check balances can be offset;
2)	An increase in proceeds from long-term debt, net of principal repayments, of $12.5 million;
3)	An increase in the excess tax benefit associated with equity-based compensation of $6.4 million, due to an increase in stock option exercises resulting in increased taxable income recognized by employees that is tax deductible by us;
4)	A decrease in debt issuance costs of $5.5 million due to our incurring $5.5 million of non-recurring debt issuance costs in 2006 associated with our sale of $200 million of the 2026 Notes; less
5)	An increase in payments to repurchase common stock of $10.3 million, due to differences in the timing and amount of repurchases.

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

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          Our Board of Directors has authorized a common stock repurchase program for the repurchase of up to $500 million of common stock through December 31, 2009. As of December 31, 2007 and 2008, we had repurchased 16.2 million and 17.3 million shares, respectively of our common stock at a cost of $397.2 million and $428.7 million, respectively. As of December 31, 2008, the remaining maximum dollar value of shares available for purchase under the program was approximately $80.2 million.

          We made $113.5 million in capital expenditures during the year ended December 31, 2008. We expect to make capital expenditures of approximately $110 million in 2009 in connection with our existing business. We intend to fund our planned 2009 capital expenditures principally through internally generated funds. In addition, we may make substantial additional capital expenditures in acquiring solid waste collection and disposal businesses. If we acquire additional landfill disposal facilities, we may also have to make significant expenditures to bring them into compliance with applicable regulatory requirements, obtain permits or expand our available disposal capacity. We cannot currently determine the amount of these expenditures because they will depend on the number, nature, condition and permitted status of any acquired landfill disposal facilities. We believe that our cash and equivalents, credit facility and the funds we expect to generate from operations will provide adequate cash to fund our working capital and other cash needs for the foreseeable future. However, disruptions in the capital and credit markets, as were experienced during 2008, could adversely affect our ability to draw on our credit facility. Our access to funds under the credit facility is dependent on the ability of the banks that are parties to the facility to meet their funding commitments. Those banks may not be able to meet their funding commitments if they experience shortages of capital and liquidity or if they experience excessive volumes of borrowing requests within a short period of time.

          We have an $845 million senior revolving credit facility, or the credit facility, with a syndicate of banks for which Bank of America, N.A. acts as agent. As of December 31, 2006, $400.0 million was outstanding under our previous credit facility, exclusive of outstanding standby letters of credit of $59.1 million. As of December 31, 2007, $479.0 million was outstanding under our credit facility, exclusive of outstanding standby letters of credit of $68.3 million. As of December 31, 2008, $400.0 million was outstanding under the credit facility, exclusive of outstanding standby letters of credit of $81.4 million.

          The credit facility requires interest payments as outlined in the credit agreement and matures in September 2012. Under the credit facility, there is no maximum amount of standby letters of credit that can be issued; however, the issuance of standby letters of credit reduces the amount of total borrowings available. The credit facility requires us to pay a commitment fee ranging from 0.15% to 0.20% of the unused portion of the facility. The borrowings under the credit facility bear interest, at our option, at either the base rate plus the applicable base rate margin on base rate loans, or the Eurodollar rate plus the applicable Eurodollar margin on Eurodollar loans. The base rate for any day is a fluctuating rate per annum equal to the higher of: (1) the federal funds rate plus one half of one percent (0.5%); and (2) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.” The Eurodollar rate is determined by the administrative agent pursuant to a formula in the credit agreement governing the credit facility. The applicable margins under the credit facility vary depending on our leverage ratio, as defined in the credit agreement, and range from 0.625% to 1.125% for Eurodollar loans and 0.00% for base rate loans. The borrowings under the credit facility are not collateralized. The credit agreement governing the credit facility contains representations and warranties and places certain business, financial and operating restrictions on us relating to, among other things, indebtedness, liens and other encumbrances, investments, mergers and acquisitions, asset sales, sale and leaseback transactions, and dividends, distributions and redemptions of capital stock. The credit facility requires that we maintain specified financial ratios. As of December 31, 2007 and 2008, we were in compliance with all applicable covenants in the credit facility. We use the credit facility for acquisitions, capital expenditures, working capital, standby letters of credit and general corporate purposes.

          On July 15, 2008, we entered into a Master Note Purchase Agreement with certain accredited institutional investors pursuant to which we issued and sold to the investors at a closing on October 1, 2008, $175 million of senior uncollateralized notes due October 1, 2015 (the “2015 Notes”), in a private placement. The 2015 Notes bear interest at the fixed rate of 6.22% per annum with interest payable in arrears semi-annually on April 1 and October 1 beginning on April 1, 2009, and with principal payable at the maturity of the 2015 Notes on October 1, 2015.

          The 2015 Notes are uncollateralized obligations and rank equally with obligations under our senior uncollateralized revolving credit facility. The 2015 Notes are subject to representations, warranties, covenants and events of default. Upon the occurrence of an event of default, payment of the 2015 Notes may be accelerated by the holders of the 2015 Notes. The 2015 Notes may also be prepaid by us at any time at par plus a make-whole amount determined in respect of the remaining scheduled interest payments on the 2015 Notes, using a discount rate of the then current market standard for United States treasury bills plus 0.50%. In addition, we will be required to offer to prepay the 2015 Notes upon certain changes in control.

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          We may issue additional series of senior uncollateralized notes pursuant to the terms and conditions of the Agreement, provided that the purchasers of the 2015 Notes shall not have any obligation to purchase any additional notes issued pursuant to the Master Note Purchase Agreement and the aggregate principal amount of the 2015 Notes and any additional notes issued pursuant to the Master Note Purchase Agreement shall not exceed $500 million.

          On March 20, 2006, we completed the offering of $200 million aggregate principal amount of our 2026 Notes pursuant to a private placement. The terms and conditions of the 2026 Notes are set forth in the Indenture, dated as of March 20, 2006, between us and U.S. Bank National Association, as trustee. The 2026 Notes rank equally in right of payment to all of our other existing and future senior uncollateralized and unsubordinated indebtedness. The 2026 Notes rank senior in right of payment to all of our existing and future subordinated indebtedness and are subordinated in right of payment to our collateralized obligations to the extent of the assets collateralizing such obligations. The 2026 Notes bear interest at 3.75% per annum payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2006, until the maturity date of April 1, 2026.

          The 2026 Notes are convertible into cash and, if applicable, shares of common stock based on an initial conversion rate of 29.4118 shares of common stock per $1,000 principal amount of 2026 Notes (which is equal to an initial conversion price of approximately $34.00 per share), subject to adjustment, and only under certain circumstances. Upon a surrender of the 2026 Notes for conversion, we will deliver cash equal to the lesser of the aggregate principal amount of notes to be converted and our total conversion obligation. We will deliver shares of our common stock in respect of the remainder, if any, of our conversion obligation. The holders of the 2026 Notes who convert their notes in connection with a change in control (as defined in the Indenture) may be entitled to a make-whole premium in the form of an increase in the conversion rate.

          Holders may surrender the 2026 Notes for conversion into cash and, if applicable, shares of our common stock at any time prior to the close of business on the maturity date, if the closing sale price of our common stock for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the quarter preceding the quarter in which the conversion occurs, is more than 130% of the conversion price per share of our common stock on that 30th day.

          Beginning on April 1, 2010, we may redeem in cash all or part of the 2026 Notes at a price equal to 100% of the principal amount plus accrued and unpaid interest, including additional interest, if any, and, if redeemed prior to April 1, 2011, an interest make-whole payment. The holders of the 2026 Notes can require us to repurchase all or a part of the 2026 Notes in cash on each of April 1, 2011, 2016 and 2021, and in the event of a change of control of Waste Connections, at a purchase price of 100% of the principal amount of the 2026 Notes plus any accrued and unpaid interest, including additional interest, if any. We are amortizing the $5.5 million debt issuance costs over a five-year term through the first put date, or April 1, 2011.

          As of December 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	$	835,456	$	4,698	$	203,978	$	403,628	$	223,152
Cash interest payments		176,499		41,991		71,647		33,044		29,817

          Long-term debt payments include:

          (1) $400.0 million in principal payments due 2012 related to our credit facility. Our credit facility bears interest, at our option, at either the base rate plus the applicable base rate margin (approximately 3.25% at December 31, 2008) on base rate loans, or the Eurodollar rate plus the applicable Eurodollar margin (approximately 2.5% at December 31, 2008) on Eurodollar loans. As of December 31, 2008, our credit facility allowed us to borrow up to $845 million.

          (2) $200.0 million in principal payments due 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) $175.0 million in principal payments due 2015 related to our 2015 Notes. Holders of the 2015 Notes may require us to purchase their notes in cash at a purchase price of 100% of the principal amount of the 2015 Notes plus accrued and unpaid interest, if any, upon a change in control, as defined in the master note purchase agreement. The 2015 Notes bear interest at a rate of 6.22%.

          (4) $54.0 million in principal payments related to our tax-exempt bonds, of which $10.8 million bears interest at fixed rates (between 7.0% and 7.25%) and $43.2 million bears interest at variable rates (between 0.97% to 1.25%) at December 31, 2008. The tax-exempt bonds have maturity dates ranging from 2012 to 2033.

          (5) $4.9 million in principal payments related to our notes payable to sellers. Our notes payable to sellers bear interest at rates between 5.5% and 10.35% at December 31, 2008, and have maturity dates ranging from 2009 to 2036.

          (6) $1.6 million in principal payments related to our notes payable to third parties. Our notes payable to third parties bear interest at rates between 9.0% and 10.9% at December 31, 2008, and have maturity dates ranging from 2009 to 2019.

40

The following assumptions were made in calculating cash interest payments:

          (1) We calculated cash interest payments on the credit facility using the Eurodollar rate plus the applicable Eurodollar margin at December 31, 2008. We assumed the credit facility is paid off when the credit facility matures in 2012.

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

          (3) We calculated cash interest payments on the tax-exempt bonds using the interest rate at December 31, 2008.

          The total liability for uncertain tax positions under FIN 48 at December 31, 2008, is approximately $2 million (refer to Note 13 to the consolidated financial statements). We are not able to reasonably estimate the amount by which the liability will increase or decrease over time; however, at this time, we do not expect a significant payment related to these obligations within the next year.

	Amount of Commitment Expiration Per Period
Unrecorded Obligations	Total		Less Than 1 Year		1 to 3 Years		3 to 5 Years		Over 5 years
Operating leases (1)	$	71,169	$	8,350	$	15,132	$	12,632	$	35,055
Unconditional purchase obligations (1)		27,543		27,543		—		—		—
		98,712		35,893		15,132		12,632		35,055

          (1) We are party to operating lease agreements and unconditional purchase obligations as discussed in Note 10 to the consolidated financial statements. These lease agreements and purchase obligations are established in the ordinary course of our business and are designed to provide us with access to facilities and products at competitive, market-driven prices. At December 31, 2008, our unconditional purchase obligations consist of multiple fixed-price fuel purchase contracts under which we have 10.5 million gallons remaining to be purchased for a total of $27.5 million, plus taxes and transportation upon delivery. The current fuel purchase contracts expire on or before December 31, 2009. These arrangements have not materially affected our financial position, results of operations or liquidity during the year ended December 31, 2008, nor are they expected to have a material impact on our future financial position, results of operations or liquidity.

          We have obtained standby letters of credit as discussed in Note 8 to the consolidated financial statements and financial surety bonds as discussed in Note 10 to the consolidated financial statements. These standby letters of credit and financial surety bonds are generally obtained to support our financial assurance needs and landfill operations. These arrangements have not materially affected our financial position, results of operations or liquidity during the year ended December 31, 2008, nor are they expected to have a material impact on our future financial position, results of operations or liquidity.

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

New Accounting Pronouncements

          For a description of the new accounting standards that affect us, see Note 1 to our Consolidated Financial Statements included in this Annual Report on Form 10-K.

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FREE CASH FLOW

          We are providing free cash flow, a non-GAAP financial measure, because it is widely used by investors as a valuation and liquidity measure in the solid waste industry. This measure should be used in conjunction with 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 years ended December 31, 2007 and 2008, is calculated as follows (in thousands):

	Years Ended December 31,
	2007			2008
Net cash provided by operating activities	$	219,069		$	270,409
Change in book overdraft		8,835			(4,520	)
Plus: Proceeds from disposal of assets		1,016			2,560
Plus: Excess tax benefit associated with equity-based compensation		14,137			6,441
Less: Capital expenditures for property and equipment		(124,234	)		(113,496	)
Less: Distributions to minority interest holders		(12,642	)		(8,232	)
Free cash flow	$	106,181		$	153,162

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 or economic pressures, or delays in the timing of rate increases under our contracts, may require us to absorb at least part of these cost increases, especially if cost increases exceed the average rate of inflation. Management’s estimates associated with inflation have an impact on our accounting for landfill liabilities.

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 11%. 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. A continuing economic recession could also influence the percent change in revenues associated with seasonal fluctuations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

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          At December 31, 2008, our derivative instruments included 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.

          Under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS 133"), all the interest rate swap agreements are considered 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 2008, of $114.8 million and $43.2 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 2008, would decrease our annual pre-tax income by approximately $1.1 million and $0.4 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.

          The market price of diesel fuel is unpredictable and can fluctuate significantly. A significant increase in the price of fuel could adversely affect our business and reduce our operating margins. To manage a portion of this risk, in the fourth quarter of 2008, we entered into multiple commodity swap agreements related to forecasted diesel fuel purchases (“fuel hedges”).

          The following table summarizes the fuel hedges as of December 31, 2008:

Date Entered	Notional Amount (in gallons per month)		Diesel Rate Paid Fixed		Diesel Rate Received Variable		Effective Date		Expiration Date
October 2008		250,000	$	3.750		DOE Diesel Fuel Index*		January 2009		December 2010
October 2008		100,000		3.745		DOE Diesel Fuel Index*		January 2009		December 2010
October 2008		250,000		3.500		DOE Diesel Fuel Index*		January 2009		December 2010
December 2008		100,000		3.000		DOE Diesel Fuel Index*		January 2010		December 2010
December 2008		150,000		3.000		DOE Diesel Fuel Index*		January 2010		December 2010
December 2008		150,000		2.820		DOE Diesel Fuel Index*		January 2010		December 2010
December 2008		150,000		2.700		DOE Diesel Fuel Index*		January 2010		December 2010
December 2008		400,000		2.950		DOE Diesel Fuel Index*		January 2011		December 2011
December 2008		400,000		3.030		DOE Diesel Fuel Index*		January 2012		December 2012

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

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          Under SFAS 133, all the fuel hedges are considered cash flow hedges for a portion of our forecasted diesel fuel purchases, and we will apply hedge accounting to account for these instruments.

          Additionally, we purchase a majority of our fuel at market prices; however, in order to mitigate the impact of adverse fuel price changes, we entered into multiple fixed-price fuel purchase contracts which expire on or before December 31, 2009. As of December 31, 2008, we had 10.5 million gallons remaining to be purchased for a total unconditional purchase obligation of $27.5 million, plus taxes and transportation upon delivery.

          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 diesel fuel purchases. Such an analysis is inherently limited in that it reflects a singular, hypothetical set of assumptions. Actual market movements may vary significantly from our assumptions. Fair value sensitivity is not necessarily indicative of the ultimate cash flow or earnings effect we would recognize from the assumed market rate movements. We purchase approximately 24 million gallons of diesel fuel per year. We have entered into fixed-price fuel purchase contracts for a total of 10.5 million gallons of diesel fuel which expire on or before December 31, 2009, and have hedged 7.2 million gallons of diesel fuel for the year ending December 31, 2009. If we purchased all of our unhedged fuel at market prices, 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 $0.6 million.

          We market a variety of recyclable materials, including cardboard, office paper, plastic containers, glass bottles and ferrous and aluminum metals. We own and operate 34 recycling processing operations and sell other collected recyclable materials to third parties for processing before resale. Certain of our municipal recycling contracts in the state of Washington specify benchmark resale prices for recycled commodities. If the prices we actually receive for the processed recycled commodities collected under the contract exceed the prices specified in the contract, we share the excess with the municipality, after recovering any previous shortfalls resulting from actual market prices falling below the prices specified in the contract. To reduce our exposure to commodity price risk with respect to recycled materials, we have adopted a pricing strategy of charging collection and processing fees for recycling volume collected from third parties. In the event of a decline in recycled commodity prices, a 10% decrease in average recycled commodity prices from the average prices that were in effect during the years ending December 31, 2007 and 2008, would have had a $3.9 million and $3.7 million impact on revenues for the years ended December 31, 2007 and 2008, respectively.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

WASTE CONNECTIONS, INC.

	Page
Report of Independent Registered Public Accounting Firm	46
Consolidated Balance Sheets as of December 31, 2007 and 2008	47
Consolidated Statements of Income for the years ended December 31, 2006, 2007 and 2008	48
Consolidated Statements of Stockholders’ Equity and Comprehensive Income for the years ended December 31, 2006, 2007 and 2008	49
Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2007 and 2008	50
Notes to Consolidated Financial Statements	52
Financial Statement Schedule	90

45

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Waste Connections, Inc.:

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Waste Connections, Inc. and its subsidiaries at December 31, 2008 and December 31, 2007, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying indexpresents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting under Item 9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As discussed in Note 13 to the consolidated financial statements, the Company changed the manner in which it accounts for uncertainty in income taxes in 2007.

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP

Sacramento, CA

February 10, 2009

46

WASTE CONNECTIONS, INC.

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

	December 31,
	2007			2008
ASSETS
Current assets:
Cash and equivalents	$	10,298		$	265,264
Accounts receivable, net of allowance for doubtful accounts of $4,387 and $3,846 at December 31, 2007 and 2008, respectively		123,882			118,456
Deferred income taxes		14,732			22,347
Prepaid expenses and other current assets		21,953			23,144
Total current assets		170,865			429,211
Property and equipment, net		865,330			984,124
Goodwill		811,049			836,930
Intangible assets, net		93,957			306,444
Restricted assets		19,300			23,009
Other assets, net		21,457			20,922
	$	1,981,958		$	2,600,640
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	59,912		$	65,537
Book overdraft		8,835			4,315
Accrued liabilities		69,578			95,220
Deferred revenue		44,074			45,694
Current portion of long-term debt and notes payable		13,315			4,698
Total current liabilities		195,714			215,464
Long-term debt and notes payable		719,518			830,758
Other long-term liabilities		38,053			47,509
Deferred income taxes		223,308			251,514
Total liabilities		1,176,593			1,345,245
Commitments and contingencies (Note 10)
Minority interests		30,220			668
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 79,842,239shares issued and outstanding at December 31, 2007 and 2008, respectively		670			798
Additional paid-in capital		254,284			647,829
Retained earnings		524,481			630,037
Accumulated other comprehensive loss		(4,290	)		(23,937	)
Total stockholders’ equity		775,145			1,254,727
	$	1,981,958		$	2,600,640

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

47

WASTE CONNECTIONS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

	Years Ended December 31,
	2006			2007			2008
Revenues	$	824,354		$	958,541		$	1,049,603
Operating expenses:
Cost of operations		492,766			566,089			628,075
Selling, general and administrative		84,541			99,565			111,114
Depreciation and amortization		74,865			85,628			97,429
Loss on disposal of assets		796			250			629
Operating income		171,386			207,009			212,356
Interest expense		(30,110	)		(35,023	)		(38,824	)
Interest income		1,140			1,593			3,297
Other income (expense), net		(3,759	)		289			(633	)
Income before income tax provision and minority interests		138,657			173,868			176,196
Minority interests		(12,905	)		(14,870	)		(12,240	)
Income from continuing operations before income taxes		125,752			158,998			163,956
Income tax provision		(48,329	)		(59,917	)		(58,400	)
Net income	$	77,423		$	99,081		$	105,556
Basic earnings per common share	$	1.14		$	1.45		$	1.51
Diluted earnings per common share	$	1.10		$	1.42		$	1.48
Shares used in calculating basic income per share		68,136,126			68,238,523			70,024,874
Shares used in calculating diluted income per share		70,408,673			69,994,713			71,419,712

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

48

WASTE CONNECTIONS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

				STOCKHOLDERS’ EQUITY
										ADDITIONAL PAID-IN CAPITAL			ACCUMULATED OTHER COMPRE- HENSIVE INCOME (LOSS)			DEFERRED STOCK COMPENSATION
	COMPREHENSIVE INCOME			COMMON STOCK															TREASURY STOCK					RETAINED EARNINGS
				SHARES			AMOUNT												SHARES		AMOUNT						TOTAL
Balances at December 31, 2005					68,887,025		$	459		$	373,382		$	4,957		$	(2,234	)	159,900		$	(3,672	)	$	345,308		$	718,200
Vesting of restricted stock					56,628			—			—			—			—		—			—			—			—
Cancellation of restricted stock					(19,182	)		—			(446	)		—			—		—			—			—			(446	)
Stock-based compensation					—			—			3,451			—			—		—			—			—			3,451
Exercise of stock options and warrants					2,082,708			14			32,132			—			—		—			—			—			32,146
Excess tax benefit associated with equity-based compensation					—			—			7,728			—			—		—			—			—			7,728
Repurchase of common stock					(4,182,900	)		(28	)		(100,217	)		—			—		—			—			—			(100,245	)
Retirement of treasury stock					—			—			(3,672	)		—			—		(159,900	)		3,672			—			—
Conversion of 2022 Floating Rate Convertible Subordinated Notes					1,441,762			10			(10	)		—			—		—			—			—			—
Issuance of common stock warrants to consultants					—			—			115			—			—		—			—			—			115
Cumulative change from adoption of accounting policy – SFAS 123(R)					—			—			(2,234	)		—			2,234		—			—			—			—
Amounts reclassified into earnings, net of taxes					—			—			—			(4,243	)		—		—			—			—			(4,243	)
Changes in fair value of interest rate swaps, net of taxes					—			—			—			2,353			—		—			—			—			2,353
Net income	$	77,423			—			—			—			—			—		—			—			77,423			77,423
Other comprehensive loss		(2,887	)		—			—			—			—			—		—			—			—			—
Income tax effect of other comprehensive loss		997			—			—			—			—			—		—			—			—			—
Comprehensive income	$	75,533			—			—			—			—			—		—			—			—			—
Balances at December 31, 2006					68,266,041		$	455		$	310,229		$	3,067		$	—		—		$	—		$	422,731		$	736,482
Stock split					—			228			—			—			—		—			—			(228	)		—
Vesting of restricted stock					168,268			2			(2	)		—			—		—			—			—			—
Cancellation of restricted stock and warrants					(54,498	)		(1	)		(1,636	)		—			—		—			—			—			(1,637	)
Stock-based compensation					—			—			6,128			—			—		—			—			—			6,128
Exercise of stock options and warrants					2,246,454			22			35,598			—			—		—			—			—			35,620
Excess tax benefit associated with equity-based compensation					—			—			14,137			—			—		—			—			—			14,137
Repurchase of common stock					(3,574,130	)		(36	)		(110,293	)		—			—		—			—			—			(110,329	)
Issuance of common stock warrants to consultants					—			—			123			—			—		—			—			—			123
Cumulative change from adoption of accounting policy – FIN 48					—			—			—			—			—		—			—			2,897			2,897
Amounts reclassified into earnings, net of taxes					—			—			—			(2,320	)		—		—			—			—			(2,320	)
Changes in fair value of interest rate swaps, net of taxes					—			—			—			(5,037	)		—		—			—			—			(5,037	)
Net income	$	99,081			—			—			—			—			—		—			—			99,081			99,081
Other comprehensive loss		(11,981	)		—			—			—			—			—		—			—			—			—
Income tax effect of other comprehensive loss		4,624			—			—			—			—			—		—			—			—			—
Comprehensive income	$	91,724			—			—			—			—			—		—			—			—			—
Balances at December 31, 2007					67,052,135		$	670		$	254,284		$	(4,290	)	$	—		—		$	—		$	524,481		$	775,145
Vesting of restricted stock					222,863			2			(2	)		—			—		—			—			—			—
Cancellation of restricted stock and warrants					(72,082	)		(1	)		(2,192	)		—			—		—			—			—			(2,193	)
Stock-based compensation					—			—			7,854			—			—		—			—			—			7,854
Exercise of stock options and warrants					1,030,594			10			19,079			—			—		—			—			—			19,089
Issuance of common stock, net of issuance costs of $17,195					12,650,000			127			393,803			—			—		—			—			—			393,930
Excess tax benefit associated with equity-based compensation					—			—			6,441			—			—		—			—			—			6,441
Repurchase of common stock					(1,041,271	)		(10	)		(31,517	)		—			—		—			—			—			(31,527	)
Issuance of common stock warrants to consultants					—			—			79			—			—		—			—			—			79
Amounts reclassified into earnings, net of taxes					—			—			—			4,010			—		—			—			—			4,010
Changes in fair value of swaps, net of taxes					—			—			—			(23,657	)		—		—			—			—			(23,657	)
Net income	$	105,556			—			—			—			—			—		—			—			105,556			105,556
Other comprehensive loss		(31,609	)		—			—			—			—			—		—			—			—			—
Income tax effect of other comprehensive loss		11,962			—			—			—			—			—		—			—			—			—
Comprehensive income	$	85,909			—			—			—			—			—		—			—			—			—
Balances at December 31, 2008					79,842,239		$	798		$	647,829		$	(23,937	)	$	—		—		$	—		$	630,037		$	1,254,727

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

49

WASTE CONNECTIONS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

	Years Ended December 31,
	2006			2007			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	77,423		$	99,081		$	105,556
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on disposal of assets		796			250			629
Depreciation		70,785			81,287			91,095
Amortization of intangibles		4,080			4,341			6,334
Deferred income taxes, net of acquisitions		26,585			12,440			31,902
Minority interests		12,905			14,870			12,240
Amortization of debt issuance costs		6,238			2,182			1,966
Stock-based compensation		3,451			6,128			7,854
Interest income on restricted assets		(618	)		(684	)		(543	)
Closure and post-closure accretion		623			1,155			1,400
Excess tax benefit associated with equity-based compensation		(7,728	)		(14,137	)		(6,441	)
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable, net		(4,928	)		(17,514	)		18,768
Prepaid expenses and other current assets		(1,083	)		(8,077	)		335
Accounts payable		(4,306	)		2,888			(54	)
Deferred revenue		324			7,870			(829	)
Accrued liabilities		19,245			27,162			6,426
Other long-term liabilities		442			(173	)		(6,229	)
Net cash provided by operating activities		204,234			219,069			270,409
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for acquisitions, net of cash acquired		(38,594	)		(109,429	)		(355,150	)
Capital expenditures for property and equipment		(96,519	)		(124,234	)		(113,496	)
Proceeds from disposal of assets		2,198			1,016			2,560
Increase in restricted assets, net of interest income		(1,411	)		(2,698	)		(2,653	)
Decrease (increase) in other assets		(224	)		(264	)		1,092
Net cash used in investing activities		(134,550	)		(235,609	)		(467,647	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt		666,035			626,000			302,000
Principal payments on notes payable and long-term debt		(621,161	)		(568,607	)		(223,854	)
Change in book overdraft		(8,869	)		8,835			(4,520	)
Proceeds from option and warrant exercises		32,146			35,620			19,089
Excess tax benefit associated with equity-based compensation		7,728			14,137			6,441
Distributions to minority interest holders		(11,270	)		(12,642	)		(8,232	)
Payments for repurchase of common stock		(100,245	)		(110,329	)		(31,527	)
Proceeds from common stock offering, net		—			—			393,930
Debt issuance costs		(6,613	)		(1,125	)		(1,123	)
Net cash (used in) provided by financing activities		(42,249	)		(8,111	)		452,204
Net increase (decrease) in cash and equivalents		27,435			(24,651	)		254,966
Cash and equivalents at beginning of year		7,514			34,949			10,298
Cash and equivalents at end of year	$	34,949		$	10,298		$	265,264

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

50

WASTE CONNECTIONS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION AND NON-CASH TRANSACTIONS:

	Years Ended December 31,
	2006			2007			2008
Cash paid for income taxes	$	15,006		$	35,260		$	24,635
Cash paid for interest	$	28,534		$	33,418		$	32,626
Conversion of 2022 Convertible Subordinated Notes to equity	$	10		$	—		$	—
In connection with its acquisitions, the Company assumed liabilities as follows:
Fair value of assets acquired	$	44,919		$	162,425		$	359,114
Elimination of minority interest		—			—			33,560
Cash paid and warrants issued for current year acquisitions		(37,560	)		(107,772	)		(354,180	)
Net assets used as consideration for acquisitions		(893	)		—			—
Liabilities assumed and notes payable issued to sellers of businesses acquired	$	6,466		$	54,653		$	38,494

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

51

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

1. ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Business

          Waste Connections, Inc. (“WCI” or “the Company”) was incorporated in Delaware on September 9, 1997, and commenced its operations on October 1, 1997, through the purchase of certain solid waste operations in the state of Washington. The Company is an integrated, non-hazardous solid waste services company that provides collection, transfer, disposal and recycling services to commercial, industrial and residential customers in the states of 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. The Company also provides intermodal services for the movement of containers in the Pacific Northwest.

