WASTE CONNECTIONS INC/DE, S-1/A, 1999-01-19

WASTE CONNECTIONS INC/DE
S-1/A, 1999-01-19
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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 19, 1999.

REGISTRATION NO. 333-70253

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 1 TO

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

WASTE CONNECTIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
DELAWARE 4953 94-3283464
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>

2260 DOUGLAS BOULEVARD, SUITE 280
ROSEVILLE, CALIFORNIA 95661
(916) 772-2221
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

RONALD J. MITTELSTAEDT
PRESIDENT, CHIEF EXECUTIVE OFFICER AND CHAIRMAN
WASTE CONNECTIONS, INC.
2260 DOUGLAS BOULEVARD, SUITE 280
ROSEVILLE, CALIFORNIA 95661
(916) 772-2221
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

COPIES OF ALL COMMUNICATIONS TO:

<TABLE>
<S> <C>
CAROLYN S. REISER, ESQ. STEPHEN A. RIDDICK, ESQ.
SHARTSIS, FRIESE & GINSBURG LLP PIPER & MARBURY L.L.P.
ONE MARITIME PLAZA, 18TH FLOOR 36 SOUTH CHARLES STREET
(415) 421-6500 BALTIMORE, MARYLAND 21201
SAN FRANCISCO, CALIFORNIA 94111 (410) 539-2530
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE

<TABLE>
<S> <C> <C> <C>
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PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE REGISTRATION FEE(1)
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Common Stock, $0.01 par value....... 3,737,500 shares $66,807,812 $18,572.57
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</TABLE>

(1) Previously paid.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

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<PAGE> 2

THE INFORMATION CONTAINED IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY
BE CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE RELATED REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION OR ANY APPLICABLE
STATE SECURITIES COMMISSION BECOMES EFFECTIVE. THIS PRELIMINARY PROSPECTUS IS
NOT AN OFFER TO SELL, NOR IS IT SEEKING AN OFFER TO BUY, THESE SECURITIES IN ANY
JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION

JANUARY 19, 1999

3,250,000 SHARES

[LOGO]

COMMON STOCK

Waste Connections, Inc. is a regional, integrated solid waste services company
that provides solid waste collection, transfer, disposal and recycling services
in secondary markets of the Western U.S. We are offering all of the 3,250,000
shares to be sold in this offering.

Our common stock is traded on the Nasdaq National Market under the symbol
"WCNX." On January 15, 1999, the last reported sale price of our common stock on
the Nasdaq National Market was $18.00 per share.

INVESTING IN THE COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 9.

<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- --------
<S> <C> <C>
Public offering price....................................... $ $
Underwriting discounts...................................... $ $
Proceeds, before expenses, to Waste Connections............. $ $
</TABLE>

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

We, and certain of our non-employee shareholders, have granted the underwriters
an option to purchase an additional 487,500 shares at the public offering price,
less underwriting discounts and commissions, to fulfill over-allotments that
occur during the offering process. We will not receive any of the proceeds from
the sale of shares by these shareholders.

------------------------

The underwriters are severally underwriting the shares being offered. The
underwriters expect to deliver the shares of common stock against payment in
Baltimore, Maryland on , 1999.

BT ALEX. BROWN
CIBC OPPENHEIMER
FIRST ANALYSIS
SECURITIES CORPORATION

PROSPECTUS DATED , 1999.
<PAGE> 3

This prospectus contains registered service marks, trademarks and trade names of
the Company, including the Waste Connections, Inc. name and logo.
<PAGE> 4

PROSPECTUS SUMMARY

This summary highlights some information from this prospectus. It may not
contain all of the information that is important to you. To understand this
offering fully, you should read the entire prospectus carefully, including the
risk factors and the financial statements. Unless otherwise specified, all
references to "Waste Connections" or the "Company" mean Waste Connections, Inc.
and our subsidiaries, and all references to "solid waste" mean non-hazardous
solid waste.

WASTE CONNECTIONS

Waste Connections is a regional, integrated solid waste services company
that provides solid waste collection, transfer, disposal and recycling services
in secondary markets of the Western U.S. We currently own and operate 32
collection operations, eight transfer stations and two Subtitle D landfills and
operate an additional seven transfer stations, one Subtitle D landfill and seven
recycling facilities. As of January 19, 1999, we served more than 300,000
commercial, industrial and residential customers in ten states: California,
Idaho, Kansas, Nebraska, Oklahoma, Oregon, South Dakota, Utah, Washington, and
Wyoming. More than 75% of our pro forma revenues for the nine months ended
September 30, 1998 were derived from exclusive arrangements.

Waste Connections was formed in September 1997 to build a leading solid
waste services company in the secondary markets of the Western U.S. We have
targeted these markets because we believe that: (1) a large number of
independent solid waste services companies suitable for acquisition by us are
located in these markets; (2) there is less competition in these markets from
large, well-capitalized solid waste services companies; and (3) these markets
have strong projected economic and population growth rates. In addition, our
senior management team has extensive experience in acquiring, integrating and
operating solid waste services businesses in the Western U.S.

We have developed a two-pronged strategy tailored to the competitive and
regulatory factors that affect our markets. In the markets where waste
collection services are performed under exclusive arrangements, we generally
focus on controlling the solid waste stream by providing collection services
under such arrangements. In markets where we believe that competitive and
regulatory factors make owning landfills advantageous, we generally focus on
providing integrated services, from collection through disposal of solid waste
in landfills that we own or operate.

Acquisitions have been and will continue to be a principal component of our
growth strategy. From our initial public offering in May 1998 to January 19,
1999, we acquired 38 solid waste services businesses, including 23 collection
operations, two Subtitle D landfills, 12 transfer stations and six recycling
facilities. These acquisitions took Waste Connections into seven new markets in
five additional states: Kansas, Nebraska, Oklahoma, Oregon and Utah. Generating
internal growth and securing additional exclusive arrangements are also
important components of our growth strategy.

Waste Connections' executive offices are located at 2260 Douglas Boulevard,
Suite 280, Roseville, California 95661. Our telephone number is (916) 772-2221.

RECENT MERGERS

On January 19, 1999, four wholly owned subsidiaries of Waste Connections
merged into Murrey's Disposal Company, Inc., American Disposal Company, Inc.,
D.M. Disposal Co., Inc. and Tacoma Recycling Company, Inc. (together, the
"Murrey Companies"), and the Murrey Companies became wholly owned subsidiaries
of Waste Connections. The Murrey Companies had

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<PAGE> 5

revenues for the nine months ended September 30, 1998 of approximately $24.5
million, of which more than 75% were derived from services provided under
exclusive arrangements. The Murrey Companies, which provide solid waste services
to more than 65,000 customers in the Seattle-Tacoma, Washington area, own and
operate five collection operations and one transfer station and operate two
transfer stations and two recycling facilities. The aggregate consideration paid
by Waste Connections to the shareholders of the Murrey Companies was 2,888,880
shares of common stock. The mergers were accounted for as poolings-of-interests.

On January 8, 1999, a wholly owned subsidiary of Waste Connections merged
into Roche & Sons, Inc. As a result of this merger, Roche & Sons, Inc. became a
wholly owned subsidiary of Waste Connections that provides solid waste services
to approximately 6,000 customers in central Utah.

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<PAGE> 6

THE OFFERING

The following information, and similar information throughout this
prospectus relating to shares to be outstanding after this offering, assumes
that the underwriters do not exercise the option granted by us and certain of
our shareholders to purchase up to 487,500 additional shares. See "Plan of
Distribution."

<TABLE>
<S> <C>
Common stock offered by Waste Connections.... 3,250,000 shares
Common stock to be outstanding after this
offering................................... 15,826,798 shares(1)
Use of proceeds.............................. Reduction of existing indebtedness and for
general corporate purposes, including
possible acquisitions and capital
expenditures.
Nasdaq National Market symbol................ WCNX
</TABLE>

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(1) Excludes 2,442,699 shares of common stock issuable upon the exercise of
warrants and options outstanding as of January 19, 1999, at a weighted
average exercise price of $4.94 per share. See "Management -- Stock Option
Plan," "Certain Transactions" and Note 9 of Notes to Waste Connections'
Financial Statements included elsewhere in this prospectus.

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<PAGE> 7

WASTE CONNECTIONS, INC.

SUMMARY HISTORICAL, SUPPLEMENTAL, AND PRO FORMA FINANCIAL

AND OPERATING DATA
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
PERIOD FROM YEAR ENDED SEPTEMBER 30, 1998
INCEPTION DECEMBER 31, 1997 ------------------------
(SEPTEMBER 9, 1997) PRO FORMA PRO FORMA
THROUGH COMBINED COMBINED AS
DECEMBER 31, 1997 AS ADJUSTED(1) ACTUAL ADJUSTED(1)
------------------- ----------------- ---------- -----------
<S> <C> <C> <C> <C>
HISTORICAL STATEMENT OF
OPERATIONS DATA:
Revenues..................... $ 6,237 $ 90,221 $ 35,336 $ 75,551
Cost of operations........... 4,703 67,694 24,007 53,855
Selling, general and
administrative............ 619 9,735 3,518 7,415
Depreciation and
amortization.............. 354 5,710 2,693 5,678
Other operating expense(2)... 4,888 4,888 561 561
---------- ---------- ---------- -----------
Income (loss) from
operations................ (4,327) 2,194 4,557 8,042
Other expense................ (1,071) (2,030) (1,427) (1,373)
---------- ---------- ---------- -----------
Income (loss) before income
taxes..................... (5,398) 164 3,130 6,669
Income tax (provision)
benefit................... 332 (1,753) (1,513) (2,800)
Extraordinary item(3)........ -- -- (815) (815)
---------- ---------- ---------- -----------
Net income (loss)............ $ (5,066) $ (1,589) $ 802 $ 3,054
========== ========== ========== ===========
Redeemable convertible
preferred stock
accretion................. (531) (531) (917) (917)
---------- ---------- ---------- -----------
Net income (loss) applicable
to common stockholders.... $ (5,597) $ (2,120) $ (115) $ 2,137
========== ========== ========== ===========
Diluted net income (loss) per
share(4).................. $ (2.99) $ (0.24) $ (0.02) $ 0.21
========== ========== ========== ===========
Shares used in calculating
diluted net income (loss)
per share................. 1,872,567 8,839,186 7,438,658 13,793,066
========== ========== ========== ===========
</TABLE>

<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
-----------------------------------------
PRO FORMA
DECEMBER 31, PRO FORMA COMBINED AS
1997 ACTUAL COMBINED(5) ADJUSTED(5)(6)
------------ -------- ----------- --------------
<S> <C> <C> <C> <C>
HISTORICAL BALANCE SHEET DATA:
Cash and equivalents............. $ 820 $ 1,090 $ 1,781 $ 1,781
Working capital (deficit)........ 836 (1,482) (10,922) (10,922)
Property and equipment, net...... 4,185 18,438 42,494 42,494
Total assets..................... 18,880 114,495 151,048 151,048
Long-term debt(7)................ 6,762 40,404 59,897 5,568
Redeemable convertible preferred
stock......................... 7,523 -- -- --
Total stockholders' equity
(deficit)..................... (551) 59,822 61,397 115,726
</TABLE>

(See footnotes on Pages 7 and 8)

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<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, 1997 SEPTEMBER 30, 1998
----------------- ------------------
<S> <C> <C>
SUPPLEMENTAL STATEMENT OF OPERATIONS DATA(8):
Revenues................................................. $ 35,111 $ 59,868
Cost of operations....................................... 27,836 43,344
Selling, general and administrative...................... 2,942 5,388
Depreciation and amortization............................ 1,725 4,333
Other operating expense(2)............................... 4,888 561
---------- -----------
Income (loss) from operations............................ (2,280) 6,242
Other expense............................................ (1,168) (1,947)
---------- -----------
Income (loss) before income taxes........................ (3,448) 4,295
Income tax provision..................................... (302) (1,927)
Extraordinary item(3).................................... -- (815)
---------- -----------
Net income (loss)........................................ $ (3,750) $ 1,553
========== ===========
Redeemable convertible preferred stock accretion......... (531) (917)
---------- -----------
Net income (loss) applicable to common stockholders...... $ (4,281) $ 636
========== ===========
Diluted net income (loss) per share...................... $ (0.90) $ 0.06
========== ===========
Shares used in calculating diluted net income (loss) per
share................................................. 4,761,447 10,327,538
========== ===========
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1997 SEPTEMBER 30, 1998
----------------- ------------------
<S> <C> <C>
SUPPLEMENTAL BALANCE SHEET DATA(8):
Cash and equivalents..................................... $ 946 $ 1,495
Working capital (deficit)................................ (2,820) (4,831)
Property and equipment, net.............................. 19,004 32,809
Total assets............................................. 38,576 134,403
Long-term debt(7)........................................ 11,669 44,451
Redeemable convertible preferred stock................... 7,523 --
Total stockholders' equity (deficit)..................... 6,940 67,900
</TABLE>

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(1) Assumes Waste Connections' acquisitions of Arrow Sanitary Service, Inc.
("Arrow"), B&B Sanitation, Inc., Red Carpet Landfill, Inc., and Darlin
Equipment, Inc. (together with B&B Sanitation, Inc. and Red Carpet Landfill,
Inc., "B&B"), J&J Sanitation, Inc. and Big Red Roll Off, Inc. (together with
J&J Sanitation, Inc. "J&J"), Contractor's Waste Removal, L.C.
("Contractors"), Curry Transfer & Recycling, Inc. ("Curry"), Amador Disposal
Service, Inc./Mother Lode Sani-Hut, Inc. ("Amador"), Butler County Landfill,
Inc./Kobus Construction, Inc. ("Butler"), Shrader Refuse and Recycling
Service Company ("Shrader"), Madera Disposal Systems, Inc. ("Madera") and
Waste Connections' predecessors and the mergers with the Murrey Companies
(accounted for as poolings-of-interests) occurred as of January 1, 1997,
adjusted to reflect the sale of the common stock offered hereby at an
assumed public offering price of $18.00 per share and the application of the
estimated net proceeds therefrom. See "Use of Proceeds" and "Unaudited Pro
Forma Financial Statements" included elsewhere herein.

(2) Other operating expense consists of start-up and integration costs and stock
compensation charges.

(3) Extraordinary item represents the expense from early extinguishment of debt,
net of income tax effects. See Note 12 of Waste Connections' historical
financial statements included elsewhere herein.

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(4) The pro forma combined as adjusted per share calculation for the nine months
ended September 30, 1998 is before extraordinary item.

(5) Assumes the acquisitions of Amador and Butler occurred on September 30, 1998
and the mergers with the Murrey Companies are accounted for as
poolings-of-interests. See "Unaudited Pro Forma Financial Statements"
included elsewhere herein.

(6) Adjusted to reflect the sale of the common stock offered by Waste
Connections through this prospectus at an assumed public offering price of
$18.00 per share and the application of the estimated net proceeds of this
offering as described in "Use of Proceeds."

(7) Excludes redeemable convertible preferred stock which converted into common
stock upon our May 1998 initial public offering.

(8) Supplemental financial data gives retroactive effect to the business
combination with the Murrey Companies which occurred on January 19, 1999.
Generally accepted accounting principles prohibit giving effect to a
consummated business combination accounted for by the pooling-of-interests
method in financial statements that do not include the date of consummation.
The supplemental financial data does not extend through the date of
consummation; however, such information will be included in the historical
consolidated financial statements of Waste Connections after financial
statements covering the date of consummation of the business combination are
issued.

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RISK FACTORS

You should carefully consider the risks described below before making an
investment decision. The risks and uncertainties described below are not the
only ones facing our company. Additional risks and uncertainties not presently
known to us or that we currently deem immaterial may also impair our business
operations.

If any of the following risks actually occur, our business, financial
condition or results of operations could be materially adversely affected. In
such case, the trading price of our common stock could decline, and you may lose
all or part of your investment.

This prospectus also contains forward-looking statements that involve risks
and uncertainties. Discussions containing such forward-looking statements are
found in the material set forth under "Prospectus Summary," "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business," as well as in the prospectus generally. Our actual
results could differ materially from those anticipated in the forward-looking
statements as a result of certain factors, including the risks described below
and elsewhere in this prospectus.

Limited Operating History; Integration of Acquisitions. Waste Connections
was formed in September 1997 and commenced operations on October 1, 1997.
Accordingly, we have only a limited operating history on which you may evaluate
our business and prospects. You should consider the disclosures about Waste
Connections in this prospectus in light of the risks, expenses and difficulties
that companies frequently encounter in their early stages of development. Our
recently assembled senior management team may not be able to manage Waste
Connections successfully or to implement our operating and growth strategies.

Our growth and future financial performance depend significantly on our
ability to integrate acquired businesses into our organization and operations.
Part of our strategy is to achieve economies of scale and operating efficiencies
by growing through acquisitions. We may not achieve these goals unless we
effectively combine the operations of acquired businesses with our existing
operations. Our senior management team may not be able to integrate our
completed and future acquisitions. Any difficulties Waste Connections encounters
in the integration process could materially and adversely affect our business
and financial results.

Growth Strategy Implementation; Ability to Manage Growth. Our growth
strategy includes expanding through acquisitions, acquiring additional exclusive
arrangements and generating internal growth. Whether we can execute our growth
strategy depends on several factors, including the success of existing and
emerging competition, the availability of acquisition candidates, our ability to
maintain profit margins in the face of competitive pressures, our ability to
continue to recruit, train and retain qualified employees, the strength of
demand for our services and the availability of capital to support our growth.

From inception through January 19, 1999, we acquired 48 solid waste
services related businesses. Waste Connections may grow rapidly at times, which
could significantly strain our management, operational, financial and other
resources. To maintain and manage our growth, we will need to expand our
management information systems capabilities and our operational and financial
systems and controls. We will also need to attract, train, motivate, retain and
manage additional senior managers, technical professionals and other employees.
Failure to do any of these things would materially and adversely affect our
business and financial results.

Availability of Acquisition Candidates. Although we have identified
numerous acquisition candidates that we believe are suitable, we may not be able
to acquire them at prices or on terms and conditions favorable to us. As a
result, our growth would be limited.

We compete for acquisition candidates with other entities, some of which
have greater financial resources than Waste Connections. Increased competition
for acquisition candidates may

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make fewer acquisition opportunities available to us, and may cause us to make
acquisitions on less attractive terms, such as higher purchase prices.
Acquisition costs may increase to levels beyond our financial capability or that
would adversely affect our operating results and financial condition. Our
ongoing ability to make acquisitions will depend in part on the relative
attractiveness of our common stock as consideration for potential acquisition
candidates. This attractiveness may depend largely on the relative market price
and capital appreciation prospects of our common stock compared to the stock of
our competitors. If the market price of our common stock were to decline
materially over a prolonged period of time, it may be difficult to make
acquisitions on attractive terms.

Highly Competitive Industry. Our industry is highly competitive and
fragmented and requires substantial labor and capital resources. Some of the
markets in which we compete or will likely compete are served by one or more
large, national solid waste companies, as well as by numerous regional and local
solid waste companies of varying sizes and resources, some of which have
accumulated substantial goodwill in their markets. We also compete with
counties, municipalities and solid waste districts that maintain their own waste
collection and disposal operations. These operators may have financial
advantages over Waste Connections because of their access to user fees and
similar charges, tax revenues and tax-exempt financing. Some of our competitors
may also be better capitalized, have greater name recognition or be able to
provide services at a lower cost than Waste Connections. Our inability to
compete with governmental service providers and larger and better capitalized
companies could materially and adversely affect our business and financial
results.

We derive a substantial portion of our revenue from services provided under
exclusive municipal contracts, franchise agreements and governmental
certificates. Many of these will be subject to competitive bidding at some time
in the future. We also intend to bid on additional municipal contracts and
franchise agreements. However, we may not be the successful bidder. In addition,
some of our customers may terminate their contracts with us before the end of
the contract term. Municipalities in Washington may by law annex unincorporated
territory, which would remove such territory from the area covered by
governmental certificates issued to us by the Washington Utilities and
Transportation Commission (the "WUTC"). Such annexation would reduce the areas
covered by our governmental certificates and subject more of our Washington
operations to competitive bidding in the future. Moreover, legislative action
could amend or repeal the laws governing governmental certificates, which could
materially and adversely affect Waste Connections. If we were not able to
replace revenues from contracts lost through competitive bidding or early
termination or the renegotiation of existing contracts with other revenues
within a reasonable time period, the lost revenues could materially and
adversely affect our business and financial results.

We face intense competition not only to provide services to customers but
also to acquire other businesses within each market. Other companies have
adopted or will probably adopt our strategy of acquiring and consolidating
regional and local businesses. We expect that increased consolidation in the
solid waste services industry will increase competitive pressures.

Potential Inability to Finance Future Growth. We expect to finance future
acquisitions through cash from operations, borrowings under our credit facility,
issuing equity or debt securities and/or seller financing. If acquisition
candidates are unwilling to accept, or we are unwilling to issue, shares of our
common stock as part of the consideration for such acquisitions or if our common
stock does not maintain a sufficient market value, we may have to use more of
our cash or borrowings under our credit facility to fund acquisitions. Using
cash for acquisitions limits our financial flexibility and makes us more likely
to seek additional capital through future debt or equity financings. If
available cash from operations and borrowings under the credit facility are not
sufficient to fund acquisitions, we will need additional equity and/or debt
financing. If we seek more debt, we may have to agree to financial covenants
that limit our operational and financial flexibility. If we seek more equity, we
may dilute the ownership
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<PAGE> 12

interests of our then-existing stockholders. We will also need to make
substantial capital expenditures to develop or acquire new landfills, transfer
stations and other facilities and to maintain such properties. We may not have
enough capital or be able to raise enough additional capital on satisfactory
terms to meet our capital requirements.

Our credit facility requires us to obtain the consent of the lending banks
before acquiring any other business for more than $10 million in cash (including
all liabilities assumed). If we are not able to obtain such consent, we may not
be able to complete certain acquisitions, which could inhibit our growth. Our
credit facility also contains financial covenants based on our current and
projected financial condition after completing an acquisition. If we cannot
satisfy these financial covenants on a pro forma basis after completing an
acquisition, we would not be able to complete the acquisition without a waiver
from our lending banks. Whether or not a waiver is needed, if the results of our
future operations differ materially from what we expect, we may no longer be
able to comply with the covenants in the credit facility. Our failure to comply
with such covenants may result in a default under the credit facility, which
would allow our lending banks to accelerate the date for repayment of debt
incurred under the credit facility and materially and adversely affect our
business and financial results.

Dependence on Management. Waste Connections depends significantly on the
services of the members of our senior management team. The departure of any of
those persons might materially and adversely affect our business and financial
results. We currently maintain "key man" life insurance for Ronald J.
Mittelstaedt, the President, Chief Executive Officer and Chairman, in the amount
of $3 million. Key members of our management have entered into employment
agreements with Waste Connections with terms ranging from three to five years.
We may not be able to enforce these agreements.

Geographic Concentration. We operate in ten states: California, Idaho,
Kansas, Nebraska, Oklahoma, Oregon, South Dakota, Utah, Washington and Wyoming.
We expect to focus our operations on the Western U.S. for at least the
foreseeable future. We estimate that more than 50% of our pro forma revenues for
the nine months ended September 30, 1998 were derived from services provided in
Washington. Our mergers with the Murrey Companies increased our geographic
concentration in Washington. Therefore, our business and financial results would
be harmed by downturns in the general economy of the Western U.S., particularly
in Washington, and other factors affecting the region, such as state regulations
affecting the solid waste services industry and severe weather conditions. In
addition, the costs and time involved in permitting, and the scarcity of,
available landfills in the Western U.S. could make it difficult for us to expand
vertically in those markets. We may not complete enough acquisitions in other
markets to lessen our geographic concentration.

Seasonality of Business. Based on historic trends experienced by the
businesses we have acquired, we expect our operating results to vary seasonally,
with revenues typically lowest in the first quarter, higher in the second and
third quarters, and lower in the fourth quarter than in the second and third
quarters. This seasonality reflects the lower volume of solid waste generated
during the late fall, winter and early spring months because of decreased
construction and demolition activities during the winter months in the Western
U.S. In addition, some of our operating costs should be generally higher in the
winter months because adverse winter weather conditions slow waste collection
activities, resulting in higher labor and operational costs, and greater
precipitation increases the weight of collected waste, resulting in higher
disposal costs, which are calculated on a per ton basis. Because we expect most
of our operating expenses to remain fairly constant throughout the year, we
expect operating income to be generally lower in the winter months. Our business
and financial results may be materially and adversely affected by future
seasonal and quarterly fluctuations.

Government Regulation. Waste Connections is subject to extensive and
evolving environmental laws and regulations. These have been enforced more and
more stringently in recent

11
<PAGE> 13

years because of greater public interest in protecting the environment. These
laws and regulations impose substantial costs on Waste Connections and affect
our business in many ways, including as set forth below. In addition, federal,
state and local governments may change the rights they grant to and the
restrictions they impose on solid waste services companies, and such changes
could have a material adverse effect on Waste Connections.

To own and operate landfills, we must obtain and maintain licenses or
permits and zoning, environmental and/or other land use approvals. These
licenses or permits and approvals are difficult and time-consuming to obtain and
renew, and elected officials and citizens' groups frequently oppose them. We may
not be able to obtain and maintain the permits and approvals we need to own or
operate landfills (including increasing their capacity), and failure to do so
could materially and adversely affect our business and financial condition.

Extensive regulations govern the design, operation and closure of
landfills. These regulations include the regulations ("Subtitle D Regulations")
that establish minimum federal requirements adopted by the U.S. Environmental
Protection Agency (the "EPA") in October 1991 under Subtitle D of the Resource
Conservation and Recovery Act of 1976 ("RCRA"). If Waste Connections fails to
comply with these regulations, we could be required to undertake investigatory
or remedial activities, curtail operations or close a landfill temporarily or
permanently. Future changes to these regulations may require us to modify,
supplement or replace equipment or facilities at substantial costs. If
regulatory agencies fail to enforce these regulations vigorously or
consistently, our competitors whose facilities do not comply with the Subtitle D
Regulations or their state counterparts may obtain an advantage over us. Our
financial obligations arising from any failure to comply with these regulations
could materially and adversely affect our business and financial results.

Companies in the solid waste services business are frequently subject in
the normal course of business to judicial and administrative proceedings
involving federal, state or local agencies or citizens' groups. Governmental
agencies may impose fines or penalties on us. They may also attempt to revoke or
deny renewal of our operating permits, franchises or licenses for violations or
alleged violations of environmental laws or regulations, or to require us to
remediate potential environmental problems relating to waste that we or our
predecessors collected, transported, disposed of or stored. Individuals or
community groups might also bring actions against us in connection with our
operations. Any adverse outcome in these proceedings could have a material
adverse effect on our business and financial results and create adverse
publicity about Waste Connections.

Potential Environmental Liability. Waste Connections is liable for any
environmental damage that our solid waste facilities cause, including damage to
neighboring landowners or residents, particularly as a result of the
contamination of soil, groundwater or surface water, and especially drinking
water. We may be liable for damage resulting from conditions existing before we
acquired these facilities. We may also be liable for any off-site environmental
contamination caused by pollutants or hazardous substances whose transportation,
treatment or disposal that we or our predecessors arranged. Any substantial
liability for environmental damage could materially and adversely affect our
business and financial results.

Each business that we acquire or have acquired may have liabilities that we
fail or are unable to discover, including liabilities that arise from prior
owners' failure to comply with environmental laws. As a successor owner, we may
be legally responsible for these liabilities. Even if we obtain legally
enforceable representations, warranties and indemnities from the sellers of such
businesses, they may not cover fully the liabilities. Some environmental
liabilities, even if we do not expressly assume them, may be imposed on Waste
Connections under various legal theories. Our insurance program does not cover
liabilities associated with any environmental cleanup or remediation of our own
sites. A successful uninsured claim against Waste Connections could materially
and adversely affect our business and financial results.

12
<PAGE> 14

Limitations on Landfill Permitting and Expansion. We currently own and
operate two landfills and operate another landfill. Our ability to meet our
growth objectives may depend in part on our ability to acquire, lease and expand
landfills and develop new landfill sites. We may not be able to obtain new
landfill sites or expand the permitted capacity of our landfills when necessary.

In some areas in which we operate, suitable land for new sites or expansion
of existing landfill sites may be unavailable. Operating permits for landfills
in states where we operate must generally be renewed at least every five years.
It has become increasingly difficult and expensive to obtain required permits
and approvals to build, operate and expand solid waste management facilities,
including landfills and transfer stations. The process often takes several
years, requires numerous hearings and compliance with zoning, environmental and
other requirements and is resisted by citizen, public interest or other groups.
We may not be able to obtain or maintain the permits we require to expand, and
such permits may contain burdensome terms and conditions. Even when granted,
final permits to expand are often not approved until the remaining permitted
disposal capacity of a landfill is very low. Local laws and ordinances also may
affect our ability to obtain permits to expand landfills. If we were to exhaust
our permitted capacity at a landfill, our ability to expand internally would be
limited, and we could be required to cap and close that landfill and forced to
dispose of collected waste at more distant landfills or at landfills operated by
our competitors. The resulting increased costs would materially and adversely
affect our business and financial results.

Alternatives to Landfill Disposal; Waste Reduction Programs. Some areas in
which we operate offer alternatives to landfill disposal, such as recycling,
composting and incineration. In addition, state and local authorities
increasingly require recycling and waste reduction at the source and prohibit
the disposal of certain types of wastes, such as yard wastes, at landfills.
These developments may reduce the volume of waste in certain areas. For example,
California and several other states in which we operate have adopted plans that
set goals for percentages of certain solid waste items to be recycled. These
plans are being phased in over the next several years. Increased use of
alternatives to landfill disposal may materially and adversely affect our
business and financial results.

Potential Inadequacy of Accruals for Closure and Post-Closure Costs. We may
be required to pay closure and post-closure costs of landfills and any disposal
facilities that we own or operate. We accrue for future closure and post-closure
costs of our owned landfills (generally for a term of 30 years after final
closure of a landfill), based on engineering estimates of consumption of
permitted landfill airspace over the useful life of any such landfill. Our
obligations to pay closure or post-closure costs may exceed the amount we
accrued and reserved and other amounts available from funds or reserves
established to pay such costs. This could materially and adversely affect our
business and financial results.

Charges Related to Capitalized Expenditures. In accordance with generally
accepted accounting principles, we capitalize some expenditures and advances
relating to acquisitions, pending acquisitions and landfill development
projects. We expense indirect acquisition costs such as executive salaries,
general corporate overhead, public affairs and other corporate services as we
incur those costs. We charge against earnings any unamortized capitalized
expenditures and advances (net of any portion thereof that we estimate we will
recover, through sale or otherwise) that relate to any operation that is
permanently shut down, any pending acquisition that is not consummated and any
landfill development project that we do not expect to complete. Therefore, Waste
Connections may incur charges against earnings in future periods, which could
materially and adversely affect our business and financial results.

Potential Inability to Obtain Performance or Surety Bonds, Letters of
Credit or Insurance. Municipal solid waste services contracts and landfill
closure obligations may require Waste Connections to obtain performance or
surety bonds, letters of credit, or other means of financial

13
<PAGE> 15

assurance to secure our performance. Some of our existing solid waste collection
and recycling contracts require us to obtain performance bonds, which we have
obtained. In the future, if we are not able to obtain performance or surety
bonds or letters of credit in sufficient amounts or at acceptable rates, we may
not be able to enter into additional municipal solid waste services contracts or
obtain or retain landfill operating permits. Any future difficulty we encounter
in obtaining insurance could also make it more difficult for us to secure future
contracts conditioned on our having adequate insurance coverage. Our failure to
obtain means of financial assurance or adequate insurance coverage could
materially and adversely affect our business and financial results.

Commodity Risk On Resale of Recyclables. We provide recycling services to
some of our customers. The sale prices of and demand for recyclable waste
products, particularly wastepaper, are frequently volatile and may affect our
operating results.

Potential Anti-Takeover Effect of Certain Charter and By-Law Provisions and
Delaware Law. Certain provisions in our Amended and Restated Certificate of
Incorporation and Amended and Restated By-Laws, and in the Delaware General
Corporation Law may deter tender offers and hostile takeovers and delay or
prevent changes in control or management of Waste Connections, including
transactions in which stockholders might be paid more than current market prices
for their shares. These provisions may also limit stockholders' ability to
approve transactions that they believe are in their best interests.

Immediate and Substantial Dilution. Purchasers of shares in this offering
will incur immediate and substantial dilution of $16.33 per share in the net
tangible book value per share of the common stock from the public offering price
upon the closing of this offering. Investors will experience additional dilution
when we issue common stock upon the exercise of outstanding stock options and
warrants or as consideration for acquisitions. We have registered 6,644,165
additional shares of common stock since our May 1998 initial public offering to
be issued from time to time in connection with future acquisitions, and have
issued 3,768,207 of those shares as of the date of this prospectus. We may also
make additional primary public offerings of our common stock in the future. If
we issue shares of common stock in connection with future acquisitions or
primary offerings, purchasers of shares of common stock in this offering may
experience additional dilution.

No Dividends. We do not intend to pay cash dividends on the common stock.
In addition, our credit facility prohibits us from paying cash dividends without
the consent of our lenders.

Impact of the Year 2000. We will need to modify or replace portions of our
software so that our computer systems will function properly with respect to
dates in the year 2000 ("Year 2000") and afterwards. We expect to complete those
modifications and upgrades during 1999 at a total cost of approximately
$100,000. We have spent part of our Year 2000 budget on replacing our billing
systems in Maltby and Vancouver, Washington. Because our operations rely
primarily on mechanical systems such as trucks to collect solid waste, we do not
expect our operations to be significantly affected by Year 2000 issues. Our
customers may need to make Year 2000 modifications to software and hardware that
they use to generate records, bills and payments relating to Waste Connections.
We do not rely on vendors on a routine basis except for providers of disposal
services. We take waste to a site and are normally billed based on tonnage
disposed. We believe that if our disposal vendors encounter Year 2000 problems,
they will convert to manual billing based on scale recordings until they resolve
those issues.

In assessing our exposure to Year 2000 issues, we believe our biggest
challenges lie in the following areas: Year 2000 issues at our banks, large
(typically municipal) customers and acquired businesses between the time we
acquire them and the time we implement our own systems. We are obtaining Year
2000 compliance certifications from our vendors, banks and customers. If Waste
Connections and our vendors, banks and customers do not complete required Year
2000 modifications on time, the Year 2000 issue could materially affect our
operations. We
14
<PAGE> 16

believe, however, that in the most reasonably likely worst case, the effects of
Year 2000 issues on our operations would be brief and small relative to our
overall operations. We have not made a contingency plan to minimize operational
problems if Waste Connections and our vendors, banks and customers do not timely
complete all required Year 2000 modifications.

USE OF PROCEEDS

We estimate that we will receive net proceeds from the sale of the
3,250,000 shares of common stock offered through this prospectus (after
deducting underwriting discounts and commissions and estimated offering
expenses) of $54.3 million ($61.8 million if the underwriters exercise their
over-allotment option), assuming a public offering price of $18.00 per share.

We intend to use the net proceeds to reduce outstanding indebtedness under
our credit facility with BankBoston, N.A. Approximately $57.3 million was
outstanding under that facility as of December 31, 1998. Our credit facility
provides for borrowing capacity of up to $115 million, presently bears interest
based on either an adjusted prime rate or the Eurodollar rate plus applicable
margin (the applicable rate was 7.1% as of the date of this prospectus) and will
mature in 2003. We obtained the credit facility primarily to fund acquisitions
and to refinance debt. The terms of the credit facility permit us to draw on it
as needed for future acquisitions and capital expenditures (subject to certain
restrictions) and general corporate purposes.

We will use the balance of the estimated net proceeds, if any, for
acquisitions, capital expenditures and working capital. We intend to invest
unused net proceeds in short-term, interest-bearing securities until we apply
them to these specific purposes. We continually evaluate potential acquisition
candidates and intend to continue to pursue acquisition opportunities.

15
<PAGE> 17

PRICE RANGE OF COMMON STOCK

Our common stock has traded on the Nasdaq National Market under the symbol
"WCNX" since our initial public offering on May 22, 1998. The following table
shows the high and low sale prices for the common stock as reported by the
Nasdaq National Market for the periods indicated.

<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
1998
Second Quarter (from May 22, 1998).......................... $20.75 $13.75
Third Quarter............................................... 23.38 17.75
Fourth Quarter.............................................. 21.13 15.88

1999
First Quarter (through January 15, 1999).................... $19.00 $16.75
</TABLE>

On January 15, 1999, the last sale price of the common stock as reported by
the Nasdaq National Market was $18.00 per share. On that date, there were 113
record holders of Waste Connections common stock.

DIVIDEND POLICY

We have never paid cash dividends on our common stock. We do not currently
anticipate paying any cash dividends on the common stock. We intend to retain
all earnings to fund the operation and expansion of our business. In addition,
our existing credit facility restricts the payment of cash dividends.

16
<PAGE> 18

CAPITALIZATION

The following table sets forth, as of September 30, 1998, (1) the long-term
debt and capitalization of Waste Connections on an historical basis, (2) the pro
forma combined long-term debt and capitalization of Waste Connections after
giving effect to certain of the Company's acquisitions accounted for as
purchases and the mergers with the Murrey Companies accounted for as
poolings-of-interests, and (3) the pro forma combined as adjusted long-term debt
and capitalization of Waste Connections after giving effect to certain of the
Company's acquisitions accounted for as purchases and the mergers with the
Murrey Companies accounted for as poolings-of-interests, as adjusted to give
effect to our sale of the 3,250,000 shares offered hereby, at an assumed public
offering price of $18.00 per share (after deducting underwriting discounts and
commissions and estimated offering expenses) and after the application of the
estimated net offering proceeds as described under "Use of Proceeds." This table
should be read in conjunction with our Financial Statements and Notes thereto
and the Unaudited Pro Forma Financial Statements and Notes thereto, which are
included elsewhere in this prospectus.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
---------------------------------------
(IN THOUSANDS)
PRO FORMA
PRO FORMA COMBINED
ACTUAL COMBINED AS ADJUSTED(1)
-------- --------- --------------
<S> <C> <C> <C>
Long-term debt, net.......................... $ 40,404 $ 59,897 $ 5,568
Stockholder's equity:
Preferred stock, $.01 par value, 10,000,000
shares authorized; no shares issued and
outstanding............................. -- -- --
Common stock, $.01 par value, 50,000,000
shares authorized; 9,204,632 shares
issued and outstanding actual;
12,093,512 shares issued and outstanding
pro forma combined; 15,343,512 shares
issued and outstanding pro forma
combined as adjusted(2)................. 92 121 154
Additional paid-in capital................... 65,944 66,415 120,711
Deferred stock compensation(3)............... (499) (499) (499)
Accumulated deficit.......................... (5,715) (4,640) (4,640)
-------- -------- --------
Total stockholders' equity................... 59,822 61,397 115,726
-------- -------- --------
Total capitalization............... $100,226 $121,294 $121,294
======== ======== ========
</TABLE>

- ---------------
(1) A portion of the estimated net proceeds from this offering will be used to
reduce our then outstanding indebtedness.

(2) Excludes 2,496,662 shares issuable on the exercise of options and warrants
outstanding at September 30, 1998, at a weighted average exercise price of
$4.90 per share. See "Management -- 1997 Stock Option Plan," "Certain
Transactions" and Note 9 of Notes to Financial Statements included elsewhere
herein.

(3) Deferred stock compensation relates to stock options granted to employees
with exercise prices below the estimated fair value of the stock on the date
of grant. Deferred stock compensation is being amortized to stock
compensation expense over the vesting periods of the respective stock
options. See Notes 1 and 9 of Notes to Financial Statements included
elsewhere herein.

17
<PAGE> 19

DILUTION

The pro forma combined negative net tangible book value of our common stock
as of September 30, 1998 was $(28.7) million, or $(2.37) per share. Pro forma
combined negative net tangible book value per share represents the amount of our
total tangible assets, less our total liabilities, divided by the total number
of shares of common stock outstanding as of September 30, 1998, after giving
effect to certain of the Company's acquisitions accounted for as purchases and
the mergers with the Murrey Companies (accounted for as poolings-of-interests).

After giving effect to our sale of 3,250,000 shares in this offering at an
assumed public offering price of $18.00 (and after deducting underwriting
discounts and commissions and estimated offering expenses), our pro forma
combined net tangible book value as of September 30, 1998 would have been
approximately $25.6 million, or $1.67 per share of common stock. This represents
an immediate increase in pro forma combined net tangible book value of
approximately $4.04 per share to existing stockholders and an immediate dilution
of pro forma combined net tangible book value of approximately $16.33 per share
to new investors purchasing common stock in this offering, as illustrated in the
following table:

<TABLE>
<S> <C> <C>
Assumed public offering price per share..................... $18.00
Pro forma combined negative net tangible book value per
share prior to this offering........................... $(2.37)
Increase in pro forma combined net tangible book value per
share attributable to new investors.................... 4.04
------
Pro forma combined net tangible book value per share after
this offering............................................. 1.67
------
Dilution in pro forma combined net tangible book value per
share to new investors.................................... $16.33
======
</TABLE>

The following table sets forth, as of September 30, 1998, on a pro forma
combined basis giving effect to the issuance of 3,250,000 shares of common stock
offered by this prospectus, and the mergers with the Murrey Companies as if we
issued these shares on September 30, 1998, the difference between existing
stockholders and new investors purchasing shares of common stock in this
offering with respect to the number of shares purchased from Waste Connections
(before deducting underwriting discounts and commissions and estimated offering
expenses), the total consideration paid and the average price per share paid:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
---------------------- ----------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
----------- ------- ------------ ------- ---------
<S> <C> <C> <C> <C> <C>
Existing
stockholders........ 12,093,512 78.8% $112,047,000 65.7% $ 9.27
New investors......... 3,250,000 21.2 58,500,000 34.3 $18.00
----------- ------ ------------ ------
Total....... 15,343,512 100.0% $170,547,000 100.0%
=========== ====== ============ ======
</TABLE>

As of September 30, 1998, stock options and warrants exercisable for
2,496,662 shares of common stock at a weighted average exercise price of $4.90
per share were outstanding. If these options and warrants are exercised, further
dilution to new investors will occur. We may also issue additional shares to
effect future business acquisitions or upon exercise of stock options granted in
the future or other equity awards, which could result in additional dilution to
then existing stockholders. See "Management -- Executive Compensation -- Stock
Options and Warrants."

18
<PAGE> 20

SELECTED HISTORICAL, SUPPLEMENTAL AND

PRO FORMA FINANCIAL AND OPERATING DATA

The following tables present selected historical, supplemental and pro
forma consolidated statements of operations and balance sheet data of Waste
Connections and our predecessors for the periods indicated.

The entities Waste Connections acquired in September 1997 from
Browning-Ferris Industries, Inc. ("BFI") are collectively referred to as Waste
Connections' predecessors. BFI acquired the predecessors during 1995 and 1996.
Before being acquired by BFI, the predecessors operated as separate stand-alone
businesses. The selected historical financial information of Waste Connections'
predecessors as of December 31, 1996, for the nine months ended September 30,
1997 and for the years ended December 31, 1995 and 1996 is based on audited
financial statements included elsewhere in this prospectus. The selected
historical financial information of Waste Connections as of December 31, 1997,
and for the period from inception (September 9, 1997) through December 31, 1997,
is based on audited financial statements included elsewhere in this prospectus.
The selected historical financial information of Waste Connections' predecessors
as of December 31, 1993, 1994 and 1995, and for the years ended December 31,
1993 and 1994 is based on financial statements that have not been audited. Waste
Connections' selected historical financial information as of September 30, 1998
and for the nine months ended September 30, 1998 is based on unaudited financial
statements included elsewhere in this prospectus. Waste Connections' management
believes that the unaudited financial data include all adjustments, consisting
only of normal recurring adjustments, necessary to fairly present the financial
position and operating results for the unaudited periods. Waste Connections'
operating results for the nine months ended September 30, 1998 do not
necessarily indicate the results that may be expected for the year ended
December 31, 1998. Various factors affect the year-to-year comparability of the
amounts presented. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Basis of Presentation" and "-- Results of
Operations" for additional information about Waste Connections and our
predecessors.

