The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this quarterly report on Form 10-Q. In addition, reference should be made to our audited consolidated financial statements and notes thereto and related "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our annual report on Form 10-K for the year ended December 31, 2008 as filed with the SEC on March 12, 2009. The discussion below contains forward-looking statements that involve risks and uncertainties. For additional information regarding some of these risks and uncertainties, please read "Risk Factors and Cautionary Statement About Forward-Looking Statements" included elsewhere in this quarterly report on Form 10-Q. Unless the context requires otherwise, references in this quarterly report on Form 10-Q to "WCA Waste," "we," "us" or "our" refer to WCA Waste Corporation on a consolidated basis.

Overview

We are a vertically integrated, non-hazardous solid waste management company providing non-hazardous solid waste collection, transfer, processing, and disposal services in the south and central regions of the United States. As of June 30, 2009, we served approximately 342,000 commercial, industrial and residential collection customers and 5,000 landfill and transfer station customers in Alabama, Arkansas, Colorado, Florida, Kansas, Missouri, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee and Texas. We currently own and/or operate 24 landfills, 26 collection operations and 23 transfer stations/materials recovery facilities (MRFs). Of these facilities, two transfer stations and two landfills are fully permitted but not yet opened, and one transfer station is idle. Additionally, we currently operate but do not own three of the transfer stations.

General Review of Results for the Three and Six Months Ended June 30, 2009

Our operations consist of the collection, transfer, processing and disposal of non-hazardous solid waste. Our revenue is generated primarily from our landfill disposal services and our collection operations provided to residential, commercial and roll-off customers. Internalization refers to the disposal of collected waste into the landfills we own. All collected waste must ultimately be processed or disposed of, with landfills being the main depository for such waste. Generally, the most cost efficient collection services occur within a 35-mile operating radius from the disposal site (up to 100 miles if a transfer station is used). Collection companies that do not own a landfill within such range from their collection routes will usually have to dispose of the waste they collect in landfills owned by third parties. Thus, owning a landfill in a market area increases internalization which increases operating margins, improves operating cash flows and provides substantial leverage in the waste management business. Our internalization for the three and six months ended June 30, 2009 was 68.1% and 68.9%, respectively.

The following table reflects our revenue segmentation (before elimination of intercompany revenue) for the three and six months ended June 30, 2009 and 2008:

                                                   Three Months Ended             Six Months Ended
                                                        June 30,                      June 30,
                                                   2009           2008           2009          2008
Collection                                            53.6 %         51.1 %         54.2 %        51.5 %
Disposal                                              30.9 %         29.7 %         30.4 %        30.3 %
Transfer and other                                    15.5 %         19.2 %         15.4 %        18.2 %
Total revenue before intercompany elimination        100.0 %        100.0 %        100.0 %       100.0 %

The following table reflects our total revenue by source for the three and six months ended June 30, 2009 and 2008 (dollars in thousands):

                              Three Months                Six Months
                             Ended June 30,             Ended June 30,
                            2009         2008         2009         2008
Collection:
Residential               $ 13,799     $ 12,360     $ 27,265     $  24,277
Commercial                   6,243        5,122       12,391         9,993
Roll-off                    12,068       15,287       23,769        29,498
Total collection            32,110       32,769       63,425        63,768
Disposal                    18,476       19,079       35,555        37,448
Less Intercompany            6,673        7,694       12,769        15,156
Disposal, net               11,803       11,385       22,786        22,292
Transfer and other           9,284       12,327       18,028        22,552
Less Intercompany            3,023        3,735        5,875         7,029
Transfer and other, net      6,261        8,592       12,153        15,523
Total revenue             $ 50,174     $ 52,746     $ 98,364     $ 101,583

Please read note 11 to our condensed consolidated financial statements included in Item 1 of this report for certain geographic information related to our operations.