Basis of Presentation

          These consolidated financial statements include the accounts of WCI and its wholly-owned and majority-owned subsidiaries. The consolidated entity is referred to herein as the Company. All significant intercompany accounts and transactions have been eliminated in consolidation.

Cash Equivalents

          The Company considers all highly liquid investments with a maturity of three months or less at purchase to be cash equivalents. As of December 31, 2007 and 2008, cash equivalents consisted of demand money market accounts.

Concentrations of Credit Risk

          Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable. The Company maintains cash and cash equivalents with banks that at times exceed applicable insurance limits. The Company reduces its exposure to credit risk by maintaining such deposits with high quality financial institutions. The Company has not experienced any losses in such accounts. The Company generally does not require collateral on its trade receivables. Credit risk on accounts receivable is minimized as a result of the large and diverse nature of the Company’s customer base. The Company maintains allowances for losses based on the expected collectability of accounts receivable.

Revenue Recognition and Accounts Receivable

          Revenues are recognized when persuasive evidence of an arrangement exists, the service has been provided, the price is fixed or determinable and collection is reasonably assured. Certain customers are billed in advance and, accordingly, recognition of the related revenues is deferred until the services are provided. In accordance with Emerging Issues Task Force (“EITF”) 06-3, How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation), any tax assessed by a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer is presented in the statements of income on a net basis (excluded from revenues).

          The Company’s receivables are recorded when billed or accrued and represent claims against third parties that will be settled in cash. The carrying value of the Company’s receivables, net of the allowance for doubtful accounts, represents their estimated net realizable value. The Company estimates its allowance for doubtful accounts based on historical collection trends, type of customer such as municipal or non-municipal, the age of outstanding receivables and existing economic conditions. If events or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectability of those balances and the allowance is adjusted accordingly. Past-due receivable balances are written off when the Company’s internal collection efforts have been unsuccessful in collecting the amount due.

Property and Equipment

          Property and equipment are stated at cost. Improvements or betterments, not considered to be maintenance and repair, which add new functionality or significantly extend the life of an asset are capitalized. Third-party expenditures related to pending development projects, such as legal, engineering and interest expenses, are capitalized. Expenditures for maintenance and repair costs, including planned major maintenance activities, are charged to expense as incurred. The cost of assets retired or otherwise disposed of and the related accumulated depreciation are eliminated from the accounts in the year of disposal. Gains and losses resulting from disposals of property and equipment are recognized in the period in which the property and equipment is disposed. Depreciation is computed using the straight-line method over the estimated useful lives of the assets or the lease term, whichever is shorter.

52

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

          The estimated useful lives are as follows:

Buildings	20 years
Land improvements	3 - 20 years
Machinery and equipment	3 - 12 years
Rolling stock	5 - 10 years
Containers	5 - 12 years
Rail cars	20 years

Landfill Accounting 

          The Company utilizes the life cycle method of accounting for landfill costs. This method applies the costs to be capitalized associated with acquiring, developing, closing and monitoring the landfills over the associated consumption of landfill capacity. The Company utilizes the units of consumption method to amortize landfill development costs over the estimated remaining capacity of a landfill. Under this method, the Company includes future estimated construction costs using current dollars, as well as costs incurred to date, in the amortization base. When certain criteria are met, the Company includes expansion airspace, which has not been permitted, in the calculation of the total remaining capacity of the landfill.

– Landfill development costs. Landfill development costs include the costs of acquisition, construction associated with excavation, liners, site berms, groundwater monitoring wells and leachate collection systems. The Company estimates the total costs associated with developing each landfill site to its final capacity. This includes certain projected landfill site costs that are uncertain because they are dependent on future events and thus actual costs could vary significantly from estimates. The total cost to develop a site to its final capacity includes amounts previously expended and capitalized, net of accumulated depletion, and projections of future purchase and development costs, liner construction costs, operating construction costs and capitalized interest costs. Total landfill costs include the development costs associated with expansion airspace. Expansion airspace is addressed below.

– Final capping, closure and post-closure obligations. The Company accrues for estimated final capping, closure and post-closure maintenance obligations at the landfills it owns and the landfills that it operates, but does not own under life-of-site agreements. Accrued final capping, closure and post-closure costs represent an estimate of the current value of the future obligation associated with final capping, closure and post-closure monitoring of non-hazardous solid waste landfills currently owned or operated under life-of-site agreements by the Company. Final capping costs represent the costs related to installation of clay liners, drainage and compacted soil layers and topsoil constructed over areas of the landfill where total airspace capacity has been consumed. Closure and post-closure monitoring and maintenance costs represent the costs related to cash expenditures yet to be incurred when a landfill facility ceases to accept waste and closes. Accruals for final capping, closure and post-closure monitoring and maintenance requirements in the U.S. consider site inspection, groundwater monitoring, leachate management, methane gas control and recovery, and operating and maintenance costs to be incurred during the period after the facility closes. Certain of these environmental costs, principally capping and methane gas control costs, are also incurred during the operating life of the site in accordance with the landfill operation requirements of Subtitle D and the air emissions standards. Daily maintenance activities, which include many of these costs, are expensed as incurred during the operating life of the landfill. Daily maintenance activities include leachate disposal; surface water, groundwater, and methane gas monitoring and maintenance; other pollution control activities; mowing and fertilizing the landfill final cap; fence and road maintenance; and third party inspection and reporting costs. Site specific final capping, closure and post-closure engineering cost estimates are prepared annually for landfills owned or operated under life-of-site agreements by the Company for which it is responsible for final capping, closure and post-closure.

          Since the adoption of Statement of Financial Accounting Standards (“SFAS”) No. 143, Accounting for Asset Retirement Obligations (“SFAS 143”), landfill final capping, closure and post-closure liabilities are calculated by estimating the total obligation in current dollars, inflating the obligation based upon the expected date of the expenditure using an inflation rate (2.5% during 2007 and 2008) and discounting the inflated total to its present value using a discount rate (7.5% during 2007 and 2008). At December 31, 2007 and 2008, accruals for landfill final capping, closure and post-closure costs (including costs assumed through acquisitions) were $17,853 and $22,002, respectively.

53

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

          In accordance with SFAS 143, final capping, closure and post-closure liability is recorded as an addition to site costs and amortized to depletion expense on a units-of-consumption basis as remaining landfill airspace is consumed. The impact of changes determined to be changes in estimates, based on an annual update, is accounted for on a prospective basis. Depletion expense resulting from final capping, closure and post-closure obligations recorded as a component of landfill site costs will generally be less during the early portion of a landfill’s operating life and increase thereafter. The final capping, closure and post-closure liabilities reflect owned landfills and landfills operated under life-of-site agreements with estimated remaining lives, based on remaining permitted capacity, probable expansion capacity and projected annual disposal volumes, that range from approximately 3to 206years, with an average remaining life of approximately 53years. The costs for final capping, closure and post-closure obligations at landfills the Company owns or operates under life-of-site agreements are generally estimated based on interpretations of current requirements and proposed or anticipated regulatory changes.

          The estimates for landfill final capping, closure and post-closure costs, including final capping costs, consider when the costs would actually be paid and factor in inflation and discount rates. Interest is accreted on the recorded liability using the corresponding discount rate. When using discounted cash flow techniques, reliable estimates of market premiums may not be obtainable. In the waste industry, there is no market for selling the responsibility for final capping, closure and post-closure obligations independent of selling the landfill in its entirety. Accordingly, the Company does not believe that it is possible to develop a methodology to reliably estimate a market risk premium and has therefore excluded any such market risk premium from its determination of expected cash flows for landfill asset retirement obligations. The possibility of changing legal and regulatory requirements and the forward-looking nature of these types of costs make any estimation or assumption less certain.

          The following is a rollforward of the Company’s final capping, closure and post-closure liability balance from December 31, 2006 to December 31, 2008:

Final capping, closure and post-closure liability at December 31, 2006	$	11,638
Adjustments to final capping, closure and post-closure liabilities		1,310
Liabilities incurred		1,354
Accretion expense		1,155
Closure payments		(1,008	)
Assumption of closure liabilities from acquisitions		3,404
Final capping, closure and post-closure liability at December 31, 2007		17,853
Adjustments to final capping, closure and post-closure liabilities		1,812
Liabilities incurred		1,598
Accretion expense		1,400
Closure payments		(1,361	)
Assumption of closure liabilities from acquisitions		700
Final capping, closure and post-closure liability at December 31, 2008	$	22,002

          The Company recorded adjustments to its final capping, closure and post-closure liabilities for the year ended December 31, 2007, due to revisions in cost estimates, a decrease in the expansion airspace at a landfill for which an expansion is being pursued, and estimated increases in annual volume at an owned landfill, causing the remaining life, in years, of the landfill to decrease. The Company recorded adjustments to its final capping, closure and post-closure liabilities for the year ended December 31, 2008, due primarily 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.

54

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

          At December 31, 2008, $20,729 of the Company’s restricted assets balance was for purposes of settling future final capping, closure and post-closure liabilities.

– Disposal capacity. The Company’s internal and third-party engineers perform surveys at least annually to estimate the disposal capacity at its landfills. This is done by using surveys and other methods to calculate, based on the terms of the permit, height restrictions and other factors, how much airspace is left to fill and how much waste can be disposed of at a landfill before it has reached its final capacity. 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 certain landfills it operates, but does not own, under life-of-site agreements. The Company’s landfill depletion rates are based on the term of the operating agreement at its operated landfills that have capitalized expenditures. 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 internal criteria to determine when expansion airspace may be included as disposal capacity is as follows:

1)	The land where the expansion is being sought is contiguous to the current disposal site, and the Company either owns the expansion property or is under an option, purchase, operating or other similar agreement;
2)	Total development costs, final capping costs, and closure/post-closure costs have been determined;
3)	Internal personnel have performed a financial analysis of the proposed expansion site and have determined that it has a positive financial and operational impact;
4)	Internal personnel or external consultants are actively working to obtain the necessary approvals to obtain the landfill expansion permit; and
5)	Obtaining the expansion is considered probable (for a pursued expansion to be considered probable, there must be no significant known technical, legal, community, business, or political restrictions or similar issues existing that could impair the success of the expansion).

          It is possible that the Company’s estimates or assumptions could ultimately be significantly different from actual results. In some cases the Company may be unsuccessful in obtaining an expansion permit or the Company may determine that an expansion permit that the Company previously thought was probable has become unlikely. To the extent that such estimates, or the assumptions used to make those estimates, prove to be significantly different than actual results, or the belief that the Company will receive an expansion permit changes adversely in a significant manner, the costs of the landfill, including the costs incurred in the pursuit of the expansion, may be subject to impairment testing, as described below, and lower profitability may be experienced due to higher amortization rates, higher capping, closure and post-closure rates, and higher expenses or asset impairments related to the removal of previously included expansion airspace.

          The Company periodically evaluates its landfill sites for potential impairment indicators. The Company’s judgments regarding the existence of impairment indicators are based on regulatory factors, market conditions and operational performance of its landfills. Future events could cause the Company to conclude that impairment indicators exist and that its landfill carrying costs are impaired.

Allocation of Acquisition Purchase Price

          A summary of the Company’s acquisition purchase price allocation policies is as follows:

● The purchase price of acquisitions is allocated to 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.

● The Company accrues the payment of contingent purchase price if the events surrounding the contingency are deemed assured beyond a reasonable doubt.

Goodwill and Indefinite-Lived Intangible Assets

The Company acquired indefinite-lived intangible assets in connection with certain of its acquisitions.  The amounts assigned to indefinite-lived intangible assets consist of the value of certain perpetual rights to provide solid waste collection and transportation services in specified territories.  The estimated fair value of the acquired indefinite-lived intangible assets was determined by management based on the discounted net cash flows associated with the rights, agreements and contracts.  Indefinite-lived intangible assets are not amortized. Goodwill represents the excess of the purchase price over the estimated fair value of the net tangible and intangible assets of the acquired entities.  Goodwill and intangible assets, deemed to have indefinite lives, are subject to annual impairment tests as described below.

55

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

Goodwill and indefinite-lived intangibles are tested for impairment on at least an annual basis in the fourth quarter of the year.  In the first step of testing for goodwill impairment, the Company estimates the fair value of each reporting unit, which it has determined to be its geographic operating segments, and compares the fair value with the carrying value of the net assets assigned to each unit.  If the fair value of a reporting unit is greater than the carrying value of the net assets assigned to the reporting unit, then no impairment results.  If the fair value is less than its carrying value, then the Company would perform a second step and determine the fair value of the goodwill.  In this second step, the fair value of goodwill is determined by deducting the fair value of a reporting unit’s identifiable assets and liabilities from the fair value of the reporting unit as a whole, as if that reporting unit had just been acquired and the purchase price were being initially allocated.  If the fair value of the goodwill is less than its carrying value for a reporting unit, an impairment charge would be recorded to earnings in the Company’s Consolidated Statement of Income.  In testing indefinite-lived intangibles for impairment, the Company compares the estimated fair value of each indefinite-lived intangible to its carrying value.  If the fair value of the indefinite-lived intangible is less than its carrying value, an impairment charge would be recorded to earnings in the Company's Consolidated Statement of Income.

To determine the fair value of each of the Company's  reporting units as a whole and each indefinite-lived intangible asset, the Company uses discounted cash flow analyses, which require significant assumptions and estimates about the future operations of each reporting unit and the future discrete cash flows related to each indefinite-lived intangible asset.  Significant judgments inherent in these analyses include the determination of appropriate discount rates, the amount and timing of expected future cash flows and growth rates.  The cash flows employed in the Company’s 2008 discounted cash flow analyses were based on ten-year financial forecasts, which in turn were based on the 2009 annual budget developed internally by management.  These forecasts reflect perpetual revenue growth rates of 5.0% and operating profit margins that were consistent with 2008 results.  The Company’s discount rate assumptions are based on an assessment of the Company’s weighted average cost of capital.  In assessing the reasonableness of the Company’s determined fair values of its reporting units, the Company evaluates its results against its current market capitalization.

          In addition, the Company would evaluate a reporting unit for impairment if events or circumstances change between annual tests indicating a possible impairment. Examples of such events or circumstances include the following:

● A significant adverse change in legal factors or in the business climate,

● An adverse action or assessment by a regulator,

● A more likely than not expectation that a segment or a significant portion thereof will be sold, or

● The testing for recoverability under Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, of a significant asset group within the segment.

          As a result of performing the tests for potential impairment, the Company determined that no impairment existed as of December 31, 2007 or 2008, and, therefore, there were no write-downs to any of its goodwill or indefinite-lived intangible assets.

Impairments of Property, Plant and Equipment and Other Intangible Assets

          Other intangible assets consist of long-term franchise agreements, contracts and non-competition agreements. Property, plant, equipment and other intangible assets are carried on the Company’s consolidated financial statements based on their cost less accumulated depreciation or amortization. The recoverability of these assets is tested whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

          Typical indicators that an asset may be impaired include:

● A significant adverse change in legal factors or in the business climate

● An adverse action or assessment by a regulator;

● A more likely than not expectation that a segment or a significant portion thereof will be sold, or

● The testing for recoverability under Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, of a significant asset group within a segment.

          If any of these or other indicators occur, a test of recoverability is performed by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows. If the carrying values are in excess of undiscounted expected future cash flows, impairment is measured by comparing the fair value of the asset to its carrying value. Fair value is determined by an internally developed discounted projected cash flow analysis of the asset. Cash flow projections are sometimes based on a group of assets, rather than a single asset. If cash flows cannot be separately and independently identified for a single asset, the Company will determine whether an impairment has occurred for the group of assets for which the projected cash flows can be identified. If the fair value of an asset is determined to be less than the carrying amount of the asset or asset group, an impairment in the amount of the difference is recorded in the period that the impairment indicator occurs. Several impairment indicators are beyond the Company’s control, and whether or not they will occur cannot be predicted with any certainty. Estimating future cash flows requires significant judgment and projections may vary from cash flows eventually realized. There are other considerations for impairments of landfills, as described below.

56

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

          The estimated fair value of the acquired long-term franchise agreements and contracts was determined by management based on the discounted net cash flows associated with the rights, agreements and contracts. The estimated fair value of the non-competition agreements reflects management’s estimates based on the amount of revenue protected under such agreements. The amounts assigned to the franchise agreements, contracts, and non-competition agreements are being amortized on a straight-line basis over the expected term of the related agreements (ranging from 1 to 56 years).

           Landfills – There are certain indicators listed above that require significant judgment and understanding of the waste industry when applied to landfill development or expansion projects. For example, a regulator may initially deny a landfill expansion permit application though the expansion permit is ultimately granted. In addition, management may periodically divert waste from one landfill to another to conserve remaining permitted landfill airspace. Therefore, certain events could occur in the ordinary course of business and not necessarily be considered indicators of impairment due to the unique nature of the waste industry.

Restricted Assets

          Restricted assets held by trustees consist principally of funds deposited in connection with landfill final capping, closure and post-closure obligations and other financial assurance requirements. Proceeds from these financing arrangements are directly deposited into trust funds, and the Company does not have the ability to utilize the funds in regular operating activities. See Note 9 for further information on restricted assets.

Fair Value of Financial Instruments

          The Company’s financial instruments consist primarily of cash, trade receivables, restricted assets, trade payables, debt instruments, interest rate swaps and commodity swaps. As of December 31, 2007 and 2008, the carrying values of cash, trade receivables, restricted assets, and trade payables are considered to be representative of their respective fair values. The carrying values of the Company’s debt instruments, excluding the 3.75% Convertible Senior Notes due 2026 (the “2026 Notes”) and the 6.22% Senior Notes due 2015 (the “2015 Notes”), approximate their fair values as of December 31, 2007 and 2008, based on current borrowing rates for similar types of borrowing arrangements. The Company’s 2026 Notes had a carrying value of $200,000 and a fair value of approximately $222,974 and $217,200 at December 31, 2007 and 2008, respectively, based on the publicly quoted trading price of these notes. The Company’s 2015 Notes had a carrying value of $175,000 and a fair value of approximately $160,213 at December 31, 2008, based on quotes of bonds with similar ratings in similar industries. For details on the fair value of the Company’s interest rate and fuel commodity swaps, refer to Note 9.

Derivative Financial Instruments

          The Company recognizes all derivatives on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of derivatives will either be offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative’s change in fair value is immediately recognized in earnings. The Company classifies cash inflows and outflows from derivatives within net income on the statement of cash flows.

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

57

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

          At December 31, 2008, the Company’s derivative instruments included nine interest rate swap agreements as follows:

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.

          Another of the Company’s objectives for utilizing derivative instruments is to reduce its exposure to fluctuations in cash flows due to changes in the price of diesel fuel. The Company’s strategy to achieve that objective involves entering into commodity swaps that are specifically designated to certain forecasted diesel fuel purchases and accounted for as cash flow hedges (“fuel hedges”). See Note 12 for further discussion on the Company’s hedge accounting.

          At December 31, 2008, the Company’s derivative instruments included nine fuel hedge agreements as follows:

Date Entered	Notional Amount (in gallons per month)	Diesel Rate Paid Fixed		Diesel Rate Received Variable	Effective Date	Expiration Date
October 2008	250,000	$	3.750	DOE Diesel Fuel Index*	January 2009	December 2010
October 2008	100,000		3.745	DOE Diesel Fuel Index*	January 2009	December 2010
October 2008	250,000		3.500	DOE Diesel Fuel Index*	January 2009	December 2010
December 2008	100,000		3.000	DOE Diesel Fuel Index*	January 2010	December 2010
December 2008	150,000		3.000	DOE Diesel Fuel Index*	January 2010	December 2010
December 2008	150,000		2.820	DOE Diesel Fuel Index*	January 2010	December 2010
December 2008	150,000		2.700	DOE Diesel Fuel Index*	January 2010	December 2010
December 2008	400,000		2.950	DOE Diesel Fuel Index*	January 2011	December 2011
December 2008	400,000		3.030	DOE Diesel Fuel Index*	January 2012	December 2012

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

Income Taxes

          The Company uses the liability method to account for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and income tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The Company assumes the deductibility of certain costs in its income tax filings and estimates the future recovery of deferred tax assets.

          The Company adopted FASB Interpretation 48, Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109 (“FIN 48”), at the beginning of fiscal year 2007. FIN 48 requires the Company to evaluate whether the tax position taken by the Company will more likely than not be sustained upon examination by the appropriate taxing authority. It also provides guidance on how the Company should measure the amount of benefit that the Company is to recognize in its financial statements. Under FIN 48, the Company also classifies a liability for unrecognized tax benefits as current only to the extent the Company anticipates making a payment within one year. 

58

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

          For fiscal years before 2007, the Company accrued income tax reserves for contingencies based upon management’s assessment of exposure associated with, for instance, permanent differences, tax credits and interest expense. The tax reserves were analyzed quarterly and adjustments were made as events occurred to warrant adjustments to the reserve. For example, if the statutory period for assessing tax on a given tax return or period lapsed, the reserve associated with that period was reversed.

Stock-Based Compensation

          Effective the beginning of the first quarter of 2006, the Company adopted the provisions of SFAS No. 123 (revised 2004), Share-Based Payment (“SFAS 123(R)”) for its share-based compensation plans. In March 2005, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 107, Share-Based Payment (“SAB 107”), relating to SFAS 123(R). The Company has applied the provisions of SAB 107 in its adoption of SFAS 123(R).

          The weighted average grant date fair value per share for options granted during 2006 was $7.72. The Company did not grant stock options during the years ended December 31, 2007 or 2008.

          The Company’s calculations of the fair value of stock options granted during the year ended December 31, 2006, was made using the Black-Scholes option-pricing model. The fair value of the Company’s stock option grants was estimated assuming no expected dividend yield and the following weighted average assumptions for the year ended December 31, 2006:

Expected life	4 years
Risk-free interest rate	4.8%
Expected volatility	20%

          Expected life is calculated based on the weighted average historical life of stock options. Risk-free interest rate is based on the U.S. treasury yield curve for the period of the expected life of the stock option. Expected volatility is calculated using the daily historical volatility over the last three years.

          The fair value of restricted stock and restricted stock units for the years ended December 31, 2006, 2007 and 2008, were determined based on the number of shares granted and the quoted price of the Company’s common stock.

          All share-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized on a straight-line basis as expense over the employee’s requisite service period. The Company calculates potential windfalls and shortfalls under the treasury stock method by including the impact of pro forma deferred tax assets in the calculation of diluted earnings per common share. The Company also adopted FASB Staff Position No. FAS 123(R)-3, Transition Election Related to Accounting for the Tax Effects of Share-Based Payment Awards (“FSP 123(R)-3”). Under FSP 123(R)-3, the Company elected to use the short-cut method to calculate the historical pool of windfall tax benefits. The Company elected to use the tax law ordering approach for purposes of determining whether an excess of tax benefit has been realized.

          Stock-based compensation expense recognized during the years ended December 31, 2006, 2007 and 2008, were approximately $3,451 ($2,200 net of taxes), $6,128 ($3,825 net of taxes) and $7,854 ($4,937 net of taxes), respectively, and consisted of stock option, restricted stock unit and restricted stock expense. The Company records stock-based compensation expense in “selling, general and administrative” expenses in the Consolidated Statements of Income. The incremental stock-based compensation expense recognized as a result of adopting SFAS 123(R) was $583 ($421 net of taxes), $665 ($476 net of taxes) and $665 ($480 net of taxes), or approximately a $0.01 per share decrease to basic and diluted earnings per common share for the years ended December 31, 2006, 2007 and 2008, respectively, which represented the expense related to stock options less the impact of recognizing a forfeiture rate assumption related to restricted stock and restricted stock units. A contra-equity balance of $2,234 in “Deferred stock compensation” on the Consolidated Balance Sheet was reversed as a change in accounting policy upon the adoption of SFAS 123(R) to “Additional paid-in capital” as of January 1, 2006. The total unrecognized compensation cost at December 31, 2008, related to unvested stock option, restricted stock unit and restricted stock awards was $19,257 and that future expense will be recognized over the remaining vesting period of the stock option, restricted stock unit and restricted stock awards which currently extends to 2013. The weighted average remaining vesting period of those awards is 1.4 years.

