<PAGE>



                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                                     OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2002    Commission File Number 0-21054

                           SYNAGRO TECHNOLOGIES, INC.
             (Exact name of Registrant as specified in its Charter)

              DELAWARE                                  76-0511324
   (State or other jurisdiction of                    (IRS Employer
    incorporation or organization)                  Identification No.)

   1800 BERING DRIVE, SUITE 1000
           HOUSTON, TEXAS                                   77057
(Address of principal executive offices)                  (Zip Code)

                                 (713) 369-1700
              (Registrant's telephone number, including area code)

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

                                 Yes [X] No [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the latest practicable date.


                     CLASS                     OUTSTANDING AT MAY 10, 2002
          -----------------------------        ---------------------------
          Common stock, par value $.002                  19,476,781




<PAGE>




                           SYNAGRO TECHNOLOGIES, INC.

                                      INDEX

<Table>
<Caption>
                                                                                 PAGE
                                                                                 ----
<S>                                                                               <C>
 PART I  -- FINANCIAL INFORMATION

 Condensed Consolidated Balance Sheets as of March 31, 2002,
    (Unaudited) and December 31, 2001 .....................................        3

 Condensed Consolidated Statements of Operations for the
    Three Months Ended March 31, 2002 and 2001 (Unaudited) ................        4

 Condensed Consolidated Statement of Stockholders' Equity (Unaudited) .....        5

 Condensed Consolidated Statements of Cash Flows for the
    Three Months Ended March 31, 2002 and 2001 (Unaudited) ................        6

 Notes to Condensed Consolidated Financial Statements .....................        8

 Management's Discussion and Analysis of  Financial
 Condition and Results of Operations ......................................       17

 PART II -- OTHER INFORMATION .............................................       22
</Table>



                                       2


<PAGE>



                           SYNAGRO TECHNOLOGIES, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS


<Table>
<Caption>
                                                                                     MARCH 31,          DECEMBER 31,
                                                                                       2002                 2001
                                                                                   --------------      --------------
                                                                                     (UNAUDITED)
<S>                                                                                <C>                 <C>

ASSETS
Current assets:
   Cash and cash equivalents .................................................     $      255,590      $      251,821
   Restricted cash ...........................................................          3,096,942           3,281,045
   Accounts receivable, net ..................................................         46,229,153          49,531,654
   Note receivable, current portion ..........................................            301,000             201,000
   Prepaid expenses and other current assets .................................         11,249,196          10,181,030
                                                                                   --------------      --------------
      Total current assets ...................................................         61,131,881          63,446,550

Property, machinery & equipment, net .........................................        206,009,913         206,114,267

Other assets:
   Goodwill, net .............................................................        164,149,974         163,739,059
      Other, net .............................................................         12,955,729          12,867,901
                                                                                   --------------      --------------
Total assets .................................................................     $  444,247,497      $  446,167,777
                                                                                   ==============      ==============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Current portion of long-term debt .........................................     $   13,101,219      $   12,880,693
   Current portion of tax-exempt project revenue bonds .......................          2,300,000           2,300,000
   Accounts payable and accrued expenses .....................................         38,913,007          40,951,059
                                                                                   --------------      --------------
      Total current liabilities ..............................................         54,314,226          56,131,752
Long-term liabilities:
   Long-term debt obligations, net ...........................................        201,117,960         202,650,523
   Nonrecourse tax-exempt project revenue bonds, net .........................         40,216,558          40,584,848
   Other long-term liabilities ...............................................          9,029,373           9,328,065
   Fair value of interest rate swap ..........................................          5,689,666           5,150,502
                                                                                   --------------      --------------
      Total long-term liabilities ............................................        256,053,557         257,713,938

COMMITMENTS AND CONTINGENCIES

Redeemable Preferred Stock, 69,792.29 shares issued and
   outstanding, redeemable at $1,000 per share ...............................         72,274,490          70,431,063

Stockholders' equity:
   Preferred stock, $.002 par value, 10,000,000 shares authorized,
      none issued and outstanding ............................................                 --                  --
   Common stock, $.002 par value, 100,000,000 shares authorized,
      19,476,781 shares outstanding ..........................................             38,954              38,954
   Additional paid in capital ................................................        109,167,460         109,167,460
   Accumulated deficit .......................................................        (45,416,819)        (45,004,998)
   Accumulated other comprehensive income ....................................         (2,184,371)         (2,310,392)
                                                                                   --------------      --------------
      Total stockholders' equity .............................................         61,605,224          61,891,024
                                                                                   --------------      --------------
Total liabilities and stockholders' equity ...................................     $  444,247,497      $  446,167,777
                                                                                   ==============      ==============
</Table>

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



                                       3

<PAGE>

                           SYNAGRO TECHNOLOGIES, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (UNAUDITED)


<Table>
<Caption>
                                                                      THREE MONTHS ENDED
                                                                            MARCH 31,
                                                                    2002                2001
                                                               --------------      --------------
<S>                                                            <C>                 <C>
Revenue ..................................................     $   56,816,527      $   58,795,142
Cost of services .........................................         43,257,392          45,326,466
                                                               --------------      --------------
Gross profit .............................................         13,559,135          13,468,676

Selling, general and administrative expenses .............          5,768,468           5,351,789
Amortization of intangibles ..............................             27,417           1,132,648
                                                               --------------      --------------
  Income from operations .................................          7,763,250           6,984,239
                                                               --------------      --------------
Other (income) expense:
  Other income, net ......................................            (38,006)             (6,270)
  Interest expense, net ..................................          5,493,244           7,359,564
                                                               --------------      --------------
     Total other expense, net ............................          5,455,238           7,353,294
                                                               --------------      --------------
Income (loss) before provision for income taxes ..........          2,308,012            (369,055)
  Provision for income taxes .............................            876,406                  --
                                                               --------------      --------------
Net income (loss) before cumulative effect of change
  in accounting for derivatives and preferred stock
  dividends ..............................................          1,431,606            (369,055)
Cumulative effect of change in accounting for
  derivatives.............................................                 --           1,860,685
                                                               --------------      --------------
Net income before preferred stock dividends...............          1,431,606          (2,229,740)
Preferred stock dividends ................................          1,843,427           1,742,921
                                                               --------------      --------------
Net loss applicable to common stock ......................     $     (411,821)     $   (3,972,661)
                                                               ==============      ==============
Earnings (loss) per share:
  Net income (loss) before cumulative effect of change
    in accounting for derivatives and preferred stock
    dividends ............................................     $          .07      $         (.02)
  Cumulative effect of change in accounting for
    derivatives...........................................                 --                (.10)
                                                               --------------      --------------
    Net income before preferred stock dividends...........                .07                (.12)
  Preferred stock dividends ..............................               (.09)               (.09)
                                                               --------------      --------------
  Net loss per common share, basic .......................     $         (.02)     $         (.21)
                                                               ==============      ==============
  Net loss per common share, diluted .....................     $         (.02)     $         (.21)
                                                               ==============      ==============

Weighted average shares outstanding, basic ...............         19,476,781          19,435,781
Weighted average shares outstanding, diluted .............         19,476,781          19,435,781
</Table>

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



                                       4

<PAGE>



                           SYNAGRO TECHNOLOGIES, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                   (UNAUDITED)


<Table>
<Caption>
                                                                                                     ACCUMULATED
                                                                        ADDITIONAL                       OTHER
                                                COMMON STOCK             PAID-IN      ACCUMULATED    COMPREHENSIVE
                                            SHARES         AMOUNT        CAPITAL        DEFICIT          INCOME          TOTAL
                                        -------------  -------------  -------------  -------------   -------------   -------------
<S>                                     <C>            <C>            <C>            <C>             <C>             <C>
BALANCE, December 31, 2001 ...........     19,476,781  $      38,954  $ 109,167,460  $ (45,004,998)  $  (2,310,392)  $  61,891,024
   Change in comprehensive income ....                                                                     126,021         126,021
   Net income applicable to common
     stock ...........................             --             --             --       (411,821)             --        (411,821)
                                        -------------  -------------  -------------  -------------   -------------   -------------
BALANCE, March 31, 2002 ..............     19,476,781  $      38,954  $ 109,167,460  $ (45,416,819)  $  (2,184,371)  $  61,605,224
                                        =============  =============  =============  =============   =============   =============
</Table>

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



                                       5

<PAGE>



                           SYNAGRO TECHNOLOGIES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<Table>
<Caption>
                                                                                    THREE MONTHS ENDED MARCH 31,
                                                                                        2002             2001
                                                                                    ------------     ------------
<S>                                                                                 <C>              <C>

Cash flows from operating activities:
   Net loss before preferred stock dividends,
      and cumulative effect of change in accounting
      for derivatives ..........................................................    $  1,431,606     $   (369,055)
   Adjustment to reconcile net loss before
      preferred stock dividends and cumulative effect of change in accounting
      for derivatives to net cash provided by (used in) operating activities:
        Depreciation ...........................................................       3,541,018        3,289,132
        Amortization ...........................................................         410,558        1,539,235
        Gain on sale of property, machinery and
          equipment ............................................................         (38,006)          (6,270)
        (Increase) decrease in the following:
          Accounts receivable ..................................................       3,302,501          185,241
          Prepaid expenses and other assets ....................................      (1,018,125)         100,449
        Increase (decrease) in the following:
          Accounts payable and accrued expenses ................................      (2,131,285)       1,665,316
                                                                                    ------------     ------------
   Net cash provided by operating activities ...................................       5,498,267        6,404,048
                                                                                    ------------     ------------

