Delaware
|
94-3283464
|
(State
or other jurisdiction
|
(I.R.S.
Employer Identification No.)
|
of
incorporation or organization)
|
|
35
Iron Point Circle
|
|
Suite
200
|
|
Folsom,
California
|
95630
|
(Address
of principal executive offices)
|
(Zip
Code)
|
þ
Large accelerated filer
|
¨
Accelerated filer
|
¨
Non-accelerated filer
|
Item
No.
|
Page
|
|
PART
I
|
||
1.
|
BUSINESS
|
1
|
1A.
|
RISK
FACTORS
|
15
|
1B.
|
UNRESOLVED
STAFF COMMENTS
|
20
|
2.
|
PROPERTIES
|
20
|
3.
|
LEGAL
PROCEEDINGS
|
20
|
4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
|
22
|
PART
II
|
||
5.
|
MARKET
FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
|
23
|
6.
|
SELECTED
FINANCIAL
DATA
|
24
|
7.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
26
|
7A.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
40
|
8.
|
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
|
42
|
9.
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
|
85
|
9A.
|
CONTROLS
AND PROCEDURES
|
85
|
9B.
|
OTHER
INFORMATION
|
85
|
PART
III
|
||
10.
|
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
86
|
11.
|
EXECUTIVE
COMPENSATION
|
86
|
12.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
|
86
|
13.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
|
86
|
14.
|
PRINCIPAL
ACCOUNTING FEES AND SERVICES
|
86
|
PART
IV
|
||
15.
|
EXHIBITS
AND FINANCIAL STATEMENT SCHEDULE
|
86
|
SIGNATURES
|
88
|
|
SCHEDULE
II - VALUATION AND QUALIFYING ACCOUNTS
|
89
|
|
EXHIBIT
INDEX
|
90
|
·
|
more
opportunities to enter into exclusive arrangements and create competitive
barriers to entry;
|
·
|
less
competition from larger solid waste services companies;
|
·
|
projected
strong economic and population growth rates that will contribute
to the
growth of our business; and
|
·
|
a
number of independent solid waste services companies suitable for
acquisition.
|
Owned
and operated landfills
|
24
|
Operated
landfills under limited-term operating agreements
|
8
|
Operated
landfills under life-of-site agreements
|
3
|
35
|
·
|
whether
the land where the expansion is being sought is contiguous to the
current
disposal site, and whether we either own it or the property is under
an
option, purchase, operating or other similar agreement;
|
·
|
whether
total development costs, final capping costs, and closure/post-closure
costs have been determined;
|
·
|
whether
internal personnel have performed a financial analysis of the proposed
expansion site and have determined that it has a positive financial
and
operational impact;
|
·
|
whether
internal personnel or external consultants are actively working to
obtain
the necessary approvals to obtain the landfill expansion permit;
and
|
·
|
whether
we consider it probable that we will achieve the expansion (for a
pursued
expansion to be considered probable, there must be no significant
known
technical, legal, community, business, or political restrictions
or
similar issues existing that could impair the success of the expansion).
|
2005
|
2006
|
||||||||||||||||||
Permitted
|
Probable
Expansion
|
Total
|
Permitted
|
Probable
Expansion
|
Total
|
||||||||||||||
Balance,
beginning of year
|
309,616
|
69,940
|
379,556
|
358,193
|
66,525
|
424,718
|
|||||||||||||
Permits
granted
|
40,626
|
(4,725
|
)
|
35,901
|
17,762
|
(17,762
|
)
|
-
|
|||||||||||
Airspace
consumed
|
(6,649
|
)
|
-
|
(6,649
|
)
|
(7,215
|
)
|
-
|
(7,215
|
)
|
|||||||||
Changes
in engineering estimates
|
14,600
|
1,310
|
15,910
|
15,714
|
(18,423
|
)
|
(2,709
|
)
|
|||||||||||
Balance,
end of year
|
358,193
|
66,525
|
424,718
|
384,454
|
30,340
|
414,794
|
0
to 10
|
11
to 20
|
21
to 40
|
41
to 50
|
51+
|
Total
|
||||||
Owned
and operated landfills
|
1
|
5
|
7
|
1
|
8
|
22
|
|||||
Operated
landfills under life-of-site agreements
|
-
|
-
|
1
|
1
|
1
|
3
|
|||||
1
|
5
|
8
|
2
|
9
|
25
|
0
to 10
|
11
to 20
|
21
to 40
|
41
to 50
|
51+
|
Total
|
||||||
Owned
and operated landfills
|
1
|
4
|
6
|
1
|
12
|
24
|
|||||
Operated
landfills under life-of-site agreements
|
-
|
-
|
2
|
-
|
1
|
3
|
|||||
1
|
4
|
8
|
1
|
13
|
27
|
Three
months ended
|
Twelve
months
ended
December
31,
2005
|
||||||||||||||||
March 31,
2005
|
June 30,
2005
|
September 30,
2005
|
December 31,
2005
|
||||||||||||||
Number
of
Sites
|
Total
Tons
|
Number
of
Sites
|
Total
Tons
|
Number
of
Sites
|
Total
Tons
|
Number
of
Sites
|
Total
Tons
|
||||||||||
Owned
landfills or landfills operated under life-of-site
agreements
|
25
|
1,436
|
25
|
1,715
|
25
|
1,771
|
25
|
1,727
|
6,649
|
||||||||
Landfills
classified as discontinued operations
|
1
|
47
|
1
|
7
|
-
|
-
|
-
|
-
|
54
|
||||||||
Operated
landfills
|
8
|
220
|
8
|
257
|
8
|
245
|
8
|
266
|
988
|
||||||||
34
|
1,703
|
34
|
1,979
|
33
|
2,016
|
33
|
1,993
|
7,691
|
Three
months ended
|
Twelve
months
ended
December 31,
2006
|
||||||||||||||||
March 31,
2006
|
June 30,
2006
|
September 30,
2006
|
December 31,
2006
|
||||||||||||||
Number
of
Sites
|
Total
Tons
|
Number
of
Sites
|
Total
Tons
|
Number
of
Sites
|
Total
Tons
|
Number
of
Sites
|
Total
Tons
|
||||||||||
Owned
landfills or landfills operated under life-of-site
agreements
|
27
|
1,655
|
27
|
1,828
|
27
|
1,888
|
27
|
1,844
|
7,215
|
||||||||
Operated
landfills
|
8
|
269
|
8
|
266
|
8
|
258
|
8
|
240
|
1,033
|
||||||||
35
|
1,924
|
35
|
2,094
|
35
|
2,146
|
35
|
2,084
|
8,248
|
·
|
concentrating
the waste stream from a wider area, which increases the volume of
disposal
at our landfill facilities and gives us greater leverage in negotiating
more favorable disposal rates at other landfills;
|
·
|
improving
utilization of collection personnel and equipment; and
|
·
|
building
relationships with municipalities and private operators that deliver
waste, which can lead to additional growth opportunities.
|
·
|
By
January 1, 2008, the California Air Resources Board, or the Board,
must adopt regulations requiring the monitoring and annual reporting
of
GHG emissions from GHG emission sources in California.
|
·
|
By
January 1, 2008, the Board must articulate what the statewide GHG
emissions level was in 1990 and approve a statewide GHG emissions
limit
that is equivalent to that level, to be achieved by 2020.
|
·
|
In
furtherance of achieving compliance with that state-wide limit, the
Board,
by January 1, 2011:
|
o
|
must
adopt specific GHG emission limits, applicable to GHG emission sources,
to
become operative on January 1, 2012; and
|
o
|
may
establish a system of market-based declining annual aggregate emission
limits for sources or categories of sources that emit GHG, applicable
from
January 1, 2012, to December 31, 2020.
|
·
|
By
an unspecified date, the Board must make recommendations to the Governor
and the Legislature of California on how to continue reductions of
GHG
emissions beyond 2020.
|
·
|
By
June 30, 2007, the Board must publish a list of discrete early action
GHG emission reduction measures that can be implemented prior to
the
measures and limits to be adopted later under AB32.
|
·
|
By
an unspecified date, the Board may adopt a schedule of fees to be
paid by
the sources of GHG emissions and used for purposes of carrying out
AB32.
|
NAME
|
AGE
|
POSITIONS
|
Ronald
J. Mittelstaedt (1)
|
43
|
Chief
Executive Officer and Chairman
|
Steven
F. Bouck
|
49
|
President
|
Darrell
W. Chambliss
|
42
|
Executive
Vice President and Chief Operating Officer
|
Robert
D. Evans
|
60
|
Executive
Vice President, General Counsel and Secretary
|
Worthing
F. Jackman
|
42
|
Executive
Vice President and Chief Financial Officer
|
David
M. Hall
|
49
|
Senior
Vice President - Sales and Marketing
|
Kenneth
O. Rose
|
58
|
Senior
Vice President - Administration
|
David
G. Eddie
|
37
|
Vice
President - Corporate Controller
|
Eric
O. Hansen
|
41
|
Vice
President - Chief Information Officer
|
Jerri
L. Hunt
|
55
|
Vice
President - Human Resources
|
James
M. Little
|
45
|
Vice
President - Engineering
|
(1)
|
Member
of the Executive Committee of the Board of Directors.
