##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the Quarterly Period Ended June 30, 2006
 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 Number: 000-25955
 Waste Services, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware(State or other jurisdiction of
incorporation or organization)
    
    01-0780204(I.R.S. Employer
Identification No.)
 1122 International Blvd., Suite 601, Burlington, Ontario, Canada L7L 6Z8
 (905) 319-1237  (Registrants telephone number, including area code)
 þ o
  Large accelerated
filer o
    
    Accelerated Filer
þ
    
    Non-accelerated filer o
 o þ




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##### 



TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONItem 1. Financial Statements.Condensed Consolidated Balance Sheets as of June 30, 2006 (unaudited) and December 31, 2005.
    
    
    2Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30,
2006 and 2005.
    
    
    3Unaudited Condensed Consolidated Statement of Shareholders Equity for the six months ended June 30, 2006.
    
    
    4Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2006 and 2005.
    
    
    5Notes to Unaudited Condensed Consolidated Financial Statements.
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
    
    
    29Item 3. Quantitative and Qualitative Disclosures About Market Risk.
    
    
    42Item 4. Controls and Procedures.
    
    
    42PART II  OTHER INFORMATIONItem 1. Legal Proceedings.
    
    
    42Item 1A. Risk Factors.
    
    
    42Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
    
    
    42Item 3. Defaults upon Senior Securities.
    
    
    42Item 4. Submission of Matters to a Vote of Security Holders.
    
    
    43Item 5. Other Information.
    
    
    43Item 6. Exhibits.
    
    
    43Signatures.
    
    
    45EX-4.16 SUPPLEMENTAL INDENTURE DATED MAY 12, 2006EX-4.17 SUPPLEMENTAL INDENTURE DATED JUNE 30, 2006SUPPLEMENTAL INDENTURE DATED JUNE 30, 2006EX-10.20 ASSET PURCHASE AGREEMENTASSET PURCHASE AGREEMENTEX-31.1 SECTION 302 CERTIFICATION OF CEOEX-31.2 SECTION 302 CERTIFICATION OF CFOEX-32.1 SECTION 1350 CERTIFICATION OF CEO AND CFO
  1




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 WASTE SERVICES, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands, except share amounts)
 June 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    2,740
    
    
    $
    8,886Accounts receivable (net of allowance for doubtful accounts of
$696 and $672 as of June 30, 2006 and December 31, 2005, respectively)
    
    
    52,500
    
    
    
    45,381Prepaid expenses and other current assets
    
    
    8,607
    
    
    
    10,063Current assets of discontinued operations
    
    
    4,609
    
    
    
    5,252Total current assets
    
    
    68,456
    
    
    
    69,582Property and equipment, net
    
    
    139,445
    
    
    
    119,485Landfill sites, net
    
    
    182,247
    
    
    
    156,498Goodwill and other intangible assets, net
    
    
    337,443
    
    
    
    307,869Other assets
    
    
    9,411
    
    
    
    23,816Non-current assets of discontinued operations
    
    
    51,057
    
    
    
    51,139Total assets
    
    $
    788,059
    
    
    $
    728,389LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    30,832
    
    
    $
    25,959Accrued expenses and other current liabilities
    
    
    42,866
    
    
    
    39,065Short-term financing and current portion of long-term debt
    
    
    1,677
    
    
    
    1,365Current liabilities of discontinued operations
    
    
    1,997
    
    
    
    1,827Total current liabilities
    
    
    77,372
    
    
    
    68,216Long-term debt
    
    
    315,220
    
    
    
    284,850Accrued closure, post-closure and other obligations
    
    
    30,713
    
    
    
    25,651Cumulative mandatorily redeemable Preferred Stock (net of discount of
nil and $2,347 as of June 30, 2006 and December 31, 2005, respectively)
    
    
    95,128
    
    
    
    84,971Non-current liabilities of discontinued operations
    
    
    287
    
    
    
    210Total liabilities
    
    
    518,720
    
    
    
    463,898Shareholders equity:Common stock
$0.01 par value; 166,666,666 and 500,000,000 (pre-reverse split) shares authorized at June 30, 2006 and
December 31, 2005, respectively; 33,957,942 shares issued
and outstanding at June 30, 2006; 93,685,889 shares (pre-reverse split) issued and
93,185,889 shares (pre-reverse split) outstanding at December 31, 2005
    
    
    340
    
    
    
    937Additional paid-in capital
    
    
    410,266
    
    
    
    383,618Treasury stock at cost; 500,000 shares (pre-reverse split)
    
    
    
    
    
    
    (1,235
    )Accumulated other comprehensive income
    
    
    43,074
    
    
    
    35,673Accumulated deficit
    
    
    (184,341
    )
    
    
    (154,502
    )Total shareholders equity
    
    
    269,339
    
    
    
    264,491Total liabilities and shareholders equity
    
    $
    788,059
    
    
    $
    728,389
  2




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WASTE SERVICES, INC.
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except per share data)
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenue
    
    $
    101,587
    
    
    $
    88,853
    
    
    $
    190,147
    
    
    $
    171,760Operating and other expenses:Cost of operations (exclusive of depreciation, depletion
and amortization)
    
    
    70,000
    
    
    
    64,515
    
    
    
    132,378
    
    
    
    124,816Selling, general and administrative expense (exclusive of
depreciation, depletion and amortization)
    
    
    14,363
    
    
    
    13,371
    
    
    
    29,600
    
    
    
    27,587Deferred acquisition costs
    
    
    
    
    
    
    
    
    
    
    5,612
    
    
    
    Depreciation, depletion and amortization
    
    
    10,153
    
    
    
    10,039
    
    
    
    19,870
    
    
    
    19,056Foreign exchange loss (gain) and other
    
    
    2,247
    
    
    
    1
    
    
    
    2,166
    
    
    
    (184
    )Income from operations
    
    
    4,824
    
    
    
    927
    
    
    
    521
    
    
    
    485Interest expense
    
    
    7,825
    
    
    
    7,173
    
    
    
    14,880
    
    
    
    13,998Cumulative mandatorily redeemable preferred stock dividends and
amortization of issue costs
    
    
    4,841
    
    
    
    5,114
    
    
    
    10,537
    
    
    
    9,956Loss from continuing operations before income taxes
    
    
    (7,842
    )
    
    
    (11,360
    )
    
    
    (24,896
    )
    
    
    (23,469
    )Income tax provision
    
    
    3,368
    
    
    
    3,013
    
    
    
    4,340
    
    
    
    5,330Net loss from continuing operations
    
    
    (11,210
    )
    
    
    (14,373
    )
    
    
    (29,236
    )
    
    
    (28,799
    )Net income (loss) from discontinued operations
    
    
    136
    
    
    
    (141
    )
    
    
    (603
    )
    
    
    18Net loss
    
    $
    (11,074
    )
    
    $
    (14,514
    )
    
    $
    (29,839
    )
    
    $
    (28,781
    )Basic and diluted loss per share:Loss per share  continuing operations
    
    
    (0.33
    )
    
    
    (0.44
    )
    
    
    (0.87
    )
    
    
    (0.88
    )Loss per share  discontinued operations
    
    
    0.01
    
    
    
    
    
    
    
    (0.01
    )
    
    
    Basic and diluted loss per share
    
    $
    (0.32
    )
    
    $
    (0.44
    )
    
    $
    (0.88
    )
    
    $
    (0.88
    )Weighted average common shares outstanding  basic and diluted
    
    
    34,130
    
    
    
    33,024
    
    
    
    33,756
    
    
    
    32,600
  3




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WASTE SERVICES, INC.
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
For the Six Months Ended June 30, 2006
(In thousands)
 AccumulatedWaste Services, Inc.
    