Cash flows from investing activities:
      Purchase of businesses including contingent consideration,
        net of cash acquired ...................................................        (410,915)        (836,283)
      Purchases of property, machinery and equipment ...........................      (3,609,412)      (3,389,611)
      Proceeds from sale of property, machinery and
        equipment ..............................................................         210,754           60,050
                                                                                    ------------     ------------
Net cash used in investing activities ..........................................      (3,809,573)      (4,165,844)
                                                                                    ------------     ------------

Cash flows from financing activities:
      Payments on debt .........................................................        (852,311)      (3,115,623)
      Debt issuance costs ......................................................        (548,427)         (34,464)
      Increase in notes receivable .............................................        (100,000)              --
      Increase in restricted cash ..............................................        (184,187)      (1,393,409)
                                                                                    ------------     ------------
   Net cash used in financing activities .......................................      (1,684,925)      (4,543,496)
                                                                                    ------------     ------------

Net increase (decrease) in cash and cash equivalents ...........................           3,769       (2,305,292)
Cash and cash equivalents, beginning of period .................................         251,821        4,597,420
                                                                                    ------------     ------------
Cash and cash equivalents, end of period .......................................    $    255,590     $  2,292,128
                                                                                    ============     ============
</Table>

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



                                       6

<PAGE>



                           SYNAGRO TECHNOLOGIES, INC.
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS--(CONTINUED)
                                   (UNAUDITED)


<Table>
<Caption>
                                                 THREE MONTHS ENDED
                                                      MARCH 31,
                                            ----------------------------
                                                2002            2001
                                            ------------    ------------
<S>                                         <C>             <C>

Supplemental Cash Flow Information
 Interest paid during the period .......    $  3,399,465    $  5,013,426
 Taxes paid during the period ..........    $    241,450    $    123,868
</Table>

                   NONCASH INVESTING AND FINANCING ACTIVITIES

During the three months ended March 31, 2001, dividends totaled approximately
$1,743,000, of which approximately $1,458,000 represents the accrued eight
percent dividend on the Company's Preferred Stock and approximately $285,000
represents accretion and amortization of issuance costs.

During the three months ended March 31, 2002, dividends totaled approximately
$1,843,000, of which approximately $1,580,000 represents the accrued eight
percent dividend on the Company's Preferred Stock and approximately $263,000
represents accretion and amortization of issuance costs.



                                       7

<PAGE>
                           SYNAGRO TECHNOLOGIES, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

(1) BASIS OF PRESENTATION

GENERAL

The accompanying unaudited, condensed consolidated financial statements have
been prepared by Synagro Technologies, Inc. ("Synagro" or the "Company")
pursuant to the rules and regulations of the Securities and Exchange Commission.
These condensed consolidated financial statements reflect all normal recurring
adjustments which are, in the opinion of management, necessary for the fair
presentation of such financial statements for the periods indicated. Certain
information relating to the Company's organization and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles has been condensed or omitted in this Form 10-Q
pursuant to Rule 10-01 of Regulation S-X for interim financial statements
required to be filed with the Securities and Exchange Commission. However, the
Company believes that the disclosures herein are adequate to make the
information presented not misleading. The results for the three months ended
March 31, 2002, are not necessarily indicative of future operating results. It
is suggested that these financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's Annual Report
on Form 10-K for the year ended December 31, 2001.

The accounting policies followed by the Company in preparing interim
consolidated financial statements are consistent with those described in the
"Notes to Consolidated Financial Statements" in the Company's Form 10-K for the
year ended December 31, 2001.

Synagro Technologies, Inc., a Delaware corporation ("Synagro"), and collectively
with its subsidiaries (the "Company") is a national wastewater residuals
management company serving more than 1,000 municipal and industrial wastewater
treatment plants and has operations in 35 states and the District of Columbia.
Synagro offers many services that focus on the beneficial reuse of organic
nonhazardous residuals resulting from the wastewater treatment process. Synagro
provides its customers with complete, vertically-integrated services and
capabilities, including facility operations, facility cleanout services,
regulatory compliance, dewatering, collection and transportation, composting,
drying and pelletization, product marketing, incineration, alkaline
stabilization, and land application.

ACCOUNTING PRONOUNCEMENTS

Effective January 1, 2001, the Company adopted SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," as amended by SFAS 138,
"Accounting for Certain Derivative Instruments and Certain Hedging Activities,"
which requires that the Company recognize all derivative instruments as assets
or liabilities on its balance sheet and measure them at their fair value.
Changes in the fair value of a derivative are recorded in income or directly to
equity, depending on the instrument's designated use. For derivative instruments
that are designated and qualify as a cash flow hedge, the effective portion of
the gain or loss on the derivative instrument is reported as a component of
other comprehensive income and reclassified into income when the hedged
transaction affects income, while the ineffective portion of the gain or loss on
the derivative instrument is recognized currently in earnings. For derivative
instruments that are designated and qualify as a fair value hedge, the gain or
loss on the derivative instrument as well as the offsetting loss or gain on the
hedged item attributable to the hedged risk are recognized in current income
during the period of the change in fair values. The noncash transition
adjustment related to the adoption of this statement has been reflected as a
"cumulative effect of change in accounting for derivatives" of approximately
$1,861,000 charged to net income and approximately $2,058,000 charged to other
comprehensive income included in stockholders' equity as of January 1, 2001. See
Note (4) for discussion of the Company's current derivative contracts and
hedging activities.

In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No.
141, "Business Combinations," and No. 142, "Goodwill and Other Intangible
Assets." SFAS 141 requires all business combinations initiated after June 30,
2001, to be accounted for using the purchase method. Under SFAS 142, goodwill
and intangible assets with indefinite lives are no longer amortized but are
reviewed annually (or more frequently if impairment indicators arise) for
impairment. Separable intangible assets that are not deemed to have indefinite
lives will be amortized over their useful lives. Management has completed the
initial impairment test required by the provisions of SFAS 142 as of January 1,
2002, and determined that there has not been an impairment of the Company's
goodwill. Beginning January 1, 2002, the Company discontinued amortizing
goodwill in accordance with the provisions of the standard.



                                       8
<PAGE>
In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." SFAS No. 143 covers all legally enforceable obligations associated
with the retirement of tangible long-lived assets and provides the accounting
and reporting requirements for such obligations. SFAS No. 143 is effective for
the Company beginning January 1, 2003. Management has yet to determine the
impact that the adoption of SFAS No. 143 will have on the Company's consolidated
financial statements.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets," which supersedes SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of." SFAS No. 144 establishes a single accounting method for long-lived assets
to be disposed of by sale, whether previously held and used or newly acquired,
and extends the presentation of discontinued operations to include more disposal
transactions. SFAS No. 144 also requires that an impairment loss be recognized
for assets held-for-use when the carrying amount of an asset (group) is not
recoverable. The carrying amount of an asset (group) is not recoverable if it
exceeds the sum of the undiscounted cash flows expected to result from the use
and eventual disposition of the asset (group), excluding interest charges.
Estimates of future cash flows used to test the recoverability of a long-lived
asset (group) must incorporate the entity's own assumptions about its use of the
asset (group) and must factor in all available evidence. Management adopted SFAS
No. 144 and there was no effect during the three months ended March 31, 2002, to
the Company's results of operations and financial position.

In April 2002, the Financial Accounting Standards Board issued SFAS No. 145,
Recission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No.
13, and Technical Corrections ("SFAS No. 145"). SFAS No. 145 requires that gains
and losses from extinguishment of debt be classified as extraordinary items only
if they meet the criteria in Accounting Principles Board Opinion No. 30
("Opinion No. 30"). Applying the provisions of Opinion No. 30 will distinguish
transactions that are part of an entity's recurring operations from those that
are unusual and infrequent that meet criteria for classification as an
extraordinary item. SFAS No. 145 is effective for the Company beginning
January 1, 2003. The Company is currently assessing the impact, if any, of
this statement on the Company's financial position.

RECLASSIFICATIONS

Certain reclassifications have been made to the prior year's financial
statements to conform to the 2002 presentation.

USE OF ESTIMATES

In preparing financial statements in conformity with accounting principles
generally accepted in the United States, management makes estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements, as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The
following are the Company's significant estimates and assumptions made in
preparation of its financial statements:

    Allowance for Doubtful Accounts -- The Company estimates losses for
    uncollectible accounts based on the aging of the accounts receivable and the
    evaluation and the likelihood of success in collecting the receivable.

    Loss Contracts -- The Company evaluates its revenue producing contracts to
    determine whether the projected revenues of such contracts exceed the direct
    cost to service such contracts. These evaluations include estimates of the
    future revenues and expenses. Accruals for loss contracts are adjusted based
    on these evaluations.