|
HIGH
|
LOW
|
||||||
2005
|
|||||||
First
Quarter
|
$
|
35.39
|
$
|
30.50
|
|||
Second
Quarter
|
38.35
|
32.86
|
|||||
Third
Quarter
|
38.15
|
33.33
|
|||||
Fourth
Quarter
|
35.69
|
31.50
|
|||||
2006
|
|||||||
First
Quarter
|
$
|
40.00
|
$
|
33.74
|
|||
Second
Quarter
|
40.64
|
35.25
|
|||||
Third
Quarter
|
39.00
|
34.55
|
|||||
Fourth
Quarter
|
42.00
|
37.51
|
|||||
2007
|
|||||||
First
Quarter (through January 31, 2007)
|
$
|
44.19
|
$
|
40.77
|
YEARS
ENDED DECEMBER 31,
|
||||||||||||||||
2002
|
2003
|
2004
(a)
|
2005
(a)
|
2006
(a)
|
||||||||||||
(in
thousands, except share and per share data)
|
||||||||||||||||
STATEMENT
OF OPERATIONS DATA:
|
||||||||||||||||
Revenues
|
$
|
477,848
|
$
|
541,797
|
$
|
624,544
|
$
|
721,899
|
$
|
824,354
|
||||||
Operating
expenses:
|
||||||||||||||||
Cost
of operations
|
266,424
|
299,901
|
354,901
|
416,883
|
492,766
|
|||||||||||
Selling,
general and administrative
|
45,046
|
51,244
|
61,223
|
72,395
|
84,541
|
|||||||||||
Depreciation
and amortization
|
37,125
|
45,071
|
54,630
|
64,788
|
74,865
|
|||||||||||
Loss
(gain) on disposal of assets
|
290
|
186
|
2,120
|
(216
|
)
|
796
|
||||||||||
Income
from operations
|
128,963
|
145,395
|
151,670
|
168,049
|
171,386
|
|||||||||||
|
||||||||||||||||
Interest
expense
|
(31,372
|
)
|
(31,666
|
)
|
(21,724
|
)
|
(23,489
|
)
|
(28,970
|
)
|
||||||
Other
income (expense), net
|
(524
|
)
|
160
|
(2,817
|
)
|
450
|
(3,759
|
)
|
||||||||
Income
before income tax provision and minority interests
|
97,067
|
113,889
|
127,129
|
145,010
|
138,657
|
|||||||||||
Minority
interests
|
(9,367
|
)
|
(10,549
|
)
|
(11,520
|
)
|
(12,422
|
)
|
(12,905
|
)
|
||||||
Income
from continuing operations before income taxes
|
87,700
|
103,340
|
115,609
|
132,588
|
125,752
|
|||||||||||
|
||||||||||||||||
Income
tax provision
|
(32,784
|
)
|
(37,527
|
)
|
(42,251
|
)
|
(48,066
|
)
|
(48,329
|
)
|
||||||
|
||||||||||||||||
Income
from continuing operations
|
54,916
|
65,813
|
73,358
|
84,522
|
77,423
|
|||||||||||
|
||||||||||||||||
Income
(loss) on discontinued operations, net of tax
|
550
|
(499
|
)
|
(1,087
|
)
|
(579
|
)
|
-
|
||||||||
Cumulative
effect of change in accounting principle, net of tax expense of
$166
|
-
|
282
|
-
|
-
|
-
|
|||||||||||
Net
income
|
$
|
55,466
|
$
|
65,596
|
$
|
72,271
|
$
|
83,943
|
$
|
77,423
|
||||||
|
||||||||||||||||
Basic
earnings per common share:
|
||||||||||||||||
Income
from continuing operations
|
$
|
1.32
|
$
|
1.55
|
$
|
1.57
|
$
|
1.81
|
$
|
1.70
|
||||||
Discontinued
operations
|
0.01
|
(0.01
|
)
|
(0.02
|
)
|
(0.01
|
)
|
-
|
||||||||
Cumulative
effect of change in accounting principle
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
Net
income per common share
|
$
|
1.33
|
$
|
1.54
|
$
|
1.55
|
$
|
1.80
|
$
|
1.70
|
||||||
|
||||||||||||||||
Diluted
earnings per common share:
|
||||||||||||||||
Income
from continuing operations
|
$
|
1.25
|
$
|
1.45
|
$
|
1.52
|
$
|
1.75
|
$
|
1.65
|
||||||
Discontinued
operations
|
0.01
|
(0.01
|
)
|
(0.02
|
)
|
(0.01
|
)
|
-
|
||||||||
Cumulative
effect of change in accounting principle
|
-
|
0.01
|
-
|
-
|
-
|
|||||||||||
Net
income per common share
|
$
|
1.26
|
$
|
1.45
|
$
|
1.50
|
$
|
1.74
|
$
|
1.65
|
||||||
|
||||||||||||||||
Shares
used in calculating basic income per share
(b)
|
41,625,963
|
42,490,944
|
46,581,441
|
46,700,649
|
45,424,084
|
|||||||||||
Shares
used in calculating diluted income per share
(b)
|
48,488,436
|
49,307,478
|
49,470,217
|
48,211,301
|
46,939,115
|
YEARS
ENDED DECEMBER 31,
|
||||||||||||||||
2002
|
2003
|
2004
(a)
|
2005
(a)
|
2006
(a)
|
||||||||||||
(in
thousands, except share and per share data)
|
||||||||||||||||
BALANCE
SHEET DATA:
|
||||||||||||||||
Cash
and equivalents
|
$
|
4,067
|
$
|
5,276
|
$
|
3,610
|
$
|
7,514
|
$
|
34,949
|
||||||
Working
capital (deficit)
|
(23,048
|
)
|
(15,060
|
)
|
(12,824
|
)
|
(25,625
|
)
|
10,368
|
|||||||
Property
and equipment, net
|
578,040
|
613,225
|
640,730
|
700,508
|
736,428
|
|||||||||||
Total
assets
|
1,261,882
|
1,395,952
|
1,491,483
|
1,676,307
|
1,773,891
|
|||||||||||
Long-term
debt
|
578,481
|
601,891
|
489,343
|
586,104
|
637,308
|
|||||||||||
Total
stockholders’ equity
|
451,712
|
537,494
|
707,522
|
718,200
|
736,482
|
(a) |
For
more information regarding this financial data, see the Management’s
Discussion and Analysis of Financial Condition and Results of Operations
section included in this report. For disclosures associated with
the
impact of the adoption of new accounting pronouncements and the
comparability of this information, see Note 1 of the consolidated
financial statements.
|
(b) |
Shares
have been adjusted to reflect our three-for-two stock split, paid
as a 50%
stock dividend, effective as of June 24, 2004.
|
(1)
|
the
land where the expansion is being sought is contiguous to the current
disposal site, and we either own the expansion property or it is
under an
option, purchase, operating or other similar agreement;
|
(2)
|
total
development costs, final capping costs, and closure/post-closure
costs
have been determined;
|
(3)
|
internal
personnel have performed a financial analysis of the proposed expansion
site and have determined that it has a positive financial and operational
impact;
|
(4)
|
internal
personnel or external consultants are actively working to obtain
the
necessary approvals to obtain the landfill expansion permit; and
|
(5)
|
we
consider it probable that we will achieve the expansion (for a pursued
expansion to be considered probable, there must be no significant
known
technical, legal, community, business, or political restrictions
or
similar issues existing that could impair the success of the expansion).
|
Years
Ended December 31,
|
|||||||||||||||||||
2004
|
2005
|
2006
|
|||||||||||||||||
Collection
|
$
|
467,310
|
65.4
|
%
|
$
|
517,536
|
62.9
|
%
|
$
|
602,762
|
64.2
|
%
|
|||||||
Disposal
and transfer
|
208,429
|
29.1
|
227,715
|
27.7
|
259,190
|
27.6
|
|||||||||||||
Recycling
and other
|
39,230
|
5.5
|
77,594
|
9.4
|
77,202
|
8.2
|
|||||||||||||
$
|
714,969
|
100.0
|
%
|
$
|
822,845
|
100.0
|
%
|
$
|
939,154
|
100.0
|
%
|
||||||||
Intercompany
elimination
|
$
|
90,425
|
$
|
100,946
|
$
|
114,800
|
Years
Ended December 31,
|
|||||||||||||||||||
2004
|
As
a % of 2004
Revenues
|
2005
|
As
a % of 2005
Revenues
|
2006
|
As
a % of 2006
Revenues
|
||||||||||||||
Revenues
|
$
|
624,544
|
100.0
|
%
|
$
|
721,899
|
100.0
|
%
|
$
|
824,354
|
100.0
|
%
|
|||||||
Cost
of operations
|
354,901
|
56.8
|
416,883
|
57.7
|
492,766
|
59.8
|
|||||||||||||
Selling,
general and administrative
|
61,223
|
9.8
|
72,395
|
10.0
|
84,541
|
10.2
|
|||||||||||||
Depreciation
and amortization
|
54,630
|
8.8
|
64,788
|
9.0
|
74,865
|
9.1
|
|||||||||||||
Loss
(gain) on disposal of assets
|
2,120
|
0.3
|
(216
|
)
|
-
|
796
|
0.1
|
||||||||||||
Operating
income
|
151,670
|
24.3
|
168,049
|
23.3
|
171,386
|
20.8
|
|||||||||||||
|
|||||||||||||||||||
Interest
expense, net
|
(21,724
|
)
|
(3.5
|
)
|
(23,489
|
)
|
(3.3
|
)
|
(28,970
|
)
|
(3.5
|
)
|
|||||||
Other
income (expense), net
|
(2,817
|
)
|
(0.4
|
)
|
450
|
-
|
(3,759
|
)
|
(0.4
|
)
|
|||||||||
Minority
interests
|
(11,520
|
)
|
(1.8
|
)
|
(12,422
|
)
|
(1.7
|
)
|
(12,905
|
)
|
(1.6
|
)
|
|||||||
Income
tax provision
|
(42,251
|
)
|
(6.8
|
)
|
(48,066
|
)
|
(6.7
|
)
|
(48,329
|
)
|
(5.9
|
)
|
|||||||
Loss
on discontinued operations, net of tax
|
(1,087
|
)
|
(0.2
|
)
|
(579
|
)
|
-
|
-
|
-
|
||||||||||
Net
income
|
$
|
72,271
|
11.6
|
%
|
$
|
83,943
|
11.6
|
%
|
$
|
77,423
|
9.4
|
%
|
Payments
Due by Period
|
||||||||||||||||
Recorded
Obligations
|
Total
|
Less
Than
1 Year
|
1
to 3
Years
|
4
to 5 Years
|
Over
5 years
|
|||||||||||
Long-term
Debt
|
$
|
644,192
|
$
|
6,884
|
$
|
18,062
|
$
|
203,631
|
$
|
415,615
|
Amount
of Commitment Expiration Per Period
|
||||||||||||||||
Unrecorded
Obligations
|
Total
|
Less
Than
1 Year
|
1
to 3
Years
|
4
to 5 Years
|
Over
5
years
|
|||||||||||
Operating
leases (1)
|
$
|
47,112
|
$
|
6,222
|
$
|
10,009
|
$
|
8,146
|
$
|
22,735
|
Years
Ended December 31,
|
|||||||
2005
|
2006
|
||||||
Net
cash provided by operating activities
|
$
|
199,812
|
$
|
204,234
|
|||
Change
in book overdraft
|
208
|
(8,869
|
)
|
||||
Plus:
Proceeds from disposal of assets
|
5,254
|
2,198
|
|||||
Plus:
Excess tax benefit associated with equity-based
compensation
|
-
|
7,728
|
|||||
Less:
Capital expenditures for property and equipment
