##### 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 September 30, 2007
 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
 (Address of principal executive offices) (zip code)
 (905) 319-1237
 (Registrants telephone number, including area code)
 þ o
  o þ o
 o þ




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##### 



TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONItem 1. Financial StatementsUnaudited Condensed Consolidated Balance Sheets as of September 30, 2007 and December 31, 2006
    
    
    2Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30,
2007 and 2006
    
    
    3Unaudited Condensed Consolidated Statement of Shareholders Equity for the nine months ended September 30, 2007
    
    
    4Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2007 and 2006
    
    
    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
    
    
    41Item 4. Controls and Procedures
    
    
    41PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    41Item 1A. Risk Factors
    
    
    41Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    41Item 3. Defaults upon Senior Securities
    
    
    41Item 4. Submission of Matters to a Vote of Security Holders
    
    
    42Item 5. Other Information
    
    
    42Item 6. Exhibits
    
    
    42Signatures
    
    
    43EX-4.1 Supplemental IndentureEX-4.2 Lender AddendumEX-10.1 Hulligan Employment AgreementEX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-32.1 Section 906 Certification of CEO and CFO
  1




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 WASTE SERVICES, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
 September 30,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    15,998
    
    
    $
    8,532Accounts receivable (net of allowance for doubtful accounts of $817 and $572
as of September 30, 2007 and December 31 2006, respectively)
    
    
    70,553
    
    
    
    51,804Prepaid expenses and other current assets
    
    
    10,767
    
    
    
    6,224Current assets of discontinued operations
    
    
    
    
    
    
    4,559Total current assets
    
    
    97,318
    
    
    
    71,119Property and equipment, net
    
    
    198,618
    
    
    
    140,673Landfill sites, net
    
    
    200,055
    
    
    
    195,881Goodwill and other intangible assets, net
    
    
    423,703
    
    
    
    350,035Other assets
    
    
    18,348
    
    
    
    10,667Non-current assets of discontinued operations
    
    
    
    
    
    
    96,688Total assets
    
    $
    938,042
    
    
    $
    865,063LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    27,045
    
    
    $
    24,033Accrued expenses and other current liabilities
    
    
    69,435
    
    
    
    53,566Short-term financing and current portion of long-term debt
    
    
    1,915
    
    
    
    3,975Current liabilities of discontinued operations
    
    
    
    
    
    
    4,784Total current liabilities
    
    
    98,395
    
    
    
    86,358Long-term debt
    
    
    442,822
    
    
    
    406,113Accrued closure, post-closure and other obligations
    
    
    47,595
    
    
    
    32,625Non-current liabilities of discontinued operations
    
    
    
    
    
    
    610Total liabilities
    
    
    588,812
    
    
    
    525,706Shareholders equity:Common stock $0.01 par value: 166,666,666 shares authorized, 43,972,362
and 43,868,606 shares issued and outstanding as of September 30, 2007 and
December 31, 2006, respectively
    
    
    439
    
    
    
    438Additional paid-in capital
    
    
    509,741
    
    
    
    506,751Accumulated other comprehensive income
    
    
    65,185
    
    
    
    35,201Accumulated deficit
    
    
    (226,135
    )
    
    
    (203,033
    )Total shareholders equity
    
    
    349,230
    
    
    
    339,357Total liabilities and shareholders equity
    
    $
    938,042
    
    
    $
    865,063
  2




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WASTE SERVICES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
 Three Months Ended September 30,
    
    

Nine Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenue
    
    $
    130,605
    
    
    $
    103,739
    
    
    $
    358,158
    
    
    $
    291,703Operating and other expenses:Cost of operations (exclusive of depreciation, depletion
and amortization)
    
    
    85,346
    
    
    
    70,312
    
    
    
    235,478
    
    
    
    201,373Selling, general and administrative expense (exclusive of
depreciation, depletion and amortization)
    
    
    18,587
    
    
    
    14,753
    
    
    
    48,479
    
    
    
    44,083Deferred acquisition costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,612Depreciation, depletion and amortization
    
    
    16,143
    
    
    
    10,602
    
    
    
    43,234
    
    
    
    29,694Foreign exchange loss (gain) and other
    
    
    638
    
    
    
    (92
    )
    
    
    51
    
    
    
    2,024Income from operations
    
    
    9,891
    
    
    
    8,164
    
    
    
    30,916
    
    
    
    8,917Interest expense
    
    
    10,243
    
    
    
    7,996
    
    
    
    30,818
    
    
    
    22,876Cumulative mandatorily redeemable preferred stock dividends and
amortization of issue costs
    
    
    
    
    
    
    4,256
    
    
    
    
    
    
    
    14,793Income (loss) from continuing operations before income taxes
    
    
    (352
    )
    
    
    (4,088
    )
    
    
    98
    
    
    
    (28,752
    )Income tax provision
    
    
    4,474
    
    
    
    4,045
    
    
    
    10,618
    
    
    
    8,386Net loss from continuing operations
    
    
    (4,826
    )
    
    
    (8,133
    )
    
    
    (10,520
    )
    
    
    (37,138
    )Net loss from discontinued operations, net of tax of $0
    
    
    
    
    
    
    (460
    )
    
    
    (1,130
    )
    
    
    (1,297
    )Loss on sale of discontinued operations, net of tax of $0
    
    
    (198
    )
    
    
    
    
    
    
    (11,452
    )
    
    
    Net loss
    
    $
    (5,024
    )
    
    $
    (8,593
    )
    
    $
    (23,102
    )
    
    $
    (38,435
    )Basic and diluted loss per share:Loss per share  continuing operations
    
    $
    (0.11
    )
    
    $
    (0.23
    )
    
    $
    (0.23
    )
    
    $
    (1.08
    )Loss per share  discontinued operations
    
    
    
    
    
    
    (0.01
    )
    
    
    (0.27
    )
    
    
    (0.03
    )Loss per share  basic and diluted
    
    $
    (0.11
    )
    
    $
    (0.24
    )
    
    $
    (0.50
    )
    
    $
    (1.11
    )Weighted average common shares outstanding  basic and diluted
    
    
    46,007
    
    
    
    36,066
    
    
    
    45,984
    
    
    
    34,534
  3




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WASTE SERVICES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
For the Nine Months Ended September 30, 2007
(In thousands)
 AccumulatedWaste Services, Inc.
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    TotalCommon Stock
    
    

Additional
    
    

Comprehensive
    
    

Accumulated
    
    

ShareholdersShares
    
    
    Amount
    
    
    Paid-in Capital
    
    
    Income
    
    
    Deficit
    
    
    EquityBalance, December 31, 2006
    
    
    43,869
    
    
    $
    438
    
    
    $
    506,751
    
    
    $
    35,201
    
    
    $
    (203,033
    )
    
    $
    339,357Exercise of options and warrants
    
    
    103
    
    
    
    1
    
    
    
    690
    
    
    
    
    
    
    
    
    
    
    
    691Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    2,300
    
    
    
    
    
    
    
    
    
    
    
    2,300Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,984
    
    
    
    
    
    
    
    29,984Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (23,102
    )
    
    
    (23,102
    )Balance, September 30, 2007
    
    
    43,972
    
    
    $
    439
    
    
    $
    509,741
    
    
    $
    65,185
    
    
    $
    (226,135
    )
    
    $
    349,230
  4




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WASTE SERVICES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 Nine Months Ended September 30,2007
    
    
    2006Cash flows from operating activities:Net loss
    
    $
    (23,102
    )
    
    $
    (38,435
    )Adjustments to reconcile net loss to net cash flows from operating activities:Net loss from discontinued operations
    
    
    12,582
    
    
    
    1,297Depreciation, depletion and amortization
    
    
    43,234
    
    
    
    29,694Cumulative mandatorily redeemable preferred stock dividends and
amortization of issue costs
    
    
    
    
    
    
    14,793Amortization of debt issue costs
    
    
    1,837
    
    
    
    1,172Deferred income tax provision
    
    
    3,766
    
    
    
    8,298Non-cash stock-based compensation expense
    
    
    2,300
    
    
    
    2,918Severance costs expensed, exclusive of stock-based compensation
    
    
    3,252
    
    
    