    Purchase Accounting -- The Company estimates the fair value of assets,
    including property, machinery and equipment and its related useful lives and
    salvage values, and liabilities when allocating the purchase price of an
    acquisition.

    Income Taxes -- The Company assumes the deductibility of certain costs in
    its income tax filings and estimates the recovery of deferred income tax
    assets.

    Legal and Contingency Accruals -- The Company estimates and accrues the
    amount of probable exposure it may have with respect to litigation, claims
    and assessments.

    Self-Insurance Reserves -- Through the use of actuarial calculations, the
Company estimates the amounts required to settle insurance claims.

Actual results could differ materially from the estimates and assumptions that
the Company uses in the preparation of its financial statements.



                                       9

<PAGE>
(2) PREFERRED STOCK

PREFERRED STOCK

The Company is authorized to issue up to 10,000,000 shares of Preferred Stock,
which may be issued in one or more series or classes by the Board of Directors
of the Company. Each such series or class shall have such powers, preferences,
rights and restrictions as determined by resolution of the Board of Directors.
Series A Juniors Participating Preferred Stock will be issued upon exercise of
the Stockholders' Rights described below.

SERIES D REDEEMABLE PREFERRED STOCK

We have authorized 32,000 shares of Series D Preferred Stock, par value $.002
per share. In 2000, we issued a total of 25,033.601 shares of the Series D
Preferred Stock to GTCR Fund VII, L.P. and its affiliates which is convertible
by the holders into a number of shares of our common stock computed by dividing
(i) the sum of (a) the number of shares to be converted multiplied by the
liquidation value and (b) the amount of accrued and unpaid dividends by (ii) the
conversion price then in effect. The initial conversion price is $2.50 per
share, provided that in order to prevent dilution, the conversion price may be
adjusted. The Series D Preferred Stock is senior to our common stock or any
other of our equity securities. The liquidation value of each share of Series D
Preferred Stock is $1,000 per share. Dividends on each share of Series D
Preferred Stock accrue daily at the rate of eight percent per annum on the
aggregate liquidation value and may be paid in cash or in kind, at our option.
The Series D Preferred Stock is entitled to one vote per share. Shares of Series
D Preferred Stock are subject to mandatory redemption by us on January 26, 2010,
at a price per share equal to the liquidation value plus accrued and unpaid
dividends. If the Series D Preferred Stock were converted, they would represent
10,013,441 shares of common stock.

SERIES E REDEEMABLE PREFERRED STOCK

We have authorized 55,000 shares of Series E Preferred Stock, par value $.002
per share. GTCR Fund VII, L.P. and its affiliates own 37,504.229 shares of
Series E Preferred Stock and certain affiliates of The TCW Group, Inc. own
7,024.58 shares. The Series E Preferred Stock is convertible by the holders into
a number of shares of our common stock computed by dividing (i) the sum of (a)
the number of shares to be converted multiplied by the liquidation value and (b)
the amount of accrued and unpaid dividends by (ii) the conversion price then in
effect. The initial conversion price is $2.50 per share, provided that in order
to prevent dilution, the conversion price may be adjusted. The Series E
Preferred Stock is senior to our common stock or any other of our equity
securities. The liquidation value of each share of Series E Preferred Stock is
$1,000 per share. Dividends on each share of Series E Preferred Stock accrue
daily at the rate of eight percent per annum on the aggregate liquidation value
and may be paid in cash or in kind, at our option. The Series E Preferred Stock
is entitled to one vote per share. Shares of Series E Preferred Stock are
subject to mandatory redemption by us on January 26, 2010, at a price per share
equal to the liquidation value plus accrued and unpaid dividends. If the Series
E Preferred Stock were converted, they would represent 17,903,475 shares of
common stock.

The Series D and Series E Preferred Stock may result in noncash beneficial
conversions valued in future periods recognized as preferred stock dividends if
the market value is higher than the conversion price.

(3)  STOCKHOLDERS' RIGHTS PLAN

In December 1996, the Company adopted a stockholders' rights plan (the "Rights
Plan"). The Rights Plan provides for a dividend distribution of one preferred
stock purchase right ("Right") for each outstanding share of the Company's
Common Stock, to stockholders of record at the close of business on January 10,
1997. The Rights Plan is designed to deter coercive takeover tactics and to
prevent an acquirer from gaining control of the Company without offering a fair
price to all of the Company's stockholders. The Rights will expire on December
31, 2006.

Each Right entitles stockholders to buy one one-thousandth of a newly issued
share of Series A Junior Participating Preferred Stock of the Company at an
exercise price of $10. The Rights are exercisable only if a person or group
acquires beneficial ownership of 15 percent or more of the Company's Common
Stock or commences a tender or exchange offer which, if consummated, would
result in that person or group owning 15 percent or more of the Common Stock of
the Company. However, the Rights will not become exercisable if Common Stock is
acquired pursuant to an offer for all shares which a majority of the Board of
Directors determines to be fair to and otherwise in the best interests of the
Company and its stockholders. If, following an acquisition of 15 percent or more
of the Company's Common Stock, the Company is acquired by that person or group
in a merger or other business combination



                                       10

<PAGE>

transaction, each Right would then entitle its holder to purchase common stock
of the acquiring company having a value of twice the exercise price. The effect
will be to entitle the Company stockholders to buy stock in the acquiring
company at 50 percent of its market price.

The Company may redeem the Rights at $.001 per Right at any time on or prior to
the tenth business day following the acquisition of 15 percent or more of its
Common Stock by a person or group or commencement of a tender offer for such 15
percent ownership.

(4) DEBT

Long-term debt obligations consist of the following:

<Table>
<Caption>
                                                                                  MARCH 31,        DECEMBER 31,
                                                                                    2002               2001
                                                                               --------------     --------------
<S>                                                                            <C>                <C>
                   Credit facility -- revolving loan ......................    $           --     $           --
                   Credit facility -- acquisition and term loans ..........       161,083,981        161,936,292
                   Subordinated debt ......................................        52,760,393         52,760,393
                   Fair value adjustment related to subordinated debt .....           342,131            801,857
                   Other notes payable ....................................            32,674             32,674
                                                                               --------------     --------------
                             Total debt ...................................    $  214,219,179     $  215,531,216
                   Less:
                   Current maturities .....................................       (13,101,219)       (12,880,693)
                                                                               --------------     --------------
                             Long-term debt, net of current maturities ....    $  201,117,960     $  202,650,523
                                                                               ==============     ==============
</Table>

CREDIT FACILITY

On January 27, 2000, the Company entered into a $110 million amended and
restated Senior Credit Agreement (the "Senior Credit Agreement") by and among
the Company, Bank of America, N.A., and certain other lenders to fund working
capital for acquisitions, to refinance existing debt, to provide working capital
for operations, to fund capital expenditures and other general corporate
purposes. The Senior Credit Agreement bears interest at LIBOR or prime plus a
margin based on a pricing schedule as set out in the Senior Credit Agreement.
The Senior Credit Agreement was subsequently syndicated on March 15, 2000, to
lenders, and the capacity was increased to $120 million. The Senior Credit
Agreement was amended and resyndicated on August 14, 2000, to lenders, and the
capacity was increased to $230 million. On February 25, 2002, the Senior Credit
Agreement was amended to, among other items, increase the revolving loan from
$30 million to approximately $51.3 million, increase sublimits for letters of
credit from $20 million to $50 million, provide limitations for restricted
payments and investments, and increase the permitted amounts of nonrecourse
financing and operating lease obligations.

As of March 31, 2002, the loan commitments under the Senior Credit Agreement, as
amended, are as follows:

      (i)   Revolving Loan up to $51,330,000 outstanding at any one time;

      (ii)  Term A Loans (which, once repaid, may not be reborrowed) of
            $50,000,000;

      (iii) Term B Loans (which, once repaid, may not be reborrowed) of
            $100,000,000;

      (iv)  Acquisition Term Loans up to $50,000,000 outstanding at any one time
            available on a revolving basis prior to February 14, 2002, provided
            that certain approvals are obtained and certain financial ratios are
            met; and

      (v)   Letters of credit issuable by the Company up to $50,000,000 as a
            subset of the Revolving Loan. At March 31, 2002, the Company had
            approximately $21,750,000 of letters of credit outstanding.



