##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
    Washington, D.C. 20549
  Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2005oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period from
    to   Commission file number 0-21054
  SYNAGRO TECHNOLOGIES,
    INC.
 (Exact name of Registrant as
    Specified in its Charter)
  DELAWARE

88-0219860(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. employer
    identification no.)   1800 BERING DRIVE, SUITE
    1000
    HOUSTON, TEXAS

77057(Zip Code)(Address of principal executive
    offices)
    Internet
    Website www.synagro.com   REGISTRANTS TELEPHONE
    NUMBER, INCLUDING AREA CODE:
 (713) 369-1700
  SECURITIES REGISTERED PURSUANT
    TO SECTION 12(g) OF THE ACT:
  Common Stock, $.002 par
    value
    Preferred Stock Purchase Rights (Title of each
    class)
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2).
 o þ o
  Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




---



##### 



2005
    FORM 10-K
    ANNUAL REPORT
  TABLE OF
    CONTENTS
  
  PagePART IItem 1.

Business


3Item 1A.

Risk Factors


18Item 1B.

Unresolved Staff
    Comments


25Item 2.

Properties


25Item 3.

Legal
    Proceedings


25Item 4.

Submission of
    Matters to a Vote of Security Holders


26PART IIItem 5.

Market for
    Registrants Common Equity and Related Stockholder
    Matters


27Item 6.

Selected Financial
    Data


29Item 7.

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


30Item 7A.

Quantitative and
    Qualitative Disclosures About Market Risk


45Item 8.

Financial
    Statements and Supplementary Data


47Item 9.

Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


86Item 9A.

Controls and
    Procedures


86PART IIIIn accordance with
    paragraph (3) of General Instruction G to
    Form 10-K,
    Part III of this Report is omitted.


87PART IVItem 15.

Exhibits and
    Financial Statement Schedules


87SIGNATURES


91INDEX TO
    FINANCIALS


47Subsidiaries of Synagro Technologies, Inc.Consent of Independent Registered Public Accounting FirmSection 302 Certification of CEOSection 302 Certification of CFOSection 906 Certification of CEOSection 906 Certification of CFO   2




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##### Table of Contents



PART I  Item 1.
    Business  Forward-Looking
    Statements
  Form 10-K. Form 10-Q, Form 8-K,
  Business
    Overview
  General
         3




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##### Table of Contents



Description
    of Business by Segment
        Year Ended
    December 31,2005


2004


2003(In thousands)Residuals Management Operations

$
269,681


$
274,790


$
253,610Rail Transportation


39,309



38,035



40,035Engineering Facilities and
    Development


32,079



17,252



8,725Eliminations


(3,065
)


(4,213
)


(3,818
)Total revenues

$
338,004


$
325,864


$
298,552  4




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##### Table of Contents



Year Ended
    December 31,2005


2004


2003(In thousands)Facilities operations

$
107,557


$
100,222


$
92,388Product marketing


11,094



11,486



12,910Land application and disposal


174,182



176,202



175,576Cleanout services


19,696



26,780



12,658Design and build


25,475



11,174



5,020Total revenues

$
338,004


$
325,864


$
298,552       Industry
    Overview
  History
    
    Population growth and population served;
    Pressures to better manage wastewater;
    More restrictive laws and regulations; and
    Advances in technology.  and/or
 5




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##### Table of Contents



Classes
    of Biosolids
  Sub-Class B.
    Sub-Class B.
  Market
    Size/Fragmentation
         6




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##### Table of Contents



Market
    Growth
    Population Growth and Population Served.
  Pressures To Better Manage Wastewater.
  Stricter Regulations.
  Advances in Technology.
  Market
    Trends
  Sub-Class B
  Decaying Infrastructure.
  Shrinking Agricultural Base and
    Urbanization.
  Public Sentiment.
 7




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##### Table of Contents



Regulatory Stringency.
  Our
    Competitive Strengths
    National, Full-Service Industry Leader.
  Recurring Revenues and Stable Operating Cash
    Flows.
  Significant Land Base.
  Large Range of Processing Capabilities and Product Marketing
    Experience.
  Experienced Sales Force.
 8




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##### Table of Contents



Regulatory Compliance and Reporting.
  Bonding Capacity.
  Strong, Experienced Management Team.
  Our
    Business Strategy
    Organic Growth.
  
    Developing New Customers.  Our sales and
    marketing efforts focus on adding new customers by marketing our
    products and services. In many cases, we believe that we can
    provide the customer with better service at a cost to them that
    is lower than what it costs them to provide the service
    internally or with their current service provider. We take a
    collaborative approach with potential customers where our sales
    force consults with potential customers and positions us as a
    solution provider.
    Expanding Services to Existing Customers.  We
    have the opportunity to provide many of our existing customers
    with additional services as part of a complete residuals
    management program. We endeavor to educate these existing
    customers about the benefits of a complete residuals management
    solution and offer other services where the value is compelling.
    These opportunities may provide us with long-term contracts,
    increased barriers to entry, and better relationships with our
    customers.
    Capitalize on Increased Demand for Class A
    Services.  In order to take advantage of operating
    efficiencies, technology and our comprehensive capabilities, we
    will endeavor to capitalize on the increased demand for
    Class A services, including drying and pelletizing,
    dewatering and composting. We believe this focus will result in
    more long-term contracts and recurring revenue. In addition, we
    are building several new facilities, which we expect will also
    result in longer-term contracts, steady revenue streams, higher
    barriers to entry for competitors, higher switching costs for
    the customer and lower seasonality.  Growth Through Complementary Acquisitions.
 9




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Disciplined Approach to Capital
    Expenditures. and/or
  Services
    and Operations
      
 10




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##### Table of Contents



Design and Build Services.
  Facility Cleanout Services.
  Regulatory Compliance.
        Dewatering.
  Collection and Transportation. and/or
  Composting.
 11




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##### Table of Contents



Drying and Pelletization.
    Product Marketing.
  Incineration.
  Alkaline Stabilization. Sub-Class B Class-B
  Land Application.
 12




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##### Table of Contents



Contracts
      put-or-pay
        Backlog
   13




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Sales and
    Marketing
         14




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##### Table of Contents



Acquisitions
    History
    Company

Date Acquired

U.S. Market
    Served

Capabilities AcquiredA&J Cartage, Inc.

June 1998

Midwest

Land ApplicationRecyc, Inc.

July 1998

West

CompostingEnvironmental Waste Recycling,
    Inc.

November 1998

Southeast

Land ApplicationNational Resource Recovery,
    Inc.

March 1999

Midwest

Land ApplicationAnti-Pollution Associates

April 1999

Florida Keys

Facility OperationsD&D Pumping, Inc.

April 1999

Florida Keys

Land ApplicationVital Cycle, Inc.

April 1999

Southwest

Product MarketingAMSCO, Inc.

May 1999

Southeast

Land ApplicationResidual Technologies, LP

January 2000

Northeast

IncinerationDavis Water Analysis, Inc.

February 2000

Florida Keys

Facility OperationsAKH Water Management, Inc.

February 2000

Florida Keys

Facility OperationsEcosystematics, Inc.

February 2000

Florida Keys

Facility OperationsRehbein, Inc.

March 2000

Midwest

Land ApplicationWhiteford Construction Company

March 2000

Mid-Atlantic

CleanoutsEnvironmental
    Protection & Improvement Inc.

March 2000

Mid-Atlantic

Rail TransportationEarthwise Organics, Inc and
    Earthwise Trucking

August 2002

West

Composting and
    TransportationAspen Resources, Inc.

May 2003

Midwest

Pulp and Paper Residuals   Competition
       15




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##### Table of Contents



Federal,
    State and Local Government Regulation
  and/or
    Permitting
    Process
  and/or and/or
    and/or
   16




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##### Table of Contents



Securities
    and Exchange Commission
    Form 10-K, Form 10-Q (713) 369-1700.
  Patents
    and Proprietary Rights
      Employees
      Potential
    Liability and Insurance
    
    personal injury;
    damage to the environment;
    violations of environmental permits; 17




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
    transportation matters;
    employee matters;
    contractual matters;
    property damage; and
    alleged negligence or professional errors or omissions in the
    planning or performance of work.        Item 1A.
    Risk
    Factors  Risk
    Factors That May Affect Future Results
  Federal
    wastewater treatment and biosolid regulations may restrict our
    operations or increase our costs of operations.
    and/or and/or
 18




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##### Table of Contents



We are
    subject to extensive and increasingly strict federal, state and
    local environmental regulation and permitting, which could
    impose substantial costs on our operations or reduce our
    operational flexibility.
  and/or and/or
      We are
    affected by unusually adverse weather and winter conditions,
    which may adversely affect our revenues and operational
    results.
   19




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##### Table of Contents



Our
    ability to grow may be limited by direct or indirect competition
    with other businesses that provide some or all of the same
    services that we provide.
    If our
    long-term contracts are renewed on less attractive terms, or not
    renewed at all, or if we are unsuccessful in bidding on new
    long-term contracts, our operating results and financial
    condition would be adversely affected.
    If one
    or more of our customer contracts are terminated prior to the
    expiration of their term, and we are not able to replace
    revenues from the terminated contract or receive liquidated
    damages pursuant to the terms of the contract, the lost revenue
    would have a material and adverse effect on our business,
    financial condition and results of operations.
    If one
    or more of our new facilities is not completed as scheduled, and
    we are not able to replace revenues from the new facility, this
    could have a material and adverse effect on our financial
    performance and cash flow.
    A
    significant amount of our business comes from a limited number
    of customers and our revenue and profits could decrease
    significantly if we lost one or more of them as
    customers.
   20




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##### Table of Contents



If we
    were unable to obtain bonding required in connection with
    certain projects, we would be ineligible to bid on those
    projects.
    We
    could face personal injury, third-party or environmental claims
    or other damages resulting in substantial liability for which we
    are uninsured or inadequately insured and which could have a
    material adverse effect on our business, financial condition and
    results of operations.
      We are
    dependent on the availability and satisfactory performance of
    subcontractors for our design and build operations and the
    insufficiency and unavailability of and unsatisfactory
    performance by these unaffiliated third party contractors could
    have a material adverse effect on our business, financial
    condition and results of operations.
    Fluctuations
    in fuel costs could increase our operating expenses and
    negatively impact our net income.
    If we
    fail to properly estimate the cost of completing a project, and
    we cannot pass additional costs through to our customers, we may
    not generate sufficient revenue from the project to cover the
    operating costs of such project, which would adversely affect
    our net income.
   21




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##### Table of Contents



We are
    not able to guarantee that our estimated remaining contract
    value, which we call backlog, will result in actual revenues in
    any particular fiscal period.
    If we
    lose the pending lawsuits we are currently involved in, we could
    be liable for significant damages and legal
    expenses.
    We
    could face considerable business and financial risk in
    implementing our acquisition strategy.
    
    difficulties in the integration of the operations, technologies,
    products and personnel of the acquired company;
    potential loss of employees;
    diversion of managements attention away from other
    business concerns;
    expenses of any undisclosed or potential legal liabilities of
    the acquired company; and
    risks of entering markets in which we have no or limited prior
    experience.     22




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##### Table of Contents



We are
    dependent on our senior management for their depth of industry
    experience and knowledge.
      Efforts
    by labor unions to organize our employees could divert
    management attention and increase our operating
    expenses.
    We may
    become subject to CERCLA or other federal or state cleanup laws,
    which could increase our costs of operations.
         23




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##### Table of Contents



Our
    intellectual property may be misappropriated or subject to
    claims of infringement.
      If we
    determine that our goodwill is impaired, we may have to write
    off all or part of it.
    We may
    be unable to meet changing laws, regulations and standards
    related to corporate governance and public
    disclosure.
    There
    is no assurance that we will continue declaring dividends or
    have the available cash to make dividend payments.
   24