|
(97,482
|
)
|
(96,519
|
)
|
|||
Less:
Distributions to minority interest holders
|
(10,486
|
)
|
(11,270
|
)
|
|||
Free
cash flow
|
$
|
97,306
|
$
|
97,502
|
Date
Entered
|
Notional
Amount
|
Fixed
Interest
Rate
Paid*
|
Variable
Interest
Rate
Received
|
Effective
Date
|
Expiration
Date
|
|||||||||||
May
2003
|
$
|
87,500
|
2.67%
|
3-month
LIBOR
|
February 2004 | February 2007 | ||||||||||
May
2003
|
$
|
87,500
|
2.68%
|
3-month
LIBOR
|
February 2004 | February 2007 | ||||||||||
March
2004
|
$
|
37,500
|
2.25%
|
1-month
LIBOR
|
March 2004 | March 2007 | ||||||||||
March
2004
|
$
|
37,500
|
2.25%
|
1-month
LIBOR
|
March 2004 | March 2007 | ||||||||||
September
2005
|
$
|
175,000
|
4.33%
|
1-month
LIBOR
|
February 2007 | February 2009 | ||||||||||
September
2005
|
$
|
75,000
|
4.34%
|
1-month
LIBOR
|
March 2007 | March 2009 | ||||||||||
December
2005
|
$
|
150,000
|
4.76%
|
1-month
LIBOR
|
June 2006 | June 2009 |
Page
|
|
Reports
of Independent Registered Public Accounting Firms
|
43
|
Consolidated
Balance Sheets as of December 31, 2005 and 2006
|
46
|
Consolidated
Statements of Income for the years ended December 31, 2004, 2005 and
2006
|
47
|
Consolidated
Statements of Stockholders’ Equity and Comprehensive Income for the years
ended December 31, 2004, 2005 and 2006
|
48
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2004, 2005
and 2006
|
49
|
Notes
to Consolidated Financial Statements
|
51
|
Financial
Statement Schedule
|
89
|
CONSOLIDATED
BALANCE SHEETS
|
(IN
THOUSANDS, EXCEPT SHARE AND PER SHARE
AMOUNTS)
|
December
31,
|
|||||||
2005
|
2006
|
||||||
ASSETS
|
|||||||
Current
assets:
|
|||||||
Cash
and equivalents
|
$
|
7,514
|
$
|
34,949
|
|||
Accounts
receivable, net of allowance for doubtful accounts of $2,826 and
$3,489 at
December 31, 2005 and 2006, respectively
|
94,438
|
100,269
|
|||||
Deferred
income taxes
|
5,145
|
9,373
|
|||||
Prepaid
expenses and other current assets
|
17,279
|
15,642
|
|||||
Total
current assets
|
124,376
|
160,233
|
|||||
|
|||||||
Property
and equipment, net
|
700,508
|
736,428
|
|||||
Goodwill
|
723,120
|
750,397
|
|||||
Intangible
assets, net
|
87,651
|
86,098
|
|||||
Restricted
assets
|
13,888
|
15,917
|
|||||
Other
assets, net
|
26,764
|
24,818
|
|||||
|
$
|
1,676,307
|
$
|
1,773,891
|
|||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable
|
$
|
54,795
|
$
|
53,010
|
|||
Book
overdraft
|
8,869
|
-
|
|||||
Accrued
liabilities
|
44,522
|
57,810
|
|||||
Deferred
revenue
|
30,957
|
32,161
|
|||||
Current
portion of long-term debt and notes payable
|
10,858
|
6,884
|
|||||
Total
current liabilities
|
150,001
|
149,865
|
|||||
|
|||||||
Long-term
debt and notes payable
|
586,104
|
637,308
|
|||||
Other
long-term liabilities
|
20,478
|
16,712
|
|||||
Deferred
income taxes
|
175,167
|
205,532
|
|||||
Total
liabilities
|
931,750
|
1,009,417
|
|||||
|
|||||||
Commitments
and contingencies
|
|||||||
Minority
interests
|
26,357
|
27,992
|
|||||
|
|||||||
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;
45,924,686 and 45,510,697 shares issued and outstanding at
December 31, 2005 and 2006, respectively
|
459
|
455
|
|||||
Additional
paid-in capital
|
373,382
|
310,229
|
|||||
Deferred
stock compensation
|
(2,234
|
)
|
-
|
||||
Treasury
stock at cost, 106,600 shares outstanding at December 31,
2005
|
(3,672
|
)
|
-
|
||||
Retained
earnings
|
345,308
|
422,731
|
|||||
Accumulated
other comprehensive income
|
4,957
|
3,067
|
|||||
Total
stockholders’ equity
|
718,200
|
736,482
|
|||||
|
$
|
1,676,307
|
$
|
1,773,891
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(IN
THOUSANDS, EXCEPT SHARE AND PER SHARE
AMOUNTS)
|
Years
Ended December 31,
|
||||||||||
2004
|
2005
|
2006
|
||||||||
Revenues
|
$
|
624,544
|
$
|
721,899
|
$
|
824,354
|
||||
Operating
expenses:
|
||||||||||
Cost
of operations
|
354,901
|
416,883
|
492,766
|
|||||||
Selling,
general and administrative
|
61,223
|
72,395
|
84,541
|
|||||||
Depreciation
and amortization
|
54,630
|
64,788
|
74,865
|
|||||||
Loss
(gain) on disposal of assets
|
2,120
|
(216
|
)
|
796
|
||||||
Operating
Income
|
151,670
|
168,049
|
171,386
|
|||||||
|
||||||||||
Interest
expense
|
(21,724
|
)
|
(23,489
|
)
|
(28,970
|
)
|
||||
Other
income (expense), net
|
(2,817
|
)
|
450
|
(3,759
|
)
|
|||||
Income
before income tax provision and minority interests
|
127,129
|
145,010
|
138,657
|
|||||||
|
||||||||||
Minority
interests
|
(11,520
|
)
|
(12,422
|
)
|
(12,905
|
)
|
||||
Income
from continuing operations before income taxes
|
115,609
|
132,588
|
125,752
|
|||||||
|
||||||||||
Income
tax provision
|
(42,251
|
)
|
(48,066
|
)
|
(48,329
|
)
|
||||
Income
from continuing operations
|
73,358
|
84,522
|
77,423
|
|||||||
|
||||||||||
Loss
on discontinued operations, net of tax (Note 3)
|
(1,087
|
)
|
(579
|
)
|
-
|
|||||
Net
income
|
$
|
72,271
|
$
|
83,943
|
$
|
77,423
|
||||
|
||||||||||
Basic
earning per common share:
|
||||||||||
Income
from continuing operations
|
$
|
1.57
|
$
|
1.81
|
$
|
1.70
|
||||
Discontinued
operations
|
(0.02
|
)
|
(0.01
|
)
|
-
|
|||||
Net
income per common share
|
$
|
1.55
|
$
|
1.80
|
$
|
1.70
|
||||
|
||||||||||
Diluted
earnings per common share:
|
||||||||||
Income
from continuing operations
|
$
|
1.52
|
$
|
1.75
|
$
|
1.65
|
||||
Discontinued
operations
|
(0.02
|
)
|
(0.01
|
)
|
-
|
|||||
Net
income per common share
|
$
|
1.50
|
$
|
1.74
|
$
|
1.65
|
||||
|
||||||||||
Shares
used in calculating basic income per share
|
46,581,441
|
46,700,649
|
45,424,084
|
|||||||
Shares
used in calculating diluted income per share
|
49,470,217
|
48,211,301
|
46,939,115
|
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE
INCOME
|
YEARS
ENDED DECEMBER 31, 2004, 2005 AND 2006
|
(IN
THOUSANDS, EXCEPT SHARE
AMOUNTS)
|
STOCKHOLDERS’
EQUITY
|
|||||||||||||||||||||||||||||||
COMPREHENSIVE
INCOME
|
COMMON
STOCK
|
ADDITIONAL
PAID-IN
CAPITAL
|
ACCUMULATED
OTHER COMPRE-
HENSIVE
INCOME
(LOSS)
|
DEFERRED
STOCK
COMPENSATION
|
TREASURY
STOCK
|
RETAINED
EARNINGS
|
|||||||||||||||||||||||||
SHARES
|
AMOUNT
|
SHARES
|
AMOUNT
|
TOTAL
|
|||||||||||||||||||||||||||
Balances
at December 31, 2003
|
43,000,182
|
$
|
430
|
$
|
348,003
|
$
|
403
|
$
|
(436
|
)
|
-
|
$
|
-
|
$
|
189,094
|
$
|
537,494
|
||||||||||||||
Issuance
of common stock warrants to employees
|
-
|
-
|
27
|
-
|
-
|
-
|
-
|
-
|
27
|
||||||||||||||||||||||
Issuance
of common stock warrants to consultants
|
-
|
-
|
223
|
-
|
-
|
-
|
-
|
-
|
223
|
||||||||||||||||||||||
Conversion
of 2006 Notes, net of issuance costs of $1,729
|
4,876,968
|
49
|
121,870
|
-
|
-
|
-
|
-
|
-
|
121,919
|
||||||||||||||||||||||
Vesting
of restricted stock
|
7,394
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||
Cancellation
of unvested restricted stock
|
-
|
-
|
(229
|
)
|
-
|
135
|
-
|
-
|
-
|
(94
|
)
|
||||||||||||||||||||
Issuance
of unvested restricted stock
|
-
|
-
|
2,242
|
-
|
(2,242
|
)
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Amortization
of deferred stock compensation
|
-
|
-
|
-
|
-
|
945
|
-
|
-
|
-
|
945
|
||||||||||||||||||||||
Exercise
of stock options and warrants
|
2,218,684
|
22
|
45,133
|
-
|
-
|
-
|
-
|
-
|
45,155
|
||||||||||||||||||||||
Repurchase
of common stock
|
(2,497,437
|
)
|
(25
|
)
|
(72,865
|
)
|
-
|
-
|
-
|
-
|
-
|
(72,890
|
)
|
||||||||||||||||||
Amounts
reclassified into earnings, net of taxes
|
-
|
-
|
-
|
409
|
-
|
-
|
-
|
-
|
409
|
||||||||||||||||||||||
Changes
in fair value of interest rate swaps
|
-
|
-
|
-
|
2,063
|
-
|
-
|
-
|
-
|
2,063
|
||||||||||||||||||||||
Net
income
|
$
|
72,271
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
72,271
|
72,271
|
||||||||||||||||||||
Other
comprehensive income
|
3,938
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Income
tax effect of other comprehensive income
|
(1,466
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||
Comprehensive
income
|
$
|
74,743
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||
Balances
at December 31, 2004
|
47,605,791
|
$
|
476
|
$
|
444,404
|
$
|
2,875
|
$
|
(1,598
|
)
|
-
|
$
|
-
|
$
|
261,365
|
$
|
707,522
|
||||||||||||||
Issuance
of common stock warrants to consultants
|
-
|
-
|
136
|
-
|
-
|
-
|
-
|
-
|
136
|
||||||||||||||||||||||
Vesting
of restricted stock
|
29,923
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||
Cancellation
of unvested restricted stock
|
-
|
-
|
(591
|
)
|
-
|
102
|
-
|
-
|
-
|
(489
|
)
|
||||||||||||||||||||