Costs of services include, but are not limited to, labor, fuel and other operating expenses, equipment maintenance, disposal fees paid to third-party disposal facilities, insurance premiums and claims expense, selling expenses, wages and salaries of field personnel located at operating facilities, third-party transportation expense and state and local waste taxes. We are self-insured for up to $100,000, $250,000 and $250,000 of our general liability, workers' compensation and automobile liability per claim, respectively. The frequency and amount of claims or incidents could vary significantly from quarter-to-quarter and/or year-to-year, resulting in increased volatility of our costs of services.

General and administrative expenses include the salaries and benefits of our corporate management, certain centralized reporting, information technology and cash management costs and other overhead costs associated with our corporate office.

Depreciation and amortization expense includes depreciation of fixed assets over their estimated useful lives using the straight-line method and amortization of landfill costs and asset retirement costs based on the consumption of airspace.

In the past, we capitalized third-party expenditures related to pending acquisitions, such as legal, engineering, and accounting expenses, and certain direct expenditures such as travel costs. We expensed indirect acquisition costs, such as salaries, commissions and other corporate services, as we incurred them. We routinely evaluated all capitalized costs, and expensed those related to projects that we believed were not likely to succeed. Starting in 2009, all acquisition-related transaction and restructuring costs are expensed as incurred rather than capitalized as part of the acquisition costs.

After an acquisition is completed, we incur integration expenses related to (i) incorporating newly-acquired truck fleets into our preventative maintenance program, (ii) testing new employees to comply with Department of Transportation regulations, (iii) implementing our safety program, (iv) re-routing trucks and equipment to assure maximization of routing efficiencies and disposal internalization, and (v) converting customers to our billing system. We generally expect that the costs of acquiring and integrating an acquired business will be incurred primarily during the first 12 months after acquisition. Synergies from tuck-in acquisitions can also take as long as 12 months to be realized.

Forward-Looking Statements and Non-GAAP Measures

As indicated in "Risk Factors and Cautionary Statement About Forward-Looking Statements" above, this report contains forward-looking statements, all of which are qualified by the risk factors and other statements set forth in that section.

Our management evaluates our performance based on non-GAAP measures, of which the primary performance measure is EBITDA. EBITDA consists of earnings (net income or loss) available to common stockholders before preferred stock dividend, interest expense (including write-off of deferred financing costs and debt discount), impact of interest rate swap agreements, income tax expense, depreciation and amortization, impairment of goodwill, net loss on early disposition of notes receivable/payable, and expenses associated with a terminated transaction. We also use these same measures when evaluating potential acquisition candidates.

We believe EBITDA is useful to an investor in evaluating our operating performance because:

· it is widely used by investors in our industry to measure a company's operating performance without regard to items such as interest expense, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, financing methods, capital structure and the method by which assets were acquired;

· it helps investors more meaningfully evaluate and compare the results of our operations from period to period by removing the impact of our capital structure (primarily interest charges from our outstanding debt and the impact of our interest rate swap agreements and payment-in-kind (PIK) dividend) and asset base (primarily depreciation and amortization of our landfills and vehicles) from our operating results; and

· it helps investors identify items that are within our operational control. Depreciation charges, while a component of operating income, are fixed at the time of the asset purchase in accordance with the depreciable lives of the related asset and as such are not a directly controllable period operating charge.

Our management uses EBITDA:

· as a measure of operating performance because it assists us in comparing our performance on a consistent basis as it removes the impact of our capital structure and asset base from our operating results;

· as one method to estimate a purchase price (often expressed as a multiple of EBITDA) for solid waste companies we intend to acquire. The appropriate EBITDA multiple will vary from acquisition to acquisition depending on factors such as the size of the operation, the type of operation, the anticipated growth in the market, the strategic location of the operation in its market as well as other considerations;

· in presentations to our board of directors to enable them to have the same consistent measurement basis of operating performance used by management;

· as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations;

· in evaluations of field operations since it represents operational performance and takes into account financial measures within the control of the field operating units;

· as a component of incentive cash bonuses paid to our executive officers and other employees;

· to assess compliance with financial ratios and covenants included in our credit agreements; and

· in communications with investors, lenders, and others, concerning our financial performance.