59

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

Per Share Information

          Basic net income per share is computed using the weighted average number of common shares outstanding. Diluted net income per share is computed using the weighted average number of common and potential common shares outstanding. Potential common shares are excluded from the computation if their effect is anti-dilutive.

Advertising Costs

          Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2006, 2007 and 2008, was $2,147, $2,252 and $2,596, respectively, which is included in selling, general and administrative expense in the Consolidated Statements of Income.

Insurance Liabilities

          The Company is effectively self-insured for automobile liability, property, general liability, workers’ compensation, employer’s liability and employee group health claims. The Company’s insurance accruals are based on claims filed and estimates of claims incurred but not reported and are developed by the Company’s management with assistance from its third-party actuary and its third-party claims administrator. The insurance accruals are influenced by the Company’s past claims experience factors, which have a limited history, and by published industry development factors. At December 31, 2007 and 2008, the Company’s total accrual for self-insured liabilities was $34,662 and $33,841, respectively, which is included in accrued liabilities in the Consolidated Balance Sheets.

Segment Information

          The Company identifies its operating segments based on management responsibility and geographic location. The Company considers each of its three operating regions that report stand-alone financial information and have segment managers that report to the Company’s chief operating decision maker to be an operating segment. The Company has assessed and determined that it has met all of the aggregation criteria required under SFAS No. 131, Disclosures About Segments of an Enterprise and Related Information (“SFAS No. 131”), to aggregate its multiple operating segments into one reportable segment. Therefore, all three operating regions have been aggregated together and are reported as a single segment consisting of the collection, transfer, recycling and disposal of non-hazardous solid waste primarily in the Western and Southern United States.

Reclassifications

          Certain amounts reported in the Company’s prior year’s financial statements have been reclassified to conform with the 2008 presentation.

New Accounting Pronouncements

          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: (1) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (2) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (3) 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 GAAP, 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.

60

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

          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.

          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. Therefore, beginning January 1, 2009, the Company will retroactively reflect the line item, “Minority Interests,” as a separate line item in the stockholders’ equity section of the Company’s balance sheet instead of the current presentation as mezzanine equity. Additionally, the line item, “Minority Interests,” in the statement of income will no longer be shown as an expense item for all periods presented, resulting in an increase to consolidated net income. The Company will retroactively present on the face of the statement of income the amounts of consolidated net income attributable to the Company and to the noncontrolling interests (the portion formally shown as “Minority Interests” expense in the statements of income). The Company does not expect the adoption of SFAS 160 to have a material impact on the Company’s prospective financial position or results of operations.

          SFAS 161. In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities – an Amendment of FASB Statement No. 133 (“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: (1) how and why an entity uses derivative instruments; (2) how derivative instruments and related hedged items are accounted for under SFAS 133 and its related interpretations; and (3) 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.

61

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

          FSP No. APB 14-1. In May 2008, the FASB issued FASB Staff Position No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement) (“FSP No. APB 14-1”). FSP No. APB 14-1 applies to convertible debt instruments that, by their stated terms, may be settled in cash (or other assets) upon conversion, including partial cash settlement, unless the embedded conversion option is required to be separately accounted for as a derivative under SFAS 133. FSP No. APB 14-1 specifies that issuers of convertible debt instruments should separately account for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. FSP No. APB 14-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. FSP No. APB 14-1 will be applied retrospectively to all periods presented. The cumulative effect of the change in accounting principle on periods prior to those presented will be recognized as of the beginning of the first period presented. An offsetting adjustment will be made to the opening balance of retained earnings for that period, presented separately.

          The adoption of FSP No. APB 14-1 will not affect the Company’s cash flows; however, it will impact the Company’s results of operations by increasing interest expense associated with the Company’s 3.75% Convertible Senior Notes due 2026 (“2026 Notes”) by adding a non-cash component to amortize a debt discount calculated based on the difference between the cash coupon of the convertible debt instrument and the estimated non-convertible debt borrowing rate. The 2026 Notes were issued in March 2006 and bear interest at a rate of 3.75% per annum. At the date of issuance, the Company’s borrowing rate for similar debt instruments with no conversion rights was estimated at 6.5% per annum. The adoption of FSP No. APB 14-1 will require the Company to record a debt discount, which will be amortized to interest expense through April 1, 2011, representing the first date on which holders of the 2026 Notes may require the Company to repurchase all or a portion of their notes. Upon the adoption of FSP No. APB 14-1, the annual decrease to net income as a result of amortizing the non-cash debt discount, net of the expected income tax benefit, will be as follows:

Year ended December 31, 2006	$	1,800
Year ended December 31, 2007	$	2,500
Year ended December 31, 2008	$	2,600
Year ended December 31, 2009	$	2,800
Year ended December 31, 2010	$	3,000
Year ended December 31, 2011	$	800

          Upon conversion of a convertible debt instrument, the Company must allocate the fair value of the consideration transferred and any transaction costs incurred between the equity and liability components. This is done by first allocating to the liability component an amount equal to the fair value of the liability component immediately prior to its conversion, with the residual consideration allocated to the equity component. Any gain or loss equal to the difference between the consideration allocated to the liability component and the carrying value of the liability component, including any unamortized debt discount or issuance costs, is recorded in earnings.

          FSP No. FAS 142-3. In April 2008, the FASB issued FSP No. 142-3, Determination of the Useful Life of Intangible Assets (“FSP FAS 142-3”), which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, Goodwill and Other Intangible Assets (“SFAS 142”). The intent of FSP FAS 142-3 is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141(R) and other U.S. generally accepted accounting principles. FSP FAS 142-3 requires an entity to disclose information for a recognized intangible asset that enables users of the financial statements to assess the extent to which the expected future cash flows associated with the asset are affected by the entity’s intent and/or ability to renew or extend the arrangement. FSP FAS 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The Company does not expect the adoption of FSP FAS 142-3 to have a material impact on the Company’s financial position or results of operations.

2. USE OF ESTIMATES AND ASSUMPTIONS

          In preparing the Company’s consolidated financial statements, several estimates and assumptions are made that affect the accounting for and recognition of assets, liabilities, revenues and expenses. These estimates and assumptions must be made because certain of the information that is used in the preparation of the Company’s consolidated financial statements is dependent on future events, cannot be calculated with a high degree of precision from data available or is simply not capable of being readily calculated based on generally accepted methodologies. In some cases, these estimates are particularly difficult to determine and the Company must exercise significant judgment. The most difficult, subjective and complex estimates and the assumptions that deal with the greatest amount of uncertainty are related to the Company’s accounting for landfills, self-insurance, income taxes, allocation of acquisition purchase price and asset impairments, which are discussed in Note 1. 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 SFAS 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 consolidated financial statements.

62

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

3. ACQUISITIONS

          The Company’s growth strategy includes the acquisition of solid waste businesses located in markets with significant growth opportunities. 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 2006, the Company acquired 14 non-hazardous solid waste collection, transfer and recycling businesses. During each of 2007 and 2008, the Company acquired 15 non-hazardous solid waste collection, transfer, disposal and recycling businesses. In addition, during 2008, the Company acquired the remaining 49% interest in Pierce County Recycling, Composting and Disposal, LLC and Pierce County Landfill Management, Inc. (“PCRCD”). Prior to the acquisition, the Company was consolidating PCRCD as a majority-owned subsidiary with a related minority interest obligation and minority interest expense.

          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. 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.

          As of December 31, 2008, the Company had eightacquisitions 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.

63

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

          A summary of the purchase price allocations for acquisitions consummated in 2006 and 2007 and preliminary purchase price allocations for the acquisitions consummated in 2008 are as follows:

	2006 Acquisitions			2007 Acquisitions			2008 Acquisitions
Acquired Assets:
Accounts receivable	$	902		$	6,099		$	13,781
Prepaid expenses and other current assets		332			724			1,527
Property and equipment		12,580			82,749			98,448
Goodwill		27,571			60,653			26,024
Long-term franchise agreements and contracts		1,859			3,667			117,416
Indefinite-lived intangibles		—			—			92,312
Other intangibles		964			3,592			9,044
Non-competition agreements		120			4,941			48
Other assets		591			—			514
Assumed Liabilities:
Deferred revenue		(879	)		(4,043	)		(2,449	)
Accounts payable		(214	)		(2,283	)		(6,692	)
Accrued liabilities		(1,558	)		(4,812	)		(3,526	)
Notes issued to sellers		—			—			(1,788	)
Debt and long-term liabilities assumed		(3,266	)		(35,442	)		(22,688	)
Deferred income taxes		(549	)		(8,073	)		(651	)
Closure liabilities		—			—			(700	)
Net assets acquired		38,453			107,772			320,620
Acquisition-related liabilities		1,149			1,780			1,049
Common stock warrants		(115	)		(123	)		(79	)
Net assets exchanged for new operations		(893	)		—			—
Elimination of minority interest		—			—			33,560
Payments for acquisitions, net of cash acquired	$	38,594		$	109,429		$	355,150

          Acquisition-related liabilities are liabilities paid in the year shown above that were accrued for in a previous year. Net assets exchanged for new operations are the assets given up in exchange for the acquisition of assets of a new operation. Elimination of minority interest consists of the minority interest liability in PCRCD that was eliminated as a result of the Company’s acquisition of the remaining 49% interest in PCRCD.  The acquisitions completed in the years ended December 31, 2006, 2007 and 2008, were not material to the Company’s results of operations, either individually or in the aggregate.  As a result, pro forma financial information has not been provided.

          Goodwill acquired in 2007 totaling $58,886 and long-term franchise agreements, contracts, and other intangibles acquired in 2007 totaling $11,269 are expected to be deductible for tax purposes. Goodwill acquired in 2008 totaling $22,586 and long-term franchise agreements, contracts, and other intangibles acquired in 2008 totaling $217,933 are expected to be deductible for tax purposes.

64

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

4. INTANGIBLE ASSETS

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

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Amortizable intangible assets:
Long-term franchise agreements and contracts	$	179,674	$	(12,751	)	$	166,923
Non-competition agreements		9,751		(5,157	)		4,594
Other		26,107		(7,340	)		18,767
		215,532		(25,248	)		190,284
Nonamortized intangible assets:
Indefinite-lived intangible assets		116,160		—			116,160
Intangible assets, exclusive of goodwill	$	331,692	$	(25,248	)	$	306,444

          The weighted-average amortization periods of long-term franchise agreements and contracts, non-competition agreements and other intangibles acquired during the year ended December 31, 2008, are 30.9 years, 6.9 years and 9.6 years, respectively.

          Intangible assets, exclusive of goodwill, consisted of the following at December 31, 2007:

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Amortizable intangible assets:
Long-term franchise agreements and contracts	$	62,258	$	(9,470	)	$	52,788
Non-competition agreements		9,703		(4,404	)		5,299
Other		17,063		(5,041	)		12,022
		89,024		(18,915	)		70,109
Nonamortized intangible assets:
Indefinite-lived intangible assets		23,848		—			23,848
Intangible assets, exclusive of goodwill	$	112,872	$	(18,915	)	$	93,957

          The weighted-average amortization periods of long-term franchise agreements and contracts, non-competition agreements and other intangibles acquired during the year ended December 31, 2007, are 22.4 years, 12.4 years and 8.4 years, respectively.

          The amounts assigned to indefinite-lived intangible assets consist of the value of certain perpetual rights to provide solid waste collection and transportation services in specified territories. These indefinite-lived intangible assets were subject to amortization prior to the Company’s adoption of SFAS No. 142.

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

For the year ended December 31, 2009	$	9,850
For the year ended December 31, 2010	$	9,710
For the year ended December 31, 2011	$	9,604
For the year ended December 31, 2012	$	9,468
For the year ended December 31, 2013	$	8,029

          Total amortization expense for intangible assets was $4,080, $4,341 and $6,334 for the years ended December 31, 2006, 2007 and 2008, respectively.

65

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

5. PROPERTY AND EQUIPMENT

          Property and equipment consists of the following:

	Year Ended December 31,
	2007			2008
Landfill site costs	$	608,750		$	655,773
Rolling stock		274,719			343,692
Land, buildings and improvements		115,461			155,712
Containers		131,412			155,646
Machinery and equipment		122,107			138,094
Construction in progress		4,122			8,594
		1,256,571			1,457,511
Less accumulated depreciation and depletion		(391,241	)		(473,387	)
	$	865,330		$	984,124

          The Company’s landfill depletion expense for the years ended December 31, 2006, 2007 and 2008, was $18,854, $22,282 and $23,422, respectively.

6. OTHER ASSETS, NET

          Other assets, net, consist of the following:

	Year Ended December 31,
	2007		2008
Deferred financing costs	$	7,972	$	7,128
Investment in unconsolidated entity		5,300		5,300
Landfill closure receivable		3,397		4,358
Deposits		917		916
Other		3,871		3,220
	$	21,457	$	20,922

7. ACCRUED LIABILITIES

          Accrued liabilities consist of the following:

	Year Ended December 31,
	2007		2008
Insurance claims	$	34,662	$	33,841
Payroll and payroll-related		18,872		20,198
Interest payable		2,674		6,934
Acquisition-related		4,852		4,227
Unrealized interest rate and fuel commodity swap losses		43		21,120
Other		8,475		8,900
	$	69,578	$	95,220

66

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

8. LONG-TERM DEBT

          Long-term debt consists of the following:

	Year Ended December 31,
	2007			2008
Revolver under Credit Facility	$	479,000		$	400,000
2026 Convertible Senior Notes		200,000			200,000
2015 Senior Notes		—			175,000
Tax-Exempt Bonds		44,510			53,960
Notes payable to sellers in connection with acquisitions, uncollateralized, bearing interest at 5.5% to 10.35%, principal and interest payments due periodically with due dates ranging from 2009 to 2036		3,994			4,888
Notes payable to third parties, collateralized by substantially all assets of certain subsidiaries of the Company, bearing interest at 9.0% to 10.9%, principal and interest payments due periodically with due dates ranging from 2009 to 2019		5,329			1,608
		732,833			835,456
Less – current portion		(13,315	)		(4,698	)
	$	719,518		$	830,758

Credit Facility

          The Company has a senior revolving credit facility with a syndicate of banks for which Bank of America, N.A. acts as agent. The maximum borrowings available under the Company’s credit facility were $800,000 and $845,000 as of December 31, 2007 and 2008, respectively. When the Company increased the maximum borrowings available under the Company’s credit facility to $845,000 in June 2008, no changes were made to the terms, pricing, conditions or covenants of the credit facility. There is no maximum amount of standby letters of credit that can be issued; however, the issuance of standby letters of credit reduces the amount of total borrowings available. As of December 31, 2007, $479,000 was outstanding under the credit facility, exclusive of outstanding standby letters of credit of $68,260. As of December 31, 2008, $400,000 was outstanding under the credit facility, exclusive of outstanding standby letters of credit of $81,401. The credit facility matures in September 2012.

          The borrowings under the credit facility bear interest, at the Company’s option, at either the base rate plus the applicable base rate margin (approximately 7.25% and 3.25% at December 31, 2007 and 2008, respectively) on base rate loans, or the Eurodollar rate plus the applicable Eurodollar margin (approximately 5.8% and 2.5% at December 31, 2007 and 2008, respectively) on Eurodollar loans. The applicable margins under the credit facility vary depending on the Company’s leverage ratio, as defined in the credit agreement. As of December 31, 2007 and 2008, these margins ranged from 0.625% to 1.125% for Eurodollar loans and 0.00% for base rate loans.

          The credit facility requires the Company to pay an annual commitment fee on the unused portion of the facility. The commitment fee ranged from 0.15% to 0.20% as of December 31, 2007 and 2008.

          The borrowings under the credit facility are not collateralized. The credit facility contains representations and warranties and places certain business, financial and operating restrictions on the Company relating to, among other things, indebtedness, liens and other encumbrances, investments, mergers and acquisitions, asset sales, sale and leaseback transactions, and dividends, distributions and redemptions of capital stock. The credit agreement requires that the Company maintain specified financial ratios. As of December 31, 2007 and 2008, the Company was in compliance with all applicable covenants in the credit facility.

Floating Rate Convertible Subordinated Notes due 2022

          In 2002, the Company issued Floating Rate Convertible Subordinated Notes due 2022 (the “2022 Notes”) with an aggregate principal amount of $175,000 in an offering pursuant to Rule 144A of the Securities Act of 1933, as amended. The 2022 Notes were uncollateralized and ranked junior to all existing and future senior indebtedness, as defined in the indenture governing the 2022 Notes. The 2022 Notes required (subject to certain exceptions) payment of the principal value in cash and net share settle of the conversion value in excess of the principal value of the notes upon conversion and contained dividend protection provisions.

67

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

          In April 2006, the Company called for redemption the $175,000 aggregate principal amount of its 2022 Notes, which redemption occurred on May 8 and June 5, 2006. Holders of the 2022 Notes had the right to convert their notes at any time prior to the end of the day that was two business days preceding the applicable redemption date. The Company paid approximately $175,000 in cash and issued 1,441,763 shares of its common stock in connection with the conversion and redemption. The Company funded the conversion and redemption with borrowings under its senior revolving credit facility. Additionally, the Company recorded a non-cash, pre-tax charge of $4,185 ($2,637 net of taxes) in other income (expense) for the write-off of unamortized debt issuance costs associated with the full $175,000 aggregate principal amount of the notes called for redemption.

Convertible Senior Notes due 2026

          On March 20, 2006, the Company completed its offering of $200,000 aggregate principal amount of its 3.75% Convertible Senior Notes due 2026 in an offering pursuant to Rule 144A of the Securities Act of 1933, as amended. The terms and conditions of the 2026 Notes are set forth in the Indenture, dated as of March 20, 2006, between the Company and U.S. Bank National Association, as trustee. The 2026 Notes rank equally in right of payment to all of the Company’s other existing and future senior uncollateralized and unsubordinated indebtedness. The 2026 Notes rank senior in right of payment to all of the Company’s existing and future subordinated indebtedness and are subordinated in right of payment to the Company’s collateralized obligations to the extent of the assets collateralizing such obligations. The 2026 Notes bear interest at 3.75% per annum payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2006, until the maturity date of April 1, 2026. The Company’s obligations under the 2026 Notes are not guaranteed by any third party.

          The 2026 Notes are convertible into cash and, if applicable, shares of common stock based on an initial conversion rate of 29.4118 shares of common stock per $1 principal amount of 2026 Notes (which is equal to an initial conversion price of approximately $34.00 per share), subject to adjustment, and only under certain circumstances. Upon a surrender of the 2026 notes for conversion, the Company will deliver cash equal to the lesser of the aggregate principal amount of notes to be converted and its total conversion obligation. The Company will deliver shares of its common stock in respect of the remainder, if any, of its conversion obligation. The holders of the 2026 Notes who convert their notes in connection with a change in control (as defined in the Indenture) may be entitled to a make-whole premium in the form of an increase in the conversion rate.

          Holders may surrender notes for conversion into cash and, if applicable, shares of the Company’s common stock at an initial conversion price of $34.00 per share (equivalent to an initial conversion rate of 29.4118 shares per $1 principal amount of notes) at any time prior to the close of business on the maturity date, if the closing sale price of the Company’s common stock for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the quarter preceding the quarter in which the conversion occurs, is more than 130% of the conversion price per share of the Company’s common stock on that 30th day. Based on the Company’s share price through December 31, 2008, the 2026 Notes have not met the requirements for conversion by the holders.

          Beginning on April 1, 2010, the Company may redeem in cash all or part of the 2026 Notes at a price equal to 100% of the principal amount plus accrued and unpaid interest, including additional interest, if any, and, if redeemed prior to April 1, 2011, an interest make-whole payment. The holders of the 2026 Notes can require the Company to repurchase all or a part of the 2026 Notes in cash on each of April 1, 2011, 2016 and 2021, and in the event of a change of control of the Company, at a purchase price of 100% of the principal amount of the 2026 Notes plus any accrued and unpaid interest, including additional interest, if any. The Company is amortizing the $5,534 debt issuance costs over a five-year term through the first put date, or April 1, 2011.

Senior Notes due 2015

          On July 15, 2008, the Company entered into a Master Note Purchase Agreement with certain accredited institutional investors pursuant to which the Company issued and sold to the investors at a closing on October 1, 2008, $175,000 of senior uncollateralized notes due October 1, 2015 (the “2015 Notes”) in a private placement. The 2015 Notes bear interest at the fixed rate of 6.22% per annum with interest payable in arrears semi-annually on April 1 and October 1 beginning on April 1, 2009, and with principal payable at the maturity of the 2015 Notes on October 1, 2015.

68

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

          The 2015 Notes are uncollateralized obligations and rank equally with obligations under the Company’s senior uncollateralized revolving credit facility. The 2015 Notes are subject to representations, warranties, covenants and events of default customary for a private placement of senior uncollateralized notes. Upon the occurrence of an event of default, payment of the 2015 Notes may be accelerated by the holders of the 2015 Notes. The 2015 Notes may also be prepaid at any time in whole or from time to time in any part (not less than 5% of the then-outstanding principal amount) by the Company at par plus a make-whole amount determined in respect of the remaining scheduled interest payments on the 2015 Notes, using a discount rate of the then current market standard for United States treasury bills plus 0.50%. In addition, the Company will be required to offer to prepay the 2015 Notes upon certain changes in control. The Company is amortizing the $1,026 debt issuance costs over a seven-year term through the maturity date, or October 1, 2015.

          The Company may issue additional series of senior uncollateralized notes pursuant to the terms and conditions of the Master Note Purchase Agreement, provided that the purchasers of the 2015 Notes shall not have any obligation to purchase any additional notes issued pursuant to the Master Note Purchase Agreement and the aggregate principal amount of the 2015 Notes and any additional notes issued pursuant to the Master Note Purchase Agreement shall not exceed $500,000.

Tax-Exempt Bonds

          The Company’s tax-exempt bond financings are as follows:

	Type of Interest Rate	Interest Rate on Bond at December 31, 2008			Outstanding Balance at December 31,				Back by Letter of Credit (Amount)
				Maturity Date of Bond
Name of Bond					2007		2008
Wasco Bond 2012	Fixed		7.00%	March 1, 2012	$	2,810	$	2,325	$	—
Wasco Bond 2021	Fixed		7.25	March 1, 2021		8,475		8,475		—
Madera Bond	Variable		0.97	May 1, 2016		1,800		1,800		1,829
Cold Canyon Bond	Variable		0.97	July 2008		5,845		—		—
Tehama Bond	Variable		0.97	June 1, 2014		640		580		598
San Jose Bonds	Variable		0.97	September 1, 2016		9,440		7,020		7,288
West Valley Bond	Variable		1.25	August 1, 2018		15,500		15,500		15,678
LeMay Washington Bond	Variable		1.03	April 1, 2033		—		15,930		16,133
LeMay Olympia Bond	Variable		1.03	April 1, 2019		—		2,330		2,379
					$	44,510	$	53,960	$	43,905

          The variable-rate bonds are all remarketed weekly by a remarketing agent to effectively maintain a variable yield. If the remarketing agent is unable to remarket the bonds, then the remarketing agent can put the bonds to the Company. The Company has obtained standby letters of credit, issued under its senior revolving credit facility, to guarantee repayment of the bonds in this event. The Company classified these borrowings as long-term at December 31, 2008, because the borrowings are supported by standby letters of credit issued under the Company’s senior revolving credit facility which is long-term.

          As of December 31, 2008, aggregate contractual future principal payments by calendar year on long-term debt are due as follows:

2009	$	4,698
2010		1,937
2011		202,041
2012		402,165
2013		1,463
Thereafter		223,152
	$	835,456

69

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

9. FAIR VALUE OF FINANCIAL INSTRUMENTS

          As discussed in Note 1, 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 cash equivalent money market funds and restricted assets. The Company’s derivative instruments are pay-fixed, receive-variable interest rate swaps and pay-fixed, receive-variable diesel fuel commodity swaps. The Company’s interest rate swaps are recorded at their estimated fair values based on quotes received from financial institutions that trade these contracts. The Company verifies the reasonableness of these quotes using similar quotes from another financial institution as of each date for which financial statements are prepared. The Company uses a discounted cash flow ("DCF") model to determine the estimated fair values of the diesel fuel commodity swaps.  The assumptions used in preparing the DCF model include: (i) estimates for the forward DOE index curve and (ii) the discount rate based on risk-free interest rates over the term of the agreements.  The DOE index curve used in the DCF model was obtained from financial institutions that trade these contracts.  For the Company’s interest rate swaps, the Company also considers the Company’s creditworthiness in its determination of the fair value measurement of these instruments in a net liability position. The Company’s cash equivalent money market funds and restricted assets are valued at quoted market prices in active markets for identical assets, which the Company receives from the financial institutions that hold such investments on its behalf. The Company’s restricted assets measured at fair value are invested primarily in U.S. government and agency securities.

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

	Fair Value Measurement at Reporting Date Using
	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Interest rate swap derivative instruments – liability position	$	(27,796	)	$	—	$	(27,796	)	$	—
Fuel hedge derivative instruments – liability position	$	(10,813	)	$	—	$	—		$	(10,813	)
Cash equivalent money market funds	$	256,060		$	256,060	$	—		$	—
Restricted assets	$	21,429		$	21,429	$	—		$	—

The following table summarizes the change in the fair value for Level 3 inputs for the twelve months ended December 31, 2008;

	Level 3 Inputs
Balance as of December 31, 2007	$	—
Realized losses included in earnings		—
Unrealized losses included in Accumulated Other
Comprehensive Loss		(10,813	)
Purchases, sales, issuances and settlements		—
Transfers in and out of Level 3		—
Balance as of December 31, 2008	$	(10,813	)

70

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

10. COMMITMENTS AND CONTINGENCIES

COMMITMENTS

Leases

          The Company leases its facilities and certain equipment under non-cancelable operating leases for periods ranging from one to 20 years, with renewal options for certain leases. The Company’s total rent expense under operating leases during the years ended December 31, 2006, 2007 and 2008, was $8,137, $8,790 and $9,008, respectively.

          As of December 31, 2008, future minimum lease payments, by calendar year, are as follows:

2009	$	8,350
2010		8,020
2011		7,112
2012		6,829
2013		5,803
Thereafter		35,055
	$	71,169

Financial Surety Bonds

          The Company uses financial surety bonds for a variety of corporate guarantees. The two largest uses of financial surety bonds are for municipal contract performance guarantees and landfill final capping, closure and post-closure financial assurance required under certain environmental regulations. Environmental regulations require demonstrated financial assurance to meet final capping, closure and post-closure requirements for landfills. In addition to surety bonds, these requirements may also be met through alternative financial assurance instruments, including insurance, letters of credit and restricted asset deposits.