                                       11

<PAGE>

The amounts borrowed under the Senior Credit Agreement are subject to repayment
as follows:

<Table>
<Caption>
                                                         REVOLVING     TERM A      TERM B   ACQUISITION
                          PERIOD ENDING DECEMBER 31,       LOANS        LOANS      LOANS       LOANS
                          --------------------------     ---------    --------    -------   -----------
<S>                                                      <C>          <C>         <C>       <C>
                          2000........................         --        5.00%       .50%           0%
                          2001........................         --       15.00%      1.00%           0%
                          2002........................         --       22.50%      1.00%        5.00%
                          2003........................         --       17.50%      1.00%        6.67%
                          2004........................         --       20.00%      1.00%       11.67%
                          2005........................     100.00%      20.00%      1.00%       76.66%
                          2006........................         --          --      94.50%          --
                                                          -------     -------    -------      -------
                                                           100.00%     100.00%    100.00%      100.00%
                                                          =======     =======    =======      =======
</Table>

The Senior Credit Agreement includes mandatory repayment provisions related to
excess cash flows, proceeds from certain asset sales, debt issuances and equity
issuances, all as defined in the Senior Credit Agreement. These mandatory
repayment provisions may also reduce the available commitment for Revolving
Loans and Acquisition Loans. The Senior Credit Agreement contains standard
covenants including compliance with laws, limitations on capital expenditures,
restrictions on dividend payments, limitations on mergers and compliance with
certain financial covenants. The Company believes that it is in compliance with
those covenants as of March 31, 2002. The Senior Credit Agreement is secured by
all the assets of the Company and expires on July 27, 2006. As of March 31,
2002, the Company has borrowed approximately $161,084,000 ($35,886,000 of Term A
Loans, $88,145,000 of Term B Loans, and $37,053,000 of Acquisition Loans), which
was primarily used to refinance existing debt and to partially fund certain
acquisitions during 2000 and 1999. As of March 31, 2002, the Company has
approximately $34,739,000 of unused borrowings under the Senior Credit
Agreement. The Company's Senior Credit Agreement contains various financial
covenants, including a senior debt-to-cash flow ratio, as defined, determined at
the end of each quarter. As of March 31, 2002, the maximum senior debt that
could have been outstanding while remaining in compliance with the covenant
ratios was approximately $195,823,000. On April 8, 2002, the Company issued $150
million of 9 1/2 percent Senior Subordinated Notes of which a portion of the
proceeds was used to pay down the above Senior Credit Agreement. On May 8, 2002,
the Company entered into a new $150 million credit facility of which the
proceeds were used to retire the remaining portion of the above Senior Credit
Agreement. (See Note 9)

SUBORDINATED DEBT

On January 27, 2000, the Company entered into an agreement with GTCR Capital
providing up to $125 million in subordinated debt financing to fund acquisitions
and for certain other uses, in each case as approved by the Board of Directors
of the Company and GTCR Capital. The agreement was amended on August 14, 2000,
allowing, among other things, for the syndication of 50 percent of the
commitment. The loans bear interest at an annual rate of 12 percent paid
quarterly and provide warrants that are convertible into Preferred Stock at $.01
per warrant. The unpaid principal plus unpaid and accrued interest must be paid
in full by January 27, 2008. The agreement contains general and financial
covenants. As of March 31, 2002, the Company has borrowed approximately
$52,760,000 of indebtedness under the terms of the agreement, which was used to
partially fund the Company's acquisitions in 2000. Warrants to acquire 9,225.839
shares of Series C, D, and E Preferred Stock were issued in connection with
these borrowings. These warrants were immediately exercised.

On April 8, 2002, the Company issued $150 million of 9 1/2 percent Senior
Subordinated Notes of which a portion of the proceeds was used to retire all
the subordinated debt and related accrued interest. (See Note 9)

DERIVATIVES AND HEDGING ACTIVITIES

Prior to June 25, 2001, the Company's derivative contracts consisted of interest
rate swap agreements and option agreements related to hedging requirements under
the Company's Senior Credit Agreement. The option agreements did not qualify for
hedge accounting under SFAS 133. Changes in the fair value of these derivatives
were recognized in earnings as interest expense of $226,000 in 2001. The
Company's interest rate swap agreements qualified for hedge accounting as cash
flow hedges of the Company's exposure to changes in variable interest rates.

On June 25, 2001, the Company entered into a reverse swap on its subordinated
debt, and terminated the previously existing interest rate swap and option
agreements noted above. The balance included in accumulated other comprehensive
loss included in stockholders' equity is being recognized in future periods'
income over the remaining term of the original swap agreement. The amount to be
recognized as a noncash expense during 2002 is approximately $813,000 of which
approximately $203,000 was recognized in the three month period ending March 31,
2002. The Company has designated the reverse swap agreement on its subordinated
debt as a fair value hedge of changes in the value of the underlying debt as a
result of changes in the benchmark interest rate. The liability related to the
reverse swap agreement totaling approximately $5,690,000 is reflected in other
long-term liabilities at March 31, 2002; additionally, a fair value adjustment
on the Company's subordinated debt of approximately $342,000 is reflected in
long-term debt at March 31, 2002. The amount of the ineffectiveness of the
reverse swap agreement debited to interest expense, net for the three months
ended March 31, 2002, totaled approximately $79,000.



                                       12

<PAGE>

On July 3, 2001, the Company entered into an interest rate cap agreement
establishing a maximum fixed LIBOR rate on $125,000,000 of its floating rate
debt at an interest rate of 6.50 percent in order to meet the hedging
requirements of its Senior Credit Agreement. Changes in the fair value of the
agreement charged to interest expense, net for the three months ended March 31,
2002, totaled approximately $30,000.

INTEREST RATE RISK

Total debt at March 31, 2001 included approximately $161,084,000 in floating
rate debt attributed to the Senior Credit Agreement at an average interest rate
of 4.66%. Total debt at May 10, 2002 included approximately $70,000,000 in
floating rate debt attributed to the new $150 million senior credit facility
entered into in May 2002 at an average interest rate of 4.9%. See note (9). As a
result, the Company's interest cost in 2002 will fluctuate based on short-term
interest rates. The impact on annual cash flow of a ten percent change in the
floating rate would be approximately $122,000.

(5)  NONRECOURSE TAX-EXEMPT REVENUE BONDS

<Table>
<Caption>
                                                                          MARCH 31,         DECEMBER 31,
                                                                             2002               2001
                                                                        --------------     --------------
<S>                                                                     <C>                <C>
Maryland Energy Financing Administration Limited Obligation
  Solid Waste Disposal Revenue Bonds, 1996 series--
     Revenue bonds due 2001 to 2005 at stated interest
       rates of 5.45% to 5.85% .....................................    $   10,010,000     $   10,010,000
     Term revenue bond due 2010 at stated interest rate of
       6.30% .......................................................        16,295,000         16,295,000
     Term revenue bond due 2016 at stated interest rate of
       6.45% .......................................................        22,360,000         22,360,000
     Less: Restricted cash .........................................        (6,148,442)        (5,780,152)
                                                                        --------------     --------------
                                                                            42,516,558         42,884,848
     Less: Current maturities ......................................        (2,300,000)        (2,300,000)
                                                                        --------------     --------------
     Nonrecourse project revenue bonds, net of current
       maturities ..................................................    $   40,216,558     $   40,584,848
                                                                        ==============     ==============
</Table>

In 1996, the Maryland Energy Financing Administration (the "Administration")
issued nonrecourse tax-exempt project revenue bonds (the "Nonrecourse Project
Revenue Bonds") in the aggregate amount of $58,550,000. The Administration
loaned the proceeds of the Nonrecourse Project Revenue Bonds to Wheelabrator
Water Technologies Baltimore L.L.C., now Synagro's wholly owned subsidiary and
known as Synagro-Baltimore, L.L.C., pursuant to a June 1996 loan agreement, and
the terms of the loan mirror the terms of the Nonrecourse Project Revenue Bonds.
The loan financed a portion of the costs of constructing thermal facilities
located in Baltimore County, Maryland, at the site of its Back River Wastewater
Treatment Plant, and in the City of Baltimore, Maryland, at the site of its
Patapsco Wastewater Treatment Plant. The Company assumed all obligations
associated with the Nonrecourse Project Revenue Bonds in connection with its
acquisition of Bio Gro in 2000.

The Nonrecourse Project Revenue Bonds are primarily secured by the pledge of
revenues and assets related to our Back River and Patapsco thermal facilities.
The underlying service contracts between us and the City of Baltimore obligated
us to design, construct and operate the thermal facilities and obligated the
City to deliver biosolids for processing at the thermal facilities. The City
makes all payments under the service contracts directly with a trustee for the
purpose of paying the Nonrecourse Project Revenue Bonds.

At our option, we may cause the redemption of the Nonrecourse Project Revenue
Bonds at any time on or after December 1, 2006, subject to redemption prices
specified in the loan agreement. The Nonrecourse Project Revenue Bonds will be
redeemed at any time upon the occurrence of certain extraordinary conditions, as
defined in the loan agreement.

Synagro-Baltimore, L.L.C., one of our wholly owned subsidiaries, guarantees the
performance of services under the underlying service agreements with the City of
Baltimore. Under the terms of the Bio Gro acquisition purchase agreement, Waste
Management, Inc. also guarantees the performance of services under those service
agreements. We have agreed to pay Waste Management $500,000 per year beginning
in 2007 until the Nonrecourse Project Revenue Bonds are paid or its guarantee is
removed. Neither Synagro-Baltimore, L.L.C nor Waste Management has guaranteed
payment of the Nonrecourse Project Revenue Bonds or the loan funded by the
Nonrecourse Project Revenue Bonds.

The loan agreement, based on the terms of the related indenture, requires that
we place certain monies in restricted fund accounts and that those funds be used
for various designated purposes (e.g., debt service reserve funds, bond funds,
etc.). Monies in these funds will remain restricted until the Nonrecourse
Project Revenue Bonds are paid.

