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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from ___________ to ___________
 Commission File No. 1-31507
 
 WASTE CONNECTIONS, INC.
  Delaware
(State or other jurisdiction of incorporation or organization)
    
    94-3283464
(I.R.S. Employer Identification No.)2295 Iron Point Road 
Suite 200
Folsom, California
(Address of principal executive offices)
    
    95630
(Zip Code)
 
  Common Stock, par value $.01 per share
(Title of each class)
    
    New York Stock Exchange
(Name of each exchange on which registered)
   þ o
  o þ
  þ o
  o o
 o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o
  o þ




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##### 



Item No.
    
    PagePART I1. BUSINESS
    
    
    11A. RISK FACTORS
    
    
    151B. UNRESOLVED STAFF COMMENTS
    
    
    222. PROPERTIES
    
    
    223. LEGAL PROCEEDINGS
    
    
    224. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    24PART II5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
    
    
    256. SELECTED FINANCIAL DATA
    
    
    277. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
    
    
    297A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    498. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    519. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    999A. CONTROLS AND PROCEDURES
    
    
    999B. OTHER INFORMATION
    
    
    99PART III10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
    
    
    10011. EXECUTIVE COMPENSATION
    
    
    10012. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
    
    
    10013. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE
    
    
    10014. PRINCIPAL ACCOUNTING FEES AND SERVICES
    
    
    100PART IV15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
    
    
    101SIGNATURES
    
    
    102SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS
    
    
    103EXHIBIT INDEX
    
    
    104Exhibit 10.27Exhibit 12.1Exhibit 21.1Exhibit 23.1Exhibit 31.1Exhibit 31.2Exhibit 32.1
   i




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##### Table of Contents



PART I
 
 ITEM 1.
    
    BUSINESS
    
    
    opportunities to enter into exclusive arrangements;
    
    more competitive barriers to entry;
    
    less competition from larger solid waste services companies;
    
    projected economic and population growth rates that will contribute to the growth of our
business; and
    
    a number of independent solid waste services companies suitable for acquisition.
     Control the Waste Stream
 Provide Vertically Integrated Services
 Manage on a Decentralized Basis
  1




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Implement Operating Standards
   Obtain Additional Exclusive Arrangements
  Generate Internal Growth
 Expand Through Acquisitions
  2




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SOLID WASTE SERVICES
      3




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Owned and operated landfills
    
    
    34Operated landfills under limited-term operating agreements
    
    
    6Operated landfills under life-of-site agreements
    
    
    343
    
    
    whether the land where the expansion is being sought is contiguous to the current
disposal site, and whether we either own it or the property is under an option, purchase,
operating or other similar agreement;
    
    whether total development costs, final capping costs, and closure/post-closure costs have
been determined;
    
    whether internal personnel have performed a financial analysis of the proposed expansion
site and have determined that it has a positive financial and operational impact;
    
    whether internal personnel or external consultants are actively working to obtain the
necessary approvals to obtain the landfill expansion permit; and
    
    whether we consider it probable that we will achieve the expansion (for a pursued
expansion to be considered probable, there must be no significant known technical, legal,
community, business or political restrictions or similar issues existing that could impair
the success of the expansion).
  4




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##### Table of Contents



2008
    
    
    2009Probable
    
    
    
    
    
    
    
    
    
    
    ProbablePermitted
    
    
    Expansion
    
    
    Total
    
    
    Permitted
    
    
    Expansion
    
    
    TotalBalance, beginning of year
    
    
    401,095
    
    
    
    28,430
    
    
    
    429,525
    
    
    
    400,380
    
    
    
    36,858
    
    
    
    437,238Acquired landfills
    
    
    5,100
    
    
    
    
    
    
    
    5,100
    
    
    
    132,892
    
    
    
    82,703
    
    
    
    215,595Permits granted
    
    
    7,028
    
    
    
    (7,028
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Airspace consumed
    
    
    (8,320
    )
    
    
    
    
    
    
    (8,320
    )
    
    
    (10,914
    )
    
    
    
    
    
    
    (10,914
    )Pursued expansions
    
    
    
    
    
    
    15,456
    
    
    
    15,456
    
    
    
    
    
    
    
    
    
    
    
    Changes in engineering
estimates
    
    
    (4,523
    )
    
    
    
    
    
    
    (4,523
    )
    
    
    1,755
    
    
    
    (334
    )
    
    
    1,421Balance, end of year
    
    
    400,380
    
    
    
    36,858
    
    
    
    437,238
    
    
    
    524,113
    
    
    
    119,227
    
    
    
    643,340
  20080 to 5
    
    
    6 to 10
    
    
    11 to 20
    
    
    21 to 40
    
    
    41 to 50
    
    
    51+
    
    
    TotalOwned and operated landfills
    
    
    1
    
    
    
    
    
    
    
    5
    
    
    
    7
    
    
    
    2
    
    
    
    12
    
    
    
    27Operated landfills under
life-of-site agreements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    1
    
    
    
    
    
    
    
    31
    
    
    
    
    
    
    
    5
    
    
    
    9
    
    
    
    3
    
    
    
    12
    
    
    
    30
 20090 to 5
    
    
    6 to 10
    
    
    11 to 20
    
    
    21 to 40
    
    
    41 to 50
    
    
    51+
    
    
    TotalOwned and operated landfills
    
    
    1
    
    
    
    1
    
    
    
    5
    
    
    
    8
    
    
    
    4
    
    
    
    15
    
    
    
    34Operated landfills under
life-of-site agreements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    1
    
    
    
    
    
    
    
    31
    
    
    
    1
    
    
    
    5
    
    
    
    10
    
    
    
    5
    
    
    
    15
    
    
    
    37
  5




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Three months endedMarch 31,
    
    
    June 30,
    
    
    September 30,
    
    
    December 31,
    
    
    Twelve months2008
    
    
    2008
    
    
    2008
    
    
    2008
    
    
    endedNumber
    
    
    Total
    
    
    Number
    
    
    Total
    
    
    Number
    
    
    Total
    
    
    Number
    
    
    Total
    
    
    December 31,of Sites
    
    
    Tons
    
    
    of Sites
    
    
    Tons
    
    
    of Sites
    
    
    Tons
    
    
    of Sites
    
    
    Tons
    
    
    2008Owned landfills
and landfills
operated under
life-of-site
agreements
    
    
    29
    
    
    
    1,972
    
    
    
    29
    
    
    
    2,204
    
    
    
    29
    
    
    
    2,235
    
    
    
    30
    
    
    
    1,909
    
    
    
    8,320Operated landfills
    
    
    7
    
    
    
    222
    
    
    
    7
    
    
    
    236
    
    
    
    7
    
    
    
    236
    
    
    
    7
    
    
    
    211
    
    
    
    90536
    
    
    
    2,194
    
    
    
    36
    
    
    
    2,440
    
    
    
    36
    
    
    
    2,471
    
    
    
    37
    
    
    
    2,120
    
    
    
    9,225
 Three months endedMarch 31,
    
    
    June 30,
    
    
    September 30,
    
    
    December 31,
    
    
    Twelve months2009
    
    
    2009
    
    
    2009
    
    
    2009
    
    
    endedNumber
    
    
    Total
    
    
    Number
    
    
    Total
    
    
    Number
    
    
    Total
    
    
    Number
    
    
    Total
    
    
    December 31,of Sites
    
    
    Tons
    
    
    of Sites
    
    
    Tons
    
    
    of Sites
    
    
    Tons
    
    
    of Sites
    
    
    Tons
    
    
    2009Owned landfills
and landfills
operated under
life-of-site
agreements
    
    
    30
    
    
    
    1,954
    
    
    
    37
    
    
    
    2,950
    
    
    
    37
    
    
    
    3,018
    
    
    
    37
    
    
    
    2,992
    
    
    
    10,914Operated landfills
    
    
    7
    
    
    
    203
    
    
    
    7
    
    
    
    223
    
    
    
    7
    
    
    
    165
    
    
    
    6
    
    
    
    141
    
    
    
    73237
    
    
    
    2,157
    
    
    
    44
    
    
    
    3,173
    
    
    
    44
    
    
    
    3,183
    
    
    
    43
    
    
    
    3,133
    
    
    
    11,646
   
    
    concentrating the waste stream from a wider area, which increases the volume of disposal
at our landfill facilities and gives us greater leverage in negotiating more favorable
disposal rates at other landfills;
    
    improving utilization of collection personnel and equipment; and
    
    building relationships with municipalities and private operators that deliver waste,
which can lead to additional growth opportunities.
    6




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INTERMODAL SERVICES
   COMPETITION
     REGULATION
    7




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8




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9




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10




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RISK MANAGEMENT, INSURANCE AND FINANCIAL SURETY BONDS
         EMPLOYEES
   11




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SEASONALITY
   12




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EXECUTIVE OFFICERS OF THE REGISTRANT
  NAME
    
    AGE
    
    POSITIONSRonald J. Mittelstaedt (1)
    
    46
    
    Chief Executive Officer and ChairmanSteven F. Bouck
    
    52
    
    PresidentDarrell W. Chambliss
    
    45
    
    Executive Vice President and Chief Operating OfficerWorthing F. Jackman
    
    45
    
    Executive Vice President and Chief Financial OfficerDavid M. Hall
    
    52
    
    Senior Vice President  Sales and MarketingJames M. Little
    
    48
    
    Senior Vice President  Engineering and DisposalEric M. Merrill
    
    57
    
    Senior Vice President  People, Safety and DevelopmentDavid G. Eddie
    
    40
    
    Vice President  Chief Accounting OfficerEric O. Hansen
    
    44
    
    Vice President  Chief Information OfficerJerri L. Hunt (2)
    
    58
    
    Vice President  Employee RelationsScott I. Schreiber
    
    53
    
    Vice President  Disposal OperationsPatrick J. Shea
    
    39
    
    Vice President, General Counsel and SecretaryRichard K. Wojahn
    
    52
    
    Vice President  Business Development
 (1)
    
    Member of the Executive Committee of the Board of Directors.(2)
    
    Key employee.         13




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AVAILABLE INFORMATION
 http://www.wasteconnections.com http://www.sec.gov
  14




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ITEM 1A.
    
    RISK FACTORS
   Risks Related to Our Business
 Our acquisitions may not be successful, resulting in changes in strategy, operating losses or a
loss on sale of the business acquired
  A portion of our growth and future financial performance depends on our ability to integrate
acquired businesses into our organization and operations
  Downturns in the worldwide economy adversely affect operating results
  Our results are vulnerable to economic conditions and seasonal factors affecting the regions in
which we operate
   15




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We may be subject in the normal course of business to judicial, administrative or other third
party proceedings that could interrupt or limit our operations, require expensive remediation,
result in adverse judgments, settlements or fines and create negative publicity
  We may be unable to compete effectively with larger and better capitalized companies and
governmental service providers
   We may lose contracts through competitive bidding, early termination or governmental
action
   Price increases may not be adequate to offset the impact of increased costs or may cause us to
lose volume
   16




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Increases in the price of fuel may adversely affect our business and reduce our operating
margins
  Increases in labor and disposal and related transportation costs could impact our financial
results
  Efforts by labor unions could divert management attention and adversely affect operating
results
  We could face significant withdrawal liability if we withdraw from participation in one or more
multiemployer pension plans in which we participate
  Increases in insurance costs and the amount that we self-insure for various risks could reduce
our operating margins and reported earnings
   17




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Competition for acquisition candidates, consolidation within the waste industry and economic
and market conditions may limit our ability to grow through acquisitions
    Our indebtedness could adversely affect our financial condition; we may incur substantially
more debt in the future
  
    
    increase our vulnerability to general adverse economic and industry conditions;
    
    limit our ability to obtain additional financing or refinancings at attractive rates;
    
    require the dedication of a substantial portion of our cash flow from operations to the
payment of principal of, and interest on, our indebtedness, thereby reducing the
availability of such cash flow to fund our growth strategy, working capital, capital
expenditures and other general corporate purposes;
    
    limit our flexibility in planning for, or reacting to, changes in our business and the
industry; and
    
    place us at a competitive disadvantage relative to our competitors with less debt.
 Each business that we acquire or have acquired may have liabilities or risks that we fail or
are unable to discover, including environmental liabilities
   18




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Liabilities for environmental damage may adversely affect our financial condition, business and
earnings
  Our accruals for our landfill site closure and post-closure costs may be inadequate
  The financial soundness of our customers could affect our business and operating results
  We depend significantly on the services of the members of our senior, regional and district
management team, and the departure of any of those persons could cause our operating results to
suffer
  Our decentralized decision-making structure could allow local managers to make decisions that
adversely affect our operating results
  Because we depend on railroads for our intermodal operations, our operating results and
financial condition are likely to be adversely affected by any reduction or deterioration in rail
service
  We may incur additional charges related to capitalized expenditures, which would decrease our
earnings
   19




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Our financial results are based upon estimates and assumptions that may differ from actual
results
  The adoption of new accounting standards or interpretations could adversely affect our
financial results
  Risks Related to Our Industry
 Our financial and operating performance may be affected by the inability to renew landfill
operating permits, obtain new landfills and expand existing ones
   20




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Future changes in laws or renewed enforcement of laws regulating the flow of solid waste in
interstate commerce could adversely affect our operating results
  Extensive and evolving environmental and health and safety laws and regulations may restrict
our operations and growth and increase our costs
  Climate change regulations may adversely affect operating results
  Extensive regulations that govern the design, operation and closure of landfills may restrict
our landfill operations or increase our costs of operating landfills
  Alternatives to landfill disposal may cause our revenues and operating results to decline.
   21




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Fluctuations in prices for recycled commodities that we sell and rebates we offer to customers
may cause our revenues and operating results to decline
  Unusually adverse weather conditions may interfere with our operations, harming our operating
results
  
 ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS
  
 ITEM 2.
    
    PROPERTIES
  
 ITEM 3.
    
    LEGAL PROCEEDINGS
 Colonias Dev. Council v. Rhino
Envtl. Servs., Inc. (In re Rhino Envtl. Servs.) 2005 NMSC 24, 117 P.3d 939
  22




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Board of Commrs of Sumner County, Kansas, Tri-County Concerned
Citizens and Dalton Holland v. Roderick Bremby, Secy of the Kansas Dept of Health and Envt, et
al.
 Heath Belcher and Denessa Arguello v. Waste
Connections, Inc., and Waste Connections of California, Inc.
  Sustainability, Parks, Recycling and Wildlife Legal Defense Fund [SPRAWLDEF] v. County of Solano,
Board of Supervisors for the County of Solano Northern California Recycling Association
v. County of Solano Sierra Club v. County of Solano
  23




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Potrero Hills Landfill, Inc. et al. v. County of Solano
 Protect the Marsh, et al. v. County of Solano, et al. Protect the Marsh
   
 ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
   24




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PART II
 
 ITEM
5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
  HIGH
    
    
    LOW2008First Quarter
    
    $
    31.77
    
    
    $
    28.05Second Quarter
    
    
    34.93
    
    
    
    29.99Third Quarter
    
    
    40.74
    
    
    
    30.31Fourth Quarter
    
    
    36.64
    
    
    
    26.542009First Quarter
    
    $
    31.77
    
    
    $
    20.52Second Quarter
    
    
    27.79
    
    
    
    23.99Third Quarter
    
    
    30.27
    
    
    
    24.43Fourth Quarter
    
    
    34.00
    
    
    
    28.362010First Quarter (through January 22, 2010)
    
    $
    33.99
    
    
    $
    32.32
    MaximumTotal Number of
    
    
    Approximate DollarShares Purchased
    
    
    Value of Shares thatTotal Number
    
    
    Average
    
    
    as Part of Publicly
    
    
    May Yet Beof Shares
    
    
    Price Paid
    
    
    Announced
    
    
    Purchased UnderPeriod
    
    Purchased
    
    
    Per Share(1)
    
    
    Program
    
    
    the Program10/1/09  10/31/09
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    340,04911/1/09  11/30/09
    
    
    337,400
    
    
    
    31.91
    
    
    
    337,400
    
    
    
    329,28212/1/09  12/31/09
    
    
    353,800
    
    
    
    33.04
    
    
    
    353,800
    
    
    
    317,593691,200
    
    
    
    32.49
    
    
    
    691,200
 (1)
    
    This amount represents the weighted average price paid per common share. This price
includes a per share commission paid for all repurchases.  25




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®
 
   Base
    
    
    Indexed ReturnsPeriod
    
    
    Years EndingCompany Name / Index
    
    Dec 04
    
    
    Dec 05
    
    
    Dec 06
    
    
    Dec 07
    
    
    Dec 08
    
    
    Dec 09Waste Connections, Inc.
    
