Waste Connections Beats Analysts' Expectations of Second Quarter Results

Date: July 23, 2007

Source: Waste Connections, Inc.

Waste Connections Reports Second Quarter 2007 Results

- Reports revenue of $241.1 million and earnings per share of $0.36

- Revenue and operating income increase 16.5% and 31.8%, respectively

- Reports combined price and volume growth of 10.0%

- Repurchases approximately $51.9 million YTD of common stock

- Reports YTD free cash flow of $51.4 million, or 11.2% of revenue

Waste Connections, Inc. today announced its results for the second quarter 2007. Revenue totaled $241.1 million, a 16.5% increase over revenue of $207.0 million in the year ago period. Operating income was $53.8 million, a 31.8% increase over operating income of $40.8 million in the second quarter of 2006. Net income in the quarter was $25.3 million, or $0.36 per share on a diluted basis of 70.6 million shares. In the year ago period, the Company reported net income of $19.2 million and diluted earnings per share of $0.27. Net income in the prior year period included additional development costs for insurance claims from prior years of $3.8 million ($2.4 million net of taxes, or approximately $0.03 per share).

"We continue to be extremely pleased with our results. Core pricing and commodity prices remain strong. Volume growth accelerated in the quarter due to typical seasonality, ramping of new contracts, and a notable increase in disposal volumes," said Ronald J. Mittelstaedt, Chairman and Chief Executive Officer. "We expect these trends to continue into the third quarter, putting us on track to exceed the upper end of our original outlook for the year."

For the six months ended June 30, 2007, revenue was $460.0 million, a 15.8% increase over revenue of $397.1 million in the year ago period. Operating income was $100.2 million, a 25.3% increase over operating income of $80.0 million for the same period in 2006. Net income for the six months ended June 30, 2007, was $47.6 million, or $0.67 per share on a diluted basis of 70.6 million shares. In the year ago period, the Company reported net income of $34.9 million, or $0.49 per share on a diluted basis of 70.9 million shares.

Waste Connections will be hosting a conference call related to second quarter earnings and third quarter outlook on July 24th at 8:30 A.M. Eastern Time. The call will be broadcast live over the Internet at www.streetevents.com and through a link on the Company's web site at www.wasteconnections.com. A playback of the call will be available at both of these sites.

For non-GAAP measures, see accompanying Non-GAAP Reconciliation Schedule.

Waste Connections, Inc. is an integrated solid waste services company that provides solid waste collection, transfer, disposal and recycling services in mostly secondary markets in the Western and Southern U.S. The Company serves more than one million residential, commercial and industrial customers from a network of operations in 23 states. The Company also provides intermodal services for the movement of containers in the Pacific Northwest. Waste Connections, Inc. was founded in September 1997 and is headquartered in Folsom, California.

For more information, visit the Waste Connections web site at www.wasteconnections.com. Copies of financial literature, including this release, are available on the Waste Connections web site or through contacting us directly at (916) 608-8200.




                           WASTE CONNECTIONS, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                THREE AND SIX MONTHS ENDED JUNE 30, 2006 AND 2007
                                   (Unaudited)
                (in thousands, except share and per share amounts)

                              Three months ended         Six months ended
                                   June 30,                  June 30,
                              2006         2007          2006        2007

    Revenues                $206,970     $241,084      $397,139    $460,035
    Operating expenses:
      Cost of operations     126,574      141,574       239,637     270,443
      Selling, general and
       administrative         20,621       24,790        40,422      48,700
      Depreciation and
       amortization           18,736       20,930        36,968      40,520
      Loss on disposal of
       assets                    236           32           154         192
    Operating income          40,803       53,758        79,958     100,180

    Interest expense          (6,619)      (8,295)      (14,113)    (16,113)
    Minority interests        (3,317)      (4,130)       (6,028)     (6,970)
    Other income
     (expense), net               11          365        (3,982)        417
    Income before income
     taxes                    30,878       41,698        55,835      77,514

    Income tax provision     (11,678)     (16,432)      (20,912)    (29,868)
    Net income               $19,200      $25,266       $34,923     $47,646

    Basic earnings per
     common share              $0.28        $0.37         $0.51       $0.70

    Diluted earnings per
     common share              $0.27        $0.36         $0.49       $0.67

    Shares used in the
     per share
     calculations:
      Basic               67,761,623   68,592,474    68,130,920  68,529,546
      Diluted             70,327,836   70,625,086    70,854,725  70,606,846






                             WASTE CONNECTIONS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                (in thousands, except share and per share amounts)

                                                  December 31,     June 30,
                                                      2006           2007
    ASSETS
    Current assets:
      Cash and equivalents                           $34,949         $9,971
      Accounts receivable, net of allowance
       for doubtful accounts of $3,489 and
       $3,811 at December 31, 2006 and
       June 30, 2007, respectively                   100,269        113,442
      Deferred income taxes                            9,373         11,203
      Prepaid expenses and other current assets       15,642         16,275
        Total current assets                         160,233        150,891

    Property and equipment, net                      736,428        791,117
    Goodwill                                         750,397        765,557
    Intangible assets, net                            86,098         85,529
    Restricted assets                                 15,917         16,928
    Other assets, net                                 24,818         23,215
                                                  $1,773,891     $1,833,237

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Accounts payable                               $53,010        $54,412
      Book overdraft                                      --          5,838
      Accrued liabilities                             57,810         59,339
      Deferred revenue                                32,161         38,312
      Current portion of long-term debt
       and notes payable                               6,884          6,657
        Total current liabilities                    149,865        164,558

    Long-term debt and notes payable                 637,308        635,852
    Other long-term liabilities                       16,712         29,303
    Deferred income taxes                            205,532        208,425
        Total liabilities                          1,009,417      1,038,138