At March 31, 2002, the Nonrecourse Project Revenue Bonds were secured by
property, machinery and equipment with a net book value of approximately
$59,546,000 and restricted cash of approximately $8,741,000, of which
approximately $6,148,000 was netted against long-term debt and the difference
was shown as restricted cash.



                                       13

<PAGE>

These Nonrecourse Project Revenue Bonds, totaling $42,517,000 of debt (net of
restricted cash) as of March 31, 2002, and $760,000 of related interest expense
accrued in the three months ended March 31, 2002, are excluded from the
financial covenant calculations required by our Senior Credit Facility.

(6) COMMITMENTS AND CONTINGENCIES

REGULATORY MATTERS

Synagro's business activities are subject to environmental regulation under
federal, state and local laws and regulations. In the ordinary course of
conducting its business activities, Synagro becomes involved in judicial and
administrative proceedings involving governmental authorities at the federal,
state and local levels. Synagro is required under various regulations to procure
licenses and permits to conduct its operations. These licenses and permits are
subject to periodic renewal without which the Company's operations could be
adversely affected. There can be no assurance that regulatory requirements will
not change to the extent that it would materially affect Synagro's consolidated
financial statements.

LITIGATION

The Company's business activities are subject to environmental regulation under
federal, state and local laws and regulations. In the ordinary course of
conducting its business activities, the Company becomes involved in judicial and
administrative proceedings involving governmental authorities at the federal,
state and local levels. The Company believes that these matters will not have a
material adverse effect on its business, financial condition and results of
operations. However, the outcome of any particular proceeding cannot be
predicted with certainty. The Company is required, under various regulations, to
procure licenses and permits to conduct its operations. These licenses and
permits are subject to periodic renewal without which the Company's operations
could be adversely affected. There can be no assurance that regulatory
requirements will not change to the extent that it would materially affect the
Company's consolidated financial statements.

Marshall Case

In January 2002, the Company settled a lawsuit that was filed in Rockingham
County Superior Court, New Hampshire, in November 1998. The plaintiff claimed
that the death of an individual was allegedly caused by exposure to certain
biosolids disposed of by one of the Company's wholly owned subsidiaries. The
plaintiff in the settlement represented that there was no scientific support to
the allegations as previously alleged.

Riverside County

The Company leases and operates a composting facility in Riverside County,
California, under a conditional use permit ("CUP") that expires January 1, 2010.
The CUP allows for a reduction in material intake and CUP term in the event of
noncompliance with the CUP's terms and conditions. In response to alleged
noncompliance due to excessive odor, on or about June 22, 1999, the Riverside
County Board of Supervisors attempted to reduce the Company's intake of
biosolids from 500 tons per day to 250 tons per day. The Company believes that
this was not an authorized action by the Board of Supervisors. On September 15,
1999, the Company was granted a preliminary injunction restraining and enjoining
the County of Riverside ("County") from restricting the Company's intake of
biosolids at its Riverside composting facility.

In the lawsuit that the Company filed in the Superior Court of California,
County of Riverside, the Company has also complained that the County's treatment
of the Company is in violation of our civil rights under U.S.C. Section 1983 and
that its due process rights were being affected because the County was
improperly administering the odor protocol in the CUP. The County alleges that
the odor "violations," as well as the Company's actions in not reducing intake,
could reduce the term of the CUP to January 2002. The Company disagrees and has
challenged the County's position in the lawsuit.

No trial date has been set at this time. The case is currently subject to an
agreed stay and we continue to operate under the existing CUP while the parties
explore settlement. The parties have executed a Memorandum of Understanding
signed by the Board of Supervisors of the County which provides for a plan to
relocate the compost facility to a piece of land owned by the County.

Whether or not the parties reach settlement based on the terms of the Memorandum
of Understanding, the site may be closed; we may incur additional costs related
to contractual agreements, relocation and site closure, as well as the need to
obtain new permits



                                       14

<PAGE>

(including some from the County) at a new site. If the Company is unsuccessful
in its efforts, goodwill and certain assets may be impaired. Total goodwill
associated with the operations is approximately $13,843,000 at March 31, 2002.
The financial impact associated with a site closure cannot be reasonably
estimated at this time. Although we feel that our case is meritorious, the
ultimate outcome cannot be determined at this time.

Reliance Insurance

For the 24 months ended October 31, 2000 (the "Reliance Coverage Period"), the
Company insured certain risks, including automobile, general liability, and
worker's compensation, with Reliance National Indemnity Company ("Reliance")
through policies totaling $26 million in annual coverage. On May 29, 2001, the
Commonwealth Court of Pennsylvania entered an order appointing the Pennsylvania
Insurance Commissioner as Rehabilitator and directing the Rehabilitator to take
immediate possession of Reliance's assets and business. On June 11, 2001,
Reliance's ultimate parent, Reliance Group Holdings, Inc., filed for bankruptcy
under Chapter 11 of the United States Bankruptcy Code of 1978, as amended. On
October 3, 2001, the Pennsylvania Insurance Commissioner removed Reliance from
rehabilitation and placed it into liquidation.

On January 21, 2000, several plaintiffs filed suit in the District Court of
Jackson County, Texas, (the "Lopez Suit") against a wholly owned subsidiary of
the Company, Synagro of Texas-CDR, Inc. The Lopez Suit was later amended to name
the Company as an additional defendant. The suit arises out of an automobile
accident involving a vehicle operated by Synagro of Texas-CDR, Inc., in which
one person was killed and two others were injured. The Lopez Suit was set for
trial in November 2001; however, on October 16, 2001, as a result of the Texas
Insurance Commissioner's finding that Reliance was impaired, a notice of an
automatic 180-day stay was filed in the Lopez Suit. The stay expired April 5,
2002. Although the Lopez Suit was set for trial on May 13, 2002, the parties
have agreed to postpone trial pending settlement discussions. There is a backup
trial setting of June 17, 2002 that is still in place. The Lopez plaintiffs are
seeking unspecified damages from the Company and its affiliates. On November 13,
2001, the Company filed a petition for intervention in the Pennsylvania Court
requesting that the Court approve and order Reliance to fund an $11.9 million
settlement that Reliance had proposed regarding the Lopez Suit (the
"Intervention Action").

The Company is vigorously defending itself against this lawsuit. In addition,
other third parties have asserted claims and/or brought suit against the Company
and its affiliates related to alleged acts or omissions occurring during the
Reliance Coverage Period. It is possible, depending on the outcome of the AON
Suit (discussed below) and the Intervention Action, and possible claims made
with the Texas Property and Casualty Insurance Guaranty Association, that the
Company will have no, or insufficient, insurance funds available to pay any
potential losses. There are uncertainties relating to (1) the Company's ultimate
liability, if any, for damages in the Lopez Suit or the other cases arising
during the covered period; (2) the availability of the insurance coverage; (3)
the potential for recovery from the AON Suit; (4) the Intervention Action; and
(5) possible recovery from the Texas Property and Casualty Insurance Guaranty
Association. Based upon information currently available, the Company has
estimated that its net probable exposure for unpaid insurance claims and other
costs for which coverage may not be available due to the pending liquidation of
Reliance is $1.9 million and, accordingly, recorded a special charge of
$2.2 million in its December 31, 2001, financial statements to record the
estimated exposure for this matter and related legal expenses. Although the
Company believes $1.9 million of the charge represents its current probable
exposure related to the Reliance matter, the final resolution could be
substantially different from the amount recorded.

AON

On October 4, 2001, the Company filed suit in the 24th Judicial District Court
of Jackson County, Texas, against its former insurance broker, AON Risk Services
of Texas, Inc. ("AON"), and the several insurance companies that reinsured the
policies issued by Reliance (the "Reinsurers") (the "AON Suit"). In the AON
Suit, the Company is seeking a judgment against AON for any and all sums that
the Company may become liable for as a result of any settlement of, or the entry
of any judgment in, the Lopez Suit, and any and all costs associated with
defense thereof, as a result of the Company's assertion of negligence by AON in
placing the entirety of the Company's insurance coverage with Reliance and AON's
failure to obtain "cut through endorsements" to the Reliance policies which
would enable the Company to proceed directly against the Reinsurers. The Company
is also seeking a declaratory judgment against the Reinsurers declaring that the
Reinsurers owe the Company a duty of defense and indemnity in the Lopez Suit as
a result of the Reinsurers' participation in the investigation, evaluation, and
handling of the Lopez Suit, as a result of any "cut through endorsements" that
may have been obtained by AON, and by virtue of a "fronting arrangement" whereby
most or all of certain Reliance policies were reinsured. The AON Suit is at an
early stage, and the ultimate outcome of this litigation, including amounts, if
any, that may be recovered by the Company, cannot be determined at this time.



                                       15

<PAGE>

Other

There are various other lawsuits and claims pending against Synagro that have
arisen in the normal course of Synagro's business and relate mainly to matters
of environmental, personal injury and property damage. The outcome of these
matters is not presently determinable but, in the opinion of management, the
ultimate resolution of these matters will not have a material adverse effect on
the consolidated financial condition or results of operations of Synagro.