    $
    100
    
    
    $
    100.61
    
    
    $
    121.31
    
    
    $
    135.33
    
    
    $
    138.26
    
    
    $
    146.01S&P 500 Index
    
    $
    100
    
    
    $
    104.91
    
    
    $
    121.48
    
    
    $
    128.16
    
    
    $
    80.74
    
    
    $
    102.11Peer Group*
    
    $
    100
    
    
    $
    106.05
    
    
    $
    127.73
    
    
    $
    123.87
    
    
    $
    120.94
    
    
    $
    133.59
 
 *
    
    Peer Group Companies: Casella Waste Systems, Inc.; Republic Services, Inc.; Waste
Management, Inc.   26




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ITEM 6. SELECTED FINANCIAL DATA
  YEARS ENDED DECEMBER 31,2005
    
    
    2006
    
    
    2007(a)
    
    
    2008(a)
    
    
    2009(a)(in thousands, except share and per share data)STATEMENT OF OPERATIONS DATA:Revenues
    
    $
    721,899
    
    
    $
    824,354
    
    
    $
    958,541
    
    
    $
    1,049,603
    
    
    $
    1,191,393Operating expenses:Cost of operations
    
    
    416,883
    
    
    
    492,766
    
    
    
    566,089
    
    
    
    628,075
    
    
    
    692,415Selling, general and administrative
    
    
    72,395
    
    
    
    84,541
    
    
    
    99,565
    
    
    
    111,114
    
    
    
    138,026Depreciation
    
    
    61,719
    
    
    
    70,785
    
    
    
    81,287
    
    
    
    91,095
    
    
    
    117,796Amortization of intangibles
    
    
    3,069
    
    
    
    4,080
    
    
    
    4,341
    
    
    
    6,334
    
    
    
    12,962Loss (gain) on disposal of assets
    
    
    (216
    )
    
    
    796
    
    
    
    250
    
    
    
    629
    
    
    
    (481
    )Operating income
    
    
    168,049
    
    
    
    171,386
    
    
    
    207,009
    
    
    
    212,356
    
    
    
    230,675Interest expense
    
    
    (23,966
    )
    
    
    (33,141
    )
    
    
    (39,206
    )
    
    
    (43,102
    )
    
    
    (49,161
    )Interest income
    
    
    477
    
    
    
    1,140
    
    
    
    1,593
    
    
    
    3,297
    
    
    
    1,413Other income (expense), net
    
    
    450
    
    
    
    (3,759
    )
    
    
    289
    
    
    
    (633
    )
    
    
    (7,551
    )Income before income tax provision
    
    
    145,010
    
    
    
    135,626
    
    
    
    169,685
    
    
    
    171,918
    
    
    
    175,376Income tax provision
    
    
    (48,066
    )
    
    
    (47,177
    )
    
    
    (58,328
    )
    
    
    (56,775
    )
    
    
    (64,565
    )Income from continuing operations
    
    
    96,944
    
    
    
    88,449
    
    
    
    111,357
    
    
    
    115,143
    
    
    
    110,811Loss on discontinued operations, net of tax
    
    
    (579
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    
    96,365
    
    
    
    88,449
    
    
    
    111,357
    
    
    
    115,143
    
    
    
    110,811Less: Net income attributable to
noncontrolling interests
    
    
    (12,422
    )
    
    
    (12,905
    )
    
    
    (14,870
    )
    
    
    (12,240
    )
    
    
    (986
    )Net income attributable to Waste Connections
    
    $
    83,943
    
    
    $
    75,544
    
    
    $
    96,487
    
    
    $
    102,903
    
    
    $
    109,825Earnings per common share attributable to
Waste Connections common stockholders:Basic
    
    $
    1.20
    
    
    $
    1.11
    
    
    $
    1.41
    
    
    $
    1.47
    
    
    $
    1.38Diluted
    
    $
    1.16
    
    
    $
    1.07
    
    
    $
    1.38
    
    
    $
    1.44
    
    
    $
    1.37Shares used in the per share calculations:Basic(b)
    
    
    70,050,974
    
    
    
    68,136,126
    
    
    
    68,238,523
    
    
    
    70,024,874
    
    
    
    79,413,067Diluted(b)
    
    
    72,316,952
    
    
    
    70,408,673
    
    
    
    69,994,713
    
    
    
    71,419,712
    
    
    
    80,337,441
  27




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##### Table of Contents



YEARS ENDED DECEMBER 31,2005
    
    
    2006
    
    
    2007(a)
    
    
    2008(a)
    
    
    2009 (a)(in thousands, except share and per share data)BALANCE SHEET DATA:Cash and equivalents
    
    $
    7,514
    
    
    $
    34,949
    
    
    $
    10,298
    
    
    $
    265,264
    
    
    $
    9,639Working capital (deficit)
    
    
    (25,625
    )
    
    
    10,368
    
    
    
    (24,849
    )
    
    
    213,747
    
    
    
    (45,059
    )Property and equipment, net
    
    
    700,508
    
    
    
    736,428
    
    
    
    865,330
    
    
    
    984,124
    
    
    
    1,308,392Total assets
    
    
    1,676,307
    
    
    
    1,773,356
    
    
    
    1,981,548
    
    
    
    2,600,357
    
    
    
    2,820,448Long-term debt and notes payable
    
    
    586,104
    
    
    
    617,665
    
    
    
    704,184
    
    
    
    819,828
    
    
    
    867,554Total equity
    
    
    744,557
    
    
    
    776,321
    
    
    
    814,618
    
    
    
    1,261,997
    
    
    
    1,357,036
 (a)
    
    For more information regarding this financial data, see the Managements Discussion and
Analysis of Financial Condition and Results of Operations section included in this report.
For disclosures associated with the impact of the adoption of new accounting pronouncements
and the comparability of this information, see Note 1 of the consolidated financial
statements.(b)
    
    Shares have been adjusted to reflect our three-for-two stock split, paid as a 50% stock
dividend, effective as of March 13, 2007.  28




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##### Table of Contents



ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Industry Overview
   Executive Overview
     2008
    
    
    2009Price
    
    
    5.6
    %
    
    
    2.7
    %Volume
    
    
    (1.9
    %)
    
    
    (6.2
    %)Intermodal, Recycling and Other
    
    
    (0.7
    %)
    
    
    (2.5
    %)Internal Growth
    
    
    3.0
    %
    
    
    (6.0
    %)
  29




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Critical Accounting Estimates and Assumptions
  Insurance liabilities
  30




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##### Table of Contents



Income taxes
 Accounting for landfills
 Landfill development costs
 Final capping, closure and post-closure obligations
  Disposal capacity
 1)
    
    the land where the expansion is being sought is contiguous to the current disposal
site, and we either own the expansion property or it is under an option, purchase,
operating or other similar agreement;
 2)
    
    total development costs, final capping costs, and closure/post-closure costs have been
determined;
  31




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3)
    
    internal personnel have performed a financial analysis of the proposed expansion site
and have determined that it has a positive financial and operational impact;
 4)
    
    internal personnel or external consultants are actively working to obtain the necessary
approvals to obtain the landfill expansion permit; and
 5)
    
    we consider it probable that we will achieve the expansion (for a pursued expansion to
be considered probable, there must be no significant known technical, legal, community,
business or political restrictions or similar issues existing that could impair the success
of the expansion).
   Goodwill and indefinite-lived intangible testing
   
    
    A significant adverse change in legal factors or in the business climate,
 
    
    An adverse action or assessment by a regulator,
 
    
    A more likely than not expectation that a segment or a significant portion thereof will
be sold, or
 
    
    The testing for recoverability of a significant asset group within the segment.
  Business Combination Accounting
  32




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##### Table of Contents



General
      Years Ended December 31,2007
    
    
    2008
    
    
    2009Collection
    
    $
    693,675
    
    
    
    63.8
    %
    
    $
    787,713
    
    
    
    66.4
    %
    
    $
    901,768
    
    
    
    66.1
    %Disposal and transfer
    
    
    298,954
    
    
    
    27.5
    
    
    
    308,811
    
    
    
    26.0
    
    
    
    392,497
    
    
    
    28.8Intermodal, recycling and other
    
    
    95,212
    
    
    
    8.7
    
    
    
    89,594
    
    
    
    7.6
    
    
    
    68,845
    
    
    
    5.11,087,841
    
    
    
    100.0
    %
    
    
    1,186,118
    
    
    
    100.0
    %
    
    
    1,363,110
    
    
    
    100.0
    %Less: intercompany elimination
    
    
    (129,300
    )
    
    
    
    
    
    
    (136,515
    )
    
    
    
    
    
    
    (171,717
    )Total revenue
    
    $
    958,541
    
    
    
    
    
    
    $
    1,049,603
    
    
    
    
    
    
    $
    1,191,393
   33




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Segment Reporting
    34




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##### Table of Contents



Years Ended December 31,2007
    
    
    2008
    
    
    2009Western
    
    $
    477,310
    
    
    $
    512,057
    
    
    $
    617,247Central
    
    
    257,188
    
    
    
    299,010
    
    
    
    291,883Southern
    
    
    224,043
    
    
    
    238,536
    
    
    
    282,263Corporate
    
    
    
    
    
    
    
    
    
    
    $
    958,541
    
    
    $
    1,049,603
    
    
    $
    1,191,393
  Years Ended December 31,2007
    
    
    2008
    
    
    2009Western
    
    $
    143,636
    
    
    $
    148,994
    
    
    $
    181,353Central
    
    
    77,042
    
    
    
    85,950
    
    
    
    95,852Southern
    
    
    71,489
    
    
    
    71,205
    
    
    
    88,546Corporate
    
    
    720
    
    
    
    4,265
    
    
    
    (4,799
    )$
    292,887
    
    
    $
    310,414
    
    
    $
    360,952
   Segment Revenue
      35




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Segment Operating Income (Loss) before Depreciation, Amortization and Gain (Loss) on Disposal
of Assets
        36




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37




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Results of Operations
  Years Ended December 31,As a % of 2007
    
    
    
    
    
    
    As a % of 2008
    
    
    
    
    
    
    As a % of 20092007
    
    
    Revenues
    
    
    2008
    
    
    Revenues
    
    
    2009
    
    
    RevenuesRevenues
    
    $
    958,541
    
    
    
    100.0
    %
    
    $
    1,049,603
    
    
    
    100.0
    %
    
    $
    1,191,393
    
    
    
    100.0
    %Cost of operations
    
    
    566,089
    
    
    
    59.1
    
    
    
    628,075
    
    
    
    59.8
    
    
    
    692,415
    
    
    
    58.1Selling, general and administrative
    
    
    99,565
    
    
    
    10.4
    
    
    
    111,114
    
    
    
    10.6
    
    
    
    138,026
    
    
    
    11.6Depreciation
    
    
    81,287
    
    
    
    8.5
    
    
    
    91,095
    
    
    
    8.7
    
    
    
    117,796
    
    
    
    9.9Amortization of intangibles
    
    
    4,341
    
    
    
    0.4
    
    
    
    6,334
    
    
    
    0.6
    
    
    
    12,962
    
    
    
    1.1Loss (gain) on disposal of assets
    
    
    250
    
    
    
    
    
    
    
    629
    
    
    
    0.1
    
    
    
    (481
    )
    
    
    (0.1
    )Operating income
    
    
    207,009
    
    
    
    21.6
    
    
    
    212,356
    
    
    
    20.2
    
    
    
    230,675
    
    
    
    19.4Interest expense
    
    
    (39,206
    )
    
    
    (4.1
    )
    
    
    (43,102
    )
    
    
    (4.1
    )
    
    
    (49,161
    )
    
    
    (4.1
    )Interest income
    
    
    1,593
    
    
    
    0.2
    
    
    
    3,297
    
    
    
    0.4
    
    
    
    1,413
    
    
    
    0.1Other income (expense), net
    
    
    289
    
    
    
    
    
    
    
    (633
    )
    
    
    (0.1
    )
    
    
    (7,551
    )
    
    
    (0.7
    )Income tax provision
    
    
    (58,328
    )
    
    
    (6.1
    )
    
    
    (56,775
    )
    
    
    (5.4
    )
    
    
    (64,565
    )
    
    
    (5.4
    )Net income attributable to
noncontrolling interests
    
    
    (14,870
    )
    
    
    (1.5
    )
    
    
    (12,240
    )
    
    
    (1.2
    )
    
    
    (986
    )
    
    
    (0.1
    )Net income attributable to Waste
Connections
    
    $
    96,487
    
    
    
    10.1
    %
    
    $
    102,903
    
    
    
    9.8
    %
    
    $
    109,825
    
    
    
    9.2
    %
  Revenues
      Cost of Operations
  38




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SG&A
  Depreciation
  Amortization of Intangibles
 Operating Income
   39




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Interest Expense
 Interest Income
 Other Income (Expense), Net
 Income Tax Provision
    Net Income Attributable to Noncontrolling Interests
  Revenues
    40




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Cost of Operations
  SG&A
  Depreciation
  41




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Amortization of Intangibles
  Operating Income
  Interest Expense
 Interest Income
 Income Tax Provision
  Net Income Attributable to Noncontrolling Interests
 Liquidity and Capital Resources
  2007
    
    
    2008
    
    
    2009Net cash provided by operating activities
    
    $
    219,069
    
    
    $
    270,409
    
    
    $
    303,637Net cash used in investing activities
    
    
    (235,609
    )
    
    
    (467,647
    )
    
    
    (548,227
    )Net cash provided by (used in) financing activities
    
    
    (8,111
    )
    
    
    452,204
    
    
    
    (11,035
    )Net increase (decrease) in cash and equivalents
    
    
    (24,651
    )
    
    
    254,966
    
    
    
    (255,625
    )Cash and equivalents at beginning of year
    
    
    34,949
    
    
    
    10,298
    
    
    
    265,264Cash and equivalents at end of year
    
    $
    10,298
    
    
    $
    265,264
    
    
    $
    9,639
  42




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##### Table of Contents



Operating Activities Cash Flows
  1)
    
    An increase in depreciation and amortization expense of $33.3 million;
 2)
    
    An increase in deferred taxes of $7.9 million primarily due to an increase in tax
deductible timing differences for depreciation and amortization expenses and to recording
basis differences for certain assets related to acquisitions;
 3)
    
    An increase of $2.4 million attributable to a decrease in the excess tax benefit
associated with equity-based compensation, due to a reduction in stock option exercises
resulting in reduced taxable income recognized by employees that is tax deductible to us;
 4)
    
    A decrease in net income of $4.3 million; and
 5)
    
    A decrease in cash flows from operating assets and liabilities, net of effects from
acquisitions, of $7.6 million to $10.8 million for the year ended December 31, 2009, from
$18.4 million for the year ended December 31, 2008. The significant components of the
$10.8 million in cash flows from changes in operating assets and liabilities include the
following:
 a)
    
    an increase from accounts payable of $13.2 million due primarily to the timing of
payments for operating activities;
 b)
    
    an increase from accrued liabilities of $6.5 million due primarily to increased
accruals for cash-based employee incentive compensation expense, increased accruals for
employee benefits, increased accruals for interest expense due to the timing of interest
payments under new debt instruments issued in 2009, increased accruals for property
taxes and increased accruals for auto and workers compensation claims due to the timing
of claims incurred;
 c)
    
    an increase from other long-term liabilities of $3.8 million due primarily to
increased deferred compensation plan liabilities resulting from employee contributions
and plan earnings; less
 d)
    
    a decrease from accounts receivable of $4.3 million due to increased revenues,
partially offset by an improvement in accounts receivable turnover in 2009; less
 e)
    
    a decrease from prepaid expenses and other current assets of $8.0 million due
primarily to an increase in prepaid income taxes and prepaid insurance premiums.
  1)
    
    An increase in the change in deferred income taxes of $19.4 million due primarily to an
increase in tax deductible timing differences for depreciation expense, amortization
expense and landfill closure and post-closure expense;2)
    
    An increase in depreciation and amortization expense of $11.8 million;
 3)
    
    An increase of $7.7 million attributable to a decrease in the excess tax benefit
associated with equity-based compensation, due to a reduction in stock option exercises
resulting in reduced taxable income recognized by employees that is tax deductible by us;4)
    
    An increase in net income of $3.8 million; and
 5)
    
    An increase in cash flows from operating assets and liabilities, net of effects from
acquisitions, of $6.2 million to $18.4 million for the year ended December 31, 2008, from
$12.2 million for the year ended December 31, 2007. The significant components of the
$18.4 million in cash flows from changes in operating assets and liabilities include the
following:
 a)
    
    an increase from accounts receivable of $18.8 million, due to improved accounts
receivable turnover in 2008;
 b)
    
    an increase from accrued liabilities of $6.4 million, due primarily to an
increase in accrued interest due to changes in the payment timing for LIBOR-based
borrowings and our issuance in 2008 of $175 million of senior unsecured notes due
October 1, 2015, which pay interest semi-annually on April 1 and October 1, less,
 c)
    
    a decrease from other long-term liabilities of $6.2 million due primarily to the
2008 expiration of certain accrued tax contingencies and interim capping expenditures at
one of our landfills.
   43




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##### Table of Contents



Investing Activities Cash Flows
  1)
    
    An increase in payments for acquisitions of $64.9 million; and
 2)
    
    An increase in capital expenditures for property and equipment of $14.8 million due to
growth from acquisitions and the acceleration of certain planned 2010 capital expenditures
into 2009 in order to take advantage of accelerated tax deduction benefits.
  1)
    