          At December 31, 2007 and 2008, the Company had provided customers and various regulatory authorities with surety bonds in the aggregate amount of approximately $112,512 and $113,273, respectively, to secure its landfill final capping, closure and post-closure requirements and $51,813 and $48,502, respectively, to secure performance under collection contracts and landfill operating agreements.

          The Company owns a 9.9% interest in a company that, among other activities, issues financial surety bonds to secure final capping, landfill closure and post-closure obligations for companies operating in the solid waste industry. The Company accounts for this investment under the cost method of accounting. There have been no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. This investee company and the parent company of the investee had written final capping, landfill closure and post-closure financial surety bonds for the Company, of which $86,806 and $85,802 were outstanding as of December 31, 2007 and 2008, respectively. The Company’s reimbursement obligations under these bonds are secured by a pledge of its stock in the investee company.

Unconditional Purchase Obligations

          At December 31, 2008, the Company’s unconditional purchase obligations consist of multiple fixed-price fuel purchase contracts under which it has 10.5 million gallons remaining to be purchased for a total of $27,543, plus taxes and transportation upon delivery. These fuel purchase contracts expire on or before December 31, 2009.

Put Option

          The minority interests holders of one of the Company’s majority-owned subsidiaries, Pierce County Recycling, Composting and Disposal, LLC, or PCRCD, had an exercisable put option to require the Company to complete the acquisition of PCRCD by purchasing their minority ownership interests for fair market value. The put option calculated the fair market value of PCRCD based on its current operating income before depreciation and amortization, as defined in the put option agreement. On August 1, 2008, Waste Connections of Washington, Inc., or WCWI, a wholly-owned subsidiary of the Company, entered into an Equity Purchase Agreement with the minority interests holders of PCRCD, Land Recovery, Inc. and Resource Investments, Inc., and their shareholders. Pursuant to the Equity Purchase Agreement, WCWI agreed to purchase from the minority interests holders all of their membership interests of PCRCD and all of their shares of capital stock of Pierce County Landfill Management, Inc., PCRCD’s Manager, for a purchase price of $103,665. The transaction closed on November 3, 2008. PCRCD and Pierce County Landfill Management, Inc., which were previously majority-owned subsidiaries of the Company, are now wholly-owned subsidiaries of the Company. Upon the closing of the PCRCD transaction, the put option terminated and is of no further force or effect. After the closing of the transaction, Pierce County Landfill Management, Inc. was merged into PCRCD.

71

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

CONTINGENCIES

Environmental Risks

          The Company is subject to liability for any environmental damage that its solid waste facilities may cause to neighboring landowners or residents, particularly as a result of the contamination of soil, groundwater or surface water, and especially drinking water, including damage resulting from conditions existing prior to the acquisition of such facilities by the Company. The Company may also be subject to liability for any off-site environmental contamination caused by pollutants or hazardous substances whose transportation, treatment or disposal was arranged by the Company or its predecessors. Any substantial liability for environmental damage incurred by the Company could have a material adverse effect on the Company’s financial condition, results of operations or cash flows. As of December 31, 2008, the Company is not aware of any material environmental liabilities.

Legal Proceedings

          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 postpone the hearing until November 2009 at the earliest to allow the Company time to explore a possible relocation of the landfill. At December 31, 2008, the Company had $9,917 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 $9,917 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 results of operations 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. The landfill has operated continuously since that time. On October 3, 2005, landfill opponents filed a suit (Board of Comm’rs of Sumner County, Kansas, Tri-County Concerned Citizens and Dalton Holland v. Roderick Bremby, Sec’y of the Kansas Dep’t of Health and Env’t, et al.) in the District Court of Shawnee County, Kansas, seeking a judicial review of KDHE’s decision to issue the permit, alleging that a site analysis prepared for the Company and submitted to 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 lacked standing to bring the action. The plaintiffs appealed this decision to the Kansas Court of Appeals, and on October 12, 2007, the Court of Appeals issued an opinion reversing and remanding the District Court’s decision. The Company appealed the decision to the Kansas Supreme Court, and on July 25, 2008, the Supreme Court affirmed the decision of the Court of Appeals and remanded the case to the District Court for further proceedings on the merits. Plaintiffs filed a second amended petition on October 22, 2008, and the Company filed a motion to strike various allegations contained within the second amended petition. The motion to strike was heard before the District Court on January 26, 2009, and the Court took the matter under submission. The outcome of the issues raised in the motion will impact the scope of briefing on the ultimate issue before the District Court. It is anticipated that the briefing will be completed during the 2009 calendar year. While the Company believes that it will prevail in this case, the District Court could remand the matter back to KDHE for additional review of its decision or could revoke the permit. An order of remand to KDHE would not necessarily affect the Company’s continued operation of the landfill. Only in the event that a final adverse determination with respect to the permit is received would there likely be 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.

72

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

          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 historical 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.

          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 consolidated and captioned In re Waste Connections, Inc. Shareholder Derivative Litigation and stayed pending the outcome of the consolidated federal action.

          In July 2008, the parties reached a preliminary agreement to settle all of these derivative actions, and in August 2008 the consolidated federal action was stayed as a result of the preliminary agreement. Under the terms of the preliminary agreement, the Company agreed to reaffirm and/or implement certain corporate governance measures and the Company’s insurance carrier agreed to pay not more than $3,000 to plaintiffs’ counsel to cover plaintiffs’ counsel’s fees and costs, which are subject to court approval. The defendants expressly deny any wrongdoing and will receive a complete release of all claims. The preliminary agreement is subject to standard conditions, including final court approval. There can be no assurance that final court approval will be obtained.

          In 2006, the Company 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 the Company estimate the amount of any losses that might result.

          On January 15, 2009, a purported class action complaint captioned Heath Belcher and Denessa Arguello v. Waste Connections, Inc., and Waste Connections of California, Inc. was filed in the United States District Court for the Eastern District of California, naming the Company and its subsidiary, Waste Connections of California, Inc., as defendants. The complaint alleges violations under the Fair Labor Standards Act related to overtime compensation, and alleges violations under California labor laws related to overtime compensation, unpaid wages, meal and rest breaks, and wage statements. The complaint also alleges violations under the California Unfair Competition Law based on the foregoing alleged violations. The complaint seeks class certification and various forms of relief, including declaratory judgment, statutory penalties, unpaid back wages, liquidated damages, restitution, interest, and attorneys’ fees and costs. The Company intends to vigorously defend this matter. As with any litigation proceeding, the Company cannot predict with certainty the eventual outcome of this matter, nor can the Company 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.

73

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

          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 December 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.

Employees

          At December 31, 2008, the Company employed 5,379 full-time employees, of which 573, or approximately 11% of its workforce, were employed under collective bargaining agreements primarily with the Teamsters Union. These employees are subject to labor agreements that are subject to renegotiation periodically. The Company has nine collective bargaining agreements that are set to expire in 2009. The Company does not expect any significant disruption in its overall business in 2009 as a result of labor negotiations, employee strikes or organizational efforts.

11. STOCKHOLDERS’ EQUITY

Stock Split

          On February 12, 2007, the Company announced that its Board of Directors had authorized a three-for-two stock split of its common stock, in the form of a 50% stock dividend, payable to stockholders of record as of February 27, 2007. Shares resulting from the split were issued on March 13, 2007. In connection therewith, the Company transferred $228 from retained earnings to common stock, representing the par value of additional shares issued. As a result of the stock split, fractional shares equal to 3,040 whole shares were repurchased for $132. All share and per share amounts for all periods presented have been adjusted to reflect the stock split.

Share Repurchase Program

          The Company’s Board of Directors has authorized a common stock repurchase program for the repurchase of up to $500,000 of common stock through December 31, 2009. 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. As of December 31, 2007 and 2008, the Company had repurchased 16,236,798 and 17,278,069 shares, respectively, of its common stock at a cost of $397,185 and $428,711, respectively. As of December 31, 2008, the remaining maximum dollar value of shares available for purchase under the program was 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.

Common Stock

          Of the 70,157,761 shares of common stock authorized but unissued as of December 31, 2008, the following shares were reserved for issuance:

Stock option plans	6,717,008
2026 Convertible Senior Notes	5,882,354
Consultant Incentive Plan	275,072
2002 Restricted stock plan	10,531
	12,884,965

          On September 24, 2008, the Company entered into an underwriting agreement with J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America Securities LLC and Credit Suisse Securities (USA) LLC, as representatives of the several underwriters involved, in connection with the offer and sale by the Company of 11,000,000 shares of its common stock, par value $0.01 per share, at a price of $32.50 per share. The Company granted the underwriters an option to purchase up to 1,650,000 additional shares of its common stock to cover over-allotments, which the underwriters exercised in full on September 25, 2008. The offering closed on September 30, 2008, and the Company received net proceeds of $393,930 after deducting underwriting discounts and commissions of $16,445, and estimated transaction expenses payable by the Company of approximately $750.

74

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

Restricted Stock and Stock Options

          During 2002, the Company’s Board of Directors adopted the 2002 Restricted Stock Plan in which selected employees, other than officers and directors, may participate. Restricted stock awards under the 2002 Restricted Stock Plan may or may not require a cash payment from a participant to whom an award is made. The awards become free of the stated restrictions over periods determined at the date of the grant, subject to continuing employment, the achievement of particular performance goals and/or the satisfaction of certain vesting provisions applicable to each award of shares. The Board of Directors authorizes the grant of any stock awards and determines the employees to whom shares are awarded, number of shares to be awarded, award period and other terms and conditions of the awards. Unvested shares of restricted stock may be forfeited and revert to the Company if a plan participant resigns from the Company and its subsidiaries, is terminated for cause or violates the terms of any noncompetition or nonsolicitation agreements to which that plan participant is bound (if such plan participant has been terminated without cause). A total of 213,750 shares of the Company’s common stock were reserved for issuance under the 2002 Restricted Stock Plan. As of December 31, 2008, 10,531 shares of common stock were available for future grants of restricted stock under the 2002 Restricted Stock Plan. The fair value of restricted stock for the years ended December 31, 2006, 2007 and 2008, was determined based on the number of shares granted and the quoted price of the Company’s common stock.

          The following table summarizes activity for the 2002 Restricted Stock Plan:

	Year Ended December 31,
	2006		2007		2008
Restricted shares granted		—		—		—
Weighted average grant-date fair value of shares granted	$	—	$	—	$	—
Total fair value of restricted shares granted	$	—	$	—	$	—
Restricted shares becoming free of restrictions		46,346		41,263		4,872
Weighted average restriction period (in years)		—		—		—

          In 1997, the Company’s Board of Directors adopted the 1997 Stock Option Plan in which all officers, employees, directors and consultants may participate. Options granted under the 1997 Stock Option Plan may either be incentive stock options or nonqualified stock options, generally have a term of 10 years from the date of grant, and will vest over periods determined at the date of grant. The exercise prices of the options are determined by the Company’s Board of Directors and, in the case of incentive stock options, will be at least 100% or 110% of the fair market value of the Company’s common stock on the date of grant as provided for in the 1997 Stock Option Plan. The 1997 Stock Option Plan provides for the reservation of common stock for issuance thereunder equal to 7,794,400 shares. As of December 31, 2008, no options for shares of common stock were available for future grants under the 1997 Stock Option Plan.

          In 2002, the Company’s Board of Directors authorized two additional equity-based compensation plans: the 2002 Stock Option Plan and 2002 Senior Management Equity Incentive Plan. A total of 5,496,364 shares of the Company’s common stock were reserved for future issuance under the 2002 Stock Option Plan. Participation in the 2002 Stock Option Plan is limited to consultants and employees, other than officers and directors. Options granted under the 2002 Stock Option Plan are nonqualified stock options and have a term of no longer than 10 years from the date they are granted. Options generally become exercisable in installments pursuant to a vesting schedule set forth in each option agreement. The Board of Directors authorizes the granting of options and determines the employees and consultants to whom options are to be granted, the number of shares subject to each option, the exercise price, option term, vesting schedule and other terms and conditions of the options. A total of 6,144,473 shares of the Company’s common stock were reserved for future issuance under the 2002 Senior Management Equity Incentive Plan. The Company’s stockholders approved the 2002 Senior Management Equity Incentive Plan on May 16, 2002. Participation in the 2002 Senior Management Equity Incentive Plan is limited to officers and directors of the Company and its subsidiaries. Options granted under the 2002 Senior Management Equity Incentive Plan may be either incentive stock options or nonqualified stock options and have a term of no longer than 10 years from the date they are granted. Options generally become exercisable in installments pursuant to a vesting schedule set forth in each option agreement. The Board of Directors authorizes the granting of options and determines the officers and directors to whom options are to be granted, the number of shares subject to each option, the exercise price, option term, vesting schedule and other terms and conditions of the options. In the case of incentive stock options, the exercise price will be at least 100% or 110% of the fair market value of the Company’s common stock on the date of grant as provided for in the 2002 Senior Management Equity Incentive Plan. As of December 31, 2008, options for 0 and 1,000,000 shares of common stock were available for future grants under the 2002 Stock Option Plan and 2002 Senior Management Equity Incentive Plan, respectively.

75

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

          In 2004, the Company’s Board of Directors authorized the 2004 Equity Incentive Plan. On May 25, 2006, the stockholders of the Company approved the Second Amended and Restated 2004 Equity Incentive Plan, and on May 15, 2008, they approved further amendments to the Second Amended and Restated 2004 Equity Incentive Plan. A total of 3,775,000 shares of the Company’s common stock were reserved for future issuance under the 2004 Equity Incentive Plan, all of which may be used for grants of stock options, restricted stock, and/or restricted stock units. Participation in the 2004 Equity Incentive Plan is limited to consultants and employees, including officers and directors. Options granted under the 2004 Equity Incentive Plan are nonqualified stock options and have a term of no longer than five years from the date they are granted. Restricted stock, restricted stock units, and options generally vest in installments pursuant to a vesting schedule set forth in each option or restricted stock or unit agreement. The Board of Directors authorizes the granting of options, restricted stock and restricted stock units, and determines the employees and consultants to whom options, restricted stock, and restricted stock units are to be granted, the number of shares subject to each option, restricted stock, or restricted stock unit, the exercise price, term, vesting schedule and other terms and conditions of the options, restricted stock, or restricted stock units. The exercise prices of the options shall not be less than the fair market value of the Company’s common stock on the date of grant. Restricted stock awards under the plan may or may not require a cash payment from a participant to whom an award is made; restricted stock unit awards under the plan do not require any cash payment from the participant to whom an award is made. The fair value of restricted stock units granted during the years ended December 31, 2006, 2007 and 2008, was determined based on the number of stock units granted and the quoted price of the Company’s common stock. As of December 31, 2008, 1,460,522 shares of common stock were available to be issued pursuant to future awards granted under the 2004 Equity Incentive Plan.

          The following table summarizes restricted stock units activity for the 2004 Equity Incentive Plan:

	Year Ended December 31,
	2006		2007		2008
Restricted stock units granted		492,000		426,802		379,949
Weighted average grant-date fair value of restricted stock units granted	$	23.37	$	29.08	$	28.99
Total fair value of restricted stock units granted	$	11,496	$	12,413	$	11,013
Restricted stock units becoming free of restrictions		10,283		127,005		217,991
Weighted average restriction period (in years)		4.6		4.5		4.4

          As of December 31, 2006, 2007 and 2008, a total of 6,148,214, 4,031,781 and 3,127,840 options to purchase common stock were exercisable under all stock option plans, respectively.

76

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

          A summary of the Company’s stock option activity and related information for the years ended December 31, 2006, 2007 and 2008, is presented below:

	Number of Shares (Options)			Weighted Average Exercise Price
Outstanding as of December 31, 2005		8,224,401		$	17.08
Granted		518,400			23.21
Forfeited		(31,725	)		23.31
Exercised		(2,061,563	)		15.59
Outstanding as of December 31, 2006		6,649,513			17.99
Granted		—			—
Forfeited		(8,186	)		22.73
Exercised		(2,237,618	)		15.92
Outstanding as of December 31, 2007		4,403,709			19.04
Granted		—			—
Forfeited		(31,314	)		22.53
Exercised		(1,022,481	)		18.67
Outstanding as of December 31, 2008		3,349,914			19.12

          The following table summarizes information about stock options outstanding as of December 31, 2008:

	Options Outstanding						Options Exercisable
Exercise Price	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)
$5.00 to $11.00		187,598	$	10.60		3.0		187,598	$	10.60		3.0
$11.01 to $16.00		400,766		14.54		4.0		400,766		14.54		4.0
$16.01 to $20.00		950,563		16.64		5.1		950,563		16.64		5.1
$20.01 to $30.00		1,810,987		22.31		5.2		1,588,913		22.19		4.9
		3,349,914		19.12		4.9		3,127,840		18.82		4.7

          The aggregate intrinsic value of options outstanding and options exercisable at December 31, 2008, was $41,722 and $39,864, respectively.

77

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

          A summary of option activity under the foregoing stock option plans as of December 31, 2007, and changes during the year ended December 31, 2008, is presented below:

	Unvested Shares			Vested Shares			Total Shares			Weighted- Average Exercise Price
Outstanding at December 31, 2007		371,928			4,031,781			4,403,709		$	19.04
Granted		—			—			—			—
Forfeited		(26,672	)		(4,642	)		(31,314	)		22.53
Vested		(123,182	)		123,182			—			—
Exercised		—			(1,022,481	)		(1,022,481	)		18.67
Outstanding at December 31, 2008		222,074			3,127,840			3,349,914			19.12

          The total intrinsic value of stock options exercised during the years ended December 31, 2006, 2007 and 2008, was $20,299, $34,951 and $15,711, respectively. The total fair value of stock options vested during the years ended December 31, 2006, 2007 and 2008, was $8, $643 and $643, respectively.

          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 year ended December 31, 2008, is presented below:

	Unvested Shares			Weighted-Average Grant Date Fair Value Per Share
Outstanding at December 31, 2007		804,748		$	26.29
Granted		379,949			28.99
Forfeited		(55,262	)		26.78
Vested		(222,863	)		26.02
Outstanding at December 31, 2008		906,572			27.45

Stock Purchase Warrants

          In 2002, the Company’s Board of Directors authorized the 2002 Consultant Incentive Plan, under which warrants to purchase the Company’s common stock may be issued to certain consultants to the Company. Warrants awarded under the Consultant Incentive Plan are subject to a vesting schedule set forth in each warrant agreement. Historically, warrants issued have been fully vested and exercisable at the date of grant. The Board of Directors authorizes the issuance of warrants and determines the consultants to whom warrants are to be issued, the number of shares subject to each warrant, the purchase price, exercise date and period, warrant term and other terms and conditions of the warrants. The Board reserved 450,000 shares of the Company’s common stock for future issuance under the Consultant Incentive Plan. As of December 31, 2008, 230,949 shares of common stock were available for future grants of warrants under the 2002 Consultant Incentive Plan. The Company issued 15,395, 14,137 and 9,267 warrants under the Consultant Incentive Plan during the years ended December 31, 2006, 2007 and 2008, respectively.

78

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

          A summary of warrant activity as of December 31, 2007, and changes during the year ended December 31, 2008, is presented below:

	Warrants			Weighted-Average Exercise Price
Outstanding at December 31, 2007		52,981		$	24.07
Granted		9,267			31.28
Forfeited		—			—
Exercised		(18,125	)		17.02
Outstanding at December 31, 2008		44,123			28.28

          The following table summarizes information about warrants outstanding as of December 31, 2007 and 2008:

					Fair Value of Warrants Issued
	Warrants Issued						Outstanding at December 31,
Grant Date			Exercise Price				2007		2008
February 1998		450,000	$	1.78	$	954		5,000		—
Throughout 2005		22,200		19.75 to 25.25		136		18,449		5,550
Throughout 2006		15,395		22.73 to 27.47		115		15,395		15,171
Throughout 2007		14,137		29.70 to 34.02		123		14,137		14,135
Throughout 2008		9,267		28.46 to 34.05		79		—		9,267
								52,981		44,123

          The warrants are exercisable when granted and expire between 2009and 2013.

          Warrants issued to consultants are valued using the Black-Scholes pricing model with assumed stock price volatility and risk-free interest rates similar to those used for stock options, and with a contractual life of ten years for warrants granted before 2002 and five years for warrants granted in 2002 and forward. Warrants issued to consultants are recorded as an element of the related cost of acquisitions or landfill development projects, based on the services provided by the consultant.

79

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

12. COMPREHENSIVE INCOME

          Comprehensive income includes changes in fair value of commodity fuel swaps and changes in the fair value of interest rate swaps that qualify for hedge accounting. The components of other comprehensive income (loss) and related tax effects for the years ended December 31, 2006, 2007 and 2008, are as follows:

	Year Ended December 31, 2006
	Gross			Tax effect			Net of tax
Amounts reclassified into earnings	$	(6,842	)	$	2,599		$	(4,243	)
Changes in fair value of interest rate swaps		3,955			(1,602	)		2,353
	$	(2,887	)	$	997		$	(1,890	)

	Year Ended December 31, 2007
	Gross			Tax effect		Net of tax
Amounts reclassified into earnings	$	(3,785	)	$	1,465	$	(2,320	)
Changes in fair value of interest rate swaps		(8,196	)		3,159		(5,037	)
	$	(11,981	)	$	4,624	$	(7,357	)

	Year Ended December 31, 2008
	Gross			Tax effect			Net of tax
Amounts reclassified into earnings	$	6,468		$	(2,458	)	$	4,010
Changes in fair value of interest rate swaps		(27,264	)		10,311			(16,953	)
Changes in fair value of fuel commodity swaps		(10,813	)		4,109			(6,704	)
	$	(31,609	)	$	11,962		$	(19,647	)

          In accordance with SFAS 133, the effective portions of the changes in fair values of interest rate swaps and fuel commodity swaps have been recorded in stockholders’ equity as a component of accumulated other comprehensive income. Because all critical terms of the interest rate swaps match the underlying debt being hedged, no ineffectiveness is recognized on these swaps and, therefore, all unrealized changes in fair value are recorded in Accumulated Other Comprehensive Loss. Amounts reclassified into earnings related to realized gains and losses on interest rate swaps are recognized in Interest Expense in the Consolidated Statements of Income when interest payments or receipts occur related to the swap contracts. Because changes in the actual price of diesel fuel and changes in the DOE index price do not offset exactly, the Company has determined it will assess whether the fuel hedges are highly effective on a prospective and retrospective basis using the cumulative dollar offset approach. At inception of the fuel hedges and at December 31, 2008, all of the Company’s fuel hedges were determined to be highly effective, therefore, the entire unrealized fair value of these agreements at December 31, 2008, has been recorded in Accumulated Other Comprehensive Loss. Beginning in January 2009, when the first fuel commodity swaps become effective, the Company will measure and record ineffectiveness on the fuel hedges based on the difference between the DOE index price and the actual price of diesel fuel purchased. Further, beginning in January 2009, amounts that will be reclassified into earnings related to realized gains and losses on fuel commodity swaps will be recognized in Cost of Operations in the Consolidated Statements of Income when the underlying fuel is consumed. The estimated net amount of the existing unrealized losses on interest rate swaps as of December 31, 2008 (based on the interest rate yield curve at that date), included in accumulated other comprehensive income expected to be reclassified into pre-tax earnings within the next 12 months is $14,340. The estimated net amount of the existing unrealized losses on fuel commodity swaps as of December 31, 2008 (based on the DOE diesel fuel index at that date), included in accumulated other comprehensive income expected to be reclassified into pre-tax earnings within the next 12 months is $7,146. The timing of actual amounts reclassified into earnings is dependent on future movements in interest rates and diesel fuel prices.

80

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

A rollforward of the amounts included in Accumulated Other Comprehensive Loss, net of taxes, is as follows:

	Fuel Commodity Swap			Interest Rate Swap			Accumulated Other Comprehensive Loss
Balance at December 31, 2007	$	—		$	(4,290	)	$	(4,290	)
Amounts reclassified into earnings		—			4,010			4,010
Changes in fair value		(6,704	)		(16,953	)		(23,657	)
Balance at December 31, 2008	$	(6,704	)	$	(17,233	)	$	(23,937	)

13. INCOME TAXES

The provision for income taxes for the years ended December 31, 2006, 2007 and 2008, consists of the following:

	Years Ended December 31,
	2006		2007		2008
Current:
Federal	$	18,759	$	40,526	$	22,492
State		2,985		6,951		4,006
Deferred:
Federal		24,223		11,076		29,656
State		2,362		1,364		2,246
Provision for income taxes	$	48,329	$	59,917	$	58,400

Significant components of deferred income tax assets and liabilities as of December 31, 2007 and 2008 are as follows:

	2007			2008
Deferred income tax assets:
Accounts receivable reserves	$	1,698		$	1,461
Accrued expenses		9,837			10,885
Self-insurance reserves		4,619			4,391
Net operating losses from acquired subsidiaries		113			—
Equity-based compensation		2,451			3,220
Interest rate and fuel commodity swaps		2,709			14,671
State taxes		2,369			1,333
Other		308			1,384
Gross deferred income tax assets		24,104			37,345
Less: Valuation allowance		—			—
Net deferred income tax assets		24,104			37,345
Deferred income tax liabilities:
Goodwill and other intangibles		(87,060	)		(106,799	)
Property and equipment		(126,725	)		(138,547	)
Landfill closure/post-closure		(12,523	)		(14,196	)
Prepaid expenses		(6,372	)		(6,970	)
Total deferred income tax liabilities		(232,680	)		(266,512	)
Net deferred income tax liability	$	(208,576	)	$	(229,167	)

          As of the year ended December 31, 2008, the Company had requested written approval from the Internal Revenue Service (“IRS”) to exclude probable expansion airspace from its calculation of landfill depreciation for tax purposes. During 2008, the Company continued to work with the IRS to pursue its approval. If the IRS approves the request, the Company would accelerate the timing of its landfill depreciation deductions, which would reduce the Company’s tax payments in the year granted by approximately $11,000.

81

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

          During the years ended December 31, 2007 and 2008, the Company reduced its taxes payable by $15,294 and $8,546, respectively, as a result of the exercise of non-qualified stock options, the vesting of restricted stock and restricted stock units, and the disqualifying disposition of incentive stock options. The excess tax benefit associated with equity-based compensation of $14,137 and $6,441 for the years ended December 31, 2007 and 2008, respectively, was recorded in additional paid-in capital.