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##### Table of Contents



Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties        Item 3.
    Legal
    Proceedings      Reliance
    Insurance
    and/or
 25




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##### Table of Contents



Design
    and Build Contract Risk
    Other
    Self-Insurance
    Item 4.
    Submission
    of Matters to a Vote of Security Holders   26




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##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Equity and Related Stockholder
    Matters  Common
    Stock Price Range
    High


LowFiscal Year 2005First Quarter

$
5.10


$
2.50Second Quarter

$
4.85


$
3.96Third Quarter

$
5.42


$
4.53Fourth Quarter

$
5.00


$
3.38Fiscal Year 2004First Quarter

$
3.07


$
2.12Second Quarter

$
3.36


$
2.75Third Quarter

$
3.21


$
2.52Fourth Quarter

$
3.10


$
2.79     Dividend
    Policy
   27




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##### Table of Contents



Equity
    Compensation Plan Information
    Number of SecuritiesRemaining Available forNumber of Securities





Future Issuance Underto be Issued Upon


Weighted Average


Equity CompensationExercise of


Exercise Price of


Plans (ExcludingOutstanding


Outstanding


Securities ReflectedStock Options


Stock Options


in column (a))Plan Category

(a)


(b)


(c)Equity compensation plans approved
    by security holders(1)


3,820,132


$
3.08



6,237,000Equity compensation not approved by
    security holders(2)


1,224,160


$
2.82



Total


5,044,292







6,237,000     (1)
    
    We have outstanding stock options granted under the 2000 Stock
    Option Plan (the 2000 Plan) and the Amended and
    Restated 1993 Stock Option Plan (the 1993 Plan) for
    officers, directors and key employees. There are 6,237,000
    options for shares of common stock reserved under the 2000 Plan
    for future grants. Effective with the approval of the 2000 Plan,
    no further grants have been made under the 1993 Plan.(2)
    
    Represents options granted pursuant to individual stock option
    agreements. An aggregate of 1,181,954 options were granted to
    executive officers in 1998 and prior. These options had an
    exercise price equal to the market price, vested over three
    years, and expire ten years from the date of grant. An aggregate
    of 850,000 options were granted to executive officers as an
    inducement essential to the individuals entering into an
    employment contract with us. These options have an exercise
    price equal to market value on the date of grant, vest over
    three years, and expire ten years from the date of grant. 28




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##### Table of Contents



Item 6.
    Selected
    Financial Data    Year Ended
    December 31,2005


2004


2003


2002


2001(In thousands, except per share
    data)Revenue

$
338,004


$
325,864


$
298,552


$
272,628


$
260,196Gross profit


62,225



67,822



64,101



70,748



68,095Selling, general and administrative
    expenses


24,480



24,346



26,070



22,935



21,958Reorganization costs










1,169



905



Transaction costs and expenses


1,517















Stock option redemptions and
    transaction bonuses


6,805















(Gain) loss on sale of assets


(2,659
)


(854
)


7



(244
)


(221
)Special charges, net






320











1,018Amortization of intangibles


238



126



450



108



4,458Gain from litigation settlement


















(6,000
)Interest expense, net


22,290



22,247



23,356



23,498



26,968Net income (loss) before cumulative
    effect of change in accounting for derivatives and asset
    retirement obligations, preferred stock dividends


(9,650
)


12,954



7,754



11,064



17,568Cumulative effect of change in
    accounting for derivatives


















1,153Cumulative effect of change in
    accounting for asset retirement obligations










476







Preferred stock dividends


9,587



8,827



8,209



7,659



7,248Net income (loss) applicable to
    common stock

$
(19,237
)

$
4,127


$
(931
)

$
3,405


$
9,167Basic Net income (loss) per share before
    cumulative effect of change in accounting for derivatives and
    asset retirement obligations, and noncash beneficial conversion
    charge

$
(0.40
)

$
0.21


$
(0.03
)

$
0.17


$
0.53Cumulative effect of change in
    accounting for derivatives


















(0.06
)Cumulative effect of change in
    accounting for asset retirement obligations










(0.02
)






Net income (loss) per
    share  basic

$
(0.40
)

$
0.21


$
(0.05
)

$
0.17


$
0.47Diluted Net income (loss) per share before
    preferred stock dividends, cumulative effect of change in
    accounting for derivatives and asset retirement obligations

$
(0.40
)

$
0.21


$
(0.03
)

$
0.17


$
0.35Cumulative effect of change in
    accounting for derivatives


















(0.02
)Cumulative effect of change in
    accounting for asset retirement obligations










(0.02
)






Net income (loss) per common
    share  diluted

$
(0.40
)

$
0.21


$
(0.05
)

$
0.17


$
0.33Working capital

$
56,259


$
15,159


$
20,517


$
20,890


$
9,135Total assets

$
543,306


$
515,024


$
490,677


$
492,120


$
448,775Total long-term debt, net of
    current maturities

$
279,951


$
248,799


$
269,133


$
283,530


$
249,016Redeemable preferred stock

$



$
95,126


$
86,299


$
78,090


$
70,431Stockholders equity

$
184,154


$
68,725


$
64,022


$
64,449


$
60,540  29




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##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Overview
    Recapitalization
  1 2
        
    $47.3 million to repay in full indebtedness under the
    previously existing credit facility (including accrued interest
    of $0.4 million);
    $8.6 million to pay fees and expenses associated with the
    establishment of the new credit facility and the repayment of
    the existing credit facility and other related fees and expenses;
    $166.3 million to repurchase all of our outstanding
    91/2
    percent notes (including tender premium of $13.2 million
    and accrued interest of $3.1 million);
    $5.5 million associated with the redemption of a portion of
    outstanding options to purchase shares of common stock held by
    certain members of our senior management and board of
    directors; and
    $1.3 million to pay transaction bonuses to certain members
    of our senior management. 30




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##### Table of Contents



Background
          For the Years Ended
    December 31,2005


2004


2003Contract


80
%


83
%


84
%Purchase order


2
%


3
%


4
%Product sales


3
%


3
%


4
%Design/build construction


8
%


3
%


2
%Event


7
%


8
%


6
%100
%


100
%


100
%   percentage-of-completion
   31




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##### Table of Contents




    new sales (including the mix of contract and event sales) and
    existing business retention objectives necessary to maintain the
    companys high percentage of contract and other recurring
    revenues;
    storage and permitted landbase available to efficiently manage
    land application of biosolids, especially during inclement
    weather patterns;
    regulatory and permit compliance requirements and safety
    programs and initiatives specific to our business; and
    reviewing and monitoring utility costs, fuel costs,
    subcontractor transportation costs, equipment utilization and
    availability, equipment purchasing activity, headcount, field
    operating overhead and selling, general and administrative
    expenses. 32




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##### Table of Contents



Results
    of Operations
    For the Years Ended December
    31,2005


2004


2003Revenue

$
338,004



100.0
%

$
325,864



100.0
%

$
298,552



100.0
%Cost of services


275,779



81.6
%


258,042



79.2
%


234,451



78.5
%Gross profit


62,225



18.4
%


67,822



20.8
%


64,101



21.5
%Selling, general and administrative
    expenses


24,480



7.2
%


24,346



7.5
%


26,070



8.7
%Transaction costs and expenses


1,517



0.4
%














Stock option redemptions and
    transaction bonuses


6,805



2.0
%














Restricted stock awards


253



0.1
%














(Gain) loss on sale of assets


(2,659
)


(0.7
)%


(854
)


(0.3
)%


7



0.0
%Reorganization costs


















1,169



0.4
%Special charges, net










320



0.1
%






Amortization of intangibles


238



0.1
%


126



0.0
%


450



0.2
%Income from operations


31,591



9.3
%


43,884



13.5
%


36,405



12.2
%Other expense:Interest expense, net


22,290



6.6
%


22,247



6.9
%


23,356



7.9
%Debt extinguishment costs


19,487



5.8
%














Other (income) expense, net


(203
)


(0.1
)%


37



0.0
%


70



0.0
%Total other expense, net


41,574



12.3
%


22,284



6.9
%


23,426



7.9
%Net income (loss) before provision
    (benefit) for income taxes


(9,983
)


(3.0
)%


21,600



6.6
%


12,979



4.3
%Provision (benefit) for income taxes


(333
)


(0.1
)%


8,646



2.6
%


5,225



1.7
%Net income (loss) before cumulative
    effect of change in accounting for asset retirement obligations
    and preferred stock dividends


(9,650
)


(2.9
)%


12,954



4.0
%


7,754



2.6
%Cumulative effect of change in
    accounting for asset retirement obligations


















476



0.2
%Net income (loss) before preferred
    stock dividends


(9,650
)


(2.9
)%


12,954



4.0
%


7,278



2.4
%Preferred stock dividends


9,587







8,827







8,209Net income (loss) applicable to
    common stock

$
(19,237
)





$
4,127






$
(931
)  33




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##### Table of Contents



For the Years Ended
    December 31,2005


2004


2003RevenueResiduals Management Operations

$
269,681


$
274,790


$
253,610Rail Transportation


39,309



38,035



40,035Engineering, Facilities, and
    Development


32,079



17,252



8,725Eliminations


(3,065
)


(4,213
)


(3,818
)$
338,004


$
325,864


$
298,552Income (loss) from operationsResiduals Management Operations

$
48,246


$
55,857


$
46,655Rail Transportation


4,229



5,134



6,194Engineering, Facilities, and
    Development


564



(1,628
)


(3,842
)Corporate


(21,448
)


(15,479
)


(12,602
)$
31,591


$
43,884


$
36,405   Results
    of Operations for the Years Ended December 31, 2005 and
    2004
    percentage-of-completion
 34




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##### Table of Contents



35




---



##### Table of Contents



Results
    of Operations for the Years Ended December 31, 2004 and
    2003
       36




---



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37




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##### Table of Contents



Liquidity
    and Capital Resources
  Overview
    Historical
    Cash Flows
  Cash Flows from Operating Activities.
     38




---



##### Table of Contents



Cash Flows from Investing Activities.
    Cash Flows from Financing Activities.
    Capital
    Expenditure Requirements
    Debt
    Service Requirements
  Senior
    Credit Facility
   39




---



##### Table of Contents



Eurodollar


Base RateRevolver


7.3
%


9.00
%Term


6.6
%


8.50
%     1 2
        Senior
    Subordinated Notes
   40




---



##### Table of Contents



Other
    Debt
  tax-exempt
  Series 2002-A Series 2002-B
  Notes Payable
    to Sellers of Acquired Businesses
      Nonrecourse


CapitalLong-Term


Project


Lease


Estimated


Operating


PurchaseYear Ended December
    31,

Debt


Revenue Bonds


Obligations


Interest


Leases


Commitments


Total2006

$
1,776


$
3,480


$
3,175


$
17,753


$
9,442


$
8,554


$
44,1802007


1,441



3,710



4,184



17,337



8,943



2,993



38,6082008


1,047



3,935



4,911



16,736



7,442



2,993



37,0642009






4,165



1,718



16,325



6,361



2,993



31,5622010






4,420



747



16,325



5,060



2,993



29,5452011-2015


210,000



24,005



328



20,943



8,675







263,9512016-2020






8,250







3,146



1,526







12,922Thereafter






7,375







1,177



1,262







9,814Total

$
214,264


$
59,340


$
15,063


$
109,742


$
48,711


$
20,526


$
467,646      41




---



##### Table of Contents



Series D
    Redeemable Preferred Stock
    Series E
    Redeemable Preferred Stock
   42




---



##### Table of Contents



Recent
    Accounting Pronouncements
        Critical
    Accounting Estimates and Assumptions
    Allowance for Doubtful Accounts
  Loss Contracts
  Long Term Construction Contracts
 43




---



##### Table of Contents



Property and Equipment/Long-Lived
    Assets
    Goodwill
  Purchase Accounting
  Income Taxes
    Legal and Contingency Accruals
  Derivatives
  Self-Insurance Reserves
 44