    Deferred acquisition costs expensed
    
    
    
    
    
    
    5,173Foreign exchange loss and loss on disposal of property and equipment
    
    
    735
    
    
    
    2,005Other non-cash items
    
    
    319
    
    
    
    515Changes in operating assets and liabilities (excluding
the effects of acquisitions and dispositions):Accounts receivable
    
    
    (5,007
    )
    
    
    (4,638
    )Prepaid expenses and other current assets
    
    
    (645
    )
    
    
    (608
    )Accounts payable
    
    
    335
    
    
    
    (5,375
    )Accrued expenses and other current liabilities
    
    
    6,180
    
    
    
    7,891Net cash provided by continuing operations
    
    
    45,786
    
    
    
    24,700Net cash provided by discontinued operations
    
    
    1,567
    
    
    
    4,346Net cash provided by operating activities
    
    
    47,353
    
    
    
    29,046Cash flows from investing activities:Cash used in business combinations and significant asset
acquisitions, net of cash acquired
    
    
    (32,289
    )
    
    
    (28,973
    )Capital expenditures
    
    
    (48,624
    )
    
    
    (37,007
    )Proceeds from asset sales and business divestitures
    
    
    17,832
    
    
    
    4,929Deposits for business acquisitions and other
    
    
    (9,820
    )
    
    
    (929
    )Net cash used in continuing operations
    
    
    (72,901
    )
    
    
    (61,980
    )Net cash used in discontinued operations
    
    
    (2,187
    )
    
    
    (3,025
    )Net cash used in investing activities
    
    
    (75,088
    )
    
    
    (65,005
    )Cash flows from financing activities:Proceeds from issuance of debt and draw on revolving credit facility
    
    
    84,066
    
    
    
    40,532Principal repayments of debt and capital lease obligations
    
    
    (49,537
    )
    
    
    (11,861
    )Proceeds from the exercise of options and warrants
    
    
    691
    
    
    
    86Fees paid for financing transactions
    
    
    (1,259
    )
    
    
    (149
    )Net cash provided by financing activities  continuing operations
    
    
    33,961
    
    
    
    28,608Effect of exchange rate changes on cash and cash equivalents
    
    
    1,240
    
    
    
    161Increase (decrease) in cash and cash equivalents
    
    
    7,466
    
    
    
    (7,190
    )Cash and cash equivalents at the beginning of the period
    
    
    8,532
    
    
    
    8,886Cash and cash equivalents at the end of the period
    
    $
    15,998
    
    
    $
    1,696
  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 September 30,
    
    Nine months ended September 30,2007
    
    2006
    
    2007
    
    2006Common Shares issuable under option grants
    
    
    57
    
    
    
    
    
    
    
    37
    
    
    
    Common Shares issuable under warrants outstanding
    
    
    669
    
    
    
    219
    
    
    
    625
    
    
    
    190Dilutive securities
    
    
    726
    
    
    
    219
    
    
    
    662
    
    
    
    190
  2. Adopted Accounting
  
    
    an allocation or a shift of income between taxing jurisdictions,
    
    the characterization of income or a decision to exclude reporting taxable income in a
tax return, or
    
    a decision to classify a transaction, entity, or other position in a tax return as
tax exempt.
    
    
    Federal  We are subject to U.S. federal tax examinations by tax authorities for the
tax years ended December 31, 2004 to 2006.
 7




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WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 
    
    State  We are subject to state tax examinations by tax authorities for the tax years
ended December 31, 2004 to 2006.
    
    Canada  We are no longer subject to foreign tax examinations by tax authorities for
years before January 1, 1999.
    
    Provincial  We are no longer subject to foreign tax examinations by tax authorities
for years before January 1, 1999.
  3. Discontinued Operations
    Arizona
    
    
    TexasOperations
    
    
    Operations
    
    
    TotalFair value of operations received
    
    $
    52,351
    
    
    $
    18,471
    
    
    $
    70,822Cash received, net of promissory note issued
    
    
    
    
    
    
    15,638
    
    
    
    15,638Less:Carrying value of operations sold
    
    
    51,559
    
    
    
    46,353
    
    
    
    97,912Gain (loss) on disposition of discontinued operations
    
    $
    792
    
    
    $
    (12,244
    )
    
    $
    (11,452
    )
 8




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WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Arizona
    
    
    TexasOperations
    
    
    Operations
    
    
    TotalAccounts receivable
    
    $
    3,418
    
    
    $
    658
    
    
    $
    4,076Prepaid expenses and other current assets
    
    
    452
    
    
    
    31
    
    
    
    483Current assets of discontinued operations
    
    
    3,870
    
    
    
    689
    
    
    
    4,559Property and equipment
    
    
    11,803
    
    
    
    4,646
    
    
    
    16,449Landfill sites
    
    
    17,229
    
    
    
    41,456
    
    
    
    58,685Goodwill and other intangible assets
    
    
    21,433
    
    
    
    
    
    
    
    21,433Other assets
    
    
    121
    
    
    
    
    
    
    
    121Non-current assets of discontinued operations
    
    
    50,586
    
    
    
    46,102
    
    
    
    96,688Total assets of discontinued operations
    
    $
    54,456
    
    
    $
    46,791
    
    
    $
    101,247Accounts payable
    
    $
    356
    
    
    $
    
    
    
    $
    356Accrued expenses and other current liabilities
    
    
    3,518
    
    
    
    910
    
    
    
    4,428Current liabilities of discontinued operations
    
    
    3,874
    
    
    
    910
    
    
    
    4,784Accrued closure, post closure and other obligations
    
    
    336
    
    
    
    274
    
    
    
    610Non-current liabilities of discontinued operations
    
    
    336
    
    
    
    274
    
    
    
    610Total liabilities of discontinued operations
    
    $
    4,210
    
    
    $
    1,184
    
    
    $
    5,394Net assets of discontinued operations
    
    $
    50,246
    
    
    $
    45,607
    
    
    $
    95,853
 4. Share-Based Payments
  Three months ended September 30,
    

Nine months ended September 30,2007
    
    2006
    
    2007
    
    2006Annual dividend yield
    
    
    
    
    
    
    N/A
    
    
    
    
    
    
    
    Weighted-average expected life (years)
    
    
    3.0
    
    
    
    N/A
    
    
    
    3.0
    
    
    
    3.0Risk-free interest rate
    
    
    4.6
    %
    
    
    N/A
    
    
    
    4.5
    %
    
    
    4.8
    %Expected volatility
    
    
    89
    %
    
    
    N/A
    
    
    
    92
    %
    
    
    38
    %
   9




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WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  5. Business Combinations and Significant Asset Acquisitions
      10




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WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Allied
    
    
    
    
    
    
    USA
    
    
    
    

    
    
    AllSouth Florida
    
    
    WCA
    
    
    Recycling
    
    
    Other
    
    
    TotalPurchase price:Cash paid and transaction costs
    
    $
    15,777
    
    
    $
    10
    
    
    $
    13,408
    
    
    $
    1,351
    
    
    $
    30,546Fair value of operations received
    
    
    52,351
    
    
    
    18,471
    
    
    
    
    
    
    
    
    
    
    
    70,822Total purchase price
    
    
    68,128
    
    
    
    18,481
    
    
    
    13,408
    
    
    
    1,351
    
    
    
    101,368Allocated as follows:Working capital assumed:Cash and cash equivalents
    
    
    1
    
    
    
    
    
    
    
    84
    
    
    
    
    
    
    
    85Accounts receivable
    
    
    7,417
    
    
    
    1,163
    
    
    
    
    
    
    
    
    
    
    
    8,580Prepaid expenses and other current assets
    
    
    290
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    290Accrued expenses and other current liabilities
    
    
    (4,134
    )
    
    
    (85
    )
    
    
    
    
    
    
    (48
    )
    
    
    (4,267
    )Net working capital
    
    
    3,574
    
    
    
    1,078
    
    
    
    84
    
    
    
    (48
    )
    
    
    4,688Property and equipment
    
    
    22,040
    
    
    
    3,082
    
    
    
    5,394
    
    
    
    648
    
    
    
    31,164Accrued closure, post-closure and other
obligations assumed
    
    
    