          The differences between the Company’s income tax provision as presented in the accompanying statements of income and income tax provision computed at the federal statutory rate consist of the items shown in the following table as a percentage of pre-tax income:

	Years Ended December 31,
	2006			2007			2008
Income tax provision at the statutory rate		35.0	%		35.0	%		35.0	%
State taxes, net of federal benefit		2.9			3.9			3.2
Deferred income tax liability adjustments		1.2			(1.3	)		(2.3	)
Other		(0.7	)		0.1			(0.3	)
		38.4	%		37.7	%		35.6	%

          During the year ended December 31, 2006, the increase to the net deferred income tax liability due to changes in the geographical apportionment of the Company’s state taxes, net of the adjustments resulting from the reconciliation of its deferred income tax liability, resulted in an increase to tax expense of $1,517. During the year ended December 31, 2007, the decrease to the net deferred income tax liability due to the adjustments resulting from the reconciliation of the Company’s deferred income tax liability, net of the impact from changes in the geographical apportionment of its state taxes, resulted in a reduction to tax expense of $2,047. During the year ended December 31, 2008, the decrease to the net deferred income tax liability due primarily to changes in the geographical apportionment of the Company’s state taxes resulted in a reduction to tax expense of $3,730. Additionally, during the year ended December 31, 2008, the Company recorded a reduction to tax expense of $1,146, due primarily to the reversal of certain tax contingencies for which the statute of limitations expired in 2008 and the reconciliation of the income tax provision to the 2007 federal and state tax returns, which were filed during 2008.

          At December 31, 2008, the Company did not have any significant federal and state net operating loss (“NOL”) carryforwards. During the years ended December 31, 2007 and 2008, the Company utilized $481 and $293 of net operating losses to reduce current tax expense by $186 and $113, respectively.

          The Company and its subsidiaries are subject to U.S. federal income tax as well as to income tax of multiple state jurisdictions. The Company has concluded all U.S. federal income tax matters for years through 2004. All material state and local income tax matters have been concluded for years through 2003.

          Effective January 1, 2007, the Company adopted FIN 48. As a result of the implementation of FIN 48, the changes to the Company’s liability for uncertain tax positions was accounted for as a $2,897 adjustment to increase the 2007 beginning balance of retained earnings on the Company’s balance sheet. At December 31, 2007 and 2008, the Company had approximately $6,716 and $1,764, respectively, of total gross unrecognized tax benefits. Of the total gross unrecognized tax benefits at December 31, 2007 and 2008, $3,402 and $1,388, respectively, (both net of the federal benefit on state amounts) represent the amount of unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in any future periods. The Company does not anticipate the total amount of unrecognized tax benefits will significantly change by December 31, 2009.

          The Company’s continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had approximately $851 and $291 accrued for interest, net of tax, at December 31, 2007 and 2008, respectively, and no accrual for penalties at December 31, 2007 and 2008. The Company recognized, net of releases, approximately $398 for interest, net of tax, and no accrual for penalties during the year ended December 31, 2007. The Company released, net of recognition, approximately $560 for interest, net of tax, and recognized no accrual for penalties during the year ended December 31, 2008.

82

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

          The following is a rollforward of the Company’s unrecognized tax benefits from January 1, 2007 to December 31, 2008:

	2007			2008
Unrecognized tax benefits at beginning of period	$	6,702		$	6,716
Gross increases – tax positions in prior periods		918			—
Gross decreases – tax positions in prior periods		—			(37	)
Lapse of statute of limitations		(904	)		(4,915	)
Unrecognized tax benefits at end of period	$	6,716		$	1,764

14. REVENUE BY SERVICE TYPE

          The table below shows for the periods indicated the Company’s total reported revenues by service line and intercompany eliminations.

	Years Ended December 31,
	2006		2007		2008
Collection	$	602,762	$	693,675	$	787,713
Disposal and transfer		259,190		298,954		308,811
Recycling and other		77,202		95,212		89,594
Total	$	939,154	$	1,087,841	$	1,186,118
Intercompany elimination	$	114,800	$	129,300	$	136,515

15. 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 years ended December 31, 2006, 2007 and 2008:

	Years Ended December 31,
	2006		2007		2008
Numerator:
Net income for basic and diluted earnings per share	$	77,423	$	99,081	$	105,556
Denominator:
Basic shares outstanding		68,136,126		68,238,523		70,024,874
Dilutive effect of 2022 Convertible Subordinated Notes		393,026		—		—
Dilutive effect of 2026 Convertible Subordinated Notes		—		—		41,270
Dilutive effect of stock options and warrants		1,746,783		1,592,418		1,161,858
Dilutive effect of restricted stock		132,738		163,772		191,710
Diluted shares outstanding		70,408,673		69,994,713		71,419,712

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

          The Company’s 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. The 2026 Notes were dilutive in the third quarter of 2008. Therefore, in accordance with EITF 04-8, the Company has included within diluted shares outstanding the dilutive effect of the conversion value 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. The Company will apply the provisions of FSP No. APB 14-1 to compute any gain or loss upon conversion, as disclosed in Note 1.

83

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

          Additionally, as of December 31, 2006, 2007 and 2008, the following stock options and warrants were not included in the computation of diluted net income per share because to do so would have been antidilutive:

	December 31, 2006			December 31, 2007				December 31, 2008
	Number of Shares		Exercise Price Range	Number of Shares		Exercise Price Range		Number of Shares		Exercise Price Range
Outstanding options		12,000	$25.37 to $26.59		—		—		—	$	—
Outstanding warrants		12,338	$25.82 to $27.47		8,777		$31.09 to $34.02		2,977	$	34.02 to 34.05
		24,338			8,777				2,977

16. EMPLOYEE BENEFIT PLANS

          WCI has a voluntary savings and investment plan (the “WCI 401(k) Plan”). The WCI 401(k) Plan is available to all eligible, non-union employees of WCI. Under the WCI 401(k) Plan, WCI’s contributions were 50% of the first 5% of the participating employee’s base salary contributed in December 31, 2006, 2007 and 2008. The Murrey Companies, wholly-owned subsidiaries of the Company, have a voluntary savings and investment plan (the “Murrey 401(k) Plan”). The Murrey 401(k) Plan is available to all eligible, non-union employees of the Murrey Companies. Under the Murrey 401(k) Plan, the Murrey Companies’ contributions are at the discretion of management. During the years ended December 31, 2006, 2007 and 2008, total employer expenses, including employer contributions, for the WCI and Murrey 401(k) Plans were approximately $3,497, $4,046 and $4,254, respectively.

          The Company also participates in various “multiemployer” pension plans administered by employee and union trustees. The Company makes periodic contributions to these plans to allow them to meet their pension benefit obligations to their participants. During the years ended December 31, 2006, 2007 and 2008, total employer expenses for the multiemployer pension plans were approximately $256, $276, and $453, respectively.

          Effective for compensation paid on and after July 1, 2004, the Company established a Deferred Compensation Plan for eligible employees, which was amended and restated effective January 1, 2008 (the “Deferred Compensation Plan”). The Deferred Compensation Plan is a non-qualified deferred compensation program under which the eligible participants, including officers and certain employees who meet a minimum salary threshold, may voluntarily elect to defer up to 80% of their base salaries and up to 100% of their bonuses and commissions. Members of the Company’s Board of Directors are eligible to participate in the Deferred Compensation Plan with respect to their Director fees. Although the Company periodically contributes the amount of its obligation under the plan to a trust on the benefit of the participants, the amounts of any compensation deferred under the Plan constitute an unsecured obligation of the Company to pay the participants in the future and, as such, are subject to the claims of other creditors in the event of insolvency proceedings. Participants may elect certain future distribution dates on which all or a portion of their accounts will be paid to them in cash, including in the case of a change in control of the Company. In addition to the amount of their contributions, the Company will pay participants a return based on the returns of various mutual funds or measurement funds selected by the participants. The measurement funds are used only to determine the amount of return the Company pays to participants and participant funds are not actually invested in the measurement fund. The total liability for deferred compensation at December 31, 2007 and 2008 was $2,578 and $2,560, respectively.

17. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

          The following table summarizes the unaudited consolidated quarterly results of operations as reported for 2007:

	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Revenues	$	218,951	$	241,084	$	250,775	$	247,730
Operating income		46,422		53,758		57,104		49,725
Net income		22,380		25,266		28,682		22,754
Basic income per common share		0.33		0.37		0.42		0.34
Diluted income per common share		0.32		0.36		0.41		0.33

84

WASTE CONNECTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

          The following table summarizes the unaudited consolidated quarterly results of operations as reported for 2008:

	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Revenues	$	250,300	$	267,033	$	272,702	$	259,568
Operating income		50,798		55,590		56,695		49,273
Net income		23,118		26,234		28,273		27,931
Basic income per common share		0.35		0.39		0.42		0.35
Diluted income per common share		0.34		0.39		0.41		0.34

18. SUBSEQUENT EVENTS

On February 6, 2009, the Company and some of its subsidiaries (“buyers”) entered into an Asset Purchase Agreement with Republic Services, Inc. and some of its subsidiaries and affiliates (“sellers”) pursuant to which the buyers agreed to purchase from sellers assets principally used by the sellers in connection with their solid waste collection and disposal business.  The assets being acquired include six municipal solid waste landfills, six collection operations and three transfer stations across seven markets: Southern California; Denver, CO; Houston, TX; Lubbock, TX; Greenville/Spartanburg, SC; Charlotte, NC; and Flint, MI.  The purchase price for the assets is approximately $313,160, subject to pre- and post-closing pro-rations and other adjustments.  We anticipate paying for the transaction with available cash and equivalents, together with borrowings on our senior revolving credit facility.  The sale of these assets to the buyers is subject to a court order issued in connection with the December 2008 merger between Republic Services and Allied Waste Industries, Inc.

85

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

          None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

          We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2008, at the reasonable assurance level such that information required to be disclosed in our Exchange Act reports: (1) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s 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.

Management’s Report on Internal Control over Financial Reporting

          Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. This process includes policies and procedures that: (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and any dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles; (3) provide reasonable assurance that receipts and expenditures of ours are being made only in accordance with authorizations of our management; and (4) provide reasonable assurance that unauthorized acquisition, use or disposition of our assets that could have a material affect on our financial statements would be prevented or timely detected.

          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 internal control over financial reporting as of December 31, 2008. In conducting our evaluation, we used the framework set forth in the report titled “Internal Control – Integrated Framework” published by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the results of our evaluation, our management has concluded that our internal control over financial reporting was effective as of December 31, 2008.

          The effectiveness of our internal control over financial reporting as of December 31, 2008, has been audited by PricewaterhouseCoopers LLP, our independent registered public accounting firm, as stated in its report which appears in Item 8 of this Annual Report of Form 10-K.

Changes in Internal Control Over Financial Reporting

          Based on an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, there has been no change to our internal control over financial reporting that occurred during the three month period ended December 31, 2008, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

On February 6, 2009, the Company and some of its subsidiaries (“buyers”) entered into an Asset Purchase Agreement with Republic Services, Inc. and some of its subsidiaries and affiliates (“sellers”) pursuant to which the buyers agreed to purchase from sellers assets principally used by the sellers in connection with their solid waste collection and disposal business.  The assets being acquired include six municipal solid waste landfills, six collection operations and three transfer stations across seven markets: Southern California; Denver, CO; Houston, TX; Lubbock, TX; Greenville/Spartanburg, SC; Charlotte, NC; and Flint, MI.  The purchase price for the assets is approximately $313.2 million, subject to pre- and post-closing pro-rations and other adjustments.  We anticipate paying for the transaction with available cash and equivalents, together with borrowings on our senior revolving credit facility.  The sale of these assets to the buyers is subject to a court order issued in connection with the December 2008 merger between Republic Services and Allied Waste Industries, Inc.

The Asset Purchase Agreement contains representations and warranties, covenants, conditions and post-closing indemnities.  The closing of transaction remains subject to closing conditions contained in the Asset Purchase Agreement, including regulatory approval and receipt of certain governmental and third party consents.  The Asset Purchase Agreement may be terminated by mutual consent of the Company and Republic Services or by either the Company or Republic Services under specified circumstances or if the transaction has not closed by August 15, 2009.

86

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

          Except as set forth above in Part I under “Executive Officers of the Registrant” and in the paragraph below, the information required by Item 10 has been omitted from this report, and is incorporated by reference to the sections “Election of Directors,” “Corporate Governance and Board Matters” and “Section 16(a) Beneficial Ownership Reporting Compliance” in our definitive Proxy Statement for the 2009 Annual Meeting of Stockholders, which we will file with the SEC pursuant to Regulation 14A within 120 days after the end of our 2008 fiscal year.

          We have adopted a Code of Conduct and Ethics that applies to our officers, including our principal executive officer, principal financial officer, principal accounting officer and all other officers, directors and employees. We have also adopted Corporate Governance Guidelines to promote the effective functioning of our Board of Directors and its committees, to promote the interests of stockholders and to ensure a common set of expectations concerning how the Board, its committees and management should perform their respective functions. Our Code of Conduct and Ethics and our Corporate Governance Guidelines are available on our website at http://www.wasteconnections.com as are the charters of our Board’s Audit, Nominating and Corporate Governance and Compensation Committees. Information on or that can be accessed through our website is not incorporated by reference to this report. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding any amendments to, or waiver from, a provision of our Code of Conduct by posting such information on our website.

          Stockholders may also obtain copies of the Corporate Governance documents discussed above by contacting our Secretary at the address or phone number listed on the cover page of this Annual Report on Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

          Information required by Item 11 has been omitted from this report and is incorporated by reference to the section “Executive Compensation” and “Corporate Governance and Board Matters” in our definitive Proxy Statement for the 2009 Annual Meeting of Stockholders.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

          Information required by Item 12 has been omitted from this report and is incorporated by reference to the sections “Principal Stockholders” and “Equity Compensation Plan Information” in our definitive Proxy Statement for the 2009 Annual Meeting of Stockholders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

          Information required by Item 13 has been omitted from this report and is incorporated by reference to the sections “Certain Relationships and Related Transactions” and “Corporate Governance and Board Matters” in our definitive Proxy Statement for the 2009 Annual Meeting of Stockholders.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

          Information required by Item 14 has been omitted from this report and is incorporated by reference to the section “Appointment of Independent Registered Public Accounting Firm” in our definitive Proxy Statement for the 2009 Annual Meeting of Stockholders.

87

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)  See Index to Consolidated Financial Statements on page 45. The following Financial Statement Schedule is filed herewith on page 91 and made a part of this Report:

          Schedule II - Valuation and Qualifying Accounts

          All other schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions or are inapplicable, and therefore have been omitted.

(b)   See Exhibit Index immediately following signature pages.

88

SIGNATURES

          Pursuant to the requirements of Sections 13 or 15(d) 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.
	By:	/s/ Ronald J. Mittelstaedt
		Ronald J. Mittelstaedt
Date: February 10, 2009		Chief Executive Officer and Chairman

POWER OF ATTORNEY

          KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ronald J. Mittelstaedt and Worthing F. Jackman, jointly and severally, his true and lawful attorneys-in-fact, each with the power of substitution, for him in any and all capacities to sign any amendments to this Annual Report on Form 10-K, and to file the same with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitutes, may do or cause to be done by virtue hereof.

          Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature		Title	Date
/s/	Ronald J. Mittelstaedt	Chief Executive Officer and Chairman
	Ronald J. Mittelstaedt	(principal executive officer)	February 10, 2009
/s/	Worthing F. Jackman	Executive Vice President and Chief Financial Officer
	Worthing F. Jackman	(principal financial officer)	February 10, 2009
/s/	David G. Eddie	Vice President – Corporate Controller
	David G. Eddie	(principal accounting officer)	February 10, 2009
/s/	Michael W. Harlan
	Michael W. Harlan	Director	February 10, 2009
/s/	William J. Razzouk
	William J. Razzouk	Director	February 10, 2009
/s/	Robert H. Davis
	Robert H. Davis	Director	February 10, 2009
/s/	Edward E. Guillet
	Edward E. Guillet	Director	February 10, 2009

89

WASTE CONNECTIONS, INC.

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

Years Ended December 31, 2006, 2007 and 2008

(in thousands)

			Additions				Deductions
Description	Balance at Beginning of Year		Charged to Costs and Expenses		Charged to Other Accounts		(Write-offs, Net of Collections)			Balance at End of Year
Allowance for Doubtful Accounts:
Year Ended December 31, 2006	$	2,826	$	3,664	$	—	$	(3,001	)	$	3,489
Year Ended December 31, 2007		3,489		4,112		—		(3,214	)		4,387
Year Ended December 31, 2008		4,387		4,126		—		(4,667	)		3,846

90

EXHIBIT INDEX

Exhibit Number	Description of Exhibits
2.1	Stock Purchase Agreement, dated as of August 1, 2008, by and among Waste Connections, Inc., on the one hand, and Harold LeMay Enterprises, Incorporated and its shareholders, on the other hand (incorporated by reference to the exhibit filed with the Registrant’s Form 8-K filed on August 7, 2008)
2.2 *	First Amendment to Stock Purchase Agreement, dated as of October 28, 2008, by and among Waste Connections, Inc., on the one hand, and Harold LeMay Enterprises, Incorporated and Norman LeMay in his capacity as the Shareholders’ Representative, on the other hand
2.3	Equity Purchase Agreement dated as of August 1, 2008 by and among Waste Connections of Washington, Inc., Land Recovery, Inc., Resource Investments, Inc. and the shareholders of Land Recovery, Inc. and Resource Investments, Inc. (incorporated by reference to the exhibit filed with the Registrant’s Form 8-K filed on August 7, 2008)
2.4 *	First Amendment to Equity Purchase Agreement, dated as of October 28, 2008, by and among Waste Connections of Washington, Inc., on the one hand, and Land Recovery, Inc., Resource Investments, Inc. and Norman LeMay in his capacity as the Stakeholders’ Representative, on the other hand
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, adopted July 20, 2004 (incorporated by reference to the exhibit filed with the Registrant’s Form 10-Q filed on July 22, 2004)
3.3	Second Amended and Restated Bylaws of the Registrant, effective May 15, 2009 (incorporated by reference to the exhibit filed with the Registrant’s Form 8-K filed on January 15, 2009)
4.1	Form of Common Stock Certificate (incorporated by reference to the exhibit filed with the Registrant’s Form S-1/A filed on May 6, 1998)
4.2	Indenture between the Registrant, as Issuer, and U.S. Bank National Association, as Trustee, dated as of March 20, 2006 (incorporated by reference to the exhibit filed with the Registrant’s Form 8-K filed on March 23, 2006)
4.3	Registration Rights Agreement between the Registrant, and Citigroup Global Markets Inc. and Banc of America Securities LLC, dated as of March 20, 2006 (incorporated by reference to the exhibit filed with the Registrant’s Form 8-K filed on March 23, 2006)
4.4	Revolving Credit Agreement, dated as of September 27, 2007 (incorporated by reference to the exhibit filed with the Registrant’s Form 8-K filed on October 3, 2007)
4.5	Increase in Commitment, dated as of June 9, 2008 (incorporated by reference to the exhibit filed with the Registrant’s Form 8-K filed on June 10, 2008)
4.6 *	Amendment No. 1 to Revolving Credit Agreement, dated as of October 17, 2008
10.1 +	Form of Warrant Agreement (incorporated by reference to the exhibit filed with the Registrant’s Form S-1 filed on March 16, 1998)
10.2 +	Employment Agreement between the Registrant and James M. Little, dated as of September 13, 1999 (incorporated by reference to the exhibit filed with the Registrant’s Form 10-K filed on March 13, 2000)
10.3 +	Second Amended and Restated Employment Agreement between the Registrant and Darrell W. Chambliss, dated as of June 1, 2000 (incorporated by reference to the exhibit filed with the Registrant’s Form 10-Q filed on November 14, 2000)

91

Exhibit Number	Description of Exhibits
10.4 +	Second Amended and Restated 1997 Stock Option Plan (incorporated by reference to the exhibit filed with the Registrant’s Form S-8 filed on July 24, 2000)
10.5 +	Employment Agreement between the Registrant and Eric O. Hansen, dated as of January 1, 2001 (incorporated by reference to the exhibit filed with the Registrant’s Form 10-Q filed on May 3, 2005)
10.6 +	2002 Senior Management Equity Incentive Plan (incorporated by reference to the exhibit filed with the Registrant’s Form 10-K filed on February 11, 2008)
10.7 +	2002 Stock Option Plan (incorporated by reference to the exhibit filed with the Registrant’s Form 10-K filed on February 11, 2008)
10.8 +	2002 Restricted Stock Plan (incorporated by reference to the exhibit filed with the Registrant’s Form S-8 filed on June 19, 2002)
10.9 +	Employment Agreement between the Registrant and Worthing F. Jackman, dated as of April 11, 2003 (incorporated by reference to the exhibit filed with the Registrant’s Form 10-Q filed on August 13, 2003)
10.10 +	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)
10.11 +	Second Amended and Restated Employment Agreement between the Registrant and Steven F. Bouck, dated as of October 1, 2004 (incorporated by reference to the exhibit filed with the Registrant’s Form 10-Q filed on October 22, 2004)
10.12 +	Amended and Restated Compensation Plan for Independent Directors, dated December 7, 2007 (incorporated by reference to the exhibit filed with the Registrant’s Form 10-K filed on February 11, 2008)
10.13 +	Second Amended and Restated Employment Agreement between the Registrant and Ronald J. Mittelstaedt, dated as of March 1, 2004 (and as amended March 22, 2005) (incorporated by reference to the exhibit filed with the Registrant’s Form 10-Q filed on May 3, 2005)
10.14 +	First Amended and Restated Employment Agreement between the Registrant and David M. Hall, dated as of October 1, 2005 (incorporated by reference to the exhibit filed with the Registrant’s Form 8-K filed on October 4, 2005)
10.15 +	First Amended and Restated Employment Agreement between the Registrant and David G. Eddie, dated as of October 1, 2005 (incorporated by reference to the exhibit filed with the Registrant’s Form 8-K filed on October 4, 2005)
10.16 +	Form of Indemnification Agreement between the Registrant and each of its directors and officers (incorporated by reference to the exhibit filed with the Registrant’s Form 10-Q filed on July 31, 2006)
10.17 +	Employment Agreement between the Registrant and Eric M. Merrill, dated as of June 1, 2007 (incorporated by reference to the exhibit filed with the Registrant’s Form 10-Q filed on July 24, 2007)
10.18 +	Employment Agreement between the Registrant and Patrick J. Shea, dated as of February 1, 2008 (incorporated by reference to the exhibit filed with the Registrant’s Form 10-Q filed on April 23, 2008)
10.19 +	Consultant Incentive Plan (incorporated by reference to the exhibit filed with the Registrant’s Form 10-Q filed on April 23, 2008)
10.20* +	Second Amended and Restated 2004 Equity Incentive Plan (as amended and restated)

92

Exhibit Number	Description of Exhibits
10.21 +	Amended and Restated Senior Management Incentive Plan (incorporated by reference to the exhibit filed with the Registrant’s Form 10-Q filed on July 30, 2008)
10.22 +	Master Note Purchase Agreement, dated July 15, 2008 (incorporated by reference to the exhibit filed with the Registrant’s Form 8-K filed on July 18, 2008)
10.23 * +	Form of Amendment to Employment Agreement between the Registrant and each of Ronald J. Mittelstaedt, Steven F. Bouck, Darrell W. Chambliss and Worthing F. Jackman
10.24 * +	Form of Amendment to Employment Agreement between the Registrant and each of David G. Eddie, David M. Hall, Eric M. Merrill and Patrick J. Shea
10.25 * +	Form of Amendment to Employment Agreement between the Registrant and James M. Little
10.26 * +	Form of Amendment to Employment Agreement between the Registrant and Eric O. Hansen
12.1 *	Statement regarding Computation of Ratios
21.1 *	Subsidiaries of the Registrant
23.1 *	Consent of Independent Registered Public Accounting Firm
24.1	Power of Attorney (see signature page of this Annual Report on Form 10-K)
31.1 *	Certification of Chief Executive Officer
31.2 *	Certification of Chief Financial Officer
32.1 *	Certificate of Chief Executive Officer and Chief Financial Officer

*	Filed herewith.
+	Management contract or compensatory plan, contract or arrangement.

93

EX-2.2

Exhibit 2.2

FIRST AMENDMENT TO

STOCK PURCHASE AGREEMENT

THIS FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT (the “Amendment), dated as of October 28, 2008 (the “Effective Date”), is entered into by and among Waste Connections, Inc., a Delaware corporation (“WCI”), Harold LeMay Enterprises, Incorporated, a Washington corporation (the “Corporation”), and Norman LeMay, in his capacity as the Shareholders’ Representative under the Agreement (defined below), with reference to the following facts:

WHEREAS, WCI, the Corporation and the Shareholders entered into that certain Stock Purchase Agreement (the “Agreement”), dated as of August 1, 2008, whereby WCI agreed to purchase from the Shareholders, and the Shareholders agreed to sell to WCI, all of the issued and outstanding capital stock of the Corporation;  and

WHEREAS, WCI, the Corporation and Norman LeMay, acting in his capacity as the Shareholders’ Representative pursuant to Section 9.10 of the Agreement, desire to amend the Agreement as set forth herein;

NOW, THEREFORE, in consideration of the premises and of the mutual agreements, representations, warranties, provisions and covenants herein contained, the parties hereto, each intending to be bound hereby, agree as follows:

1.           Definitions.  Capitalized terms not otherwise defined herein shall have the respective meanings ascribed to them in the Agreement.

2.           Amendment to Section 1.2(a).  Section 1.2(a) of the Agreement is hereby amended and restated in its entirety to read as follows:

“The Purchase Price is:  two hundred three million four hundred sixty-five thousand eight hundred twenty-five dollars ($203,465,825.00), (i) minus the Closing Date Debt, (ii) plus or minus, as the case may be, that amount by which the Effective Date Current Assets are greater than (the “Working Capital Surplus”) or less than (the “Working Capital Deficit”) the Effective Date Current Liabilities, (iii) minus, to account for changes in the working capital of the Corporation between the Effective Date and the Closing Date, an amount equal to the aggregate payments made by the Corporation (A) to the Shareholders in the form of distributions or bonuses from the Effective Date through the Closing Date, and (B) on the obligations constituting the Closing Date Debt from the Effective Date through the Closing Date, (iv) plus or minus, as the case may be, an amount equal to the Net Profit or Net Loss of the Corporation for the period from the Effective Date through the Closing Date, plus (v) the EBITDA between the Closing Date and November 30, 2008, if WCI causes the Closing to occur prior to December 1, 2008 pursuant to Section 2.1.  The Shareholders shall provide good faith estimates of the amounts of each of the items referred to in clauses (i) through (v) of this Section 1.2(a), (y) prior to the Signing Date, as if the Closing were occurring as of such date, and (z) at least two (2) business days prior to the Closing Date, which estimates shall be subject to WCI’s review and confirmation as to their accuracy and completeness.  As used herein, the term “Net Profit” or “Net Loss” shall mean the net profit or net loss of the Corporation from the Effective Date through the Closing Date, calculated in accordance with WCI’s historical accounting practices, consistently applied.  The Purchase Price, based upon the estimates provided by the Shareholders pursuant to clause (z) of this Section 1.2(a), shall be paid to the Shareholders on the Closing Date, by wire transfer in immediately available funds, in the respective percentages set forth on Schedule 3.2.  On September 5, 2008 there was a fire at the Corporation’s Recycle and Processing Building located at 2910 Hogum Bay Road, Lacey, Washington (the “Fire”).  The Corporation and the Shareholders represent and warrant that Safeco Insurance Company has paid the Corporation $261,070.64 (the “Insurance Recovery”) to cover the damage incurred, which is in excess of the costs to repair the damage related to the Fire.  WCI and the Shareholders have agreed to divide the excess of the Insurance Recovery over the mutually agreed repair costs among the Corporation and the Shareholders, such that the Shareholders will be entitled to $107,508.32 on the Closing Date as part of the Purchase Price and such amount shall be included in the calculation of the Working Capital Surplus or the Working Capital Deficit, but shall not be subject to any change in the True Up Calculations.  The Shareholders shall have no indemnity or other liability or obligation, of any kind or nature, under this Agreement or otherwise to WCI or the Corporation relating to or arising from the Fire or any damage caused by the Fire.”