The supplemental financial information gives retroactive effect to the
business combinations of Waste Connections with the Murrey Companies (accounted
for as poolings-of-interests) which occurred on January 19, 1999. Generally
accepted accounting principles prohibit giving effect to a consummated business
combination accounted for by the pooling-of-interests method in financial
statements that do not include the date of consummation. The supplemental
financial data does not extend through the date of consummation; however, such
information will be included in the historical consolidated financial statements
of Waste Connections after financial statements covering the date of
consummation of the business combination are issued. This information is based
on the audited and unaudited supplemental financial statements included
elsewhere in this prospectus.

The selected financial information of the Murrey Companies included within
the supplemental financial information as of December 31, 1996 and 1997, and for
each of the three years in the period ended December 31, 1997, is based on
audited financial statements included elsewhere in this prospectus. The selected
financial information of the Murrey Companies included within the supplemental
financial information as of December 31, 1993, 1994 and 1995, and for the years
ended December 31, 1993 and 1994, is based on financial statements that have not
been audited. The selected financial information of the Murrey Companies
included within the supplemental financial information as of September 30, 1998,
and for the nine months ended September 30, 1997 and 1998, is based on unaudited
financial statements included elsewhere in this prospectus. Waste Connections
management believes that the unaudited financial data includes all adjustments,
consisting of normal recurring adjustments, necessary to fairly present the
financial position and operating results for the nine months ended September 30,
1997 and 1998, and do not necessarily indicate the results that may be expected
for the year ended December 31, 1998.

19
<PAGE> 21

The selected pro forma financial information for the nine months ended
September 30, 1998 and for the year ended December 31, 1997 gives effect to the
sale of the common stock offered hereby and the application of the estimated net
proceeds from this offering, and the purchases of Arrow, B&B, J&J, Contractors,
Curry, Amador, Butler, Shrader, Madera and Waste Connections' predecessors and
the mergers with the Murrey Companies (accounted for as poolings-of-interests)
as of the dates and for the periods indicated. This information is based on
unaudited pro forma financial statements included elsewhere in this prospectus.
The pro forma financial information does not represent what Waste Connections'
results actually would have been had those events occurred on the dates
indicated, and it does not project our future results.

You should read the selected historical, supplemental and pro forma
financial information with Management's Discussion and Analysis of Financial
Condition and Results of Operations, the audited and unaudited Financial
Statements and Notes of Waste Connections and our predecessors, the audited and
unaudited Supplemental Financial Statements and Notes of Waste Connections and
our predecessors, the audited and unaudited Financial Statements and Notes of
the Murrey Companies, and the Unaudited Pro Forma Financial Statements and Notes
included in this prospectus.

20
<PAGE> 22

WASTE CONNECTIONS, INC. AND PREDECESSORS

SELECTED HISTORICAL, SUPPLEMENTAL AND

PRO FORMA FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
FIBRES
INTER-
NATIONAL,
INC.
THE THE PERIOD
FIBRES DISPOSAL FIBRES DISPOSAL FROM
INTERNATIONAL GROUP INTERNATIONAL, GROUP JANUARY 1, PREDECESSORS
INC. COMBINED INC. COMBINED 1995 ONE MONTH
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED THROUGH ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, NOVEMBER 30, DECEMBER 31,
1993 1993 1994 1994 1995 1995
------------- ------------ -------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
HISTORICAL STATEMENTS OF
OPERATIONS DATA(1):
Revenues.................. $3,787 $20,794 $5,610 $22,004 $7,340 $595
Cost of operations........ 2,737 16,775 4,432 18,298 5,653 527
Selling, general and
administrative.......... 553 3,559 552 3,320 823 72
Depreciation and
amortization............ 428 520 642 606 715 74
------ ------- ------ ------- ------ ----
Income (loss) from
operations.............. 69 (60) (16) (220) 149 (78)
Interest expense.......... (78) (390) (191) (548) (162) (1)
Other income (expense),
net..................... 1 684 (2) 871 98 5
------ ------- ------ ------- ------ ----
Income (loss) before
income taxes............ (8) 234 (209) 103 85 (74)
Income tax (provision)
benefit................. -- (77) -- -- (29) --
------ ------- ------ ------- ------ ----
Net income (loss)......... $ (8) $ 157 $ (209) $ 103 $ 56 $(74)
====== ======= ====== ======= ====== ====

THE
DISPOSAL
GROUP
THE COMBINED
DISPOSAL FROM
GROUP JANUARY 1, PREDECESSORS
COMBINED 1996 COMBINED
YEAR ENDED THROUGH PERIOD ENDED
DECEMBER 31, JULY 31, DECEMBER 31,
1995 1996 1996
------------ ------------ ------------
<S> <C> <C> <C>
HISTORICAL STATEMENTS OF
OPERATIONS DATA(1):
Revenues.................. $19,660 $8,738 $13,422
Cost of operations........ 16,393 6,174 11,420
Selling, general and
administrative.......... 3,312 2,126 1,649
Depreciation and
amortization............ 628 324 962
------- ------ -------
Income (loss) from
operations.............. (673) 114 (609)
Interest expense.......... (206) (12) (225)
Other income (expense),
net..................... -- 2,661 (147)
------- ------ -------
Income (loss) before
income taxes............ (879) 2,763 (981)
Income tax (provision)
benefit................. 298 (505) --
------- ------ -------
Net income (loss)......... $ (581) $2,258 $ (981)
======= ====== =======
</TABLE>

(See footnotes on page 24)

21
<PAGE> 23

<TABLE>
<CAPTION>
WASTE
CONNECTIONS, INC. WASTE CONNECTIONS, INC.
PREDECESSORS PERIOD FROM PRO FORMA NINE MONTHS ENDED
COMBINED INCEPTION COMBINED SEPTEMBER 30, 1998
NINE MONTHS (SEPTEMBER 9, AS ADJUSTED ------------------------
ENDED 1997) THROUGH YEAR ENDED PRO FORMA
SEPTEMBER 30, DECEMBER 31, DECEMBER 31, COMBINED AS
1997 1997 1997(2) ACTUAL ADJUSTED(2)
------------- ----------------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C>
HISTORICAL STATEMENTS OF OPERATIONS
DATA(1):
Revenues............................... $18,114 $ 6,237 $ 90,221 $ 35,336 $ 75,551
Cost of operations..................... 14,753 4,703 67,694 24,007 53,855
Selling, general and administrative.... 3,009 619 9,735 3,518 7,415
Depreciation and amortization.......... 1,083 354 5,710 2,693 5,678
Start-up and integration............... -- 493 493 -- --
Stock compensation..................... -- 4,395 4,395 561 561
------- ---------- ---------- ---------- -----------
Income (loss) from operations.......... (731) (4,327) 2,194 4,557 8,042
Interest expense....................... (456) (1,035) (2,626) (1,427) (1,433)
Other income (expense), net............ 14 (36) 596 -- 60
------- ---------- ---------- ---------- -----------
Income (loss) before income taxes...... (1,173) (5,398) 164 3,130 6,669
Income tax (provision) benefit......... -- 332 (1,753) (1,513) (2,800)
------- ---------- ---------- ---------- -----------
Income (loss) before extraordinary
item................................. (1,173) (5,066) (1,589) 1,617 3,869
Extraordinary item -- early
extinguishment of debt, net of income
tax benefit of $165.................. -- -- -- (815) (815)
------- ---------- ---------- ---------- -----------
Net income (loss)...................... $(1,173) $ (5,066) $ (1,589) $ 802 $ 3,054
======= ========== ========== ========== ===========
Redeemable convertible preferred stock
accretion............................ (531) (531) (917) (917)
---------- ---------- ---------- -----------
Net income (loss) applicable to common
stockholders......................... $ (5,597) $ (2,120) $ (115) $ 2,137
========== ========== ========== ===========
Basic earnings (loss) per common share:
Income (loss) before extraordinary
item............................... $ (2.99) $ (0.24) $ 0.13 $ 0.24
========== ===========
Extraordinary item................... -- (0.15)
---------- ----------
Net income (loss) per common share... $ (2.99) $ (0.02)
========== ==========
Diluted earnings (loss) per common
share:
Income (loss) before extraordinary
item............................... $ (2.99) $ (0.24) $ 0.09 $ 0.21
========== ===========
Extraordinary item................... -- (0.11)
---------- ----------
Diluted net income (loss) per common
share.............................. $ (2.99) $ (0.02)
========== ==========
Shares used in calculating basic net
income (loss) per share.............. 1,872,567 8,839,186 5,476,532 12,208,230
Shares used in calculating diluted
earnings (loss) per share............ 1,872,567 8,839,186 7,438,658 13,793,066
Pro forma basic net income (loss) per
share(3)............................. $ (1.16) $ 0.11
========== ==========
Shares used in calculating pro forma
basic net income (loss) per share.... 4,372,565 7,117,557
Pro forma diluted net income (loss) per
share(3)............................. $ (1.16) $ 0.09
========== ==========
Shares used in calculating pro forma
diluted net income (loss) per
share................................ 4,372,565 8,702,393
</TABLE>

(See footnotes on page 24)

22
<PAGE> 24

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------
1993 1994 1995 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
SUPPLEMENTAL STATEMENTS
OF OPERATIONS DATA(7):
Revenues.................................................. $ 18,444 $ 23,804 $ 27,786 $ 25,024
Cost of operations........................................ 15,562 18,829 20,859 20,465
Selling, general and administrative....................... 1,995 1,940 2,101 2,142
Depreciation and amortization............................. 646 818 923 1,236
--------- --------- --------- ---------
Income from operations.................................... 241 2,217 3,903 1,181
Interest expense.......................................... (287) (321) (198) (284)
Other income (expense), net............................... 296 (347) 210 309
--------- --------- --------- ---------
Income before income taxes................................ 250 1,549 3,915 1,206
Income tax provision...................................... (88) (517) (690) (543)
--------- --------- --------- ---------
Net income................................................ $ 162 $ 1,032 $ 3,225 $ 663
========= ========= ========= =========
Basic and diluted net income per share.................... $ 0.06 $ 0.36 $ 1.12 $ 0.23
========= ========= ========= =========
Shares used in per share calculation...................... 2,888,880 2,888,880 2,888,880 2,888,880
========= ========= ========= =========
</TABLE>

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30,
DECEMBER 31, -------------------------
1997 1997 1998
------------ ---------- -----------
<S> <C> <C> <C>
SUPPLEMENTAL STATEMENTS
OF OPERATIONS DATA(7):
Revenues.................................................. $ 35,111 $ 21,477 $ 59,868
Cost of operations........................................ 27,836 16,933 43,344
Selling, general and administrative....................... 2,942 1,653 5,388
Depreciation and amortization............................. 1,725 1,350 4,333
Start-up and integration.................................. 493 -- --
Stock compensation........................................ 4,395 -- 561
---------- ---------- -----------
Income (loss) from operations............................. (2,280) 1,541 6,242
Interest expense.......................................... (1,415) (247) (1,850)
Other income (expense), net............................... 247 150 (97)
---------- ---------- -----------
Income (loss) before income taxes......................... (3,448) 1,444 4,295
Income tax provision...................................... (302) (512) (1,927)
---------- ---------- -----------
Income (loss) before extraordinary item................... (3,750) 932 2,368
Extraordinary item -- early extinguishment of debt, net of
income tax benefit of $165.............................. -- -- (815)
---------- ---------- -----------
Net income (loss)......................................... $ (3,750) $ 932 $ 1,553
========== ========== ===========
Redeemable convertible preferred stock accretion.......... (531) -- (917)
---------- ---------- -----------
Net income (loss) applicable to common stockholders....... $ (4,281) $ 932 $ 636
========== ========== ===========
Basic income (loss) per common share:
Income (loss) before extraordinary item................. $ (0.90) $ 0.32 $ 0.17
Extraordinary item...................................... -- -- (0.10)
---------- ---------- -----------
Net income (loss) per common share...................... $ (0.90) $ 0.32 $ 0.07
========== ========== ===========
Diluted income (loss) per common share:
Income (loss) before extraordinary item................. $ (0.90) $ 0.32 $ 0.14
Extraordinary item...................................... -- -- (0.08)
---------- ---------- -----------
Net income (loss) per common share...................... $ (0.90) $ 0.32 $ 0.06
========== ========== ===========
Shares used in calculating basic net income (loss) per
share................................................... 4,761,447 2,888,880 8,365,412
========== ========== ===========
Shares used in calculating diluted net income (loss) per
share................................................... 4,761,447 2,888,880 10,327,538
========== ========== ===========
Pro forma basic net income (loss) per share(3)............ $ (0.52) $ 0.16
========== ===========
Shares used in calculating pro forma basic net income
(loss) per share........................................ 7,261,445 10,006,437
========== ===========
Pro forma diluted net income per share(3)................. $ 0.05
===========
Shares used in calculating pro forma diluted net income
per share............................................... 11,591,273
===========
</TABLE>

(See footnotes on page 24)

23
<PAGE> 25

FIBRES THE DISPOSAL FIBRES THE DISPOSAL THE DISPOSAL
INTERNATIONAL, GROUP INTERNATIONAL, GROUP PREDECESSORS GROUP
INC. COMBINED INC. COMBINED COMBINED COMBINED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1993 1993 1994 1994 1995 1995
-------------- ------------ -------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
HISTORICAL BALANCE SHEET
DATA(1):
Cash and equivalents....... $ 3 $ 196 $ 321 $ 203 $ 184 $ 961
Working capital
(deficit)................ 494 (1,497) 155 (4,279) 90 2,498
Property and equipment,
net...................... 1,454 2,440 3,810 2,771 4,035 2,221
Total assets............... 3,325 7,455 6,317 7,318 9,151 6,942
Long-term debt(6).......... 1,167 1,258 2,353 90 149 6,890
Redeemable convertible
preferred stock.......... -- -- -- -- -- --
Total stockholders' equity
(deficit)................ 991 (163) 3,045 (1,486) -- (2,067)

<CAPTION>
WASTE CONNECTIONS, INC.
---------------------------------------------------
SEPTEMBER 30, 1998
------------------------------------
PREDECESSORS PRO FORMA
COMBINED COMBINED
DECEMBER 31, DECEMBER 31, PRO FORMA AS ADJUSTED
1996 1997 ACTUAL COMBINED(4) (4)(5)
------------ ------------ -------- ----------- -----------
<S> <C> <C> <C> <C> <C>
HISTORICAL BALANCE SHEET
DATA(1):
Cash and equivalents....... $ 102 $ 820 $ 1,090 $ 1,781 $ 1,781
Working capital
(deficit)................ 695 836 (1,482) (10,922) (10,922)
Property and equipment,
net...................... 5,069 4,185 18,438 42,494 42,494
Total assets............... 15,291 18,880 114,495 151,048 151,048
Long-term debt(6).......... 89 6,762 40,404 59,897 5,568
Redeemable convertible
preferred stock.......... -- 7,523 -- -- --
Total stockholders' equity
(deficit)................ -- (551) 59,822 61,397 115,726
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------------- SEPTEMBER 30,
1993 1994 1995 1996 1997 1998
------ ------ ------- ------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
SUPPLEMENTAL BALANCE SHEET DATA(7):
Cash and equivalents...................................... $ 24 $ 349 $ 859 $ 81 $ 946 $ 1,495
Working capital (deficit)................................. (118) 626 (63) (3,721) (2,820) (4,831)
Property and equipment, net............................... 6,100 6,301 8,027 12,529 19,004 32,809
Total assets.............................................. 8,347 9,343 12,573 15,065 38,576 134,403
Long-term debt(6)......................................... 4,792 4,663 2,359 1,851 11,669 44,451
Redeemable convertible preferred stock.................... -- -- -- -- 7,523 --
Total stockholders' equity................................ 1,388 2,420 3,439 6,258 6,940 67,900
</TABLE>

- ---------------
(1) The entities Waste Connections acquired in September 1997 from BFI are
collectively referred to as Waste Connections' predecessors. BFI acquired
the predecessors at various times during 1995 and 1996, and prior to being
acquired by BFI, the predecessors operated as separate stand-alone
businesses. Various factors affect the year-to-year comparability of the
amounts presented. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Basis of Presentation" and
"-- Results of Operations" for additional information concerning Waste
Connections and our predecessors.

(2) Assumes Waste Connections' acquisitions of Arrow, B&B, J&J, Contractors,
Curry, Amador, Butler, Shrader, Madera and Waste Connections' predecessors
and the mergers with the Murrey Companies (accounted for as
poolings-of-interests) occurred as of January 1, 1997, adjusted to reflect
the sale of the common stock offered hereby at an assumed public offering
price of $18.00 per share and the application of the estimated net proceeds
therefrom. See "Use of Proceeds" and "Unaudited Pro Forma Financial
Statements" included elsewhere herein.

(3) Adjusted to reflect the conversion of all outstanding shares of redeemable
convertible preferred stock for the period from inception through December
31, 1997, and the conversion of redeemable convertible preferred stock and
all outstanding shares of redeemable common stock for the nine months ended
September 30, 1998, as if such conversions had occurred as of the first day
of each of the periods presented. See Note 11 of Notes to Waste Connections'
Historical and Supplemental Financial Statements included elsewhere herein
for an explanation of the pro forma historical per share calculations.

(4) Assumes the acquisitions of Amador and Butler occurred on September 30, 1998
and the mergers with the Murrey Companies are accounted for as poolings-of-
interests. See "Unaudited Pro Forma Financial Statements" included elsewhere
herein.

(5) Adjusted to reflect the sale of common stock offered by Waste Connections
through this prospectus at an assumed offering price of $18.00 per share and
the application of the estimated net proceeds of this offering as described
in "Use of Proceeds."

(6) Excludes redeemable convertible preferred stock, which converted into common
stock upon our May 1998 initial public offering.

(7) Supplemental financial data gives retroactive effect to the business
combination with the Murrey Companies which occurred on January 19, 1999.
Generally accepted accounting principles prohibit giving effect to a
consummated business combination accounted for by the pooling-of-interests
method in financial statements that do not include the date of consummation.
The supplemental financial data does not extend through the date of
consummation; however, such information will be included in the historical
consolidated financial statements of Waste Connections after financial
statements covering the date of consummation of the business combination are
issued.

24
<PAGE> 26

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read this discussion in conjunction with the audited and
unaudited financial statements and other financial information in this
prospectus. This prospectus contains forward-looking statements that involve
risks and uncertainties. Waste Connections' actual results may differ materially
from those discussed in the forward-looking statements because of various
factors, including, but not limited to, those listed in "Risk Factors" and the
matters discussed in this prospectus generally.

OVERVIEW

Waste Connections is a regional, integrated solid waste services company
that provides solid waste collection, transfer, disposal and recycling services
in secondary markets of the Western U.S.

Waste Connections intends to continue to pursue its acquisition-based
growth strategy and has acquired 48 companies since our inception in September
1997. We accounted for the mergers with the Murrey Companies and Roche & Sons,
Inc. as poolings-of-interests. We accounted for the remainder of our
acquisitions as purchases. Accordingly, we have included the operating results
of the acquired businesses accounted for as purchases in our financial
statements only from the dates that we acquired them. We expect a substantial
part of our future growth to come from acquiring additional solid waste
collection, transfer and disposal businesses. Additional acquisitions could
continue to affect period-to-period comparisons of our operating results. We
also expect to invest in collection vehicles and equipment, maintenance of
existing equipment, and management information systems, which should enable us
to expand internally and through acquisitions based on our existing
infrastructure. We expect to fund future acquisitions through cash from
operations, borrowings under our credit facility, the issuance of shares of our
common stock and/or seller financing. As of January 19, 1999, we had completed
the following acquisitions:

Initial Acquisitions. In September 1997, Waste Connections joined with two
other parties to bid on certain solid waste and recycling businesses offered for
sale by BFI. We acquired the stock of Browning-Ferris Industries of Washington,
Inc., a provider of solid waste services to more than 78,000 customers through
three municipal contracts and one governmental certificate in and around Clark
County, Washington, and the stock of its subsidiary, Fibres International, Inc.,
a provider of solid waste services to more than 24,000 customers through eight
municipal contracts and one governmental certificate in King and Snohomish
Counties, Washington. The acquired companies subsequently changed their names to
Waste Connections of Washington, Inc. and Waste Connections International, Inc.,
respectively. The two other parties acquired selected BFI solid waste collection
and transportation assets and operations in Idaho, and BFI's recycling assets
and operations in Washington, Idaho and Oklahoma.

California Acquisitions. Effective February 1, 1998, Waste Connections
acquired the stock of Madera, an integrated solid waste services company
operating in north central California. In connection with the Madera
acquisition, we acquired one franchise agreement and one municipal contract,
pursuant to which we serve more than 9,000 commercial, industrial and
residential customers, and agreements to operate two transfer stations, one
Subtitle D landfill and one recycling facility. On September 9, 1998, we
acquired certain collection assets from Youngclaus Enterprises, which "tuck in"
to our Madera operations. On September 22, 1998, Curry Transfer and Recycling, a
wholly owned subsidiary of Waste Connections, acquired certain business assets
of Harrell's Septic Service, which provides portable toilet and septic services
in northwestern California and southwestern Oregon (see "Oregon Acquisitions"
below). On December 30, 1998, Waste Connections acquired the stock of Amador
Disposal Service, Inc. and Mother Lode

25
<PAGE> 27

Sani-Hut, Inc., which provide solid waste collection, recycling and disposal
services to approximately 11,000 customers in north central California.

Idaho Acquisitions. On January 30, 1998, Waste Connections acquired the
stock of Waste Connections of Idaho, Inc., which provides solid waste collection
services to more than 10,000 customers in eastern Idaho through subscription
agreements with residential customers and seven municipal contracts. Waste
Connections of Idaho, Inc. was formed in September 1997 by affiliates of Waste
Connections to acquire certain assets of Browning-Ferris Industries of Idaho,
Inc. Effective March 1, 1998, Waste Connections of Idaho, Inc. acquired certain
solid waste collection assets from Hunter Enterprises, Inc., a solid waste
services company located in eastern Idaho, serving approximately 2,800
residential and commercial customers. On October 15, 1998, we acquired the
assets of R&N, LLC, which provides solid waste collection and transportation
services to approximately 4,300 customers in southwestern Idaho. These assets
"tuck in" to our Idaho operations.

Kansas Acquisition. On December 21, 1998, a wholly owned subsidiary of
Waste Connections acquired the assets of Heartland Waste Management, Inc., which
provides solid waste collection services to approximately 2,500 customers in
southern Kansas and "tucks in" to our western Oklahoma operations.

Nebraska Acquisitions. On July 31, 1998, a wholly owned subsidiary of Waste
Connections merged into Shrader, which provides solid waste and recyclables
collection services to more than 22,500 customers in eastern Nebraska. On August
3, 1998, Waste Connections acquired the stock of J&J, which serves an aggregate
of more than 9,500 customers in eastern Nebraska. On September 18, 1998, Waste
Connections of Nebraska, Inc., a wholly owned subsidiary of Waste Connections,
acquired substantially all the assets of Affiliated Waste Services, L.L.C.,
which provides solid waste collection and transportation services to
approximately 4,700 customers in eastern Nebraska. On the same date, Waste
Connections of Nebraska, Inc. acquired substantially all of the assets of
Wolff's Trashmasher and Haul It All Sanitary Service, two sole proprietorships
that provide solid waste collection and transportation services to approximately
1,400 customers in eastern Nebraska. These assets "tuck in" to our eastern
Nebraska operations.

In addition, on January 6, 1999, we purchased the stock of Butler County
Landfill, Inc. and a wholly owned subsidiary of Waste Connections purchased
certain business assets of Kobus Construction, Inc. These entities provide solid
waste disposal and transportation services to approximately 300 customers in
eastern Nebraska.

Oklahoma Acquisitions. On June 5, 1998, Waste Connections acquired the
stock of B&B, which provides solid waste and recyclables collection and
transportation, landfill and equipment leasing services to an aggregate of more
than 2,600 customers in western Oklahoma.

Oregon Acquisitions. On June 17, 1998, Waste Connections acquired the stock
of Arrow, which provides solid waste and recyclables collection, transportation
and handling services to more than 2,000 customers in northwestern Oregon and
southwestern Washington. On June 25, 1998, Waste Connections acquired the stock
of Curry and certain real estate located in Curry County, Oregon and used in
that business. Curry provides solid waste and recyclables collection and
transportation services to more than 5,400 customers in southwestern Oregon. On
September 25, 1998, Curry acquired certain business assets of Westlane Disposal,
which provides solid waste collection and transportation services to
approximately 2,200 customers in southwestern Oregon. On November 5, 1998, Waste
Connections acquired the stock of Siuslaw Disposal, Inc., which provides solid
waste collection services to approximately 1,800 customers in southwestern
Oregon. On November 12, 1998, Curry acquired certain business assets of Veneta
Garbage Service, which provides solid waste collection services to approximately
1,800 customers in southwestern Oregon. On November 13, 1998, Curry acquired
certain assets of B&G Sanitation, which provides solid waste collection services
to approximately 1,000 customers in southwestern Oregon. On November 23, 1998,
Waste Connections acquired the stock of Columbia Sanitary

26
<PAGE> 28

Services, Inc. and Moreland Sanitary Service, Inc., which provide solid waste
collection services to approximately 4,800 customers in northwestern Oregon and
southwestern Washington. Arrow, Columbia Sanitary and Moreland Sanitary all
"tuck in" to our southwestern Washington operations, while Veneta, B&G and
Suislaw all "tuck in" to our southwestern Oregon operations.

South Dakota and Wyoming Acquisitions. On May 8, 1998, Waste Connections
acquired Sowers' Sanitation, Inc. and Sunshine Sanitation Incorporated,
providers of solid waste and recyclables collection services to an aggregate of
more than 7,000 customers in western South Dakota. On August 3, 1998, Waste
Connections acquired certain assets of a South Dakota waste collection business
owned by the shareholders of J&J, which "tuck in" to our Wyoming and South
Dakota operations. (See "Nebraska Acquisitions" above). On April 8, 1998, Waste
Connections of Wyoming, Inc. acquired certain solid waste collection assets from
A-1 Disposal, Inc. and Jesse's Disposal, operating in northeastern Wyoming, and
serving an aggregate of approximately 2,300 customers. On May 11, 1998, Waste
Connections acquired T&T Disposal, Inc., a provider of solid waste and
recyclables collection services to more than 500 customers in northeastern
Wyoming.

Utah Acquisitions. On June 1, 1998, Waste Connections of Utah, Inc., a
wholly owned subsidiary of Waste Connections, acquired substantially all of the
business assets of Contractors, a provider of solid waste collection and
transportation services to more than 450 customers in central Utah. On July 27,
August 10 and August 21, 1998, Waste Connections of Utah, Inc. acquired certain
business assets of Miller Containers, Inc., ABC Waste, Inc., and Contractors
Waste, Inc., which provide solid waste collection services to an aggregate of
approximately 290 customers in central Utah and "tuck in" to our Utah
operations. On September 21, 1998, Waste Connections of Utah, Inc. acquired
certain assets of Country Garbage Services, Inc., which provides solid waste
collection and transportation services in central Utah. On December 30, 1998,
Waste Connections acquired the stock of City Sanitation, Inc., which provides
solid waste collection services to more than 4,200 customers in central Utah. On
January 8, 1999, a wholly owned subsidiary of Waste Connections merged into
Roche & Sons, Inc. As a result of this merger, Roche & Sons, Inc. became a
wholly owned subsidiary of Waste Connections that provides solid waste
collection services to approximately 6,000 customers in central Utah.

Washington Acquisitions. On September 21, 1998, a wholly owned subsidiary
of Waste Connections merged into Evergreen Waste Systems, Inc. As a result of
this merger, Evergreen Waste Systems, Inc. became a wholly owned subsidiary of
Waste Connections that provides solid waste and recyclables collection and
transportation services to more than 6,500 customers in southwestern Washington
and northwestern Oregon and "tucks in" to our southwestern Washington
operations.

On January 19, 1999, four wholly owned subsidiaries of Waste Connections
merged into the Murrey Companies and the Murrey Companies became wholly owned
subsidiaries of Waste Connections. The Murrey Companies, which provide solid
waste services to more than 65,000 customers in the Seattle-Tacoma, Washington
area, had revenues for the nine months ended September 30, 1998 of $24.5
million, over 75% of which were derived from services provided under exclusive
arrangements.

GENERAL

Our revenues consist mainly of fees we charge customers for solid waste
collection, transfer, disposal and recycling services. A large part of our
collection revenues comes from providing commercial, industrial and residential
services. We frequently perform these services under service agreements or
franchise agreements with counties or municipal contracts. County franchise
agreements and municipal contracts generally last from one to ten years. Our
existing franchise agreements and all of our existing municipal contracts give
Waste Connections the exclusive right to provide specified waste services in the
specified territory during the contract

27
<PAGE> 29

term. These exclusive arrangements are awarded, at least initially, on a
competitive bid basis and subsequently on a bid or negotiated basis. We also
provide residential collection services on a subscription basis with individual
households. More than 75% of our pro forma revenues for the nine months ended
September 30, 1998 were derived from services provided under exclusive franchise
agreements, long term municipal contracts and governmental certificates.
Governmental certificates grant Waste Connections perpetual and exclusive
collection rights in the covered areas. Contracts with counties and
municipalities and governmental certificates provide relatively consistent cash
flow during the terms of the contracts. Because we bill most residential
customers quarterly, subscription agreements also provide a stable source of
revenues for Waste Connections. Our collection business also generates revenues
from the sale of recyclable commodities.

We charge transfer station and landfill customers a tipping fee on a per
ton basis for disposing of their solid waste at the transfer stations, the
disposal facility we operate in Madera, California and the landfills we own and
operate in Major County, Oklahoma and Butler County, Nebraska. Most of our
transfer and landfill customers have entered into one to ten year disposal
contracts with us, most of which provide for annual cost of living increases.

We typically determine the prices for our solid waste services by the
collection frequency and level of service, route density, volume, weight and
type of waste collected, type of equipment and containers furnished, the
distance to the disposal or processing facility, the cost of disposal or
processing, and prices charged by competitors for similar services. The terms of
our contracts sometimes limit our ability to pass on price increases. Long-term
solid waste collection contracts typically contain a formula, generally based on
a published price index, that automatically adjusts fees to cover increases in
some, but not all, operating costs.

Costs of operations include labor, fuel, equipment maintenance and tipping
fees paid to third party disposal facilities, worker's compensation and vehicle
insurance, the cost of materials we purchase for recycling, third party
transportation expense, district and state taxes and host community fees and
royalties. Waste Connections owns and/or operates 15 transfer stations, which
reduce our costs by allowing us to use collection personnel and equipment more
efficiently and by consolidating waste to gain more favorable disposal rates
that may be available for larger quantities of waste.

Selling, general and administrative ("SG&A") expenses include management,
clerical and administrative compensation and overhead costs associated with our
marketing and sales force, professional services and community relations
expense.

Depreciation and amortization expense includes depreciation of fixed assets
over their estimated useful life using the straight line method and amortization
of goodwill and other intangible assets using the straight line method.

Waste Connections capitalizes some third party expenditures related to
pending acquisitions or development projects, such as legal and engineering
expenses. We expense indirect acquisition costs, such as executive and corporate
overhead, public relations and other corporate services, as we incur them. We
charge against net income any unamortized capitalized expenditures and advances
(net of any portion that we believe we may recover, through sale or otherwise)
that relate to any operation that is permanently shut down and any pending
acquisition or landfill development project that is not completed. We routinely
evaluate all capitalized costs, and expense those related to projects that we
believe are not likely to succeed. As of September 30, 1998, Waste Connections
had no capitalized expenditures relating to landfill development projects and
$32,610 in capitalized expenditures relating to pending acquisitions.

We accrue for estimated landfill closure and post-closure maintenance costs
at the Red Carpet Landfill we own in Major County, Oklahoma and the Butler
County Landfill we own in Butler County, Nebraska. Under applicable regulations,
Waste Connections and Madera County, as operator and owner, respectively, are
jointly liable for closure and post-closure liabilities with

28
<PAGE> 30

respect to the Fairmead Landfill. We have not accrued for such liabilities
because Madera County, as required by state law, has established a special fund
into which it deposits a portion of tipping fee surcharges to pay such
liabilities. Consequently, we do not believe that Madera had any financial
obligation for closure and post-closure costs for the Fairmead Landfill as of
September 30, 1998. We will have additional material financial obligations
relating to closure and post-closure costs of any disposal facilities we may own
or operate in the future. In such case, Waste Connections will accrue for those
obligations, based on engineering estimates of consumption of permitted landfill
airspace over the useful life of any such landfill.

BASIS OF PRESENTATION

The entities Waste Connections acquired in September 1997 from BFI are
collectively called Waste Connections' predecessors. BFI acquired the
predecessors at various times during 1995 and 1996. Before being acquired by
BFI, the predecessors operated as separate stand-alone businesses.

During the periods in which our predecessors operated as wholly owned
subsidiaries of BFI, they maintained intercompany accounts with BFI for
recording intercompany charges for costs and expenses, intercompany purchases of
equipment and additions under capital leases and intercompany transfers of cash,
among other transactions. It is not feasible to ascertain the amount of related
interest expense that would have been recorded in the historical financial
statements had the predecessors been operated as stand-alone entities. BFI
allocated charges for interest expense to Waste Connections' predecessors as
disclosed in the statement of operations data. The interest expense allocations
from BFI are based on formulas that may not correspond to the balances in the
related intercompany accounts. Moreover, the financial position and results of
operations of the predecessors during this period may not indicate the financial
position or results of operations that would have been realized had the
predecessors been operated as stand-alone entities. For the periods in which the
predecessors operated as wholly owned subsidiaries of BFI, the statements of
operations include amounts allocated by BFI to the predecessors for SG&A
expenses, which Waste Connections' management believes are reasonable.

BFI accounted for the acquisitions of the predecessors using the purchase
method of accounting and allocated the respective purchase prices to the fair
values of the assets acquired and liabilities assumed. Similarly, we accounted
for our acquisitions of the predecessors from BFI in September 1997 using the
purchase method of accounting and allocated the purchase price to the fair value
of the assets acquired and liabilities assumed. Consequently, the amounts of
depreciation and amortization included in the statements of operations for the
periods presented reflect the changes in basis of the underlying assets that
resulted from changes in ownership that occurred during those periods. In
addition, because the predecessors operated independently and were not under
common control or management during these periods, and because different tax
strategies may have influenced their operating results, the data may not be
comparable to or indicative of their operating results after their acquisition
by BFI.

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<PAGE> 31

RESULTS OF OPERATIONS

The financial information for Waste Connections and our predecessors
included in this section and in the audited financial statements included
elsewhere in this prospectus relates to the following entities for the periods
indicated:

<TABLE>
<S> <C>
YEAR ENDED DECEMBER 31, 1995:
The Disposal Group Combined Year ended December 31, 1995
Fibres International, Inc. January 1, 1995 through November 30, 1995 (BFI
acquisition date)
Predecessors One month ended December 31, 1995 (represents the
results of operations of Fibres International, Inc.
subsequent to the BFI acquisition date)

YEAR ENDED DECEMBER 31, 1996:
The Disposal Group Combined January 1, 1996 through July 31, 1996 (BFI acquisition
date)
Predecessors Combined Period ended December 31, 1996 (represents the
combined results of operations of The Disposal Group
subsequent to the BFI acquisition date and the
operations for the year ended December 31, 1996 of
Fibres International, Inc., which was acquired by BFI
in 1995)

YEAR ENDED DECEMBER 31, 1997:
Predecessors Combined Nine months ended September 30, 1997 (represents the
combined results of operations for the nine month
period of the entities acquired by BFI in 1995 and
1996 described above)
Waste Connections, Inc. Period from inception (September 9, 1997) through
December 31, 1997
</TABLE>

The Disposal Group Combined consists of three entities that were under
common control before their acquisition by BFI: Diamond Fab and Welding Service,
Inc., Buchmann Sanitary Service, Inc. and The Disposal Group.

Because the predecessors existed for different periods, year-to-year
comparisons are not meaningful and therefore we have not included discussions of
SG&A, depreciation and amortization and interest expense in this prospectus.

WASTE CONNECTIONS, INC. -- NINE MONTHS ENDED SEPTEMBER 30, 1998 VS.
PREDECESSORS COMBINED -- NINE MONTHS ENDED SEPTEMBER 30, 1997

Revenues. Revenues for the nine months ended September 30, 1998 increased
$17.2 million, or 95.1% to $35.3 million from $18.1 million for the nine months
ended September 30, 1997. Approximately $16.2 million of the increase resulted
primarily from acquisitions closed since the beginning of 1998 and approximately
$964,000 resulted from growth in the base business.

Cost of Operations. Cost of operations for the nine months ended September
30, 1998 increased $9.3 million, or 62.7%, to $24.0 million from $14.8 million
for the nine months ended September 30, 1997. The increase resulted primarily
from acquisitions closed since the beginning of 1998 and a decline in expenses
in the base business as a result of cost reduction measures.

1997 VS. 1996

Revenues. Our total revenues for 1997 were $6.2 million. The total revenues
resulted primarily from the purchase of Waste Connections' predecessors on
September 30, 1997. Revenues related to Waste Connections' Predecessors Combined
for the nine months ended

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<PAGE> 32

September 30, 1997 were $18.1 million. Waste Connections' Predecessors Combined
for the period ended December 31, 1996 had revenues of $13.4 million. The
Disposal Group Combined had revenues of $8.7 million for the period from January
1, 1996 to July 31, 1996. The monthly revenues for Waste Connections and Waste
Connections' Predecessors Combined were essentially the same in 1997 and 1996.

Cost of Operations. The total cost of operations in 1997 was $4.7 million,
or 75.4% of revenues. The total cost of operations was attributable to the
purchase of Waste Connections' predecessors on September 30, 1997. Cost of
operations of Waste Connections' Predecessors Combined for the nine months ended
September 30, 1997 was $14.8 million, or 81.4% of revenues. Waste Connections'
Predecessors Combined for the period ended December 31, 1996 had cost of
operations of $11.4 million, or 85.1% of revenues. During the period from
January 1, 1996 to July 31, 1996, the Disposal Group had cost of operations of
$6.2 million, or 70.7% of revenues. Our cost of operations as a percentage of
revenues in 1997 declined from Waste Connections' Predecessors Combined cost of
operations as a percentage of revenues in 1997 and 1996, due to price increases
in the fourth quarter of 1997 and operating cost savings in lease expense,
environmental accrual fee allocations from BFI, franchise fees and amortization
of loss contract accrual. Waste Connections' Predecessors Combined cost of
operations as a percentage of revenues for the nine months ended September 30,
1997 declined from 1996 due to the rollover effect of the acquisition of The
Disposal Group in 1996, which had generally higher margins than the existing
businesses.

1996 VS. 1995

Revenues. Waste Connections' Predecessors Combined total revenues for 1996
was $13.4 million. The Disposal Group Combined total revenues for the period
from January 1, 1996 to July 31, 1996 was $8.7 million. Waste Connections'
Predecessors Combined had revenues of $595,000 for the period ended December 31,
1995. The Disposal Group Combined had revenues of $19.7 million for the year
ended December 31, 1995. Fibres International, Inc. had revenues of $7.3 million
for the period from January 1, 1995 to November 30, 1995. The monthly revenues
for all of Waste Connections' predecessors declined in 1996 from 1995 because of
the expiration of a municipal contract and a reduction in revenue from sales of
recyclable materials due to a reduction in prices of recyclable materials.

Cost of Operations. Waste Connections' Predecessors Combined total cost of
operations for 1996 was $11.4 million, or 85.1% of revenues, and The Disposal
Group Combined cost of operations for the period from January 1, 1996 to July
31, 1996 was $6.2 million, or 70.7% of revenues. Cost of operations of Waste
Connections' Predecessors Combined for the period ended December 31, 1995 was
$527,000 or 88.6% of revenues. Cost of operations of The Disposal Group Combined
for the year ended December 31, 1995 was $16.4 million, or 83.4% of revenues.
Cost of operations of Fibres International, Inc. for the period from January 1,
1995 to November 30, 1995 was $5.7 million, or 77.0% of revenues. Cost of
operations as a percentage of revenues increased because of reductions in prices
of recyclable materials in 1996, but that was offset by the expiration of a low
margin municipal contract in 1995.

SUPPLEMENTAL WASTE CONNECTIONS, INC. AND PREDECESSORS -- NINE MONTHS ENDED
SEPTEMBER 30, 1998 VS. NINE MONTHS ENDED SEPTEMBER 30, 1997

Revenues. Total revenues increased $38.4 million, or 178.8%, to $59.9
million for the nine months ended September 30, 1998 from $21.5 million for the
nine months ended September 30, 1997. The increase was primarily attributable to
acquisitions closed in 1998 with nominal contribution from volume growth.

Cost of Operations. Total cost of operations increased $26.4 million, or
156.0%, to $43.3 million for the nine months ended September 30, 1998 from $16.9
million for the nine months

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<PAGE> 33

ended September 30, 1997. The increase was primarily attributable to
acquisitions closed in 1998. Cost of operations as a percentage of revenues
declined 6.4% to 72.4% for the nine months ended September 30, 1998 from 78.8%
for the nine months ended September 30, 1997. The decline in cost of operations
as a percentage of revenues was a result of cost reductions at acquired
businesses.

SG&A. SG&A expenses increased $3.7 million, or 226.0%, to $5.4 million for
the nine months ended September 30, 1998 from $1.7 million for the nine months
ended September 30, 1997. The increase was primarily attributable to
acquisitions closed in the second half of 1997 and in 1998. SG&A as a percentage
of revenues increased 1.3% to 9.0% for the nine months ended September 30, 1998
from 7.7% for the nine months ended September 30, 1997. The increase in SG&A as
a percentage of revenues was a result of the acquisitions, which had generally
higher overhead expenses.

Depreciation and Amortization. Depreciation and amortization expense
increased $3.0 million, or 221.0%, to $4.3 million for the nine months ended
September 30, 1998 from $1.4 million for the nine months ended September 30,
1997. The increase was primarily attributable to depreciation from acquired
assets and increased amortization of goodwill from acquisitions. Depreciation
and amortization as a percentage of revenues increased 1.0% to 7.2% for the nine
months ended September 30, 1998 from 6.3% for the nine months ended September
30, 1997. The increase in depreciation and amortization as a percentage of
revenues was primarily a result of amortization of goodwill associated with
acquisitions.

Interest Expense. Interest expense increased $1.6 million, or 649.0%, to
$1.9 million for the nine months ended September 1998 from $247,000 for the nine
months ended September 1997. The increase was primarily attributable to higher
debt levels incurred to fund all or a portion of the purchase price of acquired
businesses.

1997 VS. 1996

Revenues. Total revenues increased by $10.1 million, or 40.3%, to $35.1
million in 1997 from $25.0 million in 1996. This increase was primarily
attributable to our acquisition of the predecessors from BFI on September 30,
1997, increased volumes, price increases as a result of increased disposal fees,
the acquisition of the assets of Vashon Island Disposal and additional services
to existing customers.

Cost of Operations. Total cost of operations increased $7.4 million, or
36.0%, to $27.8 million in 1997 from $20.5 million in 1996. The increase was
principally due to our acquisition of the predecessors from BFI on September 30,
1997, increased volume, increased disposal costs and the cost of operations of
Vashon Island Disposal. Cost of operations as a percentage of revenues declined
2.5% to 79.3% from 81.8% in 1996. The percentage decrease was primarily due to
operating leverage as a result of increased volumes.

