FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form 10-Q are forward-looking in nature. These statements can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," or "anticipates," or the negative thereof or comparable terminology, or by discussions of strategy.

Our business and operations are subject to a variety of risks and uncertainties and, consequently, actual results may differ materially from those projected by any forward- looking statements. Factors that could cause actual results to differ from those projected include, but are not limited to, the following:

? A portion of our growth and future financial performance depends on our ability to integrate acquired businesses into our organization and operations;

? Our acquisitions may not be successful, resulting in changes in strategy, operating losses or a loss on sale of the business acquired;

? Downturns in the worldwide economy adversely affect operating results;

? Our results are vulnerable to economic conditions and seasonal factors affecting the regions in which we operate;

? We may be unable to compete effectively with larger and better capitalized companies and governmental service providers;

? We may lose contracts through competitive bidding, early termination or governmental action;

? Price increases may not be adequate to offset the impact of increased costs or may cause us to lose volume;

? Increases in the price of fuel may adversely affect our business and reduce our operating margins;

? Increases in labor and disposal and related transportation costs could impact our financial results;

? We could face significant withdrawal liability if we withdraw from participation in one or more multiemployer pension plans in which we participate;

? Efforts by labor unions could divert management attention and adversely affect operating results;

? Increases in insurance costs and the amount that we self-insure for various risks could reduce our operating margins and reported earnings;

? Competition for acquisition candidates, consolidation within the waste industry and economic and market conditions may limit our ability to grow through acquisitions;

? Our indebtedness could adversely affect our financial condition; we may incur substantially more debt in the future;

? Each business that we acquire or have acquired may have liabilities that we fail or are unable to discover, including environmental liabilities;

? Liabilities for environmental damage may adversely affect our financial condition, business and earnings;

? Our accruals for our landfill site closure and post-closure costs may be inadequate;

? We may be subject in the normal course of business to judicial, administrative or other third party proceedings that could interrupt our operations, require expensive remediation, result in adverse judgments, settlements or fines and create negative publicity;

? The financial soundness of our customers could affect our business and operating results;

? We depend significantly on the services of the members of our senior, regional and district management team, and the departure of any of those persons could cause our operating results to suffer;

? Our decentralized decision-making structure could allow local managers to make decisions that adversely affect our operating results;

? Because we depend on railroads for our intermodal operations, our operating results and financial condition are likely to be adversely affected by any reduction or deterioration in rail service;

? We may incur additional charges related to capitalized expenditures, which would decrease our earnings;

? Our financial results are based upon estimates and assumptions that may differ from actual results;

? The adoption of new accounting standards or interpretations could adversely affect our financial results;

? Our financial and operating performance may be affected by the inability to renew landfill operating permits, obtain new landfills and expand existing ones;

? Future changes in laws regulating the flow of solid waste in interstate commerce could adversely affect our operating results;

? Fluctuations in prices for recycled commodities that we sell and rebates we offer to customers may cause our revenues and operating results to decline;

? Extensive and evolving environmental and health and safety laws and regulations may restrict our operations and growth and increase our costs;

? Extensive regulations that govern the design, operation and closure of landfills may restrict our landfill operations or increase our costs of operating landfills; and

? Unusually adverse weather conditions may interfere with our operations, harming our operating results.

These risks and uncertainties, as well as others, are discussed in greater detail in this Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission, or SEC, including our most recent Annual Report on Form 10-K. There may be additional risks of which we are not presently aware or that we currently believe are immaterial which could have an adverse impact on our business. We make no commitment to revise or update any forward- looking statements in order to reflect events or circumstances that may change.