---



##### Table of Contents



Off-Balance Sheet Arrangements
  Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk    Derivatives
    and Hedging Activities
           45




---



##### Table of Contents



floating-to-fixed floating-to-fixed floating-to-fixed
  floating-to-fixed
  Interest
    Rate Risk
   46




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data INDEX TO
    FINANCIAL STATEMENTS  PageReport of
    Independent Registered Public Accounting
    Firm  PricewaterhouseCoopers LLP


48Consolidated
    Balance Sheets as of December 31, 2005 and 2004


50Consolidated
    Statements of Operations for the Years Ended December 31,
    2005, 2004 and 2003


51Consolidated
    Statements of Stockholders Equity and Comprehensive Income
    for the Years Ended December 31, 2005, 2004 and 2003


52Consolidated
    Statements of Cash Flows for the Years Ended December 31,
    2005, 2004 and 2003


53Notes to
    Consolidated Financial Statements


55  47




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm      Consolidated
    financial statements
    Internal
    control over financial reporting
  Internal Control  Integrated
    Framework Internal Control  Integrated
    Framework
   48




---



##### Table of Contents



49




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  CONSOLIDATED BALANCE SHEETS
  December 31,


December 31,2005


2004(In thousands exceptshare data)ASSETSCurrent Assets:Cash and cash equivalents

$
18,571


$
326Restricted cash


2,444



655Accounts receivable, net


66,429



63,891Costs and estimated earnings in
    excess of billings


10,579



8,099Prepaid expenses and other current
    assets


12,409



11,793Deferred tax assets


2,759



4,240Total current assets


113,191



89,004Property, machinery &
    equipment, net


227,678



225,541Other Assets:Costs and estimated earnings in
    excess of billings


3,837



4,704Goodwill


176,196



171,855Restricted
    cash  construction fund


406



1,988Restricted
    cash  debt service fund


7,304



7,287Other, net


14,694



14,645Total assets

$
543,306


$
515,024LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent Liabilities:Short term debt

$



$
4,000Current maturities of long-term debt


1,776



848Current maturities of nonrecourse
    project revenue bonds


3,480



3,300Current maturities of capital lease
    obligations


3,175



3,028Accrued interest payable


962



4,018Accounts payable


34,011



39,397Accrued expenses


13,528



19,254Total current liabilities


56,932



73,845Long-Term Debt:Long-term debt obligations, net


212,488



178,453Nonrecourse project revenue bonds,
    net


55,575



59,028Capital lease obligations, net


11,888



11,318Total long-term debt


279,951



248,799Deferred income taxes


19,962



22,731Other long-term liabilities


2,307



5,798Total liabilities


359,152



351,173Commitments and ContingenciesRedeemable Preferred Stock,
    69,792.29 shares issued and outstanding in 2004, none
    outstanding in 2005, redeemable at $1,000 per share






95,126Stockholders Equity:Preferred stock, $.002 par
    value, 10,000,000 shares authorized, none issued or
    outstanding






Common stock, $.002 par value,
    100,000,000 shares authorized, 72,813,378 and
    19,809,621 shares issued and outstanding in 2005 and 2004,
    respectively


146



40Unearned restricted stock


(404
)


Additional paid in capital


197,453



73,358Accumulated deficit


(13,525
)


(3,875
)Accumulated other comprehensive
    income (loss)


484



(798
)Total stockholders equity


184,154



68,725Total liabilities and
    stockholders equity

$
543,306


$
515,024    50




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##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  CONSOLIDATED STATEMENTS OF OPERATIONS
  Year Ended
    December 31,2005


2004


2003(In thousands except forshare and per share
    data)Revenue

$
338,004


$
325,864


$
298,552Cost of services


275,779



258,042



234,451Gross profit


62,225



67,822



64,101Selling, general and administrative
    expenses


24,480



24,346



26,070Transaction costs and expenses


1,517







Stock option redemptions and
    transaction bonuses


6,805







Restricted stock awards


253







(Gain) loss on sale of assets


(2,659
)


(854
)


7Reorganization costs










1,169Special charges, net






320



Amortization of intangibles


238



126



450Income from operations


31,591



43,884



36,405Other expense:Interest expense


22,290



22,247



23,356Debt extinguishment costs


19,487







Other (income) expense, net


(203
)


37



70Total other expense, net


41,574



22,284



23,426Income (loss) before provision
    (benefit) for income taxes


(9,983
)


21,600



12,979Provision (benefit) for income taxes


(333
)


8,646



5,225Net income (loss) before cumulative
    effect of change in accounting for asset retirement obligations
    and preferred stock dividends


(9,650
)


12,954



7,754Cumulative effect of change in
    accounting for asset retirement obligations, net of tax benefit
    of $292










476Net income (loss) before preferred
    stock dividends


(9,650
)


12,954



7,278Preferred stock dividends and
    accretion


9,587



8,827



8,209Net income (loss) applicable to
    common stock

$
(19,237
)

$
4,127


$
(931
)Earnings (loss) per share:Basic Earnings (loss) per share before
    cumulative effect of change in accounting for asset retirement
    obligations

$
(0.40
)

$
0.21


$
(0.03
)Cumulative effect of change in
    accounting for asset retirement obligations










(0.02
)Earnings (loss) per share

$
(0.40
)

$
0.21


$
(0.05
)Diluted Earnings (loss) per share before
    cumulative effect of change in accounting for asset retirement
    obligations

$
(0.40
)

$
0.21


$
(0.03
)Cumulative effect of change in
    accounting for asset retirement obligations










(0.02
)Net earnings (loss) per share

$
(0.40
)

$
0.21


$
(0.05
)Weighted average shares:Weighted average shares outstanding
    for basic and diluted earnings per share


47,725,820



19,777,041



19,775,821    51




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  CONSOLIDATED STATEMENTS OF STOCKHOLDERS
    EQUITY
 for the years ended December 31, 2005, 2004 AND
    2003
  AccumulatedUnearned


Additional





OtherCommon Stock


Restricted


Paid-in


Accumulated


Comprehensive





ComprehensiveShares


Amount


Stock


Stock


Deficit


Income (Loss)


Total


Income (Loss)(In thousands except share
    data)BALANCE, January 31, 2003


19,775,821


$
40






$
90,322


$
(24,107
)

$
(1,806
)

$
64,449Change in other comprehensive
    income (loss), related to amortization of derivatives, net of
    tax of $309






















504



504


$
504Preferred stock dividends














(8,209
)










(8,209
)


Net income before preferred stock
    dividends


















7,278







7,278



7,278BALANCE, December 31, 2003


19,775,821



40







82,113



(16,829
)


(1,302
)


64,022


$
7,782Change in othercomprehensive income(loss), related toamortization ofderivatives, net of tax of $309






















504



504


$
504Preferred stock dividends














(8,827
)










(8,827
)


Exercise of options


33,800











72











72



Net income before preferred stock
    dividends


















12,954







12,954



12,954BALANCE, December 31, 2004


19,809,621



40







73,358



(3,875
)


(798
)


68,725


$
13,458Change in other comprehensive
    income (loss), related to changes due to the Recapitalization
    (See Note 1), net of tax of $489






















798



798



798Change in other comprehensive
    income (loss), related to change in fair value of derivatives,
    net of tax of $280






















484



484



484Preferred stock dividends and
    accretion














(9,587
)










(9,587
)


Issuance of common shares, net of
    issuance costs of $2,358


9,302,326



18







37,623











37,641



Conversion of preferred shares


41,885,597



84







104,630











104,714



Common stock dividends














(14,455
)










(14,455
)


Exercise of options


1,651,772



4







4,148











4,152



Tax benefit from exercise of stock
    options














1,079











1,079



Issuance of restricted stock


164,062







(657
)


657















Vesting of restricted stock










253















253



Net loss before preferred stock
    dividends


















(9,650
)






(9,650
)


(9,650
)BALANCE, December 31, 2005


72,813,378


$
146


$
(404
)

$
197,453


$
(13,525
)

$
484


$
184,154


$
(8,368
)    52




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##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  Year Ended
    December 31,2005


2004


2003(In thousands)Cash flows from operating
    activities:Net income (loss) applicable to
    common stock

$
(19,237
)

$
4,127


$
(931
)Adjustments to reconcile net income
    (loss) applicable to common stock to net cash provided (used) by
    operating activities:Preferred stock dividends and
    warrant accretion


9,587



8,827



8,209Cumulative effect of change in
    accounting for asset retirement obligations










476Bad debt expense


525



300



952Reorganization costs










1,169Depreciation and amortization
    expense


21,667



19,902



18,626Amortization and write-off of debt
    financing costs


5,548



1,244



1,140Restricted stock awards


253







Other


(41
)






Provision (benefit) for deferred
    income taxes


(979
)


7,468



4,514Tax benefit from exercise of stock
    options


1,079







(Gain) loss on sale of property,
    machinery and equipment


(2,659
)


(854
)


7(Increase) decrease in the
    following, net:Accounts receivable


(3,064
)


(4,609
)


(5,633
)Costs and estimated earnings in
    excess of billings


(6,612
)


(11,940
)


(864
)Prepaid expenses and other assets


7,161



(2,289
)


4,390Increase (decrease) in the
    following:Accrued interest payable


(3,056
)


(204
)


(31
)Accounts payable, accrued expenses
    and other long-term liabilities


(13,194
)


11,458



(6,007
)Net cash provided (used) by
    operating activities


(3,022
)


33,430



26,017Cash flows from investing
    activities:Purchase of businesses, including
    contingent consideration and earnout payments, net of cash
    acquired


(341
)


(804
)


(4,634
)Purchases of property, machinery
    and equipment


(19,878
)


(14,667
)


(13,158
)Proceeds from sale of property,
    machinery and equipment


5,022



1,799



14,207Facility construction funded by
    restricted cash


(1,648
)


(10,928
)


(5,270
)Decrease in restricted cash for
    facility construction


1,648



10,200



5,270Decrease (increase) in other
    restricted cash accounts


(1,872
)


740



780Other


3



124



213Net cash used by investing
    activities


(17,066
)


(13,536
)


(2,592
)Cash flows from financing
    activities:Payments of debt


(184,936
)


(26,421
)


(20,816
)Proceeds from debt


210,000







Net increase (decrease) in bank
    revolver borrowings


(5,100
)


5,100



Net increase (decrease) in book
    overdrafts


(1,319
)


1,651



(1,868
)Debt issuance costs


(7,650
)


(176
)


(774
)Proceeds from equity offering


37,641







Dividends on common stock


(14,455
)






Proceeds from exercise of options


4,152



72



Net cash provided (used) by
    financing activities


38,333



(19,774
)


(23,458
)Net increase (decrease) in cash and
    cash equivalents


18,245



120



(33
)Cash and cash equivalents,
    beginning of period


326



206



239Cash and cash equivalents, end of
    period

$
18,571


$
326


$
206Supplemental cash flow information:Interest paid during the period

$
19,555


$
20,009


$
21,437Income taxes paid during the period

$
1,138


$
959


$
247  53




---



##### Table of Contents



NONCASH
    INVESTING AND FINANCING ACTIVITIES RELATING TO
    CONSOLIDATED STATEMENT OF CASH FLOWS
               54




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  (1)
    Business
    and Summary of Significant Accounting Policies  Business
    and Organization
    Recapitalization
  1 2
        
    $47.3 million to repay in full indebtedness under the
    previously existing credit facility (including accrued interest
    of $0.4 million);
    $8.6 million to pay fees and expenses associated with the
    establishment of the new credit facility and the repayment of
    the existing credit facility and other related fees and expenses;
    $166.3 million to repurchase all of the Companys
    outstanding
    91/2percent
    notes (including tender premium of $13.2 million and
    accrued interest of $3.1 million);
    $5.5 million associated with the redemption of a portion of
    outstanding options to purchase shares of common stock held by
    certain members of the Companys senior management and
    board of directors; and
    $1.3 million to pay transaction bonuses to certain members
    of the Companys senior management. 55