    
    
    
    
    
    Treasury
    
    
    Other
    
    
    
    
    
    
    TotalCommon Stock
    
    
    Additional
    
    
    Stock
    
    
    Comprehensive
    
    
    Accumulated
    
    
    ShareholdersShares
    
    
    Amount
    
    
    Paid-in Capital
    
    
    at Cost
    
    
    Income
    
    
    Deficit
    
    
    EquityBalance,
December 31, 2005
    
    
    93,686
    
    
    $
    937
    
    
    $
    383,618
    
    
    $
    (1,235
    )
    
    $
    35,673
    
    
    $
    (154,502
    )
    
    $
    264,491Common shares issued
    
    
    8,154
    
    
    
    82
    
    
    
    25,265
    
    
    
    1,235
    
    
    
    
    
    
    
    
    
    
    
    26,582Exercise of options and
warrants
    
    
    28
    
    
    
    
    
    
    
    86
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    86Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    1,547
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,547Conversion of exchangeable
shares
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Share reimbursement
agreement
    
    
    
    
    
    
    
    
    
    
    (929
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (929
    )Foreign currency
translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,401
    
    
    
    
    
    
    
    7,401Effect of reverse stock
split
    
    
    (67,916
    )
    
    
    (679
    )
    
    
    679
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (29,839
    )
    
    
    (29,839
    )Balance, June 30, 2006
    
    
    33,958
    
    
    $
    340
    
    
    $
    410,266
    
    
    $
    
    
    
    $
    43,074
    
    
    $
    (184,341
    )
    
    $
    269,339
  4




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WASTE SERVICES, INC.
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 Six Months Ended June 30,2006
    
    
    2005Cash flows from operating activities:Net loss
    
    $
    (29,839
    )
    
    $
    (28,781
    )Adjustments to reconcile net loss to net cash flows
from operating activities:Net loss (income) from discontinued operations
    
    
    603
    
    
    
    (18
    )Depreciation, depletion and amortization
    
    
    19,870
    
    
    
    19,056Cumulative mandatorily redeemable preferred stock dividends and
amortization of issue costs
    
    
    10,537
    
    
    
    9,956Amortization of debt issue costs
    
    
    776
    
    
    
    705Deferred income tax provision
    
    
    4,289
    
    
    
    5,063Non-cash stock-based compensation expense
    
    
    1,547
    
    
    
    1,147Deferred acquisition costs expensed
    
    
    5,612
    
    
    
    Foreign exchange loss (gain)
    
    
    2,052
    
    
    
    (6
    )Other non-cash items
    
    
    403
    
    
    
    303Changes in operating assets and liabilities (excluding the effects
of acquisitions):Accounts receivable
    
    
    (2,946
    )
    
    
    (478
    )Prepaid
expenses and other current assets
    
    
    (676
    )
    
    
    1,843Accounts payable
    
    
    652
    
    
    
    (1,995
    )Accrued expenses and other current liabilities
    
    
    3,011
    
    
    
    1,085Net cash provided by continuing operations
    
    
    15,891
    
    
    
    7,880Net cash provided by discontinued operations
    
    
    1,580
    
    
    
    2,129Net cash provided by operating activites
    
    
    17,471
    
    
    
    10,009Cash flows from investing activities:Cash used in business combinations and significant asset
acquisitions, net of cash acquired
    
    
    (28,943
    )
    
    
    (150
    )Capital expenditures
    
    
    (25,514
    )
    
    
    (16,544
    )Proceeds from asset sales and business divestitures
    
    
    4,529
    
    
    
    636Share reimbursement agreement
    
    
    (929
    )
    
    
    Deposits for business acquisitions and other
    
    
    
    
    
    
    (691
    )Net cash used in continuing operations
    
    
    (50,857
    )
    
    
    (16,749
    )Net cash used in discontinued operations
    
    
    (2,107
    )
    
    
    (3,643
    )Net cash used in investing activities
    
    
    (52,964
    )
    
    
    (20,392
    )Cash flows from financing activities:Proceeds from issuance of debt and draws on revolving credit facility
    
    
    36,197
    
    
    
    Principal repayments of debt and capital lease obligations
    
    
    (7,038
    )
    
    
    (830
    )Sale of common shares and warrants
    
    
    
    
    
    
    7,125Proceeds from the exercise of options and warrants
    
    
    86
    
    
    
    521Fees paid for financing transactions
    
    
    (138
    )
    
    
    Net cash provided by financing activities  continuing operations
    
    
    29,107
    
    
    
    6,816Effect of exchange rate changes on cash and cash equivalents
    
    
    240
    
    
    
    (133
    )Decrease in cash and cash equivalents
    
    
    (6,146
    )
    
    
    (3,700
    )Cash and cash equivalents, beginning of period
    
    
    8,886
    
    
    
    8,476Cash and cash equivalents, end of period
    
    $
    2,740
    
    
    $
    4,776
  5




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WASTE SERVICES, INC.
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1. Organization of Business and Basis of Presentation
      6




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WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   Three months ended June 30,
    
    
    Six months ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Common
shares issuable under exercisable options
    
    
    
    
    
    
    27
    
    
    
    
    
    
    
    16Common
shares issuable under exercisable warrants
    
    
    38
    
    
    
    869
    
    
    
    176
    
    
    
    714Dilutive securities
    
    
    38
    
    
    
    896
    
    
    
    176
    
    
    
    730
  2. Discontinued Operations
  7




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WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 June 30,
    
    
    December 31,2006
    
    
    2005Accounts receivable
    
    $
    3,878
    
    
    $
    4,202Prepaid expenses and other current assets
    
    
    731
    
    
    
    1,050Current assets of discontinued operations
    
    
    4,609
    
    
    
    5,252Property and equipment
    
    
    13,231
    
    
    
    13,777Landfill sites
    
    
    16,188
    
    
    
    15,630Goodwill and other intangible assets
    
    
    21,518
    
    
    
    21,602Other assets
    
    
    120
    
    
    
    130Non-current assets of discontinued operations
    
    
    51,057
    
    
    
    51,139Total assets of discontinued operations
    
    $
    55,666
    
    
    $
    56,391Accounts payable
    
    $
    294
    
    
    $
    192Accrued expenses and other current liabilities
    
    
    1,703
    
    
    
    1,635Current liabilities of discontinued operations
    
    
    1,997
    
    
    
    1,827Accrued closure, post closure and other obligations
    
    
    287
    
    
    
    210Non-current liabilities of discontinued operations
    
    
    287
    
    
    
    210Total liabilities of discontinued operations
    
    
    2,284
    
    
    
    2,037Net assets of discontinued operations
    
    $
    53,382
    
    
    $
    54,354
 3. Share-Based Payments
     8




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WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Three Months
    
    
    Six MonthsEnded June 30,
    
    
    Ended June 30,2005
    
    
    2005Net loss as reported
    
    $
    (14,514
    )
    
    $
    (28,781
    )Add: Employee compensation expense for equity awards included in the determination
of net loss as reported
    
    
    86
    
    
    
    172Less: Stock based compensation expense for equity awards determined by the fair value
based method prescribed under SFAS 123
    
    
    (2,485
    )
    
    
    (4,935
    )Pro forma net loss
    
    $
    (16,913
    )
    
    $
    (33,544
    )Basic and diluted loss per share:As reported
    
    $
    (0.44
    )
    
    $
    (0.88
    )Pro forma
    
    $
    (0.51
    )
    
    $
    (1.03
    )
   Three months ended June 30,
    
    Six months ended June 30,2006
    
    2005
    
    2006
    
    2005Annual dividend yield
    
    
    N/A
    
    
    
    
    
    
    
    
    
    
    
    Weighted-average expected life
(years)
    
    
    N/A
    
    
    2.8 years
    
    3.0 years
    
    2.8 yearsRisk-free interest rate
    
    
    N/A
    
    
    2.57% to 4.62%
    
    
    4.83
    %
    
    2.57% to 4.62%Expected
volatility
    
    
    N/A
    
    
    
    74
    %
    
    
    38
    %
    
    
    74
    %
    9




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WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Options
    
    OptionsOutstanding
    
    ExercisableNumber of U.S. dollar denominated options
    
    
    7,356,500
    
    
    
    6,456,500Number of Canadian dollar denominated options
    
    
    4,830,000
    
    
    
    4,825,000Total number of options
    
    
    12,186,500
    
    
    
    11,281,500Aggregate intrinsic value of options
    
    $
    
    
    
    $
    Weighted average remaining contractual term (years)
    
    
    2.1
    
    
    
    1.9Weighted average exercise price  U.S. dollar denominated options
    
    $
    4.43
    
    
    $
    4.54Weighted average exercise price  Canadian dollar denominated
options
    
    C$
    6.21
    
    
    C$
    6.21
  4. Business Combinations and Significant Asset Acquisitions
      10




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WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Liberty WasteTaft
    
    
    and Sun Country
    
    
    OtherRecycling
    
    
    Materials
    
    
    Acquisitions
    
    
    TotalPurchase price:Cash
    
    $
    13,300
    
    
    $
    20,622
    
    
    $
    2,528
    
    
    $
    36,450Common stock
    
    
    7,645
    
    
    
    18,937
    
    
    
    
    
    
    
    26,582Total purchase price
    
    
    20,945
    
    
    
    39,559
    
    
    
    2,528
    
    
    
    63,032Allocated as follows:Working capital assumed:Cash and cash equivalents
    
    
    125
    
    
    