The following presents a reconciliation of our total EBITDA to net income (loss) available to common stockholders (dollars in thousands):

                                                Three Months                 Six Months
                                               Ended June 30,              Ended June 30,
                                             2009          2008          2009          2008
Total EBITDA                               $  13,861     $  13,553     $  26,893     $  25,100
Depreciation and amortization                 (6,841 )      (6,909 )     (13,373 )     (13,400 )
Expenses associated with a terminated
transaction                                     (259 )           -          (259 )           -
Interest expense, net                         (4,555 )      (4,609 )      (9,014 )      (9,143 )
Impact of interest rate swap                    (465 )       3,693          (843 )        (907 )
Loss on early disposition of note
receivable                                         -          (326 )           -          (326 )
Income tax provision                            (908 )      (2,526 )      (2,007 )        (800 )
Accrued payment-in-kind dividend on
preferred stock                               (1,062 )      (1,011 )      (2,116 )      (2,016 )
Net income (loss) available to common
stockholders                               $    (229 )   $   1,865     $    (719 )   $  (1,492 )

Our EBITDA, as we define it, may not be comparable to similarly titled measures employed by other companies and is not a measure of performance calculated in accordance with GAAP. EBITDA should not be considered in isolation or as substitutes for operating income, net income or loss, cash flows provided by operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP.

Acquisitions

We target acquisition opportunities that will benefit from our core operating strategy of maximizing the internalization of waste. In markets where we already own a landfill, we still intend to focus on expanding our presence by acquiring companies that also operate in that market or in adjacent markets ("tuck-in" acquisitions). Tuck-in acquisitions are sought to provide growth in revenue and increase market share and enable disposal internalization and consolidation of duplicative facilities and functions to maximize cost efficiencies and economies of scale. If we find an attractive new market, we seek to enter that market by acquiring a permitted landfill, followed by acquiring collection and/or transfer operations and internalizing waste into the landfill.

Any acquisition we make would be financed by cash on hand and available capacity under our revolving credit facility, and through additional debt, and/or additional equity, including common stock or preferred stock.

Since completing our initial public offering in June 2004 through the six months ended June 30, 2009, we have completed 35 acquisitions. The purchase price for these acquisitions consisted of approximately $234.7 million of cash, $1.3 million of prepaid airspace, $6.1 million of convertible debt, a seller note valued at $0.9 million, $11.9 million of assumed debt (net of $0.5 million of debt discount), $4.4 million of assumed deferred tax liabilities and 1,726,336 shares of our common stock, less a note receivable valued at $7.2 million.

We completed one acquisition during the six months ended June 30, 2009. Total consideration for this acquisition included $1.0 million of cash and a seller note valued at $0.9 million with two future payments of $0.5 million due on January 15, 2010 and 2011, respectively. Information concerning our acquisitions may be found in our previously filed periodic and current reports and in note 2 to the condensed consolidated financial statements included in Item 1 of this report.

The following sets forth additional information regarding our acquisitions since our initial public offering:

                                                    Completion
Company              Location              Region   Date         Operations
Texas                Houston, TX           II       July 13,     Collection
Environmental                                       2004
Waste
Ashley Trash         Springfield, MO       I        August 17,   Collection
Service                                             2004
Power Waste          Birmingham, AL        III      August 31,   Collection
                                                    2004
Blount Recycling     Birmingham, AL        III      September    Collection,
                                                    3, 2004      Landfill & Transfer
                                                                 Station
Translift, Inc.      Little Rock, AR       III      September    Collection
                                                    17, 2004
Rural Disposal,      Willow Springs, MO    I        November     Collection
Inc.                                                12, 2004
Trash Away, Inc.     Piedmont, SC          III      November     Collection &
                                                    30, 2004     Transfer Station
Gecko Investments    St. Louis, MO         I        January      Collection &
(Eagle Ridge)                                       11, 2005     Landfill
MRR Southern, LLC    High Point/Raleigh,   III      April 1,     Landfill, Transfer
                     NC                             2005         Station & MRF
Triangle             Raleigh, NC           III      May 16,      Collection
Environmental                                       2005
Foster Ferguson      El Dorado Springs,    I        May 16,      Collection
                     MO                             2005
Triad Waste          High Point, NC        III      May 31,      Collection
                                                    2005
Proper Disposal      Chanute, KS           I        May 31,      Collection
                                                    2005
Fort Meade           Fort Meade, FL        II       October 3,   Landfill
Landfill                                            2005
Meyer & Gabbert      Sarasota/Arcadia,     II       October 3,   Collection,
                     FL                             2005         Landfill & Transfer
                                                                 Station
Pendergrass Refuse   Springfield, MO       I        October 4,   Collection
                                                    2005
Andy's Hauling       Sarasota, FL          II       October      Collection
                                                    21, 2005
Transit Waste        Durango,              II       February     Collection &
                     CO/Bloomfield, NM              10, 2006     Landfill
Fort Myers           Fort Myers, FL        II       August 10,   Transfer Station
Transfer Station                                    2006
(*)
WCA of St. Lucie,    St. Lucie, FL         II       October 2,   Transfer Station
LLC                                                 2006
Sunrise Disposal,    Springfield, MO       I        December     Collection
LLC                                                 28, 2006
Southwest            Fort Myers, FL        II       January 3,   Collection
Dumpster, Inc. (*)                                  2007
American Waste,      Oklahoma City, OK     II       February     Collection &
Inc.                                                21, 2007     Landfill
Klean Way            Springfield, MO       I        March 30,    Collection
Disposal, Inc.                                      2007
Carpenter Waste      Oklahoma City, OK     II       May 31,      Collection
Systems, LLC                                        2007
Fort Bend Regional   Houston, TX           II       June 29,     Collection,
Landfill                                            2007         Landfill & Transfer
                                                                 Station
Big Red              Ardmore, OK           II       August 14,   Collection
Containers, Inc.                                    2007
Roll-Off Rentals     Huntsville, AL        III      September    Collection
                                                    4, 2007
Waste Pro            Houston, TX           II       October 1,   Collection
Services, LLC                                       2007
DH Griffin           Greensboro, NC        III      October 1,   Collection
Container                                           2007
Services, LLC
DH Griffin           Raleigh, NC           III      October 1,   Collection
Container of                                        2007
Raleigh, LLC
Maguire Disposal,    Oklahoma City, OK     II       January 2,   Collection
Inc.                                                2008
Advantage Waste      Springfield/Verona,   I        October 1,   Collection &
Services             MO                             2008         Transfer Station
Advanced Waste       Houston, TX           II       October      Collection
Services                                            31, 2008
MRR Southern, LLC    Greensboro, NC        III      January      Transfer Station
                                                    15, 2009

(*) These assets were exchanged as part of the consideration for the acquisition of Fort Bend Regional Landfill.

Although we have reduced our acquisition efforts due to current market conditions, we intend to pursue selective acquisitions by focusing on those opportunities that most effectively leverage our existing infrastructure and maximize the internalization of waste.

Results of Operations

Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008

The following table sets forth the components of operating income (loss) by major operating segments (Region I: Kansas, Missouri; Region II: Colorado, Florida, New Mexico, Oklahoma, Texas; Region III: Alabama, Arkansas, North Carolina, South Carolina, Tennessee) for the three months ended June 30, 2009 and 2008 and the changes between the segments for each category (dollars in thousands):