    Commitments and contingencies
    Minority interests                                27,992         28,690

    Stockholders' equity:
    Preferred stock: $0.01 par value; 7,500,000
     shares authorized; none issued and outstanding       --             --
    Common stock: $0.01 par value; 100,000,000
     shares authorized; 68,266,038 and 68,037,249
     shares issued and outstanding at
     December 31, 2006 and June 30, 2007,
     respectively                                        455            680
    Additional paid-in capital                       310,229        289,713
    Retained earnings                                422,731        473,046
    Accumulated other comprehensive income             3,067          2,970
        Total stockholders' equity                   736,482        766,409
                                                  $1,773,891     $1,833,237



                             WASTE CONNECTIONS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                     SIX MONTHS ENDED JUNE 30, 2006 AND 2007
                                   (Unaudited)
                              (Dollars in thousands)

                                                        Six months ended
                                                            June 30,
                                                      2006           2007

    Cash flows from operating activities:
    Net income                                       $34,923        $47,646
    Adjustments to reconcile net income to
     net cash provided by operating activities:
      Loss on disposal of assets                         154            192
      Depreciation                                    34,946         38,459
      Amortization of intangibles                      2,022          2,061
      Deferred income taxes, net of acquisitions       6,026          3,741
      Minority interests                               6,028          6,970
      Amortization of debt issuance costs              5,271            961
      Stock-based compensation                         1,576          3,134
      Interest income on restricted assets              (288)          (261)
      Closure and post-closure accretion                 300            522
      Excess tax benefit associated with
       equity-based compensation                      (5,501)        (8,534)
      Net change in operating assets and
       liabilities, net of acquisitions               10,539         12,387
    Net cash provided by operating activities         95,996        107,278

    Cash flows from investing activities:
      Payments for acquisitions, net of cash
       acquired                                      (34,838)       (40,591)
      Capital expenditures for property
       and equipment                                 (49,038)       (64,509)
      Proceeds from disposal of assets                   313            559
      Increase in restricted assets, net of
       interest income                                  (617)          (750)
      Increase in other assets                          (236)          (485)
    Net cash used in investing activities            (84,416)      (105,776)

    Cash flows from financing activities:
      Proceeds from long-term debt                   631,997         42,000
      Principal payments on notes payable and
       long-term debt                               (569,619)       (45,668)
      Change in book overdraft                        (5,333)         5,838
      Proceeds from option and warrant exercises      24,916         21,082
      Excess tax benefit associated with
       equity-based compensation                       5,501          8,534
      Distributions to minority interest holders      (4,900)        (6,272)
      Payments for repurchase of common stock        (87,744)       (51,894)
      Debt issuance costs                             (6,185)          (100)
    Net cash used in financing activities            (11,367)       (26,480)

    Net increase (decrease) in cash and equivalents      213        (24,978)
    Cash and equivalents at beginning of period        7,514         34,949
    Cash and equivalents at end of period             $7,727         $9,971



                              ADDITIONAL STATISTICS
                         THREE MONTHS ENDED JUNE 30, 2007
                              (Dollars in thousands)

    Internal Growth:  The following table reflects revenue growth for
    operations owned for at least 12 months:

                                                       Three Months Ended
                                                          June 30, 2007
        Price                                                 4.7%
        Volume                                                5.3%
        Intermodal, Recycling and Other                       1.4%
        Total                                                11.4%


    Uneliminated Revenue Breakdown:

                                                      Three Months Ended
                                                        June 30, 2007
        Collection                                  $172,401          62.9%
        Disposal and Transfer                         78,569          28.7%
        Intermodal, Recycling and Other               22,936           8.4%
        Total                                       $273,906         100.0%

        Inter-company elimination                    $32,822


    Days Sales Outstanding for the three months ended June 30, 2007: 43
     (28 net of deferred revenue)


    Internalization for the three months ended June 30, 2007: 67%


    Other Cash Flow Items for the three months ended June 30, 2007:
      Cash Interest Paid:  $10,114
      Cash Taxes Paid:     $14,265


    Debt to Capitalization: 45.6%


    Share Information for the three months ended June 30, 2007:

        Basic shares outstanding                        68,592,474
        Dilutive effect of options and warrants          1,687,348
        Dilutive effect of restricted stock                345,264
        Diluted shares outstanding                      70,625,086

        Shares repurchased                               1,502,890



                         NON-GAAP RECONCILIATION SCHEDULE
                                  (in thousands)

    Free cash flow, a non-GAAP financial measure, is provided supplementally
    because it is widely used by investors as a valuation and liquidity
    measure in the solid waste industry.  Waste Connections defines free cash
    flow as net cash provided by operating activities, plus proceeds from
    disposal of assets and excess tax benefit associated with equity-based
    compensation, plus or minus change in book overdraft, less capital
    expenditures for property and equipment and distributions to minority
    interest holders.  This measure is not a substitute for, and should be
    used in conjunction with, GAAP financial measures. Management uses free
    cash flow as one of the principal measures to evaluate and monitor the
    ongoing financial performance of our operations.   Other companies may
    calculate free cash flow differently.

    Free cash flow reconciliation:

                                     Three Months Ended   Six Months Ended
                                          June 30, 2007      June 30, 2007
    Net cash provided by operating
     activities                                 $46,364           $107,278
    Plus: Change in book overdraft                5,838              5,838
    Plus: Proceeds from disposal
     of assets                                      344                559
    Plus: Excess tax benefit associated
     with equity-based compensation               6,274              8,534
    Less: Capital expenditures for
     property and equipment                     (28,362)           (64,509)
    Less: Distributions to minority
     interest holders                            (3,920)            (6,272)
    Free cash flow                              $26,538            $51,428

    Free cash flow as % of revenues               11.0%              11.2%

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