    488
    
    
    
    
    
    
    
    613Accounts receivable
    
    
    952
    
    
    
    2,144
    
    
    
    
    
    
    
    3,096Prepaid expenses and other current assets
    
    
    10
    
    
    
    591
    
    
    
    
    
    
    
    601Accounts payable
    
    
    (462
    )
    
    
    (2,724
    )
    
    
    
    
    
    
    (3,186
    )Accrued expenses and other current liabilities
    
    
    (252
    )
    
    
    (693
    )
    
    
    
    
    
    
    (945
    )Net working capital
    
    
    373
    
    
    
    (194
    )
    
    
    
    
    
    
    179Property and equipment
    
    
    3,254
    
    
    
    9,408
    
    
    
    675
    
    
    
    13,337Landfill sites
    
    
    
    
    
    
    23,290
    
    
    
    
    
    
    
    23,290Debt
    
    
    
    
    
    
    (390
    )
    
    
    
    
    
    
    (390
    )Accrued closure, post-closure and other
obligations
    
    
    (73
    )
    
    
    (2,257
    )
    
    
    
    
    
    
    (2,330
    )Net book
value of assets acquired and liabilities assumed
    
    
    3,554
    
    
    
    29,857
    
    
    
    675
    
    
    
    34,086Excess purchase price to be allocated
    
    $
    17,391
    
    
    $
    9,702
    
    
    $
    1,853
    
    
    $
    28,946Allocated as follows:Goodwill
    
    
    17,391
    
    
    
    9,702
    
    
    
    1,672
    
    
    
    28,765Other intangible assets
    
    
    
    
    
    
    
    
    
    
    181
    
    
    
    181Total allocated
    
    $
    17,391
    
    
    $
    9,702
    
    
    $
    1,853
    
    
    $
    28,946
    11




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenue
    
    $
    104,570
    
    
    $
    96,083
    
    
    $
    201,064
    
    
    $
    186,098Net loss
    
    $
    (11,372
    )
    
    $
    (14,941
    )
    
    $
    (30,470
    )
    
    $
    (29,748
    )Basic and diluted net loss per common share
    
    $
    (0.31
    )
    
    $
    (0.42
    )
    
    $
    (0.84
    )
    
    $
    (0.84
    )Basic and diluted pro forma weighted average number of
common shares outstanding
    
    
    36,186
    
    
    
    35,909
    
    
    
    36,067
    
    
    
    35,485
  5. Allowance for Doubtful Accounts
   2006
    
    
    2005Balance, beginning of period
    
    $
    672
    
    
    $
    545Provisions
    
    
    128
    
    
    
    323Bad debts charged to reserves, net of recoveries
    
    
    (413
    )
    
    
    (366
    )Increase due to acquisitions
    
    
    303
    
    
    
    Impact of foreign exchange rate fluctuations
    
    
    6
    
    
    
    (2
    )Balance, end of period
    
    $
    696
    
    
    $
    500
 6. Prepaid Expenses and Other Current Assets
  June 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)Prepaid expenses
    
    $
    2,961
    
    
    $
    2,357Deferred income taxes
    
    
    2,280
    
    
    
    4,763Parts and supplies
    
    
    1,770
    
    
    
    1,673Other current assets
    
    
    1,596
    
    
    
    1,270$
    8,607
    
    
    $
    10,063
 7. Property and Equipment
  12




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 June 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)Land and buildings
    
    
    33,681
    
    
    
    24,596Vehicles
    
    
    109,596
    
    
    
    96,492Containers, compactors and landfill and recycling equipment
    
    
    72,232
    
    
    
    64,547Furniture, fixtures, other office equipment and leasehold improvements
    
    
    10,105
    
    
    
    9,393Total property and equipment
    
    
    225,614
    
    
    
    195,028Less: Accumulated depreciation
    
    
    (86,169
    )
    
    
    (75,543
    )Property and equipment, net
    
    $
    139,445
    
    
    $
    119,485
 8. Landfill Sites, Accrued Closure, Post-Closure and Other Obligations
 Landfill Sites
  June 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)Landfill sites
    
    $
    222,623
    
    
    $
    189,280Less: Accumulated depletion
    
    
    (40,376
    )
    
    
    (32,782
    )Landfill sites, net
    
    $
    182,247
    
    
    $
    156,498
  2006
    
    
    2005Balance, beginning of period
    
    $
    156,498
    
    
    $
    159,385Acquisitions
    
    
    23,290
    
    
    
    Additional landfill site costs
    
    
    7,632
    
    
    
    4,184Additional asset retirement obligations
    
    
    1,013
    
    
    
    721Depletion
    
    
    (6,622
    )
    
    
    (5,369
    )Purchase price allocation adjustments for prior acquisitions and other
    
    
    
    
    
    
    99Effect of foreign exchange rate fluctuations
    
    
    436
    
    
    
    (280
    )Balance, end of period
    
    $
    182,247
    
    
    $
    158,740
 Accrued Closure, Post-Closure and Other Obligations
  June 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)Accrued closure and post-closure obligations
    
    $
    11,945
    
    
    $
    9,074Deferred income tax liability
    
    
    18,124
    
    
    
    16,206Other obligations
    
    
    644
    
    
    
    371$
    30,713
    
    
    $
    25,651
  13




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 2006
    
    
    2005Balance, beginning of period
    
    $
    9,074
    
    
    $
    6,385Acquisitions
    
    
    1,201
    
    
    
    Accretion
    
    
    386
    
    
    
    356Additional asset retirement obligations
    
    
    1,013
    
    
    
    721Effect of foreign exchange rate fluctuations
    
    
    271
    
    
    
    (86
    )Balance, end of period
    
    $
    11,945
    
    
    $
    7,376
 9. Goodwill and Other Intangible Assets
  June 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)Other intangible assets subject to amortization:Customer relationships and contracts
    
    $
    34,699
    
    
    $
    34,768Non-competition agreements and other
    
    
    2,959
    
    
    
    2,74437,658
    
    
    
    37,512Less: Accumulated amortization:Customer relationships and contracts
    
    
    (14,392
    )
    
    
    (12,128
    )Non-competition agreements and other
    
    
    (2,134
    )
    
    
    (1,761
    )Other intangible assets subject to amortization, net
    
    
    21,132
    
    
    
    23,623Goodwill
    
    
    316,311
    
    
    
    284,246Goodwill and other intangible assets, net
    
    $
    337,443
    
    
    $
    307,869
  Six Months Ended June 30, 2006Florida
    
    
    Canada
    
    
    TotalBalance, beginning of period
    
    $
    199,377
    
    
    $
    84,869
    
    
    $
    284,246Acquisitions
    
    
    27,093
    
    
    
    1,672
    
    
    
    28,765Purchase price allocation adjustments for prior acquisitions
    
    
    (259
    )
    
    
    
    
    
    
    (259
    )Effect of foreign exchange rate fluctuations
    
    
    
    
    
    
    3,559
    
    
    
    3,559Balance, end of period
    
    $
    226,211
    
    
    $
    90,100
    
    
    $
    316,311
 Six Months Ended June 30, 2005Florida
    
    
    Canada
    
    
    TotalBalance, beginning of period
    
    $
    174,629
    
    
    $
    85,255
    
    
    $
    259,884Effect of foreign exchange rate fluctuations
    
    
    
    
    
    
    (1,620
    )
    
    
    (1,620
    )Purchase price allocation adjustments for prior acquisitions
    
    
    24,748
    
    
    
    
    
    
    
    24,748Balance, end of period
    
    $
    199,377
    
    
    $
    83,635
    
    
    $
    283,012
  10. Other Assets
  14




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 June 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)Debt and redeemable Preferred Stock issue costs, net of accumulated amortization
of $3,060 and $4,761 as of June 30, 2006 and December 31, 2005,
respectively
    
    $
    8,410
    
    
    $
    9,428Acquisition deposits and deferred acquisition costs
    
    
    
    
    
    
    13,815Other assets
    
    
    1,001
    
    
    
    573$
    9,411
    
    
    $
    23,816
  11. Debt
  June 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)Senior Secured Credit Facilities:Revolving credit facility, floating interest rate at 9.8% as of
June 30, 2006, due April 2009
    
    $
    8,000
    
    
    $
    Term loan facility, floating interest rate at 8.5% and 7.9% as of
June 30, 2006 and December 31, 2005, respectively, due $370 per
quarter to March 2010, $35,020 per quarter thereafter, due March 2011
    
    
    145,630
    
    
    
    123,250Senior Subordinated Notes, fixed interest rate at 9.5%, due 2014
    
    
    160,000
    
    
    