    
    
    
    (312
    )
    
    
    
    
    
    
    
    
    
    
    (312
    )Net book value of assets acquired and liabilities
assumed
    
    
    25,614
    
    
    
    3,848
    
    
    
    5,478
    
    
    
    600
    
    
    
    35,540Excess purchase price to be allocated
    
    $
    42,514
    
    
    $
    14,633
    
    
    $
    7,930
    
    
    $
    751
    
    
    $
    65,828Allocated as follows:Goodwill
    
    $
    6,735
    
    
    $
    12,645
    
    
    $
    5,709
    
    
    $
    386
    
    
    $
    25,475Other intangible assets
    
    
    35,779
    
    
    
    1,988
    
    
    
    2,221
    
    
    
    365
    
    
    
    40,353Total allocated
    
    $
    42,514
    
    
    $
    14,633
    
    
    $
    7,930
    
    
    $
    751
    
    
    $
    65,828
    Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenue
    
    $
    130,605
    
    
    $
    129,229
    
    
    $
    379,800
    
    
    $
    378,739Net loss from continuing operations
    
    $
    (4,826
    )
    
    $
    (5,749
    )
    
    $
    (9,315
    )
    
    $
    (33,461
    )Basic and diluted loss per Share  continuing operations
    
    $
    (0.11
    )
    
    $
    (0.16
    )
    
    $
    (0.20
    )
    
    $
    (0.93
    )Pro forma weighted average
common shares outstanding  basic and diluted
    
    
    46,007
    
    
    
    36,066
    
    
    
    45,984
    
    
    
    36,066
 11




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WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  12




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WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 6. Prepaid Expenses and Other Current Assets
  September 30,
    
    
    December 31,2007
    
    
    2006Prepaid expenses
    
    $
    4,489
    
    
    $
    2,969Parts and supplies
    
    
    2,243
    
    
    
    1,710Royalty receivable
    
    
    1,316
    
    
    
    Other current assets
    
    
    2,719
    
    
    
    1,545$
    10,767
    
    
    $
    6,224
 7. Property and Equipment
  September 30,
    
    
    December 31,2007
    
    
    2006Land and buildings
    
    $
    63,863
    
    
    $
    31,470Vehicles
    
    
    145,929
    
    
    
    116,436Containers, compactors and landfill and recycling equipment
    
    
    98,913
    
    
    
    74,597Furniture, fixtures, other office equipment and leasehold improvements
    
    
    12,246
    
    
    
    10,272Total property and equipment
    
    
    320,951
    
    
    
    232,775Less: Accumulated depreciation
    
    
    (122,333
    )
    
    
    (92,102
    )Property and equipment, net
    
    $
    198,618
    
    
    $
    140,673
 8. Landfill Sites, Accrued Closure, Post-Closure and Other Obligations
 Landfill Sites
  September 30,
    
    
    December 31,2007
    
    
    2006Landfill sites
    
    $
    263,176
    
    
    $
    240,938Less: Accumulated depletion
    
    
    (63,121
    )
    
    
    (45,057
    )Landfill sites, net
    
    $
    200,055
    
    
    $
    195,881
  September 30,2007
    
    
    2006Balance at the beginning of the period
    
    $
    195,881
    
    
    $
    116,781Landfill site construction costs
    
    
    13,394
    
    
    
    11,057Reclassification to conservatory
    
    
    (1,028
    )
    
    
    Purchase price allocation adjustments for prior acquisitions
    
    
    505
    
    
    
    Acquisitions
    
    
    
    
    
    
    23,290Additional asset retirement obligations
    
    
    2,290
    
    
    
    1,419Depletion
    
    
    (13,400
    )
    
    
    (9,153
    )Effect of foreign exchange rate fluctuations
    
    
    2,413
    
    
    
    409Balance at the end of the period
    
    $
    200,055
    
    
    $
    143,803
 Accrued Closure, Post-Closure and Other Obligations
  13




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 September 30,
    
    
    December 31,2007
    
    
    2006Accrued closure and post-closure obligations
    
    $
    15,794
    
    
    $
    9,667Deferred income tax liability
    
    
    28,089
    
    
    
    22,322Accrued severance
    
    
    2,181
    
    
    
    Capital lease obligations
    
    
    927
    
    
    
    186Other obligations
    
    
    604
    
    
    
    450$
    47,595
    
    
    $
    32,625
  September 30,2007
    
    
    2006Current portion at the beginning of period
    
    $
    6,258
    
    
    $
    Long-term portion at the beginning of period
    
    
    9,667
    
    
    
    8,971Balance at the beginning of period
    
    
    15,925
    
    
    
    8,971Additional asset retirement obligations
    
    
    2,290
    
    
    
    1,419Accretion
    
    
    546
    
    
    
    591Acquisitions
    
    
    
    
    
    
    2,037Payments
    
    
    (1,281
    )
    
    
    Effect of foreign exchange rate fluctuations
    
    
    1,270
    
    
    
    255Balance at the end of period
    
    
    18,750
    
    
    
    13,273Less: Current portion
    
    
    (2,956
    )
    
    
    Long-term portion
    
    $
    15,794
    
    
    $
    13,273
 9. Goodwill and Other Intangible Assets
  September 30,
    
    
    December 31,2007
    
    
    2006Other intangible assets subject to amortization:Customer relationships and contracts
    
    $
    77,376
    
    
    $
    43,964Non-competition agreements and other
    
    
    6,995
    
    
    
    3,69484,371
    
    
    
    47,658Less: Accumulated amortization:Customer relationships and contracts
    
    
    (24,500
    )
    
    
    (17,080
    )Non-competition agreements and other
    
    
    (2,074
    )
    
    
    (2,435
    )Other intangible assets subject to amortization, net
    
    
    57,797
    
    
    
    28,143Goodwill
    
    
    365,906
    
    
    
    321,892Goodwill and other intangible assets, net
    
    $
    423,703
    
    
    $
    350,035
  14




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Nine Months Ended September 30, 2007Florida
    
    
    Canada
    
    
    TotalBalance at the beginning of the period
    
    $
    235,044
    
    
    $
    86,848
    
    
    $
    321,892Acquisitions
    
    
    25,089
    
    
    
    386
    
    
    
    25,475Purchase price allocation adjustments for prior acquisitions
    
    
    3,536
    
    
    
    61
    
    
    
    3,597Effect of foreign exchange rate fluctuations
    
    
    
    
    
    
    14,942
    
    
    
    14,942Balance at the end of the period
    
    $
    263,669
    
    
    $
    102,237
    
    
    $
    365,906
 Nine Months Ended September 30, 2006Florida
    
    
    Canada
    
    
    TotalBalance at the beginning of the period
    
    $
    199,377
    
    
    $
    84,869
    
    
    $
    284,246Acquisitions
    
    
    22,094
    
    
    
    1,672
    
    
    
    23,766Purchase price allocation adjustments for prior acquisitions
    
    
    (258
    )
    
    
    
    
    
    
    (258
    )Effect of foreign exchange rate fluctuations
    
    
    
    
    
    
    3,439
    
    
    
    3,439Balance at the end of the period
    
    $
    221,213
    
    
    $
    89,980
    
    
    $
    311,193
 10. Other Assets
  September 30,
    
    
    December 31,2007
    
    
    2006Debt issue costs, net of accumulated amortization of $5,261 and $3,853
as of September 30, 2007 and December 31, 2006, respectively
    
    $
    8,347
    
    
    $
    9,060Acquisition deposits and deferred acquisition costs
    
    
    9,484
    
    
    
    1,048Other assets
    
    
    517
    
    
    
    559$
    18,348
    
    
    $
    10,667
  11. Debt
  September 30,
    
    
    December 31,2007
    
    
    2006Senior Secured Credit Facilities:Revolving credit facility
    
    $
    
    
    
    $
    Term loan facility, floating interest rate at 8.1% as of September 30, 2007
and 10.0% (adjusted to 8.1% in January 2007) as of December 31, 2006,
due $693 per quarter from September 2008 through March 2010,
$67,264 per quarter thereafter, due March 2011
    
    
    273,910
    
    
    
    245,260Senior Subordinated Notes, fixed interest rate at 9.5%, due 2014
    
    
    160,000
    
    
    