SG&A. SG&A expenses increased approximately $800,000, or 37.3%, to $2.9
million in 1997 from $2.1 million in 1996. The increase was principally due to
our acquisition of the predecessors from BFI on September 30, 1997, and
increased wages and contributions to the Murrey Companies' 401(k) plan. As a
percentage of revenues, SG&A decreased 0.2% to 8.4% from 8.6% in 1996 as a
result of operating leverage with the increased revenues.

Depreciation and Amortization. Depreciation and amortization expense
increased approximately $489,000, or 39.6%, to $1.7 million in 1997 from $1.2
million in 1996. The increase resulted from our acquisition of the predecessors
from BFI on September 30, 1997, and the purchase of additional collection
equipment and containers. Depreciation and amortization expense remained
constant as a percentage of revenues at 4.9%.

Interest Expense. Interest expense increased approximately $1.1 million,
or 398.2%, to $1.4 million in 1997 from approximately $284,000 in 1996. The
increased interest expense was a

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<PAGE> 34

result of higher debt levels resulting from our acquisition of the predecessors
from BFI on September 30, 1997 and the purchase of additional property and
equipment.

1996 VS. 1995

Revenues. Total revenues declined by $2.8 million, or 9.9%, to $25.0
million in 1996 from $27.8 million in 1995. This decrease was primarily
attributable to a decline in recycled material commodity prices, partially
offset by increases in volumes of solid waste.

Cost of Operations. Total cost of operations decreased $394,000, or 1.9%,
to $20.5 million in 1996 from $20.9 million in 1995. The decrease was
principally due to a decline in the cost of recycled materials, which was offset
by increased operating costs associated with increased volumes of waste. Cost of
operations as a percentage of revenues increased 6.7% to 81.8% from 75.1% in
1995. The percentage increase was primarily due to reduced margins in the
recycling business.

SG&A. SG&A expenses increased approximately $41,000 to $2.2 million in
1996 from $2.1 million in 1995. As a percentage of revenues, SG&A increased 1.0%
to 8.6% from 7.6% in 1995 as a result of the decline in revenues in 1996.

Depreciation and Amortization. Depreciation and amortization expense
increased approximately $313,000 to $1.2 million in 1996 from $923,000 in 1995.
Depreciation and amortization increased as a percentage of revenues 1.6% to 4.9%
from 3.3%. The higher depreciation level was as a result of the purchase of
additional collection equipment and containers.

Interest Expense. Interest expense increased approximately $86,000, or
43.4%, to $284,000 in 1996 from approximately $198,000 in 1995. The increased
interest expense resulted from higher debt levels resulting from the purchase of
property and equipment.

LIQUIDITY AND CAPITAL RESOURCES

Our business is capital intensive. Our capital requirements include
acquisitions and fixed asset purchases. We expect that we will also make capital
expenditures for landfill cell construction, landfill development and landfill
closure activities in the future. We plan to meet our capital needs through
various financing sources, including internally generated funds and debt and
equity financings.

As of September 30, 1998, Waste Connections had a working capital deficit
of $4.8 million, including cash and cash equivalents of $1.5 million. In
managing our working capital, we generally apply the cash generated from our
operations that remains after satisfying our working capital and capital
expenditure requirements to reduce our indebtedness under our bank revolving
credit facility and to minimize our cash balances. We finance our working
capital requirements from internally generated funds and bank borrowings.

At inception, Waste Connections sold 2,300,000 shares of common stock at
$0.01 per share to its founders and 2,499,998 shares of Series A Preferred Stock
at $2.80 per share. In May and June 1998, we received approximately $24.0
million in net proceeds from the sale of 2,300,000 shares in our initial public
offering (including exercise by the underwriters of their overallotment option).
As of January 19, 1999, Waste Connections had sold or issued an additional
5,476,800 shares of common stock at a weighted average value of $15.43 per
share, and had options and warrants outstanding to purchase 2,442,699 shares of
common stock at a weighted average exercise price of $4.94 per share. The
weighted average value at which we issued shares, and the weighted average
exercise price of the outstanding options and warrants, are below the assumed
public offering price of $18.00 per share in this offering. Our liquidity and
capital resources would be greater if we had sold shares at higher prices and
issued options and warrants with higher exercise prices. In addition, our
earnings per share would be higher if there were fewer shares outstanding.

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<PAGE> 35

Waste Connections has a $115 million revolving credit facility with a
syndicate of banks for which BankBoston, N.A. acts as agent. Virtually all of
our assets, including Waste Connections' interest in the equity securities of
our subsidiaries, secure our obligations under the credit facility. The credit
facility matures in 2003 and bears interest at a rate per annum equal to, at our
discretion, either the BankBoston Base Rate plus applicable margin, or the
Eurodollar Rate plus applicable margin. The credit facility requires Waste
Connections to maintain certain financial ratios and satisfy other predetermined
requirements, such as minimum net worth, net income and limits on capital
expenditures. It also requires the lenders' approval of acquisitions in certain
circumstances. As of September 30, 1998, an aggregate of approximately $37.6
million was outstanding under our credit facility, and the interest rate on
outstanding borrowings under the credit facility was approximately 6.8%.

For the nine months ended September 30, 1998, operations provided
approximately $7.9 million of net cash, most of which was provided by operating
results for the period exclusive of non-cash charges and $263,000 of which was
provided by a decrease in working capital (net of acquisitions) for the period.

For the nine months ended September 30, 1998, we used $47.2 million for
investing activities. Of this amount, we used $44.2 million to fund the cash
portion of acquisitions and invested the remainder in trucks, management
information systems and containers.

For the nine months ended September 30, 1998, financing activities provided
net cash of $39.9 million, which was provided by net borrowings under our credit
facility and $24.0 million in proceeds from the sale of common stock in our
initial public offering.

Waste Connections recorded an income tax benefit of $332,000 for the period
from inception (September 9, 1997) through December 31, 1997. We recognized the
income tax benefit because we believe we will likely use it when existing
temporary differences reverse.

We made approximately $4.5 million in capital expenditures in 1998. We
expect to make capital expenditures of approximately $5.5 million in 1999 in
connection with our existing business. We intend to fund our planned 1999
capital expenditures principally through existing cash, internally generated
funds, and borrowings under our existing credit facility. In addition, we may
make substantial additional capital expenditures in acquiring solid waste
collection and disposal businesses. If we acquire additional landfill disposal
facilities, we may also have to make significant expenditures to bring them into
compliance with applicable regulatory requirements, obtain permits or expand our
available disposal capacity. We cannot currently determine the amount of these
expenditures because they will depend on the number, nature, condition and
permitted status of any acquired landfill disposal facilities. We believe that
our credit facility, the funds we expect to generate from operations and the net
proceeds of this offering will provide adequate cash to fund our working capital
and other cash needs for the foreseeable future.

Goodwill represents the excess of the purchase price over the fair value of
the net assets of the acquired entity and is amortized on a straight line basis
over the period of expected benefit of 40 years. Within the purchase price of an
acquired company, we first assign value to the tangible assets, followed by
intangible assets, including covenants not to compete and certain contracts and
customer lists that are determinable both in terms of size and life. We
determine value of the other intangible assets by considering, among other
things, the present value of the cash flows associated with those assets.

We continually evaluate the value and future benefits of our intangible
assets. We assess the recoverability from future operations using income from
operations of the related acquired businesses as a measure. Under this approach,
the carrying value would be reduced if it becomes probable that our best
estimate for expected future cash flows of the related business would be less
than the carrying amount of the intangible assets over the remaining
amortization period. As of September 30, 1998, there have been no adjustments to
the carrying amounts of intangibles

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<PAGE> 36

resulting from these evaluations. As of September 30, 1998, on an historical
basis, our goodwill represented approximately 71% of our total assets and 136%
of stockholder's equity.

We derive a substantial portion of our revenues from services provided
under exclusive municipal contracts and franchise agreements. Our single largest
contract, with the City of Vancouver, accounted for approximately 18.1% of our
revenues during the period from inception (September 9, 1997) through December
31, 1997, and 10.1% during the nine months ended September 30, 1998, on an
historical basis. Approximately nine years remain under that contract. No other
single contract or customer accounted for more than 7.1% of our revenues during
the period from inception (September 9, 1997) through December 31, 1997, or more
than 5.0% during the nine months ended September 30, 1998, on an historical
basis.

INFLATION

To date, inflation has not significantly affected our operations.
Consistent with industry practice, many of our contracts allow us to pass
through certain costs to our customers, including increases in landfill tipping
fees and, in some cases, fuel costs. Therefore, we believe that we should be
able to increase prices to offset many cost increases that result from
inflation. However, competitive pressures may require us to absorb at least part
of these cost increases, particularly during periods of high inflation.

SEASONALITY

Based on historic trends experienced by the businesses we have acquired, we
expect our operating results to vary seasonally, with revenues typically lowest
in the first quarter, higher in the second and third quarters and lower in the
fourth quarter than in the second and third quarters.

YEAR 2000 ISSUES

We will need to modify or replace portions of our software so that our
computer systems will function properly with respect to dates in the year 2000
and afterwards. We expect to complete those modifications and upgrades during
1999, at a total cost of approximately $100,000. We have spent part of our Year
2000 budget on replacing our billing systems in Maltby and Vancouver,
Washington. Because our operations rely primarily on mechanical systems such as
trucks to collect solid waste, we do not expect our operations to be
significantly affected by Year 2000 issues. Our customers may need to make Year
2000 modifications to software and hardware that they use to generate records,
bills and payments relating to Waste Connections. We do not rely on vendors on a
routine basis except for providers of disposal services. We bring waste to a
site and are normally billed based on tonnage received. We believe that if our
disposal vendors encounter Year 2000 problems, they will convert to manual
billing based on scale recordings until they resolve those issues.

In assessing our exposure to Year 2000 issues, management believes our
biggest challenges lie in the following areas: Year 2000 issues at Waste
Connections' banks, large (typically municipal) customers, and acquired
businesses between the time Waste Connections acquires them and the time we
implement our own systems. We are obtaining Year 2000 compliance certifications
from our vendors, banks and customers. If Waste Connections and our vendors,
banks and customers do not complete the required Year 2000 modifications on
time, the Year 2000 issue could materially affect our operations. We believe,
however, that in the most reasonably likely worst case, the effects of Year 2000
issues on our operations would be brief and small relative to our overall
operations. We have not made a contingency plan to minimize operational problems
if we and our vendors, banks and customers do not timely complete all required
Year 2000 modifications.

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<PAGE> 37

BUSINESS

INDUSTRY OVERVIEW

According to Waste Age, an industry trade publication, the U.S. solid waste
services industry generated estimated revenues of $36.9 billion in 1997. The
solid waste services industry has undergone significant consolidation and
integration since 1990. We believe that, particularly in the Western U.S., the
following factors have primarily caused the consolidation and integration of the
waste services industry:

- Increased Impact of Regulations. Stringent industry regulations, such as
the Subtitle D regulations, have caused operating and capital costs to
rise and have accelerated consolidation and acquisition activities in the
solid waste collection and disposal industry. Many smaller industry
participants have found these costs difficult to bear and have decided to
either close their operations or sell them to larger operators. In
addition, Subtitle D requires more stringent engineering of solid waste
landfills, and mandates liner systems, leachate collection, treatment and
monitoring systems and gas collection and monitoring systems. These
ongoing costs are combined with increased financial reserve requirements
for solid waste landfill operators relating to closure and post-closure
monitoring. As a result, the number of solid waste landfills is declining
while the average size is increasing.

- Increased Integration of Collection and Disposal Operations. In certain
markets, competitive pressures are forcing operators to become more
efficient by establishing an integrated network of solid waste collection
operations and transfer stations, through which they secure solid waste
streams for disposal. Operators have adopted a variety of disposal
strategies, including owning landfills, establishing strategic
relationships to secure access to landfills and to capture significant
waste stream volumes to gain leverage in negotiating lower landfill fees
and securing long-term, most-favored-pricing contracts with high capacity
landfills.

- Pursuit of Economies of Scale. Larger operators achieve economies of
scale by vertically integrating their operations or by spreading their
facility, asset and management infrastructure over larger volumes. Larger
solid waste collection and disposal companies have become more
cost-effective and competitive through control of a larger waste stream
and by gaining access to significant financial resources to make
acquisitions.

- Regulatory Framework in the Western U.S. In the Western U.S., waste
collection services are provided largely under three types of contractual
arrangements: certificates or permits, franchise agreements and municipal
contracts. Certificates or permits, such as governmental certificates
awarded to waste collection service providers in unincorporated areas and
electing municipalities of Washington by the WUTC, typically grant the
certificate holder the exclusive and perpetual right to provide specific
residential, commercial and industrial waste services in a territory at
specified rates. See "G certificates" below. Franchise agreements
typically provide an exclusive service period of five to ten years or
longer and specify the service territory, a broad range of services to be
provided, and rates for the services. They also often give the service
provider a right of first refusal to extend the term of the agreement.
Municipal contracts typically provide a shorter service period and a more
limited scope of services than franchise agreements and generally require
competitive bidding at the end of the contract term. Unless customers
within the areas covered by certain governmental certificates, franchise
agreements and municipal contracts elect not to receive any waste
collection services, they are required to pay collection fees to the
company providing these services in their area. These exclusive rights
and contractual arrangements create barriers to entry that can be
overcome primarily through acquisitions of companies with such exclusive
rights or contractual arrangements.

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<PAGE> 38

Despite the ongoing consolidation, the solid waste services industry
remains primarily regional in nature and highly fragmented. Based on published
industry sources, approximately 27% of the total revenues of the U.S. solid
waste industry is accounted for by more than 5,000 private, predominantly small,
collection and disposal businesses, approximately 41% by publicly traded solid
waste companies and approximately 32% by municipal governments that provide
collection and disposal services. We expect the current consolidation trends in
the solid waste industry to continue, because many independent landfill and
collection operators lack the capital resources, management skills and technical
expertise necessary to comply with stringent environmental and other
governmental regulations and to compete with larger, more efficient, integrated
operators. In addition, many independent operators may wish to sell their
businesses to achieve liquidity in their personal finances or as part of their
estate planning. We believe that the fragmented nature of the industry offers
significant consolidation and growth opportunities, especially in secondary
markets of the Western U.S., for companies with disciplined acquisition
programs, decentralized operating strategies and access to financial resources.

STRATEGY

Our objective is to build a leading integrated solid waste services company
in secondary markets of the Western U.S. We have developed a two-pronged
strategy tailored to the competitive and regulatory factors that affect our
markets. First, in markets where waste collection services are provided under
exclusive arrangements, or where waste disposal is municipally funded or
available from multiple municipal sources, we believe that controlling the waste
stream by providing collection services under exclusive arrangements is often
more important to our growth and profitability than owning or operating
landfills. In addition, regulations in some Western U.S. markets dictate the
disposal facility to be used. The large size of many western states increases
the cost of interstate and long haul disposal, heightening the effects of
regulations that direct waste disposal, which may make it more difficult for a
landfill to obtain the disposal volume necessary to operate profitably. In
markets with these characteristics, we believe that landfill ownership or
vertical integration is not critical to our success. Second, in markets where we
believe that owning landfills is a strategic element to a collection operation
because of competitive and regulatory factors, we generally focus on providing
integrated services, from collection through disposal of solid waste in
landfills that we own or operate.

GROWTH STRATEGY

- Expansion Through Acquisitions. We intend to expand significantly the
scope of our operations by continuing to acquire solid waste operations
in new markets and in existing or adjacent markets that are combined with
or "tuck in" to existing operations.

We intend to expand into new geographic regions by entering these markets
through acquisitions. We use an initial acquisition in a new market as an
operating base. Then we seek to strengthen the acquired operation's
presence in that market by providing additional services, adding new
customers and making "tuck-in" acquisitions. We next seek to broaden our
regional presence by adding additional operations in markets adjacent to
the new location. We are currently examining opportunities in states
other than those in which we currently operate and are assessing
potential acquisitions of solid waste operations in Colorado, Montana and
Texas.

We believe that many "tuck-in" acquisition opportunities exist within our
current and targeted market areas. For example, we have identified more
than 300 independent entities that provide collection and disposal
services in the states where we currently operate. We believe that
throughout the Western U.S., many independent entities are suitable for
acquisition by Waste Connections and provide opportunities to increase
our market share and route density.

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<PAGE> 39

- Exclusive Arrangements. We derive a significant portion of our revenues
from arrangements, including franchise agreements, municipal contracts
and governmental certificates, under which we are the exclusive service
provider in a specified market. We intend to devote significant resources
to securing additional franchise agreements and municipal contracts
through competitive bidding and additional governmental certificates by
acquiring other companies. In bidding for franchises and municipal
contracts and evaluating acquisition candidates holding governmental
certificates, our management team draws on its experience in the waste
industry and its knowledge of local service areas in existing and target
markets. Our district managers maintain relationships with local
governmental officials within their service areas, and sales
representatives may be assigned to cover specific municipalities. These
personnel focus on maintaining, renewing and renegotiating existing
franchise agreements and municipal contracts and on securing additional
agreements and contracts.

- Internal Growth. To generate continued internal growth, we will focus on
increasing market penetration in our current and adjacent markets,
soliciting new commercial, industrial, and residential customers in
markets where such customers may elect whether or not to receive waste
collection services, marketing upgraded or additional services (such as
compaction or automated collection) to existing customers and, where
appropriate, raising prices. Where possible, we intend to leverage our
franchise-based platforms to expand our customer base beyond our
exclusive market territories. As customers are added in existing markets,
our revenue per routed truck increases, which generally increases our
collection efficiencies and profitability. In markets in which we have
exclusive contracts, franchises and certificates, we expect internal
volume growth generally to track population and business growth.

Transfer stations are an important part of our internal growth strategy.
They extend our direct-haul reach and link disparate collection operations
with disposal capacity that we own, operate or contract. We currently own
and/or operate 15 transfer stations. By operating transfer stations, we
also engage in direct communications with municipalities and private
operators that deliver waste to our transfer stations. This positions us
to gain additional business in our markets if a municipality privatizes
any solid waste operations it owns or rebids existing contracts, and it
increases our opportunities to acquire other private collection operations
that use the transfer stations.

OPERATING STRATEGY

- Decentralized Operations. We manage our operations on a decentralized
basis. This places decision-making authority close to the customer,
enabling us to identify customers' needs quickly and to address those
needs in a cost-effective manner. We believe that decentralization
provides a low-overhead, highly efficient operational structure that
allows us to expand into geographically contiguous markets and operate in
relatively small communities that larger competitors may not find
attractive. We believe that this structure gives us a strategic
competitive advantage, given the relatively rural nature of much of the
Western U.S., and makes us an attractive buyer to many potential
acquisition candidates.

We currently deliver our services from 32 operating locations serving 12
market areas, or districts. Each district has a district manager, who has
autonomous service and decision-making authority for that district and is
responsible for maintaining service quality, promoting safety in the
district's operations, implementing marketing programs, and overseeing
day-to-day operations, including contract administration. District
managers also help identify acquisition candidates and are responsible
for integrating them into our operations and obtaining the permits and
other governmental approvals required for us to operate the acquired
business.

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- Operating Enhancements. We develop company-wide operating standards,
which are tailored for each of our markets based on industry standards
and local conditions. Using these standards, we track collection and
disposal routing efficiency and equipment utilization. We also implement
cost controls and employee training and safety procedures, and establish
a sales and marketing plan for each market. We have installed a wide area
network, implemented advanced management information systems and
financial controls, and consolidated accounting, insurance and employee
benefit functions, customer service, productivity reporting and
dispatching systems. While district management operates with a high
degree of autonomy, our senior officers monitor district operations and
require adherence to Waste Connections' accounting, purchasing, marketing
and internal control policies, particularly with respect to financial
matters. Our executive officers regularly review the performance of
district managers and operations. We believe that by establishing
operating standards, closely monitoring performance and streamlining
certain administrative functions, we can improve the profitability of
existing operations.

To improve an acquired business' operational productivity, administrative
efficiency and profitability, we apply the same operating standards,
information systems and financial controls to acquired businesses as our
existing operations employ. Moreover, if we can internalize the waste
stream of acquired operations, we can further increase operating
efficiencies and improve capital utilization. Where not restricted by
exclusive agreements, contracts, permits or certificates, we also solicit
new commercial, industrial and residential customers in areas within and
surrounding the markets served by acquired collection operations, to
further improve operating efficiencies and increase the volume of solid
waste collected by the acquired operations.

ACQUISITION PROGRAM

Waste Connections currently operates in ten states in the Western U.S. We
focus our acquisition efforts on markets in the Western U.S. that generally
exhibit the characteristics listed below, which we believe provide significant
growth opportunities for a well-capitalized market entrant and create economic
and operational barriers to entry by new competitors.

- A potential market revenue base of at least $15 million, usually in
market areas with a geographically dispersed population of 75,000 or
less;

- A fragmented market with additional acquisition candidates;

- The opportunity to acquire a significant market share;

- Strong projected economic or population growth rates;

- The availability of adequate disposal capacity, through acquisition or
agreements with third parties; and

- A favorable regulatory environment.

We believe that our experienced management, decentralized operating
strategy, financial strength, size and public company status make us an
attractive buyer to certain solid waste collection and disposal acquisition
candidates. We have developed a set of financial, geographic and management
criteria to evaluate specific acquisition candidates. The factors that we
consider in evaluating an acquisition candidate include:

- The candidate's historical and projected financial performance;

- The return on capital invested in a candidate, its margins and capital
requirements and its impact on our earnings;

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- The experience and reputation of the candidate's management and customer
service providers, their relationships with local communities and their
willingness to continue as employees of Waste Connections;

- The composition and size of the candidate's customer base and whether the
customer base is served under franchise agreements, municipal contracts,
governmental certificates or other exclusive arrangements;

- Whether the geographic location of the candidate will enhance or expand
our market area or ability to attract other acquisition candidates;

- Whether the acquisition will increase our market share or help protect
our existing customer base;

- Any potential synergies that may be gained by combining the candidate
with our existing operations; and

- The liabilities of the candidate.

Before completing an acquisition, we perform extensive environmental,
operational, engineering, legal, human resources and financial due diligence.
Our management evaluates and approves all acquisitions. Ronald J. Mittelstaedt,
President, Chief Executive Officer and Chairman of the Board, is authorized to
approve acquisitions for consideration of up to $1 million; the Executive
Committee of the Board of Directors must approve all other acquisitions. We seek
to integrate each acquired business promptly and to minimize disruption to the
ongoing operations of both Waste Connections and the acquired business. We
believe our senior management team has a proven track record in integrating
acquisitions.

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The following table sets forth Waste Connections' acquisitions completed
from our inception in September 1997 through January 19, 1999:

<TABLE>
<CAPTION>
ACQUIRED BUSINESS MONTH ACQUIRED PRINCIPAL BUSINESS LOCATION MARKET AREA
----------------- -------------- ------------------ -------- -----------
<S> <C> <C> <C> <C>
Murrey Companies January 1999 Collection Fife, WA Western Washington
Roche & Sons, Inc. January 1999 Collection Layton, UT Central Utah
Butler County Landfill, Inc. January 1999 Landfill David City, NE Eastern Nebraska
and Kobus Construction, Inc.
City Sanitation, Inc. December 1998 Collection Layton, UT Central Utah
Amador Disposal Service, Inc. December 1998 Collection Ione, CA North Central California
and Mother Lode Sani-Hut,
Inc.
Heartland Waste Management, December 1998 Collection Arkansas City, KA Southern Kansas
Inc.
Columbia Sanitary Services, November 1998 Collection Portland, OR Northwestern Oregon and
Inc. and Moreland Sanitary Southwestern Washington
Service, Inc.
B&G Sanitation November 1998 Collection Cottage Grove, OR Southwestern Oregon
Veneta Garbage Service November 1998 Collection Veneta, OR Southwestern Oregon
Siuslaw Disposal, Inc. November 1998 Collection Florence, OR Southwestern Oregon
R&N, LLC October 1998 Collection Mountain Home, ID Southwestern Idaho
Westlane Disposal September 1998 Collection Florence, OR Southwestern Oregon
Harrell's Septic Service September 1998 Septic Services Crescent City, CA Northwestern California
and Southwestern Oregon
Evergreen Waste Systems, Inc. September 1998 Collection Washougal, WA Southwestern Washington
and Northwestern Oregon
Wolff's Trashmasher and Haul It September 1998 Collection Stanton, NE Eastern Nebraska
All Sanitary Service
Country Garbage Services, Inc. September 1998 Collection Salt Lake City, Central Utah
UT
Youngclaus Enterprises September 1998 Collection Madera, CA North Central California
Affiliated Waste Services, September 1998 Collection Norfolk, NE Eastern Nebraska
L.L.C.
J&J Sanitation, Inc. August 1998 Collection O'Neill, NE Eastern Nebraska
Contractors Waste, Inc. August 1998 Collection Salt Lake City, Central Utah
UT
Big Red Roll Off, Inc. August 1998 Collection O'Neill, NE Eastern Nebraska
ABC Waste, Inc. August 1998 Collection Salt Lake City, Central Utah
UT
Miller Containers, Inc. July 1998 Collection Salt Lake City, Central Utah
UT
Shrader Refuse and Recycling July 1998 Collection Papillion, NE Eastern Nebraska
Service Company
Red Carpet Landfill, Inc. June 1998 Landfill Enid, OK Western Oklahoma
B&B Sanitation, Inc. June 1998 Collection Enid, OK Western Oklahoma
Darlin Equipment, Inc. June 1998 Equipment Leasing Enid, OK Western Oklahoma
Oregon Waste Technology June 1998 Collection Brookings, OR Southwestern Oregon
Curry Transfer and Recycling June 1998 Collection Brookings, OR Southwestern Oregon
Contractor's Waste Removal, L.C June 1998 Collection Orem, UT Central Utah
Arrow Sanitary Services, Inc. June 1998 Collection Portland, OR Northwestern Oregon and
Southwestern Washington
T&T Disposal, Inc. May 1998 Collection Gillette, WY Northeastern Wyoming
Sunshine Sanitation May 1998 Collection Spearfish, SD Western South Dakota
Incorporated
Sower's Sanitation, Inc. May 1998 Collection Belle Fourche, SD Western South Dakota
Jesse's Disposal April 1998 Collection Gillette, WY Northeastern Wyoming
A-1 Disposal, Inc. April 1998 Collection Gillette, WY Northeastern Wyoming
Hunter Enterprises, Inc. March 1998 Collection Shelley, ID Eastern Idaho
Madera Disposal Services Inc. February 1998 Collection and Madera, CA North Central California
Landfill
Waste Connections of Idaho, January 1998 Collection Idaho Falls, ID Eastern Idaho
Inc.
Fibres International, Inc. September 1997 Collection Issaquah, WA North Central Washington
and Central Oregon
Browning-Ferris Industries of September 1997 Collection Clark County, WA Southwestern Washington
Washington, Inc.
</TABLE>

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SERVICES

COMMERCIAL, INDUSTRIAL AND RESIDENTIAL WASTE SERVICES

Waste Connections serves more than 300,000 commercial, industrial and
residential customers. Of these, we serve more than 94,000 under governmental
certificates that grant us rights, generally perpetual and exclusive, to provide
services within specified areas, more than 26,500 under exclusive franchise
agreements with remaining terms ranging from seven to 18 years, and more than
118,500 under exclusive municipal contracts with generally shorter contract
terms.

We provide commercial and industrial services not performed under
governmental certificates, franchise agreements or municipal contracts under one
to five year service agreements. We determine fees under these agreements by
such factors as collection frequency, level of service, route density, the type,
volume and weight of the waste collected, type of equipment and containers
furnished, the distance to the disposal or processing facility, the cost of
disposal or processing and prices charged in our markets for similar service.
Collection of larger volumes associated with commercial and industrial waste
streams generally helps improve our operating efficiencies, and consolidation of
these volumes allows us to negotiate more favorable disposal prices. Our
commercial and industrial customers use portable containers for storage,
enabling us to service many customers with fewer collection vehicles. Commercial
and industrial collection vehicles normally require one operator. We provide one
to eight cubic yard containers to commercial customers, 10 to 50 cubic yard
containers to industrial customers, and 30 to 95 gallon carts to residential
customers. For an additional fee, we install stationary compactors that compact
waste prior to collection on the premises of a substantial number of large
volume customers.

We provide residential waste services that we do not perform under
governmental certificates, franchise agreements or municipal contracts under
contracts with homeowners' associations, apartment owners or mobile home park
operators, or on a subscription basis with individual households. We base
residential contract fees primarily on route density, the frequency and level of
service, the distance to the disposal or processing facility, the cost of
disposal or processing and prices charged in that market for similar services.
Collection fees are paid either by the municipalities from tax revenues or
directly by the residents receiving the services.

TRANSFER STATION SERVICES

Waste Connections has an active program to acquire, develop, own and
operate transfer stations in markets proximate to our operations. Currently, we
operate three transfer stations in California, two transfer stations in
Nebraska, four transfer stations in Washington and six transfer stations in
Oregon, which receive, compact, and transfer solid waste to be transported by
larger vehicles to landfills. We believe that the transfer stations benefit
Waste Connections by:

- concentrating the waste stream from a wider area, which increases the
volume of disposal at landfills that we operate and gives us greater
leverage in negotiating for more favorable disposal rates at other
landfills;

- improving utilization of collections personnel and equipment; and

- building relationships with municipalities and private operators that
deliver waste, which can lead to additional growth opportunities.

LANDFILLS

Waste Connections seeks to identify solid waste landfill acquisition
candidates to achieve vertical integration in markets where the economic and
regulatory environment makes such acquisitions attractive. We believe that in
some markets, acquiring landfills provides opportunities

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to vertically integrate our collection, transfer and disposal operations while
improving operating margins. We evaluate landfill candidates by determining,
among other things, the amount of waste that could be diverted to the landfill
in question, whether access to the landfill is economically feasible from Waste
Connections' existing market areas either directly or through transfer stations,
the expected life of the landfill, the potential for expanding the landfill, and
current disposal costs compared to the cost of acquiring the landfill. Where the
acquisition of a landfill is not attractive, we pursue long term disposal
contracts with facilities, which are typically municipally controlled.

We operate the Fairmead Landfill and own and operate the Red Carpet
Landfill and the Butler County Landfill, all of which are Subtitle D landfills.

Fairmead Landfill. We operate the Fairmead Landfill under an operating
agreement with Madera County with a remaining term of 18 years. As of January
19, 1999, the Fairmead Landfill consisted of 160 total acres, of which 77 acres
were permitted for disposal. As of that date, the Fairmead Landfill had
approximately 550,000 tons of unused permitted capacity remaining, with
approximately 4.9 million additional tons of capacity in various stages of
permitting, and was estimated to have a remaining life of 26 years at current
disposal rates. The Fairmead Landfill is currently permitted to accept up to 378
tons per day of municipal solid waste.

Red Carpet Landfill. As of January 19, 1999, the Red Carpet Landfill
consisted of 82 total acres, of which 40 acres were permitted for disposal. As
of that date, the Red Carpet Landfill had approximately 625,000 tons of unused
permitted capacity remaining, with approximately 1.7 million additional tons of
capacity in various stages of permitting, and was estimated to have a remaining
life of 40 years at current disposal rates. The Red Carpet Landfill is currently
permitted to accept up to 350 tons per day of municipal solid waste.

Butler County Landfill. As of January 19, 1999, the Butler County Landfill
consisted of approximately 282 acres, of which 84 acres were permitted for
disposal. As of that date, the Butler County Landfill had approximately 4.0
million tons of unused permitted capacity remaining, and was estimated to have a
remaining life of 28 years at current disposal rates.

We monitor the available permitted in-place disposal capacity of the
Fairmead, Red Carpet and Butler County Landfills on an ongoing basis and
evaluate whether to seek to expand this capacity. In making this evaluation, we
consider various factors, including the volume of waste projected to be disposed
of at the landfill, the size of the unpermitted acreage included in the
landfill, the likelihood that Waste Connections will be able to obtain the
necessary approvals and permits required for the expansion and the costs that
would be involved in developing the additional capacity. We also regularly
consider whether it is advisable, in light of changing market conditions and/or
regulatory requirements, to seek to expand or change the permitted waste streams
or to seek other permit modifications.

RECYCLING SERVICES

We offer municipal, commercial, industrial and residential customers
recycling services for a variety of recyclable materials, including cardboard,
office paper, plastic containers, glass bottles and ferrous and aluminum metals.
We operate seven recycling processing facilities and sell other collected
recyclable materials to third parties for processing before resale. The profits
from our resale of recycled materials are often shared between Waste Connections
and the other parties to our recycling contracts. For example, certain of our
municipal recycling contracts in Washington and Idaho, negotiated before we
acquired those businesses, specify certain benchmark resale prices for recycled
commodities. To the extent the prices we actually receive for the processed
recycled commodities collected under the contract exceed the prices specified in
the contract, we share the excess with the municipality, after recovering any
previous shortfalls resulting from actual market prices falling below the prices
specified in the contract. To reduce our exposure to commodity price risk with
respect to recycled materials, we have adopted a pricing strategy of

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charging collection and processing fees for recycling volume collected from
third parties. We believe that recycling will continue to be an important
component of local and state solid waste management plans due to the public's
increasing environmental awareness and expanding regulations that mandate or
encourage recycling.

G CERTIFICATES

We perform a substantial portion of our collection business in Washington
under governmental certificates (referred to as "G certificates") awarded by the
WUTC. G certificates apply only to unincorporated areas of Washington and
municipalities that have elected to have their solid waste collection overseen
by the WUTC. G certificates generally grant the holder the exclusive and
perpetual right to provide certain solid waste collection and transportation
services in a specified territory. The WUTC has repeatedly determined that, in
enacting the statute authorizing G certificates, the Washington Legislature
intended to favor grants of exclusive, rather than overlapping, service rights
for conventional solid waste services. Accordingly, most G certificates
currently grant exclusive solid waste collection and transportation rights for
conventional solid waste services in their specified territories.

The WUTC and the Washington Legislature have generally construed G
certificates as conferring vested property rights that may be defeated,
diminished or cancelled only upon the occurrence of specified events of default,
the demonstrated lack of fitness of the certificate holder, or municipalities'
annexation of territory covered by a certificate. Thus, a certificate holder is
entitled to due process in challenging any action that affects its rights. In
addition, legislation passed in 1997 requires a municipality that annexes
territory covered by a G certificate either to grant the certificate holder an
exclusive franchise, generally with a minimum term of seven years, to continue
to provide services in the affected area, or to negotiate with the certificate
holder some other compensation for the collection rights in the affected area.
The statute expressly permits the certificate holder to sue the annexing
municipality for measurable damages that exceed the value of a seven-year
franchise agreement to provide services in the affected area. Under one of the
contracts with a municipality in Washington acquired by a predecessor of Waste
Connections, the predecessor purported to waive its rights to compensation or
damages under the statute in return for the right to service any current or
prospectively annexed areas formerly covered by its G certificate.

In addition to awarding G certificates, the WUTC is required by statute to
establish just, reasonable and compensatory rates to customers of regulated
solid waste collection companies. The WUTC is charged with balancing the needs
of service providers to earn fair and sufficient returns on their investments in
plant and equipment against the needs of commercial and residential customers to
receive adequate and reasonably priced services. Over the past decade, the WUTC
has used a ratemaking methodology known as the "Lurito-Gallagher" method. This
method calculates rates based on the income statements and balance sheets of
each service provider, with the goal of establishing rates that reflect the
costs of providing service and that motivate service providers to invest in
equipment that improves operating efficiency in a cost-effective manner. The
Lurito-Gallagher rate-setting methodology was adjusted in the early 1990's to
better reflect the costs of providing recycling services, by accounting for
providers' increasing use of automated equipment and adjusting for the
cyclicality of the secondary recyclables markets. This has often resulted in
more frequent rate adjustments in response to material cost shifts.

SALES AND MARKETING

In most of our existing markets, we provide waste collection, transfer and
disposal services to municipalities and governmental authorities under exclusive
franchise agreements, municipal contracts and G certificates; service providers
do not contract directly with individual customers. In addition, because Waste
Connections has grown to date primarily through acquisitions, we
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<PAGE> 46

have generally assumed existing franchise agreements, municipal contracts and G
certificates from the acquired companies, rather than obtaining new contracts.
For these reasons, our sales and marketing efforts to date have been narrowly
focused. We expect to add sales and marketing personnel as necessary to solicit
new customers in markets where we are not the exclusive provider of solid waste
services, expand our presence into areas adjacent to or contiguous with our
existing markets, and market additional services to existing customers.

COMPETITION

The solid waste services industry is highly competitive and fragmented and
requires substantial labor and capital resources. The industry presently
includes four large national waste companies: Allied Waste Industries, Inc.,
Browning-Ferris Industries, Inc., Republic Services, Inc., and Waste Management,
Inc. Casella Waste Systems, Inc., Superior Services, Inc. and Waste Industries,
Inc. are other public companies with annual revenues in excess of $100 million.
Certain of the markets in which Waste Connections competes or will likely
compete are served by one or more large, national solid waste companies, as well
as by numerous privately-held regional and local solid waste companies of
varying sizes and resources, some of which have accumulated substantial goodwill
in their markets. We also compete with operators of alternative disposal
facilities, including incinerators, and with counties, municipalities, and solid
waste districts that maintain their own waste collection and disposal
operations. Public sector operations may have financial advantages over Waste
Connections, because of their access to user fees and similar charges, tax
revenues and tax-exempt financing.

We compete for collection, transfer and disposal volume based primarily on
the price and quality of our services. From time to time, competitors may reduce
the price of their services in an effort to expand their market shares or
service areas or to win competitively bid municipal contracts. These practices
may cause Waste Connections to reduce the price of our services or, if we elect
not to do so, to lose business. We provide a substantial portion of our
residential, commercial and industrial collection services under exclusive
franchise and municipal contracts and certificates, some of which are subject to
periodic competitive bidding. We provide the balance of our services under
subscription agreements with individual households and one to five year service
contracts with commercial and industrial customers.

Intense competition exists not only for collection, transfer and disposal
volume, but also for acquisition candidates. We generally compete for
acquisition candidates with publicly owned regional and large national waste
management companies.

REGULATION

INTRODUCTION

Waste Connections' landfill operations and non-landfill operations,
including waste transportation, transfer stations, vehicle maintenance shops and
fueling facilities, are all subject to extensive and evolving federal, state and
local environmental laws and regulations, the enforcement of which has become
increasingly stringent in recent years. The environmental regulations affecting
Waste Connections are administered by the EPA and other federal, state and local
environmental, zoning, health and safety agencies. The WUTC regulates the
portion of our collection business in Washington performed under G certificates,
which generally grant Waste Connections perpetual and exclusive collection
rights in certain areas. Waste Connections is currently in substantial
compliance with applicable federal, state and local environmental laws, permits,
orders and regulations. We do not currently anticipate any material
environmental costs necessary to bring our operations into compliance (although
there can be no assurance in this regard). We anticipate that regulation,
legislation and regulatory enforcement actions related to the solid waste
services industry will continue to increase. We attempt to anticipate future
regulatory requirements and to plan in advance as necessary to comply with them.

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The principal federal, state and local statutes and regulations that apply
to our operations are described below. All of the federal statutes described
below contain provisions that authorize, under certain circumstances, lawsuits
by private citizens to enforce the provisions of the statutes. In addition to a
penalty award by the United States, some of those statutes authorize an award of
attorneys' fees to parties that successfully bring such an action. Enforcement
actions under these statutes may include both civil and criminal penalties, as
well as injunctive relief in some instances.

THE RESOURCE CONSERVATION AND RECOVERY ACT OF 1976 ("RCRA")

RCRA regulates the generation, treatment, storage, handling, transportation
and disposal of solid waste and requires states to develop programs to ensure
the safe disposal of solid waste. RCRA divides solid waste into two groups,
hazardous and nonhazardous. Wastes are generally classified as hazardous if they
either (i) are specifically included on a list of hazardous wastes, or (ii)
exhibit certain characteristics defined as hazardous. Household wastes are
specifically designated as nonhazardous. Wastes classified as hazardous under
RCRA are subject to much stricter regulation than wastes classified as
nonhazardous, and businesses that deal with hazardous waste are subject to
regulatory obligations in addition to those imposed on handlers of nonhazardous
waste.

The EPA regulations issued under Subtitle C of RCRA impose a comprehensive
"cradle to grave" system for tracking the generation, transportation, treatment,
storage and disposal of hazardous wastes. The Subtitle C Regulations impose
obligations on generators, transporters and disposers of hazardous wastes, and
require permits that are costly to obtain and maintain for sites where such
material is treated, stored or disposed. Subtitle C requirements include
detailed operating, inspection, training and emergency preparedness and response
standards, as well as requirements for manifesting, record keeping and
reporting, corrective action, facility closure, post-closure and financial
responsibility. Most states have promulgated regulations modeled on some or all
of the Subtitle C provisions issued by the EPA. Some state regulations impose
different, additional and more stringent obligations, and may regulate certain
materials as hazardous wastes that are not so regulated under the federal
Subtitle C Regulations. From the date of inception through January 19, 1999,
Waste Connections did not, to our knowledge, transport hazardous wastes under
circumstances that would subject Waste Connections to hazardous waste
regulations under RCRA. Some of our ancillary operations (e.g., vehicle
maintenance operations) may generate hazardous wastes. Waste Connections manages
these wastes in substantial compliance with applicable laws.

In October 1991, the EPA adopted the Subtitle D Regulations governing solid
waste landfills. The Subtitle D Regulations, which generally became effective in
October 1993, include location restrictions, facility design standards,
operating criteria, closure and post-closure requirements, financial assurance
requirements, groundwater monitoring requirements, groundwater remediation
standards and corrective action requirements. In addition, the Subtitle D
Regulations require that new landfill sites meet more stringent liner design
criteria (typically, composite soil and synthetic liners or two or more
synthetic liners) intended to keep leachate out of groundwater and have
extensive collection systems to carry away leachate for treatment prior to
disposal. Groundwater monitoring wells must also be installed at virtually all
landfills to monitor groundwater quality and, indirectly, the effectiveness of
the leachate collection system. The Subtitle D Regulations also require, where
certain regulatory thresholds are exceeded, that facility owners or operators
control emissions of methane gas generated at landfills in a manner intended to
protect human health and the environment. Each state is required to revise its
landfill regulations to meet these requirements or such requirements will be
automatically imposed by the EPA on landfill owners and operators in that state.
Each state is also required to adopt and implement a permit program or other
appropriate system to ensure that landfills in the state comply with the
Subtitle D Regulations. Various states in which we operate or in which we may

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operate in the future have adopted regulations or programs as stringent as, or
more stringent than, the Subtitle D Regulations.

RCRA also regulates underground storage of petroleum and other regulated
materials. RCRA requires registration, compliance with technical standards for
tanks, release detection and reporting, and corrective action, among other
things. Certain of Waste Connections' facilities and operations are subject to
these requirements.

THE FEDERAL WATER POLLUTION CONTROL ACT OF 1972, AS AMENDED (THE "CLEAN
WATER ACT")

The Clean Water Act regulates the discharge of pollutants from a variety of
sources, including solid waste disposal sites and transfer stations, into waters
of the United States. If run-off from our transfer stations or run-off or
collected leachate from Waste Connections' owned or operated landfills is
discharged into streams, rivers or other surface waters, the Clean Water Act
would require Waste Connections to apply for and obtain a discharge permit,
conduct sampling and monitoring and, under certain circumstances, reduce the
quantity of pollutants in such discharge. Also, virtually all landfills are
required to comply with the EPA's storm water regulations issued in November
1990, which are designed to prevent contaminated landfill storm water runoff
from flowing into surface waters. We believe that our facilities comply in all
material respects with the Clean Water Act requirements. Various states in which
we operate or in which we may operate in the future have been delegated
authority to implement the Clean Water Act permitting requirements, and some of
these states have adopted regulations that are more stringent than the federal
requirements. For example, states often require permits for discharges to ground
water as well as surface water.

THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY ACT
OF 1980 ("CERCLA")

CERCLA established a regulatory and remedial program intended to provide
for the investigation and cleanup of facilities where or from which a release of
any hazardous substance into the environment has occurred or is threatened.
CERCLA's primary mechanism for remedying such problems is to impose strict joint
and several liability for cleanup of facilities on current owners and operators
of the site, former owners and operators of the site at the time of the disposal
of the hazardous substances, any person who arranges for the transportation,
disposal or treatment of the hazardous substances, and the transporters who
select the disposal and treatment facilities. CERCLA also imposes liability for
the cost of evaluating and remedying any damage to natural resources. The costs
of CERCLA investigation and cleanup can be very substantial. Liability under
CERCLA does not depend on the existence or disposal of "hazardous waste" as
defined by RCRA; it can also be based on the existence of even very small
amounts of the more than 700 "hazardous substances" listed by the EPA, many of
which can be found in household waste. In addition, the definition of "hazardous
substances" in CERCLA incorporates substances designated as hazardous or toxic
under the federal Clean Water Act, Clear Air Act and Toxic Substances Control
Act. If Waste Connections were found to be a responsible party for a CERCLA
cleanup, the enforcing agency could hold Waste Connections, or any other
generator, transporter or the owner or operator of the contaminated facility,
responsible for all investigative and remedial costs, even if others were also
liable. CERCLA also authorizes the imposition of a lien in favor of the United
States on all real property subject to, or affected by, a remedial action for
all costs for which a party is liable. CERCLA gives a responsible party the
right to bring a contribution action against other responsible parties for their
allocable shares of investigative and remedial costs. Waste Connections' ability
to obtain reimbursement from others for their allocable shares of such costs
would be limited by our ability to find other responsible parties and prove the
extent of their responsibility and by the financial resources of such other
parties. Various state laws also impose liability for investigation, cleanup and
other damages associated with hazardous substance releases.

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THE CLEAN AIR ACT

The Clean Air Act generally, through state implementation of federal
requirements, regulates emissions of air pollutants from certain landfills based
on factors such as the date of the landfill construction and tons per year of
emissions of regulated pollutants. Larger landfills and landfills located in
areas where the ambient air does not meet certain requirements of the Clean Air
Act may be subject to even more extensive air pollution controls and emission
limitations. In addition, the EPA has issued standards regulating the disposal
of asbestos-containing materials. Air permits to construct may be required for
gas collection and flaring systems, and operating permits may be required,
depending on the potential air emissions. State air regulatory programs may
implement the federal requirements but may impose additional restrictions. For
example, some state air programs uniquely regulate odor and the emission of
toxic air pollutants.

THE OCCUPATIONAL SAFETY AND HEALTH ACT OF 1970 (THE "OSH ACT")

The OSH Act is administered by the Occupational Safety and Health
Administration ("OSHA"), and in many states by state agencies whose programs
have been approved by OSHA. The OSH Act establishes employer responsibilities
for worker health and safety, including the obligation to maintain a workplace
free of recognized hazards likely to cause death or serious injury, to comply
with adopted worker protection standards, to maintain certain records, to
provide workers with required disclosures and to implement certain health and
safety training programs. Various OSHA standards may apply to Waste Connections'
operations, including standards concerning notices of hazards, safety in
excavation and demolition work, the handling of asbestos and asbestos-containing
materials, and worker training and emergency response programs.

FLOW CONTROL/INTERSTATE WASTE RESTRICTIONS

Certain permits and approvals, as well as certain state and local
regulations, may limit a landfill or transfer station to accepting waste that
originates from specified geographic areas, restrict the importation of
out-of-state waste or wastes originating outside the local jurisdiction or
otherwise discriminate against non-local waste. These restrictions, generally
known as flow control restrictions, are controversial, and some courts have held
that some flow control schemes violate constitutional limits on state or local
regulation of interstate commerce. From time to time, federal legislation is
proposed that would allow some local flow control restrictions. Although no such
federal legislation has been enacted to date, if such federal legislation should
be enacted in the future, states in which Waste Connections operates landfills
could limit or prohibit the importation of out-of-state waste or direct that
wastes be handled at specified facilities. Such state actions could adversely
affect Waste Connections' landfills. These restrictions could also result in
higher disposal costs for our collection operations. If we were unable to pass
such higher costs through to our customers, our business, financial condition
and operating results could be adversely affected.

Certain state and local jurisdictions may also seek to enforce flow control
restrictions through local legislation or contractually. In certain cases, we
may elect not to challenge such restrictions. These restrictions could reduce
the volume of waste going to landfills in certain areas, which may adversely
affect our ability to operate our landfills at their full capacity and/or reduce
the prices that we can charge for landfill disposal services. These restrictions
may also result in higher disposal costs for our collection operations. If we
were unable to pass such higher costs through to our customers, Waste
Connections' business, financial condition and operating results could be
adversely affected.

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<PAGE> 50

STATE AND LOCAL REGULATION

Each state in which Waste Connections now operates or may operate in the
future has laws and regulations governing the generation, storage, treatment,
handling, transportation and disposal of solid waste, occupational safety and
health, water and air pollution and, in most cases, the siting, design,
operation, maintenance, closure and post-closure maintenance of landfills and
transfer stations. State and local permits and approval for these operations may
be required and may be subject to periodic renewal, modification or revocation
by the issuing agencies. In addition, many states have adopted statutes
comparable to, and in some cases more stringent than, CERCLA. These statutes
impose requirements for investigation and cleanup of contaminated sites and
liability for costs and damages associated with such sites, and some provide for
the imposition of liens on property owned by responsible parties. Furthermore,
many municipalities also have ordinances, local laws and regulations affecting
Waste Connections' operations. These include zoning and health measures that
limit solid waste management activities to specified sites or activities, flow
control provisions that direct or restrict the delivery of solid wastes to
specific facilities, laws that grant the right to establish franchises for
collection services and then put such franchises out for bid, and bans or other
restrictions on the movement of solid wastes into a municipality.

Permits or other land use approvals with respect to a landfill, as well as
state or local laws and regulations, may specify the quantity of waste that may
be accepted at the landfill during a given time period, and/or specify the types
of waste that may be accepted at the landfill. Once an operating permit for a
landfill is obtained, it must generally be renewed periodically.

There has been an increasing trend at the state and local level to mandate
and encourage waste reduction at the source and waste recycling, and to prohibit
or restrict the disposal of certain types of solid wastes, such as yard wastes,
leaves and tires, in landfills. The enactment of regulations reducing the volume
and types of wastes available for transport to and disposal in landfills could
prevent Waste Connections from operating our facilities at their full capacity.

Some state and local authorities enforce certain federal laws in addition
to state and local laws and regulations. For example, in some states, RCRA, the
OSH Act, parts of the Clean Air Act and parts of the Clean Water Act are
enforced by local or state authorities instead of by the EPA, and in some states
those laws are enforced jointly by state or local and federal authorities.

PUBLIC UTILITY REGULATION

In many states, public authorities regulate the rates that landfill
operators may charge. The rates that Waste Connections may charge at the
Fairmead Landfill for the disposal of municipal solid waste are regulated by the
Madera County Board of Supervisors. The adoption of rate regulation or the
reduction of current rates in states in which Waste Connections owns or operates
landfills could adversely affect our business, financial condition and operating
results.

Solid waste collection services in all unincorporated areas of Washington
and in electing municipalities in Washington are provided under G certificates
awarded by the WUTC. The WUTC also sets rates for regulated solid waste
collection services in Washington.

RISK MANAGEMENT, INSURANCE AND PERFORMANCE BONDS

Waste Connections maintains an environmental and other risk management
programs appropriate for our business. Our environmental risk management program
includes evaluating existing facilities and potential acquisitions for
environmental law compliance. We do not presently expect environmental
compliance costs to increase above current levels, but we cannot predict whether
future acquisitions will cause such costs to increase. We also maintain a worker
safety program that encourages safe practices in the workplace. Operating
practices at all Waste Connections operations emphasize minimizing the
possibility of environmental contamination

49
<PAGE> 51

and litigation. Our facilities comply in all material respects with applicable
federal and state regulations.

We carry a broad range of insurance, which our management considers
adequate to protect our assets and operations. The coverage includes general
liability, comprehensive property damage, workers' compensation and other
coverage customary in the industry. These policies generally exclude coverage
for damages associated with environmental conditions. Because of the limited
availability and high cost of environmental impairment liability insurance, and
in light of our limited landfill operations, we have not obtained such coverage.
If Waste Connections were to incur liability for environmental cleanups,
corrective action or damage, our financial condition could be materially and
adversely affected. We will continue to investigate the possibility of obtaining
environmental impairment liability insurance, particularly if we acquire or
operate landfills other than the Fairmead Landfill, the Red Carpet Landfill and
the Butler County Landfill. We believe that most other landfill operators do not
carry such insurance.

Municipal solid waste collection contracts may require performance bonds or
other means of financial assurance to secure contractual performance. Certain
environmental regulations also require demonstrated financial assurance to meet
closure and post-closure requirements for landfills. We have not experienced
difficulty in obtaining performance bonds or letters of credit for our current
operations. At January 19, 1999, we had provided customers and various
regulatory authorities with surety bonds and letters of credit in the aggregate
amount of approximately $2.0 million to secure our obligations. Our credit
facility provides for the issuance of letters of credit in an amount up to $15
million, but any letters of credit issued reduce the availability of borrowings
for acquisitions and other general corporate purposes. If we were unable to
obtain surety bonds or letters of credit in sufficient amounts or at acceptable
rates, we could be precluded from entering into additional municipal solid waste
collection contracts or obtaining or retaining landfill operating permits.

PROPERTY AND EQUIPMENT

As of January 19, 1999, we owned and operated 32 collection operations,
eight transfer stations and two Subtitle D landfills and operated an additional
seven transfer stations, one Subtitle D landfill and seven recycling facilities.
We lease various offices and facilities, including our corporate offices in
Roseville, California. The real estate owned by Waste Connections is not subject
to material encumbrances. We own various equipment, including waste collection
and transportation vehicles, related support vehicles, carts, containers, and
heavy equipment used in landfill operations. We believe that our existing
facilities and equipment are generally adequate for our current operations.
However, we expect to make additional investments in property and equipment for
expansion and replacement of assets and in connection with future acquisitions.

EMPLOYEES

At January 19, 1999, we employed approximately 870 full-time employees,
including approximately 40 persons classified as professionals or managers,
approximately 730 employees involved in collection, transfer, disposal and
recycling operations, and approximately 100 sales, clerical, data processing or
other administrative employees.

Approximately 55 drivers and mechanics at our Vancouver, Washington
operation are represented by the Teamsters Union, with which Browning-Ferris
Industries of Washington, Inc., Waste Connections' predecessor in Vancouver,
entered a four-year collective bargaining agreement in January 1997.
Approximately 11 drivers at Arrow are currently represented by the Teamsters
Union, with which Arrow entered a three-year collective bargaining agreement in
March 1998. Approximately 65 drivers at Murrey's Disposal Company and American
Disposal Company are represent by the Teamsters Union, with which those
companies entered into a three-year collective bargaining agreement in June
1996. In addition, in July 1997, the employees

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<PAGE> 52

at our facility in Issaquah, Washington, adopted a measure to select a union to
represent them in labor negotiations with management. The union and management
operated under a one-year negotiating agreement that ended on July 27, 1998.
Since that date, negotiations have continued between the union and Waste
Connections, although the union is permitted to call a strike or call for
arbitration of the outstanding issues. The employees at Issaquah have filed to
decertify the union, and the union has filed a claim with the National Labor
Relations Board to attempt to block the decertification. We are not aware of any
other organizational efforts among our employees and believe that our relations
with our employees are good.

LEGAL PROCEEDINGS

Waste Connections is a party to various legal proceedings in the ordinary
course of business and as a result of the extensive governmental regulation of
the solid waste industry. Management does not believe that these proceedings,
either individually or in the aggregate, are likely to have a material adverse
effect on our business, financial condition, operating results or cash flows.

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<PAGE> 53

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information concerning Waste
Connections' executive officers and directors as of January 19, 1999:

<TABLE>
<CAPTION>
NAME AGE POSITIONS
---- --- ---------
<S> <C> <C>
Ronald J. 35 President, Chief Executive Officer and Chairman
Mittelstaedt(1)(2).........
Steven F. Bouck.............. 41 Executive Vice President and Chief Financial Officer
Eugene V. Dupreau(3)......... 51 Vice President -- Madera; Director
Charles B. Youngclaus........ 58 Vice President -- Madera; Advisory Director
Darrell W. Chambliss......... 34 Vice President -- Operations; Secretary
Michael R. Foos.............. 33 Vice President and Corporate Controller
Eric J. Moser................ 32 Treasurer and Assistant Corporate Controller
David M. Hall................ 41 Vice President -- Business Development
Michael W. Harlan(1)(2)(3)... 37 Director
William J. 51 Director
Razzouk(1)(2)(3)...........
Irmgard R. Wilcox............ 56 Vice President -- Finance -- Northern Washington;
Director Nominee
</TABLE>

- ---------------
(1) Member of the Executive Committee.

(2) Member of the Audit Committee.

(3) Member of the Compensation Committee.

Ronald J. Mittelstaedt has been President, Chief Executive Officer and a
director of Waste Connections since the company was formed, and was elected
Chairman in January 1998. He also served as a consultant to Waste Connections in
August and September 1997. Mr. Mittelstaedt has more than ten years of
experience in the solid waste industry. He served as a consultant to United
Waste Systems, Inc., with the title of Executive Vice President, from January
1997 to August 1997, where he was responsible for corporate development for all
states west of Colorado. As Regional Vice President of USA Waste Services, Inc.
(including Sanifill, Inc., which was acquired by USA Waste Services, Inc.) from
November 1993 to January 1997, he was responsible for all operations in 16
states and Canada. Mr. Mittelstaedt held various positions at Browning-Ferris
Industries, Inc. from August 1987 to November 1993, most recently as Division
Vice President in northern California, overseeing the San Jose market.
Previously he was the District Manager responsible for BFI's operations in
Sacramento and the surrounding areas. He holds a B.S. in Finance from the
University of California at Santa Barbara.

Steven F. Bouck has been Executive Vice President and Chief Financial
Officer of Waste Connections since February 1998. Mr. Bouck held various
positions with First Analysis Corporation from 1986 to 1998, including most
recently as Managing Director coordinating corporate finance. In that capacity,
he provided merger and acquisition advisory services to companies in the
environmental industry. Mr. Bouck was also responsible for assisting in
investing venture capital funds focused on the environmental industry that were
managed by First Analysis. In connection with those investments, he served on
the boards of directors of several companies. While at First Analysis, Mr. Bouck
also provided analytical research coverage of a number of publicly traded
environmental services companies. Mr. Bouck holds B.S. and M.S. degrees in
mechanical engineering from Rensselaer Polytechnic Institute and an M.B.A. in
Finance from the Wharton School. He has been a Chartered Financial Analyst since
1990.

Eugene V. Dupreau has been Vice President -- Madera and a director of Waste
Connections since February 23, 1998. Mr. Dupreau served as President and a
director of Madera Disposal Systems, Inc. beginning in 1981 and 1985,
respectively, and held both positions until Waste Connections acquired Madera in
1998. Mr. Dupreau holds a B.S. in Business Administration from

52
<PAGE> 54

Fresno State University and has completed advanced coursework in waste
management. He serves as a director of several civic and charitable
organizations in Madera County.

Charles B. Youngclaus has been Vice President -- Madera and an advisory
director of Waste Connections since February 23, 1998. Mr. Youngclaus founded
Madera Disposal Systems, Inc. in 1981 and was its Chief Operating Officer and
Vice President before Waste Connections acquired it in 1998. Mr. Youngclaus
owned and operated Madera's predecessor company, Madera County Disposal, from
1965 to 1981. Mr. Youngclaus holds a B.S. from Fresno State University and has
completed advanced coursework in waste management, including certification in
clay liner construction by the University of Texas in 1992. Mr. Youngclaus is a
Board Member of the California Refuse Removal Council and is incoming Treasurer
of the Northern California chapter.

Darrell W. Chambliss has been Vice President -- Operations and Secretary of
Waste Connections since October 1, 1997. Mr. Chambliss held various management
positions at USA Waste Services, Inc. (including Sanifill, Inc. and United
Waste, Inc., both of which were acquired by USA Waste Services, Inc.) from April
1995 to September 1997, including most recently Division Manager in Corning,
California, where he was responsible for the operations of 19 operating
companies as well as supervising and integrating acquisitions. From July 1989 to
April 1995, he held various management positions with Browning-Ferris
Industries, Inc., including serving as Assistant District Manager in San Jose,
California, where he was responsible for a significant hauling operation, and
serving as District Manager in Tucson, Arizona for more than three years. Mr.
Chambliss holds a B.S. in Business Administration from the University of
Arkansas.

Michael R. Foos has been Vice President and Corporate Controller of Waste
Connections since October 1, 1997. Mr. Foos served as Division Controller of USA
Waste Services, Inc. (including Sanifill, Inc., which was acquired by USA Waste
Services, Inc.) from October 1996 to September 1997, where he was responsible
for financial compilation and reporting and acquisition due diligence for a
seven-state region. Mr. Foos served as Assistant Regional Controller at USA
Waste Services, Inc. from August 1995 to September 1996, where he was
responsible for internal financial reporting for operations in six states and
Canada. Mr. Foos also served as District Controller for Waste Management, Inc.
from February 1990 to July 1995, and was a member of the audit staff of Deloitte
& Touche from 1987 to 1990. Mr. Foos holds a B.S. in Accounting from Ferris
State University.

David M. Hall has been Vice President -- Business Development since August
1, 1998. Mr. Hall has over twelve years of experience in the solid waste
industry with extensive operating and marketing experience in the Western U.S.
From October, 1995 to July 1998, Mr. Hall was the Divisional Vice President of
USA Waste Services, Inc., Rocky Mountain Division (including for Sanifill, Inc.
which was acquired by USA Waste Services, Inc.). In that position, he oversaw
all operations and business development in six Rocky Mountain states. Prior to
his employment with Sanifill, Mr. Hall held various management positions with
BFI from October 1986 to October 1995, including Vice President of Sales for the
Western United States. Mr. Hall was employed from 1979 to 1986 in a variety of
sales and marketing management positions in the high technology sector. Mr. Hall
received a BS degree in Management and Marketing in 1979 from SW Missouri State
University.

Eric J. Moser has been Waste Connections' Treasurer and Assistant Corporate
Controller since October 1, 1997. From August 1995 to September 1997, Mr. Moser
held various finance positions at USA Waste Services, Inc. (including Sanifill,
Inc., which was acquired by USA Waste Services, Inc.), most recently as
Controller of the Ohio Division, where he was responsible for internal financial
compilation and reporting and acquisition due diligence. Previously Mr. Moser
was Controller of the Michigan Division of USA Waste Services, Inc., where he
was responsible for internal financial reporting. Mr. Moser served as Controller
for Waste Management, Inc. from June 1993 to August 1995, where he was
responsible for internal financial reporting for a hauling

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<PAGE> 55

company, landfill and transfer station. Mr. Moser holds a B.S. in Accounting
from Illinois State University.

Michael W. Harlan has been a director of Waste Connections since January
30, 1998. From November 1997 to January 30, 1998, Mr. Harlan served as a
consultant to Waste Connections on various financial matters. From March 1997 to
August 1998, Mr. Harlan was Vice President and Chief Financial Officer of Apple
Orthodontix, Inc., a publicly traded company that provides practice management
services to orthodontic practices in the U.S. and Canada. From April 1991 to
December 1996, Mr. Harlan held various positions in the finance and acquisition
departments of USA Waste Services, Inc. (including Sanifill, Inc., which was
acquired by USA Waste Services, Inc.), including serving as Treasurer and
Assistant Secretary beginning in September 1993. From May 1982 to April 1991,
Mr. Harlan held various positions in the tax and corporate financial consulting
services division of Arthur Andersen LLP, where he was a Manager since July
1986. Mr. Harlan is a Certified Public Accountant and holds a B.A. from the
University of Mississippi.

William J. Razzouk has been a director of Waste Connections since January
30, 1998. Since September 1998, Mr. Razzouk has been Chairman and Chief
Executive Officer of PlanetRx, an e-commerce start-up focused on healthcare,
filling of prescriptions, over-the-counter medicines, health and beauty products
and medical supplies. From April 1998 until September 1998, Mr. Razzouk owned a
management consulting business and an investment company that focused on
identifying strategic acquisitions. From September 1997 until April 1998, he was
also the President, Chief Operating Officer and a director of Storage USA, Inc.,
a publicly traded real estate investment trust that owns and operates more than
350 mini storage warehouses. He served as the President and Chief Operating
Officer of America Online from February 1996 to June 1996. From 1983 to 1996,
Mr. Razzouk held various management positions at Federal Express Corporation,
most recently as Executive Vice President, World Wide Customer Operations, with
full worldwide profit and loss responsibility. Mr. Razzouk previously held
management positions at ROLM Corporation, Philips Electronics and Xerox
Corporation. He is a member of the Board of Directors of Fritz Companies, Inc.
and previously was a director of Sanifill, Inc., Cordis Corp. and La Quinta
Motor Inns. He holds a Bachelor of Journalism degree from the University of
Georgia.

Irmgard R. Wilcox has been Vice President -- Finance -- Northern Washington
of Waste Connections since January 19, 1999. We have agreed with the former
shareholders of the Murrey Companies to appoint Ms. Wilcox to the Waste
Connections Board of Directors at the next meeting of the Board. She is not yet
a director. Ms. Wilcox served as Chief Financial Officer, Secretary and
Treasurer of the Murrey Companies from 1982 until they merged with Waste
Connections in 1999. Ms. Wilcox joined the Murrey Companies in 1975. She holds a
B.A. in Business Administration from Pacific Lutheran University with a
concentration in accounting.

CLASSIFICATION OF BOARD OF DIRECTORS

The Board of Directors is divided into three classes. The term of office of
the first class (currently comprised of Eugene V. Dupreau) will expire at the
annual meeting of stockholders following the fiscal year ending December 31,
1998. The term of office of the second class (currently comprised of Michael W.
Harlan and William J. Razzouk) will expire at the annual meeting of stockholders
following the fiscal year ending December 31, 1999. The term of office of the
third class (currently comprised of Ronald J. Mittelstaedt and, when she is
appointed to the Board, Irmgard R. Wilcox) will expire at the annual meeting of
stockholders following the fiscal year ending December 31, 2000. At each annual
meeting, stockholders will elect successors to the directors of the class whose
term expires at such meeting, to serve for three-year terms and until their
successors are elected and qualified. See "Description of Capital Stock --
Certain Charter and By-Law Provisions -- Classified Board of Directors."

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<PAGE> 56

COMMITTEES OF THE BOARD

The Board of Directors has established an Executive Committee, an Audit
Committee and a Compensation Committee. A majority of the members of the
Executive Committee are, and both members of each of the Audit and Compensation
Committees are, independent directors who are not employees of Waste Connections
or one of our subsidiaries.

COMPENSATION OF DIRECTORS

Directors who are officers or employees of Waste Connections do not
currently receive any compensation for attending meetings of the Board of
Directors. Each independent director receives a fee of $1,500 for attending each
Board meeting and each committee meeting (unless held on the same day as the
full Board meeting), in addition to reimbursement of reasonable expenses.

Each independent director who has not been an employee of Waste Connections
at any time during the 12 months preceding his initial election and appointment
to the Board is granted an option to purchase 15,000 shares of our common stock
at the time of his or her initial election or appointment. Waste Connections
granted to each of Messrs. Harlan and Razzouk options to purchase 15,000 shares
of common stock at $3.00 per share, which became exercisable on October 1, 1998.

Beginning in 1999, Waste Connections will grant each independent director,
on February 1 of each year during which such person serves on the Board, an
option to purchase 7,500 shares of our common stock. All such options will have
an exercise price equal to the fair market value of the common stock on the
grant date, will vest in full on the grant date, and will expire upon the
earlier to occur of ten years after the grant date or one year after the
director ceases to be a member of the Board.

EXECUTIVE COMPENSATION

Summary Compensation Information

Waste Connections was incorporated in September 1997. The following table
contains information about the annual and long-term compensation earned in 1997
and 1998 by the Chief Executive Officer and the other executive officers who
were paid or earned more than $100,000. The persons named in the table are
sometimes referred to herein as the "named executive officers." No officer other
than Mr. Mittelstaedt was paid or earned more than $100,000 in 1997. The Chief
Executive Officer has been compensated in accordance with the terms of his
Employment Agreement described below.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------
SHARES
ANNUAL COMPENSATION UNDERLYING
----------------------------- RESTRICTED OPTIONS/WARRANTS ALL OTHER
YEAR SALARY BONUS OTHER STOCK GRANTED(2) COMPENSATION
---- ------- ------- ------- ---------- ---------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ronald J. Mittelstaedt........... 1997 $39,903(1) $25,000(1) -- -- 200,000 $10,000(3)
1998 176,577 100,000 $10,254 -- -- --
Steven F. Bouck.................. 1998 92,887 150,000 -- -- 250,000 --
Darrell W. Chambliss............. 1998 89,972 76,882 -- -- -- --
Michael R. Foos.................. 1998 89,809 67,039 -- -- -- --
Eric J. Moser.................... 1998 74,115 31,563 -- -- -- --
</TABLE>

- ---------------
(1) Mr. Mittelstaedt's salary and bonus figures for 1997 reflect employment from
October 1, 1997 through December 31, 1997. His bonus figure for 1997
reflects the portion earned during 1997; such bonus was paid in 1998.

55
<PAGE> 57

(2) See "Option and Warrant Grants" below.

(3) Consists of consulting fees for services rendered prior to Waste
Connections' organization.

Stock Options and Warrants

Option and Warrant Grants. The following table contains information
concerning the grant of options and warrants to purchase shares of our common
stock during 1998 to the named executive officers. No options or warrants were
granted to Messrs. Mittlestaedt, Chambliss, Foos or Moser in 1998.

1998 OPTION AND WARRANT GRANTS

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF
NUMBER OF OPTIONS AND STOCK PRICE
SHARES WARRANT APPRECIATION FOR
UNDERLYING GRANTED TO OPTION/WARRANT
OPTIONS AND EMPLOYEES TERM(3)
NAME OF WARRANT IN EXERCISE PRICE EXPIRATION -----------------------
BENEFICIAL OWNER GRANTED(1) 1998 PER SHARE(2) DATE 5% 10%
---------------- ----------- ----------- -------------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Steven F. Bouck........ 150,000 29.4% $ 2.80 Jan. 31, 2008 $3,873,956 $6,134,140
50,000 9.8% 9.50 Jan. 31, 2008 956,319 1,709,713
50,000 9.8% 12.50 Jan. 31, 2008 806,319 1,559,713
</TABLE>

- ---------------
(1) All options vested 33% on October 1, 1998, and will vest an additional 33%
on October 1, 1999, and 34% on October 1, 2000.

(2) The options and warrant were granted at or above fair market value as
determined by the Board of Directors on the date of grant.

(3) Amounts reported in these columns represent amounts that the named executive
officer could realize on exercise of options and the warrant immediately
before they expire, assuming that our common stock appreciates at 5% or 10%
annually. These amounts do not take into account taxes and expenses that may
be payable on such exercise. The amount actually realized will depend on the
price of our common stock when the options are exercised, which may be
before the term expires. The Commission requires the table to reflect 5% and
10% annualized rates of stock price appreciation; we do not project those
rates. Our common stock may not appreciate at those rates.

Option and Warrant Values. The following table shows information about the
named executive officers' exercises of options and warrants during 1998 and the
value of their unexercised options and warrants outstanding as of December 31,
1998.

AGGREGATED OPTION EXERCISES IN 1998 AND YEAR-END OPTION AND WARRANT VALUES

<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED IN-
UNDERLYING UNEXERCISED THE-MONEY OPTIONS AND
OPTIONS AND WARRANT AT WARRANT AT
SHARES DECEMBER 31, 1998 DECEMBER 31, 1998(1)
ACQUIRED VALUE --------------------------- ---------------------------
ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ronald J. Mittelstaedt... -- -- 133,000 67,000 $2,071,475 $1,043,525
Steven F. Bouck.......... 92,919 $861,311 23,749 133,332 160,711 1,529,985
Darrell W. Chambliss..... -- -- 50,000 100,000 650,422 1,300,828
Michael R. Foos.......... -- -- 50,000 100,000 650,422 1,300,828
Eric J. Moser............ -- -- 28,334 56,666 351,466 702,909
</TABLE>

- ---------------

(1) Based on the closing price of our common stock of $18.375 on the Nasdaq
National Market on December 31, 1998, less the per share exercise price.

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<PAGE> 58

EMPLOYMENT AGREEMENTS

We have entered into employment agreements with Steven F. Bouck, Eugene V.
Dupreau, Charles B. Youngclaus, Darrell W. Chambliss, Michael R. Foos, Eric J.
Moser and David M. Hall. Each agreement has a three-year term.

Waste Connections entered into an employment agreement with Ronald J.
Mittelstaedt, the President and the Chief Executive Officer, on October 1, 1997.
The initial annual base salary was $170,000. Mr. Mittelstaedt's base salary was
adjusted to $200,000 on October 1, 1998.

The agreement has an initial five-year term, and then automatically renews
for additional successive one-year terms unless terminated earlier upon written
notice of either Mr. Mittelstaedt or Waste Connections or extended further by
the Board. Waste Connections or Mr. Mittelstaedt may terminate the agreement
with or without cause at any time. If we terminate the agreement without cause
(as defined in the agreement) or if Mr. Mittelstaedt terminates the agreement
for good reason (as defined in the agreement), we are required to make certain
severance payments, and all of Mr. Mittelstaedt's unvested options, warrants and
rights relating to capital stock of Waste Connections will immediately vest. A
change of control of Waste Connections (as defined in the agreement) is
generally treated as a termination of Mr. Mittelstaedt without cause.

Under the employment agreement, Waste Connections sold Mr. Mittelstaedt
617,500 shares of our common stock for $0.01 per share and 357,143 shares of our
Series A Preferred Stock for $1,000,000. Mr. Mittelstaedt may recommend nominees
for election to the Board of Directors. If the Board has five or fewer members,
Mr. Mittelstaedt may recommend two nominees, and if it consists of more than
five members, he may recommend three nominees.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The full Board of Directors served as the compensation committee of the
Board during 1997. When the employment agreement with Mr. Mittelstaedt was
approved by the Board of Directors, Mr. Mittelstaedt was one of three members of
the Board of Directors. No executive officer of Waste Connections served as a
director or member of the compensation committee of another entity, one of whose
executive officers served as a director or member of the Compensation Committee
of Waste Connections.

1997 STOCK OPTION PLAN

The 1997 Stock Option Plan (the "Stock Option Plan") was adopted by the
Board of Directors effective as of October 1, 1997, and was approved by the
stockholders on March 12, 1998 and amended on January 19, 1999. The Stock Option
Plan is intended to provide employees, consultants and directors with additional
incentives by increasing their proprietary interests in Waste Connections. Under
the Stock Option Plan, Waste Connections may grant options with respect to a
maximum of 12% of the shares of Waste Connections common stock outstanding at
any given time. As of January 19, 1999, we had options to purchase 978,764
shares of common stock outstanding at a weighted average exercise price of $7.37
per share.

The Compensation Committee of the Board of Directors currently administers
the Stock Option Plan. The administrator of the Stock Option Plan determines the
employees, consultants and directors to whom options are granted (the
"Optionees"), the type, size and term of the options, the grant date, the
expiration date, the vesting schedule and other terms and conditions of the
options.

The Stock Option Plan provides for the grant of incentive stock options
("ISOs") as defined in section 422 of the Internal Revenue Code, as amended, and
nonqualified stock options. Only Waste Connections employees may receive ISOs.
The aggregate fair market value, as of the grant date, of the common stock
subject to ISOs that become exercisable by any employee during any calendar year
may not exceed $100,000. Options generally become exercisable in installments
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<PAGE> 59

pursuant to a vesting schedule set forth in the option agreement. No option may
be granted after September 30, 2007. No option will remain exercisable later
than 10 years after the grant date (or five years in the case of ISOs granted to
Optionees owning more than 10% of the total combined voting power of all classes
of Waste Connections' outstanding capital stock (a "Ten Percent Stockholder")).
The exercise price of ISOs granted under the Stock Option Plan must be at least
the fair market value of a share of common stock on the grant date (or 110% of
such fair market value, in the case of ISOs granted to Ten Percent
Stockholders).

If an Optionee with outstanding options retires or becomes disabled and
does not die within the three months after retirement or disability, the
Optionee may exercise his or her options, but generally only within the period
ending on the earlier of: (i) six months after retirement or disability; or (ii)
the expiration of the option set forth in the option agreement. If the Optionee
does not exercise his or her options within that time period, the options
terminate, and the shares of common stock subject to the options become
available for issuance under the Stock Option Plan. If the Optionee ceases to be
an employee, consultant or director of Waste Connections other than because of
retirement, death or disability, his or her options generally terminate on the
date such relationship terminates, and the shares of common stock subject to the
options become available for issuance under the Stock Option Plan. Each option
agreement may give Waste Connections the right to repurchase shares acquired by
an Optionee under the Stock Option Plan upon termination of the Optionee.

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CERTAIN TRANSACTIONS

INITIAL FUNDING

In September and October 1997, Waste Connections sold 2,300,000 shares of
common stock at $0.01 per share and 2,499,998 shares of Series A Preferred Stock
at $2.80 per share to 19 accredited investors, including certain officers and
directors of Waste Connections, in a private placement. The sales were made in
accordance with Regulation D under the Securities Act of 1933, as amended (the
"Securities Act"). The investors included the following officers and directors
of Waste Connections, their immediate family members, and entities controlled by
them:

Mittelstaedt Family Trust dated 6/18/97 (trustee is Ronald J.
Mittelstaedt, President, Chief Executive Officer and Chairman): 357,143
shares of Series A Preferred for $1,000,000 and 617,500 shares of common
stock for $6,175;

J. Bradford Bishop (former director; resigned January 30, 1998):
678,750 shares of common stock for $6,787.50;

James N. Cutler, Jr. (former director; resigned January 30, 1998):
678,750 shares of common stock for $6,787.50;

Bishop-Cutler L.L.C. (controlled by former directors J. Bradford
Bishop and James N. Cutler, Jr.): 339,285 shares of Series A Preferred
Stock for $950,000;

Frank W. Cutler (brother of former director James N. Cutler, Jr.):
142,857 shares of Series A Preferred Stock for $400,000 and 275,000 shares
of common stock for $2,750;

Darrell W. Chambliss (Vice President -- Operations): 20,000 shares of
common stock for $200;

Michael R. Foos (Vice President and Corporate Controller): 20,000
shares of common stock for $200;

Eric J. Moser (Treasurer and Assistant Corporate Controller): 10,000
shares of common stock for $100.

OPTIONS AND WARRANTS TO MANAGEMENT GROUP

On October 1, 1997, Darrell W. Chambliss, Michael R. Foos and Eric J. Moser
were granted options to purchase 150,000, 150,000 and 85,000 shares,
respectively, of common stock, pursuant to their respective employment
agreements with Waste Connections.

On December 15, 1997, each of then directors James N. Cutler and J.
Bradford Bishop and Board consultant Frank W. Cutler was granted a warrant to
purchase 247,000 shares of common stock at an exercise price of $2.80 per share.
Messrs. Cutler and Bishop resigned as directors on January 30, 1998, and Frank
W. Cutler's consulting relationship with the Board terminated on that date. On
December 15, 1997, Ronald J. Mittelstaedt was granted a warrant to purchase
100,000 shares of common stock at an exercise price of $2.80 per share and an
option to purchase 100,000 shares of common stock at an exercise price of $2.80
per share. All of the above warrants and options are currently exercisable,
except for the option to purchase 100,000 shares granted to Mr. Mittelstaedt,
one-third of which first becomes exercisable on each of October 1, 1998, October
1, 1999, and October 1, 2000.

On December 15, 1997, Michael W. Harlan was granted a warrant to purchase
5,000 shares of common stock at an exercise price of $2.80 per share,
exercisable on October 1, 1998. On January 30, 1998, Mr. Harlan and William J.
Razzouk were each granted an option to purchase 15,000 shares of common stock at
an exercise price of $3.00 per share, exercisable on October 1, 1998.
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<PAGE> 61

On February 1, 1998, Steven F. Bouck was granted options to purchase
200,000 shares of common stock, pursuant to his employment agreement with Waste
Connections. These options include an option to purchase 100,000 shares at an
exercise price of $2.80 per share, of which one-third is first exercisable on
each of October 1, 1998, October 1, 1999, and October 1, 2000. Of Mr. Bouck's
remaining options, an option to purchase 50,000 shares has an exercise price of
$9.50 per share, and an option to purchase 50,000 shares has an exercise price
of $12.50 per share; one-third of each of these options first becomes
exercisable on each of October 1, 1998, October 1, 1999, and October 1, 2000. On
February 1, 1998, Mr. Bouck was granted an immediately exercisable warrant to
purchase 50,000 shares of common stock at an exercise price of $2.80 per share,
which he exercised in March 1998.

On February 23, 1998, Eugene V. Dupreau and Charles B. Youngclaus were
granted warrants in connection with Waste Connections' acquisition of Madera.
See "Purchase of Madera Disposal Systems, Inc." below.

On July 7, 1998, David M. Hall was granted options to purchase 50,000
shares of common stock at an exercise price of $18.125 per share, one third of
which are first exercisable on each of October 1, 1998, October 1, 1999, and
October 1, 2000.

PURCHASE OF WASTE CONNECTIONS OF IDAHO, INC.

On January 30, 1998, Waste Connections purchased all of the outstanding
stock of Waste Connections of Idaho, Inc. from Ronald J. Mittelstaedt, J.
Bradford Bishop and James N. Cutler, Jr., the sole shareholders of Waste
Connections of Idaho, Inc. The purchase price was $3,000, which was the
aggregate price that Messrs. Mittelstaedt, Bishop and Cutler had paid initially
for the shares. Messrs. Mittelstaedt, Bishop and Cutler formed Waste Connections
of Idaho, Inc. in September 1997 for the purpose of acquiring certain assets
from Browning-Ferris Industries of Idaho, Inc.

PURCHASE OF MADERA DISPOSAL SYSTEMS, INC.

Eugene V. Dupreau was President and a 16.7% shareholder of Madera Disposal
Systems, Inc. before Waste Connections acquired it on February 23, 1998. Charles
B. Youngclaus was Chief Operating Officer and a 16.7% shareholder of Madera
before Waste Connections acquired it. For their shares of Madera's common stock,
each of Messrs. Dupreau and Youngclaus received $630,662 in cash, 333,333 shares
of Waste Connections common stock and warrants to purchase 66,667 shares of
Waste Connections common stock at an exercise price of $4.00 per share. Each of
Messrs. Dupreau and Youngclaus has been engaged by Waste Connections as Vice
President -- Madera. Mr. Dupreau was appointed a director of Waste Connections,
effective February 23, 1998.

Pursuant to the agreement under which Waste Connections acquired Madera, in
January 1999, we issued an aggregate of 15,444 additional restricted shares of
our common stock to former Madera shareholders, including Messrs. Dupreau and
Youngclaus, with respect to the successful extension of a franchise agreement
that was being negotiated by Madera at the time we acquired Madera.

PURCHASE OF YOUNGCLAUS ENTERPRISES.

On September 9, 1998, Madera Disposal Systems, Inc., a wholly-owned
subsidiary of Waste Connections, purchased the business assets of Youngclaus
Enterprises, a proprietorship, from Charles B. Youngclaus. The aggregate
purchase price was $139,000, which was paid through the issuance of 6,510
restricted shares of our common stock.

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<PAGE> 62

TRANSACTIONS WITH FIBRES INTERNATIONAL.

Waste Connections has entered into certain transactions with Continental
Paper, LLC, an Oregon limited liability company doing business as Fibres
International ("Fibres"). J. Bradford Bishop and James N. Cutler, Jr. own 60% of
the membership interests in Fibres, were directors of Waste Connections when
some of these transactions occurred and may be deemed promoters of Waste
Connections. In markets where Fibres has processing facilities (which include
three of our current markets), we deliver to Fibres' processing facilities all
of our collected recyclable materials for which Fibres pays the market rate
(adjusted to reflect our costs of transporting the materials to Fibres or
another processor) that we could otherwise obtain for such materials. We
received approximately $222,701 in gross revenues from Fibres from Waste
Connections' inception through December 31, 1997. After deducting the fees we
paid to Fibres for the right to collect the recyclables, we retained
approximately $10,860. We made net payments of $87,506 to Fibres for the
nine-month period ending September 30, 1998.

MERGERS WITH THE MURREY COMPANIES.

Donald J. Hawkins was President, Chief Executive Officer and a 5%
shareholder of the Murrey Companies before Waste Connections merged with them in
January 1999. Irmgard R. Wilcox was Chief Financial Officer, Treasurer,
Secretary and a 5% shareholder of the Murrey Companies until Waste Connections
merged with them. For their shares of the Murrey Companies' common stock, each
of Mr. Hawkins and Ms. Wilcox received 144,442 shares of Waste Connections
common stock. We have engaged Mr. Hawkins as Vice President --
Operations -- Northern Washington division and Ms. Wilcox as Vice
President -- Finance -- Northern Washington division, and have agreed to appoint
Ms. Wilcox to our Board of Directors at the next meeting of the Board. Pursuant
to their Employment Agreements, each of Mr. Hawkins and Ms. Wilcox was paid a
$2,000,000 signing bonus.

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<PAGE> 63

PRINCIPAL STOCKHOLDERS

The following table shows the amount of Waste Connections' common stock
beneficially owned, as of January 19, 1999, by: (i) each person or entity that
we know owns more than 5% of our common stock; (ii) Mr. Mittelstaedt and each
director and nominee of Waste Connections; and (iii) all current directors,
nominees and executive officers of Waste Connections as a group.

<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER(1) NUMBER PERCENTAGE
--------------------------- --------- ----------
<S> <C> <C>
Murrey Trust UTA August 5, 1993, as amended(2).............. 1,949,997 15.5%
Eugene K. Polk(2)(5)........................................ 1,311,574 10.4
Ronald J. Mittelstaedt(2)(3)................................ 1,058,376 8.3
James N. Cutler, Jr.(2)(4).................................. 977,322 7.6
J. Bradford Bishop(2)(4).................................... 916,607 7.2
Frank W. Cutler(2)(4)....................................... 672,246 5.2
Bonnie L. Murrey Revocable Trust UTA August 5, 1993, as
amended(2)................................................ 649,999 5.2
Eugene V. Dupreau(2)(6)..................................... 407,148 3.2
Irmgard R. Wilcox(2)........................................ 144,944 1.2
Michael W. Harlan(2)(7)..................................... 20,000 0.2
William J. Razzouk(2)(8).................................... 15,000 0.1
All executive officers and directors as a group (11
persons).................................................. 2,385,695 18.2
</TABLE>

- ---------------
(1) Beneficial ownership is determined in accordance with the rules of the
Commission. In general, a person who has voting power and/or investment
power with respect to securities is treated as the beneficial owner of those
securities. Shares of common stock subject to options and/or warrants
currently exercisable or exercisable within 60 days of the date of this
prospectus count as outstanding for computing the percentage beneficially
owned by the person holding such options. Except as otherwise indicated by
footnote, we believe that the persons named in this table have sole voting
and investment power with respect to the shares of common stock shown.