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Principles
    of Consolidation
    Cash
    Equivalents
    Costs
    and Estimated Earnings in Excess of Billings
    Property,
    Machinery and Equipment, net
        Goodwill
    Self-Insurance
    Liabilities
   56




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Deferred
    Financing Costs
    Revenue
    Recognition
    percentage-of-completion
    Use of
    Estimates
    Allowance for Doubtful Accounts
  Loss Contracts
  Long Term Construction Contracts
  Property and Equipment/Long-Lived
    Assets
 57




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Goodwill
  Purchase Accounting
  Income Taxes
  Legal and Contingency Accruals
  Derivatives
  Self-Insurance Reserves
    Concentration
    of Credit Risk
   58




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fair
    Value of Financial Instruments
    Income
    Taxes
    Recent
    Accounting Pronouncements
  fair-value-based
    Year Ended
    December 31,2005


2004


2003(In thousands except per share
    data)Net income (loss) applicable to
    common stock, as reported

$
(19,237
)

$
4,127


$
(931
)Plus: Compensation recognized in
    option redemptions, per APB No. 25, net of tax


3,404







Less: Compensation expense per
    SFAS No. 123, net of tax


(1,356
)


(1,191
)


(1,482
)Pro forma income (loss) after
    effect of SFAS No. 123

$
(17,189
)

$
2,936


$
(2,413
)Basic income (loss) per share, as
    reported

$
(0.40
)

$
0.21


$
(0.05
)Proforma basic income (loss) per
    share after effect of SFAS No. 123

$
(0.36
)

$
0.15


$
(0.12
)Diluted earnings (loss) per share,
    as reported

$
(0.40
)

$
0.21


$
(0.05
)Pro forma earnings (loss) per share
    after effect of SFAS No. 123

$
(0.36
)

$
0.15


$
(0.12
)    59




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        ,
    Reclassifications
   60




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (2)
    Property,
    Machinery and Equipment    EstimatedUseful


December 31,Life in Years


2005


2004(In thousands)Land


N/A


$
5,469


$
7,389Buildings and improvements


7-25



43,860



34,903Machinery and equipment


3-30



250,259



227,164Office furniture and equipment


3-10



7,739



6,221Construction in process






14,011



26,501321,338



302,178Less: Accumulated depreciation






93,660



76,637Property, machinery and equipment,
    net





$
227,678


$
225,541     (3)
    Detail of
    Certain Balance Sheet Accounts    December 31,2005


2004


2003(In thousands)Balance at beginning of year

$
1,229


$
1,530


$
1,331Uncollectible receivables written
    off


(616
)


(601
)


(753
)Additions for bad debt expense


525



300



952Balance at end of year

$
1,138


$
1,229


$
1,530     December 31,2005


2004(In thousands)Costs and estimated earnings on
    contracts in progress

$
51,709


$
20,262Less  Billings to
    date


(37,293
)


(7,459
)Costs and estimated earnings in
    excess of billings on uncompleted contracts

$
14,416


$
12,803Current assets

$
10,579


$
8,099Non current assets


3,837



4,704Total

$
14,416


$
12,803    61




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     December 31,2005


2004(In thousands)Prepaid insurance

$
2,524


$
1,619Prepaid expenses


3,980



3,989Inventory


2,989



2,594Other current assets


2,916



3,591Total

$
12,409


$
11,793     Balance at January 1, 2004

$
171,051Additions


804Balance at January 1, 2005


171,855Additions


4,341Balance at December 31, 2005

$
176,196     December 31,2005


2004(In thousands)Accrued expenses consist of the
    following:Accrued legal and other claims costs

$
300


$
1,426Accrued salaries and benefits


1,718



4,089Accrued insurance


4,990



6,129Other accrued expenses


6,520



7,610Accrued liabilities

$
13,528


$
19,254   (4)
    Short-Term
    Debt Obligations   62




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (5)
    Long-Term
    Debt Obligations    December 31,


December 31,2005


2004(In thousands)$305 million Senior Credit
    Facility Term loans

$
210,000


$
$150 million Senior Credit
    Agreement, repaid on June 21, 2005 Revolver






5,100Term loan






23,867Subordinated debt, repaid on
    June 21, 2005






150,000Fair value adjustment of
    subordinated debt as a result of interest rate swaps






(534
)Notes payable to former owners


4,257



855Other notes payable


7



13Total debt


214,264



179,301Less: Current maturities


(1,776
)


(848
)Long-term debt, net of current
    maturities

$
212,488


$
178,453   Senior
    Credit Facility
              Eurodollar


Base RateRevolver


7.3%



9.00%Term


6.6%



8.50%     1 2
 63




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Senior
    Subordinated Notes
  1 2
  Notes Payable
    to Sellers of Acquired Businesses
    Derivatives
    and Hedging Activities
     64




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          floating-to-fixed floating-to-fixed floating-to-fixed
  floating-to-fixed
 65




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Future
    Payments
    Nonrecourse


CapitalLong-Term


Project


LeaseYear Ended
    December 31,

Debt


Revenue Bonds


Obligations


Total2006

$
1,776


$
3,480


$
3,175


$
8,4312007


1,441



3,710



4,184



9,3352008


1,047



3,935



4,911



9,8932009






4,165



1,718



5,8832010






4,420



747



5,1672011-2015


210,000



24,005



328



234,3332016-2020






8,250







8,250Thereafter






7,375







7,375Total

$
214,264


$
59,340


$
15,063


$
288,667   (6)
    Nonrecourse
    Project Revenue Bonds    December 31,


December 31,2005


2004(In thousands)Maryland Energy Financing
    Administration Limited Obligation Solid Waste Disposal Revenue
    Bonds, 1996 series Revenue bonds due 2005 at stated
    interest rate of 5.85%

$



$
2,710Term revenue bond due 2010 at
    stated interest rate of 6.30%


16,295



16,295Term revenue bond due 2016 at
    stated interest rate of 6.45%


22,360



22,36038,655



41,365California Pollution Control
    Financing Authority Solid Waste Revenue Bonds Series 2002A  Revenue
    bonds due 2008 to 2024 at stated interest rates of 4.375% to
    5.50%, net of discount of $285


19,790



19,766Series 2002B  Revenue
    bonds due 2006 at stated interest rate of 4.25%


610



1,19720,400



20,963Total nonrecourse project revenue
    bonds


59,055



62,328Less: Current maturities


(3,480
)


(3,300
)Nonrecourse project revenue bonds,
    net of current maturities

$
55,575


$
59,028Amounts recorded in other assets as
    restricted cash    debt service fund

$
7,304


$
7,287   Maryland
    Project Revenue Bonds
   66




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
              Sacramento
    Project Bonds
  Series 2002-A Series 2002-B
   67




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            (7)
    Capital
    Lease Obligations      Year Ended
    December 31,2006

$
4,0612007


4,8612008


5,2182009


1,8492010


795Thereafter


334Total minimum lease payments


17,118Amount representing interest


(2,055
)Present value of minimum lease
    payments


15,063Current maturities of capital lease
    obligations


(3,175
)Long-term capital lease obligations

$
11,888  68




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (8)
    Income
    Taxes    Year Ended
    December 31,2005


2004


2003(In thousands)Provision (benefit) for income taxes

$
(333
)

$
8,646


$
5,225Income tax benefit related to
    cumulative effect of change in accounting for asset retirement
    obligations in 2003










(292
)$
(333
)

$
8,646


$
4,933     Year Ended
    December 31,2005


2004


2003(In thousands)Federal:Current

$
(99
)

$
286


$
Deferred


(2,347
)


7,351



4,270State:Current


745



892



419Deferred


1,368



117



244$
(333
)

$
8,646


$
4,933     Year Ended
    December 31,2005


2004


2003Provision at the statutory rate


35.0
%


35.0
%


35.0
%Increase resulting from:Increase in deferred tax rate for
    state taxes


(20.5
)%






Reserve for tax contingency


(10.4
)%






State income taxes, net of benefit
    for federal deduction


2.2
%


4.6
%


3.8
%Other items, net


(2.8
)%


0.4
%


1.6
%Change in valuation allowance


(0.2
)%






3.3
%


40.0
%


40.4
%    69




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     December 31,2005


2004(In thousands)Deferred tax
    assets Net operating loss carryforwards

$
41,354


$
30,020Alternative minimum tax credit


227



326Accruals not currently deductible
    for tax purposes


2,373



3,278Allowance for bad debts


455



471Other


632



2,170Total deferred tax assets


45,041



36,265Valuation allowance for deferred
    tax assets


(374
)


(353
)Deferred tax
    liability Differences between book and tax
    bases of fixed assets


49,682



44,498Differences between book and tax
    bases of goodwill


12,188



9,905Total deferred tax liabilities


61,870



54,403Net deferred tax liability

$
17,203


$
18,491      70




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (9)
    Commitments
    and Contingencies  Leases
    Year Ending
    December 31,2006

$
9,4422007


8,9432008


7,4422009


6,3612010


5,060Thereafter


11,463$
48,711   Customer
    Contracts
    Litigation
    Reliance
    Insurance
   71




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   and/or
    Design
    and Build Contract Risk
    Other
    Self-Insurance
   72




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (10)
    Stockholders
    Equity  Preferred
    Stock
    Series D
    Redeemable Preferred Stock
    Series E
    Redeemable Preferred Stock
    Earnings
    Per Share
   73




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Year Ended
    December 31,2005


2004


2003Net income (loss):Net income (loss) before cumulative
    effect of change in accounting for asset retirement obligations
    and preferred stock dividends

$
(9,650
)

$
12,954


$
7,754Cumulative effect of change in
    accounting for asset retirement obligations










476Net income (loss) before preferred
    stock dividends


(9,650
)


12,954



7,278Preferred stock dividends


9,587



8,827



8,209Net income (loss) applicable to
    common stock

$
(19,237
)

$
4,127


$
(931
)Earnings (loss) per share:BasicEarnings (loss) per share before
    cumulative effect of change in accounting for asset retirement
    obligations

$
(0.40
)

$
0.21


$
(0.03
)Cumulative effect of change in
    accounting for asset retirement obligations










(0.02
)Net income (loss) per share

$
(0.40
)

$
0.21


$
(0.05
)Weighted average shares outstanding
    for basic earnings per share calculation


47,725,820



19,777,041



19,775,821DilutedEarnings (loss) per share before
    preferred stock dividends and cumulative effect of change in
    accounting for asset retirement obligations

$
(0.40
)

$
0.21


$
(0.03
)Cumulative effect of change in
    accounting for asset retirement obligations










(0.02
)Net income (loss) per share

$
(0.40
)

$
0.21


$
(0.05
)Weighted average shares:Weighted average shares outstanding
    for basic and diluted earnings per share


47,725,820



19,777,041



19,775,821     Stockholders
    Rights Plan
   74




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          (11)
    Stock
    Option Plans     75




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     WeightedAverageShares Under


Exercise


Exercise2000 Plan

Option


Price Range


PriceOptions outstanding at
    January 1, 2003


4,511,592


$
2.50-6.31


$
2.73Granted


177,500



2.50-2.61



2.51Canceled


(40,000
)


2.50



2.50Options outstanding at
    December 31, 2003


4,649,092


$
2.50-6.31


$
2.72Granted


617,500



2.50-3.34



2.72Exercised


(7,800
)


2.50



2.50Canceled


(146,200
)


2.50



2.50Options outstanding at
    December 31, 2004


5,112,592


$
2.50-6.31


$
2.73Granted


927,200



3.80-4.56



4.30Exercised


(753,476
)


2.50-3.80



2.54Redeemed


(1,443,184
)


2.50-6.31



2.94Canceled


(44,000
)