    160,000Other secured notes payable, interest at 4.5% to 7.8%, due through
2014 (net of discount of $2,277 and $0 at September 30, 2007
and December 31, 2006, respectively)
    
    
    8,181
    
    
    
    2,041Other subordinated notes payable, interest at 6.7%, due through 2017
    
    
    2,646
    
    
    
    2,787444,737
    
    
    
    410,088Less: Current portion
    
    
    (1,915
    )
    
    
    (3,975
    )Long-term portion
    
    $
    442,822
    
    
    $
    406,113
 15




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Senior Secured Credit Facilities
    Other Secured Notes Payable
  Senior Subordinated Notes
 1 2
   16




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 12. Cumulative Mandatorily Redeemable Preferred Stock
   13. Commitments and Contingencies
 Environmental Risks
   Legal Proceedings
    17




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Surety Bonds, Letters of Credit and Insurance
    Nine Months Ended September 30,2007
    
    
    2006Balance at the beginning of the period
    
    $
    5,327
    
    
    $
    4,356Provisions
    
    
    3,343
    
    
    
    3,630Payments
    
    
    (2,838
    )
    
    
    (2,754
    )Favorable claim development for prior periods
    
    
    (336
    )
    
    
    (107
    )Balance at the end of the period
    
    $
    5,496
    
    
    $
    5,125
 Disposal Agreement
   Other Contractual Arrangements
  14. Authorized Capital Stock and Migration Transaction
 Total Shares
  18




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 
    
    166,666,666 shares of common stock, par value 0.01 per share; and
    
    5,000,000 shares of preferred stock, par value 0.01 per share, of which 45,000 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 September 30,
    
    
    Nine Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net loss
    
    $
    (5,024
    )
    
    $
    (8,593
    )
    
    $
    (23,102
    )
    
    $
    (38,435
    )Foreign currency translation adjustment
    
    
    13,881
    
    
    
    (194
    )
    
    
    29,984
    
    
    
    7,207Comprehensive income (loss)
    
    $
    8,857
    
    
    $
    (8,787
    )
    
    $
    6,882
    
    
    $
    (31,228
    )
 19




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 16. Segment Information
    Three Months Ended September 30, 2007Florida
    
    Canada
    
    Corporate
    
    TotalRevenue
    
    $
    70,616
    
    
    $
    59,989
    
    
    $
    
    
    
    $
    130,605Depreciation, depletion and amortization
    
    
    10,982
    
    
    
    4,814
    
    
    
    347
    
    
    
    16,143Income (loss) from operations
    
    
    6,991
    
    
    
    11,262
    
    
    
    (8,362
    )
    
    
    9,891Capital expenditures
    
    
    11,826
    
    
    
    12,357
    
    
    
    274
    
    
    
    24,457
 Three Months Ended September 30, 2006Florida
    
    Canada
    
    Corporate
    
    TotalRevenue
    
    $
    51,910
    
    
    $
    51,829
    
    
    $
    
    
    
    $
    103,739Depreciation, depletion and amortization
    
    
    6,091
    
    
    
    4,155
    
    
    
    356
    
    
    
    10,602Income (loss) from operations
    
    
    7,072
    
    
    
    8,903
    
    
    
    (7,811
    )
    
    
    8,164Capital expenditures
    
    
    7,261
    
    
    
    5,459
    
    
    
    35
    
    
    
    12,755
 Nine Months Ended September 30, 2007Florida
    
    Canada
    
    Corporate
    
    TotalRevenue
    
    $
    197,510
    
    
    $
    160,648
    
    
    $
    
    
    
    $
    358,158Depreciation, depletion and amortization
    
    
    29,106
    
    
    
    13,128
    
    
    
    1,000
    
    
    
    43,234Income (loss) from operations
    
    
    23,942
    
    
    
    27,972
    
    
    
    (20,998
    )
    
    
    30,916Capital expenditures
    
    
    27,873
    
    
    
    19,629
    
    
    
    1,122
    
    
    
    48,624
 Nine Months Ended September 30, 2006Florida
    
    Canada
    
    Corporate
    
    TotalRevenue
    
    $
    152,940
    
    
    $
    138,763
    
    
    $
    
    
    
    $
    291,703Depreciation, depletion and amortization
    
    
    16,946
    
    
    
    11,635
    
    
    
    1,113
    
    
    
    29,694Income (loss) from operations
    
    
    19,860
    
    
    
    21,281
    
    
    
    (32,224
    )
    
    
    8,917Capital expenditures
    
    
    17,521
    
    
    
    18,637
    
    
    
    849
    
    
    
    37,007
 17. Condensed Consolidating Financial Statements
  20




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 September 30, 2007Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    5,678
    
    
    $
    1,019
    
    
    $
    9,301
    
    
    $
    
    
    
    $
    15,998Accounts receivable, net
    
    
    
    
    
    
    33,784
    
    
    
    36,769
    
    
    
    
    
    
    
    70,553Prepaid expenses and other current assets
    
    
    863
    
    
    
    2,737
    
    
    
    7,167
    
    
    
    
    
    
    
    10,767Total current assets
    
    
    6,541
    
    
    
    37,540
    
    
    
    53,237
    
    
    
    
    
    
    
    97,318Property and equipment, net
    
    
    236
    
    
    
    109,649
    
    
    
    88,733
    
    
    
    
    
    
    
    198,618Landfill sites, net
    
    
    
    
    
    
    183,431
    
    
    
    16,624
    
    
    
    
    
    
    
    200,055Goodwill and other intangible assets, net
    
    
    
    
    
    
    320,214
    
    
    
    103,489
    
    
    
    
    
    
    
    423,703Other assets
    
    
    18,147
    
    
    
    201
    
    
    
    
    
    
    
    
    
    
    
    18,348Due from affiliates
    
    
    
    
    
    
    
    
    
    
    651
    
    
    
    (651
    )
    
    
    Investment in subsidiary
    
    
    822,745
    
    
    
    
    
    
    
    
    
    
    
    (822,745
    )
    
    
    Total assets
    
    $
    847,669
    
    
    $
    651,035
    
    
    $
    262,734
    
    
    $
    (823,396
    )
    
    $
    938,042LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    11,757
    
    
    $
    2,305
    
    
    $
    12,983
    
    
    $
    
    
    
    $
    27,045Accrued expenses and other current liabilities
    
    
    21,146
    
    
    
    25,211
    
    
    
    23,078
    
    
    
    
    
    
    
    69,435Short-term financing and current
portion of long-term debt
    
    
    1,715
    
    
    
    200
    
    
    
    
    
    
    
    
    
    
    
    1,915Total current liabilities
    
    
    34,618
    
    
    
    27,716
    
    
    
    36,061
    
    
    
    
    
    
    
    98,395Long-term debt
    
    
    440,376
    
    
    
    2,446
    
    
    
    
    
    
    
    
    
    
    
    442,822Accrued closure, post-closure and other obligations
    
    
    22,794
    
    
    
    7,815
    
    
    
    16,986
    
    
    
    
    
    
    
    47,595Due to affiliates
    
    
    651
    
    
    
    
    
    
    
    
    
    
    
    (651
    )
    
    
    Total liabilities
    
    
    498,439
    
    
    
    37,977
    
    
    
    53,047
    
    
    
    (651
    )
    
    
    588,812Shareholders equity:Common stock of Waste Services, Inc
    
    
    439
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    439Other equity
    
    
    348,791
    
    
    
    613,058
    
    
    
    209,687
    
    
    
    (822,745
    )
    
    
    348,791Total shareholders equity
    
    
    349,230
    
    
    
    613,058
    
    
    
    209,687
    
    
    
    (822,745
    )
    
    
    349,230Total liabilities and shareholders equity
    
    $
    847,669
    
    
    $
    651,035
    
    
    $
    262,734
    
    
    $
    (823,396
    )
    
    $
    938,042
 21




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 December 31, 2006Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    2,190
    
    
    $
    563
    
    
    $
    5,779
    
    
    $
    
    
    
    $
    8,532Accounts receivable, net
    
    
    
    
    
    
    24,144
    
    
    
    27,660
    
    
    