Issuance
of unvested restricted stock
|
-
|
-
|
1,908
|
-
|
(1,908
|
)
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Amortization
of deferred stock compensation
|
-
|
-
|
-
|
-
|
1,193
|
-
|
-
|
-
|
1,193
|
||||||||||||||||||||||
Exercise
of stock options and warrants
|
1,447,577
|
14
|
36,040
|
-
|
-
|
-
|
-
|
-
|
36,054
|
||||||||||||||||||||||
Repurchase
of common stock
|
(3,158,605
|
)
|
(31
|
)
|
(110,171
|
)
|
-
|
-
|
106,600
|
(3,672
|
)
|
-
|
(113,874
|
)
|
|||||||||||||||||
Accelerated
vesting of stock options
|
-
|
-
|
1,617
|
-
|
-
|
-
|
-
|
-
|
1,617
|
||||||||||||||||||||||
Stock
compensation recognized as change in option terms
|
-
|
-
|
16
|
-
|
-
|
-
|
-
|
-
|
16
|
||||||||||||||||||||||
Stock
options granted below fair market value
|
-
|
-
|
23
|
-
|
(23
|
)
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Amounts
reclassified into earnings, net of taxes
|
-
|
-
|
-
|
(1,196
|
)
|
-
|
-
|
-
|
-
|
(1,196
|
)
|
||||||||||||||||||||
Changes
in fair value of interest rate swaps
|
-
|
-
|
-
|
3,278
|
-
|
-
|
-
|
3,278
|
|||||||||||||||||||||||
Net
income
|
$
|
83,943
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
83,943
|
83,943
|
||||||||||||||||||||
Other
comprehensive income
|
3,290
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Income
tax effect of other comprehensive income
|
(1,208
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||
Comprehensive
income
|
$
|
86,025
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||
Balances
at December 31, 2005
|
45,924,686
|
$
|
459
|
$
|
373,382
|
$
|
4,957
|
$
|
(2,234
|
)
|
106,600
|
$
|
(3,672
|
)
|
$
|
345,308
|
$
|
718,200
|
|||||||||||||
Vesting
of restricted stock
|
37,752
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||
Cancellation
of restricted stock
|
(12,788
|
)
|
-
|
(446
|
)
|
-
|
-
|
-
|
-
|
-
|
(446
|
)
|
|||||||||||||||||||
Stock-based
compensation
|
-
|
-
|
3,451
|
-
|
-
|
-
|
-
|
-
|
3,451
|
||||||||||||||||||||||
Exercise
of stock options and warrants
|
1,388,472
|
14
|
32,132
|
-
|
-
|
-
|
-
|
-
|
32,146
|
||||||||||||||||||||||
Excess
tax benefit associated with equity-based compensation
|
-
|
-
|
7,728
|
-
|
-
|
-
|
-
|
-
|
7,728
|
||||||||||||||||||||||
Repurchase
of common stock
|
(2,788,600
|
)
|
(28
|
)
|
(100,217
|
)
|
-
|
-
|
-
|
-
|
-
|
(100,245
|
)
|
||||||||||||||||||
Retirement
of treasury stock
|
-
|
-
|
(3,672
|
)
|
-
|
-
|
(106,600
|
)
|
3,672
|
-
|
-
|
||||||||||||||||||||
Conversion
of 2022 Floating Rate Convertible Subordinated Notes
|
961,175
|
10
|
(10
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Issuance
of common stock warrants to consultants
|
-
|
-
|
115
|
-
|
-
|
-
|
-
|
-
|
115
|
||||||||||||||||||||||
Cumulative
change from adoption of accounting policy
|
-
|
-
|
(2,234
|
)
|
-
|
2,234
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Amounts
reclassified into earnings, net of taxes
|
-
|
-
|
-
|
(4,243
|
)
|
-
|
-
|
-
|
-
|
(4,273
|
)
|
||||||||||||||||||||
Changes
in fair value of interest rate swaps, net of taxes
|
-
|
-
|
-
|
2,353
|
-
|
-
|
-
|
-
|
2,383
|
||||||||||||||||||||||
Net
income
|
$
|
77,423
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
77,423
|
77,423
|
||||||||||||||||||||
Other
comprehensive loss
|
(2,887
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||
Income
tax effect of other comprehensive loss
|
997
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Comprehensive
income
|
$
|
75,533
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||
Balances
at December 31, 2006
|
45,510,697
|
$
|
455
|
$
|
310,229
|
$
|
3,067
|
$
|
-
|
-
|
$
|
-
|
$
|
422,731
|
$
|
736,482
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(IN
THOUSANDS)
|
Years
Ended December 31,
|
||||||||||
2004
|
2005
|
2006
|
||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||
Net
income
|
$
|
72,271
|
$
|
83,943
|
$
|
77,423
|
||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||
Loss
(gain) on disposal of assets
|
2,398
|
(413
|
)
|
796
|
||||||
Gain
on disposal of operations
|
(68
|
)
|
-
|
-
|
||||||
Depreciation
|
54,470
|
61,968
|
70,785
|
|||||||
Amortization
of intangibles
|
2,477
|
3,070
|
4,080
|
|||||||
Deferred
income taxes, net of acquisitions
|
26,566
|
(792
|
)
|
26,585
|
||||||
Minority
interests
|
11,520
|
12,422
|
12,905
|
|||||||
Amortization
of debt issuance costs
|
3,685
|
2,001
|
6,238
|
|||||||
Stock-based
compensation
|
972
|
2,826
|
3,451
|
|||||||
Interest
income on restricted assets
|
(275
|
)
|
(390
|
)
|
(618
|
)
|
||||
Closure
and post-closure accretion
|
421
|
681
|
623
|
|||||||
Tax
benefit on the exercise of stock options
|
8,195
|
7,338
|
-
|
|||||||
Excess
tax benefit associated with equity-based compensation
|
-
|
-
|
(7,728
|
)
|
||||||
Changes
in operating assets and liabilities, net of effects from
acquisitions:
|
||||||||||
Accounts
receivable, net
|
(3,357
|
)
|
(9,933
|
)
|
(4,928
|
)
|
||||
Prepaid
expenses and other current assets
|
(4,953
|
)
|
5,291
|
(1,083
|
)
|
|||||
Accounts
payable
|
2,733
|
18,060
|
(4,306
|
)
|
||||||
Deferred
revenue
|
1,372
|
4,818
|
324
|
|||||||
Accrued
liabilities
|
2,124
|
7,898
|
19,245
|
|||||||
Other
long-term liabilities
|
239
|
1,024
|
442
|
|||||||
Net
cash provided by operating activities
|
180,790
|
199,812
|
204,234
|
|||||||
|
||||||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||
Payments
for acquisitions, net of cash acquired
|
(46,784
|
)
|
(80,849
|
)
|
(38,594
|
)
|
||||
Capital
expenditures for property and equipment
|
(71,201
|
)
|
(97,482
|
)
|
(96,519
|
)
|
||||
Proceeds
from disposal of assets
|
2,088
|
5,254
|
2,198
|
|||||||
Decrease
(increase) in restricted assets, net of interest income
|
3,405
|
661
|
(1,411
|
)
|
||||||
Decrease
(increase) in other assets
|
27
|
(856
|
)
|
(224
|
)
|
|||||
Net
cash used in investing activities
|
(112,465
|
)
|
(173,272
|
)
|
(134,550
|
)
|
||||
|
||||||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||
Proceeds
from long-term debt
|
368,500
|
232,631
|
666,035
|
|||||||
Principal
payments on notes payable and long-term debt
|
(388,825
|
)
|
(159,688
|
)
|
(621,161
|
)
|
||||
Change
in book overdraft
|
(1,165
|
)
|
208
|
(8,869
|
)
|
|||||
Proceeds
from option and warrant exercises
|
36,959
|
28,716
|
32,146
|
|||||||
Excess
tax benefit associated with equity-based compensation
|
-
|
-
|
7,728
|
|||||||
Distributions
to minority interest holders
|
(11,025
|
)
|
(10,486
|
)
|
(11,270
|
)
|
||||
Payments
for repurchase of common stock
|
(72,889
|
)
|
(113,874
|
)
|
(100,245
|
)
|
||||
Debt
issuance costs
|
(1,546
|
)
|
(143
|
)
|
(6,613
|
)
|
||||
Net
cash used in financing activities
|
(69,991
|
)
|
(22,636
|
)
|
(42,249
|
)
|
||||
Net
(decrease) increase in cash and equivalents
|
(1,666
|
)
|
3,904
|
27,435
|
||||||
Cash
and equivalents at beginning of year
|
5,276
|
3,610
|
7,514
|
|||||||
Cash
and equivalents at end of year
|
$
|
3,610
|
$
|
7,514
|
$
|
34,949
|
WASTE
CONNECTIONS, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(IN
THOUSANDS)
|
Years
Ended December 31,
|
||||||||||
2004
|
2005
|
2006
|
||||||||
Cash
paid for income taxes
|
$
|
17,164
|
$
|
32,369
|
$
|
15,006
|
||||
Cash
paid for interest
|
$
|
22,379
|
$
|
22,314
|
$
|
28,534
|
||||
Conversion
of 2006 Convertible Subordinated Notes to equity
|
$
|
123,648
|
$
|
-
|
$
|
-
|
||||
Conversion
of 2022 Convertible Subordinated Notes to equity
|
$
|
-
|
$
|
-
|
$
|
10
|
||||
Fair
value of warrants issued to third party consultants in exchange for
services performed in connection with landfill development
|
$
|
-
|
$
|
54
|
$
|
-
|
||||
Transfer
from long-term other assets to property, plant and
equipment
|
$
|
-
|
$
|
2,478
|
$
|
-
|
||||
|
||||||||||
In
connection with its acquisitions, the Company assumed liabilities
as
follows:
|
||||||||||
Fair
value of assets acquired
|
$
|
116,378
|
$
|
112,802
|
$
|
44,919
|
||||
Cash
paid and warrants issued for current year acquisitions
|
(44,089
|
)
|
(78,971
|
)
|
(37,560
|
)
|
||||
Net
assets used as consideration for acquisitions
|
(31,440
|
)
|
-
|
(893
|
)
|
|||||
Liabilities
assumed, stock and notes payable issued to sellers of businesses
acquired
|
$
|
40,849
|
$
|
33,831
|
$
|
6,466
|
Buildings
|
20
years
|
Land
improvements
|
3
-
20 years
|
Machinery
and equipment
|
3
-
12 years
|
Rolling
stock
|
5
-
10 years
|
Containers
|
5
-
12 years
|
Rail
cars
|
20
years
|
- |
Landfill
development costs.