2.50



2.50Options outstanding at
    December 31, 2005


3,799,132


$
2.50-6.31


$
3.07Exercisable at December 31,
    2005


1,981,066


$
2.50-6.31


$
2.76   WeightedAverageShares Under


Exercise


Exercise1993 Plan

Option


Price Range


PriceOptions outstanding at
    January 1, 2003


1,070,673


$
2.00 - 6.31


$
3.48Canceled/expired


(120,000
)


2.75 - 4.00



3.48Options outstanding at
    December 31, 2003


950,673


$
2.00-6.31


$
3.48Exercised


(3,000
)


2.38



2.38Canceled/expired


(87,840
)


2.00-6.31



3.51Options outstanding at
    December 31, 2004


859,833


$
2.00-6.31


$
3.48Exercised


(265,000
)


2.75-3.50



3.01Redeemed


(555,000
)


2.50-6.31



3.62Canceled


(18,833
)


2.00-5.75



4.87Options outstanding at
    December 31, 2005


21,000


$
3.56-4.50


$
4.46Exercisable at December 31,
    2005


21,000


$
3.56-4.50


$
4.46  76




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Other
    Options
    WeightedAverageShares Under


Exercise


ExerciseOption


Price Range


PriceOptions outstanding at
    January 1, 2003


3,036,954


$
2.00-6.94


$
3.08Granted


150,000



2.50



2.50Options outstanding at
    December 31, 2003


3,186,954


$
2.00-6.94


$
3.05Exercised


(23,000
)


2.00



2.00Canceled


(221,332
)


6.94



6.94Options outstanding at
    December 31, 2004


2,942,622


$
2.00-4.75


$
2.77Exercised


(633,296
)


2.00-3.19



2.27Redeemed


(1,045,166
)


2.50-4.75



3.01Canceled


(40,000
)


2.50



2.50Options outstanding at
    December 31, 2005


1,224,160


$
2.00-3.38


$
2.82Exercisable at December 31,
    2005


764,160


$
2.00-3.38


$
3.01       Weighted AverageOutstanding Shares

Exercise Price


Weighted Average


Contractual LifeUnder Option

Range


Exercise Price


(In Years)


Exercisable3,506,823

$
2.00 - 2.99


$
2.51



5.41



2,102,623491,511

$
3.00 - 3.99


$
3.39



5.96



491,511970,958

$
4.00 - 5.99


$
4.36



6.29



97,09275,000

$
6.00 - 6.99


$
6.31



3.50



75,000   (12)  Restricted
    Stock Plan
       77




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        (13)
    Reorganization
    Costs  lower-than-expected
  (14)
    Special
    Charges    (15)
    Employee
    Benefit Plans    (16)
    Quarterly
    Results of Operations (Unaudited)    Quarter Ended


Quarter EndedMarch 31,


June 30,


Sept. 30,


Dec. 31,


March 31,


June 30,


Sept. 30,


Dec. 31,2005


2005


2005


2005


2004


2004


2004


2004(In thousands, except for per
    share data)


(In thousands, except for per
    share data)Revenues

$
76,214


$
83,532


$
88,238


$
90,020


$
72,660


$
82,164


$
85,940


$
85,100Gross profit

$
12,038


$
16,971


$
17,743


$
15,473


$
12,316


$
18,911


$
19,373


$
17,222Operating income

$
5,945


$
3,388


$
13,701


$
8,557


$
6,652


$
13,946


$
12,883


$
10,403Net income (loss) applicable to
    common stock

$
(2,612
)

$
(21,214
)

$
5,138


$
(549
)

$
(1,258
)

$
2,950


$
2,138


$
297Earnings (loss) per share Basic

$
(0.13
)

$
(0.84
)

$
0.07


$
(0.01
)

$
(0.06
)

$
0.15


$
0.11


$
0.02Diluted

$
(0.13
)

$
(0.84
)

$
0.07


$
(0.01
)

$
(0.06
)

$
0.09


$
0.07


$
0.02     year-to-date
 78




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (17)
    Related
    Party Transactions    (18)
    Condensed
    Consolidating Financial Statements   79




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   CONDENSED
    CONSOLIDATING BALANCE SHEETS
    AS OF DECEMBER 31, 2005
  Non-Guarantor


GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


Consolidated(Dollars in thousands)ASSETSCurrent Assets:Cash and cash equivalents

$
18,233


$
34


$
304


$



$
18,571Restricted cash






1,679



765







2,444Accounts receivable, net






65,534



942



(47
)


66,429Note receivable, current






214











214Prepaid expenses and other current
    assets


3,019



22,387



127







25,533Total current assets


21,252



89,848



2,138



(47
)


113,191Property, machinery &
    equipment, net






202,775



24,903







227,678Other Assets:Goodwill






176,196











176,196Investments in subsidiaries


100,258











(100,258
)


Intercompany


288,422











(288,422
)


Restricted
    cash  construction fund










406







406Restricted
    cash  debt service fund






5,587



1,717







7,304Other, net


7,089



8,583



2,859







18,531Total assets

$
417,021


$
482,989


$
32,023


$
(388,727
)

$
543,306LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent Liabilities:Current maturities of long-term debt

$



$
1,776


$



$



$
1,776Current maturities of nonrecourse
    project revenue bonds






2,870



610







3,480Current maturities of capital lease
    obligations






3,175











3,175Accrued interest payable


664



206



92







962Accounts payable and accrued
    expenses






46,737



849



(47
)


47,539Total current liabilities


664



54,764



1,551



(47
)


56,932Long-Term Debt:Long-term debt obligations, net


210,000



2,488











212,488Nonrecourse project revenue bonds,
    net






35,785



19,790







55,575Intercompany






288,395



27



(288,422
)


Capital lease obligations, net






11,888











11,888Total long-term debt


210,000



338,556



19,817



(288,422
)


279,951Other long-term liabilities


22,203



66











22,269Total liabilities


232,867



393,386



21,368



(288,469
)


359,152Commitments and ContingenciesStockholders Equity:Capital


197,195



36,339



9,841



(46,180
)


197,195Accumulated earnings (deficit)


(13,525
)


53,264



814



(54,078
)


(13,525
)Accumulated other comprehensive loss


484















484Total stockholders equity


184,154



89,603



10,655



(100,258
)


184,154Total liabilities and
    stockholders equity

$
417,021


$
482,989


$
32,023


$
(388,727
)

$
543,306  80




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   CONDENSED
    CONSOLIDATING BALANCE SHEETS
    AS OF DECEMBER 31, 2004
  Non-Guarantor


GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


Consolidated(Dollars in thousands)ASSETSCurrent Assets:Cash and cash equivalents

$
99


$
21


$
206


$



$
326Restricted cash






655











655Accounts receivable, net






63,367



524







63,891Note receivable, current






218











218Prepaid expenses and other current
    assets


4,240



19,663



11







23,914Total current assets


4,339



83,924



741







89,004Property, machinery &
    equipment, net






202,659



22,882







225,541Other Assets:Goodwill






171,855











171,855Investments in subsidiaries


81,649











(81,649
)


Intercompany


280,157











(280,157
)


Restricted
    cash  construction fund










1,988







1,988Restricted
    cash  debt service fund






5,573



1,714







7,287Other, net


5,204



11,135



3,010







19,349Total assets

$
371,349


$
475,146


$
30,335


$
(361,806
)

$
515,024LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent Liabilities:Short term debt

$



$



$
4,000


$



$
4,000Current maturities of long-term debt


244



604











848Current maturities of nonrecourse
    project revenue bonds






3,300











3,300Current maturities of capital lease
    obligations






3,028











3,028Accounts payable and accrued
    expenses


3,896



56,192



2,581







62,669Total current liabilities


4,140



63,124



6,581







73,845Long-Term Debt:Long-term debt obligations, net


178,189



264











178,453Nonrecourse project revenue bonds,
    net






38,065



20,963







59,028Intercompany






280,157







(280,157
)


Capital lease obligations, net






11,318











11,318Total long-term debt


178,189



329,804



20,963



(280,157
)


248,799Other long-term liabilities


25,169



3,360











28,529Total liabilities


207,498



396,288



27,544



(280,157
)


351,173Commitments and ContingenciesRedeemable Preferred Stock,
    69,792.29 shares issued and outstanding, redeemable at
    $1,000 per share


95,126















95,126Stockholders Equity:Capital


73,398



36,339



2,750



(39,089
)


73,398Accumulated earnings (deficit)


(3,875
)


42,519



41



(42,560
)


(3,875
)Accumulated other comprehensive loss


(798
)














(798
)Total stockholders equity


68,725



78,858



2,791



(81,649
)


68,725Total liabilities and
    stockholders equity

$
371,349


$
475,146


$
30,335


$
(361,806
)

$
515,024  81




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   CONSOLIDATING
    STATEMENTS OF OPERATIONS
    FOR THE YEAR ENDED DECEMBER 31, 2005
  Non-Guarantor


GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


Consolidated(Dollars in thousands)Revenue

$



$
333,660


$
4,460


$
(116
)

$
338,004Cost of services






273,472



2,423



(116
)


275,779Gross Profit






60,188



2,037







62,225Selling, general and administrative
    expenses






24,704



14







24,718Transaction fees and expenses


1,517















1,517Stock option redemptions and
    transaction bonuses


6,805















6,805Restricted stock compensation
    expense


253















253Gain on sale of assets






(2,659
)










(2,659
)Income (loss) from operations


(8,575
)


38,143



2,023







31,591Other expense:Interest expense


17,618



3,449



1,223







22,290Interest
    expense  debt extinguishment costs


19,487















19,487Intercompany interest (income)
    expense


(23,782
)


23,782











Equity in earnings of subs


(11,518
)










11,518



Other (income) expense, net






(203
)










(203
)Total other expense, net


1,805



27,028



1,223



11,518



41,574Income (loss) before provision
    (benefit) for income Taxes


(10,380
)


11,115



800



(11,518
)


(9,983
)Provision (benefit) for income taxes


(730
)


370



27







(333
)Net income (loss) before preferred
    stock dividends


(9,650
)


10,745



773



(11,518
)


(9,650
)Preferred stock dividends


9,587















9,587Net income (loss) applicable to
    common stock

$
(19,237
)

$
10,745


$
773


$
(11,518
)

$
(19,237
)  82




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   CONSOLIDATING
    STATEMENTS OF CASH FLOWS
    FOR THE YEAR ENDED DECEMBER 31, 2005
  Non-Guarantor


GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


Consolidated(Dollars in thousands)Cash flows from operating
    activities:Net income (loss) applicable to
    common stock

$
(19,237
)

$
10,745


$
773


$
(11,518
)

$
(19,237
)Adjustments to reconcile net income
    applicable to common stock to net cash provided by operating
    activities:...Preferred stock dividends


9,587















9,587Bad debt expense






525











525Depreciation and amortization
    expense






20,596



1,071







21,667Amortization and write-off of debt
    financing costs


5,212



309



27







5,548Provision (benefit) for deferred
    income taxes


(730
)


(276
)


27







(979
)Tax benefit from exercise of stock
    options


1,079















1,079Gain on sale of property, machinery
    and Equipment






(2,659
)










(2,659
)Restricted stock awards


253















253Other






(41
)










(41
)Equity in earnings of subsidiaries


(11,518
)










11,518



(Increase) decrease in the
    following, net:Accounts receivable






(2,646
)


(418
)






(3,064
)Cost in excess of billings






(6,612
)










(6,612
)Prepaid expenses and other current
    assets


434



6,843



(116
)






7,161Increase (decrease) in the
    following, net:Accrued interest payable


(3,232
)


206



(30
)






(3,056
)Intercompany
    advances  trade


(23,782
)


23,782











Accounts payable and accrued
    expenses and other long term liabilities


524



(13,757
)


39







(13,194
)Net cash provided (used) by
    operating activities


(41,410
)