    An increase in payments for acquisitions of $245.7 million; less
 2)
    
    A decrease in capital expenditures for property and equipment of $10.7 million, due
primarily to non-recurring capital expenditures incurred during the year ended December 31,
2007, associated with a new long-term contract in California.
 Financing Activities Cash Flows
  1)
    
    Net proceeds from the sale of stock in a public offering of $393.9 million during the
year ended December 31, 2008. There were no sales of stock in a public offering during the
year ended December 31, 2009;
 2)
    
    A decrease in net long-term borrowings of $53.6 million, with the net proceeds
primarily used to fund acquisition opportunities;3)
    
    An increase in payments to repurchase our common stock of $31.1 million;
 4)
    
    A decrease in proceeds from option and warrant exercises of $3.7 million due to a
decrease in the number of options and warrants exercised in 2009; less
 5)
    
    A change in book overdraft of $12.3 million resulting from fluctuations in our
outstanding cash balances at banks for which outstanding check balances can be offset;
less,
 6)
    
    A decrease in the amounts distributed to non-controlling interests of $8.2 million due
to the aforementioned purchase of the remaining 49% interest in PCRCD.
  1)
    
    An increase in proceeds from our common stock offering of $393.9 million, due to the
September 2008 sale of 12,650,000 shares of our common stock in a public offering;
 2)
    
    An increase in proceeds from long-term debt, net of principal payments, of $20.7
million; less
 3)
    
    A decrease in payments to repurchase common stock of $78.8 million, due to our election
not to repurchase stock after March 31, 2008, and to use our available capital to fund
acquisition opportunities; less
 4)
    
    A change in book overdraft of $13.3 million resulting from fluctuations in our
outstanding cash balances at banks for which outstanding check balances can be offset; less
 5)
    
    A decrease in proceeds from option and warrant exercises of $16.5 million due to a
decrease in the number of options and warrants exercised in 2008; and
 6)
    
    A decrease in the excess tax benefit associated with equity-based compensation of $7.7
million, due to the aforementioned decrease in options and warrants exercised in 2008.
   44




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45




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##### Table of Contents



th
         Payments Due by PeriodLess Than
    
    
    1 to 3
    
    
    
    
    
    
    Over 5Recorded Obligations
    
    Total
    
    
    1 Year
    
    
    Years
    
    
    3 to 5 Years
    
    
    yearsLong-term debt
    
    $
    876,409
    
    
    $
    2,609
    
    
    $
    473,610
    
    
    $
    3,287
    
    
    $
    396,903Cash interest payments
    
    
    208,150
    
    
    
    42,315
    
    
    
    60,608
    
    
    
    42,322
    
    
    
    62,905
 
  (1)
    
    $269.0 million in principal payments due 2012 related to our credit facility. Our
credit facility bears interest, at our option, at either the base rate plus the applicable
base rate margin (approximately 3.25% at December 31, 2009) on base rate loans, or the
Eurodollar rate plus the applicable Eurodollar margin (approximately 0.86% at December 31,
2009) on Eurodollar loans. As of December 31, 2009, our credit facility allowed us to
borrow up to $845 million.  46




---



##### Table of Contents



(2)
    
    $175.0 million in principal payments due 2019 related to our 2019 Notes. Holders
of the 2019 Notes may require us to purchase their notes in cash at a purchase price of 100%
of the principal amount of the 2019 Notes plus accrued and unpaid interest, if any, upon a
change in control, as defined in the Master Note Purchase Agreement. The 2019 Notes bear
interest at a rate of 5.25%.(3)
    
    $200.0 million in principal payments due 2026 related to our 2026 Notes. Holders
of the 2026 Notes may require us to purchase their notes in cash at a purchase price of 100%
of the principal amount of the 2026 Notes plus accrued and unpaid interest, if any, upon a
change in control, as defined in the Indenture, or, for the first time, on April 1, 2011.
Therefore, we have assumed the 2026 Notes will be redeemed in 2011 in the above table.
Beginning on April 1, 2010, we may redeem in cash all or part of the 2026 Notes at a price
equal to 100% of the principal amount plus accrued and unpaid interest, including additional
interest, if any, and, if redeemed prior to April 1, 2011, an interest make-whole payment.
The 2026 Notes bear interest at a rate of 3.75%. On February 8, 2010, we announced that on April 1, 2010, we intend to redeem all of our 2026 Notes.
Holders may have their 2026 Notes redeemed in cash as described above.  Alternatively, holders may
convert their 2026 Notes prior to 5 p.m., New York City time, on
March 31, 2010.(4)
    
    $175.0 million in principal payments due 2015 related to our 2015 Notes. Holders
of the 2015 Notes may require us to purchase their notes in cash at a purchase price of 100%
of the principal amount of the 2015 Notes plus accrued and
unpaid interest, if any, upon a change in control, as defined in the Master Note
Purchase Agreement. The 2015 Notes bear interest at a rate of 6.22%.(5)
    
    $50.6 million in principal payments related to our tax-exempt bonds, of which $10.3
million bears interest at fixed rates (between 7.0% and 7.25%) and $40.3 million bears
interest at variable rates (between 0.29% to 0.32%) at December 31, 2009. The tax-exempt
bonds have maturity dates ranging from 2012 to 2033. In January 2010, we gave notice to
redeem the $10.3 million of bonds that bear interest at fixed rates between 7.0% and 7.25%.
We will pay the principal plus accrued interest on these bonds on March 1, 2010.(6)
    
    $4.9 million in principal payments related to our notes payable to sellers. Our
notes payable to sellers bear interest at rates between 6.05% and 10.35% at December 31,
2009, and have maturity dates ranging from 2010 to 2036.(7)
    
    $1.9 million in principal payments related to our notes payable to third parties.
Our notes payable to third parties bear interest at rates between 1.0% and 10.9% at December
31, 2009, and have maturity dates ranging from 2010 to 2019.  (1)
    
    We calculated cash interest payments on the credit facility using the Eurodollar
rate plus the applicable Eurodollar margin at December 31, 2009. We assumed the credit
facility is paid off when the credit facility matures in 2012.(2)
    
    We calculated cash interest payments on our interest rate swaps using the stated
interest rate in the swap agreement less the Eurodollar rate through the term of the swaps.(3)
    
    We calculated cash interest payments on the tax-exempt bonds using the interest
rate at December 31, 2009.(4)
    
    Holders of the 2026 Notes may require us to purchase their notes in cash at a
purchase price of 100% of the principal amount of the 2026 Notes plus accrued and unpaid
interest, if any, upon a change in control, as defined in the Indenture, or, for the first
time, on April 1, 2011. Therefore, we have assumed the 2026 Notes will be redeemed in 2011
in the above table. Beginning on April 1, 2010, we may redeem in cash all or part of the 2026 Notes at a price equal to 100% of the principal amount plus accrued
and unpaid interest, including additional interest, if any, and, if redeemed
prior to April 1, 2011, an interest make-whole payment. On February 8, 2010, we
announced that on April 1, 2010, we intend to redeem all of our 2026 Notes.  Holders
may have their 2026 Notes redeemed in cash as described above.
Alternatively, holders may convert their 2026 Notes prior to 5 p.m.,
New York City time, on March 31, 2010.  Amount of Commitment Expiration Per PeriodLess Than
    
    
    1 to 3
    
    
    
    
    
    
    OverUnrecorded Obligations
    
    Total
    
    
    1 Year
    
    
    Years
    
    
    3 to 5 Years
    
    
    5 yearsOperating leases (1)
    
    $
    79,418
    
    
    $
    10,139
    
    
    $
    18,940
    
    
    $
    15,623
    
    
    $
    34,716Unconditional purchase
obligations (1)
    
    
    1,624
    
    
    
    1,624
    
    
    
    
    
    
    
    
    
    
    
    $
    81,042
    
    
    $
    11,763
    
    
    $
    18,940
    
    
    $
    15,623
    
    
    $
    34,716
 
 (1)
    
    We are party to operating lease agreements and unconditional purchase
obligations as discussed in Note 10 to the consolidated financial statements. These
lease agreements and purchase obligations are established in the ordinary course of our
business and are designed to provide us with access to facilities and products at
competitive, market-driven prices. At December 31, 2009, our unconditional purchase
obligations consisted of multiple fixed-price fuel purchase contracts under which we have
0.8 million gallons remaining to be purchased for a total of $1.6 million, plus taxes and
transportation costs upon delivery. The current fuel purchase contracts expire on or
before June 30, 2010. These arrangements have not materially affected our financial
position, results of operations or liquidity during the year ended December 31, 2009, nor
are they expected to have a material impact on our future financial position, results of
operations or liquidity.  47




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New Accounting Pronouncements
    Years Ended December 31,2008
    
    
    2009Net cash provided by operating activities
    
    $
    270,409
    
    
    $
    303,637Change in book overdraft
    
    
    (4,520
    )
    
    
    7,802Plus: Proceeds from disposal of assets
    
    
    2,560
    
    
    
    5,061Plus: Excess tax benefit associated with
equity-based compensation
    
    
    6,441
    
    
    
    4,054Less: Capital expenditures for property and equipment
    
    
    (113,496
    )
    
    
    (128,251
    )Less: Distributions to noncontrolling interests
    
    
    (8,232
    )
    
    
    Free cash flow
    
    $
    153,162
    
    
    $
    192,303
   Years ended December 31,2007
    
    
    2008
    
    
    2009Operating income
    
    $
    207,009
    
    
    $
    212,356
    
    
    $
    230,675Plus: Depreciation
    
    
    81,287
    
    
    
    91,095
    
    
    
    117,796Plus: Amortization of intangibles
    
    
    4,341
    
    
    
    6,334
    
    
    
    12,962Loss (gain) on disposal of assets
    
    
    250
    
    
    
    629
    
    
    
    (481
    )Operating income before
depreciation, amortization and gain
(loss) on disposal of assets
    
    $
    292,887
    
    
    $
    310,414
    
    
    $
    360,952
  48




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##### Table of Contents



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   Fixed
    
    
    VariableNotional
    
    
    Interest
    
    
    Interest RateDate Entered
    
    Amount
    
    
    Rate Paid*
    
    
    Received
    
    Effective Date
    
    Expiration DateNovember 2007
    
    $
    50,000
    
    
    
    4.37
    %
    
    1-month LIBOR
    
    February 2009
    
    February 2011November 2007
    
    $
    50,000
    
    
    
    4.37
    %
    
    1-month LIBOR
    
    February 2009
    
    February 2011November 2007
    
    $
    75,000
    
    
    
    4.37
    %
    
    1-month LIBOR
    
    February 2009
    
    February 2011November 2007
    
    $
    50,000
    
    
    
    4.29
    %
    
    1-month LIBOR
    
    June 2009
    
    June 2011March 2009
    
    $
    175,000
    
    
    
    2.85
    %
    
    1-month LIBOR
    
    February 2011
    
    February 2014
 
 *
    
    plus applicable margin.      49




---



##### Table of Contents



Diesel RatePaidNotional Amount
    
    
    Fixed(in gallons per
    
    
    (per
    
    
    Diesel Rate Received
    
    Effective
    
    ExpirationDate Entered
    
    month)
    
    
    gallon)
    
    
    Variable
    
    Date
    
    DateOctober 2008
    
    
    250,000
    
    
    $
    3.750
    
    
    DOE Diesel Fuel Index*
    
    January 2009
    
    December 2010October 2008
    
    
    100,000
    
    
    
    3.745
    
    
    DOE Diesel Fuel Index*
    
    January 2009
    
    December 2010October 2008
    
    
    250,000
    
    
    
    3.500
    
    
    DOE Diesel Fuel Index*
    
    January 2009
    
    December 2010December 2008
    
    
    100,000
    
    
    
    3.000
    
    
    DOE Diesel Fuel Index*
    
    January 2010
    
    December 2010December 2008
    
    
    150,000
    
    
    
    3.000
    
    
    DOE Diesel Fuel Index*
    
    January 2010
    
    December 2010December 2008
    
    
    150,000
    
    
    
    2.820
    
    
    DOE Diesel Fuel Index*
    
    January 2010
    
    December 2010December 2008
    
    
    150,000
    
    
    
    2.700
    
    
    DOE Diesel Fuel Index*
    
    January 2010
    
    December 2010December 2008
    
    
    400,000
    
    
    
    2.950
    
    
    DOE Diesel Fuel Index*
    
    January 2011
    
    December 2011December 2008
    
    
    400,000
    
    
    
    3.030
    
    
    DOE Diesel Fuel Index*
    
    January 2012
    
    December 2012
 
 *
    
    If the national U.S. on-highway average price for a gallon of diesel fuel (average
price), as published by the Department of Energy, exceeds the contract price per gallon,
we receive the difference between the average price and the contract price (multiplied by
the notional gallons) from the counterparty. If the average price is less than the
contract price per gallon, we pay the difference to the counterparty.      50




---



##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
   PageReport of Independent Registered Public Accounting Firm
    
    
    52Consolidated Balance Sheets as of December 31, 2008 and 2009
    
    
    53Consolidated Statements of Income for the years ended December 31, 2007, 2008 and 2009
    
    
    54Consolidated Statements of Stockholders Equity and Comprehensive Income for the years
ended December 31, 2007, 2008 and 2009
    
    
    55Consolidated Statements of Cash Flows for the years ended December 31, 2007, 2008 and 2009
    
    
    56Notes to Consolidated Financial Statements
    
    
    58Financial Statement Schedule
    
    
    103
  51




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##### Table of Contents



Internal Control  Integrated Framework
    
  52




---



##### Table of Contents



December 31,2008
    
    
    2009(as adjusted)ASSETSCurrent assets:Cash and equivalents
    
    $
    265,264
    
    
    $
    9,639Accounts receivable, net of allowance for doubtful
accounts of $3,846 and $4,058 at December 31, 2008
and 2009, respectively
    
    
    118,456
    
    
    
    138,972Deferred income taxes
    
    
    22,347
    
    
    
    17,748Prepaid expenses and other current assets
    
    
    23,144
    
    
    
    33,495Total current assets
    
    
    429,211
    
    
    
    199,854Property and equipment, net
    
    
    984,124
    
    
    
    1,308,392Goodwill
    
    
    836,930
    
    
    
    906,710Intangible assets, net
    
    
    306,444
    
    
    
    354,303Restricted assets
    
    
    23,009
    
    
    
    27,377Other assets, net
    
    
    20,639
    
    
    
    23,812$
    2,600,357
    
    
    $
    2,820,448LIABILITIES AND EQUITYCurrent liabilities:Accounts payable
    
    $
    65,537
    
    
    $
    86,669Book overdraft
    
    
    4,315
    
    
    
    12,117Accrued liabilities
    
    
    95,220
    
    
    
    93,380Deferred revenue
    
    
    45,694
    
    
    
    50,138Current portion of long-term debt and notes payable
    
    
    4,698
    
    
    
    2,609Total current liabilities
    
    
    215,464
    
    
    
    244,913Long-term debt and notes payable
    
    
    819,828
    
    
    
    867,554Other long-term liabilities
    
    
    47,509
    
    
    
    45,013Deferred income taxes
    
    
    255,559
    
    
    
    305,932Total liabilities
    
    
    1,338,360
    
    
    
    1,463,412Commitments and contingencies (Note 10)Equity:Preferred stock: $0.01 par value per share;
7,500,000 shares authorized; none issued and
outstanding
    
    
    
    
    
    
    Common stock: $0.01 par value per share;
150,000,000 shares authorized; 79,842,239 and
78,599,083 shares issued and outstanding at
December 31, 2008 and 2009, respectively
    
    
    798
    
    
    
    786Additional paid-in capital
    
    
    661,555
    
    
    
    625,173Accumulated other comprehensive loss
    
    
    (23,937
    )
    
    
    (4,892
    )Retained earnings
    
    
    622,913
    
    
    
    732,738Total Waste Connections equity
    
    
    1,261,329
    
    
    
    1,353,805Noncontrolling interests
    
    
    668
    
    
    
    3,231Total equity
    
    
    1,261,997
    
    
    
    1,357,036$
    2,600,357
    
    
    $
    2,820,448
   53




---



##### Table of Contents



Years Ended December 31,2007
    
    
    2008
    
    
    2009(as adjusted)
    
    
    (as adjusted)Revenues
    
    $
    958,541
    
    
    $
    1,049,603
    
    
    $
    1,191,393Operating expenses:Cost of operations
    
    
    566,089
    
    
    
    628,075
    
    
    
    692,415Selling, general and administrative
    
    
    99,565
    
    
    
    111,114
    
    
    
    138,026Depreciation
    
    
    81,287
    
    
    
    91,095
    
    
    
    117,796Amortization of intangibles
    
    
    4,341
    
    
    
    6,334
    
    
    
    12,962Loss (gain) on disposal of assets
    
    
    250
    
    
    
    629
    
    
    
    (481
    )Operating income
    
    
    207,009
    
    
    
    212,356
    
    
    
    230,675Interest expense
    
    
    (39,206
    )
    
    
    (43,102
    )
    