(7) COMPREHENSIVE INCOME

The Company's comprehensive income for the three months ended March 31, 2002 and
2001, is summarized as follows:

<Table>
<Caption>
                                                                           THREE MONTHS ENDED
                                                                                MARCH 31,
                                                                          2002             2001
                                                                      ------------     ------------
<S>                                                                   <C>              <C>
Net income (loss) applicable to common stock .....................    $   (411,821)    $ (3,972,661)
Other comprehensive income (loss)
    Cumulative effect of change in accounting for derivatives ....              --       (2,058,208)
    Change in fair value of derivatives ..........................              --       (1,170,526)
    Reclassification adjustment to earnings ......................        (203,260)         (76,814)
    Tax benefit of changes in fair value .........................          77,239               --
                                                                      ------------     ------------
       Subtotal ..................................................        (126,021)      (3,305,548)
                                                                      ------------     ------------
Comprehensive income (loss) ......................................    $   (537,842)    $ (7,278,209)
                                                                      ============     ============
</Table>

(8) EARNINGS (LOSS) PER COMMON SHARE


<Table>
<Caption>
                                                                              THREE MONTHS ENDED
                                                                                    MARCH 31,
                                                                            2002                 2001
                                                                      ----------------     ----------------
<S>                                                                   <C>                  <C>

          Earnings (loss) per share:
            Net income (loss) before cumulative effect of
              change in accounting for derivatives and preferred
              stock dividend......................................    $            .07     $           (.02)
            Cumulative effect of change in accounting
              for derivatives.....................................                  --                 (.10)
                                                                      ----------------     ----------------
            Net income before preferred stock dividends...........                (.07)                (.12)
            Preferred stock dividends.............................                (.09)                (.09)
                                                                      ----------------     ----------------
            Net loss per common share, basic .....................    $           (.02)    $           (.21)
                                                                      ================     ================
            Net loss per common share, diluted ...................    $           (.02)    $           (.21)
                                                                      ================     ================

          Weighted average shares outstanding, basic .............          19,476,781           19,435,781
          Weighted average shares outstanding, diluted ...........          19,476,781           19,435,781
</Table>

Basic earnings per share (EPS) is computed by dividing net income applicable to
common stock by the weighted average number of common shares outstanding for the
period. Diluted EPS is computed by dividing net income before preferred stock
dividends by the total of the weighted average number of common shares
outstanding for the period, the weighted average number of shares of common
stock that would be issued assuming conversion of the Company's preferred stock,
and other common stock equivalents for options and warrants outstanding
determined using the treasury stock method. Diluted EPS for the three months
ended March 31, 2002 and 2001, is the same as basic earnings per share and the
diluted shares used in computing diluted EPS in 2002 and 2001 excludes shares
assuming conversion of the Company's preferred stock and certain other common
stock equivalents for options and warrants outstanding determined using the
treasury stock method totaling 31,763,044 and 29,135,136, respectively, because
during loss periods diluted earnings per share is less dilutive than basic
earnings per share ("antidilutive").

Effective January 1, 2002, the Company discontinued the amortization of goodwill
in accordance with our adoption of SFAS No. 142, "Goodwill and Other Intangible
Assets." The following shows the effect on the three months ended March 31, 2001
as if SFAS No. 142 had been adopted January 1, 2001:



                                       16

<PAGE>



<Table>
<Caption>
                                                                   THREE MONTHS ENDED
                                                                       MARCH 31,
                                                                 2002               2001
                                                            --------------     --------------
<S>                                                         <C>                <C>
Net income (loss) applicable to common stock --
Reported net loss applicable to common stock ...........    $     (411,821)    $   (3,972,661)
Add back:  Goodwill amortization .......................                --          1,105,231
                                                            --------------     --------------
Adjusted net loss ......................................    $     (411,821)    $   (2,867,430)

Basic and diluted income (loss) per share --
  Reported net loss per share ..........................    $         (.02)    $         (.21)
  Goodwill amortization ................................                --                .06
                                                            --------------     --------------
  Adjusted loss per share ..............................    $         (.02)    $         (.15)
                                                            ==============     ==============
</Table>

(9)  SUBSEQUENT EVENTS

On April 17, 2002, the Company issued and sold $150 million in aggregate
principal amount of its 9 1/2 percent Senior Subordinated Notes (the "Notes")
due in 2009 in a private offering (the "Subordinated Offering"). The Company
used the proceeds from the Subordinated Offering to repay existing indebtedness
under the Company's Senior Credit Agreement and other existing subordinated
debt. In connection with the repayment of the existing subordinated debt, the
Company will expense in the second quarter of 2002 approximately $2.1 million,
net of taxes, of previously recorded deferred loan costs. All payments,
including interest and principal, of the Notes have been fully, unconditionally
and jointly and severally guaranteed by Synagro's subsidiaries. As defined by
the Securities and Exchange Commission Regulations S-X, Article 3, Rule 3-10(h),
the parent company has no independent assets or operations. Synagro Baltimore,
L.L.C., a subsidiary of Synagro, pursuant to a loan agreement in connection with
the Nonrecourse Project Revenue Bonds, is required to place certain monies in
restricted fund accounts to be used for various designated purposes. Monies in
these fund accounts will remain restricted until the Nonrecourse Project Revenue
Bonds are paid. At March 31, 2002, there was approximately $8,741,000 of
restricted cash in these fund accounts. See Note 5.

In May 2002, the Company entered into a new $150 million senior credit facility
that provides for a $70 million funded term loan and up to a $50 million
revolver, with the ability to increase the total commitment to $150 million. The
term loan proceeds were used to pay off the existing senior debt that remained
unpaid after the $150 million Senior Subordinated Notes offering. This new
facility is secured by substantially all of our assets and those of our
subsidiaries (other than assets securing nonrecourse debt) and includes
covenants restricting the incurrence of additional indebtedness, liens, certain
payments and sale of assets. During the three months ended June 30, 2002, the
Company expects to record a noncash extraordinary charge, net of tax, of
approximately $3.0 million, which represents the unamortized deferred debt costs
related to the debt that was repaid with the net proceeds received from the
Senior Subordinated Notes and the new senior credit facility.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

The following discussion should be read in conjunction with the consolidated
historical and financial statements of the Company and related notes thereto
included elsewhere in this Form 10-Q and the Annual Report on Form 10-K, as
amended for the year ended December 31, 2001. This discussion contains
forward-looking statements regarding the business and industry of the Company
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are based on the current plans and expectations of the Company
and involve risks and uncertainties that could cause actual future activities
and results of operations to be materially different from those set forth in the
forward-looking statements, but are not limited to those factors more thoroughly
disclosed in the Company's Annual Report on Form 10-K.

RECENT DEVELOPMENTS

In May 2002, the Company entered into a new $150 million senior credit facility
that provides for a $70 million funded term loan and up to a $50 million
revolver, with the ability to increase the total commitment to $150 million. The
term loan proceeds were used to pay off the existing senior debt that remained
unpaid after the April 2002 $150 million Senior Subordinated Notes offering.
This new facility is secured by substantially all of our assets and those of our
subsidiaries (other than assets securing nonrecourse debt) and includes
covenants restricting the incurrence of additional indebtedness, liens, certain
payments and sale of assets. During the three months ended June 30, 2002, the
Company expects to record a noncash extraordinary charge, net of tax, of
approximately $3.0 million, which represents the unamortized deferred debt costs
related to the debt that was repaid with the net proceeds received from the
Senior Subordinated Notes and the new senior credit facility.

On May 8, 2002, the Company announced that the City and County of Honolulu
("City") awarded to Synagro and signed a contract to design, build, and operate
a biosolids digestion, dewatering, and heat drying/pelletization facility
providing service for Honolulu's largest wastewater treatment plant. The
contract provides for an initial term of 15 years with an option to renew for an
additional 10 years. Based on the agreed upon terms, Synagro can generate
revenues between $92 and $144 million over the life of the contract.



                                       17
<PAGE>



BACKGROUND

We generate substantially all of our revenue by providing wastewater residuals
management services to municipal and industrial customers. We provide our
customers with complete, vertically-integrated services and capabilities,
including facility operations, facility cleanout services, regulatory
compliance, dewatering, collection and transportation, composting, drying and
pelletization, product marketing, incineration, alkaline stabilization, and land
application. We currently serve more than 1,000 customers in 35 states and the
District of Columbia. Our contracts typically have inflation price adjustments,
renewal clauses and broad force majeure provisions. In 2001, we experienced a
contract retention rate (both renewals and rebids) of approximately 90 percent.

Revenues under our facilities operations and maintenance contracts are
recognized either when wastewater residuals enter the facilities or when the
residuals have been processed, depending on the contract terms. All other
revenues under service contracts are recognized when the service is performed.
We provide for losses in connection with long-term contracts where an obligation
exists to perform services and it becomes evident that the projected contract
costs will exceed the related revenue.

Our costs relating to service contracts include processing, transportation,
spreading and disposal costs, and depreciation of operating assets. Our costs
relating to construction contracts primarily include subcontractor costs related
to design, permit and general construction. Our selling, general and
administrative expenses are comprised of accounting, information systems,
marketing, legal, human resources, regulatory compliance, and regional and
executive management costs. Historically, we have included amortization of
goodwill resulting from acquisitions as a separate line item in our income
statement. Beginning January 1, 2002, goodwill was no longer amortized in
accordance with SFAS No. 142, "Goodwill and Other Intangible Assets."