37,015



1,373







(3,022
)Cash flows from investing
    activities:Purchase of business






(341
)










(341
)Purchase of property,
    machinery & equipment






(16,937
)


(2,941
)






(19,878
)Proceeds from sale of property,
    machinery & equipment






5,022











5,022Facility construction funded by
    restricted cash










(1,648
)






(1,648
)Decrease in restricted cash for
    facility construction










1,648







1,648Increase in other restricted cash
    accounts






(1,037
)


(835
)






(1,872
)Other






3











3Net cash used by investing
    activities






(13,290
)


(3,776
)






(17,066
)Cash flows from financing
    activities:Payments of debt


(173,867
)


(6,479
)


(4,590
)






(184,936
)Proceeds from debt


210,000















210,000Net decrease in bank revolver
    borrowings


(5,100
)














(5,100
)Net decrease in book overdrafts






(1,319
)










(1,319
)Debt issuance costs


(7,650
)














(7,650
)Dividends on common stock


(14,455
)














(14,455
)Proceeds from equity offering


37,641















37,641Intercompany notes with subsidiaries


15,914



(15,914
)










Capital contributions


(7,091
)






7,091







Proceeds from exercise of options


4,152















4,152Net cash provided (used) by
    financing activities


59,544



(23,712
)


2,501







38,333Net increase (decrease) in cash and
    cash equivalents


18,134



13



98







18,245Cash and cash equivalents,
    beginning of period


99



21



206







326Cash and cash equivalents, end of
    period

$
18,233


$
34


$
304


$



$
18,571  83




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (19)
    Segment
    Information        Residuals





EngineeringManagement


Rail


Facilities


Segments


Corporate/Operations


Transportation


Development


Combined


Eliminations


ConsolidatedYear ended December 31,
    2005:Revenue from external services

$
269,681


$
36,244


$
32,079


$
338,004


$



$
338,004Revenue from other segments

$
1,757


$
1,145


$
121


$
3,023


$
(3,023
)


Depreciation and amortization
    expenses

$
17,821


$
1,666


$
1,070


$
20,557


$
1,110


$
21,667Income (loss) from operations

$
48,246


$
4,229


$
564


$
53,039


$
(21,448
)

$
31,591Total assets

$
418,294


$
50,214


$
45,510


$
514,018


$
29,288


$
543,306Capital expenditures

$
16,378


$
1,092


$
3,289


$
20,759


$
767


$
21,526Year ended December 31,
    2004:Revenue from external services

$
274,790


$
33,822


$
17,252


$
325,864


$



$
325,864Revenue from other segments

$



$
4,213


$



$
4,213


$
(4,213
)

$
Depreciation and amortization
    expenses

$
17,296


$
1,619


$
143


$
19,058


$
844


$
19,902Income (loss) from operations

$
55,857


$
5,134


$
(1,628
)

$
59,363


$
(15,479
)

$
43,884Total assets

$
418,847


$
49,052


$
41,791


$
509,690


$
5,333


$
515,023Capital expenditures

$
11,848


$
733


$
12,127


$
24,708


$
887


$
25,595Year ended December 31,
    2003:Revenue from external services

$
253,610


$
36,217


$
8,725


$
298,552


$



$
298,552Revenue from other segments

$



$
3,818


$



$
3,818


$
(3,818
)

$
Depreciation and amortization
    expenses

$
15,789


$
1,477


$
138


$
17,404


$
1,222


$
18,626Income (loss) from operations

$
46,655


$
6,194


$
(3,842
)

$
49,007


$
(12,602
)

$
36,405Total assets

$
396,049


$
49,720


$
26,063


$
471,832


$
18,845


$
490,677Capital expenditures

$
9,823


$
1,082


$
6,150


$
17,055


$
1,373


$
18,428    84




---



##### Table of Contents



SYNAGRO
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Year Ended
    December 31,2005


2004


2003(In thousands)Segment income from operations

$
53,039


$
59,363


$
49,007Corporate expenses and adjustments


21,448



15,479



12,602Income from operations


31,591



43,884



36,405Total other expense, net


41,574



22,284



23,426Income (loss) before provision for
    income taxes

$
(9,983
)

$
21,600


$
12,979       Year Ended
    December 31,2005


2004


2003(In thousands)Facilities operations

$
107,557


$
100,222


$
92,388Product marketing


11,094



11,486



12,910Land application and disposal


174,182



176,202



175,576Cleanout services


19,696



26,780



12,658Design and build


25,475



11,174



5,020Total revenues

$
338,004


$
325,864


$
298,552      85




---



##### Table of Contents



ITEM 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    ITEM 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  Rule 13a-15(e) Form 10-K,
  Changes
    in Internal Control over Financial Reporting
    Managements
    Report on Internal Control Over Financial Reporting
        Internal
    Control  Integrated Framework. Internal
    Control  Integrated Framework
   86




---



##### Table of Contents



PART III  Form 10-K,
 PART IV  ITEM 15.
    Exhibits
    and Financial Statement Schedules  Financial Statements:
  PageReport of Independent Registered
    Public Accounting Firm  PricewaterhouseCoopers
    LLP


48Consolidated Balance Sheets as of
    December 31, 2005 and 2004


50Consolidated Statements of
    Operations for the Years Ended December 31, 2005, 2004 and
    2003


51Consolidated Statements of
    Stockholders Equity for the Years Ended December 31,
    2005, 2004 and 2003


52Consolidated Statements of Cash
    Flows for the Years Ended December 31, 2005, 2004 and 2003


53Notes to Consolidated Financial
    Statements


55   Financial Schedules:
    Exhibits:
  3
.1



Restated Certificate of
    Incorporation of Synagro Technologies, Inc. (the
    Company) dated August 16, 1996 (Incorporated by
    reference to Exhibit 3.1 to the Companys
    Post-Effective Amendment No. 1 to Registration Statement
    No. 33-95028,
    dated October 25, 1996).3
.2



Amended and Restated Bylaws of the
    Company dated effective January 27, 2000 (Incorporated by
    reference to Exhibit No. 3.2 to the Companys
    Annual Report on
    Form 10-K
    for the year ended December 31, 2001).4
.1



Specimen Common Stock Certificate
    of the Company (Incorporated by reference to Exhibit 4.1 to
    the Companys Registration Statement on Form 10, dated
    December 29, 1992).4
.2



Certificate of Designations,
    Preferences and Rights of Series D Convertible Preferred
    Stock of Synagro Technologies, Inc. (Incorporated by reference
    to Exhibit 2.5 to the Companys Current Report on
    Form 8-K,
    dated February 17, 2000).4
.3



Certificate of Designations,
    Preferences and Rights of Series E Convertible Preferred
    Stock of Synagro Technologies, Inc. (Incorporated by reference
    to Exhibit 2.3 to the Companys Current Report on
    Form 8-K,
    dated June 30, 2000).4
.4



Amended and Restated Warrant
    Agreement, dated August  14, 2000, by and between
    Synagro Technologies, Inc. and GTCR Capital Partners, L.P.
    (Incorporated by reference to Exhibit 2.6 to the
    Companys Current Report on
    Form 8-K,
    dated August 28, 2000).4
.5



TCW/Crescent Warrant Agreement
    dated August 14, 2000, by and among Synagro Technologies,
    Inc. and TCW/Crescent Mezzanine partners II, L.P.,
    TCW/Crescent Mezzanine Trust II, TCW Leveraged Income
    Trust, L.P., TCW Leveraged Income Trust II, L.P., and TCW
    Leveraged Income Trust IV, L.P. (Incorporated by reference
    to Exhibit 2.5 to the Companys Current Report on
    Form 8-K,
    dated August 28, 2000). 87




---



##### Table of Contents



4
.6



Form of Stock Purchase Warrant
    (Incorporated by reference to Exhibit 2.7 to the
    Companys Current Report on
    Form 8-K,
    dated August 28, 2000).4
.7



Amended and Restated Registration
    Agreement dated August 14, 2000, by and between Synagro
    Technologies, Inc., GTCR Fund VII. L.P., GTCR Co-Invest,
    L.P., GTCR Capital Partners, L.P., TCW/Crescent Mezzanine
    Partners II, L.P., TCW/Crescent Mezzanine Trust II, TCW
    Leveraged Income Trust, L.P., TCW Leveraged Income
    Trust II, L.P., and TCW Leverage Income Trust IV, L.P.
    (Incorporated by reference to Exhibit 2.8 to the
    Companys Current Report on
    Form 8-K,
    dated August 28, 2000).4
.8



Stockholders Agreement dated
    August 14, 2000, by and between Synagro Technologies Inc.,
    GTCR Fund VII, L.P., GTCR Co-Invest, L.P., GTCR Capital
    Partners, L.P., TCW/Crescent Mezzanine Partners II, L.P.,
    TCW/Crescent Mezzanine Trust II, TCW Leveraged Income
    Trust, L.P., TCW Leveraged Income Trust II, L.P., and TCW
    Leveraged Income Trust IV, L.P. (Incorporated by reference
    to Exhibit 2.9 to the Companys Current Report on
    Form 8-K,
    dated August 28, 2000).4
.9



Form of TCW/Crescent Warrant
    (Incorporated by reference to Exhibit 2.10 to the
    Companys Current Report on
    Form 8-K,
    dated August 28, 2000).4
.10



Form of GTCR Warrant (Incorporated
    by reference to Exhibit 2.11 to the Companys Current
    Report on
    Form 8-K,
    dated August 28, 2000).10
.1



Form of Indemnification Agreement
    (Incorporated by reference to Appendix F to the
    Companys Proxy Statement on Schedule 14A for Annual
    Meeting of Stockholders, dated May 9, 1996).10
.2



Amended and Restated 1993 Stock
    Option Plan dated August 5, 1996 (Incorporated by reference
    to Exhibit 4.1 to the Companys Registration Statement
    on
    Form S-8
    (No. 333-64999),
    dated September 30, 1998).10
.3



Stock Purchase Agreement dated
    March 31, 2000, by and between Synagro Technologies, Inc.
    and Compost America Holding Company, Inc. (Incorporated by
    reference to Exhibit 2.1 to the Companys Current
    Report on
    Form 8-K,
    dated June 30, 2000).10
.4



Earn Out Agreement dated
    June 15, 2000, by and among Synagro Technologies, Inc. and
    Compost America Holding Company, Inc. (Incorporated by reference
    to Exhibit 2.2 to the Companys Current Report on
    Form 8-K,
    dated June 30, 2000).10
.5



Purchase Agreement dated
    January 27, 2000, by and between Synagro Technologies, Inc.
    and GTCR Fund VII, L.P. (Incorporated by reference to
    Exhibit 2.1 to the Companys Current Report on
    Form 8-K,
    dated February  17, 2000).10
.6



Professional Services Agreement,
    dated January 27, 2000,by and between Synagro Technologies,
    Inc. and GTCR Fund VII, L.P. (Incorporated by reference to
    Exhibit 2.7 to the Companys Current Report on
    Form 8-K,
    dated February 17, 2000).10
.7



Amended and Restated Senior
    Subordinated Loan Agreement, dated August 14, 2000, by and
    among Synagro Technologies, Inc., certain subsidiary guarantors,
    GTCR Capital Partners, L.P. and TCW/ Crescent Mezzanine
    Partners II, L.P., TCW/Crescent Mezzanine Trust II,
    TCW Leveraged Income Trust, L.P., TCW Leveraged Income
    Trust II, L.P., and TCW Leveraged Income Trust IV,
    L.P. (Incorporated by reference to Exhibit 2.2 to the
    Companys Current Report on
    Form 8-K,
    dated February  17, 2000).10
.8



Stock Purchase Agreement dated
    April 28, 2000, by and among Synagro Technologies, Inc.,
    Resco Holdings, Inc., Waste Management Holdings, Inc., and Waste
    Management, Inc. (Incorporated by reference to Exhibit 2.1
    to the Companys Current Report on
    Form 8-K,
    dated August 28, 2000).10
.9