    160,000Other notes payable, interest at 4.3% to 6.7%, due through June 2025
    
    
    3,267
    
    
    
    2,965316,897
    
    
    
    286,215Less: Current portion
    
    
    (1,677
    )
    
    
    (1,365
    )Long-term portion
    
    $
    315,220
    
    
    $
    284,850
 Senior Secured Credit Facilities
     15




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Senior Subordinated Notes
 1 2
   12. Cumulative Mandatorily Redeemable Preferred Stock
 3 4
  16




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  13. Commitments and Contingencies
 Environmental Risks
   Legal Proceedings
     Surety Bonds, Letters of Credit and Insurance
  17




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
    Six Months Ended June 30,2006
    
    
    2005Balance, beginning of period
    
    $
    4,356
    
    
    $
    2,426Provisions
    
    
    2,575
    
    
    
    1,868Payments
    
    
    (1,317
    )
    
    
    (428
    )Favorable claim development
    
    
    (315
    )
    
    
    (279
    )Balance, end of period
    
    $
    5,299
    
    
    $
    3,587
 Disposal Agreement
  Other Contractual Arrangements
   14. Authorized Capital Stock and Migration Transaction
 Total Shares
  
    
    166,666,666 shares of common stock, par value 0.01 per share; and
 18




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 
    
    5,000,000 shares of preferred stock, par value 0.01 per share, of which 100,000
shares have been designated as Series A Preferred Stock and one share has been designated as
Special Voting Preferred Stock.
 Preferred Stock
  Migration Transaction
     15.
Comprehensive Income (Loss)
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net loss
    
    $
    (11,074
    )
    
    $
    (14,514
    )
    
    $
    (29,839
    )
    
    $
    (28,781
    )Foreign currency translation adjustment
    
    
    8,136
    
    
    
    (3,613
    )
    
    
    7,401
    
    
    
    (3,611
    )Comprehensive loss
    
    $
    (2,938
    )
    
    $
    (18,127
    )
    
    $
    (22,438
    )
    
    $
    (32,392
    )
 16. Segment Information
  19




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
    Three Months Ended June 30, 2006All OtherFlorida
    
    Canada
    
    Operations
    
    Corporate
    
    TotalRevenue
    
    $
    52,637
    
    
    $
    47,843
    
    
    $
    1,107
    
    
    $
    
    
    
    $
    101,587Depreciation, depletion and amortization
    
    
    5,581
    
    
    
    3,792
    
    
    
    407
    
    
    
    373
    
    
    
    10,153Income (loss) from operations
    
    
    7,284
    
    
    
    7,755
    
    
    
    (101
    )
    
    
    (10,114
    )
    
    
    4,824Capital expenditures
    
    
    2,918
    
    
    
    9,655
    
    
    
    302
    
    
    
    292
    
    
    
    13,167
 Three Months Ended June 30, 2005All OtherFlorida
    
    Canada
    
    Operations
    
    Corporate
    
    TotalRevenue
    
    $
    47,055
    
    
    $
    41,134
    
    
    $
    664
    
    
    $
    
    
    
    $
    88,853Depreciation, depletion and amortization
    
    
    4,943
    
    
    
    4,497
    
    
    
    240
    
    
    
    359
    
    
    
    10,039Income (loss) from operations
    
    
    2,340
    
    
    
    5,821
    
    
    
    (274
    )
    
    
    (6,960
    )
    
    
    927Capital expenditures
    
    
    5,514
    
    
    
    4,858
    
    
    
    9
    
    
    
    774
    
    
    
    11,155
 Six Months Ended June 30, 2006All OtherFlorida
    
    Canada
    
    Operations
    
    Corporate
    
    TotalRevenue
    
    $
    101,030
    
    
    $
    86,934
    
    
    $
    2,183
    
    
    $
    
    
    
    $
    190,147Depreciation, depletion and amortization
    
    
    10,855
    
    
    
    7,480
    
    
    
    777
    
    
    
    758
    
    
    
    19,870Income (loss) from operations
    
    
    12,788
    
    
    
    12,379
    
    
    
    (232
    )
    
    
    (24,414
    )
    
    
    521Capital expenditures
    
    
    10,260
    
    
    
    13,178
    
    
    
    1,262
    
    
    
    814
    
    
    
    25,514
 Six Months Ended June 30, 2005All OtherFlorida
    
    Canada
    
    Operations
    
    Corporate
    
    TotalRevenue
    
    $
    93,559
    
    
    $
    77,278
    
    
    $
    923
    
    
    $
    
    
    
    $
    171,760Depreciation, depletion and amortization
    
    
    9,653
    
    
    
    8,392
    
    
    
    389
    
    
    
    622
    
    
    
    19,056Income (loss) from operations
    
    
    5,840
    
    
    
    9,820
    
    
    
    (666
    )
    
    
    (14,509
    )
    
    
    485Capital expenditures
    
    
    8,960
    
    
    
    5,893
    
    
    
    398
    
    
    
    1,293
    
    
    
    16,544
 17. Condensed Consolidating Financial Statements
  20




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  June 30, 2006Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    1,657
    
    
    $
    1,083
    
    
    $
    
    
    
    $
    2,740Accounts receivable, net
    
    
    24,050
    
    
    
    28,450
    
    
    
    
    
    
    
    52,500Prepaid expenses and other current assets
    
    
    2,545
    
    
    
    6,062
    
    
    
    
    
    
    
    8,607Current assets of discontinued operations
    
    
    4,609
    
    
    
    
    
    
    
    
    
    
    
    4,609Total current assets
    
    
    32,861
    
    
    
    35,595
    
    
    
    
    
    
    
    68,456Property and equipment, net
    
    
    64,234
    
    
    
    75,211
    
    
    
    
    
    
    
    139,445Landfill sites, net
    
    
    171,100
    
    
    
    11,147
    
    
    
    
    
    
    
    182,247Goodwill and other intangible assets, net
    
    
    246,164
    
    
    
    91,279
    
    
    
    
    
    
    
    337,443Other assets
    
    
    9,411
    
    
    
    
    
    
    
    
    
    
    
    9,411Due from affiliates
    
    
    
    
    
    
    10,907
    
    
    
    (10,907
    )
    
    
    Investment in subsidiary
    
    
    183,574
    
    
    
    
    
    
    
    (183,574
    )
    
    
    Non-current assets of discontinued operations
    
    
    51,057
    
    
    
    
    
    
    
    
    
    
    
    51,057Total assets
    
    $
    758,401
    
    
    $
    224,139
    
    
    $
    (194,481
    )
    
    $
    788,059LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    16,011
    
    
    $
    14,821
    
    
    $
    
    
    
    $
    30,832Accrued expenses and other current liabilities
    
    
    30,208
    
    
    
    12,658
    
    
    
    
    
    
    
    42,866Short-term financing and current
portion of long-term debt
    
    
    1,677
    
    
    
    
    
    
    
    
    
    
    
    1,677Current liabilities of discontinued operations
    
    
    1,997
    
    
    
    
    
    
    
    
    
    
    
    1,997Total current liabilities
    
    
    49,893
    
    
    
    27,479
    
    
    
    
    
    
    
    77,372Long-term debt
    
    
    315,220
    
    
    
    
    
    
    
    
    
    
    
    315,220Accrued closure, post-closure and other obligations
    
    
    17,627
    
    
    
    13,086
    
    
    
    
    
    
    
    30,713Cumulative mandatorily redeemable Preferred Stock
    
    
    95,128
    
    
    
    
    
    
    
    
    
    
    
    95,128Due to affiliates
    
    
    10,907
    
    
    
    
    
    
    
    (10,907
    )
    
    
    Non-current liabilities of discontinued operations
    
    
    287
    
    
    
    
    
    
    
    
    
    
    
    287Total liabilities
    
    
    489,062
    
    
    
    40,565
    
    
    
    (10,907
    )
    
    
    518,720Shareholders equity:Common stock of Waste Services, Inc
    
    
    340
    
    
    
    
    
    
    
    
    
    
    
    340Other equity
    
    
    268,999
    
    
    
    183,574
    
    
    
    (183,574
    )
    
    
    268,999Total shareholders equity
    
    
    269,339
    
    
    
    183,574
    
    
    
    (183,574
    )
    
    
    269,339Total liabilities and shareholders equity
    
    $
    758,401
    
    
    $
    224,139
    
    
    $
    (194,481
    )
    
    $
    788,059
 21




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 December 31, 2005Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    3,680
    
    
    $
    5,206
    
    
    $
    
    
    