OVERVIEW

The solid waste industry is a local and highly competitive business, requiring substantial labor and capital resources. The participants compete for collection accounts primarily on the basis of price and, to a lesser extent, the quality of service, and compete for landfill business on the basis of tipping fees, geographic location and quality of operations. The solid waste industry has been consolidating and continues to consolidate as a result of a number of factors, including the increasing costs and complexity associated with waste management operations and regulatory compliance. Many small independent operators and municipalities lack the capital resources, management, operating skills and technical expertise necessary to operate effectively in such an environment. The consolidation trend has caused solid waste companies to operate larger landfills that have complementary collection routes that can use company-owned disposal capacity. Controlling the point of transfer from haulers to landfills has become increasingly important as landfills continue to close and disposal capacity moves further from collection markets.

Generally, the most profitable industry operators are those companies that are vertically integrated or enter into long-term collection contracts. A vertically integrated operator will benefit from: (1) the internalization of waste, which is bringing waste to a company-owned landfill; (2) the ability to charge third-party haulers tipping fees either at landfills or at transfer stations; and (3) the efficiencies gained by being able to aggregate and process waste at a transfer station prior to landfilling.

We are 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. We also provide intermodal services for the rail haul movement of cargo and solid waste containers in the Pacific Northwest through a network of six intermodal facilities. We seek to avoid highly competitive, large urban markets and instead target markets where we can provide either solid waste services under exclusive arrangements, or markets where we can be integrated and attain high market share. In markets where waste collection services are provided under exclusive arrangements, or where waste disposal is municipally funded or available at multiple municipal sources, we believe that controlling the waste stream by providing collection services under exclusive arrangements is often more important to our growth and profitability than owning or operating landfills. As of March 31, 2009, we served approximately 1.8 million residential, commercial and industrial customers from a network of operations in 23 states: Alabama, Arizona, California, Colorado, Idaho, Illinois, Iowa, Kansas, Kentucky, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Mexico, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Utah, Washington and Wyoming. As of that date, we owned or operated a network of 134 solid waste collection operations, 52 transfer stations, 35 recycling operations, 35 municipal solid waste landfills and two construction and demolition landfills.

RECENT DEVELOPMENTS

In April 2009, we completed the acquisition of certain operations from Republic Services, Inc. ("Republic") and some of its subsidiaries and affiliates. The operations were divested as a result of Republic's recent merger with Allied Waste Industries, Inc. The operations acquired include six municipal solid waste landfills, three collection operations and two transfer stations across six markets: Southern California; Northern California; Denver, CO; Houston, TX; Greenville/Spartanburg, SC; and Flint, MI. We paid an aggregate cash purchase price of $310.7 million for the purchased operations, exclusive of amounts paid for the purchase of accounts receivable and other prepaid assets and working capital, which amounts are subject to post-closing adjustments. This acquisition may impact the income tax provision for the quarter ending June 30, 2009, as a result of changes to the geographical apportionment of our state income taxes.

CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements. As described by the SEC, critical accounting estimates and assumptions are those that may be material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and that have a material impact on the financial condition or operating performance of a company. Such critical accounting estimates and assumptions are applicable to our reportable segments. Refer to our most recent Annual Report on Form 10-K for a complete description of our critical accounting estimates and assumptions.

NEW ACCOUNTING PRONOUNCEMENTS

For a description of the new accounting standards that affect us, see Note 2 to our Condensed Consolidated Financial Statements included under Part I, Item 1 of this Quarterly Report on Form 10-Q.

GENERAL

Our revenues are derived from one industry segment, which includes the
collection, transfer, recycling and disposal of non-hazardous solid waste. No
single contract or customer accounted for more than 10% of our total revenues at
the consolidated or segment level during the periods presented. The table below
shows for the periods indicated our total reported revenues attributable to
services provided (dollars in thousands).