    
    (49,161
    )Interest income
    
    
    1,593
    
    
    
    3,297
    
    
    
    1,413Other income (expense), net
    
    
    289
    
    
    
    (633
    )
    
    
    (7,551
    )Income before income tax provision
    
    
    169,685
    
    
    
    171,918
    
    
    
    175,376Income tax provision
    
    
    (58,328
    )
    
    
    (56,775
    )
    
    
    (64,565
    )Net income
    
    
    111,357
    
    
    
    115,143
    
    
    
    110,811Less: Net income attributable to noncontrolling interests
    
    
    (14,870
    )
    
    
    (12,240
    )
    
    
    (986
    )Net income attributable to Waste Connections
    
    $
    96,487
    
    
    $
    102,903
    
    
    $
    109,825Earnings per common share attributable to Waste Connections
common stockholders:Basic
    
    $
    1.41
    
    
    $
    1.47
    
    
    $
    1.38Diluted
    
    $
    1.38
    
    
    $
    1.44
    
    
    $
    1.37Shares used in the per share calculations:Basic
    
    
    68,238,523
    
    
    
    70,024,874
    
    
    
    79,413,067Diluted
    
    
    69,994,713
    
    
    
    71,419,712
    
    
    
    80,337,441
   54




---



##### Table of Contents



WASTE CONNECTIONS EQUITYACCUMULATEDADDITIONAL
    
    
    OTHER COMPRE-COMPREHENSIVE
    
    
    COMMON STOCK
    
    
    PAID-IN
    
    
    HENSIVE INCOME
    
    
    RETAINED
    
    
    NONCONTROLLINGINCOME
    
    
    SHARES
    
    
    AMOUNT
    
    
    CAPITAL
    
    
    (LOSS)
    
    
    EARNINGS
    
    
    INTERESTS
    
    
    TOTALBalances at December 31, 2006
    
    
    
    
    
    
    68,266,041
    
    
    $
    455
    
    
    $
    310,229
    
    
    $
    3,067
    
    
    $
    422,731
    
    
    $
    27,992
    
    
    $
    764,474Cumulative change from adoption of accounting policy  convertible debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,726
    
    
    
    
    
    
    
    (1,877
    )
    
    
    
    
    
    
    11,849Balances at December 31, 2006 (as adjusted)
    
    
    
    
    
    
    68,266,041
    
    
    $
    455
    
    
    $
    323,955
    
    
    $
    3,067
    
    
    $
    420,854
    
    
    $
    27,992
    
    
    $
    776,323Stock split
    
    
    
    
    
    
    
    
    
    
    228
    
    
    
    
    
    
    
    
    
    
    
    (228
    )
    
    
    
    
    
    
    Vesting of restricted stock
    
    
    
    
    
    
    168,268
    
    
    
    2
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cancellation of restricted stock and warrants
    
    
    
    
    
    
    (54,498
    )
    
    
    (1
    )
    
    
    (1,636
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,637
    )Equity-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,128
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,128Exercise of stock options and warrants
    
    
    
    
    
    
    2,246,454
    
    
    
    22
    
    
    
    35,598
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,620Excess tax benefit associated with equity-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,137
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,137Repurchase of common stock
    
    
    
    
    
    
    (3,574,130
    )
    
    
    (36
    )
    
    
    (110,293
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (110,329
    )Issuance of common stock warrants to consultants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    123
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    123Cumulative change from adoption of accounting policy  income tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,897
    
    
    
    
    
    
    
    2,897Amounts reclassified into earnings, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,320
    )
    
    
    
    
    
    
    
    
    
    
    (2,320
    )Changes in fair value of interest rate swaps, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,037
    )
    
    
    
    
    
    
    
    
    
    
    (5,037
    )Distributions to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,642
    )
    
    
    (12,642
    )Net income
    
    $
    111,357
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    96,487
    
    
    
    14,870
    
    
    
    111,357Other comprehensive loss
    
    
    (11,981
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Income tax effect of other comprehensive loss
    
    
    4,624
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive income
    
    
    104,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive income attributable to noncontrolling interests
    
    
    (14,870
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive income attributable to Waste Connections
    
    $
    89,130
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balances at December 31, 2007 (as adjusted)
    
    
    
    
    
    
    67,052,135
    
    
    $
    670
    
    
    $
    268,010
    
    
    $
    (4,290
    )
    
    $
    520,010
    
    
    $
    30,220
    
    
    $
    814,620Vesting of restricted stock
    
    
    
    
    
    
    222,863
    
    
    
    2
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cancellation of restricted stock and warrants
    
    
    
    
    
    
    (72,082
    )
    
    
    (1
    )
    
    
    (2,192
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,193
    )Equity-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,854
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,854Exercise of stock options and warrants
    
    
    
    
    
    
    1,030,594
    
    
    
    10
    
    
    
    19,079
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,089Issuance of common stock, net of issuance costs of $17,195
    
    
    
    
    
    
    12,650,000
    
    
    
    127
    
    
    
    393,803
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    393,930Excess tax benefit associated with equity-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,441
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,441Repurchase of common stock
    
    
    
    
    
    
    (1,041,271
    )
    
    
    (10
    )
    
    
    (31,517
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31,527
    )Issuance of common stock warrants to consultants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    79
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    79Amounts reclassified into earnings, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,010
    
    
    
    
    
    
    
    
    
    
    
    4,010Changes in fair value of swaps, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (23,657
    )
    
    
    
    
    
    
    
    
    
    
    (23,657
    )Distributions to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,232
    )
    
    
    (8,232
    )Changes in ownership interest in noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33,560
    )
    
    
    (33,560
    )Net income
    
    $
    115,143
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    102,903
    
    
    
    12,240
    
    
    
    115,143Other comprehensive loss
    
    
    (31,609
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Income tax effect of other comprehensive loss
    
    
    11,962
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive income
    
    
    95,496
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive income attributable to noncontrolling interests
    
    
    (12,240
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive income attributable to Waste Connections
    
    $
    83,256
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balances at December 31, 2008 (as adjusted)
    
    
    
    
    
    
    79,842,239
    
    
    $
    798
    
    
    $
    661,555
    
    
    $
    (23,937
    )
    
    $
    622,913
    
    
    $
    668
    
    
    $
    1,261,997Vesting of restricted stock
    
    
    
    
    
    
    273,641
    
    
    
    3
    
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cancellation of restricted stock and warrants
    
    
    
    
    
    
    (92,489
    )
    
    
    (1
    )
    
    
    (2,556
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,557
    )Equity-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,336
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,336Exercise of stock options and warrants
    
    
    
    
    
    
    824,520
    
    
    
    8
    
    
    
    15,389
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,397Excess tax benefit associated with equity-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,054
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,054Repurchase of common stock
    
    
    
    
    
    
    (2,248,828
    )
    
    
    (22
    )
    
    
    (62,602
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (62,624
    )Amounts reclassified into earnings, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,416
    
    
    
    
    
    
    
    
    
    
    
    14,416Changes in fair value of swaps, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,629
    
    
    
    
    
    
    
    
    
    
    
    4,629Fair value of noncontrolling interest associated with business acquired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,577
    
    
    
    1,577Net income
    
    $
    110,811
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    109,825
    
    
    
    986
    
    
    
    110,811Other comprehensive income
    
    
    30,743
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Income tax effect of other comprehensive income
    
    
    (11,698
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive income
    
    
    129,856
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive income attributable to noncontrolling interests
    
    
    (986
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive income attributable to Waste Connections
    
    $
    128,870
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balances at December 31, 2009
    
    
    
    
    
    
    78,599,083
    
    
    $
    786
    
    
    $
    625,173
    
    
    $
    (4,892
    )
    
    $
    732,738
    
    
    $
    3,231
    
    
    $
    1,357,036
   55




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##### Table of Contents



Years Ended December 31,2007
    
    
    2008
    
    
    2009(as adjusted)
    
    
    (as adjusted)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    111,357
    
    
    $
    115,143
    
    
    $
    110,811Adjustments to reconcile net income to net cash provided by operating
activities:Loss (gain) on disposal of assets
    
    
    250
    
    
    
    629
    
    
    
    (481
    )Depreciation
    
    
    81,287
    
    
    
    91,095
    
    
    
    117,796Amortization of intangibles
    
    
    4,341
    
    
    
    6,334
    
    
    
    12,962Deferred income taxes, net of acquisitions
    
    
    10,851
    
    
    
    30,277
    
    
    
    38,224Amortization of debt issuance costs
    
    
    2,056
    
    
    
    1,840
    
    
    
    1,942Amortization of debt discount
    
    
    4,309
    
    
    
    4,404
    
    
    
    4,684Equity-based compensation
    
    
    6,128
    
    
    
    7,854
    
    
    
    9,336Interest income on restricted assets
    
    
    (684
    )
    
    
    (543
    )
    
    
    (488
    )Closure and post-closure accretion
    
    
    1,155
    
    
    
    1,400
    
    
    
    2,055Excess tax benefit associated with equity-based compensation
    
    
    (14,137
    )
    
    
    (6,441
    )
    
    
    (4,054
    )Changes in operating assets and liabilities, net of effects from acquisitions:Accounts receivable, net
    
    
    (17,514
    )
    
    
    18,768
    
    
    
    (4,328
    )Prepaid expenses and other current assets
    
    
    (8,077
    )
    
    
    335
    
    
    
    (8,032
    )Accounts payable
    
    
    2,888
    
    
    
    (54
    )
    
    
    13,218Deferred revenue
    
    
    7,870
    
    
    
    (829
    )
    
    
    (309
    )Accrued liabilities
    
    
    27,162
    
    
    
    6,426
    
    
    
    6,513Other long-term liabilities
    
    
    (173
    )
    
    
    (6,229
    )
    
    
    3,788Net cash provided by operating activities
    
    
    219,069
    
    
    
    270,409
    
    
    
    303,637CASH FLOWS FROM INVESTING ACTIVITIES:Payments for acquisitions, net of cash acquired
    
    
    (109,429
    )
    
    
    (355,150
    )
    
    
    (420,011
    )Capital expenditures for property and equipment
    
    
    (124,234
    )
    
    
    (113,496
    )
    
    
    (128,251
    )Proceeds from disposal of assets
    
    
    1,016
    
    
    
    2,560
    
    
    
    5,061Increase in restricted assets, net of interest income
    
    
    (2,698
    )
    
    
    (2,653
    )
    
    
    (3,880
    )Decrease (increase) in other assets
    
    
    (264
    )
    
    
    1,092
    
    
    
    (1,146
    )Net cash used in investing activities
    
    
    (235,609
    )
    
    
    (467,647
    )
    
    
    (548,227
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from long-term debt
    
    
    626,000
    
    
    
    302,000
    
    
    
    426,500Principal payments on notes payable and long-term debt
    
    
    (568,607
    )
    
    
    (223,854
    )
    
    
    (401,970
    )Change in book overdraft
    
    
    8,835
    
    
    
    (4,520
    )
    
    
    7,802Proceeds from option and warrant exercises
    
    
    35,620
    
    
    
    19,089
    
    
    
    15,397Excess tax benefit associated with equity-based compensation
    
    
    14,137
    
    
    
    6,441
    
    
    
    4,054Distributions to noncontrolling interests
    
    
    (12,642
    )
    
    
    (8,232
    )
    
    
    Payments for repurchase of common stock
    
    
    (110,329
    )
    
    
    (31,527
    )
    
    
    (62,624
    )Proceeds from secondary stock offering, net
    
    
    
    
    
    
    393,930
    
    
    
    Debt issuance costs
    
    
    (1,125
    )
    
    
    (1,123
    )
    
    
    (194
    )Net cash (used in) provided by financing activities
    
    
    (8,111
    )
    
    
    452,204
    
    
    
    (11,035
    )Net increase (decrease) in cash and equivalents
    
    
    (24,651
    )
    
    
    254,966
    
    
    
    (255,625
    )Cash and equivalents at beginning of year
    
    
    34,949
    
    
    
    10,298
    
    
    
    265,264Cash and equivalents at end of year
    
    $
    10,298
    
    
    $
    265,264
    
    
    $
    9,639
   56




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##### Table of Contents



SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION AND NON-CASH TRANSACTIONS:
 Years Ended December 31,2007
    
    
    2008
    
    
    2009Cash paid for income taxes
    
    $
    35,260
    
    
    $
    24,635
    
    
    $
    26,848Cash paid for interest
    
    $
    33,418
    
    
    $
    32,626
    
    
    $
    41,662In connection with its acquisitions, the Company assumed liabilities as follows:Fair value of assets acquired
    
    $
    162,425
    
    
    $
    359,114
    
    
    $
    461,120Cash paid and warrants issued for current year acquisitions
    
    
    (107,772
    )
    
    
    (320,620
    )
    
    
    (416,853
    )Liabilities assumed and notes payable issued to sellers of businesses acquired
    
    $
    54,653
    
    
    $
    38,494
    
    
    $
    44,267
   57




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##### Table of Contents



1. ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Organization and Business
  Basis of Presentation
  Cash Equivalents
  Concentrations of Credit Risk
  Revenue Recognition and Accounts Receivable
   Property and Equipment
   58




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##### Table of Contents



Buildings
    
    10  20 yearsLand and leasehold improvements
    
    3  20 yearsMachinery and equipment
    
    3  12 yearsRolling stock
    
    3  10 yearsContainers
    
    5  12 yearsRail cars
    
    20 years
 Landfill Accounting
  
    
    Landfill development costs. Landfill development costs include the costs of
acquisition, construction associated with excavation, liners, site berms, groundwater
monitoring wells and leachate collection systems. The Company estimates the total costs
associated with developing each landfill site to its final capacity. This includes certain
projected landfill site costs that are uncertain because they are dependent on future
events and thus actual costs could vary significantly from estimates. The total cost to
develop a site to its final capacity includes amounts previously expended and capitalized,
net of accumulated depletion, and projections of future purchase and development costs,
liner construction costs, operating construction costs and capitalized interest costs.
Total landfill costs include the development costs associated with expansion airspace.
Expansion airspace is addressed below.
 
    
    Final capping, closure and post-closure obligations. The Company accrues for
estimated final capping, closure and post-closure maintenance obligations at the landfills
it owns and the landfills that it operates, but does not own under life-of-site agreements.
Accrued final capping, closure and post-closure costs represent an estimate of the current
value of the future obligation associated with final capping, closure and post-closure
monitoring of non-hazardous solid waste landfills currently owned or operated under
life-of-site agreements by the Company. Final capping costs represent the costs related to
installation of clay liners, drainage and compacted soil layers and topsoil constructed
over areas of the landfill where total airspace capacity has been consumed. Closure and
post-closure monitoring and maintenance costs represent the costs related to cash
expenditures yet to be incurred when a landfill facility ceases to accept waste and closes.
Accruals for final capping, closure and post-closure monitoring and maintenance
requirements in the U.S. consider site inspection, groundwater monitoring, leachate
management, methane gas control and recovery, and operating and maintenance costs to be
incurred during the period after the facility closes. Certain of these environmental
costs, principally capping and methane gas control costs, are also incurred during the
operating life of the site in accordance with the landfill operation requirements of
Subtitle D and the air emissions standards. Daily maintenance activities, which include
many of these costs, are expensed as incurred during the operating life of the landfill.
Daily maintenance activities include leachate disposal; surface water, groundwater, and
methane gas monitoring and maintenance; other pollution control activities; mowing and
fertilizing the landfill final cap; fence and road maintenance; and third party inspection
and reporting costs. Site specific final capping, closure and post-closure engineering
cost estimates are prepared annually for landfills owned or operated under life-of-site
agreements by the Company for which it is responsible for final capping, closure and
post-closure.
  59




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##### Table of Contents



Final capping, closure and post-closure liability at December 31,
2007
    
    $
    17,853Adjustments to final capping, closure and post-closure liabilities
    
    
    1,812Liabilities incurred
    
    
    1,598Accretion expense
    
    
    1,400Closure payments
    
    
    (1,361
    )Assumption of closure liabilities from acquisitions
    
    
    700Final capping, closure and post-closure liability at December 31,
2008
    
    
    22,002Adjustments to final capping, closure and post-closure liabilities
    
    
    (1,285
    )Liabilities incurred
    
    
    1,944Accretion expense
    
    
    2,055Closure payments
    
    
    (969
    )Assumption of closure liabilities from acquisitions
    
    
    8,488Final capping, closure and post-closure liability at December 31,
2009
    
    $
    32,235
   60




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##### Table of Contents




    
    Disposal capacity. The Companys internal and third-party engineers perform
surveys at least annually to estimate the disposal capacity at its landfills. This is done
by using surveys and other methods to calculate, based on the terms of the permit, height
restrictions and other factors, how much airspace is left to fill and how much waste can be
disposed of at a landfill before it has reached its final capacity. The Companys landfill
depletion rates are based on the remaining disposal capacity, considering both permitted
and expansion airspace, at the landfills it owns, and certain landfills it operates, but
does not own, under life-of-site agreements. The Companys landfill depletion rates are
based on the term of the operating agreement at its operated landfills that have
capitalized expenditures. Expansion airspace consists of additional disposal capacity
being pursued through means of an expansion that is not actually permitted. Expansion
airspace that meets certain internal criteria is included in the estimate of total landfill
airspace. The Companys internal criteria to determine when expansion airspace may be
included as disposal capacity is as follows:
 1)
    
    The land where the expansion is being sought is contiguous to the current
disposal site, and the Company either owns the expansion property or is under an option,
purchase, operating or other similar agreement;
 2)
    
    Total development costs, final capping costs, and closure/post-closure costs have
been determined;
 3)
    
    Internal personnel have performed a financial analysis of the proposed expansion
site and have determined that it has a positive financial and operational impact;
 4)
    
    Internal personnel or external consultants are actively working to obtain the
necessary approvals to obtain the landfill expansion permit; and
 5)
    
    Obtaining the expansion is considered probable (for a pursued expansion to be
considered probable, there must be no significant known technical, legal, community,
business, or political restrictions or similar issues existing that could impair the
success of the expansion).
   Business Combination Accounting
  
    
    The Company recognizes, separately from goodwill, the identifiable assets acquired and
liabilities assumed at their estimated acquisition-date fair values. The Company measures
and recognizes goodwill as of the acquisition date as the excess of: (a) the aggregate of
the fair value of consideration transferred, the fair value of any noncontrolling interest
in the acquiree (if any) and the acquisition-date fair value of the Companys previously
held equity interest in the acquiree (if any), over (b) the fair value of net assets
acquired and liabilities assumed.
 