Landfill development costs include the costs of acquisition, construction
associated with excavation, liners, site berms, groundwater monitoring
wells and leachate collection systems. The Company estimates the
total
costs associated with developing each landfill site to its final
capacity.
This includes certain projected landfill site costs that are uncertain
because they are dependent on future events and thus actual costs
could
vary significantly from estimates. The total cost to develop a site
to its
final capacity includes amounts previously expended and capitalized,
net
of accumulated depletion, and projections of future purchase and
development costs, liner construction costs, operating construction
costs,
and capitalized interest costs. Total landfill costs include the
development costs associated with expansion airspace. Expansion airspace
is addressed below.
|
- |
Final
capping, closure and post-closure obligations.
The Company accrues for estimated final capping, closure and post-closure
maintenance obligations at the landfills it owns and the landfills
that it
operates, but does not own under life-of-site agreements. Accrued
final
capping, closure and post-closure costs represent an estimate of
the
current value of the future obligation associated with final capping,
closure and post-closure monitoring of non-hazardous solid waste
landfills
currently owned or operated under life-of-site agreements by the
Company.
Final capping costs represent the costs related to installation of
clay
liners, drainage and compacted soil layers and topsoil constructed
over
areas of the landfill where total airspace capacity has been consumed.
Closure and post-closure monitoring and maintenance costs represent
the
costs related to cash expenditures yet to be incurred when a landfill
facility ceases to accept waste and closes. Accruals for final capping,
closure and post-closure monitoring and maintenance requirements
in the
U.S. consider site inspection, groundwater monitoring, leachate
management, methane gas control and recovery, and operating and
maintenance costs to be incurred during the period after the facility
closes. Certain of these environmental costs, principally capping
and
methane gas control costs, are also incurred during the operating
life of
the site in accordance with the landfill operation requirements of
Subtitle D and the air emissions standards. Daily maintenance activities,
which include many of these costs, are expensed as incurred during
the
operating life of the landfill. Daily maintenance activities include
leachate disposal; surface water, groundwater, and methane gas monitoring
and maintenance; other pollution control activities; mowing and
fertilizing the landfill final cap; fence and road maintenance; and
third
party inspection and reporting costs. Site specific final capping,
closure
and post-closure engineering cost estimates are prepared annually
for
landfills owned or operated under life-of-site agreements by the
Company
for which it is responsible for final capping, closure and post-closure.
|
Final
capping, closure and post-closure liability at December 31,
2004
|
$
|
5,860
|
Increase
in closure and post-closure liability from changes in annual engineering
cost estimates
|
1,558
|
|
Liabilities
incurred
|
1,033
|
|
Accretion
expense
|
681
|
|
Change
in third party closure and post-closure liability
|
6,774
|
|
Final
capping, closure and post-closure liability at December 31,
2005
|
15,906
|
|
Decrease
in closure and post-closure liability from changes in annual engineering
cost estimates
|
(2,631)
|
|
Liabilities
incurred
|
1,041
|
|
Accretion
expense
|
623
|
|
Change
in third party closure and post-closure liability
|
(3,301)
|
|
Final
capping, closure and post-closure liability at December 31,
2006
|
$
|
11,638
|
- |
Disposal
capacity.
The Company’s internal and third-party engineers perform surveys at least
annually to estimate the disposal capacity at its landfills. This
is done
by using surveys and other methods to calculate, based on the terms
of the
permit, height restrictions and other factors, how much airspace
is left
to fill and how much waste can be disposed of at a landfill before
it has
reached its final capacity. The Company’s landfill depletion rates are
based on the remaining disposal capacity, considering both permitted
and
expansion airspace, at the landfills it owns, and certain landfills
it
operates, but does not own, under life-of-site agreements. The
Company’s
landfill depletion rates are based on the term of the operating
agreement
at its operated landfills that have capitalized expenditures. Expansion
airspace consists of additional disposal capacity being pursued
through
means of an expansion but is not actually permitted. Expansion
airspace
that meets certain internal criteria is included in the estimate
of total
landfill airspace. The Company’s internal criteria to determine when
expansion airspace may be included as disposal capacity is as follows:
|
(1)
|
The
land where the expansion is being sought is contiguous to the current
disposal site, and the Company either owns the expansion property
or is
under an option, purchase, operating or other similar agreement;
|
(2) |
Total
development costs, final capping costs, and closure/post-closure
costs
have been determined;
|
(3) |
Internal
personnel have performed a financial analysis of the proposed expansion
site and have determined that it has a positive financial and operational
impact;
|
(4) |
Internal
personnel or external consultants are actively working to obtain
the
necessary approvals to obtain the landfill expansion permit; and
|
(5) |
Obtaining
the expansion is considered probable (for a pursued expansion to
be
considered probable, there must be no significant known technical,
legal,
community, business, or political restrictions or similar issues
existing
that could impair the success of the expansion).
|
- |
The
purchase price of acquisitions is allocated to identified intangible
assets and tangible assets acquired and liabilities assumed based
on their
estimated fair values at the dates of acquisition, with any residual
amounts allocated to goodwill.
|
- |
The
Company accrues the payment of contingent purchase price if the events
surrounding the contingency are deemed assured beyond a reasonable
doubt.
|
- |
A
significant decrease in the market price of an asset or asset group;
|
- |
A
significant adverse change in the extent or manner in which an asset
or
asset group is being used or in its physical condition;
|
- |
A
significant adverse change in legal factors or in the business climate
that could affect the value of an asset or asset group, including
an
adverse action or assessment by a regulator;
|
- |
An
accumulation of costs significantly in excess of the amount originally
expected for the acquisition or construction of a long-lived asset;
|
- |
Current
period operating or cash flow losses combined with a history of operating
or cash flow losses or a projection or forecast that demonstrates
continuing losses associated with the use of a long-lived asset or
asset
group; or
|
- |
A
current expectation that, more likely than not, a long-lived asset
or
asset group will be sold or otherwise disposed of significantly before
the
end of its previously estimated useful life.
|
Date
Entered
|
Notional
Amount
|
Fixed
Interest
Rate
Paid*
|
Variable
Interest Rate Received
|
Effective
Date
|
Expiration
Date
|
|||||||||||
May
2003
|
$
|
87,500
|
2.67%
|
|
3-month
LIBOR
|
February 2004 | February 2007 | |||||||||
May
2003
|
$
|
87,500
|
2.68%
|
|
3-month
LIBOR
|
February 2004 | February 2007 | |||||||||
March
2004
|
$
|
37,500
|
2.25%
|
|
1-month
LIBOR
|
March 2004 | March 2007 | |||||||||
March
2004
|
$
|
37,500
|
2.25%
|
|
1-month
LIBOR
|
March 2004 | March 2007 | |||||||||
September
2005
|
$
|
175,000
|
4.33%
|
|
1-month
LIBOR
|
February 2007 | February 2009 | |||||||||
September
2005
|
$
|
75,000
|
4.34%
|
|
1-month
LIBOR
|
March 2007 | March 2009 | |||||||||
December
2005
|
$
|
150,000
|
4.76%
|
|
1-month
LIBOR
|
June 2006 | June 2009 |
2004
|
2005
|
2006
|
||||||
Exercise
prices equal to market price of stock
|
$
|
6.06
|
$
|
6.74
|
$
|
7.72
|
||
Exercise
prices less than market price of stock
|
-
|
17.67
|
-
|
Years
Ended December 31,
|
|||||||
2004
|
2005
|
||||||
Net
income, as reported
|
$
|
72,271
|
$
|
83,943
|
|||
Add:
stock-based employee compensation expense included in reported
net income,
net of related tax effects
|
611
|
1,779
|
|||||
Deduct:
total stock-based employee compensation expense determined under
the fair
value method for all awards, net of related tax effects
|
(8,414
|
)
|
(16,495
|
)
|
|||
Pro
forma net income
|
$
|
64,468
|
$
|
69,227
|
|||
Earnings
per share:
|
|||||||
Basic
- as reported
|
$
|
1.55
|
$
|
1.80
|
|||
Basic
- pro forma
|
1.38
|
1.48
|
|||||
|
|||||||
Diluted
- as reported
|
1.50
|
1.74
|
|||||
Diluted
- pro forma
|
1.34
|
1.44
|
Years
Ended December 31,
|
||||||
2004
|
2005
|
2006
|
||||
Expected
life
|
4
years
|
3.4
years
|
4
years
|
|||
Risk-free
interest rate
|
3.1%
|
4.0%
|
4.8%
|
|||
Expected
volatility
|
24%
|
20%
|
20%
|
|
Years
Ended December 31,
|
||||||
2004
|
2005
|
||||||
Revenues
|
$
|
16,098
|
$
|
1,367
|
|||
Operating
expenses:
|
|||||||
Cost
of operations
|
13,009
|
2,041
|
|||||
Selling,
general and administrative
|
2,000
|
195
|
|||||
Depreciation
and amortization
|
2,317
|
250
|
|||||
Loss
(gain) on disposal of assets and operations (a)
|
210
|
(197
|
)
|
||||
Operating
loss
|
(1,438
|
)
|
(922
|
)
|
|||
Other
income, net
|
-
|
-
|
|||||
Loss
from operations of discontinued operations
|
(1,438
|
)
|
(922
|
)
|
|||
Income
tax benefit
|
351
|
343
|
|||||
Loss
on discontinued operations
|
$
|
(1,087
|
)
|
$
|
(579
|
)
|
(a) |
Loss
on disposal of assets and operations for the year end December 31,
2004 includes $62 of gain on the sale of the operations in Washington
and
$6 of gain on the disposal of the Company’s Georgia operations.