    
    
    
    
    51,804Prepaid expenses and other current assets
    
    
    570
    
    
    
    2,292
    
    
    
    3,362
    
    
    
    
    
    
    
    6,224Current asets of discontinued operations
    
    
    
    
    
    
    4,559
    
    
    
    
    
    
    
    
    
    
    
    4,559Total current assets
    
    
    2,760
    
    
    
    31,558
    
    
    
    36,801
    
    
    
    
    
    
    
    71,119Property and equipment, net
    
    
    167
    
    
    
    71,305
    
    
    
    69,201
    
    
    
    
    
    
    
    140,673Landfill sites, net
    
    
    
    
    
    
    182,050
    
    
    
    13,831
    
    
    
    
    
    
    
    195,881Goodwill and other intangible assets, net
    
    
    
    
    
    
    262,056
    
    
    
    87,979
    
    
    
    
    
    
    
    350,035Other assets
    
    
    10,429
    
    
    
    238
    
    
    
    
    
    
    
    
    
    
    
    10,667Due from affiliates
    
    
    
    
    
    
    
    
    
    
    344
    
    
    
    (344
    )
    
    
    Investment in subsidiary
    
    
    777,619
    
    
    
    
    
    
    
    
    
    
    
    (777,619
    )
    
    
    Non-current assets of discontinued operations
    
    
    
    
    
    
    96,688
    
    
    
    
    
    
    
    
    
    
    
    96,688Total assets
    
    $
    790,975
    
    
    $
    643,895
    
    
    $
    208,156
    
    
    $
    (777,963
    )
    
    $
    865,063LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    9,411
    
    
    $
    3,189
    
    
    $
    11,433
    
    
    $
    
    
    
    $
    24,033Accrued expenses and other current liabilities
    
    
    18,503
    
    
    
    19,600
    
    
    
    15,463
    
    
    
    
    
    
    
    53,566Short-term financing and current
portion of long-term debt
    
    
    3,786
    
    
    
    189
    
    
    
    
    
    
    
    
    
    
    
    3,975Current liabilities of discontinued operations
    
    
    
    
    
    
    4,784
    
    
    
    
    
    
    
    
    
    
    
    4,784Total current liabilities
    
    
    31,700
    
    
    
    27,762
    
    
    
    26,896
    
    
    
    
    
    
    
    86,358Long-term debt
    
    
    403,516
    
    
    
    2,597
    
    
    
    
    
    
    
    
    
    
    
    406,113Accrued closure, post-closure and other obligations
    
    
    16,058
    
    
    
    2,755
    
    
    
    13,812
    
    
    
    
    
    
    
    32,625Due to affiliates
    
    
    344
    
    
    
    
    
    
    
    
    
    
    
    (344
    )
    
    
    Non-current liabilities of discontinued operations
    
    
    
    
    
    
    610
    
    
    
    
    
    
    
    
    
    
    
    610Total liabilities
    
    
    451,618
    
    
    
    33,724
    
    
    
    40,708
    
    
    
    (344
    )
    
    
    525,706Shareholders equity:Common stock of Waste Services, Inc
    
    
    438
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    438Other equity
    
    
    338,919
    
    
    
    610,171
    
    
    
    167,448
    
    
    
    (777,619
    )
    
    
    338,919Total shareholders equity
    
    
    339,357
    
    
    
    610,171
    
    
    
    167,448
    
    
    
    (777,619
    )
    
    
    339,357Total liabilities and shareholders equity
    
    $
    790,975
    
    
    $
    643,895
    
    
    $
    208,156
    
    
    $
    (777,963
    )
    
    $
    865,063
 22




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Three Months Ended September 30, 2007Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedRevenue
    
    $
    
    
    
    $
    70,616
    
    
    $
    59,989
    
    
    $
    
    
    
    $
    130,605Operating and other expenses:Cost of operations (exclusive of depreciation,
depletion and amortization)
    
    
    
    
    
    
    45,701
    
    
    
    39,645
    
    
    
    
    
    
    
    85,346Selling, general and administrative expense (exclusive
of depreciation, depletion and amortization)
    
    
    6,749
    
    
    
    4,966
    
    
    
    6,872
    
    
    
    
    
    
    
    18,587Depreciation, depletion and amortization
    
    
    22
    
    
    
    10,982
    
    
    
    5,139
    
    
    
    
    
    
    
    16,143Foreign exchange loss (gain) and other
    
    
    
    
    
    
    672
    
    
    
    (34
    )
    
    
    
    
    
    
    638Equity earnings in investees, net of tax
    
    
    (11,938
    )
    
    
    
    
    
    
    
    
    
    
    11,938
    
    
    
    Income from operations
    
    
    5,167
    
    
    
    8,295
    
    
    
    8,367
    
    
    
    (11,938
    )
    
    
    9,891Interest expense
    
    
    10,191
    
    
    
    39
    
    
    
    13
    
    
    
    
    
    
    
    10,243Income (loss) from continuing operations before income taxes
    
    
    (5,024
    )
    
    
    8,256
    
    
    
    8,354
    
    
    
    (11,938
    )
    
    
    (352
    )Income tax provision
    
    
    
    
    
    
    1,716
    
    
    
    2,758
    
    
    
    
    
    
    
    4,474Net income (loss) from continuing operations
    
    
    (5,024
    )
    
    
    6,540
    
    
    
    5,596
    
    
    
    (11,938
    )
    
    
    (4,826
    )Loss on sale of discontinued operations
    
    
    
    
    
    
    (198
    )
    
    
    
    
    
    
    
    
    
    
    (198
    )Net income (loss)
    
    $
    (5,024
    )
    
    $
    6,342
    
    
    $
    5,596
    
    
    $
    (11,938
    )
    
    $
    (5,024
    )
 23




---



##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Three Months Ended September 30, 2006Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedRevenue
    
    $
    
    
    
    $
    51,910
    
    
    $
    51,829
    
    
    $
    
    
    
    $
    103,739Operating and other expenses:Cost of operations (exclusive of depreciation, depletion
and amortization)
    
    
    
    
    
    
    35,122
    
    
    
    35,190
    
    
    
    
    
    
    
    70,312Selling, general and administrative expense (exclusive of
depreciation, depletion and amortization)
    
    
    5,778
    
    
    
    3,310
    
    
    
    5,665
    
    
    
    
    
    
    
    14,753Depreciation, depletion and amortization
    
    
    12
    
    
    
    6,091
    
    
    
    4,499
    
    
    
    
    
    
    
    10,602Foreign exchange gain and other
    
    
    
    
    
    
    (62
    )
    
    
    (30
    )
    
    
    
    
    
    
    (92
    )Equity earnings in investees, net of tax
    
    
    (9,340
    )
    
    
    
    
    
    
    
    
    
    
    9,340
    
    
    
    Income from operations
    
    
    3,550
    
    
    
    7,449
    
    
    
    6,505
    
    
    
    (9,340
    )
    
    
    8,164Interest expense
    
    
    7,887
    
    
    
    45
    
    
    
    64
    
    
    
    
    
    
    
    7,996Cumulative mandatorily redeemable preferred stock dividends and
amortization of issue costs
    
    
    4,256
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,256Income (loss) from continuing operations before income taxes
    
    
    (8,593
    )
    
    
    7,404
    
    
    
    6,441
    
    
    
    (9,340
    )
    
    
    (4,088
    )Income tax provision
    
    
    
    
    
    
    1,452
    
    
    
    2,593
    
    
    
    
    
    
    
    4,045Net income (loss) from continuing operations
    
    
    (8,593
    )
    
    
    5,952
    
    
    
    3,848
    
    
    
    (9,340
    )
    
    
    (8,133
    )Net loss from discontinued operations
    
    
    
    
    
    
    (460
    )
    
    
    
    
    
    
    
    
    
    
    (460
    )Net income (loss)
    
    $
    (8,593
    )
    
    $
    5,492
    
    
    $
    3,848
    
    
    $
    (9,340
    )
    
    $
    (8,593
    )
 24




---



##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Nine Months Ended September 30, 2007Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedRevenue
    
    $
    
    
    
    $
    197,510
    
    
    $
    160,648
    
    
    $
    
    
    