(2) The address of the Murrey Trust and the Bonnie L. Murrey Revocable Trust is
c/o US Bank, 5580 Pacific Highway, Suite A, Fife, Washington 98424. The
address of Mr. Mittelstaedt is 2260 Douglas Boulevard, Suite 280, Roseville,
California 95661. The address of J. Bradford Bishop and James N. Cutler, Jr.
is 6950 S.W. Hampton Street, Suite 200, Portland, Oregon 97223. The address
of Eugene P. Polk is P.O. Box 1151, Prescott, Arizona 86302. The address of
Frank W. Cutler is 711 North Bayfront, Newport Beach, California 92662. The
address of Eugene V. Dupreau is Madera Disposal Systems, Inc., 21739 Road
19, Chowchilla, California 93610. The address of Michael W. Harlan is 2777
Allen Parkway, Suite 700, Houston, Texas 77019. The address of William J.
Razzouk is 5915 River Oaks Road, Memphis, Tennessee 38120. The address of
Irmgard R. Wilcox is 4622 70 Avenue East, Fife, Washington 98731.

(3) Includes 100,000 shares purchasable under currently exercisable warrants and
33,333 shares purchasable under currently exercisable options. Also includes
567,900 shares held by the Mittelstaedt Family Trust dated 6/18/97, of which
Mr. Mittelstaedt is the Trustee.

(4) Includes 247,000 shares purchasable under currently exercisable warrants.

(5) Includes 297,704 shares beneficially owned through three trusts for which
Eugene Polk serves as a trustee (190,562 shares -- Eugene P. Polk and
Barbara J. Polk Revocable Trust U/A 11/18/68; 53,571 shares -- Margaret T.
Morris Trust U/A 5/1/67; and 53,571 shares -- Margaret T. Morris Trust U/A
4/19/69); and 170,714 shares held by the Polk Investment Partnership 93-1,
for which Eugene Polk serves as a Manager; and 281,052 shares held by
Kieckhefer Trust Partnership, for which Eugene Polk serves as Manager; and
562,104 shares held by Kieckhefer Partnership 84-1, for which Eugene Polk
serves as Managing Partner.

(6) Includes 66,667 shares purchasable under immediately exercisable warrants
and 5,000 shares purchasable under immediately exercisable options.

(7) Includes 5,000 shares purchasable under immediately exercisable warrants and
15,000 shares purchasable under immediately exercisable options.

(8) Includes 15,000 shares purchasable under immediately exercisable options.

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<PAGE> 64

DESCRIPTION OF CAPITAL STOCK

GENERAL

The authorized capital stock of Waste Connections consists of 50,000,000
shares of common stock, par value $0.01 per share, and 10,000,000 shares of
Preferred Stock, par value $0.01 per share (the "Preferred Stock"). As of
January 19, 1999, there were 12,576,798 shares of common stock outstanding and
no shares of Preferred Stock outstanding.

COMMON STOCK

The holders of shares of common stock are entitled to one vote per share
held on all matters submitted to a vote at a meeting of stockholders. Cumulative
voting for the election of directors is not permitted. Subject to any
preferences to which holders of Preferred Stock are entitled, the holders of
outstanding shares of common stock are entitled to receive ratably any dividends
that the Board of Directors declares. If Waste Connections liquidates, dissolves
or winds up, the holders of shares of common stock are entitled to receive pro
rata all assets of Waste Connections that are available for distribution to
stockholders. The holders of shares of common stock do not have any preemptive,
subscription, redemption, conversion or sinking fund rights. The outstanding
shares of common stock, and the shares of common stock to be issued pursuant to
this prospectus, are fully paid and nonassessable.

PREFERRED STOCK

Waste Connections is authorized by the Amended and Restated Certificate of
Incorporation to issue a maximum of 10,000,000 shares of Preferred Stock, in one
or more series. The Board determines the rights, privileges and limitations of
Preferred Stock, including dividend rights, voting rights, conversion
privileges, redemption rights, liquidation rights and/or sinking fund rights.
Preferred Stock may be issued in the future in connection with acquisitions,
financings or such other matters as the Board of Directors believes appropriate.
There are no shares of Preferred Stock outstanding, and we have no current plans
to issue Preferred Stock.

One effect of having Preferred Stock authorized is that the Board of
Directors alone may be able to authorize the issuance of Preferred Stock in ways
that render more difficult or discourage an attempt to obtain control of Waste
Connections by a tender offer, proxy contest, merger or otherwise, and thereby
protect the continuity of Waste Connections' management. The issuance of shares
of Preferred Stock may adversely affect the voting and other rights of holders
of common stock. For example, Preferred Stock may rank prior to the common stock
as to dividend rights, liquidation preferences or both, may have full or limited
voting rights and may be convertible into common stock. Accordingly, the
issuance of Preferred Stock may discourage bids for the common stock or
otherwise adversely affect the market price of the common stock.

CERTAIN STATUTORY, CHARTER AND BY-LAW PROVISIONS

Classified Board of Directors. Waste Connections' amended and Restated
Certificate of Incorporation (the "Restated Certificate") provides that the
Board will be divided into three classes serving staggered terms, and that the
number of directors in each class will be as nearly equal as is possible based
on the number of directors constituting the entire Board. At each annual meeting
of stockholders, successors to directors of the class whose term expires at such
meeting will be elected to serve for three-year terms.

The classification of directors makes it more difficult for stockholders to
change the composition of the Board. At least two annual meetings of
stockholders, instead of one, will generally be required to change the majority
of the Board. This delay may help ensure that Waste Connections' directors, if
confronted by a third party attempting to force a proxy contest, a tender or
exchange offer or other extraordinary corporate transaction, would have
sufficient time to
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review the proposal and available alternatives and to act in what they believe
to be the best interests of the stockholders. However, such classification could
also discourage a third party from initiating a proxy contest, making a tender
offer or otherwise attempting to obtain control of Waste Connections, even
though such an attempt might benefit Waste Connections and our stockholders. The
classification of the Board could thus make it more likely that incumbent
directors will retain their positions.

Number of Directors; Removal; Filling Vacancies. The Restated Certificate
provides that the number of directors will be fixed from time to time by a
majority of the directors then in office. In no event may there be less than
three or more than nine directors, unless approved by at least two-thirds of the
directors then in office. In addition, the Restated Certificate provides that
newly created directorships resulting from an increase in the authorized number
of directors, vacancies on the Board resulting from death, resignation,
retirement, disqualification or removal of directors or any other cause may be
filled only by the Board (and not by the stockholders unless there are no
directors in office), if a quorum is then in office and present, or by a
majority of the directors then in office, if less than a quorum is then in
office, or by the sole remaining director. Accordingly, the Board could prevent
any stockholder from enlarging the Board and filling the new directorships with
such stockholder's own nominees.

The Restated Certificate allows directors to be removed only for cause and
only on the affirmative vote of holders of at least 66 2/3% of the voting power
of all the then outstanding shares of stock entitled to vote generally in the
election of directors ("Voting Stock"), voting together as a single class.

The provisions of the Restated Certificate governing the number of
directors, their removal and the filling of vacancies may discourage a third
party from initiating a proxy contest, making a tender offer or otherwise
attempting to gain control of Waste Connections, or attempting to change the
composition or policies of the Board, even though such attempts might benefit
Waste Connections or our stockholders. These provisions of the Restated
Certificate could thus increase the likelihood that incumbent directors retain
their positions.

Limitation on Special Meetings; No Stockholder Action by Written
Consent. The Restated Certificate and the Amended and Restated By-laws (the
"Restated By-laws") provide that: (i) only a majority of the Board of Directors
or the President or Chairman of the Board may call a special meeting of
stockholders; (ii) only matters stated in the notice of meeting or properly
brought before the meeting by or at the direction of the Board of Directors may
be transacted at the meeting; and (iii) stockholder action may be taken only at
a duly called and convened annual or special meeting of stockholders and may not
be taken by written consent. These provisions, taken together, prevent
stockholders from forcing consideration of stockholder proposals over the
opposition of the Board, except at an annual meeting.

Advance Notice Provisions for Stockholder Nominations and Stockholder
Proposals. The Restated By-laws establish an advance notice procedure for
stockholders to make nominations of candidates for election as director, or to
bring other business before an annual meeting of stockholders of Waste
Connections (the "Stockholder Notice Procedure"). In general, only persons who
are nominated by or at the direction of the Board, any committee appointed by
the Board, or by a stockholder who has given timely written notice to the
Secretary of Waste Connections, may be elected as directors. At an annual
meeting, only business that has been brought before the meeting by, or at the
direction of, the Board, any committee appointed by the Board, or by a
stockholder who has given timely written notice to the Secretary of Waste
Connections, may be conducted. To be timely, notice of stockholder nominations
or proposals to be made at an annual or special meeting must be received by
Waste Connections not less than 60 days nor more than 90 days before the
scheduled date of the meeting (or, if less than 70 days' notice or prior public
disclosure of the date of the meeting is given, then the 15th day following the
earlier of the day such notice was mailed or the day such public disclosure was
made).

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<PAGE> 66

By requiring advance notice of nominations by stockholders, the Stockholder
Notice Procedure gives the Board an opportunity to consider the qualifications
of the proposed nominees and inform stockholders about such qualifications. By
requiring advance notice of other proposed business, the Stockholder Notice
Procedure provides a more orderly procedure for conducting annual meetings of
stockholders. It also gives the Board an opportunity to inform stockholders in
advance of any business proposed to be conducted at such meetings, together with
the Board's recommendations regarding action to be taken with respect to such
business, so that stockholders can better decide whether to attend such a
meeting or to grant a proxy regarding the disposition of any such business.

Although the Restated By-laws do not give the Board any power to approve or
disapprove stockholder nominations for the election of directors or proposals
for action, the Stockholder Notice Procedure may preclude a contest for the
election of directors or the consideration of stockholder proposals. It may also
discourage or deter a third party from soliciting proxies to elect its own slate
of directors or to approve its own proposal, even though consideration of such
nominees or proposals might benefit Waste Connections and our stockholders.

Certain Provisions Relating to Potential Change of Control. The Restated
Certificate authorizes the Board and any committee of the Board to take such
action as it determines to be reasonably necessary or desirable to encourage any
person or entity to enter into negotiations with the Board and management about
transactions that may result in a change of control of Waste Connections. The
Board and its committees may also contest or oppose any such transaction that
the Board determines to be unfair, abusive or otherwise undesirable to Waste
Connections, our business, assets, properties or stockholders. The Board or any
Board committee may adopt plans or to issue securities of Waste Connections, and
to determine the terms and conditions on which such securities may be
exchangeable or convertible into cash or other securities. In addition, the
Board or Board committee may treat any holder or class of holders of such
designated securities differently than all other security holders in respect of
the terms, conditions, provisions and rights of such securities.

This authority is intended to give the Board flexibility to act in the best
interests of stockholders in the event of a potential change of control. Such
provisions may, however, deter potential acquirors from proposing unsolicited
transactions not approved by the Board and might enable the Board to hinder or
frustrate such a transaction if proposed.

Limitation of Liability of Directors. The Restated Certificate provides
that a director will not be personally liable to Waste Connections or our
stockholders for monetary damages for any breach of fiduciary duty as a
director, except for liability: (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders; (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law; (iii) under Section 174 of the Delaware General Corporation Law (the
"Delaware Law"), which concerns unlawful payments of dividends, stock purchases
or redemptions; or (iv) for any transaction from which the director derived an
improper personal benefit. If the Delaware Law is subsequently amended to permit
further limitation of the personal liability of directors, the liability of a
director of Waste Connections will be eliminated or limited to the fullest
extent permitted by the Delaware Law as so amended.

Amendment of the Certificate of Incorporation and By-laws. The Restated
Certificate contains provisions requiring the affirmative vote of the holders of
at least 66 2/3% of the voting power of the Voting Stock to amend certain
provisions of the Restated Certificate (including the provisions discussed above
relating to the size and classification of the Board, replacement and/or removal
of Board members, action by written consent, special stockholder meetings, the
authorization for the Board to take steps to encourage or oppose, as the case
may be, transactions which may result in a change of control of Waste
Connections, and limitation of the liability of directors) or to amend any
provision of the Restated By-laws by action of stockholders. These

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<PAGE> 67

provisions make it more difficult for stockholders to make changes in the
Restated Certificate and the Restated By-laws, including changes designed to
facilitate the exercise of control over Waste Connections.

Business Combination Provisions of Delaware Law. Waste Connections is a
Delaware corporation and is subject to section 203 of the Delaware Law. Section
203 generally prevents a person who, together with affiliates and associates,
owns, or within the past three years did own, 15% or more of the outstanding
voting stock of a corporation (an "Interested Stockholder") from engaging in
certain business combinations with the corporations for three years after the
date such person became an Interested Stockholder, subject to certain
exceptions. Business combinations covered by section 203 include a wide variety
of transactions with or caused by an Interested Stockholder, including mergers,
asset sales and other transactions in which the Interested Stockholder receives
or could receive a benefit on other than a pro rata basis with other
stockholders.

TRANSFER AGENT AND REGISTRAR

BankBoston, N.A., c/o Boston EquiServe, L.P., serves as transfer agent and
registrar for the common stock.

SHARES ELIGIBLE FOR FUTURE SALE

On completing this offering, we will have 15,826,798 shares of common stock
outstanding. All of the shares offered by this prospectus will be freely
saleable in the public market after this offering is completed, unless acquired
by affiliates of Waste Connections. The shares outstanding before completion of
this offering are saleable in the public market as follows:

<TABLE>
<S> <C>
2,300,000 shares sold in Waste Currently freely saleable in the public
Connections' initial public offering market, unless acquired by affiliates
3,768,207 shares Currently eligible for resale in the
public market
6,313,206 shares* Eligible for resale in the public market
in 1999 (including 1,000,000 shares
eligible for resale in February 1999)
195,385 shares* Will be eligible for resale in the
public market after 1999
</TABLE>

- ---------------
* Subject to the restrictions of Rule 144. Shares of common stock held by Waste
Connections' affiliates are subject to certain volume and other limitations
discussed below under Rule 144.

We have agreed not to offer, sell, sell short, transfer, hypothecate,
pledge or otherwise dispose of any shares of our common stock or other
securities convertible into or exchangeable or exercisable for shares of our
common stock or derivative of our common stock (or agreement for such) for a
period of 90 days after the date of this prospectus, directly or indirectly, by
us or otherwise, except as consideration for business acquisitions, on exercise
of certain of the currently outstanding stock options or warrants or on the
issuance of options to employees, consultants and directors under our 1997 Stock
Option Plan, and the exercise of such options, without the prior written consent
of BT Alex. Brown Incorporated.

Our directors and executive officers have agreed not to offer, sell, sell
short, transfer, hypothecate, pledge or otherwise dispose of any shares of our
common stock or other capital stock of Waste Connections, or any other
securities convertible into or exchangeable or exercisable for shares of our
common stock or derivative of our common stock owned by these persons (or as to
which such person has the right to direct the disposition of) for a period of

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60 days after the date of this prospectus, directly or indirectly, except with
the prior written consent of BT Alex. Brown Incorporated.

In general, under Rule 144, a person (or persons whose shares are
aggregated), including persons who may be deemed affiliates of Waste
Connections, who has beneficially owned his or her shares for at least one year
may sell in any three-month period a number of shares equal to the greater of 1%
of the outstanding shares of the common stock (125,767 shares as of January 19,
1999) or the average weekly trading volume during the four calendar weeks
preceding each such sale. Sales under Rule 144 also are subject to certain
manner of sale provisions, notice requirements and the availability of current
public information about Waste Connections. Under Rule 144(k), a person (or
persons whose shares are aggregated) who is not or has not been deemed an
"affiliate" of Waste Connections for at least three months and who has
beneficially owned his or her shares for at least two years may sell such shares
under Rule 144 without regard to the limitations discussed above.

The common stock has been publicly traded only since May 22, 1998, and it
is possible that no active public market for the common stock will develop or be
sustained. Sales of substantial amounts of the common stock, or the perception
that such sales could occur, could cause the market price of the common stock to
decline and impair our ability to raise capital or fund acquisitions by issuing
common stock.

In July 1998, Waste Connections filed a registration statement on Form S-4
under the Securities Act to register up to 3,000,000 shares issuable from time
to time in connection with our acquisitions of solid waste services businesses.
In October 1998, we filed an additional registration statement on Form S-4 under
the Securities Act to increase by 20% the number of shares covered by the
previous registration statement. Also in October 1998, we filed a third
registration statement on Form S-4 under the Securities Act to register up to
3,000,000 shares issuable from time to time in connection with our acquisitions
of solid waste services businesses. As of January 19, 1999, Waste Connections
had issued 3,768,207 shares under the original registration statement on Form
S-4, and an additional 2,875,958 shares were issuable under the three Form S-4
registration statements.

In September 1998, we filed a registration statement under the Securities
Act to register 309,700 shares issuable on exercise of stock options or other
awards granted or to be granted under our Stock Option Plan. Subject to certain
restrictions under Rule 144, those shares will be freely saleable in the public
market immediately following exercise of such options.

67
<PAGE> 69

PLAN OF DISTRIBUTION

We have entered into an underwriting agreement with the underwriters named
below in which they have severally agreed to purchase from us the number of
shares of common stock set forth beside their names below. BT Alex. Brown
Incorporated, CIBC Oppenheimer Corp. and First Analysis Securities Corporation
are the representatives of the underwriters.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
----------- ---------
<S> <C>
BT Alex. Brown Incorporated.................................
CIBC Oppenheimer Corp. .....................................
First Analysis Securities Corporation.......................

---------
Total............................................. 3,250,000
=========
</TABLE>

The obligation of the underwriters to purchase the common stock is subject
to the terms and conditions set forth in the underwriting agreement. The
underwriting agreement requires the underwriters to purchase all of the shares
of the common stock offered by this prospectus, if any are purchased. The shares
of common stock offered by the underwriters pursuant to this prospectus are
subject to prior sale, when, as and if delivered to and accepted by the
underwriters, and subject to the underwriters' right to reject any order in
whole or in part.

The underwriters have advised us that they propose to offer the shares of
common stock to the public at the public offering price of $ per share. Any
shares sold by the underwriters to securities dealers may be sold at a discount
of up to $ per share from the public offering price. Any such securities
dealers may resell any shares purchased from the underwriters to certain other
brokers or dealers at a discount of up to $0.10 per share from the public
offering price. The underwriters may change the public offering price after the
common stock is released for sale to the public. The following table sets forth
the public offering price and all discounts and commissions to be allowed to the
underwriters.

<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO PUBLIC DISCOUNT/COMMISSION WASTE CONNECTIONS
--------------- ------------------- -----------------
<S> <C> <C> <C>
Per share................... $ $ $
Total....................... $ $ $
</TABLE>

The underwriters may sell more shares than the total number set forth in
the table above. To cover these sales, the underwriters have an option to
purchase up to 487,500 additional shares of common stock from Waste Connections
and certain of our non-employee stockholders at the public offering price less
the underwriting discounts and commissions set forth in the table above. The
underwriters may exercise this option for 30 days after the date of this
prospectus only to cover these sales. To the extent that the underwriters
purchase shares pursuant to this option, each of the underwriters will purchase
shares in approximately the same proportion as the number of shares of common
stock to be purchased by it shown in the above table bears to

68
<PAGE> 70

3,250,000, and we and those non-employee stockholders will be obligated,
pursuant to the option, to sell such shares to the underwriters. If purchased,
the underwriters will offer such additional shares on the same terms as those on
which the 3,250,000 shares are being offered.

We have agreed to indemnify the underwriters with respect to certain
liabilities, including liabilities under the Securities Act of 1933, as amended.

To facilitate the offering of the common stock, the underwriters may engage
in transactions that stabilize, maintain or otherwise affect the market price of
the common stock. Specifically, the underwriters may overallot shares of the
common stock in connection with this offering, thereby creating a short position
in the underwriters' account. A short position results when an underwriter sells
more shares of common stock than such underwriter is committed to purchase.
Additionally, to cover such overallotments or to stabilize the market price of
the common stock, the underwriters may bid for, and purchase, shares of the
common stock at a level above that which might otherwise prevail in the open
market. The underwriters are not required to engage in these activities, and, if
commenced, any such activities may be discontinued at any time. The underwriters
also may reclaim selling concessions allowed to an underwriter or dealer, if the
underwriters repurchase shares distributed by that underwriter or dealer.

In connection with this offering, certain underwriters and selling group
members (if any) who are qualified market makers on the Nasdaq National Market
may engage in passive market making transactions in the common stock on the
Nasdaq National Market in accordance with Rule 103 of Regulation M under the
Securities Exchange Act of 1934, as amended, during the business day prior to
the pricing of the offering before the commencement of offers or sales of the
common stock. Passive market makers must comply with applicable volume and price
limitations and must be identified as such. In general, a passive market maker
must display its bid at a price not in excess of the highest independent bid of
such security; if all independent bids are lowered below the passive market
makers' bid, however, such bid must then be lowered when certain purchase limits
are exceeded.

The underwriters and their respective affiliates may be customers of,
lenders to, engage in transactions with, and perform services for us and our
subsidiaries in the ordinary course of business.

69
<PAGE> 71

LEGAL MATTERS

The validity of the issuance of the shares of common stock offered hereby
will be passed upon for Waste Connections by Shartsis, Friese & Ginsburg LLP,
San Francisco, California. Certain partners and associate attorneys of Shartsis,
Friese & Ginsburg LLP own an aggregate of 3,400 shares of Waste Connections'
common stock. Certain legal matters related to this offering will be passed upon
for the underwriters by Piper & Marbury L.L.P., Baltimore, Maryland. The
statements pertaining to Waste Connections' G certificates awarded by the WUTC
under "Risk Factors -- Highly Competitive Industry," "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- General,"
"Business -- Industry Overview," and "Business -- G certificates" will be passed
upon for Waste Connections by Williams, Kastner & Gibbs PLLC, Seattle,
Washington.

EXPERTS

The following financial statements appearing in this prospectus and
Registration Statement have been audited by Ernst & Young LLP, independent
auditors, as set forth in their reports thereon appearing elsewhere in this
prospectus and Registration Statement:

(a) financial statements of Waste Connections, Inc. and Predecessors
as of December 31, 1996 and 1997, and for each of the three years in the
period ended December 31, 1997;

(b) combined financial statements of The Murrey Companies (which
consist of Murrey's Disposal Company, Inc., American Disposal Company,
Inc., D.M. Disposal Co., Inc. and Tacoma Recycling Company, Inc.) as of
December 31, 1996 and 1997, and for each of the three years in the period
ended December 31, 1997;

(c) financial statements of Madera Disposal Systems, Inc. as of
December 31, 1996 and 1997, and for each of the three years in the period
ended December 31, 1997;

(d) financial statements of Arrow Sanitary Service, Inc. as of
September 30, 1997, and for the year then ended;

(e) financial statements of Contractors Waste Removal, L.C. as of
December 31, 1997, and for the year then ended;

(f) consolidated financial statements of Curry Transfer and Recycling,
Inc. as of December 31, 1997 and for the year then ended;

(g) combined financial statements of Butler County Landfill, Inc. and
Kobus Construction, Inc. as of December 31, 1997, and for the year then
ended; and

(h) Supplemental Consolidated Financial Statements of Waste
Connections, Inc. and Predecessors as of December 31, 1996 and 1997, and
for each of the three years in the period ended December 31, 1997.

Such financial statements have been included in this prospectus and
Registration Statement in reliance upon such reports given upon the authority of
such firm as experts in accounting and auditing.

The following financial statements appearing in this prospectus and
Registration Statement have been audited by Grant Thornton LLP, independent
auditors, as set forth in their reports thereon appearing elsewhere in this
prospectus and Registration Statement:

(a) financial statements of Shrader Refuse and Recycling Service
Company as of September 30, 1996 and 1997, and for the years then ended;

70
<PAGE> 72

(b) combined financial statements of B&B Sanitation (consisting of B&B
Sanitation, Inc., Red Carpet Landfill, Inc. and Darlin Equipment, Inc.) as
of December 31, 1997, and for the year then ended; and

(c) combined financial statements of J&J Sanitation (consisting of J&J
Sanitation, Inc., Big Red Roll Off, Inc., and J&J Sanitation of South
Dakota) as of December 31, 1997, and for the year then ended.

Such financial statements have been included in this prospectus and
Registration Statement in reliance upon such reports given upon the authority of
such firm as experts in accounting and auditing.

The combined financial statements of Amador Disposal Service, Inc. and
Mother Lode Sani-Hut, Inc. at June 30, 1998 and for the year then ended
appearing in this prospectus and Registration Statement have been audited by
PricewaterhouseCoopers LLP, independent auditors, as set forth in their reports
thereon appearing elsewhere in this prospectus and Registration Statement. Such
financial statements have been included in this prospectus and Registration
Statement in reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.

AVAILABLE INFORMATION

Waste Connections has filed with the Commission a registration statement on
Form S-1. This prospectus, which forms a part of the Registration Statement,
omits some of the information included in the Registration Statement. You should
refer to the Registration Statement and its exhibits for further information.

Waste Connections files annual, quarterly and special reports, proxy
statements and other information with the Commission. You may read and copy the
Registration Statement and any reports, statements or other information on file
at the Commission's public reference rooms in Washington, D.C., Chicago,
Illinois and New York, New York. Please call the Commission at 1-800-732-0330
for further information on the public reference rooms. You can also request
copies of those documents by writing to the Commission; you will be charged a
duplicating fee. Our Commission filings are also available to the public from
commercial document retrieval services and at the web site the Commission
maintains at "http://www.sec.gov." Our common stock is listed on the Nasdaq
National Market, and you may also inspect and copy our Commission filings at the
offices of the National Association of Securities Dealers, Inc., located at 1735
K Street, N.W., Washington, D.C. 20549.

71
<PAGE> 73

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
WASTE CONNECTIONS, INC. UNAUDITED PRO FORMA FINANCIAL
STATEMENTS
Introduction to Unaudited Pro Forma Financial
Statements............................................. F-5
Unaudited Pro Forma Statement of Operations for the year
ended December 31, 1997................................ F-6
Unaudited Pro Forma Statement of Operations for the nine
months ended September 30, 1998........................ F-7
Notes to Unaudited Pro Forma Statements of Operations..... F-8
Unaudited Pro Forma Balance Sheet as of September 30,
1998................................................... F-13
Notes to Unaudited Pro Forma Balance Sheet................ F-14

WASTE CONNECTIONS, INC. AND PREDECESSORS
Report of Ernst & Young LLP, Independent Auditors......... F-15
Combined Balance Sheet of Predecessors as of December 31,
1996................................................... F-16
Consolidated Balance Sheets of Waste Connections, Inc. as
of December 31, 1997 (Audited) and September 30, 1998
(Unaudited)............................................ F-16
Combined Statement of Operations of Predecessors for the
nine months ended September 30, 1997................... F-17
Consolidated Statements of Operations of Waste
Connections, Inc. for the period from inception
(September 9, 1997) through December 31, 1997 (Audited)
and the nine months ended September 30, 1998
(Unaudited)............................................ F-17
Combined Statement of Operations of The Disposal Group for
the period from January 1, 1996 through July 31,
1996................................................... F-18
Combined Statement of Operations of Predecessors for the
period ended December 31, 1996......................... F-18
Combined Statement of Operations of The Disposal Group for
the year ended December 31, 1995....................... F-19
Statement of Operations of Fibres International, Inc. for
the period from January 1, 1995 through November 30,
1995................................................... F-19
Statement of Operations of Predecessors for the one month
ended December 31, 1995................................ F-19
Consolidated Statement of Redeemable Stock and
Stockholders' Equity (Deficit) of Waste Connections,
Inc. for the period from inception (September 9, 1997)
through December 31, 1997 (Audited) and the nine months
ended September 30, 1998 (Unaudited)................... F-20
Combined Statement of Cash Flows of Predecessors for the
nine months ended September 30, 1997................... F-21
Consolidated Statements of Cash Flows of Waste
Connections, Inc. for the period from inception
(September 9, 1997) through December 31, 1997 (Audited)
and the nine months ended September 30, 1998
(Unaudited)............................................ F-21
Combined Statement of Cash Flows of The Disposal Group for
the period from January 1, 1996 through July 31,
1996................................................... F-22
Combined Statement of Cash Flows of Predecessors for the
period ended December 31, 1996......................... F-22
Combined Statement of Cash Flows of The Disposal Group for
the year ended December 31, 1995....................... F-23
Statement of Cash Flows of Fibres International, Inc. for
the period from January 1, 1995 through November 30,
1995................................................... F-23
Statement of Cash Flows of Predecessors for the one month
ended December 31, 1995................................ F-23
Notes to Financial Statements............................. F-24
</TABLE>

F-1
<PAGE> 74

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
THE MURREY COMPANIES
Report of Ernst & Young LLP, Independent Auditors......... F-45
Combined Balance Sheets as of December 31, 1996 and 1997
(Audited) and September 30, 1998 (Unaudited)........... F-46
Combined Statements of Income and Retained Earnings for
the years ended December 31, 1995, 1996 and 1997
(Audited) and for the nine months ended September 30,
1997 and 1998 (Unaudited).............................. F-47
Combined Statements of Cash Flows for the years ended
December 31, 1995, 1996 and 1997 (Audited) and for the
nine months ended September 30, 1997 and 1998
(Unaudited)............................................ F-48
Notes to Combined Financial Statements.................... F-49

MADERA DISPOSAL SYSTEMS, INC.
Report of Ernst & Young LLP, Independent Auditors......... F-59
Balance Sheets as of December 31, 1996 and 1997........... F-60
Statements of Income and Retained Earnings for the years
ended December 31, 1995, 1996 and 1997................. F-61
Statements of Cash Flows for the years ended December 31,
1995, 1996 and 1997.................................... F-62
Notes to Financial Statements............................. F-63

ARROW SANITARY SERVICE, INC.
Report of Ernst & Young LLP, Independent Auditors......... F-69
Balance Sheets as of September 30, 1997 (Audited) and
March 31, 1998 (Unaudited)............................. F-70
Statements of Income and Retained Earnings for the year
ended September 30, 1997 (Audited) and the six months
ended March 31, 1997 and 1998 (Unaudited).............. F-71
Statements of Cash Flows for the year ended September 30,
1997 (Audited) and the six months ended March 31, 1997
and 1998 (Unaudited)................................... F-72
Notes to Financial Statements............................. F-73

SHRADER REFUSE AND RECYCLING SERVICE COMPANY
Report of Independent Certified Public Accountants........ F-79
Balance Sheets as of September 30, 1996 and 1997 (Audited)
and June 30, 1998 (Unaudited).......................... F-80
Statements of Income for the years ended September 30,
1996 and 1997 (Audited) and the nine months ended June
30, 1997 and 1998 (Unaudited).......................... F-81
Statement of Stockholders' Equity for the years ended
September 30, 1996 and 1997 (Audited) and the nine
months ended June 30, 1998 (Unaudited)................. F-82
Statements of Cash Flows for the years ended September 30,
1996 and 1997 (Audited) and the nine months ended June
30, 1997 and 1998 (Unaudited).......................... F-83
Notes to Financial Statements............................. F-84

CONTRACTOR'S WASTE REMOVAL, L.C.
Report of Ernst & Young LLP, Independent Auditors......... F-92
Balance Sheets as of December 31, 1997 (Audited) and March
31, 1998 (Unaudited)................................... F-93
Statements of Operations and Change in Members' Deficit
for the year ended December 31, 1997 (Audited) and the
three months ended March 31, 1997 and 1998
(Unaudited)............................................ F-94
Statements of Cash Flows for the year ended December 31,
1997 (Audited) and the three months ended March 31,
1997 and 1998 (Unaudited).............................. F-95
Notes to Financial Statements............................. F-96
</TABLE>

F-2
<PAGE> 75

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
CURRY TRANSFER AND RECYCLING, INC.
Report of Ernst & Young LLP, Independent Auditors......... F-100
Consolidated Balance Sheets as of December 31, 1997
(Audited) and March 31, 1998 (Unaudited)............... F-101
Consolidated Statements of Income and Retained Earnings
for the year ended December 31, 1997 (Audited) and the
three months ended March 31, 1997 and 1998
(Unaudited)............................................ F-102
Consolidated Statements of Cash Flows for the year ended
December 31, 1997 (Audited) and the three months ended
March 31, 1997 and 1998 (Unaudited).................... F-103
Notes to Consolidated Financial Statements................ F-104

B&B SANITATION
Report of Independent Certified Public Accountants........ F-111
Combined Balance Sheets as of December 31, 1997 (Audited)
and March 31, 1998 (Unaudited)......................... F-112
Combined Statements of Earnings for the year ended
December 31, 1997 (Audited) and the three months ended
March 31, 1997 and 1998 (Unaudited).................... F-113
Combined Statement of Stockholders' Deficit for the year
ended December 31, 1997 (Audited) and the three months
ended March 31, 1998 (Unaudited)....................... F-114
Combined Statements of Cash Flows for the year ended
December 31, 1997 (Audited) and the three months ended
March 31, 1997 and 1998 (Unaudited).................... F-115
Notes to Combined Financial Statements.................... F-116

J & J SANITATION
Report of Independent Certified Public Accountants........ F-120
Combined Balance Sheets as of December 31, 1997 (Audited)
and June 30, 1998 (Unaudited).......................... F-121
Combined Statements of Operations for the year ended
December 31, 1997 (Audited) and the six months ended
June 30, 1997 and 1998 (Unaudited)..................... F-122
Combined Statement of Stockholders' and Partners' Equity
for the year ended December 31, 1997 (Audited) and the
six months ended June 30, 1998 (Unaudited)............. F-123
Combined Statements of Cash Flows for the year ended
December 31, 1997 (Audited) and the six months ended
June 30, 1997 and 1998 (Unaudited)..................... F-124
Notes to Combined Financial Statements.................... F-125

AMADOR DISPOSAL SERVICES, INC. AND MOTHER LODE SANI-HUT,
INC.
Report of PricewaterhouseCoopers LLP, Independent
Auditors............................................... F-131
Combined Balance Sheets as of June 30, 1998, (Audited) and
September 30, 1998 (Unaudited)......................... F-132
Combined Statements of Operations and Retained Earnings
for the year ended June 30, 1998 (Audited) and the
three months ended September 30, 1997 and 1998
(Unaudited)............................................ F-133
Combined Statements of Cash Flows for the year ended June
30, 1998 (Audited) and the three months ended September
30, 1997 and 1998 (Unaudited).......................... F-134
Notes to Combined Financial Statements.................... F-135

BUTLER COUNTY LANDFILL, INC. AND KOBUS CONSTRUCTION, INC.
Report of Ernst & Young LLP, Independent Auditors......... F-140
Combined Balance Sheets as of December 31, 1997 (Audited)
and September 30, 1998 (Unaudited)..................... F-141
</TABLE>

F-3
<PAGE> 76

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Combined Statements of Income and Retained Earnings for
the year ended December 31, 1997 (Audited) and the nine
months ended September 30, 1997 and 1998 (Unaudited)... F-142
Combined Statements of Cash Flows for the year ended
December 31, 1997 (Audited) and the nine months ended
September 30, 1997 and 1998 (Unaudited)................ F-143
Notes to Combined Financial Statements.................... F-144

SUPPLEMENTAL WASTE CONNECTIONS, INC. AND PREDECESSORS
Report of Ernst & Young LLP, Independent Auditors......... F-151
Combined Balance Sheet of Predecessors as of December 31,
1996................................................... F-152
Supplemental Consolidated Balance Sheets of Waste
Connections, Inc. as of December 31, 1996 and 1997
(Audited) and September 30, 1998 (Unaudited)........... F-152
Combined Statement of Operations of Predecessors for the
nine months ended September 30, 1997................... F-153
Supplemental Consolidated Statements of Operations of
Waste Connections, Inc. for the year ended December 31,
1997 (Audited) and the nine months ended September 30,
1997 and 1998 (Unaudited).............................. F-153
Combined Statement of Operations of The Disposal Group for
the period from January 1, 1996 through July 31,
1996................................................... F-154
Combined Statement of Operations of Predecessors for the
period ended December 31, 1996......................... F-154
Supplemental Consolidated Statement of Operations of Waste
Connections, Inc. for the year ended December 31,
1996................................................... F-154
Combined Statement of Operations of The Disposal Group for
the year ended December 31, 1995....................... F-155
Statement of Operations of Fibres International, Inc. for
the period from January 1, 1995 through November 30,
1995................................................... F-155
Statement of Operations of Predecessors for the one month
ended December 31, 1995................................ F-155
Supplemental Consolidated Statement of Operations of Waste
Connections, Inc. for the year ended December 31,
1995................................................... F-155
Supplemental Consolidated Statement of Redeemable Stock
and Stockholders' Equity of Waste Connections, Inc. for
the years ended December 31, 1995, 1996 and 1997
(Audited) and the nine months ended September 30, 1998
(Unaudited)............................................ F-156
Combined Statement of Cash Flows of Predecessors for the
nine months ended September 30, 1997................... F-158
Supplemental Consolidated Statements of Cash Flows of
Waste Connections, Inc. for the year ended December 31,
1997 (Audited) and the nine months ended September 30,
1997 and 1998 (Unaudited).............................. F-158
Combined Statement of Cash Flows of The Disposal Group for
the period from January 1, 1996 through July 31,
1996................................................... F-159
Combined Statement of Cash Flows of Predecessors for the
period ended December 31, 1996......................... F-159
Supplemental Consolidated Statement of Cash Flows of Waste
Connections, Inc. for the year ended December 31,
1996................................................... F-159
Combined Statement of Cash Flows of The Disposal Group for
the year ended December 31, 1995....................... F-160
Statement of Cash Flows of Fibres International, Inc. for
the period from January 1, 1995 through November 30,
1995................................................... F-160
Statement of Cash Flows of Predecessors for the one month
ended December 31, 1995................................ F-160
Supplemental Consolidated Statement of Cash Flows of Waste
Connections, Inc. for the year ended December 31,
1995................................................... F-160
Notes to Supplemental Consolidated Financial Statements... F-161
</TABLE>

F-4
<PAGE> 77

WASTE CONNECTIONS, INC.

INTRODUCTION TO UNAUDITED PRO FORMA

FINANCIAL STATEMENTS

The Unaudited Pro Forma Statements of Operations for the year ended
December 31, 1997 and the nine months ended September 30, 1998, give effect to
the business combinations involving WCI, its predecessors, Madera Disposal
Systems, Inc. ("Madera"), Arrow Sanitary Service, Inc. ("Arrow"), Shrader Refuse
and Recycling Service Company ("Shrader"), Curry Transfer and Recycling, Inc.
("Curry"), Contractors Waste Removal L.C. ("Contractors"), J & J Sanitation ("J
& J"), B&B Sanitation ("B&B"), Amador Disposal Service, Inc./Mother Lode
Sani-Hut, Inc. ("Amador"), and Butler County Landfill, Inc./Kobus Construction,
Inc. ("Butler") as if such business combinations occurred on January 1, 1997 and
were accounted for using the purchase method of accounting. In addition to
reflecting the business combinations involving WCI, its predecessors, Madera,
Arrow, Shrader, Curry, Contractors, J & J, B & B, Amador and Butler, the
following Unaudited WCI and the Murrey Companies Pro Forma Combined Statements
of Operations for the year ended December 31, 1997 and the nine months ended
September 30, 1998 reflect the merger with the Murrey Companies as
poolings-of-interests.

The following Unaudited Pro Forma Balance Sheet as of September 30, 1998
assumes WCI's acquisition of Amador and Butler occurred on September 30, 1998.
In addition to reflecting the business combinations involving WCI, Amador and
Butler, the following Unaudited Pro Forma Combined Balance Sheet as of September
30, 1998 reflects the mergers with the Murrey Companies as
poolings-of-interests.

The accompanying pro forma financial statements have also been adjusted to
reflect the sale of the Common Stock offered by the Company hereby and the
application of the estimated net proceeds therefrom, as described in "Use of
Proceeds."

WCI has preliminarily analyzed the savings that it expects to be realized
by consolidating certain operational and general and administrative functions.
WCI has not and cannot quantify all of these savings due to the short period of
time since the predecessor, Madera, Arrow, Shrader, Curry, Contractors, J & J,
B&B, Amador and Butler acquisitions occurred. It is anticipated that these
savings will be partially offset by the costs of being a publicly held company
and the incremental increase in costs related to WCI's corporate management.
However, these costs, like the savings they offset, cannot be quantified
accurately. Neither the anticipated savings nor the anticipated costs have been
included in the Unaudited Pro Forma Financial Statements.

The Unaudited Pro Forma Financial Statements include certain adjustments to
the historical financial statements, including adjusting depreciation expense to
reflect purchase price allocations of the entities acquired by WCI, adjusting
interest expense to reflect acquisition-related debt and the related income tax
effects of these adjustments.

The pro forma adjustments are based on preliminary estimates, available
information and certain assumptions and may be revised as additional information
becomes available. The Unaudited Pro Forma Financial Statements do not purport
to represent what WCI's financial position or results of operations would
actually have been if such transactions in fact had occurred on those dates or
to project WCI's financial position or results of operations for any future
period. Because WCI, its predecessors, the Murrey Companies, Madera, Arrow,
Shrader, Curry, Contractors, J & J, B&B, Amador and Butler were not under common
control or management for all periods, historical combined results may not be
comparable to, or indicative of, future performance. The Unaudited Pro Forma
Financial Statements should be read in conjunction with the other financial
statements and notes thereto included elsewhere herein, as well as information
included under the headings "Selected Financial Data," "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and "Risk
Factors" included elsewhere herein.

F-5
<PAGE> 78

WASTE CONNECTIONS, INC.

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
WASTE
CONNECTIONS,
INC. ARROW
PERIOD FROM MADERA SANITARY
INCEPTION PREDECESSORS DISPOSAL SERVICE, INC.
(SEPTEMBER 9, COMBINED NINE SYSTEMS, INC. YEAR
1997) TO MONTHS ENDED YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
1997 1997 1997 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues.................................................... $ 6,237 $18,114 $ 7,845 $6,209
Operating expenses:
Cost of operations......................................... 4,703 14,753 5,289 4,970
Selling, general and administrative........................ 619 3,009 1,041 776
Depreciation and amortization.............................. 354 1,083 627 143
Start-up and integration................................... 493 -- -- --
Stock compensation......................................... 4,395 -- -- --
--------- ------- ------- ------
Income (loss) from operations............................... (4,327) (731) 888 320
Interest expense............................................ (1,035) (456) (280) (72)
Other income (expense), net................................. (36) 14 173 (2)
--------- ------- ------- ------
Income (loss) before (provision) benefit for income taxes... (5,398) (1,173) 781 246
(Provision) benefit for income taxes........................ 332 -- -- (117)
--------- ------- ------- ------
Net income (loss)........................................... $ (5,066) $(1,173) $ 781 $ 129
========= ======= ======= ======
Redeemable convertible preferred stock accretion............ $ (531)
---------
Net loss applicable to common
stockholders............................................... $ (5,597)
=========
Basic and diluted net loss per common share................. $ (2.99)
=========
Shares used in the per share calculation.................... 1,872,567
=========

SHRADER CURRY
REFUSE AND TRANSFER
RECYCLING AND CONTRACTORS J & J
SERVICE RECYCLING, WASTE SANITATION
COMPANY INC. REMOVAL, L.C. COMBINED
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1997 1997 1997
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Revenues.................................................... $6,896 $3,617 $1,903 $2,346
Operating expenses:
Cost of operations......................................... 4,601 2,259 1,234 1,789
Selling, general and administrative........................ 567 655 359 319
Depreciation and amortization.............................. 770 260 202 197
Start-up and integration................................... --
Stock compensation......................................... --
------ ------ ------ ------
Income (loss) from operations............................... 958 443 108 41
Interest expense............................................ (292) (50) (178) (108)
Other income (expense), net................................. 59 64 -- --
------ ------ ------ ------
Income (loss) before (provision) benefit for income taxes... 725 457 (70) (67)
(Provision) benefit for income taxes........................ (183) -- --
------ ------ ------ ------
Net income (loss)........................................... $ 725 $ 274 $ (70) $ (67)
====== ====== ====== ======
Redeemable convertible preferred stock accretion............
Net loss applicable to common
stockholders...............................................
Basic and diluted net loss per common share.................
Shares used in the per share calculation....................