    $
    8,886Accounts receivable, net
    
    
    21,236
    
    
    
    24,145
    
    
    
    
    
    
    
    45,381Prepaid expenses and other current assets
    
    
    1,969
    
    
    
    8,094
    
    
    
    
    
    
    
    10,063Current assets of discontinued operations
    
    
    5,252
    
    
    
    
    
    
    
    
    
    
    
    5,252Total current assets
    
    
    32,137
    
    
    
    37,445
    
    
    
    
    
    
    
    69,582Property and equipment, net
    
    
    53,576
    
    
    
    65,909
    
    
    
    
    
    
    
    119,485Landfill sites, net
    
    
    146,398
    
    
    
    10,100
    
    
    
    
    
    
    
    156,498Goodwill and other intangible assets, net
    
    
    221,674
    
    
    
    86,195
    
    
    
    
    
    
    
    307,869Other assets
    
    
    10,263
    
    
    
    13,553
    
    
    
    
    
    
    
    23,816Due from affiliates
    
    
    
    
    
    
    2,295
    
    
    
    (2,295
    )
    
    
    Investment in subsidiary
    
    
    177,882
    
    
    
    
    
    
    
    (177,882
    )
    
    
    Non-current assets of discontinued operations
    
    
    51,139
    
    
    
    
    
    
    
    
    
    
    
    51,139Total assets
    
    $
    693,069
    
    
    $
    215,497
    
    
    $
    (180,177
    )
    
    $
    728,389LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    14,473
    
    
    $
    11,486
    
    
    $
    
    
    
    $
    25,959Accrued expenses and other current liabilities
    
    
    26,276
    
    
    
    12,789
    
    
    
    
    
    
    
    39,065Short-term financing and current
portion of long-term debt
    
    
    1,365
    
    
    
    
    
    
    
    
    
    
    
    1,365Current liabilities of discontinued operations
    
    
    1,827
    
    
    
    
    
    
    
    
    
    
    
    1,827Total current liabilities
    
    
    43,941
    
    
    
    24,275
    
    
    
    
    
    
    
    68,216Long-term debt
    
    
    284,850
    
    
    
    
    
    
    
    
    
    
    
    284,850Accrued closure, post-closure and other obligations
    
    
    12,311
    
    
    
    13,340
    
    
    
    
    
    
    
    25,651Cumulative mandatorily redeemable Preferred Stock
    
    
    84,971
    
    
    
    
    
    
    
    
    
    
    
    84,971Due to affiliates
    
    
    2,295
    
    
    
    
    
    
    
    (2,295
    )
    
    
    Non-current liabilities of discontinued operations
    
    
    210
    
    
    
    
    
    
    
    
    
    
    
    210Total liabilities
    
    
    428,578
    
    
    
    37,615
    
    
    
    (2,295
    )
    
    
    463,898Shareholders equity:Common stock of Waste Services, Inc
    
    
    937
    
    
    
    
    
    
    
    
    
    
    
    937Other equity
    
    
    263,554
    
    
    
    177,882
    
    
    
    (177,882
    )
    
    
    263,554Total shareholders equity
    
    
    264,491
    
    
    
    177,882
    
    
    
    (177,882
    )
    
    
    264,491Total liabilities and shareholders equity
    
    $
    693,069
    
    
    $
    215,497
    
    
    $
    (180,177
    )
    
    $
    728,389
 22




---



##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Three Months Ended June 30, 2006Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedRevenue
    
    $
    53,744
    
    
    $
    47,843
    
    
    $
    
    
    
    $
    101,587Operating and other expenses:Cost of operations (exclusive of depreciation,
depletion and amortization)
    
    
    37,234
    
    
    
    32,766
    
    
    
    
    
    
    
    70,000Selling, general and administrative expense (exclusive
of depreciation, depletion and amortization)
    
    
    8,634
    
    
    
    5,729
    
    
    
    
    
    
    
    14,363Depreciation, depletion and amortization
    
    
    5,999
    
    
    
    4,154
    
    
    
    
    
    
    
    10,153Foreign exchange gain and other
    
    
    85
    
    
    
    2,162
    
    
    
    
    
    
    
    2,247Equity earnings in investees
    
    
    (1,017
    )
    
    
    
    
    
    
    1,017
    
    
    
    Income from operations
    
    
    2,809
    
    
    
    3,032
    
    
    
    (1,017
    )
    
    
    4,824Interest expense
    
    
    7,704
    
    
    
    121
    
    
    
    
    
    
    
    7,825Cumulative mandatorily redeemable preferred stock
dividends and amortization of issue costs
    
    
    4,841
    
    
    
    
    
    
    
    
    
    
    
    4,841Loss from continuing operations before income taxes
    
    
    (9,736
    )
    
    
    2,911
    
    
    
    (1,017
    )
    
    
    (7,842
    )Income tax provision
    
    
    1,474
    
    
    
    1,894
    
    
    
    
    
    
    
    3,368Net loss from continuing operations
    
    
    (11,210
    )
    
    
    1,017
    
    
    
    (1,017
    )
    
    
    (11,210
    )Net income from discontinued operations
    
    
    136
    
    
    
    
    
    
    
    
    
    
    
    136Net
income (loss) attributable to Common Shareholders
    
    $
    (11,074
    )
    
    $
    1,017
    
    
    $
    (1,017
    )
    
    $
    (11,074
    )
 23




---



##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Three Months Ended June 30, 2005Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedRevenue
    
    $
    47,719
    
    
    $
    41,134
    
    
    $
    
    
    
    $
    88,853Operating and other expenses:Cost of operations (exclusive of depreciation,
depletion and amortization)
    
    
    36,983
    
    
    
    27,532
    
    
    
    
    
    
    
    64,515Selling, general and administrative expense (exclusive
of depreciation, depletion and amortization)
    
    
    7,663
    
    
    
    5,708
    
    
    
    
    
    
    
    13,371Depreciation, depletion and amortization
    
    
    5,231
    
    
    
    4,808
    
    
    
    
    
    
    
    10,039Foreign exchange gain and other
    
    
    29
    
    
    
    (28
    )
    
    
    
    
    
    
    1Equity earnings in investees
    
    
    (1,417
    )
    
    
    
    
    
    
    1,417
    
    
    
    Income (loss) from operations
    
    
    (770
    )
    
    
    3,114
    
    
    
    (1,417
    )
    
    
    927Interest expense
    
    
    7,126
    
    
    
    47
    
    
    
    
    
    
    
    7,173Cumulative mandatorily redeemable preferred stock
dividends and amortization of issue costs
    
    
    5,114
    
    
    
    
    
    
    
    
    
    
    
    5,114Loss from continuing operations before income taxes
    
    
    (13,010
    )
    
    
    3,067
    
    
    
    (1,417
    )
    
    
    (11,360
    )Income tax provision
    
    
    1,363
    
    
    
    1,650
    
    
    
    
    
    
    
    3,013Net loss from continuing operations
    
    
    (14,373
    )
    
    
    1,417
    
    
    
    (1,417
    )
    
    
    (14,373
    )Net loss from discontinued operations
    
    
    (141
    )
    
    
    
    
    
    
    
    
    
    
    (141
    )Net
income (loss) attributable to Common Shareholders
    
    $
    (14,514
    )
    
    $
    1,417
    
    
    $
    (1,417
    )
    
    $
    (14,514
    )
 24




---



##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Six Months Ended June 30, 2006Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedRevenue
    
    $
    103,213
    
    
    $
    86,934
    
    
    $
    
    
    
    $
    190,147Operating and other expenses:Cost of operations (exclusive of depreciation,
depletion and amortization)
    
    
    72,388
    
    
    
    59,990
    
    
    
    
    
    
    
    132,378Selling, general and administrative expense (exclusive
of depreciation, depletion and amortization)
    
    
    17,799
    
    
    
    11,801
    
    
    
    
    
    
    
    29,600Deferred acquisition costs
    
    
    439
    
    
    
    5,173
    
    
    
    
    
    
    
    5,612Depreciation, depletion and amortization
    
    
    11,653
    
    
    
    8,217
    
    
    
    
    
    
    
    19,870Foreign exchange gain and other
    
    
    140
    
    
    
    2,026
    
    
    
    
    
    
    
    2,166Equity earnings in investees
    
    
    1,991
    
    
    
    
    
    
    
    (1,991
    )
    
    
    Income (loss) from operations
    
    
    (1,197
    )
    
    
    (273
    )
    
    
    1,991
    
    
    
    521Interest expense
    
    
    14,663
    
    
    
    217
    
    
    
    
    
    
    