                                          Three months ended March 31,
                                         2008                      2009
Collection                       $ 186,161        65.9 %   $ 209,782        70.0 %
Disposal and transfer               72,158        25.6        76,267        25.4
Recycling and other                 23,960         8.5        13,922         4.6
                                   282,279       100.0 %     299,971       100.0 %

Less: intercompany elimination     (31,979 )                 (37,296 )
Total revenue                    $ 250,300                 $ 262,675

Our Chief Operating Decision Maker evaluates performance and determines resource allocations based on several factors, of which the primary financial measure is operating income before depreciation, amortization and gain (loss) on disposal of assets. Operating income before depreciation, amortization and gain (loss) on disposal of assets is not a measure of operating income, operating performance or liquidity under GAAP and may not be comparable to similarly titled measures reported by other companies. Our management uses operating income before depreciation, amortization and gain (loss) on disposal of assets in the evaluation of segment operating performance as it is a profit measure that is generally within the control of the operating segments.

We manage our operations through three geographic operating segments (Western, Central and Southern); which, commencing in 2009, are also our reportable segments. Prior to 2009, we aggregated our multiple operating segments into one reportable segment. Each segment is responsible for managing several vertically integrated operations, which are comprised of districts.

We have presented prior period segment results to reflect the realignment of our organizational structure in the second quarter of 2008, which reduced the number of our geographic segments from four to three.

Summarized financial information concerning our reportable segments for the three months ended March 31, 2009 and 2008 is shown in the following tables (in thousands):

                                Operating Income
                              Before Depreciation,
                                Amortization and
                Net              Gain (Loss) on            Total
  2009       Revenue(a)        Disposal of Assets         Assets
Western     $    138,262     $               39,333     $ 1,080,379
Central           67,569                     21,431         613,156
Southern          56,844                     19,204         596,457
Corporate              -                     (4,511 )       379,172
            $    262,675     $               75,457     $ 2,669,164



                                Operating Income
                              Before Depreciation,
                                Amortization and
                Net              Gain (Loss) on            Total
  2008       Revenue(a)        Disposal of Assets         Assets
Western     $    121,520     $               36,710     $   745,096
Central           70,007                     20,693         595,366
Southern          58,773                     18,384         583,938
Corporate              -                     (1,709 )        78,585
            $    250,300     $               74,078     $ 2,002,985

A reconciliation of operating income before depreciation, amortization and gain
(loss) on disposal of assets to Income before income taxes is included in Note 8 to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Significant changes in revenue and operating income before depreciation, amortization and gain (loss) on disposal of assets for our reportable segments for the three month period ended March 31, 2009, compared to the three month period ended March 31, 2008, are discussed below:

Segment Revenue

Revenue in our Western segment increased $16.8 million, or 13.8%, to $138.3 million for the three months ended March 31, 2009, from $121.5 million for the three months ended March 31, 2008. The components of the revenue increase consisted of revenue acquired from acquisitions closed during, or subsequent to, the three months ended March 31, 2008 of $25.0 million and net price increases of $4.3 million, partially offset by volume decreases of $3.1 million, recyclable commodity sales decreases of $6.2 million and other revenue decreases of $3.2 million.

Revenue in our Central segment decreased $2.4 million, or 3.5%, to $67.6 million for the three months ended March 31, 2009, from $70.0 million for the three months ended March 31, 2008. The components of the revenue decrease consisted of volume decreases of $6.6 million and recyclable commodity sales decreases of $1.2 million, partially offset by revenue acquired from acquisitions closed during, or subsequent to, the three months ended March 31, 2008 of $1.4 million, net price increases of $3.9 million and other revenue increases of $0.1 million.

Revenue in our Southern segment decreased $2.0 million, or 3.3%, to $56.8 million for the three months ended March 31, 2009, from $58.8 million for the three months ended March 31, 2008. The components of the revenue decrease consisted of volume decreases of $4.6 million and recyclable commodity sales decreases of $0.3 million, partially offset by net price increases of $2.0 million and other revenue increases of $0.9 million.