AMADOR BUTLER
B&B DISPOSAL COUNTY
SANITATION SERVICE, INC. LANDFILL, INC.
COMBINED COMBINED COMBINED
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, PRO FORMA
1997 1997 1997 ADJUSTMENTS
------------ ------------- -------------- -----------
<S> <C> <C> <C> <C>
Revenues.................................................... $1,965 $3,205 $3,010 $ --
Operating expenses:
Cost of operations......................................... 1,074 2,432 1,898 (146)(a)
(195)(b)
(100)(c)
Selling, general and administrative........................ 480 236 (570)(d)
(132)(e)
(267)(j)
Depreciation and amortization.............................. 259 317 631 (102)(f)
(2,022)(k)
1,620(l)
Start-up and integration................................... -- -- --
Stock compensation......................................... -- -- --
------ ------ ------ -------
Income (loss) from operations............................... 312 (24) 245 1,914
Interest expense............................................ (108) (77) (180) 456(g)
(218)(g)
1,345(m)
(4,796)(n)
Other income (expense), net................................. 1 (3) 43 --
------ ------ ------ -------
Income (loss) before (provision) benefit for income taxes... 205 (104) 108 (1,299)
(Provision) benefit for income taxes........................ -- (2) -- (92)(h)
(618)(o)
1,082(l)
------ ------ ------ -------
Net income (loss)........................................... $ 205 $ (106) $ 108 $ (927)
====== ====== ====== =======
Redeemable convertible preferred stock accretion............
Net loss applicable to common
stockholders...............................................
Basic and diluted net loss per common share.................
Shares used in the per share calculation....................

THE MURREY PRO FORMA
PRO FORMA COMPANIES COMBINED
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, PRO FORMA
1997 1997 1997 ADJUSTMENTS
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Revenues.................................................... $ 61,347 $28,874 $ 90,221 $ --
Operating expenses:
Cost of operations......................................... 44,561 23,133 67,694 --
Selling, general and administrative........................ 7,412 2,323 9,735 --
Depreciation and amortization.............................. 4,339 1,371 5,710 --
Start-up and integration................................... 493 -- 493 --
Stock compensation......................................... 4,395 -- 4,395 --
---------- ------- ---------- ------
Income (loss) from operations............................... 147 2,047 2,194 --
Interest expense............................................ (6,049) (380) (6,429) 3,803(p)
Other income (expense), net................................. 313 283 596 --
---------- ------- ---------- ------
Income (loss) before (provision) benefit for income taxes... (5,589) 1,950 (3,639) 3,803
(Provision) benefit for income taxes........................ 402 (634) (232) (1,521)(q)
---------- ------- ---------- ------
Net income (loss)........................................... $ (5,187) $ 1,316 $ (3,871) $2,282
========== ======= ========== ======
Redeemable convertible preferred stock accretion............ (531) (531)
---------- ----------
Net loss applicable to common
stockholders............................................... $ (5,718) $ (4,402)
========== ==========
Basic and diluted net loss per common share................. $ (2.12) $ (0.79)
========== ==========
Shares used in the per share calculation.................... 2,700,306 5,589,186
========== ==========

PRO FORMA
COMBINED
AS ADJUSTED
YEAR ENDED
DECEMBER 31,
1997
------------
<S> <C>
Revenues.................................................... $ 90,221
Operating expenses:
Cost of operations......................................... 67,694
Selling, general and administrative........................ 9,735
Depreciation and amortization.............................. 5,710
Start-up and integration................................... 493
Stock compensation......................................... 4,395
----------
Income (loss) from operations............................... 2,194
Interest expense............................................ (2,626)
Other income (expense), net................................. 596
----------
Income (loss) before (provision) benefit for income taxes... 164
(Provision) benefit for income taxes........................ (1,753)
----------
Net income (loss)........................................... $ (1,589)
==========
Redeemable convertible preferred stock accretion............ (531)
==========
Net loss applicable to common
stockholders............................................... $ (2,120)
==========
Basic and diluted net loss per common share................. $ (0.24)
==========
Shares used in the per share calculation.................... 8,839,186
==========
</TABLE>

See accompanying notes.

F-6
<PAGE> 79

WASTE CONNECTIONS, INC.

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1998

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
CURRY
TRANSFER CONTRACTORS
WASTE MADERA ARROW SHRADER REFUSE AND WASTE
CONNECTIONS, DISPOSAL SANITARY AND RECYCLING RECYCLING, REMOVAL
INC. CONSOLIDATED SYSTEMS, INC. SERVICE, INC. SERVICE INC. L.C.
NINE MONTHS ONE MONTH FIVE MONTHS COMPANY FIVE MONTHS FIVE MONTHS
ENDED ENDED ENDED SIX MONTHS ENDED ENDED
SEPTEMBER 30, JANUARY 31, MAY 31, ENDED MAY 31, MAY 31,
1998 1998 1998 JUNE 30, 1998 1998 1998
----------------- ------------- ------------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Revenues........................ $ 35,336 $ 611 $2,508 $3,505 $1,408 $ 791
Operating expenses:
Cost of operations............. 24,007 412 1,836 2,264 837 543
Selling, general and
administrative............... 3,518 112 385 310 270 182
Depreciation and amortization.. 2,693 69 67 471 124 94
Stock compensation............. 561 -- -- -- -- --
--------- ----- ------ ------ ------ -----
Income (loss) from operations... 4,557 18 220 460 177 (28)
Interest expense................ (1,427) (289) (14) (191) (33) (90)
Other income, net............... -- 16 2 11 41 --
--------- ----- ------ ------ ------ -----
Income (loss) before (provision)
benefit for income taxes....... 3,130 (255) 208 280 185 (118)
(Provision) benefit for income
taxes.......................... (1,513) -- (89) -- -- --
--------- ----- ------ ------ ------ -----
Income (loss) before
extraordinary item............. 1,617 $(255) $ 119 $ 280 $ 185 $(118)
===== ====== ====== ====== =====
Extraordinary Item -- early
extinguishment of debt, net of
tax benefit of $165............ (815)
---------
Net income (loss)............... $ 802
=========
Redeemable convertible preferred
stock accretion................ $ (917)
---------
Net income (loss) applicable to
common stockholders............ $ (115)
=========
Basic earnings (loss) per common
share:
Income (loss) before
extraordinary item............. $ 0.13
=========
Extraordinary item.............. (0.15)
=========
Basic net income (loss) per
common share................... $ (0.02)
=========
Diluted earnings (loss) per
common share:
Income (loss) before
extraordinary item............. $ 0.09
=========
Extraordinary item.............. (0.11)
---------
Diluted net loss per common
share.......................... $ (0.02)
=========
Shares used in the per share
calculations:
Basic.......................... 5,476,532
=========
Diluted........................ 7,438,658
=========

AMADOR BUTLER
J & J B&B DISPOSAL COUNTY
SANITATION SANITATION SERVICE, INC LANDFILL, INC.
COMBINED COMBINED COMBINED COMBINED PRO FORMA
SIX MONTHS FIVE MONTHS NINE MONTHS NINE MONTHS NINE MONTHS
ENDED ENDED ENDED ENDED ENDED
JUNE 30, MAY 31, SEPTEMBER 30, SEPTEMBER 30, PRO FORMA SEPTEMBER 30,
1998 1998 1998 1998 ADJUSTMENTS 1998
----------- ----------- ------------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Revenues........................ $1,210 $876 $2,355 $2,419 $ -- $ 51,019
Operating expenses:
Cost of operations............. 854 464 1,642 1,659 -- 34,518
Selling, general and
administrative............... 213 136 400 130 (111)(j) 5,545
Depreciation and amortization.. 107 110 229 408 (334)(l) 4,038
Stock compensation............. -- -- -- -- -- 561
------ ---- ------ ------ ------- ----------
Income (loss) from operations... 36 166 84 222 445 6,357
Interest expense................ (53) (46) (88) (109) 624(m) (3,862)
(2,146)(n)
Other income, net............... -- -- (22) 109 -- 157
------ ---- ------ ------ ------- ----------
Income (loss) before (provision)
benefit for income taxes....... (17) 120 (26) 222 (1,077) 2,652
(Provision) benefit for income
taxes.......................... -- -- (1) 358(o) (1,245)
------ ---- ------ ------ ------- ----------
Income (loss) before
extraordinary item............. $ (17) $120 $ (27) $ 222 $ (719) 1,407
====== ==== ====== ====== =======
Extraordinary Item -- early
extinguishment of debt, net of
tax benefit of $165............ (815)
----------
Net income (loss)............... $ 592
==========
Redeemable convertible preferred
stock accretion................ $ (917)
----------
Net income (loss) applicable to
common stockholders............ $ (325)
==========
Basic earnings (loss) per common
share:
Income (loss) before
extraordinary item............. $ 0.08
==========
Extraordinary item..............
Basic net income (loss) per
common share...................
Diluted earnings (loss) per
common share:
Income (loss) before
extraordinary item............. $ 0.06
==========
Extraordinary item..............
Diluted net loss per common
share..........................
Shares used in the per share
calculations:
Basic.......................... 6,069,350
==========
Diluted........................ 7,654,186
==========

THE MURREY PRO FORMA
COMPANIES COMBINED
NINE MONTHS NINE MONTHS
ENDED ENDED PRO FORMA
SEPTEMBER 30, SEPTEMBER 30, PRO FORMA COMBINED
1998 1998 ADJUSTMENTS AS ADJUSTED
------------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues........................ $24,532 $ 75,551 $ -- $ 75,551
Operating expenses:
Cost of operations............. 19,337 53,855 -- 53,855
Selling, general and
administrative............... 1,870 7,415 -- 7,415
Depreciation and amortization.. 1,640 5,678 -- 5,678
Stock compensation............. -- 561 -- 561
------- ----------- ----------- -----------
Income (loss) from operations... 1,685 8,042 -- 8,042
Interest expense................ (423) (4,285) $ 2,852(p) (1,433)
Other income, net............... (97) 60 -- 60
------- ----------- ----------- -----------
Income (loss) before (provision)
benefit for income taxes....... 1,165 3,817 2,852 6,669
(Provision) benefit for income
taxes.......................... (414) (1,659) (1,141)(q) (2,800)
------- ----------- ----------- -----------
Income (loss) before
extraordinary item............. $ 751 2,158 $ 1,711 3,869
======= ===========
Extraordinary Item -- early
extinguishment of debt, net of
tax benefit of $165............ (815) (815)
----------- -----------
Net income (loss)............... $ 1,343 $ 3,054
=========== ===========
Redeemable convertible preferred
stock accretion................ $ (917) $ (917)
----------- -----------
Net income (loss) applicable to
common stockholders............ $ 426 $ 2,137
=========== ===========
Basic earnings (loss) per common
share:
Income (loss) before
extraordinary item............. $ 0.14 $ 0.24
=========== ===========
Extraordinary item..............
Basic net income (loss) per
common share...................
Diluted earnings (loss) per
common share:
Income (loss) before
extraordinary item............. $ 0.12 $ 0.21
=========== ===========
Extraordinary item..............
Diluted net loss per common
share..........................
Shares used in the per share
calculations:
Basic.......................... 8,958,230 12,208,230
=========== ===========
Diluted........................ 10,543,066 13,793,066
=========== ===========
</TABLE>

See accompanying notes.

F-7
<PAGE> 80

WASTE CONNECTIONS, INC.

NOTES TO UNAUDITED PRO FORMA
STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

ASSUMPTIONS. The unaudited pro forma statements of operations for the year
ended December 31, 1997 and for the nine months ended September 30, 1998 are
presented as if the acquisitions of the Company's predecessors, Madera, Arrow,
Shrader, Curry, Contractors, J & J, B&B, Amador and Butler had occurred on
January 1, 1997. In addition, the unaudited pro forma combined statements of
operations for the year ended December 31, 1997 and for the nine months ended
September 30, 1998 combine the pro forma statements of operations for those
respective periods with the historical statements of operations for the Murrey
Companies for the year ended December 31, 1997 and for the nine months ended
September 30, 1998, respectively.

BUSINESS COMBINATIONS. The acquisitions of Madera, Arrow, Shrader, Curry,
Contractors, J & J, B&B, Amador and Butler are being accounted for under the
purchase method of accounting for business combinations. Certain items affecting
the purchase prices and their allocations are preliminary. The preliminary
purchase prices consist of the following:

<TABLE>
<CAPTION>
MADERA ARROW SHRADER CURRY CONTRACTORS J & J B&B AMADOR BUTLER
------- ------- ------- ------- ----------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cash paid to
shareholders....... $6,949 $ 7,537 $ 8,106 $ 6,347 $ 2,442 $ 2,074 $ 3,321 $ 5,581 $ 7,013
Common stock
issued............. 7,500 3,045 9,997 -- 1,000 -- -- -- --
Liabilities assumed.. 4,256 769 2,102 1,298 2,561 1,372 1,723 1,428 2,219
Sellers notes........ -- -- 378 25 166 93 24 -- 172
Acquisition costs.... 180 125 225 90 73 80 170 100 132
Common stock warrants
issued............. 954 -- -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- ------- -------
$19,839 $11,476 $20,808 $ 7,760 $ 6,242 $ 3,619 $ 5,238 $ 7,109 $ 9,536
======= ======= ======= ======= ======= ======= ======= ======= =======
</TABLE>

The Company has preliminarily allocated the purchase prices as follows:

<TABLE>
<CAPTION>
MADERA ARROW SHRADER CURRY CONTRACTORS J & J B&B AMADOR BUTLER
------- ------- ------- ------- ----------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Tangible assets
purchased.......... $4,534 $ 898 $ 4,378 $ 2,877 $ 1,506 $ 687 $ 2,611 $ 1,935 $ 9,265
Goodwill............. 14,580 10,528 16,300 4,583 4,686 2,892 2,577 5,144 251
Covenants not to
compete............ -- 50 130 100 50 40 50 30 20
Long-term franchise
agreements and
contracts.......... 725 -- -- 200 -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- ------- -------
$19,839 $11,476 $20,808 $ 7,760 $ 6,242 $ 3,619 $ 5,238 $ 7,109 $ 9,536
======= ======= ======= ======= ======= ======= ======= ======= =======
</TABLE>

The valuation of the Company's common stock issued in connection with the
acquisitions was determined based on the market price of the securities over a
reasonable period of time before and after the two companies reached agreement
on the purchase price and, if applicable, after the proposed transaction is
announced. The valuation of common stock issued with contractual trading
restrictions is discounted to reflect the specific features of the stock issued.

WCI's mergers with the Murrey Companies will be accounted for under the
pooling of interests method of accounting for business combinations. The pro
forma financial statements assume the issuance of 2,888,880 shares, which
represents the number of shares exchanged.

F-8
<PAGE> 81
WASTE CONNECTIONS, INC.

NOTES TO UNAUDITED PRO FORMA

STATEMENTS OF OPERATIONS (CONTINUED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

PRO FORMA ADJUSTMENTS. The unaudited pro forma statements of operations do
not reflect non-recurring costs resulting directly from the merger between the
Company and the Murrey Companies. The management of the Company estimates that
these costs will approximate $6,500 and will be charged to operations in the
quarter that the merger was consummated. The amount includes costs to merge the
companies, signing bonuses to be paid to Murrey Company officers, and
professional fees. The following adjustments have been made to the unaudited pro
forma statements of operations:

(a) To eliminate BFI corporate environmental expense allocation related to
BFI landfill closure costs which do not exist for the Company.

(b) To record amortization of the loss contract accrual that was recorded
in connection with the acquisitions of the predecessor operations. The
loss contract accrual is being amortized to operating expenses over
the related terms of the loss contracts which range from 6 to 65
months. The loss contract accrual represents the estimated incremental
losses to the Company related to certain unfavorable contracts the
Company acquired in connection with the acquisition of the predecessor
operations.

(c) To reduce facilities lease expense to the amounts provided for in the
sublease agreement entered into with BFI in connection with the
acquisitions of the predecessor operations. The sublease agreement was
directly attributable to, a required element of, and a condition to
the closing of the acquisition.

(d) To reduce BFI corporate overhead expense allocations to the amount of
corporate overhead currently being incurred by the Company.

(e) To eliminate consulting expenses incurred by BFI related to the
acquisition of The Disposal Group which the Company did not assume in
connection with the acquisitions of the predecessors. The
non-assumption of the consulting agreement was directly attributable
to, a required element of, and a condition to the closing of the
acquisition.

(f) To decrease goodwill amortization for the lower goodwill amount
recorded by the Company in connection with its acquisition of the
predecessor operations.

(g) To eliminate the predecessor's interest expense and record interest
expense on the debt obligations incurred by the Company in connection
with the acquisitions of the predecessors.

(h) To record the estimated tax provision associated with the proforma
adjustments for the Company's predecessors net of the tax benefit for
the net operating loss for the nine months ended September 30, 1997
using the Company's effective tax rate.

(i) To record the estimated tax benefit for the year ended December 31,
1997 associated with the pro forma adjustments for the Madera $198,
Arrow $226, Shrader $60, Curry $177, Contractors $96, J&J $76, B&B
$93, Amador $144 and Butler $12 acquisitions using the Company's
estimated effective tax rates.

(j) To reduce officers' salaries to levels provided for in the new
employment agreements which were directly attributable to, required
elements of, and a condition to the closing of the Madera acquisition
$83 and the Shrader acquisition $184 for the year ended 1997 and
Madera $19 and Shrader $92 for the nine months ended September 30,
1998.

F-9
<PAGE> 82
WASTE CONNECTIONS, INC.

NOTES TO UNAUDITED PRO FORMA

STATEMENTS OF OPERATIONS (CONTINUED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

(k) To reduce depreciation for the reduction in the property and
equipment's carrying value to fair value related to the acquisition of
Madera $377, Arrow $78, Shrader $585, Curry $130, Contractors $48, J&J
$130, B&B $82, Amador $180 and Butler $412 for the year ended December
31, 1997.

(l) To increase amortization for the increase in goodwill and other
intangibles resulting from the acquisition of Madera $364, Arrow $265,
Shrader $439, Curry $130, Contractors $128, J&J $80, B&B $69, Amador
$135 and Butler $10 for the year ended December 31, 1997. To increase
(decrease) depreciation and amortization for effects of the purchase
for Madera ($19), Arrow $90, Shrader ($160), Curry ($4), Contractors
$47, J&J ($33), B&B ($2), Amador ($25) and Butler ($228) for the nine
months ended September 30, 1998. Goodwill is amortized over a term of
40 years and the covenant not to compete is amortized over a term of
five years.

(m) To eliminate interest expense associated with the outstanding debt
obligations of Madera $280, Arrow $72, Shrader $292, Curry $50,
Contractors $178, J&J $108, B&B $108, Amador $77 and Butler $180 which
were paid-off in connection with the acquisitions for the year ended
December 31, 1997 and Arrow $14, Shrader $191, Curry $33, Contractors
$90, J&J $53, B&B $46, Amador $88 and Butler $109 for the nine months
ended September 30, 1998.

(n) To record interest expense on the additional long-term debt
obligations incurred by the Company in connection with the acquisition
of Madera $897, Arrow $606, Shrader $771, Curry $493, Contractors
$338, J&J $244, B&B $354, Amador $481 and Butler $612 for the year
ended 1997 and Arrow $239, Shrader $372, Curry $247, Contractors $169,
J&J $122, B&B $177, Amador $361 and Butler $459 for the nine months
ended September 30, 1998. In the aggregate the Company incurred or
refinanced long-term debt obligations of approximately $64,469 related
to these acquisitions; with a weighted average interest rate of 7.4%.

(o) To record C corporation income tax (provision) benefit for the year
ended December 31, 1997 for Madera ($297), Shrader ($290), Contractors
$28, J&J $27, B&B ($82), Amador $41 and Butler $(45), which were
subchapter S corporations LLC or partnerships for income tax purposes
for all periods prior to their acquisition by the Company. To record
the estimated C corporation tax (provision) benefit and tax effect of
pro forma adjustments for Madera $83, Arrow $118, Shrader ($64), Curry
$10, Contractors $97, J&J $42, B&B $4, Amador $110 and Butler ($42)
for the nine months ended September 30, 1998.

(p) To eliminate interest expense for a reduction in the pro-forma
combined debt, as the offering proceeds will be used to pay off
outstanding debt obligations of the Company.

(q) To record income tax expense associated with the reduction in interest
expense associated with pro form adjustment(p).

F-10
<PAGE> 83
WASTE CONNECTIONS, INC.

NOTES TO UNAUDITED PRO FORMA

STATEMENTS OF OPERATIONS (CONTINUED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

PRO FORMA PER SHARE DATA. The shares used in computing the unaudited pro
forma net loss per share for the periods ended December 31, 1997, and the nine
months ended September 30, 1998 are based upon the pro forma number of common
shares as summarized in the table below. See Note 1 of the Company's notes to
financial statements included elsewhere herein for information concerning the
computation of basic and diluted net income (loss) per share.

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1997 1998
------------ ------------------
<S> <C> <C>
Basic Share Count:
Company weighted average shares outstanding.............. 1,872,567 5,476,532
Shares issued in connection with the acquisition of
Arrow................................................. 213,750 131,538(1)
Shares issued in connection with the acquisition of
Contractors........................................... 76,423 43,829(2)
Shares issued in connection with the acquisition of
Shrader............................................... 537,566 417,451(3)
---------- ----------
Shares used in calculating proforma basic income (loss)
per share............................................. 2,700,306 6,069,350
Shares issued in exchange for the Murrey Companies'
stock................................................. 2,888,880 2,888,880
---------- ----------
Shares used in calculating pro forma combined basic net
income (loss) per share............................... 5,589,186 8,958,230
Shares issued in connection with this offering........... 3,250,000 3,250,000
---------- ----------
Shares used in calculating pro forma combined, as
adjusted, basic net income (loss) per share........... 8,839,186 12,208,230
========== ==========
Diluted Share Count:
Shares used in calculating pro forma basic income (loss)
per share............................................. 2,700,306 6,069,350
Dilutive effect of stock options and warrants
outstanding........................................... -- 1,584,836
---------- ----------
Shares used in calculating pro forma dilutive income
(loss)................................................ 2,700,306 7,654,186
Shares issued in exchange for the Murrey Companies'
stock................................................. 2,888,880 2,888,880
---------- ----------
Shares used in calculating pro forma combined diluted net
income (loss) per share............................... 5,589,186 10,543,066
Shares issued in connection with this offering........... 3,250,000 3,250,000
---------- ----------
Shares used in calculating pro forma combined, as
adjusted, diluted net income (loss) per share......... 8,839,186 13,793,066
========== ==========
</TABLE>

- ---------------
(1) Includes only incremental shares issued for acquisition of Arrow because
82,212 shares are already included in the Company's weighted average shares
outstanding for the nine months ended September 30, 1998.

(2) Includes only incremental shares issued for acquisition of Contractors
because 39,094 shares are already in the Company's weighted average shares
outstanding for the nine months ended September 30, 1998.

(3) Includes only incremental shares issued for acquisition of Shrader because
120,115 shares are already in the Company's weighted average for the nine
months ended September 30, 1998.

ACQUISITION COSTS. The Company incurred costs of $180, $125, $225, $90,
$73, $80, $170, $100 and $132 related to the Madera, Arrow, Shrader, Curry,
Contractors, J&J, B&B, Amador and

F-11
<PAGE> 84
WASTE CONNECTIONS, INC.

NOTES TO UNAUDITED PRO FORMA

STATEMENTS OF OPERATIONS (CONTINUED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

Butler acquisitions, respectively, which have been factored into the respective
purchase agreements. Costs incurred by Madera, Arrow, Shrader, Curry,
Contractors, J&J, B&B, Amador and Butler were expensed as incurred.

No adjustments have been made in these pro forma statements of operations
to conform accounting policies of the Murrey Companies with those of the
Company. The nature and extent of such adjustments, if any, are not expected to
be significant.

CONTINGENT PAYMENTS. In connection with the Madera, Shrader, J & J and
Butler acquisitions the Company is required to pay contingent consideration to
certain former shareholders of the respective companies, subject to their
involvement in specified events that give rise to the consideration. No amounts
related to these contingent payments have been included in the pro forma
financial statements as the events which would give rise to such payments have
not yet occurred nor are probable.

Contingent payments relating to these acquisitions total $6.8 million, are
payable primarily in cash, and are earned based upon the achievement of certain
milestones. Of the total contingent payments, $4.8 million relates to the
achievement of certain operational and financial performance goals, and $2
million relates to the consummation of future acquisitions.

OTHER. The Professional Cleaning business of Madera ceased operations in
July 1997. This business had revenues of $193 and an operating loss of $215
during the year ended December 31, 1997.

Shortly before the acquisition of the predecessor operations by the
Company, BFI amended a franchise agreement with a municipality which provided
for a reduction in the franchise fees. Had this amended franchise agreement been
in effect as of January 1, 1997, pro forma cost of operations would have been
approximately $135 lower during the year ended December 31, 1997.

F-12
<PAGE> 85

WASTE CONNECTIONS, INC.

UNAUDITED PRO FORMA BALANCE SHEET
SEPTEMBER 30, 1998
(IN THOUSANDS)

<TABLE>
<CAPTION>
AMADOR BUTLER
WASTE DISPOSAL COUNTY
CONNECTIONS, INC. SERVICE, INC. LANDFILL, INC. PRO FORMA THE MURREY
CONSOLIDATED COMBINED COMBINED ADJUSTMENTS PRO FORMA COMPANIES
----------------- ------------- -------------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash.................... $ 1,090 $ 239 $ 47 $ --(2)(5)(6) $ 1,376 $ 405
Accounts receivable,
net................... 9,046 190 428 -- 9,664 3,364
Prepaid expenses and
other current
assets................ 773 76 154 -- 1,003 10
-------- ------ ------ ------- -------- -------
Total current
assets........... 10,909 505 629 -- 12,043 3,779
Property and equipment,
net..................... 18,438 2,107 3,124 4,454(3) 28,123 14,371
Goodwill, net............ 81,294 -- -- 5,395(4) 86,689 1,758
Other assets............. 3,854 30 351 50(4) 4,285 --
-------- ------ ------ ------- -------- -------
$114,495 $2,642 $4,104 $ 9,899 $131,140 $19,908
======== ====== ====== ======= ======== =======
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings... $ -- $ -- $ -- $ -- $ -- $ 620
Accounts payable........ 6,123 87 107 -- 6,317 2,217
Advance from a related
party................. -- -- -- -- -- 543
Deferred revenue........ 1,501 -- -- -- 1,501 1,432
Accrued liabilities..... 3,165 145 214 -- 3,524 1,288
Income taxes payable.... -- -- -- -- -- 277
Current portion of notes
payable............... 1,256 38 608 (474)(5)(8) 1,428 751
Other current
liabilities........... 346 -- -- -- 346 --
Accrued merger related
expenses.............. -- -- -- -- -- --
-------- ------ ------ ------- -------- -------
Total current
liabilities...... 12,391 270 929 (474) 13,116 7,128
Other long-term
liabilities............. 1,499 -- 474 -- 1,973 --
Long-term debt, net...... 40,404 1,158 816 13,472(5)(6) 55,850 4,047
Deferred income taxes.... 379 -- -- -- 379 658
Stockholders' equity:
Common stock............ 92 188 10 (198)(7) 92 45
Additional paid-in
capital............... 65,944 118 2 (120)(7) 65,944 455
Deferred stock
compensation.......... (499) -- -- -- (499) --
Retained earnings
(deficit)............. (5,715) 908 1,873 (2,781)(7) (5,715) 7,575
-------- ------ ------ ------- -------- -------
Total stockholders'
equity........... 59,822 1,214 1,885 (3,099) 59,822 8,075
-------- ------ ------ ------- -------- -------
$114,495 $2,642 $4,104 $ 9,899 $131,140 $19,908
======== ====== ====== ======= ======== =======

PRO FORMA
PRO FORMA PRO FORMA PRO FORMA COMBINED
ADJUSTMENTS COMBINED ADJUSTMENTS AS ADJUSTED
----------- --------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash.................... $ -- $ 1,781 $ 54,329(9) $ 1,781
(54,329)(10)
Accounts receivable,
net................... -- 13,028 -- $ 13,028
Prepaid expenses and
other current
assets................ -- 1,013 -- $ 1,013
------- -------- -------- --------
Total current
assets........... -- 15,822 -- 15,822
Property and equipment,
net..................... -- 42,494 -- 42,494
Goodwill, net............ -- 88,447 -- 88,447
Other assets............. -- 4,285 -- 4,285
------- -------- -------- --------
$ -- $151,048 $ -- $151,048
======= ======== ======== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings... $ -- $ 620 $ -- $ 620
Accounts payable........ -- 8,534 -- 8,534
Advance from a related
party................. -- 543 -- 543
Deferred revenue........ -- 2,933 -- 2,933
Accrued liabilities..... -- 4,812 -- 4,812
Income taxes payable.... -- 277 -- 277
Current portion of notes
payable............... -- 2,179 -- 2,179
Other current
liabilities........... -- 346 -- 346
Accrued merger related
expenses.............. 6,500(1) 6,500 -- 6,500
------- -------- -------- --------
Total current
liabilities...... 6,500 26,744 -- 26,744
Other long-term
liabilities............. -- 1,973 -- 1,973
Long-term debt, net...... -- 59,897 (54,329)(10) 5,568
Deferred income taxes.... -- 1,037 -- 1,037
Stockholders' equity:
Common stock............ (16)(1) 121 33(9) 154
Additional paid-in
capital............... 16(1) 66,415 54,296(9) 120,711
Deferred stock
compensation.......... -- (499) -- (499)
Retained earnings
(deficit)............. (6,500)(1) (4,640) -- (4,640)
------- -------- -------- --------
Total stockholders'
equity........... (6,500) 61,397 54,329 115,726
------- -------- -------- --------
$ -- $151,048 $ -- $151,048
======= ======== ======== ========
</TABLE>

See accompanying notes.
F-13
<PAGE> 86

WASTE CONNECTIONS, INC.

NOTES TO UNAUDITED PRO FORMA BALANCE SHEET

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

ASSUMPTIONS. The unaudited pro forma balance sheet as of September 30, 1998
combines the historical balance sheet of Waste Connections, Inc. with the
historical balance sheets of Amador and Butler to be accounted for as purchases,
and the historical balance sheet of the Murrey Companies to be accounted for as
poolings-of-interests as of September 30, 1998.

PRO FORMA ADJUSTMENTS. The following adjustments have been made to the
unaudited pro forma consolidated balance sheet.

(1) To record Merger related entries consisting of estimated non-recurring
costs of the Merger with the Murrey Companies and the issuance of
2,888,880 shares of the Company's common stock. The management of the
Company estimates that the non-recurring costs will approximate $6,500
and will be charged to operations in the quarter the merger was
consummated. This estimated expense, has been charged to retained
earnings on the accompanying unaudited pro forma balance sheet.

(2) Cash payments to former shareholders of Amador ($5,581) and payment of
acquisition costs ($100). Cash payments to the former shareholders of
Butler ($7,013) and payment of acquisition cost of ($132).

(3) To increase (reduce) property, plant and equipment ($707) and $5,161
of Amador and Butler, respectively to its estimated fair market value.

(4) To increase goodwill and other intangible assets for excess of the
purchase prices over the net assets acquired from Amador of $5,144 and
$30 and Butler of $251 and $20, respectively.

(5) Pay off outstanding debt obligations ($1,196) of Amador and debt
obligations ($1,424) of Butler.

(6) To record additional long term debt associated with the acquisition of
Amador and Butler of $6,877 and $8,569 respectively.

(7) To eliminate the equity accounts of Amador and Butler.

(8) To record Seller Notes Payable issued in connection with the
acquisition of Butler of $172.

(9) Issuance of 3,250,000 shares of common stock with estimated net
proceeds of $54,329.

(10) Pay-off of outstanding debt obligations of the Company with estimated
net proceeds.

No adjustments have been made in the unaudited pro forma balance sheet to
conform accounting policies of the Murrey Companies with those of the Company.
The nature and extent of such adjustments, if any, are not expected to be
significant.

F-14
<PAGE> 87

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Board of Directors and Stockholders
Waste Connections, Inc.

We have audited the accompanying financial statements of Waste Connections,
Inc. and Predecessors as of December 31, 1996 and 1997, and for each of the
three years in the period ended December 31, 1997 which appear on pages F-16
through F-23 herein as listed in the accompanying Index to Financial Statements.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Waste Connections, Inc. and
Predecessors at December 31, 1996 and 1997, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 1997, in conformity with generally accepted accounting principles.

/s/ ERNST & YOUNG LLP

Sacramento, California
March 6, 1998

F-15
<PAGE> 88

WASTE CONNECTIONS, INC. AND PREDECESSORS

BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
WASTE CONNECTIONS, INC.
CONSOLIDATED
PREDECESSORS ----------------------------
COMBINED
DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1996 (NOTE 1) 1997 1998
------------- ------------ -------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash...................................................... $ 102 $ 820 $ 1,090
Accounts receivable, less allowance for doubtful accounts
of $390 at September 30, 1998 and $19 at December 31,
1997 ($81 in 1996)...................................... 2,650 3,940 9,046
Prepaid expenses and other current assets................. 339 358 773
------- ------- --------
Total current assets................................ 3,091 5,118 10,909
Property and equipment, net................................. 5,069 4,185 18,438
Goodwill, net............................................... 6,762 9,408 81,294
Other assets................................................ 369 169 3,854
------- ------- --------
$15,291 $18,880 $114,495
======= ======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable.......................................... $ 1,025 $ 2,609 $ 6,123
Deferred revenue.......................................... 564 597 1,501
Accrued liabilities....................................... 634 825 3,165
Current portion of notes payable.......................... -- -- 1,256
Current portion of long-term debt......................... 54 -- --
Other current liabilities................................. 119 251 346
------- ------- --------
Total current liabilities........................... 2,396 4,282 12,391
Other long term liabilities................................. -- 702 1,499
Long-term debt.............................................. 89 6,762 40,404
Deferred income taxes....................................... -- 162 379
Commitments and contingencies (Note 7)
Redeemable convertible preferred stock: $.01 par value;
2,500,000 shares authorized; 2,499,998 shares issued and
outstanding at December 31, 1997; no shares issued and
outstanding at September 30, 1998 (aggregate liquidation
preference of $10,500 at December 31, 1997)............... -- 7,523 --
Net intercompany balance.................................... 12,806 -- --
Stockholders' equity (deficit):
Preferred stock: $.01 par value; 7,500,000 shares
authorized; none issued and outstanding................. -- -- --
Common stock: $.01 par value; 50,000,000 shares
authorized; 2,300,000 shares issued and outstanding at
December 31, 1997; 9,204,632 shares issued and
outstanding at September 30, 1998....................... -- 23 92
Additional paid-in capital................................ -- 5,105 65,944
Stockholder notes receivable.............................. -- (82) --
Deferred stock compensation............................... -- -- (499)
Accumulated deficit....................................... -- (5,597) (5,715)
------- ------- --------
Total stockholders' equity (deficit)................ -- (551) 59,822
------- ------- --------
$15,291 $18,880 $114,495
======= ======= ========
</TABLE>

See accompanying notes.
F-16
<PAGE> 89

WASTE CONNECTIONS, INC. AND PREDECESSORS

STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997 (AUDITED)
AND NINE MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
WASTE
PREDECESSORS CONNECTIONS, INC.
COMBINED CONSOLIDATED PERIOD WASTE
NINE MONTHS FROM INCEPTION CONNECTIONS, INC.
ENDED (SEPTEMBER 9, 1997) CONSOLIDATED NINE
SEPTEMBER 30, THROUGH MONTHS ENDED
1997 (NOTE 1) DECEMBER 31, 1997 SEPTEMBER 30, 1998
------------- ------------------- ------------------
(UNAUDITED)
<S> <C> <C> <C>
- --------------------------------------------------
Revenues.......................................... $18,114 $ 6,237 $ 35,336
Operating expenses:
Cost of operations.............................. 14,753 4,703 24,007
Selling, general and administrative............. 3,009 619 3,518
Depreciation and amortization................... 1,083 354 2,693
Start-up and integration........................ -- 493 --
Stock compensation.............................. -- 4,395 561
------- ---------- ----------
Income (loss) from operations..................... (731) (4,327) 4,557
Interest expense.................................. (456) (1,035) (1,427)
Other income (expense), net....................... 14 (36) --
------- ---------- ----------
Income (loss) before income taxes................. (1,173) (5,398) 3,130
Income tax (provision) benefit.................... -- 332 (1,513)
------- ---------- ----------
Income (loss) before extraordinary item........... (1,173) (5,066) 1,617
Extraordinary item -- early extinguishment
of debt, net of tax benefit of $165............. -- -- (815)
------- ---------- ----------
Net income (loss)................................. ($1,173) $ (5,066) $ 802
======= ========== ==========
Redeemable convertible preferred stock
accretion....................................... (531) (917)
---------- ----------
Net loss applicable to common stockholders........ $ (5,597) $ (115)
========== ==========
Basic loss per common share:
Income (loss) before extraordinary item......... $ (2.99) $ 0.13
Extraordinary item.............................. -- (0.15)
---------- ----------
Net loss per common share....................... $ (2.99) $ (0.02)
========== ==========
Diluted earnings per common share:
Income before extraordinary item................ $ (2.99) $ 0.09
Extraordinary item.............................. -- (0.11)
---------- ----------
Net loss per common share....................... $ (2.99) $ (0.02)
========== ==========
Shares used in calculating basic net loss per
share........................................... 1,872,567 5,476,532
========== ==========
Shares used in calculating diluted net loss per
share........................................... 1,872,567 7,438,658
========== ==========
Pro forma basic net income (loss) per share....... $ (1.16) $ 0.11
========== ==========
Shares used in calculating pro forma basic net
income (loss) per share......................... 4,372,565 7,117,557
========== ==========
Pro forma diluted net income (loss) per share..... $ (1.16) $ 0.09
========== ==========
Shares used in calculating pro forma diluted net
income (loss) per share......................... 4,372,565 8,702,393
- --------------------------------------------------
========== ==========
</TABLE>

See accompanying notes.
F-17
<PAGE> 90

WASTE CONNECTIONS, INC. AND PREDECESSORS

STATEMENTS OF OPERATIONS (CONTINUED)
YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS)

<TABLE>
<CAPTION>
PREDECESSORS
------------------------------------
THE DISPOSAL
GROUP
COMBINED PREDECESSORS
PERIOD FROM COMBINED PERIOD
JANUARY 1, 1996 ENDED
THROUGH DECEMBER 31, 1996
JULY 31, 1996 (NOTE 1)
--------------- -----------------
<S> <C> <C>
Revenues.................................................. $8,738 $13,422
Operating expenses:
Cost of operations...................................... 6,174 11,420
Selling, general and administrative..................... 2,126 1,649
Depreciation and amortization........................... 324 962
------ -------
Income (loss) from operations............................. 114 (609)
Interest expense.......................................... (12) (225)
Other income (expense), net............................... 2,661 (147)
------ -------
Income (loss) before income taxes......................... 2,763 (981)
Income tax (provision) benefit............................ (505) --
------ -------
Net income (loss)......................................... $2,258 $ (981)
====== =======
</TABLE>

See accompanying notes.
F-18
<PAGE> 91

WASTE CONNECTIONS, INC. AND PREDECESSORS

STATEMENTS OF OPERATIONS (CONTINUED)
YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS)

<TABLE>
<CAPTION>
PREDECESSORS
----------------------------------------------------
THE DISPOSAL FIBRES
GROUP INTERNATIONAL, INC. PREDECESSORS
COMBINED PERIOD FROM ONE MONTH
YEAR ENDED JANUARY 1, 1995 ENDED
DECEMBER 31, THROUGH DECEMBER 31,
1995 NOVEMBER 30, 1995 1995(NOTE 1)
------------ -------------------- ------------
<S> <C> <C> <C>
Revenues.............................. $19,660 $7,340 $595
Operating expenses:
Cost of operations.................. 16,393 5,653 527
Selling, general and
administrative................... 3,312 823 72
Depreciation and amortization....... 628 715 74
------- ------ ----
Income (loss) from operations......... (673) 149 (78)
Interest expense...................... (206) (162) (1)
Other income, net..................... -- 98 5
------- ------ ----
Income (loss) before income taxes..... (879) 85 (74)
Income tax (provision) benefit........ 298 (29) --
------- ------ ----
Net income (loss)..................... $ (581) $ 56 $(74)
======= ====== ====
</TABLE>

See accompanying notes.
F-19
<PAGE> 92

WASTE CONNECTIONS, INC. AND PREDECESSORS

CONSOLIDATED STATEMENT OF REDEEMABLE STOCK
AND STOCKHOLDERS' EQUITY (DEFICIT)
PERIOD FROM INCEPTION (SEPTEMBER 9, 1997) THROUGH DECEMBER 31, 1997 (AUDITED)
AND NINE MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
WASTE CONNECTIONS, INC. CONSOLIDATED
---------------------------------------------
REDEEMABLE STOCKHOLDERS' EQUITY (DEFICIT)
CONVERTIBLE REDEEMABLE ---------------------------------------------
PREFERRED STOCK COMMON STOCK COMMON STOCK ADDITIONAL STOCKHOLDER
-------------------- -------------------- ------------------ PAID-IN NOTES
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL RECEIVABLE
---------- ------- ---------- ------- --------- ------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balances at inception........ -- $ -- -- $ -- -- -- $ -- $ --
Sale of redeemable
convertible preferred
stock....................... 2,499,998 6,992 -- -- -- -- -- --
Sale of common stock......... -- -- -- -- 2,300,000 23 4,395 --
Issuance of common stock
warrants.................... -- -- -- -- -- -- 710 --
Issuance of stockholder notes
receivable.................. -- -- -- -- -- -- -- (82)
Accretion of redeemable
convertible preferred
stock....................... -- 531 -- -- -- -- -- --
Net loss..................... -- -- -- -- -- -- -- --
---------- ------- ---------- ------- --------- --- ------- ----
Balances at December 31,
1997........................ 2,499,998 7,523 -- -- 2,300,000 23 5,105 (82)
Exercise of warrants
(unaudited)................. -- -- -- -- 50,000 -- 140 --
Payment of stockholder notes
receivable.................. -- -- -- -- -- -- -- 82
Issuance of redeemable common
stock (unaudited)........... -- -- 1,000,000 7,500 -- -- -- --
Issuance of common stock
warrants (unaudited)........ -- -- -- -- -- -- 2,388 --
Accretion of redeemable
convertible preferred stock
(unaudited)................. -- 917 -- -- -- -- -- --
Deferred stock compensation
associated with stock
options (unaudited)......... -- -- -- -- -- -- 821 --
Amortization of deferred
stock compensation
(unaudited)................. -- -- -- -- -- -- -- --
Common stock sold in
connection with IPO
(unaudited)................. -- -- -- -- 2,300,000 23 23,963 --
Issuance of common stock
(unaudited)................. -- -- -- -- 1,054,634 11 17,783 --
Preferred stock dividend
(unaudited)................. -- (161) -- -- -- -- -- --
Conversion of redeemable
preferred stock
(unaudited)................. (2,499,998) (8,279) -- -- 2,499,998 25 8,254 --
Conversion of redeemable
common stock (unaudited).... (1,000,000) (7,500) 1,000,000 10 7,490 --
Net income (unaudited)....... -- -- -- -- -- -- -- --
---------- ------- ---------- ------- --------- --- ------- ----
Balances at September 30,
1998 (unaudited)............ -- $ -- -- $ -- 9,204,632 $92 $65,944 $ --
========== ======= ========== ======= ========= === ======= ====