                         Region I       Region II       Region III       Corporate        Total       % of Revenue
Three months ended
June 30, 2009:
Revenue                 $   12,942     $    25,991     $     11,241     $         -     $  50,174             100.0
Cost of services             9,067          16,730            7,387               -        33,184              66.2
Depreciation and
amortization                 1,485           3,315            1,915             126         6,841              13.6
General and
administrative                 801           1,480              678             445         3,404               6.8
Operating income
(loss)                  $    1,589     $     4,466     $      1,261     $      (571 )   $   6,745              13.4
Three months ended
June 30, 2008:
Revenue                 $   13,668     $    25,768     $     13,310     $         -     $  52,746             100.0
Cost of services             9,885          17,186            9,510               -        36,581              69.4
Depreciation and
amortization                 1,387           3,287            2,100             135         6,909              13.1
General and
administrative                 844           1,816              954            (909 )       2,705               5.1
Operating income        $    1,552     $     3,479     $        746     $       774     $   6,551              12.4
Increase/(decrease)
in 2009 compared to
2008:
Revenue                 $     (726 )   $       223     $     (2,069 )   $         -     $  (2,572 )
Cost of services              (818 )          (456 )         (2,123 )             -        (3,397 )
Depreciation and
amortization                    98              28             (185 )            (9 )         (68 )
General and
administrative                 (43 )          (336 )           (276 )         1,354           699
Operating income
(loss)                  $       37     $       987     $        515     $    (1,345 )   $     194

Revenue. Total revenue for the three months ended June 30, 2009 decreased by 4.9% to $50.2 million from $52.7 million for the three months ended June 30, 2008. We estimate that volume decreases of $3.6 million and decreases in fuel surcharges of $1.7 million were partially offset by operational price increases of $1.1 million and acquisition growth of $1.6 million. The above table reflects the change in revenue in each operating region. The financial results of completed acquisitions are generally blended with existing operations and do not have separate financial information available with the exception of new regions acquired which can be analyzed individually. Revenue in Region III decreased $2.1 million primarily due to the volume decreases in Alabama and North Carolina as a result of general market conditions.

Cost of services. Total cost of services for the three months ended June 30, 2009 decreased $3.4 million, or 9.3%, to $33.2 million from $36.6 million for the three months ended June 30, 2008. The primary cause of the decrease in cost of services was a $3.0 million reduction in fuel costs. Additionally, cost of services in Region III decreased $2.1 million as a result of the decrease in revenue in this region.

Overall cost of services decreased to 66.2% of revenue for the three months ended June 30, 2009 from 69.4% during the same period last year. Decreases in operating costs as a percentage of revenue were primarily attributable to lower fuel prices. Diesel fuel costs as a percentage of revenue decreased from 10.7% for the three months ended June 30, 2008 to 5.2% for the three months ended June 30, 2009. Other than periodic volatility in fuel prices, inflation has not materially affected our operations.

General and administrative. Total general and administrative expense for the three months ended June 30, 2009 increased $0.7 million, or 25.8%, to $3.4 million from $2.7 million for the three months ended June 30, 2008. The increase in general and administrative expense was mainly attributable to increases in payroll-related expenses, timing of professional fees incurred, and expenses associated with a terminated transaction in 2009. Such increase also resulted in the increase of overall general and administrative expenses from 5.1% of revenue during the three months ended June 30, 2008 to 6.8% of revenue during the three months ended June 30, 2009.

The following table sets forth items below operating income in our condensed consolidated statement of operations and as a percentage of revenue for the three months ended June 30, 2009 and 2008 (dollars in thousands):

                                                       Three Months Ended June 30,
                                                    2009                         2008
Operating income                           $   6,745          13.4 %    $   6,551          12.4 %
Interest expense, net                         (4,555 )        (9.1 )       (4,609 )        (8.7 )
Impact on interest rate swap                    (465 )        (0.9 )        3,693           7.0
Other income (loss), net                          16          (0.0 )         (233 )        (0.5 )
Income tax provision                            (908 )        (1.8 )       (2,526 )        (4.8 )
Accrued payment-in-kind dividend on
preferred stock                               (1,062 )        (2.1 )       (1,011 )        (1.9 )
Net income (loss) available to common
stockholders                               $    (229 )        (0.5 )%   $   1,865           3.5 %

Impact of interest rate swap. The impact of interest rate swap for the three . . .