Amended and Restated Monitoring
    Agreement dated August  14, 2000, by and between
    Synagro Technologies, Inc., GTCR Golder Rauner, L.L.C., and
    TCW/Crescent Mezzanine Partners II, L.P., TCW/Crescent
    Mezzanine Trust II, TCW Leveraged Income Trust, L.P., TCW
    Leveraged Income Trust II, L.P., and TCW Leveraged Income
    Trust IV, L.P. (Incorporated by reference to
    Exhibit 2.12 to the Companys Current Report on
    Form 8-K,
    dated August 28, 2000).10
.10



Employment Agreement dated
    February 19, 1999, by and between Synagro Technologies,
    Inc. and Ross M. Patten (Incorporated by reference to
    Exhibit 10.20 to the Companys Current Report on
    Form 10-K/A,
    dated April 30, 2001); Agreement Concerning Employment
    Rights dated January 27, 2000, by and between Synagro
    Technologies, Inc. and Ross M. Patten (Incorporated by reference
    to Exhibit 2.8 to the Companys Current Report on
    Form 8-K,
    dated February 17, 2000).(1) 88




---



##### Table of Contents



10
.11



Employment Agreement dated
    February 19, 1999, by and between Synagro Technologies,
    Inc. and Mark A. Rome (Incorporated by reference to
    Exhibit 10.21 to the Companys Current Report on
    Form 10-K/A,
    dated April 30, 2001); Agreement Concerning Employment
    Rights dated January 27, 2000, by and between Synagro
    Technologies, Inc. and Mark A. Rome (Incorporated by reference
    to Exhibit 2.9 to the Companys Current Report on
    Form 8-K,
    dated February 17, 2000).(1)10
.12



Employment Agreement dated
    February 19, 1999, by and between Synagro Technologies,
    Inc. and Alvin L. Thomas II (Incorporated by reference to
    Exhibit 10.22 to the Companys Current Report on
    Form 10-K/A,
    dated April 30, 2001); Agreement Concerning Employment
    Rights dated January 27, 2000, by and between Synagro
    Technologies, Inc. and Alvin L. Thomas, II (Incorporated by
    reference to Exhibit 2.10 to the Companys Current
    Report on
    Form 8-K,
    dated February 17, 2000).(1)10
.13



Employment Agreement dated
    May 10, 1999, by and between Synagro Technologies, Inc. and
    J. Paul Withrow (Incorporated by reference to Exhibit 2.11
    to the Companys Current Report on
    Form 8-K,
    dated February  17, 2000); Agreement Concerning
    Employment Rights dated January 27, 2000, by and between
    Synagro Technologies, Inc. and J. Paul Withrow (Incorporated by
    reference to Exhibit 2.12 to the Companys Current
    Report on
    Form 8-K,
    dated February 17, 2000).(1)10
.14



Amendment No. 2 to Agreement
    Concerning Employment Rights dated March 1, 2001, by and
    between Synagro Technologies, Inc. and Ross M. Patten
    (Incorporated by reference to the Companys Annual Report
    on
    Form 10-K
    for the year ended December 31, 2001).(1)10
.15



Amendment No. 2 to Agreement
    Concerning Employment Rights dated March 1, 2001, by and
    between Synagro Technologies, Inc. and Mark A. Rome
    (Incorporated by reference to the Companys Annual Report
    on
    Form 10-K
    for the year ended December 31, 2001).(1)10
.16



Amendment No. 2 to Agreement
    Concerning Employment Rights dated March 1, 2001, by and
    between Synagro Technologies, Inc. and Alvin L. Thomas, II
    (Incorporated by reference to the Companys Annual Report
    on
    Form 10-K
    for the year ended December 31, 2001).(1)10
.17



Amendment No. 2 to Agreement
    Concerning Employment Rights dated March 1, 2001, by and
    between Synagro Technologies, Inc. and J. Paul Withrow
    (Incorporated by reference to the Companys Annual Report
    on
    Form 10-K
    for the year ended December 31, 2001).(1)10
.18



2000 Stock Option Plan dated
    October 31, 2000 (Incorporated by reference to
    Exhibit A to the Companys Proxy Statement on
    Schedule 14A for Annual Meeting of Stockholders, dated
    September 28, 2000).(1)10
.19



Employment Agreement dated
    March 1, 2002, by and between Synagro Technologies, Inc.
    and Robert Boucher Incorporated by reference to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2001).(1)10
.20



Amendment No. 1 to Employment
    Agreement dated effective February 1, 2002, by and between
    Synagro Technologies, Inc. and Randall S. Tuttle (Incorporated
    by reference to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2001).(1)10
.21



Third Amended and Credit Agreement
    dated May 8, 2002, among Synagro Technologies, Inc.,
    various financial institutions, and Bank of America, N.A.
    (Incorporated by reference to the Companys
    Form 10-Q
    for the period ended March 31, 2002).10
.22



Amendment No. 3 to Employment
    Agreement dated effective December 30, 2003, by and between
    Synagro Technologies, Inc. and Ross M. Patten (Incorporated by
    reference to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2003).(1)10
.23



General Release dated effective
    December 30, 2003, executed and delivered by Ross M. Patten
    in favor of Synagro Technologies, Inc. (Incorporated by
    reference to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2003).(1)10
.24



Credit Agreement, dated as of
    April 29, 2005, among Synagro Technologies, Inc., each
    lender from time to time party thereto, Bank of America, N.A.,
    as Administrative Agent, Swing Line Lender and L/C Issuer,
    Lehman Commercial Paper Inc., as Syndication Agent, and CIBC
    World Markets Corp., as Documentation Agent. (Incorporated by
    reference to Exhibit 10.1 to the Companys Current
    Report on
    Form 8-K/A,
    dated May 23, 2005).10
.25



Amendment No. 1 to Credit
    Agreement dated as of March 6, 2006, among Synagro
    Technologies, Inc., the Lenders signatory thereto and Bank of
    America, N.A. (Incorporated by reference to Exhibit 10.1 to
    the Companys Current Report on
    Form 8-K,
    dated March 9, 2006). 89




---



##### Table of Contents



10
.26



Synagro Technologies, Inc. 2005
    Restricted Stock Plan. . (Incorporated by reference to
    Exhibit 10.24 to the Companys Registration Statement
    on
    Form S-1/A
    (Registration
    No. 333-122351,
    filed on May 23, 2005).10
.27



Third Amendment to the Agreement
    Concerning Employment Rights for Alvin L. Thomas II signed
    December 7, 2005 (Incorporated by reference to
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K,
    dated December 9, 2005). (1)10
.28



Agreement for Receipt of
    Restricted Stock for Thomas M. Urban signed December 7,
    2005 (Incorporated by reference to Exhibit 10.2 to the
    Companys Current Report on
    Form 8-K,
    dated December 9, 2005). (1)10
.29



Amendment No. 2 to the
    Employment Agreement for Robert C. Boucher, Jr. signed
    December 7, 2005 (Incorporated by reference to
    Exhibit 10.3 to the Companys Current Report on
    Form 8-K,
    dated December 9, 2005). (1)10
.30



Amendment No. 3 to the
    Employment Agreement for J. Paul Withrow signed December 7,
    2005 (Incorporated by reference to Exhibit 10.4 to the
    Companys Current Report on
    Form 8-K,
    dated December 9, 2005). (1)10
.31



Supplement to Employment Agreement
    dated May 31, 2005 by and between Mark A. Rome and Synagro
    Technologies, Inc. (Incorporated by reference to
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K,
    dated June 3, 2005). (1)21
.1*



Subsidiaries of Synagro
    Technologies, Inc.23
.1*



Consent of Independent Registered
    Public Accounting Firm31
.1*



Section 302 Certification of
    Chief Executive Officer31
.2*



Section 302 Certification of
    Chief Financial Officer32
.1*



Section 906 Certification of
    Chief Executive Officer32
.2*



Section 906 Certification of
    Chief Financial Officer     *
    
    Filed with this
    Form 10-K.(1)
    
    Management contract or compensatory plan or agreement. 90




---



##### Table of Contents



SIGNATURES        By:
    /s/  ROBERT
    C. BOUCHER, JR.          Signature

Title

Date/s/  ROSS
    M. PATTENRoss
    M. Patten

Chairman of the Board

March 29, 2006/s/  ROBERT
    C. BOUCHER, JR.Robert
    C. Boucher, Jr.

Chief Executive Officer and
    Director (Principal Executive Officer)

March 29, 2006/s/  J.
    PAUL WITHROWJ.
    Paul Withrow

Chief Financial Officer and
    Director (Principal Accounting Officer)

March 29, 2006/s/  GENE
    MEREDITHGene
    Meredith

Director

March 29, 2006/s/  ALFRED
    TYLER, 2NDAlfred
    Tyler, 2nd

Director

March 29, 2006/s/  DAVID
    A. DONNINIDavid
    A. Donnini

Director

March 29, 2006/s/  VINCENT
    J. HEMMERVincent
    J. Hemmer

Director

March 29, 2006/s/  GEORGE
    E. SPERZELGeorge
    E. Sperzel

Director

March 29, 2006/s/  JAMES
    B. MATTLYJames
    B. Mattly

Director

March 29, 2006  91




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##### Table of Contents



INDEX TO
    EXHIBITS
  3
.1



Restated Certificate of
    Incorporation of Synagro Technologies, Inc. (the
    Company) dated August 16, 1996 (Incorporated by
    reference to Exhibit 3.1 to the Companys
    Post-Effective Amendment No. 1 to Registration Statement
    No. 33-95028,
    dated October 25, 1996).3
.2



Amended and Restated Bylaws of the
    Company dated effective January 27, 2000 (Incorporated by
    reference to Exhibit No. 3.2 to the Companys Annual
    Report on
    Form 10-K
    for the year ended December 31, 2001).4
.1



Specimen Common Stock Certificate
    of the Company (Incorporated by reference to Exhibit 4.1 to
    the Companys Registration Statement on Form 10, dated
    December 29, 1992).4
.2



Certificate of Designations,
    Preferences and Rights of Series D Convertible Preferred
    Stock of Synagro Technologies, Inc. (Incorporated by reference
    to Exhibit 2.5 to the Companys Current Report on
    Form 8-K,
    dated February 17, 2000).4
.3



Certificate of Designations,
    Preferences and Rights of Series E Convertible Preferred
    Stock of Synagro Technologies, Inc. (Incorporated by reference
    to Exhibit 2.3 to the Companys Current Report on
    Form 8-K,
    dated June 30, 2000).4
.4



Amended and Restated Warrant
    Agreement, dated August 14, 2000, by and between Synagro
    Technologies, Inc. and GTCR Capital Partners, L.P. (Incorporated
    by reference to Exhibit 2.6 to the Companys Current
    Report on
    Form 8-K,
    dated August 28, 2000).4
.5



TCW/Crescent Warrant Agreement
    dated August 14, 2000, by and among Synagro Technologies,
    Inc. and TCW/Crescent Mezzanine partners II, L.P.,
    TCW/Crescent Mezzanine Trust II, TCW Leveraged Income
    Trust, L.P., TCW Leveraged Income Trust II, L.P., and TCW
    Leveraged Income Trust IV, L.P. (Incorporated by reference
    to Exhibit 2.5 to the Companys Current Report on
    Form 8-K,
    dated August 28, 2000).4
.6



Form of Stock Purchase Warrant
    (Incorporated by reference to Exhibit 2.7 to the
    Companys Current Report on
    Form 8-K,
    dated August 28, 2000).4
.7