    14,880Cumulative mandatorily redeemable preferred stock
dividends and amortization of issue costs
    
    
    10,537
    
    
    
    
    
    
    
    
    
    
    
    10,537Loss from continuing operations before income taxes
    
    
    (26,397
    )
    
    
    (490
    )
    
    
    1,991
    
    
    
    (24,896
    )Income tax provision
    
    
    2,839
    
    
    
    1,501
    
    
    
    
    
    
    
    4,340Net loss from continuing operations
    
    
    (29,236
    )
    
    
    (1,991
    )
    
    
    1,991
    
    
    
    (29,236
    )Net loss from discontinued operations
    
    
    (603
    )
    
    
    
    
    
    
    
    
    
    
    (603
    )Net loss attributable to Common Shareholders
    
    $
    (29,839
    )
    
    $
    (1,991
    )
    
    $
    1,991
    
    
    $
    (29,839
    )
 25




---



##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Six Months Ended June 30, 2005Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedRevenue
    
    $
    94,482
    
    
    $
    77,278
    
    
    $
    
    
    
    $
    171,760Operating and other expenses:Cost of operations (exclusive of depreciation,
depletion and amortization)
    
    
    72,301
    
    
    
    52,515
    
    
    
    
    
    
    
    124,816Selling, general and administrative expense (exclusive
of depreciation, depletion and amortization)
    
    
    16,037
    
    
    
    11,550
    
    
    
    
    
    
    
    27,587Depreciation, depletion and amortization
    
    
    10,109
    
    
    
    8,947
    
    
    
    
    
    
    
    19,056Foreign exchange gain and other
    
    
    
    
    
    
    (184
    )
    
    
    
    
    
    
    (184
    )Equity earnings in investees
    
    
    (1,692
    )
    
    
    
    
    
    
    1,692
    
    
    
    Income (loss) from operations
    
    
    (2,273
    )
    
    
    4,450
    
    
    
    (1,692
    )
    
    
    485Interest expense
    
    
    13,844
    
    
    
    154
    
    
    
    
    
    
    
    13,998Cumulative mandatorily redeemable preferred stock
dividends and amortization of issue costs
    
    
    9,956
    
    
    
    
    
    
    
    
    
    
    
    9,956Loss from continuing operations before income taxes
    
    
    (26,073
    )
    
    
    4,296
    
    
    
    (1,692
    )
    
    
    (23,469
    )Income tax provision
    
    
    2,726
    
    
    
    2,604
    
    
    
    
    
    
    
    5,330Net loss from continuing operations
    
    
    (28,799
    )
    
    
    1,692
    
    
    
    (1,692
    )
    
    
    (28,799
    )Net income from discontinued operations
    
    
    18
    
    
    
    
    
    
    
    
    
    
    
    18Net
income (loss) attributable to Common Shareholders
    
    $
    (28,781
    )
    
    $
    1,692
    
    
    $
    (1,692
    )
    
    $
    (28,781
    )
 26




---



##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Six Months Ended June 30, 2006Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net cash provided by operating activities
    
    $
    2,451
    
    
    $
    15,020
    
    
    $
    
    
    
    $
    17,471Cash flows from investing activities:Cash used in business combinations and significant
asset acquisitions, net of cash acquired
    
    
    (26,415
    )
    
    
    (2,528
    )
    
    
    
    
    
    
    (28,943
    )Capital expenditures
    
    
    (11,732
    )
    
    
    (13,782
    )
    
    
    
    
    
    
    (25,514
    )Proceeds from asset sales and business divestitures
    
    
    4,182
    
    
    
    347
    
    
    
    
    
    
    
    4,529Share reimbursement agreement
    
    
    (929
    )
    
    
    
    
    
    
    
    
    
    
    (929
    )Intercompany
    
    
    
    
    
    
    (2,955
    )
    
    
    2,955
    
    
    
    Net cash used in continuing operations
    
    
    (34,894
    )
    
    
    (18,918
    )
    
    
    2,955
    
    
    
    (50,857
    )Net cash used in discontinued operations
    
    
    (2,107
    )
    
    
    
    
    
    
    
    
    
    
    (2,107
    )Net cash used in investing activities
    
    
    (37,001
    )
    
    
    (18,918
    )
    
    
    2,955
    
    
    
    (52,964
    )Cash flows from financing activities:Proceeds from issuance of debt and draws on revolving credit facility
    
    
    34,000
    
    
    
    2,197
    
    
    
    
    
    
    
    36,197Principal repayments of debt and capital
lease obligations
    
    
    (4,376
    )
    
    
    (2,662
    )
    
    
    
    
    
    
    (7,038
    )Proceeds from the exercise of options and warrants
    
    
    86
    
    
    
    
    
    
    
    
    
    
    
    86Fees paid for financing transactions
    
    
    (138
    )
    
    
    
    
    
    
    
    
    
    
    (138
    )Intercompany
    
    
    2,955
    
    
    
    
    
    
    
    (2,955
    )
    
    
    32,527
    
    
    
    (465
    )
    
    
    (2,955
    )
    
    
    29,107Effect of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    240
    
    
    
    
    
    
    
    240Decrease in cash and cash equivalents
    
    
    (2,023
    )
    
    
    (4,123
    )
    
    
    
    
    
    
    (6,146
    )Cash and cash equivalents, beginning of period
    
    
    3,680
    
    
    
    5,206
    
    
    
    
    
    
    
    8,886Cash and cash equivalents, end of period
    
    $
    1,657
    
    
    $
    1,083
    
    
    $
    
    
    
    $
    2,740
 27




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Six Months Ended June 30, 2005Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net cash provided by operating activities
    
    $
    (5,085
    )
    
    $
    15,094
    
    
    $
    
    
    
    $
    10,009Cash flows from investing activities:Cash used in business combinations and significant
asset acquisitions, net of cash acquired
    
    
    (150
    )
    
    
    
    
    
    
    
    
    
    
    (150
    )Capital expenditures
    
    
    (9,363
    )
    
    
    (7,181
    )
    
    
    
    
    
    
    (16,544
    )Proceeds from asset sales and business divestitures
    
    
    314
    
    
    
    322
    
    
    
    
    
    
    
    636Deposits for business acquisitions and other
    
    
    23
    
    
    
    (714
    )
    
    
    
    
    
    
    (691
    )Intercompany
    
    
    
    
    
    
    (6,715
    )
    
    
    6,715
    
    
    
    Net cash used in continuing operations
    
    
    (9,176
    )
    
    
    (14,288
    )
    
    
    6,715
    
    
    
    (16,749
    )Net cash used in discontinued operations
    
    
    (3,643
    )
    
    
    
    
    
    
    
    
    
    
    (3,643
    )Net cash used in investing activities
    
    
    (12,819
    )
    
    
    (14,288
    )
    
    
    6,715
    
    
    
    (20,392
    )Cash flows from financing activities:Principal repayments of debt and capital
lease obligations
    
    
    (581
    )
    
    
    (249
    )
    
    
    
    
    
    
    (830
    )Sale of common shares and warrants
    
    
    7,125
    
    
    
    
    
    
    
    
    
    
    
    7,125Proceeds from the exercise of options and warrants
    
    
    521
    
    
    
    
    
    
    
    
    
    
    
    521Intercompany
    
    
    6,715
    
    
    
    
    
    
    
    (6,715
    )
    
    
    13,780
    
    
    
    (249
    )
    
    
    (6,715
    )
    
    
    6,816Effect of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    (133
    )
    
    
    
    
    
    
    (133
    )Increase (decrease) in cash and cash equivalents
    
    
    (4,124
    )
    
    
    424
    
    
    
    
    
    
    
    (3,700
    )Cash and cash equivalents, beginning of period
    
    
    6,192
    
    
    
    2,284
    
    
    
    
    
    
    
    8,476Cash and cash equivalents, end of period
    
    $
    2,068
    
    
    $
    2,708
    
    
    $
    
    
    
    $
    4,776
 28




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Overview
  Sources of Revenue
       29




---



##### Table of Contents



Expense Structure
       Recent Developments
  30




---



##### Table of Contents



Results of Operations for the Three and Six Months Ended June 30, 2006 and 2005
  31




---



##### Table of Contents



Three Months Ended June 30, 2006US
    
    
    Canada
    
    
    TotalRevenue
    
    $
    53,744
    
    
    
    100.0
    %
    
    $
    47,843
    
    
    
    100.0
    %
    
    $
    101,587
    
    
    
    100.0
    %Operating expenses:Cost of
operations
    
    
    37,234
    
    
    
    69.3
    %
    
    
    32,766
    
    
    