    
    At the acquisition date, the Company measures at their acquisition-date fair values all
assets acquired and liabilities assumed that arise from contractual contingencies. The
Company measures at their acquisition-date fair values all noncontractual contingencies if,
as of the acquisition date, it is more likely than not that the contingency will give rise
to an asset or liability.
  61




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##### Table of Contents



Goodwill and Indefinite-Lived Intangible Assets
     
    
    A significant adverse change in legal factors or in the business climate,
 
    
    An adverse action or assessment by a regulator,
 
    
    A more likely than not expectation that a segment or a significant portion thereof will
be sold, or
 
    
    The testing for recoverability of a significant asset group within the segment.
  Impairments of Property, Plant and Equipment and Other Intangible Assets
   62




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##### Table of Contents




    
    A significant adverse change in legal factors or in the business climate;
 
    
    An adverse action or assessment by a regulator;
 
    
    A more likely than not expectation that a segment or a significant portion thereof will
be sold; or
 
    
    The testing for recoverability of a significant asset group within a segment.
    Restricted Assets
  Fair Value of Financial Instruments
   63




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##### Table of Contents



Derivative Financial Instruments
    Fixed
    
    
    VariableNotional
    
    
    Interest
    
    
    Interest RateDate Entered
    
    Amount
    
    
    Rate Paid*
    
    
    Received
    
    Effective Date
    
    Expiration DateNovember 2007
    
    $
    50,000
    
    
    
    4.37
    %
    
    1-month LIBOR
    
    February 2009
    
    February 2011November 2007
    
    $
    50,000
    
    
    
    4.37
    %
    
    1-month LIBOR
    
    February 2009
    
    February 2011November 2007
    
    $
    75,000
    
    
    
    4.37
    %
    
    1-month LIBOR
    
    February 2009
    
    February 2011November 2007
    
    $
    50,000
    
    
    
    4.29
    %
    
    1-month LIBOR
    
    June 2009
    
    June 2011March 2009
    
    $
    175,000
    
    
    
    2.85
    %
    
    1-month LIBOR
    
    February 2011
    
    February 2014
 
 *
    
    plus applicable margin.    64




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##### Table of Contents



Notional
    
    
    DieselAmount
    
    
    Rate Paid(in gallons per
    
    
    Fixed (per
    
    
    Diesel Rate Received
    
    Effective
    
    ExpirationDate Entered
    
    month)
    
    
    gallon)
    
    
    Variable
    
    Date
    
    DateOctober 2008
    
    
    250,000
    
    
    $
    3.750
    
    
    DOE Diesel Fuel Index*
    
    January 2009
    
    December 2010October 2008
    
    
    100,000
    
    
    
    3.745
    
    
    DOE Diesel Fuel Index*
    
    January 2009
    
    December 2010October 2008
    
    
    250,000
    
    
    
    3.500
    
    
    DOE Diesel Fuel Index*
    
    January 2009
    
    December 2010December 2008
    
    
    100,000
    
    
    
    3.000
    
    
    DOE Diesel Fuel Index*
    
    January 2010
    
    December 2010December 2008
    
    
    150,000
    
    
    
    3.000
    
    
    DOE Diesel Fuel Index*
    
    January 2010
    
    December 2010December 2008
    
    
    150,000
    
    
    
    2.820
    
    
    DOE Diesel Fuel Index*
    
    January 2010
    
    December 2010December 2008
    
    
    150,000
    
    
    
    2.700
    
    
    DOE Diesel Fuel Index*
    
    January 2010
    
    December 2010December 2008
    
    
    400,000
    
    
    
    2.950
    
    
    DOE Diesel Fuel Index*
    
    January 2011
    
    December 2011December 2008
    
    
    400,000
    
    
    
    3.030
    
    
    DOE Diesel Fuel Index*
    
    January 2012
    
    December 2012
 
 *
    
    If the national U.S. on-highway average price for a gallon of diesel fuel (average
price), as published by the Department of Energy, exceeds the contract price per gallon,
the Company receives the difference between the average price and the contract price
(multiplied by the notional gallons) from the counterparty. If the average price is less
than the contract price per gallon, the Company pays the difference to the counterparty.  DerivativesDesignated as Cash
    
    Asset Derivatives
    
    
    Liability DerivativesFlow Hedges
    
    Balance Sheet Location
    
    Fair Value
    
    
    Balance Sheet Location
    
    Fair ValueInterest rate swaps
    
    Other assets, net
    
    $
    1,647
    
    
    Accrued liabilities(a)
    
    $
    (8,235
    )Other assets, net
    
    
    (1,173
    )Fuel hedges
    
    Accrued liabilities(b)
    
    
    1,406
    
    
    Accrued liabilities(b)
    
    
    (3,884
    )Other assets, net
    
    
    2,374Total derivatives
designated as cash
flow hedges
    
    
    
    $
    5,427
    
    
    
    
    $
    (13,292
    )
 
 (a)
    
    Represents the estimated amount of the existing unrealized losses on interest rate
swaps as of December 31, 2009 (based on the interest rate yield curve at that date), included in
accumulated other comprehensive loss expected to be reclassified into pre-tax earnings within
the next 12 months. The actual amounts reclassified into earnings are dependent on future
movements in interest rates.(b)
    
    The net balance of $2,478 represents the estimated amount of the existing unrealized
losses on fuel hedges as of December 31, 2009 (based on the forward DOE diesel fuel index curve
at that date), included in accumulated other comprehensive loss expected to be reclassified into
pre-tax earnings within the next 12 months. The actual amounts reclassified into earnings are
dependent on future movements in diesel fuel prices.  65




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##### Table of Contents



Amount of Gain
Recognized in
AOCL on
Derivatives,
Net of Tax
    
    
    Statement of Income
    
    Amount of Gain
Reclassified
from AOCL
into Earnings,
Net of TaxDerivatives Designated as Cash Flow Hedges
    
    (Effective Portion)(a)
    
    
    Classification
    
    (Effective Portion)(b), (c)Interest rate swaps
    
    $
    3,283
    
    
    Interest expense
    
    $
    9,124Fuel hedges
    
    
    1,346
    
    
    Cost of operations
    
    
    5,292Total
    
    $
    4,629
    
    
    
    
    $
    14,416
 
 (a)
    
    In accordance with the derivatives and hedging guidance, the effective portions of the
changes in fair values of interest rate swaps and fuel hedges have been recorded in equity as a
component of AOCL. As the critical terms of the interest rate swaps match the underlying debt
being hedged, no ineffectiveness is recognized on these swaps and, therefore, all unrealized
changes in fair value are recorded in AOCL. Because changes in the actual price of diesel fuel
and changes in the DOE index price do not offset exactly each reporting period, the Company
assesses whether the fuel hedges are highly effective using the cumulative dollar offset
approach.(b)
    
    Amounts reclassified from AOCL into earnings related to realized gains and losses on
interest rate swaps are recognized when interest payments or receipts occur related to the swap
contracts, which correspond to when interest payments are made on the Companys hedged debt.(c)
    
    Amounts reclassified from AOCL into earnings related to realized gains and losses on
fuel hedges are recognized when settlement payments or receipts occur related to the hedge
contracts, which correspond to when the underlying fuel is consumed.   Income Taxes
   Stock-Based Compensation
    66




---



##### Table of Contents



Per Share Information
  Advertising Costs
  Insurance Liabilities
  Reclassifications
  New Accounting Pronouncements
 Business
Combinations
  67




---



##### Table of Contents



Fair Value Measurements and Disclosures
   Consolidation  Noncontrolling Interests
 Derivatives and Hedging
  68




---



##### Table of Contents



Convertible Debt
  Intangible Assets
 Subsequent Events
 2. USE OF ESTIMATES AND ASSUMPTIONS
   69




---



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3. ACQUISITIONS
        70




---



##### Table of Contents



2007
    
    
    2008
    
    
    2009Acquisitions
    
    
    Acquisitions
    
    
    AcquisitionsFair value of consideration transferred:Cash
    
    $
    107,649
    
    
    $
    320,541
    
    
    $
    416,853Debt assumed
    
    
    31,249
    
    
    
    22,688
    
    
    
    16,423Notes issued to sellers
    
    
    
    
    
    
    1,788
    
    
    
    Contingent consideration
    
    
    
    
    
    
    
    
    
    
    4,274Common stock warrants
    
    
    123
    
    
    
    79
    
    
    
    139,021
    
    
    
    345,096
    
    
    
    437,550Recognized amounts of identifiable assets
acquired, liabilities assumed and
noncontrolling interests associated with
businesses acquired:Accounts receivable
    
    
    6,099
    
    
    
    13,781
    
    
    
    16,187Other current assets
    
    
    724
    
    
    
    1,527
    
    
    
    2,319Property and equipment
    
    
    82,749
    
    
    
    98,448
    
    
    
    308,454Long-term franchise agreements and contracts
    
    
    3,667
    
    
    
    117,416
    
    
    
    9,325Indefinite-lived intangibles
    
    
    
    
    
    
    92,312
    
    
    
    Customer lists
    
    
    3,592
    
    
    
    9,044
    
    
    
    33,730Other intangibles
    
    
    
    
    
    
    
    
    
    
    19,132Non-competition agreements
    
    
    4,941
    
    
    
    48
    
    
    
    Other assets
    
    
    
    
    
    
    514
    
    
    
    667Deferred revenue
    
    
    (4,043
    )
    
    
    (2,449
    )
    
    
    (4,754
    )Accounts payable
    
    
    (2,283
    )
    
    
    (6,692
    )
    
    
    (1,264
    )Accrued liabilities
    
    
    (4,812
    )
    
    
    (3,526
    )
    
    
    (2,436
    )Noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    (1,577
    )Other long-term liabilities
    
    
    (4,193
    )
    
    
    (700
    )
    
    
    (8,489
    )Deferred income taxes
    
    
    (8,073
    )
    
    
    (651
    )
    
    
    (5,050
    )Total identifiable net assets
    
    
    78,368
    
    
    
    319,072
    
    
    
    366,244Goodwill
    
    $
    60,653
    
    
    $
    26,024
    
    
    $
    71,306
    71




---



##### Table of Contents



2007
    
    
    2008
    
    
    2009Acquisitions
    
    
    Acquisitions
    
    
    AcquisitionsCash consideration transferred
    
    $
    107,649
    
    
    $
    320,541
    
    
    $
    416,853Elimination of noncontrolling interests
    
    
    
    
    
    
    33,560
    
    
    
    Payment of contingent consideration
    
    
    
    
    
    
    
    
    
    
    2,000Payment of acquisition-related liabilities
    
    
    1,780
    
    
    
    1,049
    
    
    
    1,158Payments for acquisitions, net of cash acquired
    
    $
    109,429
    
    
    $
    355,150
    
    
    $
    420,011
   4. INTANGIBLE ASSETS
  Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingAmount
    
    
    Amortization
    
    
    AmountAmortizable intangible assets:Long-term franchise agreements and contracts
    
    $
    187,105
    
    
    $
    (18,751
    )
    
    $
    168,354Customer lists
    
    
    57,572
    
    
    
    (11,265
    )
    
    
    46,307Non-competition agreements
    
    
    9,732
    
    
    
    (5,740
    )
    
    
    3,992Other
    
    
    21,236
    
    
    
    (1,746
    )
    
    
    19,490275,645
    
    
    
    (37,502
    )
    
    
    238,143Nonamortized intangible assets:Indefinite-lived intangible assets
    
    
    116,160
    
    
    
    
    
    
    
    116,160Intangible assets, exclusive of goodwill
    
    $
    391,805
    
    
    $
    (37,502
    )
    
    $
    354,303
   72




---



##### Table of Contents



Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingAmount
    
    
    Amortization
    
    
    AmountAmortizable intangible assets:Long-term franchise agreements and contracts
    
    $
    179,674
    
    
    $
    (12,751
    )
    
    $
    166,923Customer lists
    
    
    22,083
    
    
    
    (4,951
    )
    
    
    17,132Non-competition agreements
    
    
    9,751
    
    
    
    (5,157
    )
    
    
    4,594Other
    
    
    4,024
    
    
    
    (2,389
    )
    
    
    1,635215,532
    
    
    
    (25,248
    )
    
    
    190,284Nonamortized intangible assets:Indefinite-lived intangible assets
    
    
    116,160
    
    
    
    
    
    
    
    116,160Intangible assets, exclusive of goodwill
    
    $
    331,692
    
    
    $
    (25,248
    )
    
    $
    306,444
    For the year ending December 31, 2010
    
    $
    14,299For the year ending December 31, 2011
    
    $
    14,126For the year ending December 31, 2012
    
    $
    13,807For the year ending December 31, 2013
    
    $
    12,385For the year ending December 31, 2014
    
    $
    11,806
 5. PROPERTY AND EQUIPMENT
  Year Ended December 31,2008
    
    
    2009Landfill site costs
    
    $
    655,773
    
    
    $
    923,670Rolling stock
    
    
    343,692
    
    
    
    406,010Land, buildings and improvements
    
    
    155,712
    
    
    
    197,214Containers
    
    
    155,646
    
    
    
    175,542Machinery and equipment
    
    
    138,094
    
    
    
    180,801Construction in progress
    
    
    8,594
    
    
    
    5,8311,457,511
    
    
    
    1,889,068Less accumulated depreciation and depletion
    
    
    (473,387
    )
    
    
    (580,676
    )$
    984,124
    
    
    $
    1,308,392
   73




---



##### Table of Contents



6. OTHER ASSETS, NET
  Year Ended December 31,2008
    
    
    2009Deferred financing costs
    
    $
    6,845
    
    
    $
    5,096Investment in unconsolidated entity
    
    
    5,300
    
    
    
    5,300Landfill closure receivable
    
    
    4,358
    
    
    
    4,619Deposits
    
    
    916
    
    
    
    1,597Unrealized interest rate and fuel hedge gains
    
    
    
    
    
    
    2,849Other
    
    
    3,220
    
    
    
    4,351$
    20,639
    
    
    $
    23,812
 7. ACCRUED LIABILITIES
  Year Ended December 31,2008
    
    
    2009Insurance claims
    
    $
    33,841
    
    
    $
    35,834Payroll and payroll-related
    
    
    20,198
    
    
    
    23,692Interest payable
    
    
    6,934
    
    
    
    7,806Acquisition-related
    
    
    4,227
    
    
    
    4,913Unrealized interest rate and fuel hedge losses
    
    
    21,120
    
    
    
    10,714Other
    
    
    8,900
    
    
    
    10,421$
    95,220
    
    
    $
    93,380
 8. LONG-TERM DEBT
  Year Ended December 31,2008
    
    
    2009Revolver under Credit Facility
    
    $
    400,000
    
    
    $
    269,0002026 Notes, net of discount of $10,930 and
$6,246 as of December 31, 2008 and 2009,
respectively
    
    
    189,070
    
    
    
    193,7542015 Notes
    
    
    175,000
    
    
    
    175,0002019 Notes
    
    
    
    
    
    
    175,000Tax-exempt bonds
    
    
    53,960
    
    
    
    50,615Notes payable to sellers in connection with
acquisitions, uncollateralized, bearing
interest at 6.05% to 10.35%, principal and
interest payments due periodically with due
dates ranging from 2010 to 2036
    
    
    4,888
    
    
    
    4,872Notes payable to third parties,
collateralized by substantially all assets
of certain subsidiaries of the Company,
bearing interest at 1.0% to 10.9%,
principal and interest payments due
periodically with due dates ranging from
2010 to 2019
    
    
    1,608
    
    
    
    1,922824,526
    
    
    