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

Operating income before depreciation, amortization and gain (loss) on disposal of assets in our Western segment increased $2.6 million, or 7.1%, to $39.3 million for the three months ended March 31, 2009, from $36.7 million for the three months ended March 31, 2008. The increase was primarily due to income generated from acquisitions closed during, or subsequent to, the three months ended March 31, 2008, decreased labor expenses, decreased fuel expense, decreased disposal and third party trucking and transportation expenses, and decreased expenses associated with the cost of purchasing recyclable commodities, partially offset by decreased revenues at operations owned in the comparable periods and increased employee medical benefit expenses.

Operating income before depreciation, amortization and gain (loss) on disposal of assets in our Central segment increased $0.7 million, or 3.6%, to $21.4 million for the three months ended March 31, 2009, from $20.7 million for the three months ended March 31, 2008. The increase was primarily due to decreased third party trucking and transportation expenses, decreased major vehicle and equipment repairs, decreased fuel expense, and decreased labor expenses, partially offset by increased employee medical benefit expenses and decreased revenues.

Operating income before depreciation, amortization and gain (loss) on disposal of assets in our Southern segment increased $0.8 million, or 4.5%, to $19.2 million for the three months ended March 31, 2009, from $18.4 million for the three months ended March 31, 2008. The increase was primarily due to decreased fuel expense, decreased labor expenses and decreased auto insurance costs, partially offset by increased employee medical benefit expenses and decreased revenues.

Operating income before depreciation, amortization and gain (loss) on disposal of assets at Corporate decreased $2.8 million, or 164.0%, due primarily to a $1.2 million charge recorded during the three months ended March 31, 2009, reflecting the fair value of our liability for remaining rental expenses, net of estimated sublease rentals, at our prior corporate office facilities, and $1.3 million of direct acquisition costs that were charged to expense as required by our adoption of SFAS 141(R), effective January 1, 2009.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2009

The following table sets forth items in our condensed consolidated statements of
income as a percentage of revenues for the periods indicated.

                                                        Three months ended
                                                             March 31,
                                                         2008          2009
Revenues                                                   100.0 %      100.0 %
Cost of operations                                          59.6         58.9
Selling, general and administrative                         10.8         12.4
Depreciation                                                 8.7          9.5
Amortization of intangibles                                  0.6          0.9
Loss on disposal of assets                                     -          0.2
Operating income                                            20.3         18.1

Interest expense                                            (4.2 )       (4.6 )
Interest income                                              0.1          0.4
Other income (expense), net                                    -            -
Income tax provision                                        (5.8 )       (5.4 )
Net income attributable to noncontrolling interests         (1.4 )       (0.1 )
Net income attributable to Waste Connections                 9.0 %        8.4 %

Revenues. Total revenues increased $12.4 million, or 4.9%, to $262.7 million for the three months ended March 31, 2009, from $250.3 million for the three months ended March 31, 2008.

Acquisitions closed during, or subsequent to, the three months ended March 31, 2008, increased revenues by approximately $26.4 million.

During the three months ended March 31, 2009, the net increase in prices charged to our customers was $10.3 million, consisting of $14.3 million of core price increases, partially offset by a $4.0 million reduction in surcharges primarily related to declining fuel costs.

Volume decreases in our existing business during the three months ended March 31, 2009 reduced revenue by approximately $14.4 million. The net decrease in volume was primarily attributable to declines in roll off activity and landfill and transfer station volumes for operations owned in the comparable periods as a result of the economic recession currently affecting the United States.

Lower recyclable commodity prices during the three months ended March 31, 2009, decreased revenues by $7.7 million. Price declines were primarily a result of decreased overseas demand for recyclable commodities.

Other revenues decreased by $2.2 million during the three months ended March 31, 2009.