HISTORICAL RESULTS AND OPERATIONS

<Table>
<Caption>
                                                                                THREE MONTHS ENDED
                                                                                      MARCH 31,
                                                                 2002                               2001
                                                            --------------                     --------------
<S>                                                         <C>                   <C>          <C>                   <C>
Revenue ................................................    $   56,816,527          100.0%     $   58,795,142         100.0%
Cost of services .......................................        43,257,392           76.1%         45,326,466           77.1%
                                                            --------------        -------      --------------        -------
Gross profit ...........................................        13,559,135           23.9%         13,468,676           22.9%

Selling, general and administrative expenses ...........         5,768,468           10.2%          5,351,789            9.1%
Amortization of intangibles.............................            27,417             --           1,132,648            1.9%
                                                            --------------        -------      --------------        -------

  Income from operations ...............................         7,763,250           13.7%         6,984,239            11.9%
                                                            --------------        -------      --------------        -------
Other (income) expense:
  Other income, net ....................................           (38,006)           (.1)%            (6,270)            --%
  Interest expense, net ................................         5,493,244            9.7%          7,359,564           12.5%
                                                            --------------        -------      --------------        -------

     Total other expense, net ..........................         5,455,238            9.6%          7,353,294           12.5%
                                                            --------------        -------      --------------        -------
Income (loss) before provision for income taxes ........         2,308,012            4.1%           (369,055)           (.6)%
  Provision for income taxes ...........................           876,406            1.6%                 --             --
                                                            --------------        -------      --------------        -------
Net income (loss) before cumulative effect of
  change in accounting for derivatives and
  preferred stock dividends ............................         1,431,606            2.5%          (369,055)            (.6)%
Cumulative effect of change in accounting for
  derivatives ..........................................                --                          1,860,685
Preferred stock dividends ..............................         1,843,427                          1,742,921
                                                            --------------                     --------------
Net loss applicable to common stock ....................    $     (411,821)                    $   (3,972,611)
                                                            ==============                     ==============
</Table>


For the three months ended March 31, 2002, net sales were approximately
$56,817,000 compared to approximately $58,795,000 for the three months ended
March 31, 2001, representing a decrease of approximately $1,978,000 or 3.4
percent. The decrease for the three months ended March 31, 2002, relates
primarily to an anticipated decrease in cleanout services.

Cost of services and gross profit for the three months ended March 31, 2002,
were approximately $43,257,000 and approximately $13,559,000, respectively,
compared with approximately $45,326,000 and approximately $13,469,000,
respectively, for the three months ended March 31, 2001, resulting in gross
profit as a percentage of sales increasing to 23.9 percent in 2002 from 22.9
percent in 2001. The increase in gross profit and margin for the three months
ended March 31, 2002, relates to lower storage costs and a planned reduction in
certain transportation expenses.

Selling, general and administrative expenses were approximately $5,768,000 for
the three months ended March 31, 2002, compared to approximately $5,352,000 for
the three months ended March 31, 2001, representing an increase of approximately
$416,000. The increase relates to additional marketing development costs.



                                       18

<PAGE>

Amortization was approximately $28,000 for the three months ended March 31,
2002, compared to approximately $1,133,000 for the three months ended March 31,
2001. The decrease results from the adoption of SFAS No. 141 as beginning
January 1, 2002, the Company no longer amortizes goodwill.

As a result of the foregoing, income from operations for the three months ended
March 31, 2002, was approximately $7,763,000 or 13.7 percent of sales compared
to approximately $6,984,000 or 11.9 percent of sales.

Other expenses, net were approximately $5,455,000 for the three months ended
March 31, 2002, compared to approximately $7,353,000 for the three months ended
March 31, 2001, representing a decrease of approximately $1,898,000. The
decrease relates to interest savings related to repayments of debt funded from
operational cash flow and significant reductions in market interest rates on the
Company's floating rate debt.

For the three months ended March 31, 2002, the Company recorded a provision for
income taxes of approximately $876,000 as the prior year valuation allowance
related to certain deferred tax assets no longer offset deferred tax provision
requirements.

As a result of the foregoing, net income (loss) before cumulative effect of
change in accounting for derivatives and preferred stock dividends of
approximately $1,432,000 for the three months ended March 31, 2002, compared to
a net income (loss) of approximately $(369,000) for the same period in 2001.

LIQUIDITY AND CAPITAL RESOURCES

OVERVIEW

During the past three years, our principal sources of funds were cash generated
from our operating activities and long-term borrowings. We use cash mainly for
capital expenditures, working capital and debt service. In the future, we expect
that we will use cash principally to fund working capital, our debt service and
repayment obligations and capital expenditures. In addition, we may use cash to
pay dividends on our preferred stock and potential earn out payments resulting
from prior acquisitions. We have historically financed our acquisitions
principally through the issuance of equity and debt securities, our credit
facility, and funds provided by operating activities.

HISTORICAL CASH FLOWS

Cash Flows from Operating Activities. For the three months ended March 31, 2002,
cash flows from operating activities were approximately $5,498,000 compared to
approximately $6,404,000 for the same period in 2001, a decrease of
approximately $906,000, or 14.1 percent. The decrease primarily relates to
change in working capital.

Cash Flows from Investing Activities. For the three months ended March 31, 2002,
cash flows used for investing activities were approximately $3,810,000 compared
to approximately $4,166,000 for the same period in 2001, a decrease of
approximately $356,000.

Cash Flows from Financing Activities. For the three months ended March 31, 2002,
cash flows used for financing activities were approximately $1,685,000 compared
to cash flows used by financing activities of approximately $4,543,000 for the
same period in 2001, a decrease of approximately $2,858,000. The decrease
primarily relates to additional debt payments made in 2001 using excess cash at
the end of 2000 and cash paid in 2002 for debt issuance costs related to the
9 1/2 percent Senior Subordinated Notes issued in April 2002.

CAPITAL EXPENDITURE REQUIREMENTS

Capital expenditures for the three months ended March 31, 2002, totaled
approximately $3,609,000 compared to approximately $3,390,000 in 2001. Our
ongoing capital expenditure program consists of expenditures for replacement
equipment, betterments, and growth. We expect our capital expenditures for 2002
to be approximately $14 to $15 million.

DEBT SERVICE REQUIREMENTS

On January 27, 2000, we entered into an $110,000,000 senior credit facility to
fund working capital for acquisitions, to refinance existing debt, to provide
working capital for operations, to fund capital expenditures and for other
general corporate purposes. On February 25, 2002, the existing credit facility
was amended to, among other things, increase the revolving loan from $30,000,000
to



                                       19
<PAGE>

approximately $51,330,000, increase sublimits for letters of credit from
$20,000,000 to $50,000,000, provide limitations for restricted payments and
investments, and increase the permitted amounts of nonrecourse financing and
operating lease obligations. The senior credit agreement contains standard
covenants including compliance with laws, limitations on capital expenditures,
restrictions on dividend payments, limitations on mergers and compliance with
certain financial covenants.

In January 2000, we entered into an agreement with GTCR Capital Partners, L.P.
which agreed to provide up to $125 million in subordinated debt financing to
fund acquisitions and for certain other uses, in each case as approved by our
Board of Directors and the Board of Directors of GTCR Capital Partners, L.P.
GTCR Capital Partners, L.P. is an affiliate of GTCR Golder Rauner, LLC ("GTCR"),
our majority stockholder. The agreement was amended in August 2000, allowing,
among other things, for GTCR Capital Partners, L.P. to syndicate a portion of
the commitment. The loans bear interest at an annual rate of 12 percent paid
quarterly and provided warrants that were convertible into preferred stock at
$.01 per share. The unpaid principal plus unpaid and accrued interest must be
paid in full by January 27, 2008. The agreement contains general and financial
covenants. As of March 31, 2002, we have borrowed approximately $52,760,000 of
indebtedness under the terms of the agreement, which was used to partially fund
our acquisitions in 2000.

In April 2002, the Company completed the sale of $150 million 9 1/2 percent
Senior Subordinated Notes due 2009 and used the proceeds to pay down
approximately $92 million of senior bank debt and to pay off approximately $53
million of 12 percent subordinated debt. In May 2002, the Company entered into a
new $150 million senior credit facility that provides for a $70 million funded
term loan and up to a $50 million revolver, with the ability to increase the
total commitment to $150 million. The term loan proceeds were used to pay off
the existing senior debt that remained unpaid after the $150 million Senior
Subordinated Notes offering. This new facility is secured by substantially all
of our assets and those of our subsidiaries (other than assets securing
nonrecourse debt) and includes covenants restricting the incurrence of
additional indebtedness, liens, certain payments and sale of assets. During the
three months ended June 30, 2002, the Company expects to record a noncash
extraordinary charge, net of tax, of approximately $5.0 million, which
represents the unamortized deferred debt costs related to the debt that was
repaid with the net proceeds received from the Senior Subordinated Notes and the
new senior credit facility.