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3.           Addition of Section 9.1(e).  A new Section 9.1(e) shall be added to the Agreement and read as follows:

“(e)           At the reasonable request of the Shareholders to WCI, or of WCI to the Shareholders, as applicable, the non-requesting party, at the expense of the requesting party, shall perform or cause to be performed such acts and execute such documents after Closing as the requesting party deems to be reasonably necessary to clear title to the real properties that are Excluded Assets in the name of the Shareholders or otherwise effectuate the transfer and assignment of the Excluded Assets and any contractual or other arrangements related thereto.”

4.           Addition of Section 9.15.  A new Section 9.15 shall be added to the Agreement and read as follows:

“9.15                      Employee Rights.  The Corporation’s employees shall be granted the right to cash out their vacation and sick leave accrued through the Closing Date, to the extent allowed under the Corporation’s vacation and sick leave policies, at any time within 30 days after the Closing Date, and WCI shall cause the Corporation to pay such amounts so elected to the employees.”

5.           Amendment to Section 10.1(d) (Indemnity by the Shareholders).  Section 10.1(d) of the Agreement is hereby amended and restated in its entirety to read as follows:

“(d)           Any amount owed by the Corporation that exceeds the reserve therefor included in Effective Date Current Liabilities arising from or related to (i) any employee wages, pension or other benefits due to or required to be contributed in respect of any employees, directors or other service providers of the Corporation on or prior to the Closing Date, (ii) any withdrawal liability due to any partial or complete withdrawal occurring on or before the Closing Date, or (iii)  the employment of Debbie Carson, or termination or separation of employment (constructive or otherwise) of Ms. Carson for any reason whether occurring prior to, on or within three (3) days after the Closing Date, including any claim or allegation by or involving Ms. Carson based on or relating to sexual assault, sexual harassment, emotional distress, a hostile work environment, wrongful or unlawful discharge or termination, disparate treatment or impact, negligent hiring, retention or supervision, assault and battery, unlawful retaliation, sex discrimination or other violation of Law or otherwise arising from or in connection with the action commenced by Ms. Carson in the Pierce County Superior Court of the State of Washington under Cause No. 082136553, or any amendment thereto or any successor or other action by her related to the subject matter thereof.”

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6.           Amendment to Section 10.3(g) (Insurance).  Section 10.3(g) of the Agreement is hereby amended and restated in its entirety to read as follows:

“(g)           Insurance.  Notwithstanding any other provision of this Agreement, no Indemnitee shall be entitled to indemnification or other remedy with respect to any Damages for which insurance proceeds are received by the Indemnitee from occurrence-based policies that were obtained by the Corporation and in effect prior to the Closing Date or from Traveler’s Insurance Policy No. 104955918, but only to the extent of the net proceeds actually received by the Indemnitee pursuant to any such policies.  The Indemnitees shall cooperate with the applicable insurance companies and assist in making settlements and in defense of claims and shall attend hearings and trials and assist in securing and giving evidence and obtaining attendance of witnesses.”

7.           Effective Date.  This Amendment shall be effective from and after the Effective Date.

8.           Effect.  Except as expressly modified by this Amendment, the Agreement shall remain unchanged and in full force and effect.

9.           Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

[Signatures appear on the following page.]

3

IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to Stock Purchase Agreement by persons thereunto duly authorized as of the date first above written.

WCI:	CORPORATION:
Waste Connections, Inc.	Harold LeMay Enterprises, Incorporated
By:  __________________________ Ronald J. Mittelstaedt, Chief Executive Officer	By:  __________________________ Nancy L. LeMay President
	SHAREHOLDERS’ REPRESENTATIVE:
	Norman LeMay

S-1

EX-2.4

Exhibit 2.4

FIRST AMENDMENT TO

EQUITY PURCHASE AGREEMENT

THIS FIRST AMENDMENT TO EQUITY PURCHASE AGREEMENT (the “Amendment), dated as of October 28, 2008 (the “Effective Date”), is entered into by and among Waste Connections of Washington, Inc., a Washington corporation (“WCWI”) on the one hand, and Land Recovery, Inc., a Washington corporation (“LRI”), Resource Investments, Inc., a Washington corporation (“RII” and, together with LRI, the “Selling Unitholders”), and Norman LeMay, in his capacity as the Stakeholders’ Representative under the Agreement (defined below) on the other hand, with reference to the following facts:

WHEREAS, WCWI and the Selling Stakeholders entered into that certain Equity Purchase Agreement (the “Agreement”), dated as of August 1, 2008, whereby WCWI agreed to purchase from the Selling Unitholders all of their membership interests of Pierce County Recycling, Composting and Disposal, LLC, a Washington limited liability company (the “LLC”), and all of their respective shares of capital stock of Pierce County Landfill Management, Inc., a Washington corporation; and

WHEREAS, WCWI, the Selling Unitholders and Norman LeMay, acting in his capacity as the Stakeholders’ Representative pursuant to Section 7.4 of the Agreement, desire to amend the Agreement as set forth herein;

NOW, THEREFORE, in consideration of the premises and of the mutual agreements, representations, warranties, provisions and covenants herein contained, the parties hereto, each intending to be bound hereby, agree as follows:

1.           Definitions.  Capitalized terms not otherwise defined herein shall have the respective meanings ascribed to them in the Agreement.

2.           Amendment to Section 1.2.  Section 1.2 of the Agreement is hereby amended and restated in its entirety to read as follows:

“1.2         Purchase Price and Payment.

“(a)          Purchase Price.  At the Closing, in full consideration for the purchase and sale of the Subject Units, WCWI shall pay or cause to be paid to the Selling Unitholders the aggregate amount of one hundred three million six hundred sixty-five thousand two hundred ninety-five dollars and fifty-three cents ($103,665,295.53) (the “Purchase Price”), which shall be paid to the Selling Unitholders by wire transfer, in the respective amounts and to the respective bank accounts specified for the Selling Unitholders on Schedule 1.2, and which amount includes:

(i)           $1,100,000.00, in payment of 49% of all earnings before interest, taxes, depreciation and amortization of the LLC from the Closing Date through November 30, 2008, based on the good faith forecast of WCWI as of the Closing Date (the “Estimated EBITDA”); and

1

(ii)           $2,565,295.53, in payment of LRI’s and RII’s pro rata share of all Cash (as defined below) of the LLC as of October 31, 2008, subject to Section 6.7.6 of the LLC Operating Agreement.  The term "Cash" for purposes of this Section 1.2(a)(ii) shall mean book cash (bank cash minus outstanding checks, and not solely bank cash) of the LLC as of October 31, 2008, and (A) shall include all amounts accrued and owed to the LLC by any of its members or their Affiliates as of October 31, 2008 (including any amount owed for any service provided by the LLC to any of its members or their Affiliates through such date), all of which  amounts shall be paid to the LLC, on or prior to the Closing Date, by the member or Affiliate that owes such payment, but (B) shall be reduced for all amounts accrued and owed by the LLC to any of its members or their Affiliates as of October 31, 2008, to the extent that such amounts have not been paid by the LLC, on or prior to the Closing Date, to the member or Affiliate thereof that is owed such payment.  All amounts accrued and owed by the LLC to persons or entities other than its members and their Affiliates shall be paid by the LLC in the ordinary course of business consistent with past practices.  For the avoidance of doubt, distributions made to the LLC's members pursuant to this Section 1.2(a) shall bring the LLC's book cash as of the Closing Date to zero.   

                “(b)          True-Up Calculation.  Within one hundred twenty (120) days after the Closing Date (the “True Up Date”) and in any event within ten (10) business days after the True Up Calculation is completed, WCWI shall determine and provide a statement to the Stakeholders’ Representative showing the actual amount of 49% of all earnings before interest, taxes, depreciation and amortization of the LLC from the Closing Date through November 30, 2008 (such actual amount being referred to as the “Actual EBITDA” and such calculation being referred to as the “True Up Calculation”).  If the Stakeholders’ Representative accepts the True Up Calculation, or if the Stakeholders’ Representative fails to give notice to WCWI of any objection within thirty (30) days after receipt of the True Up Calculation, the True Up Calculation shall be the final and binding calculation of the Purchase Price adjustments set forth in Section 1.2(c) (the “Adjustments”).  If the Stakeholders’ Representative gives notice to WCWI of an objection to the True Up Calculation within thirty (30) days after receipt of the True Up Calculation, WCWI and the Stakeholders’ Representative shall attempt in good faith to resolve their differences.  If WCWI and the Stakeholders’ Representative are able to resolve their differences, the True Up Calculation, as modified to reflect the resolution of the differences between WCWI and the Stakeholders’ Representative, shall be the final and binding calculation of the Purchase Price Adjustments.  If, however, WCWI and the Stakeholders’ Representative are unable to resolve their differences, WCWI and the Stakeholders’ Representative shall submit any disputed items to the Seattle or Tacoma office of Moss Adams LLP.  The determination of either such office of Moss Adams LLP shall be final and binding on WCWI and the Selling Stakeholders, and the True Up Calculation, as modified to reflect (i) those differences, if any, that WCWI and the Stakeholders’ Representative were able to resolve, and (ii) the certified public accountant’s determination with regard to the remaining disputed items, shall be the final and binding resolution of the Purchase Price Adjustments.

2

“(c)          Purchase Price Adjustment.  If the Actual EBITDA as determined by the True Up Calculation is less than the Estimated EBITDA as determined on the Closing Date, the Selling Stakeholders shall promptly pay to WCWI an amount equal to the difference.  If the Actual EBITDA as determined by the True Up Calculation is greater than the Estimated EBITDA as determined on the Closing Date, WCWI shall promptly pay to the Selling Stakeholders, in the respective amounts and to the respective bank accounts specified for the Selling Unitholders on Schedule 1.2, an amount equal to the difference.”

“(d)           Tacoma Receivable.  As of the date of the Amendment, the City of Tacoma is past due on amounts owed to the LLC in the amount of $2,199,307.57(the “Tacoma Receivable”).  Within five business (5) days after receipt of the Tacoma Receivable by the LLC, whether before or after the Closing, WCWI shall cause the LLC to pay to the Selling Unitholders 49% of the Tacoma Receivable, less any amount in respect thereof paid to the Selling Unitholders as part of the Cash payment made to the Selling Unitholders pursuant to Section 1.2(a)(ii), by wire transfer in the respective percentages and to the respective bank accounts specified for the Selling Unitholders on Schedule 1.2.”

3.           Effective Date.  This Amendment shall be effective from and after the Effective Date.

4.           Effect.  Except as expressly modified by this Amendment, the Agreement shall remain unchanged and in full force and effect.

5.           Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

[Signatures appear on the following page.]

3

IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to Equity Purchase Agreement by persons thereunto duly authorized as of the date first above written.

WCWI:	SELLING UNITHOLDERS:
Waste Connections of Washington, Inc.	Land Recovery, Inc.
By:  __________________________ Ronald J. Mittelstaedt, Chief Executive Officer	By:
		Nancy L. LeMay President
	Resource Investments, Inc. By ________________________________________       Nancy L. LeMay       President STAKEHOLDERS’ REPRESENTATIVE:
	Norman LeMay

CONSENTED AND AGREED:

Pierce County Landfill Management, Inc.

By:          _________________________

Ronald J. Mittelstaedt

Chief Executive Officer

Pierce County Recycling, Composting and Disposal, LLC

By:          Pierce County Landfill Management, Inc.

By:  ______________________

                Ronald J. Mittelstaedt

Chief Executive Officer

S-1

EX-4.6

Exhibit 4.6

AMENDMENT NO. 1 TO

REVOLVING CREDIT AGREEMENT

This AMENDMENT NO. 1 TO REVOLVING CREDIT AGREEMENT, dated as of October __, 2008 (this “Amendment”), is by and among (a) Waste Connections, Inc., a Delaware corporation (the “Parent”), each Subsidiary of the Parent from time to time party to the Credit Agreement referred to below (the “Subsidiaries” and, together with the Parent, the “Borrowers”), (b) each of the banks and other lending institutions from time to time party to the Credit Agreement referred to below (each a “Lender” and, collectively, the “Lenders”), and (c) Bank of America, N.A., as administrative agent (the “Administrative Agent”) for the Lenders.  Capitalized terms used herein without definition shall have the meanings assigned to such terms in the Credit Agreement referred to below.

WHEREAS, the Borrowers, the Lenders and the Administrative Agent are party to that certain Revolving Credit Agreement, dated as of September 27, 2007 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”);

WHEREAS, the Borrowers and the Required Lenders desire to amend certain provisions of the Credit Agreement as provided more fully herein below;

NOW THEREFORE, in consideration of the mutual agreements contained in the Credit Agreement and herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

§1.              Amendments to the Credit Agreement.

§1.1.           Amendments to §1 of the Credit Agreement (Definitions).  Section 1 of the Credit Agreement is hereby amended by inserting the following new definitions in the proper alphabetical order therein:

“Auto-Reinstatement Letter of Credit.  See §3.1.8.

Non-Reinstatement Deadline.  See §3.1.8.”

§1.2.        Amendments to §3 of the Credit Agreement (Letters of Credit).  Section 3 of the Credit Agreement is hereby amended by:

(a)           deleting the first sentence of Section 3.1.1(a) thereof in its entirety and substituting the following new sentence therefor:

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 “Subject to the terms and conditions hereof and the execution and delivery by the Borrowers of a letter of credit application on the Issuing Lender’s customary form (a “Letter of Credit Application”), the Issuing Lender on behalf of the Revolving Credit Lenders and in reliance upon the agreement of the Revolving Credit Lenders set forth in §3.1.4 and upon the representations and warranties of the Borrowers contained herein, agrees, in its individual capacity, to issue, extend, maintain, reinstate or deem reinstated for the account of any of the Borrowers one or more standby letters of credit (each, a “Letter of Credit”) including, in the case of L/C Supported IRBs, so called direct pay Letters of Credit to support the payment and performance of an IRB (each, an “IRB Letter of Credit”), in such form as may be requested from time to time by the Borrowers and agreed to by the Issuing Lender; provided, however, that, after giving effect to such request, (i) the Maximum Drawing Amount plus all Unpaid Reimbursement Obligations shall not exceed $500,000,000 and (ii) the Maximum Drawing Amount plus all Unpaid Reimbursement Obligations plus the aggregate outstanding amount of all Revolving Credit Loans, plus the aggregate outstanding amount of all Swing Line Loans shall not exceed the Total Revolving Credit Commitment.”

(b)           deleting subclauses (v) and (vi) of Section 3.1.1(b) thereof in their entirety and substituting the following new subclauses in the proper alphabetical and numerical order therefor:

“(v)          Reserved; or

(vi) a default of any Revolving Credit Lender’s obligations to fund under §3.3 exists or any Revolving Credit Lender is at such time a Delinquent Lender hereunder, unless the Issuing Lender has entered into arrangements satisfactory to the Issuing Lender with the Borrowers or such Revolving Credit Lender to eliminate the Issuing Lender’s risk with respect to such Revolving Credit Lender, including, without limitation, through the provision of cash collateral or similar security for the benefit of the Issuing Lender.”

(c)           inserting the following new Section 3.1.8 immediately following Section 3.1.7 therein:

“3.1.8      Auto Reinstatement Letters of Credit.   If any Borrower so requests in any applicable Letter of Credit Application, the Issuing Lender may, in its sole and absolute discretion, agree to issue or deem issued a Letter of Credit that permits the automatic reinstatement of all or a portion of the stated amount thereof after any drawing thereunder (each, an “Auto-Reinstatement Letter of Credit”).  Unless otherwise directed by the Issuing Lender, the Borrowers shall not be required to make a specific request to the Issuing Lender to permit such reinstatement.  Once an Auto-Reinstatement Letter of Credit has been issued, except as provided in the following sentence, the Lenders shall be deemed to have authorized (but may not require) the Issuing Lender to reinstate all or a portion of the stated amount thereof in accordance with the provisions of such Letter of Credit.  Notwithstanding the foregoing, if such Auto-Reinstatement Letter of Credit permits the Issuing Lender to decline to reinstate all or any portion of the stated amount thereof after a drawing thereunder by giving notice of such non-reinstatement within a specified number of days after such drawing (the “Non-Reinstatement Deadline”), the Issuing Lender shall not permit such reinstatement if it has received a notice (which may be by telephone or in writing) on or before the day that is seven Business Days before the Non-Reinstatement Deadline (A) from the Administrative Agent that the Required Lenders have elected not to permit such reinstatement or (B) from the Administrative Agent, any Lender or the Borrowers that one or more of the applicable conditions specified in §10 is not then satisfied (treating such reinstatement as an extension of such Letter of Credit for purposes of this §3.1.8).”

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§2.           Affirmation of the Borrowers.  Each Borrower hereby ratifies and confirms all of its Obligations to the Administrative Agent and the Lenders, including, without limitation, the Loans and the Reimbursement Obligations, and each Borrower hereby affirms its absolute and unconditional promise to pay to the Administrative Agent and the Lenders, as applicable, the Loans, the Reimbursement Obligations and all other amounts due under the Credit Agreement, as amended hereby, and the other Loan Documents, at the times and in the amounts provided for therein.  Each Borrower confirms and agrees that all references to the term “Credit Agreement” in the Loan Documents shall hereafter refer to the Credit Agreement as amended hereby.

§3.           Representations and Warranties.  Each Borrower hereby represents and warrants to the Administrative Agent and the Lenders as follows:

(a)           The execution and delivery by such Borrower of this Amendment and the performance by such Borrower of its obligations and agreements under this Amendment and the Credit Agreement as amended hereby are within the corporate authority of such Borrower, have been duly authorized by all necessary corporate proceedings on behalf of such Borrower, and do not and will not contravene any provision of law, statute, rule or regulation to which such Borrower is subject or such Borrower’s constitutive documents or of any agreement or other instrument binding upon such Borrower.

(b)           Each of this Amendment and the Credit Agreement as amended hereby constitutes the legal, valid and binding obligation of such Borrower, enforceable in accordance with its respective terms, except as limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights.

(c)           No approval or consent of, or filing with, any governmental agency or authority is required to make valid and legally binding the execution, delivery or performance by such Borrower of this Amendment or the Credit Agreement as amended hereby.

(d)           The representations and warranties contained in Article V of the Credit Agreement, the other Loan Documents and in any document or instrument delivered pursuant to or in connection with the Credit Agreement are true and correct at and as of the date made and as of the date hereof, except to the extent (i) of changes resulting from transactions contemplated or permitted by the Credit Agreement and changes occurring in the ordinary course of business which singly or in the aggregate are not material adverse or (ii) that such representations and warranties relate expressly to an earlier date.

(e)           Such Borrower has performed and complied in all material respects with all terms and conditions herein and in the Credit Agreement required to be performed or complied with by such Borrower prior to or at the time hereof, and as of the date hereof, after giving effect to the provisions hereof, there exists no Default or Event of Default.

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§4.           Conditions Precedent.  This Amendment shall become effective upon receipt by the Administrative Agent, in form and substance reasonably satisfactory to the Administrative Agent, of a copy of this Amendment duly executed by  the Borrowers, the Required Lenders and the Administrative Agent.

§5.           Miscellaneous Provisions.

§5.1.        Except as otherwise expressly provided by this Amendment, all of the terms, conditions and provisions of the Credit Agreement and the other Loan Documents shall remain unchanged and in full force and effect.  It is declared and agreed by each of the parties hereto that the Credit Agreement and the other Loan Documents, as amended hereby, shall continue in full force and effect, and that this Amendment and the Credit Agreement shall be read and construed as a single instrument.  This Amendment shall constitute a Loan Document under the Credit Agreement.

§5.2.        The amendments set forth herein are effective solely for the purposes set forth herein and shall be limited precisely as written.  Except as expressly provided herein, this Amendment shall not be deemed to (i) be a consent to any amendment, waiver or modification of any other term or condition of the Credit Agreement or any other Loan Document, or (ii) operate as a waiver or otherwise prejudice any right, power or remedy that the Administrative Agent or the Lenders may now have or may have in the future under or in connection with the Credit Agreement or any other Loan Document, except as specifically set forth herein.

§5.3.        This Amendment may be executed in any number of counterparts, but all such counterparts shall together constitute but one instrument.  In making proof of this Amendment, it shall not be necessary to produce or account for more than one counterpart signed by each party hereto by and against which enforcement hereof is sought.

§5.4.        The Borrowers hereby agree to pay to the Administrative Agent, on demand by the Administrative Agent, all reasonable out-of-pocket costs and expenses incurred or sustained by the Administrative Agent and the Lenders in connection with the preparation of this Amendment (including legal fees).

§6.           GoverningLaw.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

[Reminder of page intentionally left blank]

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written.

THEBORROWERS:

     WASTE CONNECTIONS, INC.

     ADVANCED SYSTEMS PORTABLE RESTROOMS, INC.

     AMERICAN DISPOSAL COMPANY, INC.

     AMERICAN SANITARY SERVICE, INC.

     AMERICAN WEST LEASING, INC.

     BITUMINOUS RESOURCES, INC.

     BROADACRE LANDFILL, INC.

     BUTLER COUNTY LANDFILL, INC.

     CAMINO REAL ENVIRONMENTAL CENTER, INC.

     COLD CANYON LAND FILL, INC.

     COMMUNITY REFUSE DISPOSAL INC.

     CONTRACTORS WASTE SERVICES, INC.

     CORRAL DE PIEDRA LAND COMPANY

     CURRY TRANSFER & RECYCLING, INC.

     D. M. DISPOSAL CO., INC.

     DENVER REGIONAL LANDFILL, INC.

     ELKO SANITATION COMPANY

     EMPIRE DISPOSAL, INC.

     EVERGREEN DISPOSAL, INC.

     ENVIRONMENTAL TRUST COMPANY

     FINNEY COUNTY LANDFILL, INC.

     FRANK’S SERVICE, INC.

     G & P DEVELOPMENT, INC.

     HIGH DESERT SOLID WASTE FACILITY, INC.  (F/K/A RHINO SOLID WASTE, INC.)

     ISLAND DISPOSAL, INC.

     J BAR J LAND, INC.

     KELLY’S HAUL AWAY, INC.

     LAKESHORE DISPOSAL, INC.

     LEALCO, INC.

     LES’ COUNTY SANITARY, INC.

     MADERA DISPOSAL SYSTEMS, INC.

     MAMMOTH DISPOSAL COMPANY

     By: 

     Name:  Worthing F. Jackman

     Title:    Chief Financial Officer

THE BORROWERS

     MANAGEMENT ENVIRONMENTAL NATIONAL, INC.

     MASON COUNTY GARBAGE CO., INC.

     MDSI OF LA, INC.

     MILLENNIUM WASTE INCORPORATED

     MISSION COUNTRY DISPOSAL

     MORRO BAY GARBAGE SERVICE

     MURREY’S DISPOSAL COMPANY, INC.

     NEBRASKA ECOLOGY SYSTEMS, INC.

     NOBLES COUNTY LANDFILL, INC.

     NORTHERN PLAINS DISPOSAL, INC.

     NORTHWEST CONTAINER SERVICES, INC.

     OKLAHOMA CITY WASTE DISPOSAL, INC.

     OKLAHOMA LANDFILL HOLDINGS, INC.

     OSAGE LANDFILL, INC.

     PSI ENVIRONMENTAL SERVICES, INC.

     PSI ENVIRONMENTAL SYSTEMS, INC.

     PUEBLO SANITATION, INC.

     R.A. BROWNRIGG INVESTMENTS, INC.

     RED CARPET LANDFILL, INC.

     RH FINANCIAL CORPORATION

     RURAL WASTE MANAGEMENT, INC.

     SAN LUIS GARBAGE COMPANY

     SCOTT SOLID WASTE DISPOSAL COMPANY

     SEDALIA LAND COMPANY

     SOUTH COUNTY SANITARY SERVICE, INC.

     SOUTHERN PLAINS DISPOSAL, INC.

     TACOMA RECYCLING COMPANY, INC.

     TENNESSEE WASTE MOVERS, INC.

     WASCO COUNTY LANDFILL, INC.

     WASTE CONNECTIONS MANAGEMENT SERVICES, INC.

     WASTE CONNECTIONS OF ALABAMA, INC.

     WASTE CONNECTIONS OF ARIZONA, INC.

     WASTE CONNECTIONS OF ARKANSAS, INC.

     By: 

     Name:  Worthing F. Jackman

     Title:    Chief Financial Officer

THE BORROWERS

     WASTE CONNECTIONS OF CALIFORNIA, INC.

     (F/K/A AMADOR DISPOSAL SERVICE, INC.)

     WASTE CONNECTIONS OF COLORADO, INC.

     WASTE CONNECTIONS OF GEORGIA, INC.

     (F/K/A WCI OF GEORGIA, INC.)

     WASTE CONNECTIONS OF IDAHO, INC.

     (F/K/A MOUNTAIN JACK ENVIRONMENTAL SERVICES, INC.)

     WASTE CONNECTIONS OF ILLINOIS, INC.

     WASTE CONNECTIONS OF IOWA, INC.

     (F/K/A WHALEY WASTE SYSTEMS INC.)

     WASTE CONNECTIONS OF KANSAS, INC.

     WASTE CONNECTIONS OF KENTUCKY, INC.

     WASTE CONNECTIONS OF MINNESOTA, INC.

     (F/K/A RITTER’S SANITARY SERVICE, INC.)

     WASTE CONNECTIONS OF MISSISSIPPI, INC.