|
2004
Disposals
|
||||
Disposed
assets:
|
||||
Accounts
receivable
|
$
|
1,271
|
||
Prepaid
expenses and other current assets
|
106
|
|||
Other
long-term assets
|
452
|
|||
Property
and equipment, net
|
18,254
|
|||
Goodwill,
net
|
14,262
|
|||
Intangible
assets, net
|
108
|
|||
Disposed
liabilities:
|
||||
Deferred
revenue
|
(972
|
)
|
||
Other
liabilities
|
(39
|
)
|
||
$
|
33,442
|
|
2005
Acquisitions
|
2006
Acquisitions
|
|||||
Assets:
|
|||||||
Accounts
receivable
|
$
|
3,641
|
$
|
902
|
|||
Prepaid
expenses and other current assets
|
439
|
332
|
|||||
Property
and equipment
|
23,910
|
12,580
|
|||||
Goodwill
|
62,628
|
27,571
|
|||||
Long-term
franchise agreements and contracts
|
5,170
|
1,859
|
|||||
Indefinite-lived
intangibles
|
6,646
|
-
|
|||||
Other
intangibles
|
9,575
|
964
|
|||||
Non-competition
agreements
|
793
|
120
|
|||||
Other
assets
|
-
|
591
|
|||||
Liabilities:
|
|||||||
Deferred
revenue
|
(1,984
|
)
|
(879
|
)
|
|||
Accounts
payable
|
(2,455
|
)
|
(214
|
)
|
|||
Accrued
liabilities
|
(2,432
|
)
|
(1,558
|
)
|
|||
Notes
issued to sellers
|
(254
|
)
|
-
|
||||
Debt
and long-term liabilities assumed
|
(25,481
|
)
|
(3,266
|
)
|
|||
Deferred
income taxes
|
(1,225
|
)
|
(549
|
)
|
|||
Total
consideration, net
|
$
|
78,971
|
$
|
38,453
|
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
|||||||
Amortizable
intangible assets:
|
||||||||||
Long-term
franchise agreements and contracts
|
$
|
58,592
|
$
|
(7,354
|
)
|
$
|
51,238
|
|||
Non-competition
agreements
|
4,761
|
(3,838
|
)
|
923
|
||||||
Other
|
13,470
|
(3,381
|
)
|
10,089
|
||||||
|
76,823
|
(14,573
|
)
|
62,250
|
||||||
Nonamortized
intangible assets:
|
||||||||||
Indefinite-lived
intangible assets
|
23,848
|
-
|
23,848
|
|||||||
Intangible
assets, exclusive of goodwill
|
$
|
100,671
|
$
|
(14,573
|
)
|
$
|
86,098
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
||||||||
Amortizable
intangible assets:
|
||||||||||
Long-term
franchise agreements and contracts
|
$
|
56,617
|
$
|
(5,351
|
)
|
$
|
51,266
|
|||
Non-competition
agreements
|
4,783
|
(3,460
|
)
|
1,323
|
||||||
Other
|
13,106
|
(1,892
|
)
|
11,214
|
||||||
|
74,506
|
(10,703
|
)
|
63,803
|
||||||
Nonamortized
intangible assets:
|
||||||||||
Indefinite-lived
intangible assets
|
23,848
|
-
|
23,848
|
|||||||
Intangible
assets, exclusive of goodwill
|
$
|
98,354
|
$
|
(10,703
|
)
|
$
|
87,651
|
For
the year ended December 31, 2007
|
$
|
3,987
|
||
For
the year ended December 31, 2008
|
3,855
|
|||
For
the year ended December 31, 2009
|
3,610
|
|||
For
the year ended December 31, 2010
|
3,534
|
|||
For
the year ended December 31, 2011
|
3,438
|
|
Year
Ended December 31,
|
||||||
2005
|
2006
|
||||||
Landfill
site costs
|
$
|
486,303
|
$
|
516,490
|
|||
Rolling
stock
|
194,199
|
216,941
|
|||||
Land,
buildings and improvements
|
83,852
|
91,625
|
|||||
Containers
|
95,210
|
112,491
|
|||||
Machinery
and equipment
|
89,365
|
105,955
|
|||||
Construction
in progress
|
3,784
|
10,114
|
|||||
|
952,713
|
1,053,616
|
|||||
Less
accumulated depreciation and depletion
|
(252,205
|
)
|
(317,188
|
)
|
|||
$
|
700,508
|
$
|
736,428
|
|
Year
Ended December 31,
|
||||||
2005
|
2006
|
||||||
Deferred
financing costs
|
$
|
8,654
|
$
|
9,028
|
|||
Investment
in unconsolidated entity
|
5,300
|
5,300
|
|||||
Landfill
closure receivable
|
6,774
|
3,473
|
|||||
Deposits
|
927
|
869
|
|||||
Unrealized
interest-rate swap gains
|
2,328
|
2,493
|
|||||
Other
|
2,781
|
3,655
|
|||||
$
|
26,764
|
$
|
24,818
|
Year
Ended December 31,
|
|||||||
2005
|
2006
|
||||||
Insurance
claims
|
$
|
21,086
|
$
|
28,686
|
|||
Payroll
and payroll-related
|
10,620
|
14,389
|
|||||
Interest
payable
|
2,615
|
2,797
|
|||||
Acquisition-related
|
1,613
|
2,522
|
|||||
Income
taxes payable
|
3,873
|
2,933
|
|||||
Other
|
4,715
|
6,483
|
|||||
$
|
44,522
|
$
|
57,810
|
Year
Ended December 31,
|
|||||||
2005
|
2006
|
||||||
Revolver
under Credit Facility
|
$
|
367,000
|
$
|
400,000
|
|||
2026
Senior Convertible Notes
|
-
|
200,000
|
|||||
2022
Floating Rate Convertible Subordinated Notes
|
175,000
|
-
|
|||||
2001
Wasco Bonds
|
12,165
|
11,740
|
|||||
California
Tax-Exempt Bonds
|
24,045
|
20,090
|
|||||
Notes
payable to sellers in connection with acquisitions, uncollateralized,
bearing interest at 5.5% to 7.5%, principal and interest payments
due
periodically with due dates ranging from 2010 to 2036
|
7,849
|
4,867
|
|||||
Notes
payable to third parties, collateralized by substantially all assets
of
certain subsidiaries of the Company, bearing interest at 5.1% to
11.0%,
principal and interest payments due periodically with due dates ranging
from 2007 to 2010
|
10,903
|
7,495
|
|||||
596,962
|
644,192
|
||||||
Less
- current portion
|
(10,858
|
)
|
(6,884
|
)
|
|||
$
|
586,104
|
$
|
637,308
|
2007
|
$
|
6,884
|
||
2008
|
12,667
|
|||
2009
|
5,395
|
|||
2010
|
1,771
|
|||
2011
|
201,860
|
|||
Thereafter
|
415,615
|
|||
$
|
644,192
|
2007
|
$
|
6,222
|
||
2008
|
5,410
|
|||
2009
|
4,599
|
|||
2010
|
4,227
|
|||
2011
|
3,919
|
|||
Thereafter
|
22,735
|
|||
$
|
47,112
|
Stock
option plans
|
6,765,447
|
|||
2026
Convertible Senior Notes
|
3,921,569
|
|||
Consultant
Incentive Plan
|
202,865
|
|||
Stock
purchase warrants
|
7,449
|
|||
2002
Restricted stock plan
|
50,582
|
|||
10,947,912
|
Year
Ended December 31,
|
||||||||||
2004
|
2005
|
2006
|
||||||||
Restricted
shares issued
|
89,927
|
10,750
|
-
|
|||||||
Weighted
average grant-date fair value of shares issued
|
$
|
24.93
|
$
|
33.01
|
$
|
-
|
||||
Total
fair value of restricted shares issued
|
$
|
2,242
|
$
|
355
|
$
|
-
|
||||
Restricted
shares becoming free of restrictions
|
7,394
|
25,983
|
30,897
|
|||||||
Weighted
average restriction period (in years)
|
3.0
|
3.0
|
-
|
Year
Ended December 31,
|
||||||||||
2004
|
2005
|
2006
|
||||||||
Restricted
stock units issued
|
-
|
43,500
|
328,000
|
|||||||
Weighted
average grant-date fair value of restricted stock units
issued
|
$
|
-
|
$
|
35.70
|
$
|
35.05
|
||||
Total
fair value of restricted stock units issued
|
$
|
-
|
$
|
1,553
|
$
|
11,496
|
||||
Restricted
stock units becoming free of restrictions
|
-
|
3,940
|
6,855
|
|||||||
Weighted
average restriction period (in years)
|
-
|
5.7
|
4.6
|
Number
of
Shares
(Options)
|
Weighted
Average
Exercise
Price
|
||||||
Outstanding
as of December 31, 2003
|
5,435,592
|
$
|
18.86
|
||||
Granted
|
2,351,454
|
25.06
|
|||||
Forfeited
|
(215,129
|
)
|
21.55
|
||||
Exercised
|
(2,112,621
|
)
|
17.37
|
||||
Outstanding
as of December 31, 2004
|
5,459,296
|
22.01
|
|||||
Granted
|
1,670,125
|
33.11
|
|||||
Forfeited
|
(254,500
|
)
|
24.58
|
||||
Exercised
|
(1,391,987
|
)
|
20.63
|
||||
Outstanding
as of December 31, 2005
|
5,482,934
|
25.62
|
|||||
Granted
|
345,600
|
34.81
|
|||||
Forfeited
|
(21,150
|
)
|
34.96
|
||||
Exercised
|
(1,374,375
|
)
|
23.39
|
||||
Outstanding
as of December 31, 2006
|
4,433,009
|
26.99
|
|
Options
Outstanding
|
Options
Exercisable
|
||||||||||||
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Life
(in
years)
|
Shares
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Life
(in years)
|
||||||||
$
7.00 to $14.00
|
16,000
|
$
|
8.02
|
2.9
|
16,000
|
$
|
8.02
|
2.9
|
||||||
$14.01
to $22.00
|
1,152,125
|
20.18
|
5.7
|
1,152,125
|
20.18
|
5.7
|
||||||||
$22.01
to $30.00
|
1,501,199
|
24.84
|
7.0
|
1,501,199
|
24.84
|
7.0
|
||||||||
$30.01
to $40.00
|
1,763,685
|
33.43
|
6.9
|
1,429,485
|
33.11
|
6.3
|
||||||||
4,433,009
|
26.99
|
6.6
|
4,098,809
|
26.35
|
6.4
|
Unvested
Shares
|
Vested
Shares
|
Total
Shares
|
Weighted-
Average
Exercise
Price
|
||||||||||
Outstanding
at December 31, 2005
|
-
|
5,482,934
|
5,482,934
|
$
|
25.62
|
||||||||
Granted
|
344,600