In 1996, the Maryland Energy Financing Administration (the "Administration")
issued nonrecourse tax-exempt project revenue bonds (the "Nonrecourse Project
Revenue Bonds") in the aggregate amount of $58,550,000. The Administration
loaned the proceeds of the Nonrecourse Project Revenue Bonds to Wheelabrator
Water Technologies Baltimore L.L.C., now our wholly owned subsidiary and known
as Synagro -- Baltimore, L.L.C., pursuant to a June 1996 loan agreement, and the
terms of the loan mirror the terms of the Nonrecourse Project Revenue Bonds. The
loan financed a portion of the costs of constructing thermal facilities located
in Baltimore County, Maryland, at the site of its Back River Wastewater
Treatment Plant, and in the City of Baltimore, Maryland, at the site of its
Patapsco Wastewater Treatment Plant. We assumed all obligations associated with
the Nonrecourse Project Revenue Bonds in connection with our acquisition of Bio
Gro in 2000. Nonrecourse Project Revenue Bonds in the aggregate amount of
$9,885,000 have already been paid, and the remaining Nonrecourse Project Revenue
Bonds bear interest at annual rates between 5.45 percent and 6.45 percent and
mature on dates between December 1, 2002, and December 1, 2016.

At May 10, 2002, future minimum principal payments of long-term debt under the
new credit facility entered into in May 2002 and the 9 1/2 percent $150 million
Senior Subordinated Notes issued in April 2002 are as follows:


<Table>
<Caption>
                                                                          NONRECOURSE
                                                           LONG-TERM        PROJECT
                         YEAR ENDING DECEMBER 31,            DEBT         REVENUE BONDS        TOTAL
                         ------------------------       ---------------   -------------    -------------
<S>                                                     <C>               <C>              <C>
                         2002......................     $     181,535     $  2,300,000     $   2,481,535
                         2003......................           706,535        2,430,000         3,136,535
                         2004......................           706,535        2,570,000         3,276,535
                         2005......................           706,535        2,710,000         3,416,535
                         2006......................           706,535               --           706,535
                         2007-2010.................       217,025,000       16,295,000       233,320,000
                         2011-2016.................                --       16,211,558        16,211,558
                                                        -------------     ------------     -------------
                              Total................     $ 220,032,675     $ 42,516,558     $ 262,549,233
                                                        =============     ============     =============
</Table>

We lease certain facilities and equipment under noncancelable, long-term lease
agreements. Minimum annual rental commitments under these leases have not
materially changed during the three months ended March 31, 2002.



                                       20

<PAGE>
We believe we will have sufficient cash generated by our operations and
available through our new credit facility entered into in May 2002 to provide
for future working capital and capital expenditure requirements that will be
adequate to meet our liquidity needs for the foreseeable future, payment of
interest on our existing credit facility and payments on the Nonrecourse Project
Revenue Bonds. We cannot assure you, however, that our business will generate
sufficient cash flow from operations, that any cost savings and any operating
improvements will be realized or that future borrowings will be available to us
under our existing credit facility in an amount sufficient to enable us to pay
our indebtedness or to fund our other liquidity needs. We may need to refinance
all or a portion of our indebtedness on or before maturity. We cannot assure you
that we will be able to refinance any of our indebtedness, including our
existing credit facility, on commercially reasonable terms or at all.

SERIES D REDEEMABLE PREFERRED STOCK

We have authorized 32,000 shares of Series D Preferred Stock, par value $.002
per share. In 2000, we issued a total of 25,033.601 shares of the Series D
Preferred Stock to GTCR Fund VII, L.P. and its affiliates which is convertible
by the holders into a number of shares of our common stock computed by dividing
(i) the sum of (a) the number of shares to be converted multiplied by the
liquidation value and (b) the amount of accrued and unpaid dividends by (ii) the
conversion price then in effect. The initial conversion price is $2.50 per
share, provided that in order to prevent dilution, the conversion price may be
adjusted. The Series D Preferred Stock is senior to our common stock or any
other of our equity securities. The liquidation value of each share of Series D
Preferred Stock is $1,000 per share. Dividends on each share of Series D
Preferred Stock accrue daily at the rate of eight percent per annum on the
aggregate liquidation value and may be paid in cash or in kind, at our option.
The Series D Preferred Stock is entitled to one vote per share. Shares of Series
D Preferred Stock are subject to mandatory redemption by us on January 26, 2010,
at a price per share equal to the liquidation value plus accrued and unpaid
dividends. If the Series D Preferred Stock were converted, they would represent
10,013,441 shares of common stock.

SERIES E REDEEMABLE PREFERRED STOCK

We have authorized 55,000 shares of Series E Preferred Stock, par value $.002
per share. GTCR Fund VII, L.P. and its affiliates own 37,504.229 shares of
Series E Preferred Stock and certain affiliates of The TCW Group, Inc. own
7,024.58 shares. The Series E Preferred Stock is convertible by the holders into
a number of shares of our common stock computed by dividing (i) the sum of (a)
the number of shares to be converted multiplied by the liquidation value and (b)
the amount of accrued and unpaid dividends by (ii) the conversion price then in
effect. The initial conversion price is $2.50 per share, provided that in order
to prevent dilution, the conversion price may be adjusted. The Series E
Preferred Stock is senior to our common stock or any other of our equity
securities. The liquidation value of each share of Series E Preferred Stock is
$1,000 per share. Dividends on each share of Series E Preferred Stock accrue
daily at the rate of eight percent per annum on the aggregate liquidation value
and may be paid in cash or in kind, at our option. The Series E Preferred Stock
is entitled to one vote per share. Shares of Series E Preferred Stock are
subject to mandatory redemption by us on January 26, 2010, at a price per share
equal to the liquidation value plus accrued and unpaid dividends. If the Series
E Preferred Stock were converted, they would represent 17,903,475 shares of
common stock.

The Series D and Series E Preferred Stock may result in noncash beneficial
conversions valued in future periods recognized as preferred stock dividends if
the market value is higher than the conversion price.

INTEREST RATE RISK

Total debt at March 31, 2001 included approximately $161,084,000 in floating
rate debt attributed to the Senior Credit Agreement at an average interest rate
of 4.66%. Total debt at May 10, 2002 included approximately $70,000,000 in
floating rate debt attributed to the new $150 million senior credit facility
entered into in May 2002 at an average interest rate of 4.9%. See note (9). As a
result, the Company's interest cost in 2002 will fluctuate based on short-term
interest rates. The impact on annual cash flow of a ten percent change in the
floating rate would be approximately $122,000.

WORKING CAPITAL

At March 31, 2002, we had working capital of approximately $22,219,000 compared
to approximately $22,495,000 at March 31, 2001, a decrease of approximately
$276,000.

CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

In preparing financial statements in conformity with accounting principles
generally accepted in the United States, management makes estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements, as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The
following are our significant estimates and assumptions made in preparation of
its financial statements:

Allowance for Doubtful Accounts -- We estimate losses for uncollectible accounts
based on the aging of the accounts receivable and the evaluation and the
likelihood of success in collecting the receivable.


                                       21
<PAGE>

Loss Contracts -- We evaluate our revenue producing contracts to determine
whether the projected revenues of such contracts exceed the direct cost to
service such contracts. These evaluations include estimates of the future
revenues and expenses. Accruals for loss contracts are adjusted based on these
evaluations.

Purchase Accounting -- We estimate the fair value of assets, including property,
machinery and equipment and its related useful lives and salvage values, and
liabilities when allocating the purchase price of an acquisition.

Income Taxes -- We assume the deductibility of certain costs in our income tax
filings and estimates the recovery of deferred income tax assets.

Legal and Contingency Accruals -- We estimate and accrue the amount of probable
exposure we may have with respect to litigation, claims and assessments.

Self-Insurance Reserves -- Through the use of actuarial calculations, we
estimate the amounts required to settle insurance claims.

Actual results could differ materially from the estimates and assumptions that
we use in the preparation of our financial statements.

ACCOUNTING PRONOUNCEMENTS

Information regarding new accounting pronouncements can be found under the
"Accounting Pronouncements" section of Note (1) to the Condensed Consolidated
Financial Statements.


PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Information regarding our legal proceedings can be found under the "Litigation"
section of Note (7), Commitments and Contingencies, to the Condensed
Consolidated Financial Statements.


                                       22

<PAGE>


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(A)  Exhibit Index

(B)  Reports on Form 8-K

         None



                                       23

<PAGE>



SIGNATURES

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

    SYNAGRO TECHNOLOGIES, INC.

    Date:  May 10, 2002                    By:      /s/ Ross M. Patten
                                               --------------------------------
                                                    Chief Executive Officer

    Date:  May 10, 2002                    By:      /s/ J. Paul Withrow
                                               --------------------------------
                                                    Chief Financial Officer



                                       24
<PAGE>



                                  EXHIBIT INDEX


<Table>
<Caption>
EXHIBIT                                     DESCRIPTION OF EXHIBIT
-------                                     ----------------------
<S>              <C>
10.1*            Third Amended and Restated Credit Agreement dated May 8, 2002
                 among Synagro Technologies, Inc., various financial
                 institutions and Bank of America, N.A.

----------

* filed herein
</Table>



                                       25