    $
    358,158Operating and other expenses:Cost of operations (exclusive of depreciation,
depletion and amortization)
    
    
    
    
    
    
    128,404
    
    
    
    107,074
    
    
    
    
    
    
    
    235,478Selling, general and administrative expense (exclusive
of depreciation, depletion and amortization)
    
    
    15,141
    
    
    
    13,534
    
    
    
    19,804
    
    
    
    
    
    
    
    48,479Depreciation, depletion and amortization
    
    
    52
    
    
    
    29,106
    
    
    
    14,076
    
    
    
    
    
    
    
    43,234Foreign exchange loss (gain) and other
    
    
    (175
    )
    
    
    513
    
    
    
    (287
    )
    
    
    
    
    
    
    51Equity earnings in investees, net of tax
    
    
    (22,443
    )
    
    
    
    
    
    
    
    
    
    
    22,443
    
    
    
    Income from operations
    
    
    7,425
    
    
    
    25,953
    
    
    
    19,981
    
    
    
    (22,443
    )
    
    
    30,916Interest expense
    
    
    30,527
    
    
    
    140
    
    
    
    151
    
    
    
    
    
    
    
    30,818Income (loss) from continuing operations before income taxes
    
    
    (23,102
    )
    
    
    25,813
    
    
    
    19,830
    
    
    
    (22,443
    )
    
    
    98Income tax provision
    
    
    
    
    
    
    3,504
    
    
    
    7,114
    
    
    
    
    
    
    
    10,618Net income (loss) from continuing operations
    
    
    (23,102
    )
    
    
    22,309
    
    
    
    12,716
    
    
    
    (22,443
    )
    
    
    (10,520
    )Net loss from discontinued operations
    
    
    
    
    
    
    (1,130
    )
    
    
    
    
    
    
    
    
    
    
    (1,130
    )Loss on sale of discontinued operations
    
    
    
    
    
    
    (11,452
    )
    
    
    
    
    
    
    
    
    
    
    (11,452
    )Net income (loss)
    
    $
    (23,102
    )
    
    $
    9,727
    
    
    $
    12,716
    
    
    $
    (22,443
    )
    
    $
    (23,102
    )
 25




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Nine Months Ended September 30, 2006Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedRevenue
    
    $
    
    
    
    $
    152,940
    
    
    $
    138,763
    
    
    $
    
    
    
    $
    291,703Operating and other expenses:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cost of operations (exclusive of depreciation, depletion
and amortization)
    
    
    
    
    
    
    106,196
    
    
    
    95,177
    
    
    
    
    
    
    
    201,373Selling, general and administrative expense (exclusive of
depreciation, depletion and amortization)
    
    
    17,188
    
    
    
    9,428
    
    
    
    17,467
    
    
    
    
    
    
    
    44,083Deferred acquisition costs
    
    
    439
    
    
    
    
    
    
    
    5,173
    
    
    
    
    
    
    
    5,612Depreciation, depletion and amortization
    
    
    31
    
    
    
    16,945
    
    
    
    12,718
    
    
    
    
    
    
    
    29,694Foreign exchange loss (gain) and other
    
    
    439
    
    
    
    (411
    )
    
    
    1,996
    
    
    
    
    
    
    
    2,024Equity earnings in investees, net of tax
    
    
    (16,916
    )
    
    
    
    
    
    
    
    
    
    
    16,916
    
    
    
    Income (loss) from operations
    
    
    (1,181
    )
    
    
    20,782
    
    
    
    6,232
    
    
    
    (16,916
    )
    
    
    8,917Interest expense
    
    
    22,461
    
    
    
    134
    
    
    
    281
    
    
    
    
    
    
    
    22,876Cumulative mandatorily redeemable preferred stock dividends and
amortization of issue costs
    
    
    14,793
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,793Income (loss) from continuing operations before income taxes
    
    
    (38,435
    )
    
    
    20,648
    
    
    
    5,951
    
    
    
    (16,916
    )
    
    
    (28,752
    )Income tax provision
    
    
    
    
    
    
    4,291
    
    
    
    4,095
    
    
    
    
    
    
    
    8,386Net loss from continuing operations
    
    
    (38,435
    )
    
    
    16,357
    
    
    
    1,856
    
    
    
    (16,916
    )
    
    
    (37,138
    )Net loss from discontinued operations
    
    
    
    
    
    
    (1,297
    )
    
    
    
    
    
    
    
    
    
    
    (1,297
    )Net income (loss)
    
    $
    (38,435
    )
    
    $
    15,060
    
    
    $
    1,856
    
    
    $
    (16,916
    )
    
    $
    (38,435
    )
 26




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Nine Months Ended September 30, 2007Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet cash (used in) provided by operating activities
    
    $
    (32,802
    )
    
    $
    51,664
    
    
    $
    28,491
    
    
    $
    
    
    
    $
    47,353Cash flows from investing activities:Cash used in business combinations and significant
asset acquisitions, net of cash acquired
    
    
    
    
    
    
    (30,892
    )
    
    
    (1,397
    )
    
    
    
    
    
    
    (32,289
    )Capital expenditures
    
    
    (123
    )
    
    
    (27,873
    )
    
    
    (20,628
    )
    
    
    
    
    
    
    (48,624
    )Proceeds from asset sales and business divestitures
    
    
    
    
    
    
    17,772
    
    
    
    60
    
    
    
    
    
    
    
    17,832Deposits for business acquisitions and other
    
    
    (8,338
    )
    
    
    117
    
    
    
    (1,599
    )
    
    
    
    
    
    
    (9,820
    )Intercompany
    
    
    
    
    
    
    (8,003
    )
    
    
    (2,645
    )
    
    
    10,648
    
    
    
    Net cash used in continuing operations
    
    
    (8,461
    )
    
    
    (48,879
    )
    
    
    (26,209
    )
    
    
    10,648
    
    
    
    (72,901
    )Net cash used in discontinued operations
    
    
    
    
    
    
    (2,187
    )
    
    
    
    
    
    
    
    
    
    
    (2,187
    )Net cash used in investing activities
    
    
    (8,461
    )
    
    
    (51,066
    )
    
    
    (26,209
    )
    
    
    10,648
    
    
    
    (75,088
    )Cash flows from financing activities:Proceeds from issuance of debt and draws on revolving credit facility
    
    
    84,066
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    84,066Principal repayments of debt and capital lease obligations
    
    
    (49,395
    )
    
    
    (142
    )
    
    
    
    
    
    
    
    
    
    
    (49,537
    )Proceeds from the exercise of options and warrants
    
    
    691
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    691Fees paid for financing transactions
    
    
    (1,259
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,259
    )Intercompany
    
    
    10,648
    
    
    
    
    
    
    
    
    
    
    
    (10,648
    )
    
    
    Net cash provided by financing activities  continuing operations
    
    
    44,751
    
    
    
    (142
    )
    
    
    
    
    
    
    (10,648
    )
    
    
    33,961Effect of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    1,240
    
    
    
    
    
    
    
    1,240Increase in cash and cash equivalents
    
    
    3,488
    
    
    
    456
    
    
    
    3,522
    
    
    
    
    
    
    
    7,466Cash and cash equivalents at the beginning of the period
    
    
    2,190
    
    
    
    563
    
    
    
    5,779
    
    
    
    
    
    
    
    8,532Cash and cash equivalents at the end of the period
    
    $
    5,678
    
    
    $
    1,019
    
    
    $
    9,301
    
    
    $
    
    
    
    $
    15,998
 27




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##### Table of Contents



WASTE SERVICES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Nine Months Ended September 30, 2006Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet cash (used in) provided by operating activities
    
    $
    (32,712
    )
    
    $
    39,732
    
    
    $
    22,026
    
    
    $
    
    
    
    $
    29,046Cash flows from investing activities:Cash used in business combinations and significant asset acquisitions,
net of cash acquired
    
    
    
    
    
    
    (26,445
    )
    
    
    (2,528
    )
    
    
    
    
    
    
    (28,973
    )Capital expenditures
    
    
    (188
    )
    
    
    (17,522
    )
    
    
    (19,297
    )
    
    
    
    
    
    
    (37,007
    )Proceeds from asset sales and business divestitures
    
    
    