<CAPTION>
WASTE CONNECTIONS, INC. CONSOLIDATED
------------------------------------
STOCKHOLDERS' EQUITY (DEFICIT)
------------------------------------
DEFERRED
STOCK ACCUMULATED
COMPENSATION DEFICIT TOTAL
------------ ----------- -------
<S> <C> <C> <C>
Balances at inception........ $ -- $ -- $ --
Sale of redeemable
convertible preferred
stock....................... -- -- --
Sale of common stock......... -- -- 4,418
Issuance of common stock
warrants.................... -- -- 710
Issuance of stockholder notes
receivable.................. -- -- (82)
Accretion of redeemable
convertible preferred
stock....................... -- (531) (531)
Net loss..................... -- (5,066) (5,066)
----- ------- -------
Balances at December 31,
1997........................ -- (5,597) (551)
Exercise of warrants
(unaudited)................. -- -- 140
Payment of stockholder notes
receivable.................. -- -- 82
Issuance of redeemable common
stock (unaudited)........... -- -- --
Issuance of common stock
warrants (unaudited)........ -- -- 2,388
Accretion of redeemable
convertible preferred stock
(unaudited)................. -- (917) (917)
Deferred stock compensation
associated with stock
options (unaudited)......... (821) -- --
Amortization of deferred
stock compensation
(unaudited)................. 322 -- 322
Common stock sold in
connection with IPO
(unaudited)................. -- -- 23,986
Issuance of common stock
(unaudited)................. -- -- 17,794
Preferred stock dividend
(unaudited)................. -- -- --
Conversion of redeemable
preferred stock
(unaudited)................. -- -- 8,279
Conversion of redeemable
common stock (unaudited).... -- -- 7,500
Net income (unaudited)....... -- 802 802
----- ------- -------
Balances at September 30,
1998 (unaudited)............ $(499) $(5,715) $59,822
===== ======= =======
</TABLE>

See accompanying notes.
F-20
<PAGE> 93

WASTE CONNECTIONS, INC. AND PREDECESSORS

STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1997 (AUDITED)
AND NINE MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED)
(IN THOUSANDS)

<TABLE>
<CAPTION>
WASTE CONNECTIONS, INC.
PREDECESSORS CONSOLIDATED
COMBINED PERIOD FROM
NINE MONTHS INCEPTION WASTE CONNECTIONS, INC.
ENDED (SEPTEMBER 9, 1997) CONSOLIDATED NINE
SEPTEMBER 30, THROUGH MONTHS ENDED
1997 (NOTE 1) DECEMBER 31, 1997 SEPTEMBER 30, 1998
------------- ----------------------- -----------------------
(UNAUDITED)
<S> <C> <C> <C>
- ------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)......................................... $(1,173) $ (5,066) $ 802
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Gain on sale of assets.................................. (4) -- --
Depreciation and amortization........................... 1,083 354 2,693
Deferred income taxes................................... -- (369) --
Amortization of debt issuance costs, debt guarantee fees
and accretion of discount on long-term debt........... -- 860 176
Stock compensation...................................... -- 4,395 562
Extraordinary item -- extinguishment of debt............ -- -- 981
Changes in operating assets and liabilities, net of
effects from acquisitions:
Accounts receivable, net.............................. (604) (1,021) (989)
Prepaid expenses and other current assets............. (74) (51) (249)
Accounts payable...................................... (221) 2,607 492
Deferred revenue...................................... (137) 169 326
Accrued liabilities................................... (450) 801 (178)
Accrued losses on acquired contracts.................. -- (65) (241)
------- ---------- --------
Net cash provided by (used in) operating activities....... (1,580) 2,614 4,375
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment.............. 188 -- 58
Payments for acquisitions, net of cash acquired........... -- (11,493) (44,185)
Prepaid acquisition costs................................. -- (20) --
Capital expenditures for property and equipment........... (735) (264) (2,068)
Decrease (increase) in other assets....................... 22 (19) --
Proceeds from stockholder notes receivable................ -- -- 82
Issuance of stockholder notes receivable.................. -- (82) --
------- ---------- --------
Net cash used in investing activities....................... (525) (11,878) (46,113)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net intercompany balance.................................. 2,142 -- --
Proceeds from short-term borrowings....................... -- 600 --
Proceeds from long-term debt.............................. -- 5,500 57,703
Principal payments on notes payable....................... (38) (2,724) (407)
Principal payments on long-term debt...................... -- (157) (38,653)
Proceeds from sale of redeemable convertible preferred
stock................................................... -- 6,992 --
Proceeds from sale of common stock........................ -- 23 24,126
Payment of preferred stock dividend....................... -- -- (161)
Debt issuance costs....................................... -- (150) (600)
------- ---------- --------
Net cash provided by financing activities................... 2,104 10,084 42,008
------- ---------- --------
Net increase (decrease) in cash............................. (1) 820 270
Cash at beginning of period................................. 102 -- 820
------- ---------- --------
Cash at end of period....................................... $ 101 $ 820 $ 1,090
======= ========== ========
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION AND
NON-CASH TRANSACTIONS:
Cash paid for income taxes................................ $ -- $ -- $ 887
======= ========== ========
Cash paid for interest.................................... $ -- $ 183 $ 791
======= ========== ========
Redeemable convertible preferred stock accretion.......... $ 531 $ 917
========== ========
In connection with the BFI related acquisitions (Note 2),
the Company assumed liabilities as follows:
Fair value of assets acquired........................... $ 17,040 $ 91,103
Cash paid for acquisitions (including acquisition
costs)................................................ (11,493) (44,185)
---------- --------
Liabilities assumed, stock and notes payable to
seller................................................ $ 5,547 $ 46,918
========== ========
</TABLE>

See accompanying notes.
F-21
<PAGE> 94

WASTE CONNECTIONS, INC. AND PREDECESSORS

STATEMENTS OF CASH FLOWS (CONTINUED)

YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS)

<TABLE>
<CAPTION>
PREDECESSORS
-------------------------------
THE DISPOSAL
GROUP COMBINED PREDECESSORS
PERIOD FROM COMBINED
JANUARY 1, PERIOD ENDED
1996 THROUGH DECEMBER 31,
JULY 31, 1996 1996 (NOTE 1)
--------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)......................................... $2,258 $ (981)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization.......................... 324 962
Deferred income taxes.................................. 298 --
Changes in operating assets and liabilities, net of
effects from acquisitions:
Accounts receivable, net............................. 1,201 (1,992)
Prepaid expenses and other current assets............ (2) (104)
Accounts payable..................................... (45) 713
Deferred revenue..................................... (522) 421
Accrued liabilities.................................. (987) 428
------ ------
Net cash provided by (used in) operating activities....... 2,525 (553)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment.............. -- 117
Capital expenditures for property and equipment........... (7) (282)
Decrease in other assets.................................. -- 33
------ ------
Net cash used in investing activities....................... (7) (132)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net intercompany balance.................................. -- 642
Proceeds from long-term debt.............................. 142 --
Principal payments on long-term debt...................... (427) --
Principal payments on notes payable....................... -- (39)
------ ------
Net cash provided by (used in) financing activities......... (285) 603
------ ------
Net increase (decrease) in cash............................. 2,233 (82)
Cash at beginning of period................................. 961 184
------ ------
Cash at end of period....................................... $3,194 $ 102
====== ======
</TABLE>

See accompanying notes.

F-22
<PAGE> 95

WASTE CONNECTIONS, INC. AND PREDECESSORS

STATEMENTS OF CASH FLOWS (CONTINUED)

YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS)

<TABLE>
<CAPTION>
PREDECESSORS
-----------------------------------
THE DISPOSAL FIBRES
GROUP INTERNATIONAL, INC. PREDECESSORS
COMBINED PERIOD FROM ONE MONTH
YEAR ENDED JANUARY 1, 1995 ENDED
DECEMBER 31, THROUGH DECEMBER 31,
1995 NOVEMBER 30, 1995 1995 (NOTE 1)
------------ ------------------- -------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)......................... $ (581) $ 56 $ (74)
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Loss on sale of assets................. 18 -- --
Depreciation and amortization.......... 628 778 74
Deferred income taxes.................. (298) -- --
Changes in operating assets and
liabilities, net of effects from
acquisitions:
Accounts receivable, net............. 592 59 10
Prepaid expenses and other current
assets............................ (18) -- (30)
Accounts payable..................... (49) 53 (30)
Deferred revenue..................... 65 30 (26)
Accrued liabilities.................. 2,218 47 20
------- ----- -----
Net cash provided by (used in) operating
activities............................. 2,575 1,023 (56)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures for property and
equipment.............................. (87) (827) --
Decrease in other assets.................. -- 3 10
------- ----- -----
Net cash provided by (used in) investing
activities................................ (87) (824) 10
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt.............. 306 -- --
Principal payments on long-term debt...... (2,037) (288) --
Principal payments on notes payable....... -- -- (2)
------- ----- -----
Net cash used in financing activities..... (1,731) (288) (2)
------- ----- -----
Net increase (decrease) in cash............. 757 (89) (48)
Cash at beginning of period................. 204 321 232
------- ----- -----
Cash at end of period....................... $ 961 $ 232 $ 184
======= ===== =====
</TABLE>

See accompanying notes.

F-23
<PAGE> 96

WASTE CONNECTIONS, INC. AND PREDECESSORS

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(INFORMATION RELATING TO SEPTEMBER 30, 1998 AND
THE NINE MONTHS ENDED SEPTEMBER 30, 1998 IS UNAUDITED)

1. ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Business

Waste Connections, Inc. ("WCI" or "the Company") was incorporated in
Delaware on September 9, 1997 and commenced its operations on October 1, 1997
through the purchase of certain solid waste operations in Washington, as more
fully described below and in Note 2. The Company is a regional, integrated,
non-hazardous solid waste services company that provides collection, transfer,
disposal and recycling services to commercial, industrial and residential
customers.

Basis of Presentation

The consolidated financial statements of the Company include the accounts
of WCI and its wholly owned subsidiaries. All significant intercompany
transactions and balances have been eliminated in consolidation.

The entities the Company acquired in September 1997 from Browning-Ferris
Industries, Inc. ("BFI") are collectively referred to herein as the Company's
predecessors. BFI acquired the predecessor operations at various times during
1995 and 1996, and prior to being acquired by BFI, the predecessors operated as
separate stand-alone businesses.

During the periods in which the Company's predecessors operated as wholly
owned subsidiaries of BFI, they maintained intercompany accounts with BFI for
recording intercompany charges for costs and expenses, intercompany purchases of
equipment and additions under capital leases and intercompany transfers of cash,
among other transactions. It is not feasible to ascertain the amount of related
interest expense that would have been recorded in the historical financial
statements had the predecessors been operated as stand-alone entities. Charges
for interest expense were allocated to the Company's predecessors by BFI as
disclosed in the accompanying Statement of Operations. The interest expense
allocations from BFI are based on formulas that do not necessarily correspond
with the balances in the related intercompany accounts. Moreover, the financial
position and results of operations of the predecessors during this period may
not necessarily be indicative of the financial position or results of operations
that would have been realized had the predecessors been operated as stand-alone
entities. For the periods in which the predecessors operated as wholly owned
subsidiaries of BFI, the statements of operations include amounts allocated by
BFI to the predecessors for selling, general and administrative expenses based
on certain allocation methodologies which the Company's management believes are
reasonable.

During the periods prior to their acquisition by BFI, the Company's
predecessors operated as separate stand-alone businesses. The acquisitions of
the predecessors by BFI were accounted for using the purchase method of
accounting, and the respective purchase prices were allocated to the fair values
of the assets acquired and liabilities assumed. Similarly, the Company's
acquisitions of the predecessors from BFI in September 1997 were accounted for
using the purchase method of accounting, and the purchase price was allocated to
the fair value of the assets acquired and liabilities assumed. Consequently, the
amounts of depreciation and amortization included in the statements of
operations for the periods presented reflect the changes in basis of the
underlying assets that were made as a result of the changes in ownership that
occurred during the periods presented. In addition, because the predecessor
companies operated independently and were not under common control or management
during these periods, and because different tax strategies

F-24
<PAGE> 97
WASTE CONNECTIONS, INC. AND PREDECESSORS

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(INFORMATION RELATING TO SEPTEMBER 30, 1998 AND
THE NINE MONTHS ENDED SEPTEMBER 30, 1998 IS UNAUDITED)

may have influenced their results of operations, the data may not be comparable
to or indicative of their operating results after their acquisition by BFI.

Due to the manner in which BFI intercompany transactions were recorded as
described above, it is not feasible to present a detailed analysis of
transactions reflected in the net intercompany balance with BFI. The change in
the predecessors' combined intercompany balance with BFI (net of income (loss)
and initial investment in the acquired companies) was $642 and $2,142 during the
period ended December 31, 1996 and the nine months ended September 30, 1997,
respectively.

The accompanying statements of operations and cash flows for the Company
and its predecessors for the years ended December 31, 1995, 1996 and 1997 are
comprised of the following entities for the periods indicated:

<TABLE>
<S> <C>
YEAR ENDED DECEMBER 31, 1995:

The Disposal Group Combined Year ended December 31, 1995
Fibres International, Inc. January 1, 1995 through November 30, 1995
(BFI acquisition date)
Predecessors One month ended December 31, 1995 (represents the
results of operations of Fibres International,
Inc. subsequent to the BFI acquisition date)

YEAR ENDED DECEMBER 31, 1996:

The Disposal Group Combined January 1, 1996 through July 31, 1996
(BFI acquisition date)
Predecessors Combined Period ended December 31, 1996 (represents the
combined results of operations of The Disposal
Group subsequent to the BFI acquisition date and
the operations for the year ended December 31,
1996 of Fibres International, Inc. which was
acquired by BFI in 1995)

YEAR ENDED DECEMBER 31, 1997:

Predecessors Combined Nine months ended September 30, 1997 (represents
the combined results of operations for the nine
month period of the entities acquired by BFI in
1995 and 1996 described above)
Waste Connections, Inc. Period from inception (September 9, 1997) through
December 31, 1997
</TABLE>

The Disposal Group Combined consists of three entities that were under
common control prior to their acquisition by BFI: Diamond Fab and Welding
Service, Inc., Buchmann Sanitary Service, Inc., and The Disposal Group.

F-25
<PAGE> 98
WASTE CONNECTIONS, INC. AND PREDECESSORS

Interim Financial Information

The unaudited interim consolidated financial statements as of September 30,
1998 and for the nine months ended September 30, 1998 have been prepared in
accordance with generally accepted accounting principles for interim financial
information. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the nine months ended September 30,
1998 are not necessarily indicative of the results that may be expected for the
year ended December 31, 1998.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

\ Common Stock Valuation

In connection with the Company's organization and initial capitalization in
September 1997, the Company sold 2.3 million shares of common stock for $.01 per
share to certain directors, consultants, and management. As a result, the
Company recorded a non-recurring, non-cash stock compensation charge of $4,395
in the accompanying consolidated statement of operations, representing the
difference between the amount paid for the shares and the estimated fair value
of the shares of $1.92 per share on the date of sale. The estimated fair value
of the common shares was determined by the Company based on an independent
valuation of the common stock.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to
concentrations of credit risks consist primarily of accounts receivable. Credit
risk on accounts receivable is minimized as a result of the large and diverse
nature of the Company's customer base. The Company maintains an allowance for
losses based on the expected collectibility of accounts receivable. Credit
losses have been within management's expectations.

Property and Equipment

Property and equipment are stated at cost. Improvements or betterments
which significantly extend the life of an asset are capitalized. Expenditures
for maintenance and repair costs are charged to operations as incurred. The cost
of assets retired or otherwise disposed of and the related accumulated
depreciation are eliminated from the accounts in the year of disposal. Gains and
losses resulting from property disposals are included in other income (expense).
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets.

F-26
<PAGE> 99
WASTE CONNECTIONS, INC. AND PREDECESSORS

The estimated useful lives are as follows:

<TABLE>
<S> <C>
Machinery and equipment........ 3 - 10 years
Rolling stock.................. 10 years
Containers..................... 5 - 12 years
Furniture and fixtures......... 3 - 6 years
</TABLE>

In connection with the BFI acquisitions (Note 2) the Company acquired
certain used property and equipment. This used property and equipment is being
depreciated using the straight-line method over its estimated remaining useful
lives, which range from one to nine years.

Capitalized landfill costs include expenditures for land and related
airspace, permitting costs and preparation costs. Landfill permitting and
preparation costs represent only direct costs related to those activities,
including legal, engineering and construction. Interest is capitalized on
landfill permitting and construction projects and other projects under
development while the assets are undergoing activities to ready them for their
intended use. The interest capitalization rate is based on the Company's
weighted average cost of indebtedness. No interest was capitalized during the
nine months ended September 30, 1998. Landfill permitting, acquisition and
preparation costs, excluding the estimated residual value of land, are amortized
as permitted airspace of the landfill is consumed. Landfill preparation costs
include the costs of construction associated with excavation, liners, site berms
and the installation of leak detection and leachate collection systems. In
determining the amortization rate for a landfill, preparation costs include the
total estimated costs to complete construction of the landfills' permitted
capacity. Units-of-production amortization rates are determined annually for the
Company's operating landfill. The rates are based on estimates provided by the
Company's outside engineers and consider the information provided by surveys
which are performed at least annually.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of
the net assets of the acquired entities (Note 2), and is amortized on a
straight-line basis over the period of expected benefit of 40 years. Accumulated
amortization amounted to $279 and $64 as of December 31, 1996 and 1997,
respectively.

The Company continually evaluates the value and future benefits of its
intangibles. The Company assesses recoverability from future operations using
income from operations of the related acquired business as a measure. Under this
approach, the carrying value would be reduced if it becomes probable that the
Company's best estimate for expected future cash flows of the related business
would be less than the carrying amount of the intangible over the remaining
amortization period. For the period ending December 31, 1997, there were no
adjustments to the carrying amounts of intangibles resulting from these
evaluations.

Fair Value of Financial Instruments

The carrying values of the line of credit (Note 5) and other long-term debt
(Note 6) approximate their fair values as of December 31, 1997 and September 30,
1998, based on current incremental borrowing rates for similar types of
borrowing arrangements.

F-27
<PAGE> 100
WASTE CONNECTIONS, INC. AND PREDECESSORS

Income Taxes

The Company, The Disposal Group, and Fibres International, Inc., use the
liability method to account for income taxes. Under this method, deferred tax
assets and liabilities are determined based on differences between the financial
reporting and tax bases of assets and liabilities and are measured using the
enacted tax rates and laws that will be in effect when the differences are
expected to reverse.

During the periods in which the predecessors were owned by BFI, their
operations were included in the consolidated income tax returns of BFI, and no
allocations of income taxes were reflected in the historical statements of
operations. For purposes of the combined predecessor financial statements,
current and deferred income taxes have been provided on a separate income tax
return basis.

Revenue Recognition

Revenues are recognized as services are provided. Certain customers are
billed in advance and, accordingly, recognition of the related revenues is
deferred until the services are provided.

Start-Up and Integration Expenses

During the period from inception (September 9, 1997) through December 31,
1997, the Company incurred certain start-up expenses relating to the formation
of the Company, primarily for legal and other professional services, and the
costs associated with recruiting the Company's initial management team. In
addition, the Company incurred certain integration expenses relating to the
Acquisitions (Note 2). These start-up and integration expenses have been charged
to operations as incurred.

As described in Note 9, the Company issued warrants during the period from
inception (September 9, 1997) through December 31, 1997 to a bank in connection
with a line of credit and term loan payable, and to certain directors and
stockholders of the Company in connection with their guarantee of certain of the
Company's debt obligations. The fair value of these warrants is being amortized
into interest expense. During the period from inception (September 9, 1997)
through December 31, 1997, $710 relating to these warrants is included in
interest expense in the accompanying statement of operations of the Company.

Stock-Based Compensation

As permitted under the provisions of Financial Accounting Standards No. 123
"Accounting for Stock Based Compensation" ("SFAS 123"), the Company has elected
to account for stock-based compensation using the intrinsic value method
prescribed by Accounting Principles Board's Opinion No. 25 "Accounting for Stock
Issued to Employees" ("APB 25"). Under the intrinsic value method, compensation
cost is the excess, if any, of the quoted market price or fair value of the
stock at the grant date or other measurement date over the amount an employee
must pay to acquire the stock. None of the predecessor entities awarded
stock-based compensation to employees. Consequently, the related disclosures in
the accompanying financial statements and notes relate solely to the Company.

F-28
<PAGE> 101
WASTE CONNECTIONS, INC. AND PREDECESSORS

Per Share Information

In 1997, the Financial Accounting Standards Board ("FASB")issued Statement
No. 128, Earnings per Share. Statement 128 replaced the calculation of primary
and fully diluted earnings per share with basic and diluted earnings per share.
Unlike primary earnings per share, basic earnings per share excludes any
dilutive effects of options, warrants and convertible securities. Diluted
earnings per share is very similar to the previously reported fully diluted
earnings per share. All earnings per share amounts have been presented on the
basis set forth in Statement 128 (Note 11). Earnings per share data have not
been presented for the predecessor operations because such data is not
meaningful.

Pro-forma basic net income (loss) per share is computed by dividing the net
income (loss) by the sum of the weighted average number of shares of common
stock outstanding and common shares issuable upon the conversion of all
outstanding shares of Redeemable Convertible Preferred Stock (Note 8) as though
such conversion occurred at the beginning of the period.

Pro-forma diluted net income per share is computed by dividing net income
by the sum of the weighted average number of shares of common stock outstanding,
common shares issuable upon conversion of all outstanding shares of Redeemable
Convertible Preferred Stock (Note 8) as though such conversion occurred at the
beginning of the period, and common shares issuable upon the exercise of
outstanding common stock options and warrants (calculated using the treasury
stock method.)

Closure and Post-Closure Costs

The Company does not accrue for closure and post-closure costs related to
the Fairmead Landfill it operated in Madera County, California. Madera County as
required by state law, has established a special fund to pay such liabilities.
On June 5, 1998, the Company acquired the stock of Red Carpet Landfill, Inc. in
Oklahoma. Red Carpet is engaged in landfilling of municipal solid waste and
other acceptable waste streams in the county of Major, Oklahoma. As a result of
the acquisition, the Company is required to accrue for closure and post-closure
costs related to the landfill. Accrued closure and post-closure costs include
the current and non-current portion of accruals associated with obligations for
closure and post-closure of the landfill. The Company, based as input from its
outside engineers, estimates its future closure and post-closure monitoring and
maintenance costs for solid waste landfills based on its interpretation of the
technical standards of the U.S. Environmental Protection Agency's Subtitle D
regulations and the air emissions standards under the Clean Air Act as they are
being applied on a state-by-state basis. 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 closure and post-closure monitoring and maintenance requirements in the U.S.
consider final capping of the site, 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. Reviews of the future requirements for closure and
post-closure monitoring and maintenance costs for the Company's operating
landfills are performed by the Company's consulting engineers at least annually
and are the basis upon which the Company's estimates of
F-29
<PAGE> 102
WASTE CONNECTIONS, INC. AND PREDECESSORS

these future costs and the related accrual rates are revised. The Company
provides accruals for these estimated costs as the remaining permitted airspace
of such facilities is consumed. As of September 30, 1998, the Company estimates
that total closure and post closure costs relating to the Red Carpet Landfill
will be approximately $929,000, of which approximately $491,000 has been accrued
as of September 30, 1998 and included in other long-term liabilities in the
accompanying balance sheet. The states in which the Company operates its
landfills require a specified portion of these accrued closure and post-closure
obligations to be funded at any point in time.

New Accounting Pronouncements

In February 1997, the FASB issued Statement No. 129, Disclosure of
Information about Capital Structure, which is effective for financial statements
for periods ending after December 15, 1997. This statement establishes standards
for disclosing information about an entity's capital structure. Adoption of
Statement 129 will have no impact on the Company's existing disclosures.

In June 1997, the FASB issued Statement No. 130, Reporting Comprehensive
Income. Statement 130 establishes standards for reporting and disclosure of
comprehensive income and its components (revenues, expenses, gains, and losses)
in a full set of general-purpose financial statements. Statement 130, which is
effective for fiscal years beginning after December 15, 1997, requires
reclassification of financial statements for earlier periods to be provided for
comparative purposes. The Company anticipates that implementing the provisions
of Statement 130 will not have a significant impact on the Company's existing
disclosures.

In June 1997, the FASB issued Statement No. 131, Disclosure About Segments
of an Enterprise and Related Information. Statement 131 establishes standards
for the way that public business enterprises report information about operating
segments. It also establishes standards for related disclosures about products
and services, geographic areas and major customers. Statement 131 is effective
for fiscal years beginning after December 15, 1997. In the initial year of
application, comparative information for earlier years must be restated. The
Company anticipates that implementing the provisions of Statement 131 will not
have a significant impact on the Company's existing disclosures.

2. ACQUISITIONS

Browning-Ferris Industries Related

On September 29, 1997, the Company purchased all of the outstanding stock
of Browning-Ferris Industries of Washington, Inc. and Fibres International, Inc.
from BFI (collectively the "Acquisitions"). The total purchase price for the
Acquisitions was approximately $15,036, comprised principally of $11,493 in cash
and promissory notes payable to BFI totaling $3,543. Of the combined $15,036
purchase price, $9,578 was recorded as goodwill and $150 was assigned to a
non-competition agreement. The Acquisitions were accounted for in accordance
with the purchase method of accounting and, accordingly, the net assets acquired
were included in the Company's consolidated balance sheet based upon their
estimated fair values on the date of the Acquisitions. The Company's
consolidated statement of operations includes the revenues and expenses of the
acquired businesses after the effective date of the transaction.

F-30
<PAGE> 103
WASTE CONNECTIONS, INC. AND PREDECESSORS

Certain items affecting the purchase price and the allocation are
preliminary. A summary of the preliminary purchase price allocation as of
December 31, 1997 for the Acquisitions is as follows:

<TABLE>
<S> <C>
Acquired assets:
Accounts receivable................................... $ 2,919
Prepaid expenses and other current assets............. 287
Property and equipment................................ 4,106
Goodwill.............................................. 9,578
Non-competition agreement............................. 150
Assumed liabilities:
Deferred revenue...................................... (428)
Accounts payable and accrued liabilities.............. (26)
Accrued losses on acquired contracts.................. (1,018)
Deferred income taxes................................. (532)
-------
$15,036
=======
</TABLE>

During the nine months ended September 30, 1998, the Company increased the
accrual for losses on acquired contracts and goodwill by approximately $291 to
reflect revised estimates of additional losses on the acquired contracts that
are expected to be incurred.

Madera Disposal Systems, Inc.

On February 23, 1998, the Company purchased all of the outstanding stock of
Madera Disposal Systems, Inc. ("Madera") effective February 1, 1998, pursuant to
a Stock Purchase Agreement (the "Agreement"). The Agreement requires the Company
to pay to the shareholders of Madera $9,579 in cash (a portion of which was used
to repay Madera outstanding debt on the date of acquisition and which is subject
to other adjustments as specified in the Agreement), 1,000,000 shares of the
Company's common stock with a fair market value of $7,500 (the "Stock"),
warrants to purchase 200,000 shares of the Company's common stock at $4.00 per
share with a fair market value of $954 (the "Warrants") and other contingent
consideration. The Agreement provides that in the event the Company does not
complete an initial public offering ("IPO") of its stock by March 31, 1999, with
aggregate gross proceeds of at least $5,000, the Company may be required to
repurchase the Stock and the Warrants from the former shareholders of Madera for
$2,800 in cash if certain other conditions are also met.

The Madera acquisition has been accounted for in accordance with the
purchase method of accounting. The total purchase price and the excess of the
purchase price over the fair value of the net assets acquired in the Madera
acquisition were approximately $18,213 and $14,580, respectively.

F-31
<PAGE> 104
WASTE CONNECTIONS, INC. AND PREDECESSORS

Certain items affecting the purchase price and the allocation are
preliminary. A summary of the preliminary purchase price allocation for the
Madera acquisition is as follows:

<TABLE>
<S> <C>
Acquired assets:
Cash...................................................... $ 1,388
Accounts receivable....................................... 905
Prepaid expenses and other current assets................. 141
Property and equipment.................................... 2,100
Long-term franchise agreements and contracts.............. 725
Goodwill.................................................. 14,580
Assumed liabilities:
Accounts payable and accrued liabilities.................. (1,120)
Accrued losses on acquired contracts...................... (306)
Notes payable............................................. (200)
-------
$18,213
=======
</TABLE>

Arrow Sanitary Service, Inc.

On June 17, 1998, the Company purchased all of the outstanding stock of
Arrow Sanitary Service, Inc. ("Arrow") effective June 1, 1998, pursuant to a
Stock Purchase Agreement (the "Arrow Agreement"). The Arrow Agreement required
the Company to pay the shareholders of Arrow $7,944 in cash (a portion of which
was used to repay the Arrow outstanding debt on the date of the acquisition and
a portion of which is subject to other adjustments as specified in the Arrow
Agreement), 213,750 shares of the Company's common stock with an estimated fair
market value of $3,045.

The Arrow acquisition has been accounted for in accordance with the
purchase method of accounting. The total purchase price and the excess of the
purchase price over the fair value of the net assets acquired in the Arrow
acquisition were approximately $11,255 and $10,528, respectively.

Certain items affecting the purchase price and the allocation are
preliminary. A summary of the preliminary purchase price allocation for the
Arrow acquisition is as follows:

<TABLE>
<S> <C>
Acquired assets:
Accounts receivable....................................... $ 575
Prepaid expenses and other current assets................. 10
Property and equipment.................................... 313
Covenant not to compete................................... 50
Goodwill.................................................. 10,528
Assumed liabilities:
Accounts payable and accrued liabilities.................. (221)
-------
$11,255
=======
</TABLE>

F-32
<PAGE> 105
WASTE CONNECTIONS, INC. AND PREDECESSORS

Predecessor Acquisitions

As described in Note 1, BFI acquired for cash and debt Fibres
International, Inc. on November 30, 1995 and The Disposal Group Combined on July
31, 1996 in transactions that were accounted for as purchases. Accordingly, the
respective purchase prices were allocated to the fair values of the assets
acquired and liabilities assumed. The following presents purchase price
information for these acquisitions:

<TABLE>
<CAPTION>
THE
FIBRES DISPOSAL
INTERNATIONAL, GROUP
INC. COMBINED
-------------- ---------
<S> <C> <C>
Tangible assets acquired................... $5,076 $2,076
Goodwill................................... 4,187 2,671
Assumed liabilities........................ (969) (33)
------ ------
$8,294 $4,714
====== ======
</TABLE>

3. PROPERTY AND EQUIPMENT

Property and equipment as of December 31, 1996 and 1997 and September 30,
1998 consists of the following:

<TABLE>
<CAPTION>
PREDECESSORS COMPANY
COMBINED ----------------------------
DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1996 1997 1998
------------ ------------ -------------
(UNAUDITED)
<S> <C> <C> <C>
Land and buildings........... $2,314 $ -- $ 3,737
Machinery and equipment...... 146 60 1,461
Rolling stock................ 2,068 2,353 8,165
Containers................... 1,084 1,995 6,408
Furniture and fixtures....... 137 67 851
------ ------ -------
5,749 4,475 20,622
Less accumulated
depreciation............... (680) (290) (2,184)
------ ------ -------
$5,069 $4,185 $18,438
====== ====== =======
</TABLE>

Combined depreciation expense for the predecessor operations was $1,304,
$1,101, and $789 for the years ended December 31, 1995 and 1996, and the nine
months ended September 30, 1997, respectively. The Company's depreciation
expense for the period from inception (September 9, 1997) through December 31,
1997 was $290.

F-33
<PAGE> 106
WASTE CONNECTIONS, INC. AND PREDECESSORS

4. OTHER ASSETS

Other assets as of December 31, 1996 and 1997 and September 30, 1998
consist of the following:

<TABLE>
<CAPTION>
PREDECESSORS COMPANY
COMBINED ----------------------------
DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1996 1997 1998
------------ ------------ -------------
(UNAUDITED)
<S> <C> <C> <C>
Long-term franchise agreements and
contracts.......................... $ -- $ -- $1,048
Non-competition agreement, net....... -- 142 585
Restricted Cash...................... -- -- 1,895
Other................................ 369 27 326
---- ---- ------
$369 $169 $3,854
==== ==== ======
</TABLE>

Related to certain of the Acquisitions (Note 2), the Company acquired
certain long-term franchise agreements and contracts and entered into a
non-competition agreement. The estimated fair value of the acquired long-term
franchise agreements and contracts was determined by management based on the
discounted net cash flows associated with the agreements and contracts. The
amounts assigned to the franchise agreements and contracts is being amortized on
a straight-line method over the remaining term of the related agreements (11
years). Accumulated amortization amounted to $62 as of September 30, 1998. The
estimated fair value of the non-competition agreement was determined by
management based on the discounted adjusted operating income stream that would
have otherwise been subject to competition. The amount assigned to the
non-competition agreement is being amortized on a straight-line method over the
term of the agreement (five years). Accumulated amortization amounted to $8 as
of December 31, 1997 and $36 as of September 30, 1998.

5. LINE OF CREDIT

On September 30, 1997, the Company obtained a revolving line of credit (the
"Line") from a bank (the "Bank"). The maximum amount available under the terms
of the Line was $2,000 and borrowings bore interest based on the prime rate plus
1.5% (aggregating 10.0% at December 31, 1997). Interest was payable monthly and
the Line was to expire on September 29, 1998. Borrowings under the Line were
secured by substantially all of the Company's assets and were subordinate to the
notes payable to BFI (Note 6) with respect to certain specified assets. The Line
was personally guaranteed by certain officers and stockholders of the Company
(Note 9). As of December 31, 1997, $600 was outstanding under the Line.

Management used borrowings from a new credit facility obtained in January
1998 (Note 12) to pay off amounts outstanding under the Line, and as such, these
amounts have been included in long-term debt as of December 31, 1997.

F-34
<PAGE> 107
WASTE CONNECTIONS, INC. AND PREDECESSORS

6. OTHER LONG-TERM DEBT

Other long-term debt consists of the following as of December 31, 1997:

<TABLE>
<S> <C>
Term loan payable to the Bank bearing interest at the Bank's
prime rate plus 2.0% (aggregating 10.5% as of December 31,
1997); monthly principal payments of $76 plus interest
beginning October 1997 through August 2002; all
outstanding principal and interest are due September 2002;
secured by substantially all of the Company's assets;
subordinate to the notes payable to BFI with respect to
certain specified assets.................................. $5,343
Note payable to BFI bearing interest at 6.0%; all
outstanding principal and interest are due December 1997;
secured by substantially all of the Company's accounts
receivable................................................ 319
Note payable to BFI bearing interest at 10.0%; quarterly
payments of interest beginning December 1997; all
outstanding principal and interest are due March 1998;
secured by substantially all of WCII's assets............. 500
------
$6,162
======
</TABLE>

The term loan payable to the Bank and the notes payable to BFI were
personally guaranteed by certain officers and stockholders of the Company (Note
9).

As of December 31, 1997, aggregate contractual future principal payments by
calendar year on long-term debt are due as follows:

<TABLE>
<S> <C>
1998................................ $1,736
1999................................ 917
2000................................ 917
2001................................ 917
2002................................ 917
Thereafter.......................... 758
------
$6,162
======
</TABLE>

Management used borrowings from a new credit facility obtained in January
1998 (Note 12) to pay off all amounts outstanding under the term loan payable to
the Bank and all notes payable to BFI, and as such, these amounts have been
classified as long-term debt as of December 31, 1997.

On June 16, 1998, the Company completed a $1.8 million tax-exempt bond
financing for its Madera subsidiary. These funds will be used for specified
capital expenditures and improvements, including installation of a landfill gas
recovery system. The bonds issued mature on May 1, 2016 and bear interest at
variable rates based on market conditions for California tax exempt bonds. The
bonds are backed by a letter of credit issued by BankBoston under the Credit
Facility for $1.8 million. Funds from the bond offering are held by a trustee
until the capital expenditures are completed. The unused funds are classified as
restricted cash and included in other assets on the accompanying consolidated
balance sheet. The capital expenditures funded by the bonds are expected to be
substantially completed by December 31, 1998.

F-35
<PAGE> 108
WASTE CONNECTIONS, INC. AND PREDECESSORS

7. COMMITMENTS AND CONTINGENCIES

COMMITMENTS

Leases

The Company leases its facilities and certain equipment under
non-cancelable operating leases for periods ranging from one to five years.
Combined rent expense for the predecessor operations was $398, $412, and $441
for the years ended December 31, 1995 and 1996, and the nine months ended
September 30, 1997, respectively. The Company's rent expense under operating
leases during the period from inception (September 9, 1997) through December 31,
1997 amounted to $52.

As of December 31, 1997, future minimum lease payments under these leases,
by calendar year, are as follows:

Performance Bonds and Letters of Credit

Municipal solid waste collection contracts may require performance bonds or
other means of financial assurance to secure contractual performance. As of
December 31, 1997, the Company had provided customers and various regulatory
authorities with bonds and letters of credit of approximately $800 to secure its
obligations. The Company's new credit facility (Note 12) provides for the
issuance of letters of credit in an amount up to $5,000, but any letters of
credit issued reduce the availability of borrowings for acquisitions or other
general corporate purposes. If the Company were unable to obtain surety bonds or
letters of credit in sufficient amounts or at acceptable rates, it could be
precluded from entering into additional municipal solid waste collection
contracts or obtaining or retaining landfill operating permits.

CONTINGENCIES

Environmental Risks

The Company is subject to liability for any environmental damage that its
solid waste facilities may cause to neighboring landowners or residents,
particularly as a result of the contamination of soil, groundwater or surface
water, and especially drinking water, including damage resulting from conditions
existing prior to the acquisition of such facilities by the Company. The Company
may also be subject to liability for any off-site environmental contamination
caused by pollutants or hazardous substances whose transportation, treatment or
disposal was arranged by the Company or its predecessors. Any substantial
liability for environmental damage incurred by the Company could have a material
adverse effect on the Company's financial condition, results of operations or
cash flows. As of December 31, 1997 and September 30, 1998, the Company is not
aware of any such environmental liabilities.

F-36
<PAGE> 109
WASTE CONNECTIONS, INC. AND PREDECESSORS

Legal Proceedings

In the normal course of its business and as a result of the extensive
governmental regulation of the solid waste industry, the Company may
periodically become subject to various judicial and administrative proceedings
involving federal, state or local agencies. In these proceedings, an agency may
seek to impose fines on the Company or to revoke or deny renewal of an operating
permit held by the Company. From time to time the Company may also be subject to
actions brought by citizens' groups or adjacent landowners or residents in
connection with the permitting and licensing of landfills and transfer stations,
or alleging environmental damage or violations of the permits and licenses
pursuant to which the Company operates.

In addition, the Company may become party to various claims and suits
pending for alleged damages to persons and property, alleged violations of
certain laws and alleged liabilities arising out of matters occurring during the
normal operation of the waste management business. However, as of December 31,
1997 and September 30, 1998 there is no current proceeding or litigation
involving the Company that the Company believes will have a material adverse
impact on the Company's business, financial condition, results of operations or
cash flows.

During the period from January 1, 1996 through July 31, 1996, The Disposal
Group won a lawsuit against the city of Vancouver, Washington relating to the
city's annexation of certain territories served by The Disposal Group. The
Disposal Group received approximately $2.6 million from the lawsuit, which is
included in other income in the accompanying statement of operations.

Employees

Approximately 55 drivers and mechanics at the Company's Vancouver,
Washington operation are represented by the Teamsters Union, with which
Browning-Ferris Industries of Washington, Inc., the Company's predecessor in
Vancouver, entered a four-year collective bargaining agreement in January 1997.
Approximately 11 drivers at Arrow Sanitary Services, Inc. ("Arrow"), a wholly
owned subsidiary of the Company, are represented by the Teamsters Union, with
which Arrow entered into a three-year collective bargaining agreement in March
1998. In addition, in July 1997, the employees at the Company's facility in
Issaquah, Washington, adopted a measure to select a union to represent them in
labor negotiations with management. The union and management operated under a
one-year negotiating agreement, that ended July 27, 1998.

Since July 27, 1998, negotiations have continued between the union and the
Company, although the union is permitted to call a strike or call for
arbitration of the outstanding issues. The employees at Issaquah have filed to
decertify the union, and the union has filed a claim with the National Labor
Relation Board to attempt to block the decertification. The Company is not aware
of any other organizational efforts among its employees and believes that its
relations with its employees are good.

8. REDEEMABLE CONVERTIBLE PREFERRED STOCK

F-37
<PAGE> 110
WASTE CONNECTIONS, INC. AND PREDECESSORS

any accumulated and unpaid dividends are convertible at the holder's option into
shares of the Company's common stock at the calculated rate of $2.80 per share
divided by the "Conversion Price" subject to certain anti-dilution adjustments.
Each share was automatically converted into common stock immediately upon the
closing of the Company's initial public offering of common stock at a Conversion
Price of $2.80 per share.

Each share of Preferred Stock is redeemable, at the holder's option, during
the period from April 1, 1999 through October 1, 1999 for $4.20 per share plus
any accumulated and unpaid dividends. The difference between the carrying value
of the Preferred Stock and the redemption value (including accumulated
dividends) is being accreted using the interest method through the earliest
redemption date. The redemption of the Preferred Stock is not mandatory if it
would cause the Company to incur additional indebtedness or if it is prohibited
under any of the Company's then existing debt agreements.

The preferred stockholders are entitled to one vote for each share of
common stock into which such shares can be converted, and are also entitled to
liquidation preferences equal to the greater of the initial purchase price per
share ($2.80) plus any accumulated and unpaid dividends, plus the greater of
$4.20 per share or an amount which equals an internal rate of return of 50% to
the investor. After receiving such preference, the holders of the preferred
stock share remaining proceeds with the common stockholders on an as converted
basis.

9. STOCKHOLDERS' EQUITY

Common Stock

Of the 47,700,000 shares of common stock authorized but unissued as of
December 31, 1997, the following shares were reserved for issuance:

<TABLE>
<S> <C>
Preferred Stock.................................. 2,521,874
Madera acquisition (Note 2)...................... 1,200,000
Stock option plan................................ 1,200,000
Stock purchase warrants.......................... 1,056,000
---------
5,977,874
=========
</TABLE>

Stockholder Notes Receivable

In December 1997, the Company provided loans in the aggregate amount of $82
to certain employees, who are also common stockholders, for the purchase of
shares of the Company's Preferred Stock. The notes bear interest at 8%, are due
on January 1, 1999 and are secured by the Preferred Stock purchased and common
stock owned by the employees.

Stock Options

In November 1997, the Company's Board of Directors adopted a stock option
plan in which all officers, employees, directors and consultants may participate
(the "Option Plan"). Options granted under the Option Plan may either be
incentive stock options or nonqualified stock options (the "Options") and they
will generally have a term of 10 years from the date of grant and will vest over
periods determined at the date of grant. The exercise prices of the options are
determined by the
F-38
<PAGE> 111
WASTE CONNECTIONS, INC. AND PREDECESSORS

Company's Board of Directors and will be at least 100% or 110% of the fair
market value of the Company's common stock on the date of grant as provided for
in the Option Plan.