    870,163Less  current portion
    
    
    (4,698
    )
    
    
    (2,609
    )$
    819,828
    
    
    $
    867,554
  74




---



##### Table of Contents



Credit Facility
     Convertible Senior Notes due 2026
     75




---



##### Table of Contents



th
        76




---



##### Table of Contents



December 31, 2008Balance as Reported
    
    
    
    
    
    
    December 31, 2008in the 2008 Annual
    
    
    Cumulative
    
    
    Balance as Presented inReport on Form
    
    
    Retrospective
    
    
    the 2009 Annual ReportConsolidated Balance Sheet
    
    10-K
    
    
    Adjustment
    
    
    on Form 10-KOther assets, net
    
    $
    20,922
    
    
    $
    (283
    )
    
    $
    20,639Long-term debt and notes payable
    
    $
    830,758
    
    
    $
    (10,930
    )
    
    $
    819,828Deferred income taxes
    
    $
    251,514
    
    
    $
    4,045
    
    
    $
    255,559Additional paid-in capital
    
    $
    647,829
    
    
    $
    13,726
    
    
    $
    661,555Retained earnings
    
    $
    630,037
    
    
    $
    (7,124
    )
    
    $
    622,913
 Balance for the YearEnded December 31,
    
    
    
    
    
    
    Balance for the Year2007, as Reported
    
    
    
    
    
    
    Ended December 31,in the 2008
    
    
    
    
    
    
    2007, as Presented inConsolidated Statement of
    
    Annual Report on
    
    
    Retrospective
    
    
    the 2009 Annual ReportIncome
    
    Form 10-K
    
    
    Adjustment
    
    
    on Form 10-KInterest expense
    
    $
    35,023
    
    
    $
    4,183
    
    
    $
    39,206Income tax provision
    
    $
    59,917
    
    
    $
    (1,589
    )
    
    $
    58,328Basic earnings per share
    
    $
    1.45
    
    
    $
    (0.04
    )
    
    $
    1.41Diluted earnings per share
    
    $
    1.42
    
    
    $
    (0.04
    )
    
    $
    1.38
 Balance for the YearEnded December 31,
    
    
    
    
    
    
    Balance for the Year2008, as Reported
    
    
    
    
    
    
    Ended December 31,in the 2008
    
    
    
    
    
    
    2008, as Presented inConsolidated Statement of
    
    Annual Report on
    
    
    Retrospective
    
    
    the 2009 Annual ReportIncome
    
    Form 10-K
    
    
    Adjustment
    
    
    on Form 10-KInterest expense
    
    $
    38,824
    
    
    $
    4,278
    
    
    $
    43,102Income tax provision
    
    $
    58,400
    
    
    $
    (1,625
    )
    
    $
    56,775Basic earnings per share
    
    $
    1.51
    
    
    $
    (0.04
    )
    
    $
    1.47Diluted earnings per share
    
    $
    1.48
    
    
    $
    (0.04
    )
    
    $
    1.44
 Balance for the YearEnded December 31,
    
    
    
    
    
    
    Balance for the Year2007, as Reported
    
    
    
    
    
    
    Ended December 31,in the 2008
    
    
    
    
    
    
    2007, as Presented inConsolidated Statement of
    
    Annual Report on
    
    
    Retrospective
    
    
    the 2009 Annual ReportCash Flows
    
    Form 10-K
    
    
    Adjustment
    
    
    on Form 10-KDeferred income taxes,
net of acquisitions
    
    $
    12,440
    
    
    $
    (1,589
    )
    
    $
    10,851Amortization of debt
issuance costs
    
    $
    2,182
    
    
    $
    (126
    )
    
    $
    2,056Amortization of debt discount
    
    $
    
    
    
    $
    4,309
    
    
    $
    4,309
 Balance for the YearEnded December 31,
    
    
    
    
    
    
    Balance for the Year2008, as Reported
    
    
    
    
    
    
    Ended December 31,in the 2008
    
    
    
    
    
    
    2008, as Presented inConsolidated Statement of
    
    Annual Report on
    
    
    Retrospective
    
    
    the 2009 Annual ReportCash Flows
    
    Form 10-K
    
    
    Adjustment
    
    
    on Form 10-KDeferred income taxes,
net of acquisitions
    
    $
    31,902
    
    
    $
    (1,625
    )
    
    $
    30,277Amortization of debt
issuance costs
    
    $
    1,966
    
    
    $
    (126
    )
    
    $
    1,840Amortization of debt discount
    
    $
    
    
    
    $
    4,404
    
    
    $
    4,404
  77




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##### Table of Contents



December 31, 2009
    
    
    
    
    
    
    December 31, 2009Balance as Reported in
    
    
    
    
    
    
    Balance Prior tothe 2009 Annual
    
    
    
    
    
    
    Adoption of NewReport on
    
    
    
    
    
    
    Convertible DebtConsolidated Balance Sheet
    
    Form 10-K
    
    
    Adjustment
    
    
    PronouncementOther assets, net
    
    $
    23,812
    
    
    $
    157
    
    
    $
    23,969Long-term debt and notes payable
    
    $
    867,554
    
    
    $
    6,246
    
    
    $
    873,800Deferred income tax liabilities
    
    $
    305,932
    
    
    $
    (2,314
    )
    
    $
    303,618Additional paid-in capital
    
    $
    625,173
    
    
    $
    (13,726
    )
    
    $
    611,447Retained earnings
    
    $
    732,738
    
    
    $
    9,951
    
    
    $
    742,689Balance for the Year
    
    
    
    
    
    
    Balance for the YearEnded December 31,
    
    
    
    
    
    
    Ended December 31,2009, as Reported in
    
    
    
    
    
    
    2009 Prior to AdoptionConsolidated Statement of
    
    the 2009 Annual
    
    
    
    
    
    
    of New ConvertibleIncome
    
    Report on Form 10-K
    
    
    Adjustment
    
    
    Debt PronouncementInterest expense
    
    $
    49,161
    
    
    $
    (4,558
    )
    
    $
    44,603Income tax provision
    
    $
    64,565
    
    
    $
    1,732
    
    
    $
    66,297Basic earnings per share
    
    $
    1.38
    
    
    $
    0.04
    
    
    $
    1.42Diluted earnings per share
    
    $
    1.37
    
    
    $
    0.04
    
    
    $
    1.41Balance for the Year
    
    
    
    
    
    
    Balance for the YearEnded December 31,
    
    
    
    
    
    
    Ended December 31,2009, as Reported in
    
    
    
    
    
    
    2009 Prior to AdoptionConsolidated Statement of
    
    the 2009 Annual
    
    
    
    
    
    
    of New ConvertibleCash Flows
    
    Report on Form 10-K
    
    
    Adjustment
    
    
    Debt PronouncementDeferred income taxes,
net of acquisitions
    
    $
    38,224
    
    
    $
    1,732
    
    
    $
    39,956Amortization of debt
issuance costs
    
    $
    1,942
    
    
    $
    126
    
    
    $
    2,068Amortization of debt discount
    
    $
    4,684
    
    
    $
    (4,684
    )
    
    $
    
   December 31, 2008
    
    
    December 31, 2009Carrying amount of equity component
    
    $
    13,726
    
    
    $
    13,726Principal amount of liability component
    
    $
    200,000
    
    
    $
    200,000Unamortized
discount on liability component
    
    
    (10,930
    )
    
    
    (6,246
    )Net carrying amount of liability component
    
    $
    189,070
    
    
    $
    193,754
  78




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##### Table of Contents



Master Note Purchase Agreement
 Senior Notes due 2015
   Senior Notes due 2019
     79




---



##### Table of Contents



Tax-Exempt Bonds
  Interest Rate
    
    
    
    
    
    
    
    
    
    
    
    
    BackedType of
    
    on Bond at
    
    
    
    
    Outstanding Balance at
    
    
    by LetterInterest
    
    December 31,
    
    
    Maturity Date of
    
    December 31,
    
    
    of CreditName of Bond
    
    Rate
    
    2009
    
    
    Bond
    
    2008
    
    
    2009
    
    
    (Amount)Wasco Bond 2012
    
    Fixed
    
    
    7.00
    %
    
    March 1, 2012
    
    $
    2,325
    
    
    $
    1,800
    
    
    $
    Wasco Bond 2021
    
    Fixed
    
    
    7.25
    
    
    March 1, 2021
    
    
    8,475
    
    
    
    8,475
    
    
    
    Madera Bond
    
    Variable
    
    
    0.32
    
    
    May 1, 2016
    
    
    1,800
    
    
    
    1,800
    
    
    
    1,829Tehama Bond
    
    Variable
    
    
    0.32
    
    
    June 1, 2014
    
    
    580
    
    
    
    515
    
    
    
    523San Jose Bonds
    
    Variable
    
    
    0.32
    
    
    September 1, 2016
    
    
    7,020
    
    
    
    4,475
    
    
    
    4,750West Valley Bond
    
    Variable
    
    
    0.30
    
    
    August 1, 2018
    
    
    15,500
    
    
    
    15,500
    
    
    
    15,678LeMay Washington Bond
    
    Variable
    
    
    0.29
    
    
    April 1, 2033
    
    
    15,930
    
    
    
    15,930
    
    
    
    16,126LeMay Olympia Bond
    
    Variable
    
    
    0.29
    
    
    April 1, 2019
    
    
    2,330
    
    
    
    2,120
    
    
    
    2,151$
    53,960
    
    
    $
    50,615
    
    
    $
    41,057
    2010
    
    $
    2,6092011
    
    
    202,2002012
    
    
    271,4102013
    
    
    1,5552014
    
    
    1,732Thereafter
    
    
    396,903$
    876,409
  9. FAIR VALUE OF FINANCIAL INSTRUMENTS
   80




---



##### Table of Contents



Fair Value Measurement at December 31, 2008 UsingQuoted Prices in
    
    
    SignificantActive Markets
    
    
    Other
    
    
    Significantfor Identical
    
    
    Observable
    
    
    UnobservableAssets
    
    
    Inputs
    
    
    InputsTotal
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Interest rate swap
derivative
instruments -
liability position
    
    $
    (27,796
    )
    
    $
    
    
    
    $
    (27,796
    )
    
    $
    Fuel hedge
derivative
instruments -net
liability position
    
    $
    (10,812
    )
    
    $
    
    
    
    $
    
    
    
    $
    (10,812
    )Cash equivalent
money market funds
    
    $
    256,060
    
    
    $
    256,060
    
    
    $
    
    
    
    $
    Restricted assets
    
    $
    21,429
    
    
    $
    21,429
    
    
    $
    
    
    
    $
    
 Fair Value Measurement at December 31, 2009 UsingQuoted Prices in
    
    
    SignificantActive Markets
    
    
    Other
    
    
    Significantfor Identical
    
    
    Observable
    
    
    UnobservableAssets
    
    
    Inputs
    
    
    InputsTotal
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Interest rate swap
derivative
instruments  net
liability position
    
    $
    (7,761
    )
    
    $
    
    
    
    $
    (7,761
    )
    
    $
    Fuel hedge
derivative
instruments  net
liability position
    
    $
    (104
    )
    
    $
    
    
    
    $
    
    
    
    $
    (104
    )Restricted assets
    
    $
    27,617
    
    
    $
    27,617
    
    
    $
    
    
    
    $
    
  81




---



##### Table of Contents



Level 3DerivativesBalance as of December 31, 2007
    
    $
    Realized losses included in earnings
    
    
    Unrealized losses included in AOCL
    
    
    (10,812
    )Balance as of December 31, 2008
    
    
    (10,812
    )Realized losses included in earnings
    
    
    8,509Unrealized gains included in AOCL
    
    
    2,199Balance as of December 31, 2009
    
    $
    (104
    )
  10. COMMITMENTS AND CONTINGENCIES
 COMMITMENTS
 Leases
   2010
    
    $
    10,1392011
    
    
    9,2722012
    
    
    9,6682013
    
    
    8,5042014
    
    
    7,119Thereafter
    
    
    34,716$
    79,418
 Financial Surety Bonds
     82




---



##### Table of Contents



Unconditional Purchase Obligations
  CONTINGENCIES
 Environmental Risks
  Legal Proceedings
 Colonias Dev. Council v. Rhino Envtl. Servs., Inc. (In re Rhino Envtl. Servs.) 2005 NMSC 24, 117
P.3d 939
 Board of Commrs of Sumner County, Kansas,
Tri-County Concerned Citizens and Dalton Holland v. Roderick Bremby, Secy of the Kansas Dept of
Health and Envt, et al.
  83




---



##### Table of Contents



Heath Belcher and Denessa Arguello v. Waste
Connections, Inc., and Waste Connections of California, Inc.
  Sustainability, Parks, Recycling and Wildlife Legal Defense Fund [SPRAWLDEF] v.
County of Solano, Board of Supervisors for the County of Solano Northern California
Recycling Association v. County of Solano Sierra Club v. County of Solano
  84




---



##### Table of Contents



Potrero Hills Landfill, Inc. et al. v. County of Solano
 Protect the Marsh, et al. v. County of Solano, et al. Protect the Marsh
   Collective Bargaining Agreements
   85




---



##### Table of Contents



11. STOCKHOLDERS EQUITY
 Stock Split
  Share Repurchase Program
  Common Stock
  Stock option and restricted stock unit plans
    
    
    5,621,2192026 Notes
    
    
    5,882,354Consultant Incentive Plan
    
    
    269,8222002 Restricted Stock Plan
    
    
    10,53111,783,926
  Restricted Stock and Stock Options
   86




---



##### Table of Contents



Year Ended December 31,2007
    
    
    2008
    
    
    2009Restricted shares granted
    
    
    
    
    
    
    
    
    
    
    Weighted average grant-date fair value of
shares granted
    
    $
    
    
    
    $
    
    
    
    $
    Total fair value of restricted shares granted
    
    $
    
    
    
    $
    
    
    
    $
    Restricted shares becoming free of restrictions
    
    
    41,263
    
    
    
    4,872
    
    
    
    Weighted average restriction period (in years)
    
    
    
    
    
    
    
    
    
    
    
     87




---



##### Table of Contents



Year Ended December 31,2007
    
    
    2008
    
    
    2009Restricted stock units granted
    
    
    426,802
    
    
    
    379,949
    
    
    
    391,684Weighted average grant-date fair value of
restricted stock units granted
    
    $
    29.08
    
    
    $
    28.99
    
    
    $
    26.26Total fair value of restricted stock units granted
    
    $
    12,413
    
    
    $
    11,013
    
    
    $
    10,265Restricted stock units becoming free of
restrictions
    
    
    127,005
    
    
    
    217,991
    
    
    
    272,757Weighted average restriction period (in years)
    
    
    4.5
    
    
    
    4.4
    
    
    
    4.4
   WeightedNumber of
    
    
    AverageShares (Options)
    
    
    Exercise PriceOutstanding as of December 31, 2006
    
    
    6,649,513
    
    
    $
    17.99Granted
    
    
    
    
    
    
    Forfeited
    
    
    (8,186
    )
    
    
    22.73Exercised
    
    
    (2,237,618
    )
    
    
    15.92Outstanding as of December 31, 2007
    
    
    4,403,709
    
    
    
    19.04Granted
    
    
    
    
    
    
    Forfeited
    
    
    (26,814
    )
    
    
    22.53Exercised
    
    
    (1,022,481
    )
    
    
    18.67Outstanding as of December 31, 2008
    
    
    3,354,414
    
    
    
    19.12Granted
    
    
    
    
    
    
    Forfeited
    
    
    (2,063
    )
    
    
    22.85Exercised
    
    
    (823,782
    )
    
    
    18.37Outstanding as of December 31, 2009
    
    
    2,528,569
    
    
    
    19.35
  88




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##### Table of Contents



Options Outstanding
    
    
    Options ExercisableWeightedAverage
    
    
    
    
    
    
    
    
    
    
    WeightedWeighted
    
    
    Remaining
    
    
    
    
    
    
    Weighted
    
    
    AverageAverage
    
    
    Contractual
    
    
    
    
    
    
    Average
    
    
    RemainingExercise
    
    
    Life
    
    
    
    
    
    
    Exercise
    
    
    ContractualExercise Price
    
    Shares
    
    
    Price
    
    
    (in years)
    
    
    Shares
    
    
    Price
    
    
    Life (in years)$5.00 to $14.00
    
    
    56,735
    
    
    $
    10.82
    
    
    
    1.9
    
    
    
    56,735
    
    
    $
    10.82
    
    
    
    1.9$14.01 to $16.00
    
    
    297,941
    
    
    
    14.67
    
    
    
    3.0
    
    
    
    297,941
    
    
    
    14.67
    
    
    
    3.0$16.01 to $20.00
    
    
    814,226
    
    
    
    16.63
    
    
    
    4.1
    
    
    
    814,226
    
    
    
    16.63
    
    
    
    4.1$20.01 to $30.00
    
    
    1,359,667
    
    
    
    22.36
    
    
    
    5.4
    
    
    
    1,250,126
    
    
    
    22.29
    
    
    
    5.42,528,569
    
    
    