     (F/K/A LIBERTY WASTE SERVICES OF MISSISSIPPI HOLDINGS, INC.)

     WASTE CONNECTIONS OF MISSOURI, INC.

     WASTE CONNECTIONS OF MONTANA, INC.

     WASTE CONNECTIONS OF NEBRASKA, INC.

     WASTE CONNECTIONS OF NEW MEXICO, INC.

     By: 

     Name:  Worthing F. Jackman

     Title:    Chief Financial Officer

THE BORROWERS

     WASTE CONNECTIONS OF OKLAHOMA, INC.

     (F/K/A B & B SANITATION, INC.)

     WASTE CONNECTIONS OF OREGON, INC.

     (SUCCESSOR BY MERGER TO ENVIRONMENTAL

     WASTE SYSTEMS, INC. AND F/K/A SWEET HOME

     SANITATION SERVICE, INC.)

     WASTE CONNECTIONS OF SOUTH DAKOTA, INC.

     (F/K/A NOVAK ENTERPRISES, INC.)

     WASTE CONNECTIONS OF TENNESSEE, INC.

     (F/K/A LIBERTY WASTE SERVICES OF

     TENNESSEE HOLDINGS, INC.)

     WASTE CONNECTIONS OF THE CENTRAL VALLEY, INC.

     (F/K/A/ KINGSBURG DISPOSAL SERVICE, INC.)

     WASTE CONNECTIONS OF UTAH, INC.

     WASTE CONNECTIONS OF WASHINGTON, INC.

     WASTE CONNECTIONS OF WYOMING, INC.

     WASTE CONNECTIONS TRANSPORTATION COMPANY, INC.

     WASTE SERVICES OF N.E. MISSISSIPPI, INC.

     WEST BANK ENVIRONMENTAL SERVICES, INC.

     WEST COAST RECYCLING AND TRANSFER, INC.

     WYOMING ENVIRONMENTAL SERVICES, INC.

     WYOMING ENVIRONMENTAL SYSTEMS, INC.

     By: 

     Name:  Worthing F. Jackman

     Title:    Chief Financial Officer

THE BORROWERS

     COLUMBIA RESOURCE CO., L.P.

     FINLEY-BUTTES LIMITED PARTNERSHIP

     By:           Management Environmental National, Inc.,

     its General Partner

     By: 

     Name:  Worthing F. Jackman

     Title:    Chief Financial Officer

     EL PASO DISPOSAL, LP

     By:           Waste Connections of Texas, LLC,

     its General Partner

     By:           Waste Connections Management Services,Inc.,

      its Manager

     By:

     Name:  Worthing F. Jackman

     Title:    Chief Financial Officer

THE BORROWERS

     GLACIER DISPOSAL, L.L.C.

     LAUREL RIDGE LANDFILL, L.L.C.

     SUNRISE SANITATION, LLC

     WASTE CONNECTIONS OF MISSISSIPPI DISPOSAL SERVICES, LLC

     (F/K/A SANTEK ENVIRONMENTAL OF MISSISSIPPI, L.L.C.)

     WASTE CONNECTIONS OF LEFLORE, LLC

     (F/K/A WASTE SERVICES OF MISSISSIPPI, LLC)

     By:          Waste Connections, Inc.,

      its Managing Member

     By:

     Name:  Worthing F. Jackman

     Title:    Chief Financial Officer

     WASTE CONNECTIONS OF TEXAS, LLC

     By:            Waste Connections Management

      Services, Inc., its Manager

     By: 

     Name:  Worthing F. Jackman

     Title:    Chief Financial Officer

THE BORROWERS

     HORIZON PROPERTY MANAGEMENT, LLC

     RAILROAD AVENUE DISPOSAL, LLC

     SCOTT WASTE SERVICES, LLC

     THE TRASH COMPANY, LLC

     WASTE SOLUTIONS GROUP OF SAN BENITO, LLC

     VOORHEES SANITATION, L.L.C.

     By:           Waste Connections, Inc.

       its Manager

     By:  

     Name:  Worthing F. Jackman

     Title:    Chief Financial Officer

BANK OF AMERIC, N.A.,

as Administrative Agent

By:  

Name: Maria F. Maia

Title:   Managing Director

THE LENDERS:

BANK OF AMERICA, N.A.

By:  

Name:  Maria F. Maia

Title:    Managing Director

THE LENDERS:

JPMORGAN CHASE BANK, N.A.

By:  

Name:

Title:

THE LENDERS:

DEUTSCHE BANK TRUST COMPANY AMERICAS

By:  

Name:

Title:

By:  

Name:

Title:

THE LENDERS:

WELLS FARGO BANK, N.A.

By:  

Name:

Title:

THE LENDERS:

UNION BANK OF CALIFORNIA N.A.

By:  

Name:

Title:

THE LENDERS:

U.S. BANK NATIONAL ASSOCIATION

By:  

Name:

Title:

THE LENDERS:

COMMERZBANK AG, NEW YORK

AND GRAND CAYMAN BRANCHES

By:  

Name:

Title:

By:  

Name:

Title:

THE LENDERS:

KEYBANK NATIONAL ASSOCIATION

By:  

Name:

Title:

THE LENDERS:

PNC BANK, NATIONAL ASSOCIATION

By:  

Name:

Title:

THE LENDERS:

SUMITOMO MITSUI BANKING CORPORATION

By:  

Name:

Title:

THE LENDERS:

BANK OF THE WEST

By:  

Name:

Title:

THE LENDERS:

COBANK, ACB

By:  

Name:

Title:

THE LENDERS:

PEOPLE'S UNITED BANK

By:  

Name:

Title:

EX-10.20

Exhibit 10.20

WASTE CONNECTIONS, INC.

SECOND AMENDED AND RESTATED

2004 EQUITY INCENTIVE PLAN

(as amended and restated)

1.  PURPOSE.

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

2.  DEFINITIONS.

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

(b)  “Change in Control” means:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(p)  “Options” means Nonqualified Stock Options.

(q)  “Plan” means this Waste Connections, Inc. Second Amended and Restated 2004 Equity Incentive Plan (as amended and restated).

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

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

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

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

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

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

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

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

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

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

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

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

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

3.  SHARES SUBJECT TO THE PLAN.

(a)  Stock Available for Awards. Subject to adjustment as provided in Section 9 for changes in Stock, the Stock that may be sold or delivered pursuant to Options, Restricted Stock and/or Restricted Stock Unit Awards shall not exceed 3,775,000 shares. The Company shall reserve for Options, Restricted Stock and/or Restricted Stock Unit Awards 3,775,000 shares of Stock, subject to adjustment as provided in Section 9. If any Option for any reason terminates, expires or is cancelled without having been exercised in full, the Stock not purchased under such Option shall revert to and again become available for issuance under the Plan. Shares of Stock that are issued pursuant to Restricted Stock or Restricted Stock Unit Awards may be either authorized and unissued shares (which will not be subject to preemptive rights) or previously issued shares acquired by the Company or any Subsidiary. Any shares of Stock subject to a Restricted Stock Award that are forfeited shall revert to and again become available for issuance under the Plan. If any Restricted Stock Unit Award terminates or is cancelled for any reason before all the shares of Stock subject to such award vest and become issuable, the shares of Stock which do not vest and become issuable under that Restricted Stock Unit Award shall revert to and again become available for issuance under the Plan.

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

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4.  ADMINISTRATION.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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5.  TERMS AND CONDITIONS OF OPTIONS.

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

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

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

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

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

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

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

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

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

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

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

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

6.  TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS.

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

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

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

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

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

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

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

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

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

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

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

7.  TERMS AND CONDITIONS OF RESTRICTED STOCK UNIT AWARDS.

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

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

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

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

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

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

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

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

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

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

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

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

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

9.  ADJUSTMENTS ON CERTAIN EVENTS.

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

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(b) Changes in Control.

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

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

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

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

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

(c) Adjustment Of Shares. The aggregate number, class and kind of shares of stock available for issuance under the Plan, the aggregate number, class and kind of shares of stock as to which Restricted Stock or Restricted Stock Unit Awards may be granted, the limitation set forth in Section 4(c) on the number of shares of Stock that may be issued by a single officer under the Plan, the number, class and kind of shares under each outstanding Restricted Stock or Restricted Stock Unit Award, the exercise price of each Option and the number of shares purchasable on exercise of such Option shall be appropriately adjusted by the Board in its discretion to preserve the benefits or potential benefits intended to be made available under the Plan or with respect to any outstanding Options or any outstanding Restricted Stock or Restricted Stock Unit Awards or otherwise necessary to reflect any such change, if the Company shall (i) pay a dividend in, or make a distribution of, shares of Stock (or securities convertible into, exchangeable for or otherwise entitling a holder thereof to receive Stock), or evidences of indebtedness or other property or assets, on outstanding Stock, (ii) subdivide the outstanding shares of Stock into a greater number of shares, (iii) combine the outstanding shares of Stock into a smaller number of shares or (iv) issue any shares of its capital stock in a reclassification of the Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the resulting corporation). An adjustment made pursuant to this Section 9(c) shall, in the case of a dividend or distribution, be made as of the record date therefor and, in the case of a subdivision, combination or reclassification, be made as of the effective date thereof. In case of any adjustment pursuant to this Section 9(c) with respect to an Option, the total number of shares and the number of shares or other units of such other securities purchasable on exercise of the Option immediately prior thereto shall be adjusted so that the Optionee shall be entitled to receive at the same aggregate purchase price the number of shares of Stock and the number of shares or other units of such other securities that the Optionee would have owned or would have been entitled to receive immediately following the occurrence of any of the events described above had the Option been exercised in full immediately prior to the occurrence (or applicable record date) of such event. If, as a result of any adjustment pursuant to this Section 9(c), the Optionee shall become entitled to receive shares of two or more classes or series of securities of the Company, the Board shall equitably determine the allocation of the adjusted exercise price between or among shares or other units of such classes or series and shall notify the Optionee of such allocation. Any new or additional shares or securities received by a Restricted Stock Participant shall be subject to the same terms and conditions, including the Restriction Period, as related to the original Restricted Stock Award.

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

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

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

10.  TAX WITHHOLDING OBLIGATIONS.

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

(b) Withholding Requirement and Procedure.

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

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

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

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

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

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

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

11.  AMENDMENT, TERMINATION OR SUSPENSION OF THE PLAN.

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

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

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

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

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

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

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

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

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

13.  COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT.

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

14.  LIMITATION OF LIABILITY AND INDEMNIFICATION.

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

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

15

15.  MISCELLANEOUS

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

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

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

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

16

Annex A

NONQUALIFIED STOCK OPTION AGREEMENT

Dear __________________:

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

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

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

1.  Award Date: ____________

2.  Number of Shares Subject to Option: ____________

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

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

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

4.  Exercise Price.

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

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

Annex A: Page 1

5.  Partial or Early Exercise.

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

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

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

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

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

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

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

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

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

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

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

Annex A: Page 2

9. Conditions on Exercise.

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

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

10. Adjustments on Certain Events.

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

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

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

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

Annex A: Page 3

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

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

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

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

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

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

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

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

Annex A: Page 4

ATTACHMENTS:

Waste Connections, Inc. Second Amended and Restated 2004 Equity Incentive Plan (as amended and restated)

Notice of Exercise

Annex A: Page 5

The undersigned:

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

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

NONE: _____________________

 (Initial)

OTHER: _____________________________

_____________________________

_____________________________

____________________________________
OPTIONEE
Address:	_________________________
	_________________________

Annex A: Page 6

NOTICE OF EXERCISE

Waste Connections, Inc.

35 Iron Circle, Suite 200

Folsom, CA 95630-8589               Date of Exercise: __________

Ladies and Gentlemen:

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

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

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

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

     Very truly yours,

_______________

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

Annex A: Page 7

Annex B

RESTRICTED STOCK AGREEMENT

Dear _____________:

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

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

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

        1. Award Date:_______________.

        2. Number of Shares Subject to Award:_______________.

        3. Purchase Price. The purchase price for each share of Stock awarded by this Agreement is $__________.

        4. Vesting Schedule. The Award of Restricted Stock shall be deemed non-forfeitable and such Stock shall no longer be considered Restricted Stock on the earlier of a Change in Control or the expiration of the Restriction Period on the following dates with respect to the following percentages of the total shares of Restricted Stock awarded, and the Company shall, within a reasonable time and subject to Section 5, deliver stock certificates evidencing such Stock to you:

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

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

Annex B: Page 1

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

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

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

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

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

7.   Adjustments on Certain Events.

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

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

Annex B: Page 2

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

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

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

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

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

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

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

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

9.   Tax Withholding Obligations.

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

Annex B: Page 3

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

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

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

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

ATTACHMENT:

Waste Connections, Inc. Second Amended and Restated 2004 Equity Incentive Plan (as amended and restated)

Annex B: Page 4

The undersigned:

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

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

____________________________________
RESTRICTED STOCK PARTICIPANT
Address:	_________________________
	_________________________

Annex B: Page 5

Annex C

RESTRICTED STOCK UNIT AGREEMENT

Dear _______________:

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

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

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

Award Date:	_______________
Number of Shares Subject to Award:	________________ shares of the Company’s common stock (the “Shares”).
Vesting Schedule:	The Shares will vest and become issuable in a series of ____________ (___) successive equal annual installments upon your completion of each year of Continuous Status as an Employee, Director or Consultant over the ____________ (___) year period measured from the Award Date. However, no Shares which vest in accordance with such schedule will actually be issued until you satisfy all applicable income and employment withholding taxes.

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

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

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

Annex C: Page 1

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

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

4. Federal Income Taxation: You will recognize ordinary income for federal income tax purposes on the date the Shares subject to your Award vest, and you must satisfy the income tax withholding obligation applicable to that income. The amount of your taxable income will be equal to the closing selling price per share of Common Stock on the New York Stock Exchange on the vesting date times the number of Shares which vest on that date.

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

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

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

(b)           Should any Shares vest under the Award at a time the Share Withholding Method is not available, then the applicable federal, state and local income and employment withholding taxes shall be collected from you through either of the following alternatives:

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

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

Annex C: Page 2

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

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

X = (A x B)/C, where

X	=	the additional number of Shares which will become subject to your Award by reason of the cash dividend;
A	=	the number of unissued Shares subject to this Award as of the record date for such dividend;
B	=	the per Share amount of the cash dividend; and
C	=	the closing selling price per share of Common Stock on the New York Stock Exchange on the payment date of such dividend.

The additional Shares resulting from such calculation will be subject to the same terms and conditions as the unissued Shares to which they relate under your Award.

9. Change in Control: In the event of a Change in Control, the vesting of the Shares subject to your Award will accelerate in full immediately upon such Change in Control and the shares subject to your Award shall be issued, subject to your satisfaction of all applicable federal, state, local and/or foreign income and employment withholding taxes.

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

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

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

Annex C: Page 3

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

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

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

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

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

Please execute the Acknowledgment section below to indicate your acceptance of the terms and conditions of your Award.

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

Annex C: Page 4

ACKNOWLEDGMENT

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

SIGNATURE: ___________________________________
PRINTED NAME: ______________________________
DATED: ____________________________________, 200_
Address:	_________________________
	_________________________

Annex C: Page 5

EX-10.23

Exhibit 10.23

AMENDMENT TO

[___________________] EMPLOYMENT AGREEMENT

This AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”), is made and entered into effective as of [_________________], 2008 (the “Effective Date”), by and between Waste Connections, Inc., a Delaware corporation (the “Company”), and [_________________] (the “Employee”).

WHEREAS, the Company and the Employee desire to amend that certain [__________________] Employment Agreement by and between the Company and the Employee, dated as of [_________________] (the “Agreement”), in order to ensure that the benefits to be provided by the Agreement comply with, or are exempt from, the provisions of Section 409A of the United States Internal Revenue Code (the “Code”).

NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions herein, the Company and the Employee hereby agree as follows effective as of the Effective Date.  Except as otherwise defined herein, capitalized terms shall have the meanings assigned to them in the Agreement.

1.           Amendment.  The Agreement shall be deemed amended to the extent necessary to provide the following:

(a)           Separation from Service.  No benefits payable upon Employee’s termination of employment that are deemed deferred compensation subject to Section 409A of the Code, shall be payable upon Employee’s termination of employment pursuant to the Agreement unless such termination of employment constitutes a “separation from service” with the Company within the meaning of Section 409A of the Code and the Department of Treasury regulations and other guidance promulgated thereunder (a “Separation from Service”).

(b)           Change in Control.  No benefits deemed deferred compensation subject to Section 409A of the Code shall be payable upon a Change in Control pursuant to the Agreement unless such Change in Control constitutes a “change in control event” with respect to the Company within the meaning of Section 409A of the Code and the Department of Treasury regulations and other guidance promulgated thereunder.

(c)           Waiver.  Employee shall not waive any provision of the Agreement if the effect of such waiver would be to delay the payment of an amount that is, or as a result of such waiver becomes, subject to Section 409A of the Code, and any attempt to waive such provision shall be deemed void ab initio.

(d)           Specified Employee.  If Employee is deemed by the Company 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 the 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 (i) the expiration of the six-month period measured from the date of the Employee’s Separation from Service or (ii) the date of Employee’s death.  Upon the first business day following the expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Section shall be paid in a lump sum to Employee, and any remaining payments due under the Agreement shall be paid as otherwise provided herein.

Amendment To Employment Agreement Page 1

(e)           Expense Reimbursements.  To the extent that any reimbursements payable pursuant to the Agreement, including any Gross Up Payments, are subject to the provisions of Section 409A of the Code, any such reimbursements payable to Employee pursuant to the Agreement shall be paid to Employee no later than December 31 of the year following the year in which the expense was incurred, the amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year, and Employee’s right to reimbursement under the Agreement will not be subject to liquidation or exchange for another benefit.  Any determination with respect to the amount of any tax reimbursement, whether any tax reimbursement is due and the assumptions to be used in such determinations shall be made by the nationally recognized certified public accounting firm used by the Company immediately prior to a Change in Control or, if such firm declines to serve, such nationally recognized certified public accounting firm as may be designated by Employee.

(f)           Installments.  For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), Employee’s right to receive any installment payments under the Agreement shall be treated as a right to receive a series of separate payments and, accordingly, each such installment payment shall at all times be considered a separate and distinct payment.

(g)           Extensions.  To the extent the exercisability or term of any option, warrant or other right relating to the capital stock of the Company is extended pursuant to the terms of the Agreement, the exercisability or term of such option, warrant or other right shall in no event extend to a date later than the date such option, warrant or other right would have expired under any circumstances pursuant to its original terms.

(h)           Bonus.  Any Bonus payable pursuant to the Agreement shall be paid no later than the fifteenth (15th) day of the third (3rd) month following the end of the fiscal year to which such Bonus relates.

(i)           Date of Termination.  For the purposes of the Agreement, “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), if the Employee terminates employment for Good Reason, thirty (30) days after Notice of Termination is given to the Company, or, if the Employee’s employment is terminated by the Company for any reason other than Disability or by the Employee for any reason other than Good Reason, the date specified in the Notice of Termination which shall be within thirty (30) days of the date such Notice of Termination is given.

(j)           Good Reason.  No action by the Company shall constitute “Good Reason” unless (i) such action provides a material negative change to Employee’s employment relationship with the Company, within the meaning of Section 409A of the Code and the Department of Treasury regulations and other guidance promulgated thereunder, (ii) Employee’s Notice of Termination is provided to the Company within thirty (30) days of the initial occurrence of the action giving rise to Good Reason and (iii) the Company fails to remedy the basis for Good Reason prior to thirty (30) days following the date of the Notice of Termination.

2.           Counterparts.  This Amendment 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.

Amendment To Employment Agreement Page 2

3.           Ratification.  All terms and provisions of the Agreement not amended hereby, either expressly or by necessary implication, shall remain in full force and effect.  From and after the date of this Amendment, all references to the term “Agreement” in this Amendment and in the original Agreement shall include the terms contained in this Amendment.

4.           Conflicting Provisions.  In the event of any conflict between the original terms of the Agreement and this Amendment, the terms of this Amendment shall prevail.

5.           Authorization.  Each party executing this Amendment represents and warrants that it is duly authorized to cause this Amendment to be executed and delivered.

IN WITNESS WHEREOF, this Amendment to 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:

Amendment To Employment Agreement Page 3

EX-10.24

Exhibit 10.24

AMENDMENT TO

EMPLOYMENT AGREEMENT

This AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”), is made and entered into effective as of [_________________], 2008 (the “Effective Date”), by and between Waste Connections, Inc., a Delaware corporation (the “Company”), and [_________________] (the “Employee”).

WHEREAS, the Company and the Employee desire to amend that certain Employment Agreement by and between the Company and the Employee, dated as of [_________________] (the “Agreement”), in order to ensure that the benefits to be provided by the Agreement comply with, or are exempt from, the provisions of Section 409A of the United States Internal Revenue Code (the “Code”).

NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions herein, the Company and the Employee hereby agree as follows effective as of the Effective Date.  Except as otherwise defined herein, capitalized terms shall have the meanings assigned to them in the Agreement.

1.           Amendment.  The Agreement shall be deemed amended to the extent necessary to provide the following:

(a)           Separation from Service.  No benefits payable upon Employee’s termination of employment that are deemed deferred compensation subject to Section 409A of the Code, shall be payable upon Employee’s termination of employment pursuant to the Agreement unless such termination of employment constitutes a “separation from service” with the Company within the meaning of Section 409A of the Code and the Department of Treasury regulations and other guidance promulgated thereunder (a “Separation from Service”).

(b)           Change in Control.  No benefits deemed deferred compensation subject to Section 409A of the Code shall be payable upon a Change in Control pursuant to the Agreement unless such Change in Control constitutes a “change in control event” with respect to the Company within the meaning of Section 409A of the Code and the Department of Treasury regulations and other guidance promulgated thereunder.

(c)           Waiver.  Employee shall not waive any provision of the Agreement if the effect of such waiver would be to delay the payment of an amount that is, or as a result of such waiver becomes, subject to Section 409A of the Code, and any attempt to waive such provision shall be deemed void ab initio.

(d)           Specified Employee.  If Employee is deemed by the Company 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 the 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 (i) the expiration of the six-month period measured from the date of the Employee’s Separation from Service or (ii) the date of Employee’s death.  Upon the first business day following the expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Section shall be paid in a lump sum to Employee, and any remaining payments due under the Agreement shall be paid as otherwise provided herein.

Amendment To Employment Agreement Page 1

(e)           Expense Reimbursements.  To the extent that any reimbursements payable pursuant to the Agreement are subject to the provisions of Section 409A of the Code, any such reimbursements payable to Employee pursuant to the Agreement shall be paid to Employee no later than December 31 of the year following the year in which the expense was incurred, the amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year, and Employee’s right to reimbursement under the Agreement will not be subject to liquidation or exchange for another benefit.

(f)           Installments.  For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), Employee’s right to receive any installment payments under the Agreement shall be treated as a right to receive a series of separate payments and, accordingly, each such installment payment shall at all times be considered a separate and distinct payment.

(g)           Extensions.  To the extent the exercisability or term of any option, warrant or other right relating to the capital stock of the Company is extended pursuant to the terms of the Agreement, the exercisability or term of such option, warrant or other right shall in no event extend to a date later than the date such option, warrant or other right would have expired under any circumstances pursuant to its original terms.

(h)           Bonus.  Any Bonus payable pursuant to the Agreement shall be paid no later than the fifteenth (15th) day of the third (3rd) month following the end of the fiscal year to which such Bonus relates.

(i)           Date of Termination.  For the purposes of the Agreement, “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), if the Employee’s employment is terminated by the Company for any reason other than Disability, the date specified in the Notice of Termination, or if the Employee’s employment is terminated by the Employee for any reason, the date specified in the Notice of Termination which shall be within thirty (30) days of the date of such Notice of Termination.

2.           Counterparts.  This Amendment 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.

3.           Ratification.  All terms and provisions of the Agreement not amended hereby, either expressly or by necessary implication, shall remain in full force and effect.  From and after the date of this Amendment, all references to the term “Agreement” in this Amendment and in the original Agreement shall include the terms contained in this Amendment.

4.           Conflicting Provisions.  In the event of any conflict between the original terms of the Agreement and this Amendment, the terms of this Amendment shall prevail.

5.           Authorization.  Each party executing this Amendment represents and warrants that it is duly authorized to cause this Amendment to be executed and delivered.

Amendment To Employment Agreement Page 2

IN WITNESS WHEREOF, this Amendment to 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:

Amendment To Employment Agreement Page 3

EX-10.25

Exhibit 10.25

AMENDMENT TO

EMPLOYMENT AGREEMENT

This AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”), is made and entered into effective as of [__________________], 2008 (the “Effective Date”), by and between Waste Connections, Inc., a Delaware corporation (the “Company”), and [_________________] (the “Employee”).

WHEREAS, the Company and the Employee desire to amend that certain Employment Agreement by and between the Company and the Employee, dated as of [_________________] (the “Agreement”), in order to ensure that the benefits to be provided by the Agreement comply with, or are exempt from, the provisions of Section 409A of the United States Internal Revenue Code (the “Code”).

NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions herein, the Company and the Employee hereby agree as follows effective as of the Effective Date.  Except as otherwise defined herein, capitalized terms shall have the meanings assigned to them in the Agreement.

1.           Amendment.  The Agreement shall be deemed amended to the extent necessary to provide the following:

(a)           Separation from Service.  No benefits payable upon Employee’s termination of employment that are deemed deferred compensation subject to Section 409A of the Code, shall be payable upon Employee’s termination of employment pursuant to the Agreement unless such termination of employment constitutes a “separation from service” with the Company within the meaning of Section 409A of the Code and the Department of Treasury regulations and other guidance promulgated thereunder (a “Separation from Service”).

(b)           Change in Control.  No benefits deemed deferred compensation subject to Section 409A of the Code shall be payable upon a Change in Control pursuant to the Agreement unless such Change in Control constitutes a “change in control event” with respect to the Company within the meaning of Section 409A of the Code and the Department of Treasury regulations and other guidance promulgated thereunder.

(c)           Waiver.  Employee shall not waive any provision of the Agreement if the effect of such waiver would be to delay the payment of an amount that is, or as a result of such waiver becomes, subject to Section 409A of the Code, and any attempt to waive such provision shall be deemed void ab initio.

(d)           Specified Employee.  If Employee is deemed by the Company 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 the 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 (i) the expiration of the six-month period measured from the date of the Employee’s Separation from Service or (ii) the date of Employee’s death.  Upon the first business day following the expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Section shall be paid in a lump sum to Employee, and any remaining payments due under the Agreement shall be paid as otherwise provided herein.