    
    
    
    4,356
    
    
    
    573
    
    
    
    
    
    
    
    4,929Share reimbursement agreement
    
    
    (929
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (929
    )Intercompany
    
    
    
    
    
    
    
    
    
    
    (4,345
    )
    
    
    4,345
    
    
    
    Net cash used in continuing operations
    
    
    (1,117
    )
    
    
    (39,611
    )
    
    
    (25,597
    )
    
    
    4,345
    
    
    
    (61,980
    )Net cash used in discontinued operations
    
    
    
    
    
    
    (3,025
    )
    
    
    
    
    
    
    
    
    
    
    (3,025
    )Net cash used in investing activities
    
    
    (1,117
    )
    
    
    (42,636
    )
    
    
    (25,597
    )
    
    
    4,345
    
    
    
    (65,005
    )Cash flows from financing activities:Proceeds from issuance of debt and draw on revolving credit facility
    
    
    37,000
    
    
    
    
    
    
    
    3,532
    
    
    
    
    
    
    
    40,532Principal repayments of debt and capital lease obligations
    
    
    (7,333
    )
    
    
    (529
    )
    
    
    (3,999
    )
    
    
    
    
    
    
    (11,861
    )Proceeds from the exercise of options and warrants
    
    
    86
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    86Fees paid for financing transactions
    
    
    (149
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (149
    )Intercompany
    
    
    1,095
    
    
    
    3,250
    
    
    
    
    
    
    
    (4,345
    )
    
    
    Net cash provided by (used in) financing activities  continuing operations
    
    
    30,699
    
    
    
    2,721
    
    
    
    (467
    )
    
    
    (4,345
    )
    
    
    28,608Effect of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    161
    
    
    
    
    
    
    
    161Decrease in cash and cash equivalents
    
    
    (3,130
    )
    
    
    (183
    )
    
    
    (3,877
    )
    
    
    
    
    
    
    (7,190
    )Cash and cash equivalents at the beginning of the period
    
    
    3,130
    
    
    
    550
    
    
    
    5,206
    
    
    
    
    
    
    
    8,886Cash and cash equivalents at the end of the period
    
    $
    
    
    
    $
    367
    
    
    $
    1,329
    
    
    $
    
    
    
    $
    1,696
 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 Nine Months Ended September 30, 2007 and 2006
   Three Months Ended September 30, 2007US
    
    
    
    
    
    
    Canada
    
    
    
    
    
    
    TotalRevenue
    
    $
    70,616
    
    
    
    100.0
    %
    
    $
    59,989
    
    
    
    100.0
    %
    
    $
    130,605
    
    
    
    100.0
    %Operating expenses:Cost of operations
    
    
    45,701
    
    
    
    64.7
    %
    
    
    39,645
    
    
    
    66.1
    %
    
    
    85,346
    
    
    
    65.3
    %Selling, general and administrative expense
    
    
    7,720
    
    
    
    10.9
    %
    
    
    6,872
    
    
    
    11.5
    %
    
    
    14,592
    
    
    
    11.2
    %Severance and related costs
    
    
    3,995
    
    
    
    5.7
    %
    
    
    
    
    
    
    0.0
    %
    
    
    3,995
    
    
    
    3.1
    %Depreciation, depletion and amortization
    
    
    11,004
    
    
    
    15.6
    %
    
    
    5,139
    
    
    
    8.6
    %
    
    
    16,143
    
    
    
    12.4
    %Foreign exchange loss (gain) and other
    
    
    672
    
    
    
    0.9
    %
    
    
    (34
    )
    
    
    -0.1
    %
    
    
    638
    
    
    
    0.4
    %Income from operations
    
    $
    1,524
    
    
    
    2.2
    %
    
    $
    8,367
    
    
    
    13.9
    %
    
    $
    9,891
    
    
    
    7.6
    %
 Three Months Ended September 30, 2006US
    
    
    
    
    
    
    Canada
    
    
    
    
    
    
    TotalRevenue
    
    $
    51,910
    
    
    
    100.0
    %
    
    $
    51,829
    
    
    
    100.0
    %
    
    $
    103,739
    
    
    
    100.0
    %Operating expenses:Cost of operations
    
    
    35,122
    
    
    
    67.6
    %
    
    
    35,190
    
    
    
    67.9
    %
    
    
    70,312
    
    
    
    67.8
    %Selling, general and administrative expense
    
    
    9,088
    
    
    
    17.5
    %
    
    
    5,665
    
    
    
    10.9
    %
    
    
    14,753
    
    
    
    14.2
    %Depreciation, depletion and amortization
    
    
    6,103
    
    
    
    11.8
    %
    
    
    4,499
    
    
    
    8.7
    %
    
    
    10,602
    
    
    
    10.2
    %Foreign exchange gain and other
    
    
    (62
    )
    
    
    -0.1
    %
    
    
    (30
    )
    
    
    -0.1
    %
    
    
    (92
    )
    
    
    -0.1
    %Income from operations
    
    $
    1,659
    
    
    
    3.2
    %
    
    $
    6,505
    
    
    
    12.6
    %
    
    $
    8,164
    
    
    
    7.9
    %
 31




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##### Table of Contents



Nine Months Ended September 30, 2007US
    
    
    
    
    
    
    Canada
    
    
    
    
    
    
    TotalRevenue
    
    $
    197,510
    
    
    
    100.0
    %
    
    $
    160,648
    
    
    
    100.0
    %
    
    $
    358,158
    
    
    
    100.0
    %Operating expenses:Cost of operations
    
    
    128,404
    
    
    
    65.0
    %
    
    
    107,074
    
    
    
    66.7
    %
    
    
    235,478
    
    
    
    65.7
    %Selling, general and administrative expense
    
    
    24,680
    
    
    
    12.5
    %
    
    
    19,804
    
    
    
    12.3
    %
    
    
    44,484
    
    
    
    12.4
    %Severance and related costs
    
    
    3,995
    
    
    
    2.0
    %
    
    
    
    
    
    
    0.0
    %
    
    
    3,995
    
    
    
    1.1
    %Depreciation, depletion and amortization
    
    
    29,158
    
    
    
    14.8
    %
    
    
    14,076
    
    
    
    8.8
    %
    
    
    43,234
    
    
    
    12.1
    %Foreign exchange loss (gain) and other
    
    
    338
    
    
    
    0.2
    %
    
    
    (287
    )
    
    
    -0.2
    %
    
    
    51
    
    
    
    0.1
    %Income from operations
    
    $
    10,935
    
    
    
    5.5
    %
    
    $
    19,981
    
    
    
    12.4
    %
    
    $
    30,916
    
    
    
    8.6
    %
 Nine Months Ended September 30, 2006US
    
    
    
    
    
    
    Canada
    
    
    
    
    
    
    TotalRevenue
    
    $
    152,940
    
    
    
    100.0
    %
    
    $
    138,763
    
    
    
    100.0
    %
    
    $
    291,703
    
    
    
    100.0
    %Operating expenses:Cost of operations
    
    
    106,196
    
    
    
    69.4
    %
    
    
    95,177
    
    
    
    68.6
    %
    
    
    201,373
    
    
    
    69.0
    %Selling, general and administrative expense
    
    
    26,616
    
    
    
    17.4
    %
    
    
    17,467
    
    
    
    12.6
    %
    
    
    44,083
    
    
    
    15.1
    %Deferred acquisition costs
    
    
    439
    
    
    
    0.3
    %
    
    
    5,173
    
    
    
    3.7
    %
    
    
    5,612
    
    
    
    1.9
    %Depreciation, depletion and amortization
    
    
    16,976
    
    
    
    11.1
    %
    
    
    12,718
    
    
    
    9.2
    %
    
    
    29,694
    
    
    
    10.2
    %Foreign exchange loss and other
    
    
    28
    
    
    
    0.0
    %
    
    
    1,996
    
    
    
    1.4
    %
    
    
    2,024
    
    
    
    0.7
    %Income from operations
    
    $
    2,685
    
    
    
    1.8
    %
    
    $
    6,232
    
    
    
    4.5
    %
    
    $
    8,917
    
    
    