|
1,000
|
345,600
|
34.81
|
|||||||||
Forfeited
|
(10,400
|
)
|
(10,750
|
)
|
(21,150
|
)
|
34.96
|
||||||
Exercised
|
-
|
(1,374,375
|
)
|
(1,374,375
|
)
|
23.39
|
|||||||
Outstanding
at December 31, 2006
|
334,200
|
4,098,809
|
4,433,009
|
26.99
|
|
Unvested
Shares
|
Weighted-Average
Grant
Date Fair
Value
Per Share
|
|||||
Outstanding
at December 31, 2005
|
102,867
|
$
|
36.29
|
||||
Granted
|
328,000
|
35.05
|
|||||
Forfeited
|
(13,829
|
)
|
35.25
|
||||
Vested
|
(37,752
|
)
|
36.64
|
||||
Outstanding
at December 31, 2006
|
379,286
|
35.22
|
Warrants
|
Weighted-Average
Exercise Price
|
||||||
Outstanding
at December 31, 2005
|
61,099
|
$
|
23.52
|
||||
Granted
|
10,263
|
39.48
|
|||||
Forfeited
|
-
|
-
|
|||||
Exercised
|
(34,350
|
)
|
22.79
|
||||
Outstanding
at December 31, 2006
|
37,012
|
28.62
|
|
Fair
Value
of
Warrants
Issued
|
Outstanding
at December 31,
|
||||||||||||||
Grant
Date
|
Warrants
Issued
|
Exercise
Price
|
2005
|
2006
|
||||||||||||
February
1998
|
300,000
|
$
|
2.67
|
$
|
954
|
9,999
|
6,699
|
|||||||||
Throughout
2002
|
96,915
|
17.35
to 24.67
|
577
|
750
|
750
|
|||||||||||
Throughout
2003
|
61,500
|
19.47
to 24.55
|
173
|
750
|
750
|
|||||||||||
Throughout
2004
|
43,050
|
23.25
to 27.37
|
223
|
34,800
|
3,750
|
|||||||||||
Throughout
2005
|
14,800
|
29.62
to 37.87
|
136
|
14,800
|
14,800
|
|||||||||||
Throughout
2006
|
10,263
|
34.10
to 41.20
|
115
|
-
|
10,263
|
|||||||||||
61,099
|
37,012
|
Year
Ended December 31, 2004
|
||||||||||
Gross
|
Tax
effect
|
Net
of tax
|
||||||||
Amounts
reclassified into earnings
|
$
|
649
|
$
|
(240
|
)
|
$
|
409
|
|||
Changes
in fair value of interest rate swaps
|
3,289
|
(1,226
|
)
|
2,063
|
||||||
$
|
3,938
|
$
|
(1,466
|
)
|
$
|
2,472
|
||||
Year
Ended December 31, 2005
|
||||||||||
Gross
|
Tax
effect
|
Net
of tax
|
||||||||
Amounts
reclassified into earnings
|
$
|
(1,904
|
)
|
$
|
708
|
$
|
(1,196
|
)
|
||
Changes
in fair value of interest rate swaps
|
5,194
|
(1,916
|
)
|
3,278
|
||||||
$
|
3,290
|
$
|
(1,208
|
)
|
$
|
2,082
|
||||
|
Year
Ended December 31, 2006
|
|||||||||
Gross
|
Tax
effect
|
Net
of tax
|
||||||||
Amounts
reclassified into earnings
|
$
|
(6,842
|
)
|
$
|
2,599
|
$
|
(4,243
|
)
|
||
Changes
in fair value of interest rate swaps
|
3,955
|
(1,602
|
)
|
2,353
|
||||||
$
|
(2,887
|
)
|
$
|
997
|
$
|
(1,890
|
)
|
Years
Ended December 31,
|
||||||||||
2004
|
2005
|
2006
|
||||||||
Current:
|
||||||||||
Federal
|
$
|
14,237
|
$
|
45,676
|
$
|
18,759
|
||||
State
|
1,448
|
3,182
|
2,985
|
|||||||
Deferred:
|
||||||||||
Federal
|
25,484
|
(761
|
)
|
24,223
|
||||||
State
|
1,082
|
(31
|
)
|
2,362
|
||||||
Provision
before discontinued operations
|
$
|
42,251
|
$
|
48,066
|
$
|
48,329
|
||||
|
||||||||||
Discontinued
operations
|
(351
|
)
|
(343
|
)
|
-
|
|||||
$
|
41,900
|
$
|
47,723
|
$
|
48,329
|
2005
|
2006
|
||||||
Deferred
income tax assets:
|
|||||||
Accounts
receivable reserves
|
$
|
1,046
|
$
|
1,341
|
|||
Accrued
expenses
|
6,132
|
8,210
|
|||||
Self-insurance
reserves
|
3,471
|
4,291
|
|||||
Net
operating losses from acquired subsidiaries
|
946
|
298
|
|||||
Stock
options
|
493
|
1,293
|
|||||
Other
|
1,384
|
-
|
|||||
Gross
deferred income tax assets
|
13,472
|
15,433
|
|||||
Less:
Valuation allowance
|
-
|
-
|
|||||
Net
deferred income tax assets
|
13,472
|
15,433
|
|||||
|
|||||||
Deferred
income tax liabilities:
|
|||||||
Amortization
|
(54,835
|
)
|
(75,874
|
)
|
|||
Depreciation
|
(119,853
|
)
|
(116,853
|
)
|
|||
Landfill
closure/post-closure
|
-
|
(11,180
|
)
|
||||
Interest
rate swap
|
(2,911
|
)
|
(1,914
|
)
|
|||
Prepaid
expenses
|
(4,386
|
)
|
(4,990
|
)
|
|||
Other
|
(1,509
|
)
|
(781
|
)
|
|||
Total
deferred income tax liabilities
|
(183,494
|
)
|
(211,592
|
)
|
|||
Net
deferred income tax liability
|
$
|
(170,022
|
)
|
$
|
(196,159
|
)
|
Years
Ended December 31,
|
||||||||||
2004
|
2005
|
2006
|
||||||||
Income
tax provision at the statutory rate
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
||||
State
taxes, net of federal benefit
|
1.2
|
1.3
|
2.9
|
|||||||
Other
|
0.3
|
-
|
0.5
|
|||||||
36.5
|
%
|
36.3
|
%
|
38.4
|
%
|
Years
Ended December 31,
|
||||||||||
2004
|
2005
|
2006
|
||||||||
Numerator:
|
||||||||||
Net
income for basic earnings per share
|
$
|
72,271
|
$
|
83,943
|
$
|
77,423
|
||||
Interest
expense on 2006 Convertible Subordinated Notes, net of tax
effects
|
1,706
|
-
|
-
|
|||||||
Net
income for diluted earnings per share
|
$
|
73,977
|
$
|
83,943
|
$
|
77,423
|
||||
Denominator:
|
||||||||||
Basic
shares outstanding
|
46,581,441
|
46,700,649
|
45,424,084
|
|||||||
Dilutive
effect of 2006 Convertible Subordinated Notes
|
1,706,874
|
-
|
-
|
|||||||
Dilutive
effect of 2022 Convertible Subordinated Notes
|
20,525
|
389,754
|
262,017
|
|||||||
Dilutive
effect of stock options and warrants
|
1,133,374
|
1,091,993
|
1,164,522
|
|||||||
Dilutive
effect of restricted stock
|
28,003
|
28,905
|
88,492
|
|||||||
Diluted
shares outstanding
|
49,470,217
|
48,211,301
|
46,939,115
|
December 31,
2005
|
December 31,
2006
|
||||||||
Number
of
Shares
|
Exercise
Price
Range
|
Number
of
Shares
|
Exercise
Price
Range
|
||||||
Outstanding
options
|
67,500
|
$34.87
to $38.06
|
8,000
|
$38.06
to $39.89
|
|||||
Outstanding
warrants
|
3,500
|
$37.17
to $37.87
|
8,225
|
$38.73
to $41.20
|
|||||
71,000
|
16,225
|
|
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
|||||||||
Revenues
|
$
|
164,444
|
$
|
180,265
|
$
|
188,745
|
$
|
188,445
|
|||||
Operating
income
|
38,663
|
43,627
|
46,480
|
39,279
|
|||||||||
Income
from continuing operations
|
19,560
|
21,786
|
24,475
|
18,701
|
|||||||||
Income
(loss) on discontinued operations, net of tax
|
(201
|
)
|
(378
|
)
|
-
|
-
|
|||||||
Net
income
|
19,359
|
21,408
|
24,475
|
18,701
|
|||||||||
Basic
income per common share:
|
|||||||||||||
Before
discontinued operations
|
0.41
|
0.47
|
0.53
|
0.41
|
|||||||||
Net
income per common share
|
0.41
|
0.46
|
0.53
|
0.41
|
|||||||||
Diluted
income per common share:
|
|||||||||||||
Before
discontinued operations
|
0.40
|
0.45
|
0.51
|
0.40
|
|||||||||
Net
income per common share
|
0.40
|
0.44
|
0.51
|
0.40
|
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
||||||||||
Revenues
|
$
|
190,169
|
$
|
206,970
|
$
|
216,547
|
$
|
210,668
|
|||||
Operating
income
|
39,155
|
40,803
|
47,531
|
43,897
|
|||||||||
Income
from continuing operations
|
15,723
|
19,200
|
21,873
|
20,627
|
|||||||||
Net
income
|
15,723
|
19,200
|
21,873
|
20,627
|
|||||||||
Basic
income per common share
|
0.34
|
0.43
|
0.48
|
0.45
|
|||||||||
Diluted
income per common share
|
0.33
|
0.41
|
0.47
|
0.44
|
Years
Ended December 31,
|
||||||||||
2004
|
2005
|
2006
|
||||||||
Basic
earning per common share:
|
||||||||||
Income
from continuing operations
|
$
|
1.05
|
$
|
1.21
|
$
|
1.14
|
||||
Discontinued
operations
|
(0.02
|
)
|
(0.01
|
)
|
-
|
|||||
Net
income per common share
|
$
|
1.03
|
$
|
1.20
|
$
|
1.14
|
||||
Diluted
earnings per common share:
|
||||||||||
Income
from continuing operations
|
$
|
1.01
|
$
|
1.17
|
$
|
1.10
|
||||
Discontinued
operations
|
(0.01
|
)
|
(0.01
|
)
|
-
|
|||||
Net
income per common share
|
$
|
1.00
|
$
|
1.16
|
$
|
1.10
|
||||
|
||||||||||
Shares
used in calculating basic income per common share
|
69,872,162
|
70,050,974
|
68,136,126
|
|||||||
Shares
used in calculating diluted income per common share
|
74,205,326
|
72,316,952
|
70,408,673
|
(a)
|
See
Index to Consolidated Financial Statements on page 41. The following
Financial Statement Schedule is filed herewith on page 87 and made a
part of this Report:
|
(b)
|
See
Exhibit Index immediately following signature pages.
|
Date: February 13,
2007
|
Waste
Connections, Inc.