    19.35
    
    
    
    4.6
    
    
    
    2,419,028
    
    
    
    19.18
    
    
    
    4.6
   Weighted-AverageUnvested
    
    
    
    
    
    
    
    
    
    
    ExerciseShares
    
    
    Vested Shares
    
    
    Total Shares
    
    
    PriceOutstanding at
December 31, 2008
    
    
    223,199
    
    
    
    3,131,215
    
    
    
    3,354,414
    
    
    $
    19.12Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    (1,500
    )
    
    
    (563
    )
    
    
    (2,063
    )
    
    
    22.85Vested
    
    
    (112,158
    )
    
    
    112,158
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    (823,782
    )
    
    
    (823,782
    )
    
    
    18.37Outstanding at
December 31, 2009
    
    
    109,541
    
    
    
    2,419,028
    
    
    
    2,528,569
    
    
    
    19.35
   Weighted-AverageGrant Date FairUnvested Shares
    
    
    Value Per ShareOutstanding at December 31, 2008
    
    
    906,572
    
    
    $
    27.45Granted
    
    
    391,684
    
    
    
    26.26Forfeited
    
    
    (30,821
    )
    
    
    27.82Vested
    
    
    (272,757
    )
    
    
    26.91Outstanding at December 31, 2009
    
    
    994,678
    
    
    
    27.12
  89




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##### Table of Contents



Stock Purchase Warrants
   Weighted-AverageWarrants
    
    
    Exercise PriceOutstanding at December 31, 2008
    
    
    44,123
    
    
    $
    28.28Granted
    
    
    3,726
    
    
    
    27.06Forfeited
    
    
    
    
    
    
    Exercised
    
    
    (5,250
    )
    
    
    21.96Outstanding at December 31, 2009
    
    
    42,599
    
    
    
    28.96
  Fair ValueofWarrants
    
    
    
    
    Warrants
    
    
    Outstanding at December 31,Grant Date
    
    Issued
    
    
    Exercise Price
    
    Issued
    
    
    2008
    
    
    2009Throughout 2005
    
    
    22,200
    
    
    $19.75 to 25.25
    
    $
    136
    
    
    
    5,550
    
    
    
    300Throughout 2006
    
    
    15,395
    
    
    22.73 to 27.47
    
    
    115
    
    
    
    15,171
    
    
    
    15,171Throughout 2007
    
    
    14,137
    
    
    29.70 to 34.02
    
    
    123
    
    
    
    14,135
    
    
    
    14,135Throughout 2008
    
    
    9,267
    
    
    28.46 to 34.05
    
    
    79
    
    
    
    9,267
    
    
    
    9,267Throughout 2009
    
    
    3,726
    
    
    22.01 to 29.41
    
    
    22
    
    
    
    
    
    
    
    3,72644,123
    
    
    
    42,599
    90




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##### Table of Contents



12. COMPREHENSIVE INCOME
  Year Ended December 31, 2007Gross
    
    
    Tax effect
    
    
    Net of taxInterest rate swap amounts reclassified
into interest expense
    
    $
    (3,785
    )
    
    $
    1,465
    
    
    $
    (2,320
    )Changes in fair value of interest rate swaps
    
    
    (8,196
    )
    
    
    3,159
    
    
    
    (5,037
    )$
    (11,981
    )
    
    $
    4,624
    
    
    $
    (7,357
    )
 Year Ended December 31, 2008Gross
    
    
    Tax effect
    
    
    Net of taxInterest rate swap amounts reclassified
into interest expense
    
    $
    6,468
    
    
    $
    (2,458
    )
    
    $
    4,010Changes in fair value of interest rate swaps
    
    
    (27,264
    )
    
    
    10,311
    
    
    
    (16,953
    )Changes in fair value of fuel hedges
    
    
    (10,813
    )
    
    
    4,109
    
    
    
    (6,704
    )$
    (31,609
    )
    
    $
    11,962
    
    
    $
    (19,647
    )
 Year Ended December 31, 2009Gross
    
    
    Tax effect
    
    
    Net of taxInterest rate swap amounts reclassified
into interest expense
    
    $
    14,669
    
    
    $
    (5,545
    )
    
    $
    9,124Fuel hedge amounts reclassified into cost
of operations
    
    
    8,508
    
    
    
    (3,216
    )
    
    
    5,292Changes in fair value of interest rate swaps
    
    
    5,367
    
    
    
    (2,084
    )
    
    
    3,283Changes in fair value of fuel hedges
    
    
    2,199
    
    
    
    (853
    )
    
    
    1,346$
    30,743
    
    
    $
    (11,698
    )
    
    $
    19,045
  AccumulatedOtherInterest
    
    
    ComprehensiveFuel Hedges
    
    
    Rate Swaps
    
    
    LossBalance at December 31, 2007
    
    $
    
    
    
    $
    (4,290
    )
    
    $
    (4,290
    )Amounts reclassified into earnings
    
    
    
    
    
    
    4,010
    
    
    
    4,010Changes in fair value
    
    
    (6,704
    )
    
    
    (16,953
    )
    
    
    (23,657
    )Balance at December 31, 2008
    
    
    (6,704
    )
    
    
    (17,233
    )
    
    
    (23,937
    )Amounts reclassified into earnings
    
    
    5,292
    
    
    
    9,124
    
    
    
    14,416Changes in fair value
    
    
    1,346
    
    
    
    3,283
    
    
    
    4,629Balance at December 31, 2009
    
    $
    (66
    )
    
    $
    (4,826
    )
    
    $
    (4,892
    )
  91




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##### Table of Contents



13. INCOME TAXES
  Years Ended December 31,2007
    
    
    2008
    
    
    2009Current:Federal
    
    $
    40,526
    
    
    $
    22,492
    
    
    $
    22,544State
    
    
    6,951
    
    
    
    4,006
    
    
    
    3,797Deferred:Federal
    
    
    9,487
    
    
    
    28,031
    
    
    
    35,388State
    
    
    1,364
    
    
    
    2,246
    
    
    
    2,836Provision for income taxes
    
    $
    58,328
    
    
    $
    56,775
    
    
    $
    64,565
  2008
    
    
    2009Deferred income tax assets:Accounts receivable reserves
    
    $
    1,461
    
    
    $
    1,534Accrued expenses
    
    
    10,885
    
    
    
    12,044Self-insurance reserves
    
    
    4,391
    
    
    
    4,165Equity-based compensation
    
    
    3,220
    
    
    
    3,916Interest rate and fuel hedges
    
    
    14,671
    
    
    
    2,973Leases
    
    
    
    
    
    
    1,641State taxes
    
    
    1,333
    
    
    
    1,415Other
    
    
    
    
    
    
    1,548Gross deferred income tax assets
    
    
    35,961
    
    
    
    29,236Less: Valuation allowance
    
    
    
    
    
    
    Net deferred income tax assets
    
    
    35,961
    
    
    
    29,236Deferred income tax liabilities:Goodwill and other intangibles
    
    
    (106,799
    )
    
    
    (128,635
    )Property and equipment
    
    
    (138,547
    )
    
    
    (164,216
    )Landfill closure/post-closure
    
    
    (14,196
    )
    
    
    (15,193
    )Prepaid expenses
    
    
    (6,970
    )
    
    
    (9,376
    )Other
    
    
    (2,661
    )
    
    
    Total deferred income tax liabilities
    
    
    (269,173
    )
    
    
    (317,420
    )Net deferred income tax liability
    
    $
    (233,212
    )
    
    $
    (288,184
    )
   92




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##### Table of Contents



Years Ended December 31,2007
    
    
    2008
    
    
    2009Income tax provision at the
statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State taxes, net of federal benefit
    
    
    3.5
    
    
    
    3.0
    
    
    
    3.0Deferred income tax liability
adjustments
    
    
    (1.2
    )
    
    
    (2.2
    )
    
    
    (0.7
    )Noncontrolling interests
    
    
    (3.0
    )
    
    
    (2.5
    )
    
    
    (0.2
    )Other
    
    
    0.1
    
    
    
    (0.3
    )
    
    
    (0.3
    )34.4
    %
    
    
    33.0
    %
    
    
    36.8
    %
       93




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##### Table of Contents



2007
    
    
    2008
    
    
    2009Unrecognized tax benefits at beginning of period
    
    $
    6,702
    
    
    $
    6,716
    
    
    $
    1,764Gross increases  tax positions in prior periods
    
    
    918
    
    
    
    
    
    
    
    562Gross decreases  tax positions in prior periods
    
    
    
    
    
    
    (37
    )
    
    
    Lapse of statute of limitations
    
    
    (904
    )
    
    
    (4,915
    )
    
    
    (1,384
    )Unrecognized tax benefits at end of period
    
    $
    6,716
    
    
    $
    1,764
    
    
    $
    942
 14. SEGMENT REPORTING
     Operating Income(Loss) BeforeDepreciation,Year Ended
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization andDecember 31,
    
    
    
    
    
    Intercompany
    
    
    Net
    
    
    Gain (Loss) on
    
    
    Depreciation and
    
    
    Capital
    
    
    Total2007
    
    Gross Revenues
    
    
    Revenues(b)
    
    
    Revenues
    
    
    Disposal of Assets(c)
    
    
    Amortization
    
    
    Expenditures
    
    
    Assets(e)Western
    
    $
    527,880
    
    
    $
    (50,570
    )
    
    $
    477,310
    
    
    $
    143,636
    
    
    $
    35,315
    
    
    $
    58,085
    
    
    $
    724,928Central
    
    
    290,619
    
    
    
    (33,431
    )
    
    
    257,188
    
    
    
    77,042
    
    
    
    25,470
    
    
    
    35,594
    
    
    
    585,333Southern
    
    
    269,342
    
    
    
    (45,299
    )
    
    
    224,043
    
    
    
    71,489
    
    
    
    23,722
    
    
    
    27,861
    
    
    
    585,076Corporate(a), (d)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    720
    
    
    
    1,121
    
    
    
    2,694
    
    
    
    86,211$
    1,087,841
    
    
    $
    (129,300
    )
    
    $
    958,541
    
    
    $
    292,887
    
    
    $
    85,628
    
    
    $
    124,234
    
    
    $
    1,981,548
 Operating Income(Loss) BeforeDepreciation,Year Ended
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization andDecember 31,
    
    
    
    
    
    Intercompany
    
    
    Net
    
    
    Gain (Loss) on
    
    
    Depreciation and
    
    
    Capital
    
    
    Total2008
    
    Gross Revenues
    
    
    Revenues(b)
    
    
    Revenues
    
    
    Disposal of Assets(c)
    
    
    Amortization
    
    
    Expenditures
    
    
    Assets(e)Western
    
    $
    567,341
    
    
    $
    (55,362
    )
    
    $
    511,979
    
    
    $
    148,994
    
    
    $
    41,488
    
    
    $
    42,651
    
    
    $
    1,075,168Central
    
    
    337,246
    
    
    
    (38,193
    )
    
    
    299,053
    
    
    
    85,950
    
    
    
    29,571
    
    
    
    41,107
    
    
    
    614,738Southern
    
    
    281,531
    
    
    
    (42,960
    )
    
    
    238,571
    
    
    
    71,205
    
    
    
    25,105
    
    
    
    28,715
    
    
    
    599,623Corporate(a), (d)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,265
    
    
    
    1,265
    
    
    
    1,023
    
    
    
    310,828$
    1,186,118
    
    
    $
    (136,515
    )
    
    $
    1,049,603
    
    
    $
    310,414
    
    
    $
    97,429
    
    
    $
    113,496
    
    
    $
    2,600,357
  94




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##### Table of Contents



Operating Income(Loss) BeforeDepreciation,Year Ended
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization andDecember 31,
    
    
    
    
    
    Intercompany
    
    
    Net
    
    
    Gain (Loss) on
    
    
    Depreciation and
    
    
    Capital
    
    
    Total2009
    
    Gross Revenues
    
    
    Revenues(b)
    
    
    Revenues
    
    
    Disposal of Assets(c)
    
    
    Amortization
    
    
    Expenditures
    
    
    Assets(e)Western
    
    $
    701,141
    
    
    $
    (83,894
    )
    
    $
    617,247
    
    
    $
    181,353
    
    
    $
    62,382
    
    
    $
    62,112
    
    
    $
    1,365,159Central
    
    
    326,064
    
    
    
    (34,181
    )
    
    
    291,883
    
    
    
    95,852
    
    
    
    33,520
    
    
    
    33,051
    
    
    
    654,286Southern
    
    
    335,905
    
    
    
    (53,642
    )
    
    
    282,263
    
    
    
    88,546
    
    
    
    33,345
    
    
    
    29,365
    
    
    
    747,008Corporate(a), (d)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,799
    )
    
    
    1,511
    
    
    
    3,723
    
    
    
    53,995$
    1,363,110
    
    
    $
    (171,717
    )
    
    $
    1,191,393
    
    
    $
    360,952
    
    
    $
    130,758
    
    
    $
    128,251
    
    
    $
    2,820,448
 
 (a)
    
    Corporate functions include accounting, legal, tax, treasury, information
technology, risk management, human resources, training and other typical administrative
functions.(b)
    
    Intercompany revenues reflect each segments total intercompany sales, including
intercompany sales within a segment and between segments. Transactions within and between
segments are generally made on a basis intended to reflect the market value of the service.(c)
    
    For those items included in the determination of operating income (loss) before
depreciation, amortization and gain (loss) on disposal of assets, the accounting policies of
the segments are the same as those described in Note 1.(d)
    
    Corporate assets include cash, net deferred tax assets, loan fees, equity
investments, and corporate facility leasehold improvements and equipment.(e)
    
    Goodwill is included within total assets for each of the Companys three geographic
operating segments. During the second quarter of 2008, the Company realigned its
organizational structure, which reduced the number of its geographic operating segments from
four to three. This realignment resulted in the reallocation of goodwill among its
segments.  Western
    
    
    Central
    
    
    Southern
    
    
    TotalBalance as of December 31, 2007
    
    $
    237,148
    
    
    $
    306,930
    
    
    $
    266,972
    
    
    $
    811,049Goodwill acquired
    
    
    20,555
    
    
    
    6,215
    
    
    
    
    
    
    
    26,770Goodwill adjustments
    
    
    
    
    
    
    
    
    
    
    (747
    )
    
    
    (747
    )Goodwill divested
    
    
    (143
    )
    
    
    
    
    
    
    
    
    
    
    (143
    )Balance as of December 31, 2008
    
    
    257,560
    
    
    
    313,145
    
    
    
    266,225
    
    
    
    836,930Goodwill acquired
    
    
    34,221
    
    
    
    221
    
    
    
    36,864
    
    
    
    71,306Goodwill divested
    
    
    
    
    
    
    
    
    
    
    (1,526
    )
    
    
    (1,526
    )Balance as of December 31, 2009
    
    $
    291,781
    
    
    $
    313,366
    
    
    $
    301,563
    
    
    $
    906,710
   95




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##### Table of Contents



Years ended December 31,2007
    
    
    2008
    
    
    2009Operating income before
depreciation, amortization and
gain (loss) on disposal of assets
    
    $
    292,887
    
    
    $
    310,414
    
    
    $
    360,952Depreciation
    
    
    (81,287
    )
    
    
    (91,095
    )
    
    
    (117,796
    )Amortization of intangibles
    
    
    (4,341
    )
    
    
    (6,334
    )
    
    
    (12,962
    )Gain (loss) on disposal of assets
    
    
    (250
    )
    
    
    (629
    )
    
    
    481Interest expense
    
    
    (39,206
    )
    
    
    (43,102
    )
    
    
    (49,161
    )Interest income
    
    
    1,593
    
    
    
    3,297
    
    
    
    1,413Other income (expense)
    
    
    289
    
    
    
    (633
    )
    
    
    (7,551
    )Income before income tax provision
    
    $
    169,685
    
    
    $
    171,918
    
    
    $
    175,376
  Years Ended December 31,2007
    
    
    2008
    
    
    2009Collection
    
    $
    693,675
    
    
    $
    787,713
    
    
    $
    901,768Disposal and transfer
    
    
    298,954
    
    
    
    308,811
    
    
    
    392,497Intermodal, recycling and other
    
    
    95,212
    
    
    
    89,594
    
    
    
    68,8451,087,841
    
    
    
    1,186,118
    
    
    
    1,363,110Less: intercompany elimination
    
    
    (129,300
    )
    
    
    (136,515
    )
    
    
    (171,717
    )Total revenues
    
    $
    958,541
    
    
    $
    1,049,603
    
    
    $
    1,191,393
 15. NET INCOME PER SHARE INFORMATION
  Years Ended December 31,2007
    
    
    2008
    
    
    2009Numerator:Net income attributable to Waste Connections
for basic and diluted earnings per share
    
    $
    96,487
    
    
    $
    102,903
    
    
    $
    109,825Denominator:Basic shares outstanding
    
    
    68,238,523
    
    
    
    70,024,874
    
    
    
    79,413,067Dilutive effect of 2026 Notes
    
    
    
    
    
    
    41,270
    
    
    