    68.5
    %
    
    
    70,000
    
    
    
    68.9
    %Selling,
general and
administrative
expense
    
    
    8,634
    
    
    
    16.1
    %
    
    
    5,729
    
    
    
    12.0
    %
    
    
    14,363
    
    
    
    14.1
    %Depreciation,
depletion and
amortization
    
    
    5,999
    
    
    
    11.2
    %
    
    
    4,154
    
    
    
    8.7
    %
    
    
    10,153
    
    
    
    10.0
    %Foreign
exchange loss
and
other
    
    
    85
    
    
    
    0.1
    %
    
    
    2,162
    
    
    
    4.5
    %
    
    
    2,247
    
    
    
    2.3
    %Income from
operations
    
    $
    1,792
    
    
    
    3.3
    %
    
    $
    3,032
    
    
    
    6.3
    %
    
    $
    4,824
    
    
    
    4.7
    %
 Three Months Ended June 30, 2005US
    
    
    Canada
    
    
    TotalRevenue
    
    $
    47,719
    
    
    
    100.0
    %
    
    $
    41,134
    
    
    
    100.0
    %
    
    $
    88,853
    
    
    
    100.0
    %Operating expenses:Cost of
operations
    
    
    36,983
    
    
    
    77.5
    %
    
    
    27,532
    
    
    
    66.9
    %
    
    
    64,515
    
    
    
    72.6
    %Selling,
general and
administrative
expense
    
    
    7,663
    
    
    
    16.1
    %
    
    
    5,708
    
    
    
    13.9
    %
    
    
    13,371
    
    
    
    15.0
    %Depreciation,
depletion and
amortization
    
    
    5,231
    
    
    
    11.0
    %
    
    
    4,808
    
    
    
    11.7
    %
    
    
    10,039
    
    
    
    11.4
    %Foreign
exchange loss
(gain) and
other
    
    
    29
    
    
    
    0.0
    %
    
    
    (28
    )
    
    
    -0.1
    %
    
    
    1
    
    
    
    0.0
    %Income (loss) from
operations
    
    $
    (2,187
    )
    
    
    -4.6
    %
    
    $
    3,114
    
    
    
    7.6
    %
    
    $
    927
    
    
    
    1.0
    %
 Six Months Ended June 30, 2006US
    
    
    Canada
    
    
    TotalRevenue
    
    $
    103,213
    
    
    
    100.0
    %
    
    $
    86,934
    
    
    
    100.0
    %
    
    $
    190,147
    
    
    
    100.0
    %Operating expenses:Cost of
operations
    
    
    72,388
    
    
    
    70.1
    %
    
    
    59,990
    
    
    
    69.0
    %
    
    
    132,378
    
    
    
    69.6
    %Selling,
general and
administrative
expense
    
    
    17,799
    
    
    
    17.2
    %
    
    
    11,801
    
    
    
    13.6
    %
    
    
    29,600
    
    
    
    15.6
    %Impairment
of deferred
acquisition
costs
    
    
    439
    
    
    
    0.4
    %
    
    
    5,173
    
    
    
    6.0
    %
    
    
    5,612
    
    
    
    3.0
    %Depreciation
, depletion
and
amortization
    
    
    11,653
    
    
    
    11.4
    %
    
    
    8,217
    
    
    
    9.4
    %
    
    
    19,870
    
    
    
    10.4
    %Foreign
exchange
loss (gain)
and
other
    
    
    140
    
    
    
    0.1
    %
    
    
    2,026
    
    
    
    2.3
    %
    
    
    2,166
    
    
    
    1.1
    %Income (loss) from
operations
    
    $
    794
    
    
    
    0.8
    %
    
    $
    (273
    )
    
    
    -0.3
    %
    
    $
    521
    
    
    
    0.3
    %
 32




---



##### Table of Contents



Six Months Ended June 30, 2005US
    
    
    Canada
    
    
    TotalRevenue
    
    $
    94,482
    
    
    
    100.0
    %
    
    $
    77,278
    
    
    
    100.0
    %
    
    $
    171,760
    
    
    
    100.0
    %Operating expenses:Cost of
operations
    
    
    72,301
    
    
    
    76.5
    %
    
    
    52,515
    
    
    
    68.0
    %
    
    
    124,816
    
    
    
    72.7
    %Selling,
general and
administrative
expense
    
    
    16,037
    
    
    
    17.0
    %
    
    
    11,550
    
    
    
    14.9
    %
    
    
    27,587
    
    
    
    16.1
    %Depreciation,
depletion and
amortization
    
    
    10,109
    
    
    
    10.7
    %
    
    
    8,947
    
    
    
    11.5
    %
    
    
    19,056
    
    
    
    11.0
    %Foreign
exchange loss
(gain) and
other
    
    
    
    
    
    
    0.0
    %
    
    
    (184
    )
    
    
    -0.2
    %
    
    
    (184
    )
    
    
    -0.1
    %Income (loss) from
operations
    
    $
    (3,965
    )
    
    
    -4.2
    %
    
    $
    4,450
    
    
    
    5.8
    %
    
    $
    485
    
    
    
    0.3
    %
 Revenue
  Three Months Ended June 30,
    
    
    
    
    
    
    Six Months Ended June 30,2006
    
    2005
    
    2006
    
    
    2005Collection
    
    $
    83,196
    
    
    
    73.6
    %
    
    $
    74,109
    
    
    
    76.2
    %
    
    $
    156,846
    
    
    
    74.7
    %
    
    $
    144,057
    
    
    
    77.2
    %Landfill
disposal
    
    
    14,005
    
    
    
    12.4
    %
    
    
    10,350
    
    
    
    10.6
    %
    
    
    26,580
    
    
    
    12.7
    %
    
    
    18,068
    
    
    
    9.7
    %Transfer
station
    
    
    12,706
    
    
    
    11.2
    %
    
    
    9,330
    
    
    
    9.6
    %
    
    
    21,015
    
    
    
    10.0
    %
    
    
    17,785
    
    
    
    9.5
    %Material recovery
facilities
    
    
    2,845
    
    
    
    2.5
    %
    
    
    2,835
    
    
    
    2.9
    %
    
    
    5,098
    
    
    
    2.4
    %
    
    
    5,637
    
    
    
    3.0
    %Other specialized
services
    
    
    290
    
    
    
    0.3
    %
    
    
    580
    
    
    
    0.7
    %
    
    
    440
    
    
    
    0.2
    %
    
    
    1,013
    
    
    
    0.6
    %113,042
    
    
    
    100.0
    %
    
    
    97,204
    
    
    
    100.0
    %
    
    
    209,979
    
    
    
    100.0
    %
    
    
    186,560
    
    
    
    100.0
    %Intercompany
elimination
    
    
    (11,455
    )
    
    
    
    
    
    
    (8,351
    )
    
    
    
    
    
    
    (19,832
    )
    
    
    
    
    
    
    (14,800
    )$
    101,587
    
    
    
    
    
    
    $
    88,853
    
    
    
    
    
    
    $
    190,147
    
    
    
    
    
    
    $
    171,760
 All Other
    
    
    TotalThree Months Ended June 30,
    
    Florida
    
    
    Canada
    
    
    Operations
    
    
    Revenue2006
    
    $
    52,637
    
    
    $
    47,843
    
    
    $
    1,107
    
    
    $
    101,5872005
    
    
    47,055
    
    
    
    41,134
    
    
    
    664
    
    
    
    88,853
 All Other
    
    
    TotalSix Months Ended June 30,
    
    Florida
    
    
    Canada
    
    
    Operations
    
    
    Revenue2006
    
    $
    101,030
    
    
    $
    86,934
    
    
    $
    2,183
    
    
    $
    190,1472005
    
    
    93,559
    
    
    
    77,278
    
    
    
    923
    
    
    
    171,760
      33




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##### Table of Contents



Cost of Operations
       Selling, General and Administrative Expense
  34




---



##### Table of Contents



Deferred Acquisition Costs
  Depreciation, Depletion and Amortization
   Foreign Exchange Loss (Gain) and Other
  35




---



##### Table of Contents



Interest Expense
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Preferred Stock
dividends and
amortization of
issue
costs
    
    $
    4,841
    
    
    $
    5,114
    
    
    $
    10,537
    
    
    $
    9,956Credit facility and
Subordinated Note
interest
    
    
    6,953
    
    
    
    6,445
    
    
    
    13,119
    
    
    
    12,518Amortization of
debt issue
costs
    
    
    388
    
    
    
    361
    
    
    
    776
    
    
    
    705Other interest
expense
    
    
    484
    
    
    
    367
    
    
    