By: /s/
Ronald J. Mittelstaedt
Ronald J. Mittelstaedt
Chief Executive Officer and
Chairman
|
Signature
|
Title
|
Date
|
||
/s/
Ronald
J. Mittelstaedt
|
Chief
Executive Officer and Chairman
|
|||
Ronald
J. Mittelstaedt
|
(principal
executive officer)
|
February
13, 2007
|
||
/s/
Worthing
F. Jackman
|
Executive
Vice President and Chief Financial Officer
|
|||
Worthing
F. Jackman
|
(principal
financial officer)
|
February 13,
2007
|
||
/s/
David
G. Eddie
|
Vice
President - Corporate Controller
|
|||
David
G. Eddie
|
(principal
accounting officer)
|
February 13,
2007
|
||
/s/
Eugene
V. Dupreau
|
Director
and Regional Vice President - Western
|
|||
Eugene
V. Dupreau
|
Region
|
February 13,
2007
|
||
/s/
Michael
W. Harlan
|
||||
Michael
W. Harlan
|
Director
|
February 13,
2007
|
||
/s/
William
J. Razzouk
|
||||
William
J. Razzouk
|
Director
|
February 13,
2007
|
||
/s/
Robert
H. Davis
|
||||
Robert
H. Davis
|
Director
|
February 13,
2007
|
Additions
|
Deductions
(Write-offs,
Net
of
Collections)
|
|||||||||||||||
Description
|
Balance
at
Beginning
of
Year
|
Charged
to
Costs
and
Expenses
|
Charged
to
Other
Accounts
|
Balance
at End
of
Year
|
||||||||||||
Allowance
for Doubtful Accounts:
|
||||||||||||||||
Year
Ended December 31, 2004
|
$
|
2,570
|
$
|
2,930
|
$
|
-
|
$
|
(3,086
|
)
|
$
|
2,414
|
|||||
Year
Ended December 31, 2005
|
2,414
|
3,220
|
-
|
(2,808
|
)
|
2,826
|
||||||||||
Year
Ended December 31, 2006
|
2,826
|
3,664
|
-
|
(3,001
|
)
|
3,489
|
Exhibit
Number
|
Description
of Exhibits
|
|||
3.1
|
Amended
and Restated Certificate of Incorporation of the Registrant (incorporated
by reference to the exhibit filed with the Registrant’s Form T-3
filed on June 16, 2004)
|
|||
3.2
|
Amended
and Restated Bylaws of the Registrant (incorporated by reference
to the
exhibit filed with the Registrant’s Form 10-Q filed on July 22,
2004)
|
|||
4.1
|
Form
of Common Stock Certificate (incorporated by reference to the exhibit
filed with the Registrant’s Form S-1/A filed on May 6,
1998)
|
|||
4.2
|
Indenture
between the Registrant, as Issuer, and U.S. Bank National Association,
as
Trustee, dated as of March 20, 2006 (incorporated by reference
to the
exhibit filed with the Registrant’s Form 8-K filed on March 23,
2006)
|
|||
4.3
|
Registration
Rights Agreement between Registrant, and Citigroup Global Markets
Inc. and
Banc of America Securities LLC, dated as of March 20, 2006 (incorporated
by reference to the exhibit filed with the Registrant’s Form 8-K
filed on March 23, 2006)
|
|||
10.1
+
|
Employment
Agreement between the Registrant and Eugene V. Dupreau, dated as
of
February 23, 1998 (incorporated by reference to the exhibit filed
with the Registrant’s Form S-1 filed on March 16,
1998)
|
|||
10.2
+
|
Form
of Warrant Agreement (incorporated by reference to the exhibit
filed with
the Registrant’s Form S-1 filed on March 16, 1998)
|
|||
10.3
+
|
Employment
Agreement between the Registrant and James M. Little, dated as
of
September 13, 1999 (incorporated by reference to the exhibit filed
with the Registrant’s Form 10-K filed on March 13,
2000)
|
|||
10.4
+
|
Employment
Agreement between the Registrant and Jerri L. Hunt, dated as of
October 25, 1999 (incorporated by reference to the exhibit filed with
the Registrant’s Form 10-K filed on March 13,
2000)
|
|||
10.5
+
|
Second
Amended Employment Agreement between the Registrant and Darrell
Chambliss,
dated as of June 1, 2000 (incorporated by reference to the exhibit
filed with the Registrant’s Form 10-Q filed on November 14,
2000)
|
|||
10.6
+
|
Second
Amended and Restated 1997 Stock Option Plan (incorporated by reference
to
the exhibit filed with the Registrant’s Form S-8 filed on
July 24, 2000)
|
|||
10.7
+
|
Employment
Agreement between the Registrant and Eric O. Hansen, dated as of
January 1, 2001 (incorporated by reference to the exhibit filed with
the Registrant’s Form 10-Q filed on May 3,
2005)
|
|||
10.8
+
|
2002
Senior Management Equity Incentive Plan (incorporated by reference
to the
exhibit filed with the Registrant’s Form S-8 filed on
February 21, 2002)
|
|||
10.9
+
|
2002
Stock Option Plan (incorporated by reference to the exhibit filed
with the
Registrant’s Form S-8 filed on February 21,
2002)
|
|||
10.10
+
|
Employment
Agreement between the Registrant and Kenneth O. Rose, dated as
of
May 1, 2002 (incorporated by reference to the exhibit filed with the
Registrant’s Form 10-Q filed on August 13,
2002)
|
Exhibit
Number
|
Description of Exhibits | |||
10.11
+
|
Employment
Agreement between the Registrant and Robert D. Evans, dated as of
May 10, 2002 (incorporated by reference to the exhibit filed with the
Registrant’s Form 10-Q filed on August 13,
2002)
|
|||
10.12
+
|
2002
Restricted Stock Plan (incorporated by reference to the exhibit filed
with
the Registrant’s Form S-8 filed on June 19,
2002)
|
|||
10.13
+
|
Consultant
Incentive Plan (incorporated by reference to the exhibit filed with
the
Registrant’s Form S-8 filed on January 8,
2003)
|
|||
10.14
+
|
Employment
Agreement between the Registrant and Worthing F. Jackman, dated as
of
April 11, 2003 (incorporated by reference to the exhibit filed with
the Registrant’s Form 10-Q filed on August 13,
2003)
|
|||
10.15
+
|
Nonqualified
Deferred Compensation Plan, dated July 1, 2004 (incorporated by
reference to the exhibit filed with the Registrant’s Form 10-Q filed
on July 22, 2004)
|
|||
10.16
+
|
Second
Amended and Restated Employment Agreement between the Registrant
and
Steven Bouck, dated as of October 1, 2004 (incorporated by reference
to the exhibit filed with the Registrant’s Form 10-Q filed on
October 22, 2004)
|
|||
10.17
|
Amended
and Restated Revolving Credit and Term Loan Agreement, dated as of
November 17, 2004 (incorporated by reference to the exhibit filed
with the Registrant’s Form 10-K filed on February 28,
2005)
|
|||
10.18
+
|
Compensation
Plan for Independent Directors, dated March 1, 2005 (incorporated by
reference to the exhibit filed with the Registrant’s Form 10-Q filed
on May 3, 2005)
|
|||
10.19
+
|
Second
Amended and Restated Employment Agreement between the Registrant
and
Ronald J. Mittelstaedt, dated as of March 1, 2004 (and as amended
March 22, 2005) (incorporated by reference to the exhibit filed with
the
Registrant’s Form 10-Q filed on May 3, 2005)
|
|||
10.20
|
Amendment
No. 1 to the Amended and Restated Revolving Credit and Term Loan
Agreement, dated as of June 30, 2005 (incorporated by reference to
the exhibit filed with the Registrant’s Form 10-Q filed on
August 5, 2005)
|
|||
10.21
+
|
First
Amended and Restated Employment Agreement between the Registrant
and David
M. Hall, dated as of October 1, 2005 (incorporated by reference to
the exhibit filed with the Registrant’s Form 8-K filed on
October 4, 2005)
|
|||
10.22
+
|
First
Amended and Restated Employment Agreement between the Registrant
and David
Eddie, dated as of October 1, 2005 (incorporated by reference to the
exhibit filed with the Registrant’s Form 8-K filed on October 4,
2005)
|
|||
10.23
|
Amendment
No. 2 to the Amended and Restated Revolving Credit and Term Loan
Agreement, dated as of October 19, 2005 (incorporated by reference to
the exhibit filed with the Registrant’s Form 10-Q filed on
October 27, 2005)
|
|||
10.24
|
Amended
and Restated Revolving Credit and Term Loan Agreement, dated as of
January 12, 2006 (incorporated by reference to the exhibit filed with
the Registrant’s Form 8-K filed on January 17,
2006)
|
|||
10.25 +
|
Second
Amended and Restated 2004 Equity Incentive Plan (incorporated by
reference
to the exhibit filed with the Registrant’s Form 10-Q filed on
July 31, 2006)
|
Exhibit
Number
|
Description of Exhibits | |||
10.26 +
|
Form
of Indemnification Agreement between the Registrant and each of
its
directors and officers (incorporated by reference to the exhibit
filed
with the Registrant’s Form 10-Q filed on July 31,
2006)
|
|||
10.27
|
First
Amendment to Amended and Restated Revolving Credit and Term Loan
Agreement, dated as of November 16, 2006 (incorporated by reference
to the exhibit filed with the Registrant’s Form 8-K filed on
November 21, 2006)
|
|||
12.1
*
|
Statement
regarding Computation of Ratios
|
|||
21.1
*
|
Subsidiaries
of the Registrant
|
|||
23.1
*
|
Consent
of Independent Registered Public Accounting Firm
|
|||
23.2
*
|
Consent
of Independent Registered Public Accounting Firm
|
|||
24.1
|
Power
of Attorney (see signature page of this Annual Report on
Form 10-K)
|
|||
31.1
*
|
Certification
of Chief Executive Officer
|
|||
31.2
*
|
Certification
of Chief Financial Officer
|
|||
32.1
*
|
Certificate
of Chief Executive Officer and Chief Financial Officer
|
|||