Cost of Operations. Total cost of operations increased $5.6 million, or 3.7%, to $154.7 million for the three months ended March 31, 2009, from $149.1 million for the three months ended March 31, 2008. The increase was attributable to operating costs associated with acquisitions closed during, or subsequent to, the three months ended March 31, 2008, increased employee medical benefit expenses resulting from an increase in medical claims cost and severity, partially offset by decreased labor expenses due to headcount reductions at our operations owned in the comparable periods, decreased diesel fuel expense resulting from lower volumes consumed and lower prices, decreased disposal and third party trucking and transportation expenses due to decreased volumes, decreased major vehicle and equipment repairs, decreased expenses associated with the cost of purchasing recyclable commodities due to recyclable commodity pricing declines and decreased insurance expenses due to a reduction in expected development costs recorded in prior years for open auto and workers' compensation claims based on changes in estimates of actuarially projected losses on open claims determined by our third party administrators' review and a third party actuarial review of our estimated insurance liability.

Cost of operations as a percentage of revenues decreased 0.7 percentage points to 58.9% for the three months ended March 31, 2009, from 59.6% for the three months ended March 31, 2008. The decrease as a percentage of revenues was primarily attributable to decreased disposal and third party trucking and transportation expenses, decreased fuel prices, decreases in the cost of recyclable commodities, decreased labor expenses, and decreased insurance expenses, partially offset by increased employee medical benefit expenses.

SG&A. SG&A expenses increased $5.4 million, or 20.0%, to $32.5 million for the three months ended March 31, 2009, from $27.1 million for the three months ended March 31, 2008. The increase in SG&A expenses was primarily the result of additional personnel from acquisitions closed during, or subsequent to, the three months ended March 31, 2008, increased legal expenses, recording a $1.2 million charge during the three months ended March 31, 2009, reflecting the fair value of our liability for remaining rental expenses, net of estimated sublease rentals, at our prior corporate office facilities, and recording a $1.3 million charge related to direct acquisition costs that were charged to SG&A expense as required by our adoption of SFAS 141(R), effective January 1, 2009.

SG&A expenses as a percentage of revenues increased 1.6 percentage points to 12.4% for the three months ended March 31, 2009, from 10.8% for the three months ended March 31, 2008. The increase as a percentage of revenues was primarily attributable to declines in revenues from operations owned in the comparable periods, the aforementioned expense charge for our former corporate office facilities and the aforementioned charge for direct acquisition costs.

Depreciation. Depreciation expense increased $3.0 million, or 13.8%, to $24.8 million for the three months ended March 31, 2009, from $21.8 million for the three months ended March 31, 2008. The increase was primarily attributable to depreciation associated with acquisitions closed during, or subsequent to, the three months ended March 31, 2008, and additions to our fleet and equipment purchased to support our existing operations.

Depreciation expense as a percentage of revenues increased 0.8 percentage points to 9.5% for the three months ended March 31, 2009, from 8.7% for the three months ended March 31, 2008. The increase in depreciation expense as a percentage of revenues was due to the impact of declines in revenues from operations owned in the comparable periods, coupled with the aforementioned increased depreciation expense from additions to our fleet and equipment.

Amortization of Intangibles. Amortization of intangibles expense increased $1.1 million, or 77.4%, to $2.5 million for the three months ended March 31, 2009, from $1.4 million for the three months ended March 31, 2008. Amortization of intangibles expense as a percentage of revenues increased 0.3 percentage points to 0.9% for the three months ended March 31, 2009, from 0.6% for the three months ended March 31, 2008. These increases were primarily attributable to amortization on contracts and customer lists acquired during, or subsequent to, the three months ended March 31, 2008.

Operating Income. Operating income decreased $3.2 million, or 6.2%, to $47.6 million for the three months ended March 31, 2009, from $50.8 million for the three months ended March 31, 2008. The decrease was primarily attributable to increased operating costs, increased SG&A expense, and increased depreciation and amortization of intangibles expense, partially offset by increased revenues.

Operating income as a percentage of revenues decreased 2.2 percentage points to 18.1% for the three months ended March 31, 2009, from 20.3% for the three months ended March 31, 2008. The decrease as a percentage of revenues was due to the . . .