    3.1
    %
 Revenue
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Collection
    
    $
    103,845
    
    
    
    72.0
    %
    
    $
    84,143
    
    
    
    74.7
    %
    
    $
    287,950
    
    
    
    72.6
    %
    
    $
    240,748
    
    
    
    76.6
    %Landfill disposal
    
    
    17,184
    
    
    
    11.9
    %
    
    
    13,225
    
    
    
    11.7
    %
    
    
    46,683
    
    
    
    11.8
    %
    
    
    35,640
    
    
    
    11.3
    %Transfer station
    
    
    16,809
    
    
    
    11.7
    %
    
    
    11,659
    
    
    
    10.4
    %
    
    
    46,075
    
    
    
    11.6
    %
    
    
    28,924
    
    
    
    9.2
    %Material recovery facilities
    
    
    5,905
    
    
    
    4.1
    %
    
    
    3,110
    
    
    
    2.8
    %
    
    
    14,644
    
    
    
    3.7
    %
    
    
    8,206
    
    
    
    2.6
    %Other specialized services
    
    
    506
    
    
    
    0.3
    %
    
    
    471
    
    
    
    0.4
    %
    
    
    1,016
    
    
    
    0.3
    %
    
    
    915
    
    
    
    0.3
    %144,249
    
    
    
    100.0
    %
    
    
    112,608
    
    
    
    100.0
    %
    
    
    396,368
    
    
    
    100.0
    %
    
    
    314,433
    
    
    
    100.0
    %Intercompany elimination
    
    
    (13,644
    )
    
    
    
    
    
    
    (8,869
    )
    
    
    
    
    
    
    (38,210
    )
    
    
    
    
    
    
    (22,730
    )$
    130,605
    
    
    
    
    
    
    $
    103,739
    
    
    
    
    
    
    $
    358,158
    
    
    
    
    
    
    $
    291,703
 TotalThree Months Ended September 30,
    
    Florida
    
    Canada
    
    Revenue2007
    
    $
    70,616
    
    
    $
    59,989
    
    
    $
    130,6052006
    
    
    51,910
    
    
    
    51,829
    
    
    
    103,739
 TotalNine Months Ended September 30,
    
    Florida
    
    Canada
    
    Revenue2007
    
    $
    197,510
    
    
    $
    160,648
    
    
    $
    358,1582006
    
    
    152,940
    
    
    
    138,763
    
    
    
    291,703
 32




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##### Table of Contents



Cost of Operations
      33




---



##### Table of Contents



Selling, General and Administrative Expense
   Severance and Related Costs
  Deferred Acquisition Costs
  Depreciation, Depletion and Amortization
  34




---



##### Table of Contents



Foreign Exchange Gain and Other
   Interest Expense
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Credit Facility and Senior Subordinated Note interest
    
    $
    9,248
    
    
    $
    7,217
    
    
    $
    27,771
    
    
    $
    20,337Amortization of debt issue costs
    
    
    522
    
    
    
    396
    
    
    
    1,837
    
    
    
    1,172Preferred Stock dividends and amortization of issue costs
    
    
    
    
    
    
    4,256
    
    
    
    
    
    
    
    14,793Other interest expense
    
    
    473
    
    
    
    383
    
    
    
    1,210
    
    
    
    1,367$
    10,243
    
    
    $
    12,252
    
    
    $
    30,818
    
    
    $
    37,669
   35




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##### Table of Contents



Income Tax Provision
  Liquidity and Capital Resources
  Senior Secured Credit Facilities
    Other Secured Notes Payable
  Senior Subordinated Notes
 1 2
 36




---



##### Table of Contents



Migration Transaction
     Surety Bonds, Letters of Credit and Insurance
   37




---



##### Table of Contents



Cash Flows
  Cash Flows from Operating Activities
  Cash Flows from Investing Activities
  Cash Flows from Financing Activities
  Cash Flow from Discontinued Operations
  Off-Balance Sheet Financing
  38




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##### Table of Contents



Landfill Sites
  Balance,
    
    
    
    
    
    Changes in
    
    Balance,Beginning
    
    Airspace
    
    Engineering
    
    Endof Period
    
    Consumed
    
    Estimates
    
    of PeriodUnited StatesPermitted capacity
    
    
    54,992
    
    
    
    (2,251
    )
    
    
    
    
    
    
    52,741Probable expansion capacity
    
    
    18,300
    
    
    
    
    
    
    
    
    
    
    
    18,300Total available airspace
    
    
    73,292
    
    
    
    (2,251
    )
    
    
    
    
    
    
    71,041Number of sites
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    4CanadaPermitted capacity
    
    
    11,644
    
    
    
    (552
    )
    
    
    
    
    
    
    11,092Probable expansion capacity
    
    
    4,970
    
    
    
    
    
    
    
    (262
    )
    
    
    4,708Total available airspace
    
    
    16,614
    
    
    
    (552
    )
    
    
    (262
    )
    
    
    15,800Number of sites
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    3TotalPermitted capacity
    
    
    66,636
    
    
    
    (2,803
    )
    
    
    
    
    
    
    63,833Probable expansion capacity
    
    
    23,270
    
    
    
    
    
    
    
    (262
    )
    
    
    23,008Total available airspace
    
    
    89,906
    
    
    
    (2,803
    )
    
    
    (262
    )
    
    
    86,841Number of sites
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    7
 Trend Information
 Seasonality
  New Accounting Pronouncements
  39




---



##### 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 business is capital intensive and may consume cash in excess of cash flow from
operations and borrowings;
    
    our ability to vertically integrate our operations;
    
    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, exchange rates and the
financial markets and accounting standards or pronouncements; and
    
    construction, equipment delivery or permitting delays for our transfer stations or
landfills.
  40




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
   
 Item 4. Controls and Procedures
 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
 41




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##### Table of Contents



Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
    
 Item 6. Exhibits
 Exhibit 4.1
    
    Supplemental Indenture, dated as of June 29, 2007, among Southwest Dumpster Inc.,
Waste Services, Inc., the other guarantors and Wells Fargo Bank, National
Association, as Trustee.Exhibit 4.2
    
    Lender Addendum, dated as of August 14, 2007, by and among Bank of America, N.A.,
Waste Services (CA) Inc., Waste Services, Inc., Lehman Commercial Paper Inc., as
administrative agent, and Canadian Imperial Bank of Commerce, as Canadian agent.Exhibit 10.1
    
    Employment Agreement dated as of August 23, 2007 between Waste Services, Inc. and
William P. Hulligan.Exhibit 31.1
    
    Section 302 Certification of David Sutherland-Yoest, Chief Executive OfficerExhibit 31.2
    
    Section 302 Certification of Edwin D. Johnson, Chief Financial OfficerExhibit 32.1
    
    Section 1350 Certification of the Chief Executive Officer and Chief Financial Officer
 42




---



##### Table of Contents



SIGNATURES
  Waste Services, Inc.Date: November 1, 2007By:
    /s/ DAVID SUTHERLAND-YOESTDavid Sutherland-YoestChairman of the Board, President and Chief Executive OfficerBy:
    /s/ EDWIN D. JOHNSONEdwin D. JohnsonExecutive Vice President, Chief Financial Officer 43




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No
    
    DescriptionExhibit 4.1
    
    Supplemental Indenture, dated as of June 29, 2007, among Southwest Dumpster Inc., Waste
Services, Inc., the other guarantors and Wells Fargo Bank, National Association, as
Trustee.Exhibit 4.2
    
    Lender Addendum, dated as of August 14, 2007, by and among Bank of America, N.A., Waste
Services (CA) Inc., Waste Services, Inc., Lehman Commercial Paper Inc., as
administrative agent, and Canadian Imperial Bank of Commerce, as Canadian agent.Exhibit 10.1
    
    Employment Agreement dated as of August 23, 2007 between Waste Services, Inc. and
William P. Hulligan.Exhibit 31.1
    
    Section 302 Certification of David Sutherland-Yoest, Chief Executive OfficerExhibit 31.2
    
    Section 302 Certification of Edwin D. Johnson, Chief Financial OfficerExhibit 32.1
    
    Section 1350 Certification of the Chief Executive Officer and Principal Financial Officer
 44