Amended and Restated Registration
    Agreement dated August  14, 2000, by and between
    Synagro Technologies, Inc., GTCR Fund VII. L.P., GTCR
    Co-Invest, L.P., GTCR Capital Partners, L.P., TCW/Crescent
    Mezzanine Partners II, L.P., TCW/Crescent Mezzanine
    Trust II, TCW Leveraged Income Trust, L.P., TCW Leveraged
    Income Trust II, L.P., and TCW Leverage Income
    Trust IV, L.P. (Incorporated by reference to
    Exhibit 2.8 to the Companys Current Report on
    Form 8-K,
    dated August 28, 2000).4
.8



Stockholders Agreement dated
    August 14, 2000, by and between Synagro Technologies Inc.,
    GTCR Fund VII, L.P., GTCR Co-Invest, L.P., GTCR Capital
    Partners, L.P., TCW/Crescent Mezzanine Partners II, L.P.,
    TCW/Crescent Mezzanine Trust II, TCW Leveraged Income
    Trust, L.P., TCW Leveraged Income Trust II, L.P., and TCW
    Leveraged Income Trust IV, L.P. (Incorporated by reference
    to Exhibit 2.9 to the Companys Current Report on
    Form 8-K,
    dated August  28, 2000).4
.9



Form of TCW/Crescent Warrant
    (Incorporated by reference to Exhibit 2.10 to the
    Companys Current Report on
    Form 8-K,
    dated August 28, 2000).4
.10



Form of GTCR Warrant (Incorporated
    by reference to Exhibit 2.11 to the Companys Current
    Report on
    Form 8-K,
    dated August 28, 2000).10
.1



Form of Indemnification Agreement
    (Incorporated by reference to Appendix F to the
    Companys Proxy Statement on Schedule 14A for Annual
    Meeting of Stockholders, dated May 9, 1996).10
.2



Amended and Restated 1993 Stock
    Option Plan dated August  5, 1996 (Incorporated by
    reference to Exhibit 4.1 to the Companys Registration
    Statement on
    Form S-8
    (No.
    333-64999),
    dated September 30, 1998).10
.3



Stock Purchase Agreement dated
    March 31, 2000, by and between Synagro Technologies, Inc.
    and Compost America Holding Company, Inc. (Incorporated by
    reference to Exhibit 2.1 to the Companys Current
    Report on
    Form 8-K,
    dated June 30, 2000).10
.4



Earn Out Agreement dated
    June 15, 2000, by and among Synagro Technologies, Inc. and
    Compost America Holding Company, Inc. (Incorporated by reference
    to Exhibit 2.2 to the Companys Current Report on
    Form 8-K,
    dated June 30, 2000).10
.5



Purchase Agreement dated
    January 27, 2000, by and between Synagro Technologies, Inc.
    and GTCR Fund VII, L.P. (Incorporated by reference to
    Exhibit 2.1 to the Companys Current Report on
    Form 8-K,
    dated February 17, 2000).




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##### Table of Contents



10
.6



Professional Services Agreement,
    dated January 27, 2000, by and between Synagro
    Technologies, Inc. and GTCR Fund VII, L.P. (Incorporated by
    reference to Exhibit 2.7 to the Companys Current
    Report on
    Form 8-K,
    dated February 17, 2000).10
.7



Amended and Restated Senior
    Subordinated Loan Agreement, dated August 14, 2000, by and
    among Synagro Technologies, Inc., certain subsidiary guarantors,
    GTCR Capital Partners, L.P. and TCW/ Crescent Mezzanine
    Partners II, L.P., TCW/Crescent Mezzanine Trust II,
    TCW Leveraged Income Trust, L.P., TCW Leveraged Income
    Trust II, L.P., and TCW Leveraged Income Trust IV,
    L.P. (Incorporated by reference to Exhibit 2.2 to the
    Companys Current Report on
    Form 8-K,
    dated February 17, 2000).10
.8



Stock Purchase Agreement dated
    April 28, 2000, by and among Synagro Technologies, Inc.,
    Resco Holdings, Inc., Waste Management Holdings, Inc., and Waste
    Management, Inc. (Incorporated by reference to Exhibit 2.1
    to the Companys Current Report on
    Form 8-K,
    dated August 28, 2000)10
.9



Amended and Restated Monitoring
    Agreement dated August 14, 2000, by and between Synagro
    Technologies, Inc., GTCR Golder Rauner, L.L.C., and TCW/Crescent
    Mezzanine Partners II, L.P., TCW/Crescent Mezzanine
    Trust II, TCW Leveraged Income Trust, L.P., TCW Leveraged
    Income Trust II, L.P., and TCW Leveraged Income
    Trust IV, L.P. (Incorporated by reference to
    Exhibit 2.12 to the Companys Current Report on
    Form 8-K,
    dated August 28, 2000).10
.10



Employment Agreement dated
    February 19, 1999, by and between Synagro Technologies,
    Inc. and Ross M. Patten (Incorporated by reference to
    Exhibit 10.20 to the Companys Current Report on
    Form 10-K/A,
    dated April 30, 2001); Agreement Concerning Employment
    Rights dated January 27, 2000, by and between Synagro
    Technologies, Inc. and Ross M. Patten (Incorporated by reference
    to Exhibit 2.8 to the Companys Current Report on
    Form 8-K,
    dated February 17, 2000).(1)10
.11



Employment Agreement dated
    February 19, 1999, by and between Synagro Technologies,
    Inc. and Mark A. Rome (Incorporated by reference to
    Exhibit 10.21 to the Companys Current Report on
    Form 10-K/A,
    dated April 30, 2001); Agreement Concerning Employment
    Rights dated January 27, 2000, by and between Synagro
    Technologies, Inc. and Mark A. Rome (Incorporated by reference
    to Exhibit 2.9 to the Companys Current Report on
    Form 8-K,
    dated February 17, 2000).(1)10
.12



Employment Agreement dated
    February 19, 1999, by and between Synagro Technologies,
    Inc. and Alvin L. Thomas II (Incorporated by reference to
    Exhibit 10.22 to the Companys Current Report on
    Form 10-K/A,
    dated April 30, 2001); Agreement Concerning Employment
    Rights dated January 27, 2000, by and between Synagro
    Technologies, Inc. and Alvin L. Thomas, II (Incorporated by
    reference to Exhibit 2.10 to the Companys Current
    Report on
    Form 8-K,
    dated February 17, 2000).(1)10
.13



Employment Agreement dated
    May 10, 1999, by and between Synagro Technologies, Inc. and
    J. Paul Withrow (Incorporated by reference to Exhibit 2.11
    to the Companys Current Report on
    Form 8-K,
    dated February 17, 2000); Agreement Concerning Employment
    Rights dated January 27, 2000, by and between Synagro
    Technologies, Inc. and J. Paul Withrow (Incorporated by
    reference to Exhibit 2.12 to the Companys Current
    Report on
    Form 8-K,
    dated February 17, 2000).(1)10
.14



Amendment No. 2 to Agreement
    Concerning Employment Rights dated March 1, 2001, by and
    between Synagro Technologies, Inc. and Ross M. Patten
    (Incorporated by reference to the Companys Annual Report
    on
    Form 10-K
    for the year ended December 31, 2001).(1)10
.15



Amendment No. 2 to Agreement
    Concerning Employment Rights dated March 1, 2001, by and
    between Synagro Technologies, Inc. and Mark A. Rome
    (Incorporated by reference to the Companys Annual Report
    on
    Form 10-K
    for the year ended December 31, 2001).(1)10
.16



Amendment No. 2 to Agreement
    Concerning Employment Rights dated March 1, 2001, by and
    between Synagro Technologies, Inc. and Alvin L. Thomas, II
    (Incorporated by reference to the Companys Annual Report
    on
    Form 10-K
    for the year ended December 31, 2001).(1)10
.17



Amendment No. 2 to Agreement
    Concerning Employment Rights dated March 1, 2001, by and
    between Synagro Technologies, Inc. and J. Paul Withrow
    (Incorporated by reference to the Companys Annual Report
    on
    Form 10-K
    for the year ended December 31, 2001).(1)10
.18



2000 Stock Option Plan dated
    October 31, 2000 (Incorporated by reference to
    Exhibit A to the Companys Proxy Statement on
    Schedule 14A for Annual Meeting of Stockholders, dated
    September 28, 2000).(1)10
.19



Employment Agreement dated
    March 1, 2002, by and between Synagro Technologies, Inc.
    and Robert Boucher (Incorporated by reference to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2001).(1)




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##### Table of Contents



10
.20



Amendment No. 1 to Employment
    Agreement dated effective February 1, 2002, by and between
    Synagro Technologies, Inc. and Randall S. Tuttle (Incorporated
    by reference to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2001).(1)10
.21



Third Amended and Restated Credit
    Agreement dated May 8, 2002, among Synagro Technologies,
    Inc., various financial institutions, and Bank of America, N.A.
    (Incorporated by reference to the Companys
    Form 10-Q
    for the period ended March 31, 2002)10
.22



Amendment No. 3 to Employment
    Agreement dated effective December 30, 2003, by and between
    Synagro Technologies, Inc. and Ross M. Patten (Incorporated by
    reference to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2003). (1)10
.23



General Release dated Effective
    December 30, 2003, executed and delivered by Ross M. Patten
    in favor of Synagro Technologies, Inc. (Incorporated by
    reference to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2003). (1)10
.24



Credit Agreement, dated as of
    April 29, 2005, among Synagro Technologies, Inc., each
    lender from time to time party thereto, Bank of America, N.A.,
    as Administrative Agent, Swing Line Lender and L/C Issuer,
    Lehman Commercial Paper Inc., as Syndication Agent, and CIBC
    World Markets Corp., as Documentation Agent. (Incorporated by
    reference to Exhibit 10.1 to the Companys Current
    Report on
    Form 8-K/A,
    dated May 23, 2005).10
.25



Amendment No. 1 to Credit
    Agreement dated as of March  6, 2006, among Synagro
    Technologies, Inc., the Lenders signatory thereto and Bank of
    America, N.A. (Incorporated by reference to Exhibit 10.1 to
    the Companys Current Report on
    Form 8-K,
    dated March 9, 2006).10
.26



Synagro Technologies, Inc. 2005
    Restricted Stock Plan. . (Incorporated by reference to
    Exhibit 10.24 to the Companys Registration Statement
    on
    Form S-1/A
    (Registration
    No. 333-122351,
    filed on May 23, 2005).10
.27



Third Amendment to the Agreement
    Concerning Employment Rights for Alvin L. Thomas II signed
    December 7, 2005 (Incorporated by reference to
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K,
    dated December 9, 2005). (1)10
.28



Agreement for Receipt of
    Restricted Stock for Thomas M. Urban signed December 7,
    2005 (Incorporated by reference to Exhibit 10.2 to the
    Companys Current Report on
    Form 8-K,
    dated December 9, 2005). (1)10
.29



Amendment No. 2 to the
    Employment Agreement for Robert C. Boucher, Jr. signed
    December 7, 2005 (Incorporated by reference to
    Exhibit 10.3 to the Companys Current Report on
    Form 8-K,
    dated December 9, 2005). (1)10
.30



Amendment No. 3 to the
    Employment Agreement for J. Paul Withrow signed December 7,
    2005 (Incorporated by reference to Exhibit 10.4 to the
    Companys Current Report on
    Form 8-K,
    dated December 9, 2005). (1)10
.31



Supplement to Employment Agreement
    dated May 31, 2005 by and between Mark A. Rome and Synagro
    Technologies, Inc. (Incorporated by reference to
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K,
    dated June 3, 2005). (1)21
.1*



Subsidiaries of Synagro
    Technologies, Inc.23
.1*



Consent of Independent Registered
    Public Accounting Firm31
.1*



Section 302 Certification of
    Chief Executive Officer31
.2*



Section 302 Certification of
    Chief Financial Officer32
.1*



Section 906 Certification of
    Chief Executive Officer32
.2*



Section 906 Certification of
    Chief Financial Officer     *
    
    Filed with this
    Form 10-K**
    
    Previously filed