    985
    
    
    
    775$
    12,666
    
    
    $
    12,287
    
    
    $
    25,417
    
    
    $
    23,954
   Income Tax Provision
  Liquidity and Capital Resources
  Senior Secured Credit Facilities
  36




---



##### Table of Contents



Maximum ConsolidatedMaximum Consolidated
    
    Senior Secured
    
    Minimum ConsolidatedFiscal Quarter
    
    Leverage Ratio
    
    Leverage Ratio
    
    Interest Coverage RatioFQ2
2006
    
    
    5.25:1.00
    
    
    
    2.25:1.00
    
    
    
    2.00:1.00FQ3
2006
    
    
    5.00:1.00
    
    
    
    2.25:1.00
    
    
    
    2.00:1.00FQ4
2006
    
    
    4.75:1.00
    
    
    
    2.25:1.00
    
    
    
    2.25:1.00FQ1
2007
    
    
    4.75:1.00
    
    
    
    2.25:1.00
    
    
    
    2.25:1.00FQ2
2007
    
    
    4.50:1.00
    
    
    
    2.25:1.00
    
    
    
    2.25:1.00
 Senior Subordinated Notes
 1 2
  37




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##### Table of Contents



Equity Placement
  Cumulative Mandatory Redeemable Preferred Stock
   Migration Transaction
   Surety Bonds, Letters of Credit and Insurance
   Cash Flows
  38




---



##### Table of Contents



Cash Flows from Operating Activities
  Cash Flows from Investing Activities
  Cash Flows from Financing Activities
  Off-Balance Sheet Financing
  Landfill Sites
  39




---



##### Table of Contents



June 30, 2006Balance,Beginning of
    
    
    
    
    
    
    
    
    
    
    Balance, End ofPeriod
    
    
    Landfills Acquired
    
    
    Airspace Consumed
    
    
    PeriodUnited StatesPermitted
Capacity
    
    
    70,840
    
    
    
    17,042
    
    
    
    (1,270
    )
    
    
    86,612Probable
expansion
capacity
    
    
    18,300
    
    
    
    
    
    
    
    
    
    
    
    18,300Total
available
airspace
    
    
    89,140
    
    
    
    17,042
    
    
    
    (1,270
    )
    
    
    104,912Number of
landfill
sites
    
    
    3
    
    
    
    1
    
    
    
    
    
    
    
    4CanadaPermitted
Capacity
    
    
    11,878
    
    
    
    
    
    
    
    (176
    )
    
    
    11,702Probable
expansion
capacity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
available
airspace
    
    
    11,878
    
    
    
    
    
    
    
    (176
    )
    
    
    11,702Number of
landfill
sites
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    3TotalPermitted
Capacity
    
    
    82,718
    
    
    
    17,042
    
    
    
    (1,446
    )
    
    
    98,314Probable
expansion
capacity
    
    
    18,300
    
    
    
    
    
    
    
    
    
    
    
    18,300Total
available
airspace
    
    
    101,018
    
    
    
    17,042
    
    
    
    (1,446
    )
    
    
    116,614Number of
landfill
sites
    
    
    6
    
    
    
    1
    
    
    
    
    
    
    
    7
 Trend Information
 Seasonality
  New Accounting Pronouncements
   40




---



##### Table of Contents



Disclosure Regarding Forward-Looking Statements and Factors Affecting Future Results
   
    
    our substantial indebtedness and the significant restrictive covenants in our various
credit facilities and our ability to finance acquisitions with cash on hand, debt or equity
offerings;
    
    our ability to implement a refinancing plan for our mandatorily redeemable preferred
stock and to achieve the expected benefits;
    
    our ability to maintain and perform our financial assurance obligations;
    
    changes in regulations affecting our business and costs of compliance;
    
    revocation of existing permits and licenses or the refusal to renew or grant new permits
and licenses, which are required to enable us to operate our business or implement our
growth strategy;
    
    our ability to successfully implement our corporate strategy and integrate any acquisitions we undertake;
    
    our ability to negotiate renewals of existing service agreements at favorable rates;
    
    our ability to enhance profitability of certain aspects of our operations in markets
where we are not internalized through either divestiture or asset swaps;
    
    costs and risks associated with litigation;
    
    changes in general business and economic conditions, changes in exchange rates and in the financial markets;
    
    changes in accounting standards or pronouncements; and
    
    construction, equipment delivery or permitting delays for our transfer stations or landfills.
  41




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
   
 Item 4. Controls and Procedures
 Disclosure Controls and Procedures/Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls Over Financial Reporting
  
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults upon Senior Securities
  42




---



##### Table of Contents



Item 4. Submission of Matters to a Vote of Security Holders
   Director
    
    For
    
    
    WithheldWallace Timmeny
    
    
    44,588,231
    
    
    
    11,973,280Michael Verrochi
    
    
    44,588,231
    
    
    
    11,973,280
   For
    Against
    
    
    Abstentions
    
    
    Broker Non-Votes54,060,087
    
    2,263,384
    
    
    
    238,040
    
    
    
    0
 
 Item 5. Other Information
  
 Item 6. Exhibits
              43




---



##### Table of Contents



44




---



##### Table of Contents



SIGNATURES
  Waste Services, Inc.Date:
August 1, 2006By:
    
    /s/ DAVID SUTHERLAND-YOESTDavid Sutherland-YoestChairman of the Board,Chief Executive Officer, and DirectorBy:
    
    /s/ MARK A. PYTOSHMark A. PytoshExecutive Vice President andChief Financial Officer
 45




---



##### Table of Contents



EXHIBIT INDEX
 Exhibit No
    
    DescriptionExhibit 3.7
    
    Amendment to Amended and Restated Certificate of Incorporation of Waste Services,
Inc. (incorporated by reference to Exhibit 3.1 filed on Form 8-K on July 5, 2006).Exhibit 3.8
    
    Amended Certificate of Designations of Special Voting Preferred Stock of Waste
Services, Inc. (incorporated by reference to Exhibit 3.2 filed on Form 8-K on July
5, 2006).Exhibit 3.9
    
    Amendment to Provisions for Exchangeable Shares of Waste Services (CA) Inc.
effective June 30, 2006 (incorporated by reference to Exhibit 3.3 filed on Form 8-K
on July 5, 2006).Exhibit 4.15
    
    Agreement effective as of the 30th day of March, 2006 among Waste Services, Inc.,
Kelso Investment Associates VI, L.P, and KEP VI, LLC. (incorporated by reference to
Exhibit 20.3 filed on Form 8-K on April 5, 2006).Exhibit 4.16
    
    Supplemental Indenture dated as of May 12, 2006 to the Note Indenture among Liberty
Waste, LLC, Waste Services, Inc., the other guarantors and Wells Fargo Bank National
Association, as Trustee.Exhibit 4.17
    
    Supplemental Indenture dated as of
June 30, 2006 to the Note Indenture among Taft
Recycling, Inc., Waste Services, Inc., the other guarantors and Wells Fargo Bank
National Association, as Trustee.Exhibit 4.18
    
    Supplemental Indenture dated as of June 30, 2006 to the Note Indenture among Sun Country
Materials, LLC., Waste Services, Inc., the other guarantors and Wells Fargo Bank National
Association, as Trustee.Exhibit 10.17
    
    Fifth Amendment to Amended and
Restated Credit Agreement dated as of March 22, 2006 (incorporated by reference to Exhibit 20.1 filed on Form 8-K on April 5, 2006).Exhibit 10.18
    
    Sixth Amendment to Amended and Restated Credit Agreement dated as of March 31, 2006
(incorporated by reference to Exhibit 20.2 filed on Form 8-K on April 5, 2006).Exhibit 10.19
    
    Seventh Amendment to Amended and Restated Credit Agreement dated as of June 20,
2006 (incorporated by reference to Exhibit 20.1 on Form 8-K on June 20, 2006).Exhibit 10.20
    
    Asset Purchase Agreement dated as of July 19, 2006 among Waste
Services of Florida, Inc. and various affiliates of Allied Waste
Industries, Inc.Exhibit 10.21
    
    Asset Purchase Agreement dated as of July 19, 2006 among Allied Waste
Transfer Services of Arizona, LLC, Waste Services, Inc. and Waste
Services of Arizona, Inc.Exhibit 31.1
    
    Section 302 Certification of David Sutherland-Yoest, Chief Executive OfficerExhibit 31.2
    
    Section 302 Certification of Mark A. Pytosh, Chief Financial OfficerExhibit 32.1
    
    Section 1350 Certification of the Chief Executive Officer and Chief Financial Officer
 46