    Dilutive effect of stock options and warrants
    
    
    1,592,418
    
    
    
    1,161,858
    
    
    
    772,063Dilutive effect of restricted stock
    
    
    163,772
    
    
    
    191,710
    
    
    
    152,311Diluted shares outstanding
    
    
    69,994,713
    
    
    
    71,419,712
    
    
    
    80,337,441
  96




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##### Table of Contents



December 31, 2007
    
    December 31, 2008
    
    December 31, 2009Number
    
    
    Exercise Price
    
    Number of
    
    
    Exercise Price
    
    Number of
    
    
    Exercise Priceof Shares
    
    
    Range
    
    Shares
    
    
    Range
    
    Shares
    
    
    RangeOutstanding options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding warrants
    
    
    8,777
    
    
    $31.09 to $34.02
    
    
    2,977
    
    
    $34.02 to $34.05
    
    
    25,493
    
    
    $28.21 to $34.058,777
    
    
    
    
    
    2,977
    
    
    
    
    
    25,493
 16. EMPLOYEE BENEFIT PLANS
     97




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##### Table of Contents



17. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
  First Quarter
    
    
    Second Quarter
    
    
    Third Quarter
    
    
    Fourth QuarterRevenues
    
    $
    250,300
    
    
    $
    267,033
    
    
    $
    272,702
    
    
    $
    259,568Operating income
    
    
    50,798
    
    
    
    55,590
    
    
    
    56,695
    
    
    
    49,273Net income
    
    
    25,828
    
    
    
    29,377
    
    
    
    31,422
    
    
    
    28,516Net income
attributable to
Waste Connections
    
    
    22,455
    
    
    
    25,571
    
    
    
    27,609
    
    
    
    27,268Basic income per
common share
attributable to
Waste Connections
common stockholders
    
    
    0.34
    
    
    
    0.38
    
    
    
    0.41
    
    
    
    0.34Diluted income per
common share
attributable to
Waste Connections
common stockholders
    
    
    0.33
    
    
    
    0.38
    
    
    
    0.40
    
    
    
    0.34
  First Quarter
    
    
    Second Quarter
    
    
    Third Quarter
    
    
    Fourth QuarterRevenues
    
    $
    262,675
    
    
    $
    302,830
    
    
    $
    315,990
    
    
    $
    309,897Operating income
    
    
    47,634
    
    
    
    59,418
    
    
    
    64,761
    
    
    
    58,861Net income
    
    
    22,312
    
    
    
    30,682
    
    
    
    34,263
    
    
    
    23,554Net income
attributable to
Waste Connections
    
    
    21,978
    
    
    
    30,438
    
    
    
    34,150
    
    
    
    23,259Basic income per
common share
attributable to
Waste Connections
common stockholders
    
    
    0.27
    
    
    
    0.38
    
    
    
    0.43
    
    
    
    0.30Diluted income per
common share
attributable to
Waste Connections
common stockholders
    
    
    0.27
    
    
    
    0.38
    
    
    
    0.43
    
    
    
    0.29
  98




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##### Table of Contents



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Managements Report on Internal Control over Financial Reporting
    Changes in Internal Control Over Financial Reporting
  
 ITEM 9B. OTHER INFORMATION
     99




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
  http://www.wasteconnections.com
  
 ITEM 11. EXECUTIVE COMPENSATION
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  
 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
   100




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a)
    
    See Index to Consolidated Financial Statements on page 51. The following
Financial Statement Schedule is filed herewith on page 103 and made a part of this
Report:
   (b)
    
    See Exhibit Index immediately following signature pages.
  101




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##### Table of Contents



Waste Connections, Inc.By:
    /s/ Ronald J. MittelstaedtRonald J. MittelstaedtDate: February 9, 2010
    
    Chief Executive Officer and Chairman    Signature
    
    Title
    
    Date/s/ Ronald J. Mittelstaedt
    
    Chief Executive Officer and ChairmanRonald J. Mittelstaedt
    
    (principal
executive officer)
    
    February 9, 2010/s/ Worthing F. Jackman
    
    Executive Vice President and Chief
Financial OfficerWorthing F. Jackman
    
    (principal
financial officer)
    
    February 9, 2010/s/ David G. Eddie
    
    Vice President  Chief Accounting OfficerDavid G. Eddie
    
    (principal
accounting officer)
    
    February 9, 2010/s/ Michael W. HarlanMichael W. Harlan
    
    Director
    
    February 9, 2010/s/ William J. RazzoukWilliam J. Razzouk
    
    Director
    
    February 9, 2010/s/ Robert H. DavisRobert H. Davis
    
    Director
    
    February 9, 2010/s/ Edward E. GuilletEdward E. Guillet
    
    Director
    
    February 9, 2010
  102




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##### Table of Contents



Additions
    
    
    DeductionsBalance at
    
    
    Charged to
    
    
    Charged to
    
    
    (Write-offs,Beginning of
    
    
    Costs and
    
    
    Other
    
    
    Net of
    
    
    Balance at EndDescription
    
    Year
    
    
    Expenses
    
    
    Accounts
    
    
    Collections)
    
    
    of YearAllowance for Doubtful
Accounts:Year Ended December 31, 2007
    
    $
    3,489
    
    
    $
    4,112
    
    
    $
    
    
    
    $
    (3,214
    )
    
    $
    4,387Year Ended December 31, 2008
    
    
    4,387
    
    
    
    4,126
    
    
    
    
    
    
    
    (4,667
    )
    
    
    3,846Year Ended December 31, 2009
    
    
    3,846
    
    
    
    5,357
    
    
    
    
    
    
    
    (5,145
    )
    
    
    4,058
  103




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibits2.1
    
    
    Stock Purchase Agreement, dated as of August 1, 2008, by and among Waste Connections,
Inc., on the one hand, and Harold LeMay Enterprises, Incorporated and its shareholders,
on the other hand (incorporated by reference to the exhibit filed with the Registrants
Form 8-K filed on August 7, 2008)2.2
    
    
    First Amendment to Stock Purchase Agreement, dated as of October 28, 2008, by and among
Waste Connections, Inc., on the one hand, and Harold LeMay Enterprises, Incorporated and
Norman LeMay in his capacity as the Shareholders Representative, on the other hand
(incorporated by reference to the exhibit filed with the Registrants Form 10-K filed on
February 10, 2009)2.3
    
    
    Equity Purchase Agreement dated as of August 1, 2008 by and among Waste Connections of
Washington, Inc., Land Recovery, Inc., Resource Investments, Inc. and the shareholders of
Land Recovery, Inc. and Resource Investments, Inc. (incorporated by reference to the
exhibit filed with the Registrants Form 8-K filed on August 7, 2008)2.4
    
    
    First Amendment to Equity Purchase Agreement, dated as of October 28, 2008, by and among
Waste Connections of Washington, Inc., on the one hand, and Land Recovery, Inc., Resource
Investments, Inc. and Norman LeMay in his capacity as the Stakeholders Representative,
on the other hand (incorporated by reference to the exhibit filed with the Registrants
Form 10-K filed on February 10, 2009)2.5
    
    
    Asset Purchase Agreement, dated as of February 6, 2009, by and among Republic Services,
Inc., Waste Connections, Inc. and the other entities party thereto (incorporated by
reference to the exhibit filed with the Registrants Form 10-Q filed on May 8, 2009)2.6
    
    
    Amended and Restated Asset Purchase Agreement, dated as of April 1, 2009, by and among
Republic Services, Inc., Waste Connections, Inc. and the other entities party thereto
(incorporated by reference to the exhibit filed with the Registrants Form 10-Q filed on
May 8, 2009)2.7
    
    
    Purchase Agreement, dated as of April 1, 2009, by and among Republic Services, Inc.,
Republic Services of California Holding Company, Inc., Republic Services of California I,
LLC, Waste Connections, Inc. and Chiquita Canyon, Inc. (incorporated by reference to the
exhibit filed with the Registrants Form 10-Q filed on May 8, 2009)2.8
    
    
    Purchase Agreement, dated as of April 1, 2009, by and among Republic Services, Inc.,
Allied Waste Landfill Holdings, Inc., Allied Waste North America, Inc., Anderson Regional
Landfill, LLC, Waste Connections, Inc. and Anderson County Landfill, Inc. (incorporated
by reference to the exhibit filed with the Registrants Form 10-Q filed on May 8, 2009)2.9
    
    
    Stock Purchase Agreement, dated as of April 1, 2009, by and among Republic Services,
Inc., Chambers Development of North Carolina, Inc., Allied Waste North America, Inc. and
Waste Connections, Inc. (incorporated by reference to the exhibit filed with the
Registrants Form 10-Q filed on May 8, 2009)3.1
    
    
    Amended and Restated Certificate of Incorporation of the Registrant (incorporated by
reference to the exhibit filed with the Registrants Form 10-Q filed on July 24, 2007)3.2
    
    
    Third Amended and Restated Bylaws of the Registrant, effective May 15, 2009 (incorporated
by reference to the exhibit filed with the Registrants Form 8-K filed on April 23, 2009)4.1
    
    
    Form of Common Stock Certificate (incorporated by reference to the exhibit filed with the
Registrants Form S-1/A filed on May 6, 1998)
  104




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibits4.2
    
    
    Indenture between the Registrant, as Issuer, and U.S. Bank National Association, as
Trustee, dated as of March 20, 2006 (incorporated by reference to the exhibit filed with
the Registrants Form 8-K filed on March 23, 2006)4.3
    
    
    Registration Rights Agreement between the Registrant, and Citigroup Global Markets Inc.
and Banc of America Securities LLC, dated as of March 20, 2006 (incorporated by reference
to the exhibit filed with the Registrants Form 8-K filed on March 23, 2006)4.4
    
    
    Revolving Credit Agreement, dated as of September 27, 2007 (incorporated by reference to
the exhibit filed with the Registrants Form 8-K filed on October 3, 2007)4.5
    
    
    Increase in Commitment, dated as of June 9, 2008 (incorporated by reference to the
exhibit filed with the Registrants Form 8-K filed on June 10, 2008)4.6
    
    
    Amendment No. 1 to Revolving Credit Agreement, dated as of October 17, 2008 (incorporated
by reference to the exhibit filed with the Registrants Form 10-K filed on February 10,
2009)4.7
    
    
    Amendment No. 2 to Revolving Credit Agreement, dated as of July 10, 2009 (incorporated by
reference to the exhibit filed with the Registrants Form 10-Q filed on August 5, 2009)4.8
    
    
    Master Note Purchase Agreement, dated July 15, 2008 (incorporated by reference to the
exhibit filed with the Registrants Form 8-K filed on July 18, 2008)4.9
    
    
    Amendment No. 1 to Master Note Purchase Agreement, dated as of July 20, 2009
(incorporated by reference to the exhibit filed with the Registrants Form 10-Q filed on
August 5, 2009)4.10
    
    
    First Supplement to Master Note Purchase Agreement, dated as of October 26, 2009
(incorporated by reference to the exhibit filed with the Registrants Form 10-Q filed on
October 27, 2009)10.1
    +
    
    Form of Warrant Agreement (incorporated by reference to the exhibit filed with the
Registrants Form S-1 filed on March 16, 1998)10.2
    +
    
    Employment Agreement between the Registrant and James M. Little, dated as of September
13, 1999 (incorporated by reference to the exhibit filed with the Registrants Form 10-K
filed on March 13, 2000)10.3
    +
    
    Second Amended and Restated Employment Agreement between the Registrant and Darrell W.
Chambliss, dated as of June 1, 2000 (incorporated by reference to the exhibit filed with
the Registrants Form 10-Q filed on November 14, 2000)10.4
    +
    
    Second Amended and Restated 1997 Stock Option Plan (incorporated by reference to the
exhibit filed with the Registrants Form S-8 filed on July 24, 2000)10.5
    +
    
    Employment Agreement between the Registrant and Eric O. Hansen, dated as of January 1,
2001 (incorporated by reference to the exhibit filed with the Registrants Form 10-Q
filed on May 3, 2005)10.6
    +
    
    2002 Senior Management Equity Incentive Plan (incorporated by reference to the exhibit
filed with the Registrants Form 10-K filed on February 11, 2008)10.7
    +
    
    2002 Stock Option Plan (incorporated by reference to the exhibit filed with the
Registrants Form 10-K filed on February 11, 2008)10.8
    +
    
    2002 Restricted Stock Plan (incorporated by reference to the exhibit filed with the
Registrants Form S-8 filed on June 19, 2002)10.9
    +
    
    Employment Agreement between the Registrant and Worthing F. Jackman, dated as of April
11, 2003 (incorporated by reference to the exhibit filed with the Registrants Form 10-Q
filed on August 13, 2003)
  105




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibits10.10
    +
    
    Second Amended and Restated Employment Agreement between the Registrant and Steven F.
Bouck, dated as of October 1, 2004 (incorporated by reference to the exhibit filed with
the Registrants Form 10-Q filed on October 22, 2004)10.11
    +
    
    Amended and Restated Compensation Plan for Independent Directors, dated December 7, 2007
(incorporated by reference to the exhibit filed with the Registrants Form 10-K filed on
February 11, 2008)10.12
    +
    
    Second Amended and Restated Employment Agreement between the Registrant and Ronald J.
Mittelstaedt, dated as of March 1, 2004 (and as amended March 22, 2005) (incorporated by
reference to the exhibit filed with the Registrants Form 10-Q filed on May 3, 2005)10.13
    +
    
    First Amended and Restated Employment Agreement between the Registrant and David M. Hall,
dated as of October 1, 2005 (incorporated by reference to the exhibit filed with the
Registrants Form 8-K filed on October 4, 2005)10.14
    +
    
    First Amended and Restated Employment Agreement between the Registrant and David G.
Eddie, dated as of October 1, 2005 (incorporated by reference to the exhibit filed with
the Registrants Form 8-K filed on October 4, 2005)10.15
    +
    
    Form of Indemnification Agreement between the Registrant and each of its directors and
officers (incorporated by reference to the exhibit filed with the Registrants Form 10-Q
filed on July 31, 2006)10.16
    +
    
    Employment Agreement between the Registrant and Eric M. Merrill, dated as of June 1, 2007
(incorporated by reference to the exhibit filed with the Registrants Form 10-Q filed on
July 24, 2007)10.17
    +
    
    Employment Agreement between the Registrant and Patrick J. Shea, dated as of February 1,
2008 (incorporated by reference to the exhibit filed with the Registrants Form 10-Q
filed on April 23, 2008)10.18
    +
    
    Consultant Incentive Plan (incorporated by reference to the exhibit filed with the
Registrants Form 10-Q filed on April 23, 2008)10.19
    +
    
    Second Amended and Restated 2004 Equity Incentive Plan (as amended and restated)
(incorporated by reference to the exhibit filed with the Registrants Form 10-K filed on
February 10, 2009)10.20
    +
    
    Amended and Restated Senior Management Incentive Plan (incorporated by reference to the
exhibit filed with the Registrants Form 10-Q filed on July 30, 2008)10.21
    +
    
    Form of Amendment to Employment Agreement between the Registrant and each of Ronald J.
Mittelstaedt, Steven F. Bouck, Darrell W. Chambliss and Worthing F. Jackman (incorporated
by reference to the exhibit filed with the Registrants Form 10-K filed on February 10,
2009)10.22
    +
    
    Form of Amendment to Employment Agreement between the Registrant and each of David G.
Eddie, David M. Hall, Eric M. Merrill and Patrick J. Shea (incorporated by reference to
the exhibit filed with the Registrants Form 10-K filed on February 10, 2009)10.23
    +
    
    Form of Amendment to Employment Agreement between the Registrant and James M. Little
(incorporated by reference to the exhibit filed with the Registrants Form 10-K filed on
February 10, 2009)10.24
    +
    
    Form of Amendment to Employment Agreement between the Registrant and Eric O. Hansen
(incorporated by reference to the exhibit filed with the Registrants Form 10-K filed on
February 10, 2009)
  106




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibits10.25
    +
    
    Employment Agreement between the Registrant and Rick Wojahn, dated as of February 9, 2009
(incorporated by reference to the exhibit filed with the Registrants Form 10-Q filed on
May 8, 2009)10.26
    +
    
    Employment Agreement between the Registrant and Scott Schreiber, dated as of February 9,
2009 (incorporated by reference to the exhibit filed with the Registrants Form 10-Q
filed on May 8, 2009)10.27
    + *
    
    Nonqualified Deferred Compensation Plan, amended and restated as of January 1, 201012.1
    *
    
    Statement regarding Computation of Ratios21.1
    *
    
    Subsidiaries of the Registrant23.1
    *
    
    Consent of Independent Registered Public Accounting Firm24.1
    
    
    Power of Attorney (see signature page of this Annual Report on Form 10-K)31.1
    *
    
    Certification of Chief Executive Officer31.2
    *
    
    Certification of Chief Financial Officer32.1
    *
    
    Certificate of Chief Executive Officer and Chief Financial Officer
 *
    
    Filed herewith.+
    
    Management contract or compensatory plan, contract or arrangement.  107