Amendment To Employment Agreement Page 1

(e)           Expense Reimbursements.  To the extent that any reimbursements payable pursuant to the Agreement are subject to the provisions of Section 409A of the Code, any such reimbursements payable to Employee pursuant to the Agreement shall be paid to Employee no later than December 31 of the year following the year in which the expense was incurred, the amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year, and Employee’s right to reimbursement under the Agreement will not be subject to liquidation or exchange for another benefit.

(f)           Installments.  For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), Employee’s right to receive any installment payments under the Agreement shall be treated as a right to receive a series of separate payments and, accordingly, each such installment payment shall at all times be considered a separate and distinct payment.

(g)           Extensions.  To the extent the exercisability or term of any option, warrant or other right relating to the capital stock of the Company is extended pursuant to the terms of the Agreement, the exercisability or term of such option, warrant or other right shall in no event extend to a date later than the date such option, warrant or other right would have expired under any circumstances pursuant to its original terms.

(h)           Bonus.  Any Bonus payable pursuant to the Agreement shall be paid no later than the fifteenth (15th) day of the third (3rd) month following the end of the fiscal year to which such Bonus relates.

(i)           Date of Termination.  For the purposes of the Agreement, “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), if the Employee’s employment is terminated by the Company for any reason other than Disability, the date specified in the Notice of Termination, or if the Employee’s employment is terminated by the Employee for any reason, the date specified in the Notice of Termination which shall be within thirty (30) days of the date of such Notice of Termination.

(j)           Exchange of Benefits.  No benefits payable under the Agreement that are deemed deferred compensation subject to Section 409A of the Code shall be subject to forfeiture in exchange for another benefit under the Agreement.

2.           Counterparts.  This Amendment 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.

3.           Ratification.  All terms and provisions of the Agreement not amended hereby, either expressly or by necessary implication, shall remain in full force and effect.  From and after the date of this Amendment, all references to the term “Agreement” in this Amendment and in the original Agreement shall include the terms contained in this Amendment.

4.           Conflicting Provisions.  In the event of any conflict between the original terms of the Agreement and this Amendment, the terms of this Amendment shall prevail.

5.           Authorization.  Each party executing this Amendment represents and warrants that it is duly authorized to cause this Amendment to be executed and delivered.

Amendment To Employment Agreement Page 2

IN WITNESS WHEREOF, this Amendment to 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:
	Ronald J. Mittelstaedt
	Chief Executive Officer

Amendment To Employment Agreement Page 3

EX-10.26

Exhibit 10.26

AMENDMENT TO

EMPLOYMENT AGREEMENT

This AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”), is made and entered into effective as of [_________________], 2008 (the “Effective Date”), by and between Waste Connections, Inc., a Delaware corporation (the “Company”), and [_________________] (the “Employee”).

WHEREAS, the Company and the Employee desire to amend that certain Employment Agreement by and between the Company and the Employee, dated as of [_________________] (the “Agreement”), in order to ensure that the benefits to be provided by the Agreement comply with, or are exempt from, the provisions of Section 409A of the United States Internal Revenue Code (the “Code”).

NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions herein, the Company and the Employee hereby agree as follows effective as of the Effective Date.  Except as otherwise defined herein, capitalized terms shall have the meanings assigned to them in the Agreement.

1.Amendment.  The Agreement shall be deemed amended to the extent necessary to provide the following:

(a)Separation from Service.  No benefits payable upon Employee’s termination of employment that are deemed deferred compensation subject to Section 409A of the Code, shall be payable upon Employee’s termination of employment pursuant to the Agreement unless such termination of employment constitutes a “separation from service” with the Company within the meaning of Section 409A of the Code and the Department of Treasury regulations and other guidance promulgated thereunder (a “Separation from Service”).

(b)Change in Control.  No benefits deemed deferred compensation subject to Section 409A of the Code shall be payable upon a Change in Control pursuant to the Agreement unless such Change in Control constitutes a “change in control event” with respect to the Company within the meaning of Section 409A of the Code and the Department of Treasury regulations and other guidance promulgated thereunder.

(c)Waiver.  Employee shall not waive any provision of the Agreement if the effect of such waiver would be to delay the payment of an amount that is, or as a result of such waiver becomes, subject to Section 409A of the Code, and any attempt to waive such provision shall be deemed void ab initio.

(d)Specified Employee.  If Employee is deemed by the Company 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 the 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 (i) the expiration of the six-month period measured from the date of the Employee’s Separation from Service or (ii) the date of Employee’s death.  Upon the first business day following the expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Section shall be paid in a lump sum to Employee, and any remaining payments due under the Agreement shall be paid as otherwise provided herein.

Amendment To Employment Agreement Page 1

(e)Expense Reimbursements.  To the extent that any reimbursements payable pursuant to the Agreement are subject to the provisions of Section 409A of the Code, any such reimbursements payable to Employee pursuant to the Agreement shall be paid to Employee no later than December 31 of the year following the year in which the expense was incurred, the amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year, and Employee’s right to reimbursement under the Agreement will not be subject to liquidation or exchange for another benefit.

(f)Installments.  For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), Employee’s right to receive any installment payments under the Agreement shall be treated as a right to receive a series of separate payments and, accordingly, each such installment payment shall at all times be considered a separate and distinct payment.

(g)Extensions.  To the extent the exercisability or term of any option, warrant or other right relating to the capital stock of the Company is extended pursuant to the terms of the Agreement, the exercisability or term of such option, warrant or other right shall in no event extend to a date later than the date such option, warrant or other right would have expired under any circumstances pursuant to its original terms.

(h)Bonus.  Any Bonus payable pursuant to the Agreement shall be paid no later than the fifteenth (15th) day of the third (3rd) month following the end of the fiscal year to which such Bonus relates.

(i)Date of Termination.  For the purposes of the Agreement, “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), if the Employee’s employment is terminated by the Company for any reason other than Disability, the date specified in the Notice of Termination which shall be inclusive of any Transition Period, or if the Employee’s employment is terminated by the Employee for any reason, the date specified in the Notice of Termination which shall be within thirty (30) days of the date of such Notice of Termination.

(j)Transition Period.  Any Notice of Termination provided by the Company in connection with Employee’s termination of employment by the Company without Cause shall include a description of any transitional services required by the Company as a condition to any benefits being paid under the Agreement, which may be for a period of up to one hundred twenty (120) days (the “Transition Period”), and no benefits shall be payable under the Agreement unless such transitional services have been satisfactorily provided, as determined by the Company.  In no event shall the Company require a full time transition period following the Date of Termination.

2.Counterparts.  This Amendment 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.

3.Ratification.  All terms and provisions of the Agreement not amended hereby, either expressly or by necessary implication, shall remain in full force and effect.  From and after the date of this Amendment, all references to the term “Agreement” in this Amendment and in the original Agreement shall include the terms contained in this Amendment.

4.Conflicting Provisions.  In the event of any conflict between the original terms of the Agreement and this Amendment, the terms of this Amendment shall prevail.

Amendment To Employment Agreement Page 2

5.Authorization.  Each party executing this Amendment represents and warrants that it is duly authorized to cause this Amendment to be executed and delivered.

IN WITNESS WHEREOF, this Amendment to 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:
	Ronald J. Mittelstaedt
	Chief Executive Officer

Amendment To Employment Agreement Page 3

EX-12.1

EXHIBIT 12.1
STATEMENT OF COMPUTATION OF RATIO OF EARNINGS
TO FIXED CHARGES
(In thousands)
	2004		2005		2006		2007		2008
Earnings:
Income before income taxes	$	115,609		132,588		125,752		158,998		163,956
Plus:  fixed charges per below		23,999		26,547		32,399		36,657		37,887
Less: capitalized interest per below		167		432		654		206		29
Plus:  current period amortization of interest
capitalized in prior periods		13		21		30		39		39
Total earnings	$	139,454	$	158,724	$	157,527	$	195,488	$	201,853
Fixed charges
Interest expense	$	21,724	$	23,489	$	28,970	$	33,430	$	35,527
Capitalized interest		167		432		654		206		29
Interest portion of rent expense		2,108		2,626		2,775		3,021		2,331
Total fixed charges	$	23,999	$	26,547	$	32,399	$	36,657	$	37,887
Ratio of earnings to fixed charges		5.8		6.0		4.9		5.3		5.3

EX-21.1

EXHIBIT 21.1

SUBSIDIARIES OF WASTE CONNECTIONS, INC.

		Other Names
	State of	Under Which
	Incorporation/	Conducts
Subsidiary	Organization	Business
ADVANCED SYSTEMS PORTABLE RESTROOMS, INC.	Oregon	Advanced Mobile Storage
		Advanced Systems Portable
		Restrooms
		McDonald Portable Toilets
AMADOR SERVICES, LLC	California
AMERICAN DISPOSAL COMPANY, INC.	Washington
AMERICAN SANITARY SERVICE, INC.	Oregon
AMERICAN WEST LEASING, INC.	Oregon
BITUMINOUS RESOURCES, INC.	Kentucky
BROADACRE LANDFILL, INC.	Colorado	Pueblo Landfill and
		Recycling Center
BUTLER COUNTY LANDFILL, INC.	Nebraska
CAMINO REAL ENVIRONMENTAL CENTER, INC.	New Mexico
COLD CANYON LANDFILL, INC.	California	ColdCanyon
		Processing Facility
		ColdCanyon Recycling
COLUMBIA RESOURCE CO., LP	Washington
COMMUNITY REFUSE DISPOSAL, INC.	Nebraska
CONTRACTORS WASTE SERVICES, INC.	Kentucky
CORRAL DE PIEDRA LAND COMPANY	California
COUNTY RECYCLING, INC.	Washington	County Recycling
CURRY TRANSFER AND RECYCLING, INC.	Oregon	City Transfer
		& Recycling
		CountyTransfer
		& Recycling
		Country Transfer
		& Recycling
		Extra Mile Disposal
		& Hauling
		Harrell's Septic
		Roto-Rooter of
		CurryCounty
		Sandy's Disposal Service
		Westlane Disposal
DM DISPOSAL CO., INC.	Washington	American Portable
		Storage
		D.M. Recycling
		Superior Refuse
		Removal
DENVER REGIONAL LANDFILL, INC.	Colorado
EL PASO DISPOSAL, LP	Texas	Caprock Waste
		Services Company, LLC
		Waste Wranglers
ELKO SANITATION COMPANY	Nevada	Waste Connections of
		Nevada
EMPIRE DISPOSAL, INC.	Washington
ENVIRONMENTAL TRUST COMPANY	Tennessee
EVERGREEN DISPOSAL, INC.	Montana
FINLEY-BUTTES LIMITED PARTNERSHIP	Oregon	Finley Buttes Landfill
		Company
FINNEY COUNTY LANDFILL, INC.	Delaware
FRANK'S SERVICE, INC.	Montana
G&P DEVELOPMENT, INC.	Nebraska
GLACIER DISPOSAL, L.L.C.	Montana
HAROLD LEMAY ENTERPRISES, INCORPORATED	Washington	AA Better Trash & Junk
		Clean Up
		AA Lucky Portable Storage
		Aberdeen Sanitation Co.
		All Star Recycling
		Butler's Cove Refuse
		Service
		City Sanitary Co.
		Eastern Grays Harbor
		Disposal
		EGH Disposal
		Harbor Disposal Co.
		Harold LeMay Enterprises
		HE Recycling
		Joes Refuse Service
		Lakewood Recycling
		Service
		Lakewood Refuse Service
		LeMay Inc.
		LeMay Mobile Shredding
		LeMay Transportation
		Services
		Le May Trucking, Inc.
		Pacific Disposal
		Pierce CountyRefuse
		Recycle Services
		Rural Garbage Service
		Rural Refuse Service
		White Pass Garbage
HIGH DESERT SOLID WASTE FACILITY, INC.	New Mexico
HORIZON PROPERTY MANAGEMENT, LLC	Colorado
ISLAND DISPOSAL, INC.	Washington	Whidbey Recycling
		Services
J BAR J LAND, INC.	Nebraska
KELLY'S HAUL AWAY, INC.	Montana
LAKESHORE DISPOSAL, INC.	Idaho
LAUREL RIDGE LANDFILL, L.L.C.	Delaware
LEALCO, INC.	Texas	ABC Waste Collection
LES' COUNTY SANITARY, INC.	Oregon
MADERA DISPOSAL SYSTEMS, INC.	California	Allied Disposal
		Company
		Bishop Waste
		Disposal
		Coastal Rolloff Service
		Riverdale Disposal
		Service
		Sierra Disposal
		Western Johns

EXHIBIT 21.1

SUBSIDIARIES OF WASTE CONNECTIONS, INC.

		Other Names
	State of	Under Which
	Incorporation/	Conducts
Subsidiary	Organization	Business

MAMMOTH DISPOSAL COMPANY	California
MANAGEMENT ENVIRONMENTAL NATIONAL, INC.	Washington
MASON COUNTY GARBAGE CO., INC.	Washington
MDSI OF LA, INC.	California
MILLENIUM WASTE INCORPORATED	Indiana	Quad Cities Landfill
MISSION COUNTRY DISPOSAL	California	TriCity Disposal
MORROBAY GARBAGE SERVICE	California
MURREY’S DISPOSAL COMPANY, INC.	Washington	Olympic Disposal
NEBRASKA ECOLOGY SYSTEMS, INC.	Nebraska
NOBLES COUNTY LANDFILL, INC.	Minnesota
NORTHERN PLAINS DISPOSAL INC.	Delaware
NORTHWEST CONTAINER SERVICES, INC.	Oregon
OKLAHOMA CITY WASTE DISPOSAL, INC.	Oklahoma
OKLAHOMA LANDFILL HOLDINGS, INC.	Delaware
OSAGE LANDFILL, INC.	Oklahoma
PIERCE COUNTY RECYCLING COMPOSTING & DISPOSAL, LLC	Washington	LRI
PSI ENVIRONMENTAL SERVICES INC.	Indiana	PSI WASTE
PSI ENVIRONMENTAL SYSTEMS, INC.	Indiana	PSI WASTE
PUEBLO SANITATION, INC.	Colorado
PUYALLUP ENERGY RECOVERY COMPANY, LLC	Washington
R.A. BROWNRIGG INVESTMENTS, INC.	Oregon	Cascade Disposal Company
		Cascade Recycling Co.
		Kelvic Disposal Co,
		Kelvic Dropbox Company
		Sun Country Disposal
RAILROAD AVENUE DISPOSAL, LLC	Delaware
RED CARPET LANDFILL, INC.	Oklahoma
RH FINANCIAL CORPORATION	Washington
RURAL WASTE MANAGEMENT, INC.	Oklahoma
SAN LUIS GARBAGE COMPANY	California
SCOTT SOLID WASTE DISPOSAL COMPANY	Tennessee	Reliable Waste Services
		TWM-Landfill
SCOTT WASTE SERVICES, LLC	Kentucky
SEDALIA LAND COMPANY	Colorado
SOUTHCOUNTY SANITARY SERVICE, INC.	California	Nipomo Garbage
		Company
		Nipomo Recycling
		Center
SOUTHERN PLAINS DISPOSAL, INC.	Delaware
SUNRISE SANITATION, LLC	Oregon
TACOMA RECYCLING COMPANY, INC.	Washington
TENNESSEE WASTE MOVERS, INC.	Delaware	Volunteer Landfill
THE TRASH COMPANY, LLC	Colorado
VOORHEES SANITATION, L.L.C.	Idaho
WASCO COUNTY LANDFILL, INC.	Delaware	Republic Services of
		Oregon I
WASTE CONNECTIONS MANAGEMENT SERVICES, INC.	Delaware
WASTE CONNECTIONS OF ALABAMA, INC.	Delaware	Competitive Waste
		Systems
WASTE CONNECTIONS OF ARIZONA, INC.	Delaware
WASTE CONNECTIONS OF ARKANSAS, INC.	Delaware
WASTE CONNECTIONS OF CALIFORNIA, INC.	California	Amador Disposal Service
		BearValley Disposal
		Service
		Calaveras Sanitation
		Services
		EbbettsPass Disposal
		Service
		Betts Disposal Service
		El Dorado Disposal
		Service
		GreenTeam
		GreenTeam of San Jose
		GreenWaste of Tehama
		Mother Lode Sani-Hut
		Sani-Hut Portable
		Toilets
		SEI Debris Box Rent-A-Bin
		SEI Solid Waste
		Western El Dorado
		Recovery Systems
		Westside Sanitation
WASTE CONNECTIONS OF COLORADO, INC.	Delaware	All Trash Service
		Aspen Waste
		Aspen Waste Systems
		Community Recycling
		Denver Roll-Off Service
		El Paso Disposal Services
		Fremont Disposal
		Horizon Property Management
		PlatteValley Disposal
		Pueblo Disposal
		Pueblo Disposal &
		Recycling Service
		SnowyPeaks Trash
		Company
		Solid Waste Transfer
		Services
		The Trash Company
		Town & Country
		Disposal
		U.S. Disposal
		U.S. Disposal Services
		White Sanitation
WASTE CONNECTIONS OF GEORGIA, INC.	Delaware	Baxter Waste Systems
WASTE CONNECTIONS OF IDAHO, INC.	Indiana	Mountain Jack
		Environmental Services
		T, T & R Enterprises
		Valley Waste and Recycling
WASTE CONNECTIONS OF ILLINOIS, INC.	Delaware	Millenium Waste
WASTE CONNECTIONS OF IOWA, INC.	Iowa	EZ Roll Off
		EZ Roll Off Systems
		E-Z Sanitation
		Frangenberg Sanitation
		Huberg Solid Waste
		Management
		Millenium Waste
		Stone Roll-Off
		Stone Sanitation
		Town & Country
		Disposal
		Whaley Waste
		Systems

EXHIBIT 21.1

SUBSIDIARIES OF WASTE CONNECTIONS, INC.

		Other Names
	State of	Under Which
	Incorporation/	Conducts
Subsidiary	Organization	Business

WASTE CONNECTIONS OF KANSAS, INC.	Delaware	Anderson Trash Service
		Best Yet Refuse
		Collectia LTD
		DualCounty
		Sanitation
		Northend Disposal
		R-Arrow
		Salina Waste Systems
WASTE CONNECTIONS OF KENTUCKY, INC.	Delaware	Corbin's Disposal
		Service
		Kentucky Waste
		Systems, Inc.
		Mid-State Recycling
		Waste Systems
		Mid-State Waste
		Waste Systems, Inc.
WASTE CONNECTIONS OF LEFLORE, LLC	Mississippi
WASTE CONNECTIONS OF MINNESOTA, INC.	Minnesota	Hendrickson Sanitation
		L & L Sanitation
		Schaap Sanitation
		Scotting Sanitation
		Ulrich Sanitation
WASTE CONNECTIONS OF MISSISSIPPI DISPOSAL SERVICES, LLC	Mississippi
WASTE CONNECTIONS OF MISSISSIPPI, INC.	Delaware	Asco Sanitation
		Best Waste & Recycling
		Best Waste and Recycling
		Buck Run Landfill
		Northeast Mississippi
		Regional Landfill
		Oxford Waste
		Services
WASTE CONNECTIONS OF MISSOURI, INC.	Delaware
WASTE CONNECTIONS OF MONTANA, INC.	Delaware	Bitterroot Disposal
		Valley Recycling
		Victor Transfer
WASTE CONNECTIONS OF NEBRASKA, INC.	Delaware	Allied Refuse Countryside Services
		B&B Sanitary Service
		Big Red Roll Off
		Central Waste
		Disposal
		Community Refuse
		Countryside Services
		Duren Sanitation
		J-D Sanitation
		J&J Sanitation
		Junk in the Box
		Midwest Refuse
		Service Commercial
		Omega Systems
		Papillion Sanitation
		RiverCity Recycling
		Sanitation Systems
		SaundersCounty
		Disposal
		Schaben Sanitation
		Shrader Refuse and
		Recycling Service
		Company
		Steve's Sanitation
		Steve's Sanitation Service
		The Garbage Company
		The Garbage Company
		of DavidCity
		Ummel Sanitation
		Wahoo Sanitation
WASTE CONNECTIONS OF NEW MEXICO, INC.	Delaware	Silva Sanitation
		Southwest Disposal
WASTE CONNECTIONS OF OKLAHOMA, INC.	Oklahoma	Green Country Refuse
		Service
		Metropolitan Waste
		Services
		Oklahoma Disposal
		& Sanitation
		Waste Connections
WASTE CONNECTIONS OF OREGON, INC.	Oregon	Ace Sanicans
		Arrow Sanitary Service
		Babe's Garbage Service
		Bandon Disposal &
		Recycling
		Buck's Sanitary
		Service
		Clatskanie Sanitary
		Service
		EWSI
		Environmental Waste
		Systems
		HoodRiver Garbage
		Service
		HoodRiver Recycling
		& Transfer Station
		Hudson Portable
		Toilet Service
		Hudson's Garbage
		Service
		Jack Fleming Sanitary
		Service
		Les' Sanitary Service
		North Bend Sanitation
		Service
		Oregon Paper Fiber
		Public Disposal and
		RecylingCenter
		Refuse Removal
		Sweet Home
		Sanitation Service
		Sweet Home Transfer
		& Recycling
		The Dalles Disposal
		The Dalles Transfer
		Station
		Wally's Portable
		Restrooms

EXHIBIT 21.1

SUBSIDIARIES OF WASTE CONNECTIONS, INC.

		Other Names
	State of	Under Which
	Incorporation/	Conducts
Subsidiary	Organization	Business

WASTE CONNECTIONS OF SOUTH DAKOTA, INC.	South Dakota	A & C Keiffer Sanitation
		Art's Garbage Service
		Cook's Wastepaper
		& Recycling
		Dakota Data Shred
		Envirotech Waste
		Services
		Kieffer Sanitation
		Novak Enterprises
		Novak Sanitary
		Service
		Pierre Recycling
		Center
		Ron's Dray
		SiouxValley
		Sanitation Service
		Steve's Garbage
		Service
		Van Zee Sanitary
		Service
		Walker Refuse
WASTE CONNECTIONS OF TENNESSEE, INC.	Delaware	Asco Sanitation
		Cumberland Waste
		Disposal
		LMP Transportation
		Company
		Ocoee Environmental
		Services
		Scott Solid Waste
		Snelson's Trash Service
		Southern Disposal
WASTE CONNECTIONS OF TEXAS, LLC	Delaware	West Texas Disposal
WASTE CONNECTIONS OF THE CENTRAL VALLEY, INC.	California	Environmental Waste
		Management
		Kingsburg Disposal
		Service
WASTE CONNECTIONS OF UTAH, INC.	Delaware	City Sanitation
		Roche & Sons
WASTE CONNECTIONS OF WASHINGTON, INC.	Washington	Buchmann Sanitation
		Service
		ClarkCounty Disposal
		Group
		Colfax Recycling
		Diamond Fab and
		Welding Service
		Empire Disposal Hauling
		Hero
		Household Environmental
		Recycling Operation
		The Disposal Group
		TwinCity Sanitary
		Service
		Vancouver Sanitary
		Service
WASTE CONNECTIONS OF WYOMING, INC.	Delaware	American Disposal
		BW Waste
		Edwal Services
		Green RiverValley Refuse
WASTE CONNECTIONS TRANSPORTATION CO., INC.	Oregon
WASTE SERVICES OF N.E. MISSISSIPPI, INC.	Mississippi
WASTE SOLUTIONS GROUP OF SAN BENITO, LLC	Delaware
WEST BANK ENVIRONMENTAL SERVICES, INC	Indiana	Westbank Sanitation
WESTCOAST RECYCLING AND TRANSFER, INC.	Oregon	Public Disposal and
		Recycling Center
		Store-It
WEST VALLEY COLLECTION & RECYCLING, LLC	California
WYOMING ENVIRONMENTAL SERVICES, INC.	Indiana
WYOMING ENVIRONMENTAL SYSTEMS, INC.	Indiana	Wyoming Waste
		Systems
YAKIMA WASTE SYSTEMS, INC.	Washington	Yakima Storage Systems
		Yakima Waste Systems

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements of Waste Connections, Inc. listed below of our report dated February 10, 2009 relating to the consolidated financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K:

Registration Statement (Form S-8 No. 333-42096) pertaining to the Second Amended and Restated 1997 Stock Option Plan of Waste Connections, Inc.;

Registration Statement (Form S-8 No. 333-72113) pertaining to the First Amended and Restated 1997 Stock Option Plan of Waste Connections, Inc.;

Registration Statement (Form S-8 No. 333-63407) pertaining to the 1997 Stock Option Plan of Waste Connections, Inc.;

Registration Statement (Form S-8 No. 333-83172) pertaining to the 2002 Stock Option Plan and 2002 Senior Management Equity Incentive Plan of Waste Connections, Inc.;

Registration Statement (Form S-8 No. 333-90810) pertaining to the 2002 Restricted Stock Plan;

Registration Statement (Form S-8 No. 333-102413) pertaining to the Consultant Incentive Plan;

Registration Statement (Form S-8 No. 333-117764) pertaining to the 2004 Equity Incentive Plan;

Registration Statement (Form S-4 No. 333-65615) pertaining to the 1998 registration of 3,000,000 shares;

Registration Statement (Form S-4 No. 333-83825) pertaining to the 1999 registration of 6,000,000 shares;

Registration Statement (Form S-3 No. 333-76722) pertaining to the 2002 registration of common stock, preferred stock and debt not to exceed $87,433,125;

Registration Statement (Form S-3 No. 333-87703) pertaining to 1999 registration of common stock, preferred stock and debt not to exceed $200,000,000;

Registration Statement (Form S-3 No. 333-87269) pertaining to the 1999 registration of 534,815 shares;

Registration Statement (Form S-3 No. 333-134050) pertaining to the 3.75% Convertible Subordinated Notes due 2026; and

Registration Statement (Form S-3 No. 333-153617) pertaining to the 2008 secondary offering of common stock.

/s/ PricewaterhouseCoopers LLP

Sacramento, California

February 10, 2009

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHAIRMAN AND CHIEF EXECUTIVE OFFICER

I, Ronald J. Mittelstaedt, certify that:

1. I have reviewed this annual report on Form 10-K 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 fourth fiscal quarter of 2008 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 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: February 10, 2009	/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 annual report on Form 10-K 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 fourth fiscal quarter of 2008 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 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: February 10, 2009	/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 annual report of the Company on Form 10-K for the year ended December 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: February 10, 2009	By:	/s/ Ronald J. Mittelstaedt
		Ronald J. Mittelstaedt
		Chief Executive Officer

Date: February 10, 2009	By:	/s/ Worthing F. Jackman
		Worthing F. Jackman
		Executive Vice President and Chief Financial Officer