In connection with the Option Plan, the Company's Board of Directors
approved the reservation of 1,200,000 shares of common stock for issuance
thereunder. As of December 31, 1997 and September 30, 1998, 35,000 options to
purchase common stock were exercisable under the Option Plan. In addition, as of
December 31, 1997 and September 30, 1998, options for 671,500 and 160,450
shares, respectively of common stock were available for future grants under the
Option Plan.

A summary of the Company's stock option activity and related information
during the period from inception (September 9, 1997) through December 31, 1997
and the nine months ended September 30, 1998 is presented below:

<TABLE>
<CAPTION>
NUMBER OF WEIGHTED AVERAGE
SHARES (OPTIONS) EXERCISE PRICE
---------------- ----------------
<S> <C> <C>
Outstanding at inception.......... -- $ --
Granted........................... 528,500 4.92
Forfeited......................... -- --
Exercised......................... -- --
---------
Outstanding as of December 31,
1997............................ 528,500 4.92
Granted (unaudited)............... 511,050 9.59
Forfeited (unaudited)............. -- --
Exercised (unaudited)............. -- --
---------
Outstanding as of September 30,
1998 (unaudited)................ 1,039,550 7.21
=========
</TABLE>

The following table summarizes information about stock options outstanding
as of December 31, 1997 and September 30, 1998:

<TABLE>
<CAPTION>
DECEMBER 31, 1997 SEPTEMBER 30, 1998
------------------- -----------------------
WEIGHTED WEIGHTED
AVERAGE AVERAGE
EXERCISE EXERCISE
EXERCISE RANGE SHARES PRICE SHARES PRICE
-------------- ------- -------- ----------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
$ 2.80 to 5.00............. 385,500 2.85 589,800 2.91
$ 6.00 to 9.50............. -- -- 72,500 8.54
$10.50 to 12.50............ 143,000 10.50 245,000 11.07
$15.19 to 19.00............ -- -- 95,750 17.24
$21.00 to 22.13............ -- -- 36,500 21.90
------- ----- --------- -----
528,500 4.92 1,039,550 7.21
======= ===== ========= =====
</TABLE>

The weighted average remaining contractual life of stock options
outstanding as of December 31, 1997, was 9.4 years.

fair value method of that Statement. The fair value for these options was
estimated at the date of grant using a Black-Scholes option pricing model with
the following weighted-average assumptions for the period from inception
(September 9, 1997) through December 31, 1997: risk-free interest rate of 6%;
dividend yield of zero; volatility factor of the expected market price of the
Company's common stock of .40; and a weighted-average expected life of the
option of 4 years.

The Black-Scholes option valuation model was developed for us in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's
pro forma net loss and pro forma basic net loss per share for the period from
inception (September 9, 1997) through December 31, 1997 were $(5,070) and
$(2.99) per share, respectively.

During the nine months ended September 30, 1998, the Company recorded
deferred stock compensation of $821 relating to stock options granted during the
period with exercise prices less than the estimated fair value of the Company's
common stock on the date of grant. The deferred stock compensation is being
amortized into expense over the vesting periods of the stock options which
generally range from 1 to 3 years. Compensation expense of $322 was recorded
during the nine months ended September 30, 1998 relating to these options, and
the remaining $499 will be amortized into expense in future periods.

Stock Purchase Warrants

In September 1997, the Company issued a warrant to purchase 200,000 shares
of the Company's common stock to the Bank that provided the Line and term loan
payable (Notes 5 and 6). The exercise price of the warrant is $.01 per share.
The warrant was valued at $382 on its date of issuance using the Black-Scholes
pricing model with an assumed stock price volatility of .40, risk-free interest
rate of 6.0%, estimated fair value of the common stock of $1.92 per share and an
expected life of 7 years. The value assigned to the warrant was reflected as a
discount on long-term debt. The discount was fully accreted to interest expense
using the straight-line method over the expected term of the debt agreements
(approximately three months).

In connection with their guarantee of certain of the Company's debt
obligations (Notes 5 and 6), the Company issued warrants to purchase 841,000
shares of the Company's common stock to certain directors and stockholders of
the Company. The exercise price of the warrants is $2.80 per share. The warrants
were valued at $328 on their date of issuance using the Black-Scholes pricing
model with an assumed stock price volatility of .40, risk-free interest rate of
6.0%, estimated fair value of the common stock of $1.92 per share and expected
lives of 3 years. The value assigned to these warrants was fully amortized to
interest expense over the expected term of the debt agreements (approximately
three months).

F-40
<PAGE> 113
WASTE CONNECTIONS, INC. AND PREDECESSORS

In December 1997, the Company issued to consultants warrants to purchase
15,000 shares of the Company's common stock. Warrants to purchase 10,000 and
5,000 shares of common stock had exercise prices of $5.00 per share and $2.80
per share, respectively.

In February 1998, the Company granted warrants to an employee to purchase
50,000 shares of the Company's common stock at $2.80 per share. The Company
recorded stock compensation expense of approximately $235 relating to these
warrants.

Initial Public Offering

In May 1998, the Company sold in its initial public offering, a total of
2,300,000 shares of common stock at $12.00 per share. The net proceeds after
underwriters' commissions and fees and other costs associated with the offering
were approximately $23,986. In connection with the offering, the redeemable
convertible preferred stock was converted into common stock, and the redemption
provisions of the common stock issued in connection with the Madera acquisition
(Note 2) expired.

10. INCOME TAXES

The provision (benefit) for income taxes for the periods ended December 31,
1995 and 1996, the nine months ended September 30, 1997 and for the period from
inception (September 9, 1997) through December 31, 1997 consists of the
following:

<TABLE>
<CAPTION>
PREDECESSORS
-------------------------------------------------------------
FIBRES THE DISPOSAL GROUP WASTE CONNECTIONS, INC.
INTERNATIONAL, INC. COMBINED CONSOLIDATED
THE DISPOSAL GROUP PERIOD FROM PERIOD FROM PERIOD FROM INCEPTION
COMBINED JANUARY 1, 1995 JANUARY 1, 1996 (SEPTEMBER 9, 1997)
YEAR ENDED THROUGH THROUGH THROUGH
DECEMBER 31, 1995 NOVEMBER 30, 1995 JULY 31, 1996 DECEMBER 31, 1997
------------------ ------------------- ------------------ -----------------------
<S> <C> <C> <C> <C>
Current:
Federal............ $ -- $ 29 $207 $ 38
State.............. -- -- -- --
Deferred:
Federal............ (298) -- 298 (370)
State.............. -- -- -- --
----- ---- ---- -----
$(298) $ 29 $505 $(332)
===== ==== ==== =====
</TABLE>

F-41
<PAGE> 114
WASTE CONNECTIONS, INC. AND PREDECESSORS

Significant components of the Company's deferred income tax assets and
liability were as follows as of December 31, 1996 and 1997:

<TABLE>
<CAPTION>
PREDECESSORS
COMBINED COMPANY
1996 1997
------------ -------
<S> <C> <C>
Deferred income tax assets:
Accounts receivable reserves...................... $ 32 $ 8
Amortization...................................... -- 290
Accrued expenses.................................. 4 --
Vacation accrual.................................. 2 15
Net operating losses.............................. 208 54
------ ------
Total deferred income tax assets.................... 246 367
Deferred income tax liability:
Depreciation...................................... -- (529)
------ ------
Net deferred income tax asset (liability)........... 246 (162)
Less valuation allowance............................ (246) --
------ ------
$ -- $ (162)
====== ======
</TABLE>

The differences between the Company's provision (benefit) for income taxes
as presented in the accompanying statements of operations and benefit for income
taxes computed at the federal statutory rate is comprised of the items shown in
the following table as a percentage of pre-tax income (loss):

<TABLE>
<CAPTION>
PREDECESSORS
-------------------------------------------------------------------------------
THE DISPOSAL
FIBRES GROUP
THE DISPOSAL INTERNATIONAL, INC. COMBINED
GROUP PERIOD FROM PERIOD FROM
COMBINED JANUARY 1, 1995 PREDECESSORS JANUARY 1, 1996
YEAR ENDED THROUGH ONE MONTH ENDED THROUGH
DECEMBER 31, 1995 NOVEMBER 30, 1995 DECEMBER 31, 1995 JULY 31, 1996
----------------- ------------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Income tax provision
(benefit) at the
statutory rate....... (34.0%) 34.0% 34.0% 34.0%
Effect of valuation
allowance............ -- -- (34.0%) (16.0%)
------- ------- ------- --------
(34.0%) 34.0% -- 18.0%
======= ======= ======= ========
</TABLE>

<TABLE>
<CAPTION>
PREDECESSORS
-------------------------------------
PREDECESSORS WASTE CONNECTIONS, INC.
COMBINED CONSOLIDATED
PREDECESSORS NINE MONTHS PERIOD FROM INCEPTION
COMBINED ENDED (SEPTEMBER 9, 1997)
PERIOD ENDED SEPTEMBER 30, THROUGH
DECEMBER 31, 1996 1997 DECEMBER 31, 1997
----------------- ----------------- -----------------------
<S> <C> <C> <C>
Income tax benefit at the statutory
rate.............................. (34.0%) (34.0%) (34.0%)
Effect of valuation allowance....... 34.0% 34.0% --
Stock compensation expense.......... -- -- 28.0%
-------- -------- --------
-- -- (6.0%)
======== ======== ========
</TABLE>

F-42
<PAGE> 115
WASTE CONNECTIONS, INC. AND PREDECESSORS

11. NET INCOME (LOSS) PER SHARE INFORMATION

The following table sets forth the calculation of the numerator and
denominator used in the computation of basic and diluted net loss per share and
pro forma basic and diluted net income (loss) per share for the period from
inception (September 9, 1997) through December 31, 1997 and the nine months
ended September 30, 1998. The pro forma basic and diluted net income (loss) per
share calculations assume the conversion of all outstanding shares of redeemable
convertible preferred stock for the period from inception (September 9, 1997)
through December 31, 1997, and the conversion of all outstanding shares of
redeemable convertible preferred stock and redeemable common stock for the nine
months ended September 30, 1998, as if such conversions occurred as of the first
day of each period presented or the actual date of issuance, if subsequent to
the first day of the period presented.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
DECEMBER 31, 1997 ----------------------------------------------
--------------------- (UNAUDITED)
PRO FORMA PRO FORMA PRO FORMA
BASIC BASIC BASIC DILUTED BASIC DILUTED
NET LOSS NET LOSS NET LOSS NET LOSS NET LOSS NET LOSS
PER SHARE PER SHARE PER SHARE PER SHARE PER SHARE PER SHARE
--------- --------- --------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Numerator:
Income (loss) before
extraordinary item........ $ (5,066) $ (4,788) $ 1,617 $ 1,617 $ 1,617 $ 1,617
Redeemable convertible
preferred stock
accretion................. (531) -- (917) (917) -- --
--------- --------- --------- --------- --------- ---------
Income (loss) applicable to
common stockholders before
extraordinary item........ $ (5,597) $ (4,788) $ 700 $ 700 $ 1,617 $ 1,617
========= ========= ========= ========= ========= =========
Extraordinary item.......... -- -- (815) (815) (815) (815)
--------- --------- --------- --------- --------- ---------
Net income (loss) applicable
to common stockholders.... $ (5,597) $ (4,788) $ (115) $ (115) $ 802 $ 802
========= ========= ========= ========= ========= =========
Denominator:
Weighted average common
shares outstanding........ 1,872,567 1,872,567 5,476,532 5,476,532 5,476,532 5,476,532
Dilutive effect of stock
options and warrants
outstanding............... -- -- -- 1,584,836 -- 1,584,836
Incremental common shares
issuable upon redemption
of redeemable common
stock..................... -- -- -- 377,290 377,290 377,290
Incremental common shares
issuable upon conversion
of preferred stock........ -- 2,499,998 -- -- 1,263,735 1,263,735
--------- --------- --------- --------- --------- ---------
1,872,567 4,372,565 5,476,532 7,438,658 7,117,557 8,702,393
========= ========= ========= ========= ========= =========
</TABLE>

As of December 31, 1997, outstanding options to purchase 528,500 shares of
common stock (with exercise prices ranging from $2.80 to $10.50), outstanding
warrants to purchase 1,056,000 shares of common stock (with exercise prices from
$0.01 to $5.00), and the outstanding Redeemable Convertible Preferred Stock
could potentially dilute basic earnings per share in the future and have not
been included in the computation of diluted net loss per share because to do so
would have been antidilutive for the period presented.

F-43
<PAGE> 116
WASTE CONNECTIONS, INC. AND PREDECESSORS

12. NEW CREDIT FACILITY

On January 30, 1998, the Company obtained a revolving credit facility from
BankBoston (the "Credit Facility"). The maximum amount available under the
Credit Facility was $25,000 including stand-by letters-of-credit and the
borrowings bore interest at various fixed and/or variable rates at the Company's
'option. The Credit Facility allowed for the Company to issue up to $5,000 in
stand-by letters-of-credit. The Credit Facility required quarterly payments of
interest. The Credit Facility required the Company to pay an annual commitment
fee equal to 0.5% of the unused portion of the Credit Facility. In connection
with the Credit Facility the Company granted to an affiliate of BankBoston a
warrant to purchase 140,000 shares of the Company's common stock with an
exercise price of $2.80 per share and an expiration date of January 29, 2008.

On May 28, 1998, the Company entered into a new revolving credit facility
with a syndicate of banks for which BankBoston N.A. acts as agent (the "May
Credit Facility"). The maximum amount available under the May Credit Facility
was $60 million (including stand-by letters of credit) and the borrowings bore
interest at various fixed and/or variable rates at the Company's option
(approximately 7.49% as of September 30, 1998). The May Credit Facility replaced
an existing revolving credit facility. The May Credit Facility allowed for the
Company to issue up to $5 million in stand-by letters-of-credit. The May Credit
Facility required quarterly payments of interest. Borrowings under the May
Credit Facility were secured by virtually all of the Company's assets. The May
Credit Facility required the Company to pay an annual commitment fee equal to
0.375% of the unused portion of the Credit Facility.

On November 20, 1998, the Company entered into a new revolving credit
facility with a syndicate of banks for which BankBoston N.A. acts as agent (the
"November Credit Facility"). The maximum amount available under the November
Credit Facility is $115 million (including stand-by letters of credit) and the
borrowings bear interest at various fixed and/or variable rates at the Company's
option (approximately 7.0% as of September 30, 1998). The November Credit
Facility replaced an existing revolving credit facility. The November Credit
Facility allows for the Company to issue up to $15 million in stand-by
letters-of-credit. The November Credit Facility requires quarterly payments of
interest and it matures in November 2003. Borrowings under the November Credit
Facility are secured by virtually all of the Company's assets. The November
Credit Facility requires the Company to pay an annual commitment fee equal to
0.375% of the unused portion of the November Credit Facility. The November
Credit Facility places certain business, financial and operating restrictions on
the Company relating to, among other things the incurrence of additional
indebtedness, investments, acquisitions, asset sales, mergers, dividends,
distributions and repurchase and redemption of capital stock. The November
Credit Facility also requires that specified financial ratios and balances be
maintained. Management of the Company expects to record an extraordinary charge
of approximately $211 (net of income tax) in the fourth quarter of 1998 related
to the extinguishment of the May Credit Facility.

13. RELATED PARTY TRANSACTIONS

The Company has entered into certain transactions with Continental Paper,
LLC ("Continental"), in which the Company delivers to Continental all of the
Company's collected recyclable materials in areas in which Continental has
processing facilities and Continental pays the Company market rates for the
recyclable materials. Certain of the Company's stockholders are the majority
owners of Continental. During the period from inception (September 9, 1997)
through December 31, 1997, the Company received approximately $223 from
Continental in these transactions.

F-44
<PAGE> 117

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Board of Directors and Shareholders
Murrey's Disposal Company, Inc.
American Disposal Company, Inc.
D.M. Disposal Co., Inc.
Tacoma Recycling Company, Inc.

We have audited the accompanying combined balance sheets of Murrey's
Disposal Company, Inc., American Disposal Company, Inc., D.M. Disposal Co.,
Inc., and Tacoma Recycling Company, Inc. (collectively the "Murrey Companies")
as of December 31, 1996 and 1997, and the related combined statements of income
and retained earnings, and cash flows for each of the three years in the period
ended December 31, 1997. These financial statements are the responsibility of
the Murrey Companies' management. Our responsibility is to express an opinion on
these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the combined financial position of the Murrey
Companies at December 31, 1996 and 1997, and the combined results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1997, in conformity with generally accepted accounting principles.

/s/ ERNST & YOUNG LLP

Sacramento, California
October 2, 1998,
except for Note 12, as to
which the date is
October 22, 1998

F-45
<PAGE> 118

THE MURREY COMPANIES

COMBINED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31,
------------------ SEPTEMBER 30,
1996 1997 1998
------- ------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents............................. $ 81 $ 126 $ 405
Accounts receivable, less allowance for doubtful
accounts of
$62 in 1996, $74 in 1997 and $82 in 1998........... 2,333 2,779 3,364
Prepaid expenses and other current assets............. 119 79 10
------- ------- -------
Total current assets.................................... 2,533 2,984 3,779
Property, plant and equipment, net...................... 12,529 14,819 14,371
Intangible assets, net.................................. -- 1,862 1,758
Other assets............................................ 3 31 --
------- ------- -------
$15,065 $19,696 $19,908
======= ======= =======

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings................................. $ 1,609 $ 1,628 $ 620
Accounts payable...................................... 1,108 1,617 2,217
Advances from a related party......................... 818 543 543
Deferred revenue...................................... 765 919 1,432
Accrued liabilities................................... 705 832 1,288
Income taxes payable.................................. 321 228 277
Current portion of long-term debt..................... 928 873 751
------- ------- -------
Total current liabilities............................... 6,254 6,640 7,128
Long-term debt.......................................... 1,851 4,907 4,047
Deferred income taxes................................... 702 658 658
Commitments and contingencies (Note 7)
Shareholders' equity:
Common stock at par value; 60,500 shares authorized;
1,470 shares issued and outstanding................ 45 45 45
Additional paid-in capital............................ 455 455 455
Retained earnings..................................... 5,758 6,991 7,575
------- ------- -------
Total shareholders' equity.............................. 6,258 7,491 8,075
------- ------- -------
$15,065 $19,696 $19,908
======= ======= =======
</TABLE>

See accompanying notes.
F-46
<PAGE> 119

THE MURREY COMPANIES

COMBINED STATEMENTS OF INCOME AND RETAINED EARNINGS
(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------- ------------------
1995 1996 1997 1997 1998
------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues............................. $27,786 $25,024 $28,874 $21,477 $24,532
Operating expenses:
Cost of operations................. 20,859 20,465 23,133 16,933 19,337
Selling, general and
administrative.................. 2,101 2,142 2,323 1,653 1,870
Depreciation and amortization...... 923 1,236 1,371 1,350 1,640
------- ------- ------- ------- -------
Income from operations............... 3,903 1,181 2,047 1,541 1,685
Interest expense..................... (198) (284) (380) (247) (423)
Other income (expense), net.......... 210 309 283 150 (97)
------- ------- ------- ------- -------
Income before income taxes........... 3,915 1,206 1,950 1,444 1,165
Income tax provision................. (690) (543) (634) (512) (414)
------- ------- ------- ------- -------
Net income........................... 3,225 663 1,316 932 751
Retained earnings, beginning of
period............................. 1,920 5,095 5,758 5,758 6,991
Dividends............................ (50) -- (83) -- (167)
------- ------- ------- ------- -------
Retained earnings, end of period..... $ 5,095 $ 5,758 $ 6,991 $ 6,690 $ 7,575
======= ======= ======= ======= =======
Pro forma income taxes (unaudited --
Note 11)........................... $(1,338) $ (432) $ (697) $ (522) $ (421)
------- ------- ------- ------- -------
Pro forma net income (unaudited --
Note 11)........................... $ 2,577 $ 774 $ 1,253 $ 922 $ 744
======= ======= ======= ======= =======
</TABLE>

See accompanying notes.
F-47
<PAGE> 120

THE MURREY COMPANIES

COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------- -----------------
1995 1996 1997 1997 1998
------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income........................................... $ 3,225 $ 663 $ 1,316 $ 932 $ 751
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................... 923 1,236 1,371 1,056 1,640
Deferred income taxes........................... 147 (19) (44) -- --
Gain on sale of land............................ -- -- -- -- (8)
Changes in operating assets and liabilities:
Accounts receivable, net..................... (31) 63 (446) (562) (585)
Prepaid expenses and other assets............ (83) (36) 40 (616) 69
Accounts payable............................. (156) 932 509 1,004 600
Deferred revenue............................. 68 42 154 95 513
Accrued liabilities.......................... (352) 129 127 26 456
Income taxes payable......................... 383 (232) (93) 426 49
------- ------- ------- ------- -------
Net cash provided by operating activities............ 4,124 2,778 2,934 2,361 3,485
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for acquisitions............................ -- -- (2,900) (100) --
Capital expenditures for property and equipment...... (3,025) (4,790) (2,108) (2,106) (1,731)
Proceeds from sale of land........................... -- -- -- -- 625
Net change in other assets........................... (18) 31 (28) (117) 57
------- ------- ------- ------- -------
Net cash used in investing activities.................. (3,043) (4,759) (5,036) (2,323) (1,049)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt......................... 750 1,418 3,414 2,021 550
Principal payments on long-term debt................. (1,383) (615) (928) (302) (1,532)
Net change in short-term borrowings.................. (77) 659 19 (812) (1,008)
Net change in advances from a related party.......... 189 (259) (275) (275) --
Payment of dividends................................. (50) -- (83) -- (167)
------- ------- ------- ------- -------
Net cash provided by (used in) financing activities.... (571) 1,203 2,147 632 (2,157)
------- ------- ------- ------- -------
Net increase (decrease) in cash and cash equivalents... 510 (778) 45 670 279
Cash and cash equivalents:
Beginning of period............................... 349 859 81 81 126
------- ------- ------- ------- -------
End of period..................................... $ 859 $ 81 $ 126 $ 751 $ 405
======= ======= ======= ======= =======
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION
AND NON-CASH TRANSACTIONS:
Cash paid for interest............................ $ 198 $ 284 $ 358 $ 247 $ 423
======= ======= ======= ======= =======
Cash paid for income taxes........................ $ 160 $ 792 $ 744 $ 277 $ 10
======= ======= ======= ======= =======
Issuance of notes payable for land and
buildings....................................... $ -- $ 260 $ 315 $ -- $ --
======= ======= ======= ======= =======
In connection with acquisitions (Note 3) the
Murrey Companies acquired assets and issued
notes payable to sellers as follows:
Fair value of assets acquired................ $ -- $ -- $ 3,100 $ 300 $ --
Notes payable to sellers..................... -- -- (200) (200) --
------- ------- ------- ------- -------
Cash paid for acquisitions................... $ -- $ -- $ 2,900 $ 100 $ --
======= ======= ======= ======= =======
</TABLE>

See accompanying notes.
F-48
<PAGE> 121

THE MURREY COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(INFORMATION RELATING TO SEPTEMBER 30, 1998 AND
THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998 IS UNAUDITED)

1. BUSINESS, ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS AND ORGANIZATION

Murrey's Disposal Company, Inc. ("Murrey's"), American Disposal Company,
Inc. ("American"), D.M. Disposal Co., Inc. ("DM"), and Tacoma Recycling Company,
Inc. ("Tacoma") (collectively the "Murrey Companies") are regional, integrated,
non-hazardous solid waste services companies that provide collection, transfer,
and disposal of solid waste and recyclables to residential and commercial
customers in and around the Tacoma, Washington area. Murrey's, American, DM and
Tacoma were incorporated in Washington on March 13, 1963, October 27, 1966, July
12, 1979 and January 30, 1990, respectively.

Each of the Murrey Companies' Common Stock is owned 90% by one or both of
two trusts. The beneficiary of both trusts is also an officer and director of
the Murrey Companies. The remaining stock is owned by two individuals (5% each)
who are also officers and directors of the Murrey Companies.

BASIS OF COMBINATION

The combined financial statements of the Murrey Companies include the
accounts of Murrey's, American, DM and Tacoma as a result of their common
management which exercises significant influence over their operations.
Significant intercompany balances and transactions between the Murrey Companies
have been eliminated in combination.

INTERIM FINANCIAL INFORMATION

The unaudited interim combined financial statements as of September 30,
1998 and for the nine months ended September 30, 1997 and 1998 have been
prepared in accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the nine months ended September 30
1998 are not necessarily indicative of the results that may be expected for the
year ended December 31, 1998.

USE OF ESTIMATES

CASH EQUIVALENTS

The Murrey Companies considers all highly liquid investments with a
maturity of three months or less at purchase to be cash equivalents.

F-49
<PAGE> 122
THE MURREY COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(INFORMATION RELATING TO SEPTEMBER 30, 1998 AND
THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998 IS UNAUDITED)

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Murrey Companies to
concentrations of credit risks consist primarily of accounts receivable. Credit
risk on accounts receivable is minimized as a result of the large and diverse
nature of the Murrey Companies' customer base. The Murrey Companies maintain
allowances for losses based on the expected collectibility of accounts
receivable. Credit losses have been within management's expectations.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost. Improvements or
betterments which significantly extend the life of an asset are capitalized.
Expenditures for maintenance and repair costs are charged to operations as
incurred. The cost of assets retired or otherwise disposed of and the related
accumulated depreciation are eliminated from the accounts in the year of
disposal. Gains and losses resulting from property disposals are included in
other income (expense). Depreciation is computed using the straight-line method
over the estimated useful lives of the assets.

The estimated useful lives are as follows:

<TABLE>
<S> <C>
Buildings.............................................. 20 years
Machinery and equipment................................ 5 - 15 years
Rolling stock.......................................... 10 years
Containers............................................. 5 - 15 years
Furniture and fixtures................................. 3 - 5 years
</TABLE>

In connection with the Acquisitions (Note 3) the Murrey Companies acquired
certain used property and equipment. This used property and equipment is being
depreciated using the straight-line method over its estimated remaining useful
lives, which range from one to twelve years.

GOODWILL

Goodwill represents the excess of the purchase price over the fair value of
the net assets acquired (Notes 3 and 4), and is amortized on a straight-line
basis over the period of expected benefit of 40 years.

The Murrey Companies continually evaluate the value and future benefits of
its goodwill. The Murrey Companies assess recoverability from future operations
using income from operations of the related acquired business as a measure.
Under this approach, the carrying value would be reduced if it becomes probable
that the Murrey Companies' best estimate for expected future cash flows of the
related business would be less than the carrying amount of the goodwill over the
remaining amortization period. For the period ending December 31, 1997, there
were no adjustments to the carrying amount of goodwill resulting from these
evaluations.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying values of cash and cash equivalents approximate their fair
values as of December 31, 1996 and 1997. The carrying values of short-term
borrowings (Note 5) and long-term debt (Note 6) approximate their fair values as
of December 31, 1996 and 1997, based on current incremental borrowing rates for
similar types of borrowing arrangements.

F-50
<PAGE> 123
THE MURREY COMPANIES

REVENUE RECOGNITION

The Murrey Companies recognize revenues as services are provided. Certain
customers are billed in advance and, accordingly, recognition of the related
revenues is deferred until the services are provided.

INCOME TAXES

DM uses the liability method to account for income taxes. Under this
method, deferred tax assets and liabilities are determined based on differences
between the financial reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse.

Murrey's, American and Tacoma operate under Subchapter S of the Internal
Revenue Code for federal and state income tax reporting purposes. Consequently
all of the income tax attributes and liabilities of these companies' operations
flow through to the individual shareholders.

2. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment as of December 31, 1996 and 1997 and
September 30, 1998 consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------ SEPTEMBER 30,
1996 1997 1998
------- ------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Land and buildings...................... $ 6,316 $ 6,668 $ 6,111
Machinery and equipment................. 3,518 3,780 3,883
Rolling stock........................... 6,134 7,570 8,315
Containers.............................. 3,140 4,380 5,224
Furniture and fixtures.................. 231 255 242
------- ------- -------
19,339 22,653 23,775
Less accumulated depreciation........... (6,810) (7,834) (9,404)
------- ------- -------
$12,529 $14,819 $14,371
======= ======= =======
</TABLE>

3. ACQUISITIONS

During 1997, the Murrey Companies purchased substantially all of the assets
of Island Disposal (effective May 2, 1997) and Environmental Waste Systems and
Olympic Disposal (both effective December 1, 1997) (collectively the
"Acquisitions"). The total purchase price for the Acquisitions was approximately
$3,100, comprised of $2,900 in cash and promissory notes payable to the sellers
totaling $200. Of the combined $3,100 purchase price, $1,791 was recorded as
goodwill and $80 was assigned to non-competition agreements. The Acquisitions
were accounted for in accordance with the purchase method of accounting and,
accordingly, the net assets acquired were included in the Murrey Companies'
combined balance sheet based upon their estimated fair values on the date of the
Acquisitions. The Murrey Companies' combined statement of operations includes
the revenues and expenses of the acquired businesses after the effective date of
the transactions.

F-51
<PAGE> 124
THE MURREY COMPANIES

Certain items affecting the purchase price and the allocation are
preliminary. A summary of the preliminary purchase price allocation as of
December 31, 1997, for the Acquisitions is as follows:

<TABLE>
<S> <C>
Acquired assets:
Property and equipment.................................... $1,229
Goodwill.................................................. 1,791
Non-competition agreements................................ 80
------
$3,100
======
</TABLE>

The following unaudited pro forma information shows the results of the
Murrey Companies' operations as though the Acquisitions had occurred as of
January 1, 1996:

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
--------------------
1996 1997
------- -------
(UNAUDITED)
<S> <C> <C>
Revenue.............................................. $27,485 $31,106
======= =======
Net Income........................................... $ 706 $ 1,094
======= =======
</TABLE>

The pro forma results have been prepared for comparative purposes only and
are not necessarily indicative of the actual results of operations had the
Acquisitions occurred on January 1, 1996, or the results of future operations of
the Murrey Companies. Furthermore, the pro forma results do not give effect to
all cost savings or incremental costs that may occur as a result of the
integration and consolidation of the Acquisitions.

4. INTANGIBLE ASSETS

Intangible assets as of December 31, 1996 and 1997 and September 30, 1998
consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------- SEPTEMBER 30,
1996 1997 1998
------ ------ -------------
(UNAUDITED)
<S> <C> <C> <C>
Goodwill, net............................. $ -- $1,783 $1,691
Non-competition agreement, net............ -- 79 67
------ ------ ------
$ -- $1,862 $1,758
====== ====== ======
</TABLE>

Accumulated amortization on intangible assets amounted to $9 as of December
31, 1997 (none in 1996) and $113 as of September 30, 1998.

5. SHORT-TERM BORROWINGS

Short-term borrowings consist of various revolving and non-revolving
lines-of-credit with banks, bearing interest at variable rates (ranging from
9.0% to 9.25% as of December 31, 1997) and mature at various dates through
November 30, 1998. The lines of credit are secured by all cash accounts held
with the banks, which totaled $126 as of December 31, 1997. All available
amounts under these lines-of-credit were outstanding as of December 31, 1997.

F-52
<PAGE> 125
THE MURREY COMPANIES

Certain of these lines-of-credit contain certain restrictive covenants,
which among other things require that specified financial balances and ratios be
maintained. As of December 31, 1997, the Murrey Companies were in compliance
with the covenants.

6. LONG-TERM DEBT

Long-term debt as of December 31, 1996 and 1997 and September 30, 1998
consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------- SEPTEMBER 30,
1996 1997 1998
------ ------ -------------
(UNAUDITED)
<S> <C> <C> <C>
Note payable to a bank bearing interest at a
variable rate (approximately 8.5% as of December
31, 1997); monthly payments of principal and
interest of $25; maturing in November, 2007;
secured by certain cash accounts and a pledge of
one of the Murrey Companies exclusive franchise
agreements...................................... $ -- $2,000 $1,901
Note payable to a bank bearing interest at 8.6%;
monthly payments of principal and interest
aggregating $13; maturing in October, 2001;
secured by equipment with a net book value of
approximately $533 as of December 31, 1997 and
certain cash accounts........................... $ -- $ 632 $ 542
Notes payable to a bank bearing interest at
various fixed rates (ranging from 9.1% to 9.2%
as of December 31, 1997); monthly payments of
principal and interest aggregating $25 and one-
time payments of $470 and $751 in September,
2000 and May, 2001, respectively; maturing at
various dates between September, 2000 and May,
2001; secured by land and buildings with a net
book value of approximately $2,548 as of
December 31, 1997............................... 1,752 1,544 1,393
Equipment financing notes payable bearing interest
at various rates (ranging from 8.6% to 8.8% as
of December 31, 1997); monthly payments of
principal and interest aggregating $25; maturing
at various dates through September, 2001;
secured by equipment with an aggregate net book
value of approximately $984 as of December 31,
1997............................................ 567 822 479
Notes payable to sellers bearing interest at
various rates (ranging from 8.5% to 9.0% as of
December 31, 1997); monthly principal and
interest payments of $9; maturing at various
dates between February, 2001 and October, 2007;
secured by land and buildings with a net book
value of approximately $908 as of December 31,
1997............................................ 218 471 295
</TABLE>

F-53
<PAGE> 126
THE MURREY COMPANIES

<TABLE>
<CAPTION>
DECEMBER 31,
---------------- SEPTEMBER 30,
1996 1997 1998
------ ------ -------------
(UNAUDITED)
<S> <C> <C> <C>
Unsecured notes payable to seller bearing interest
at 8.0% as of December 31, 1997; monthly
principal and interest payments of $4; maturing
in June, 2002................................... -- 189 100
Others............................................ 242 122 88
------ ------ ------
2,779 5,780 4,798
Less: current portion............................. 928 873 751
------ ------ ------
Long-term debt.................................... $1,851 $4,907 $4,047
====== ====== ======
</TABLE>

As of December 31, 1997, aggregate contractual future principal payments by
calendar year on long-term debt are due as follows:

<TABLE>
<S> <C>
1998........................................................ $ 873
1999........................................................ 780
2000........................................................ 1,056
2001........................................................ 1,232
2002........................................................ 408
Thereafter.................................................. 1,431
------
$5,780
======
</TABLE>

7. COMMITMENTS AND CONTINGENCIES

COMMITMENTS

Operating Leases

The Murrey Companies lease certain equipment and facilities under
non-cancelable operating leases. Rent expense under all operating leases during
the years ended December 31, 1995, 1996 and 1997 amounted to $319, $170 and
$183, respectively.

As of December 31, 1997, future minimum lease payments under these
operating leases, by calendar year, are as follows:

<TABLE>
<S> <C>
1998........................................................ $ 187
1999........................................................ 186
2000........................................................ 167
2001........................................................ 107
2002........................................................ 87
Thereafter.................................................. 355
------
$1,089
======
</TABLE>

F-54
<PAGE> 127
THE MURREY COMPANIES

CONTINGENCIES

Environmental Risks

The Murrey Companies are subject to liability for any environmental damage
that the solid waste facilities they operate may cause to neighboring
landowners, particularly as a result of the contamination of drinking water
sources or soil, including damage resulting from conditions existing prior to
the operation of such facilities by the Murrey Companies. The Murrey Companies
may also be subject to liability for any off-site environmental contamination
caused by pollutants or hazardous substances whose transportation, treatment or
disposal was arranged by the Murrey Companies. Any substantial liability for
environmental damage incurred by the Murrey Companies could have a material
adverse effect on the Murrey Companies' combined financial condition, results of
operations or cash flows.

Legal Proceedings

In the normal course of their business and as a result of the extensive
governmental regulation of the solid waste industry, the Murrey Companies may
periodically become subject to various judicial and administrative proceedings
involving federal, state or local agencies. In these proceedings, an agency may
seek to impose fines or to revoke or deny renewal of an operating permit held by
the Murrey Companies. From time to time the Murrey Companies may also become
parties to various claims or suits for alleged damages to persons and property,
alleged violations of certain laws and alleged liabilities arising out of
matters occurring during the normal course of operating a waste management
business. However, as of December 31, 1997 and September 30, 1998, there is no
current proceeding or litigation involving the Murrey Companies that the Murrey
Companies believe will have a material adverse impact on the Murrey Companies'
business, financial condition, results of operations or cash flows.

Disposal Site

The Murrey Companies have been informed that the Hidden Valley Landfill
which is currently utilized by them for disposal of waste collected in Pierce
County is currently operating under a Consent Decree with the Washington State
Department of Ecology and the Environmental Protection Agency. Under the terms
of the Consent Decree the Hidden Valley Landfill is required to be closed on or
before December 31, 1998; after which all of the waste collected by the Murrey
Companies in Pierce County will be long hauled to an alternate disposal site
until the new solid waste landfill in Pierce County is opened. The new landfill
is projected to open in November 1999. Management of the Murrey Companies does
not believe that the closure of the Hidden Valley Landfill will have a material
adverse impact on the Murrey Companies' business, combined financial position,
results of operations or cash flows.

Employees

Approximately 44 of the Murrey Companies' route drivers are represented by
the Teamsters Union. The Murrey Companies have a collective bargaining agreement
that expires in June 1999. The Murrey Companies are not aware of any other
organizational efforts among their employees and believes that their relations
with their employees are good.

F-55
<PAGE> 128
THE MURREY COMPANIES

8. RELATED PARTY TRANSACTIONS

OPERATING LEASE

The Murrey Companies lease land on which certain of their facilities are
located from a shareholder of the Murrey Companies. This lease is pursuant to an
informal arrangement whereby the Murrey Companies pay all of the property taxes
and other expenses associated with the leased land in lieu of monthly rent.
These payments totaled approximately $10 during each of the years ended December
31, 1995, 1996, and 1997.

ADVANCES

As of December 31, 1996 and 1997, the Murrey Companies had non-interest
bearing advances payable to one of their shareholders totaling $818 and $543,
respectively.

DISPOSAL FEES

During the years ended December 31, 1995, 1996 and 1997, the Murrey
Companies paid $7,355, $7,730, and $8,592, respectively, in disposal fees to a
landfill that is owned and operated by a company in which one of the Murrey
Companies shareholders has an approximate 33% ownership interest.

9. 401(k) PLAN

The Murrey Companies have a voluntary savings and investment plan (the
"401(k) Plan"). The 401(k) Plan is available to all eligible, non-union
employees of the Murrey Companies. Under the 401(k) Plan the Murrey Companies'
contributions are at the discretion of management of the Murrey Companies.
During the years ended December 31, 1995, 1996 and 1997, the Murrey Companies'
401(k) Plan expense was approximately $246, $267 and $316, respectively.

10. INCOME TAXES

The provision (benefit) for income taxes for the Murrey Companies pertains
solely to DM and consists of the following:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Federal:
Current....................................... $543 $562 $678
Deferred...................................... 147 (19) (44)
---- ---- ----
$690 $543 $634
==== ==== ====
</TABLE>

Deferred taxes result from temporary differences in the recognition of
certain expense items for income tax and financial reporting purposes. The
Murrey Companies' deferred taxes as of December 31, 1996 and 1997 are
substantially comprised of depreciation deducted for tax purposes that will be
recorded in future periods for financial reporting purposes.

F-56
<PAGE> 129
THE MURREY COMPANIES

The principal reasons for the difference between the federal statutory
income tax rate and the effective income tax rate are as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------
1995 1996 1997
------- ----- -----
<S> <C> <C> <C>
Federal expense expected at statutory rates on combined
income before income taxes............................... $1,331 $410 $663
Tax effect of companies reporting under Subchapter S....... (645) 124 (42)
Other...................................................... 4 9 13
------ ---- ----
$ 690 $543 $634
====== ==== ====
</TABLE>

11. PRO FORMA INCOME TAX INFORMATION (UNAUDITED)

As described in Note 1, Murrey's, American, and Tacoma (the "S
Corporations") operate under Subchapter S of the Internal Revenue Code and are
not subject to federal income taxes. In connection with the Murrey Companies'
proposed merger with Waste Connections, Inc. ("WCI") (Note 12), the Subchapter S
election will be terminated. As a result, the S Corporations (as wholly-owned
subsidiaries of WCI) will be subject to corporate income taxes subsequent to the
termination of S corporation status. The Murrey Companies had combined income
for income tax purposes of $2,769, $2,135 and $1,941 for 1995, 1996 and 1997,
respectively. Had the Murrey Companies filed federal income tax returns as
regular corporations for 1995, 1996 and 1997, income tax expense under the
provisions of Financial Accounting Standards No. 109 would have been $1,338,
$432 and $697, respectively.

The following unaudited pro forma information reflects income tax expense
(benefit) for the Murrey Companies as if the S Corporations had also been
subject to federal income taxes:

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
-----------------------
1995 1996 1997
------ ----- ----
<S> <C> <C> <C>
Federal:
Current................................................ $ 941 $ 726 $660
Deferred............................................... 397 (294) 37
------ ----- ----
Pro forma income taxes................................... $1,338 $ 432 $697
====== ===== ====
</TABLE>

The pro forma provisions for income taxes for the years ended December 31,
1995, 1996 and 1997 differ from the amounts computed by applying the applicable
statutory federal income tax rate (34%) to income before income taxes due to
certain non-deductible expenses.

The Murrey Companies pro forma deferred income tax asset of approximately
$98 and $71 as of December 31, 1996 and 1997, respectively, relates principally
to differences in the recognition of bad debt expenses, vacation accruals, and
certain other temporary differences. The Murrey Companies also had pro forma
deferred tax liabilities as of December 31, 1996 and 1997 of approximately
$1,322 and $1,332 which relate to differences between tax and financial methods
of depreciation and the use of the cash method of accounting for tax purposes by
certain of the S Corporations.

F-57
<PAGE> 130
THE MURREY COMPANIES

12. SUBSEQUENT EVENT

MERGER OF THE MURREY COMPANIES

On October 22, 1998, the Murrey Companies and WCI jointly announced that
they had signed a definitive agreement under which the Murrey Companies will
merge with wholly-owned subsidiaries of WCI. Under the terms of the agreement,
substantially all shares of common stock of the Murrey Companies will be
exchanged for 2.75 million shares of WCI common stock (subject to adjustment at
the date of consummation of the Merger). The transaction is expected to be
accounted for as a pooling of interests and is expected to close during the
fourth quarter of calendar 1998.

13. YEAR 2000 (UNAUDITED)

The Murrey Companies will need to modify or replace portions of their
software so that their computer systems will function properly with respect to
dates in the year 2000 ("Year 2000") and thereafter. To date, the Murrey
Companies have not incurred any costs related to the Year 2000 project. The
Murrey Companies do not believe that their expenditures relating to the Year
2000 project will be material. However, if the required Year 2000 modifications
and conversions are not made or are not completed in a timely manner, the Year
2000 issue could materially affect their operations.

F-58
<PAGE> 131

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Board of Directors and Shareholders
Madera Disposal Systems, Inc.

We have audited the accompanying balance sheets of Madera Disposal Systems,
Inc. as of December 31, 1996 and 1997, and the related statements of income and
retained earnings, and cash flows for each of the three years in the period
ended December 31, 1997. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Madera Disposal Systems,
Inc. at December 31, 1996 and 1997, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1997, in
conformity with generally accepted accounting principles.

/s/ ERNST & YOUNG LLP

Sacramento, California
February 20, 1998

F-59
<PAGE> 132

MADERA DISPOSAL SYSTEMS, INC.

BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1996 1997
------ ------
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents................................... $1,064 $1,527
Accounts receivable, less allowance for doubtful
accounts of $111 ($90 in 1996)........................ 788 691
Receivables from shareholders.......................... 100 113
Prepaid expenses and other current assets.............. 216 214
------ ------
Total current assets................................... 2,168 2,545
Property and equipment, net................................. 3,800 3,636
Assets held for sale........................................ -- 77
Other assets................................................ 36 39
------ ------
$6,004 $6,297
====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable....................................... $ 750 $ 644
Deferred revenue....................................... 208 219
Accrued liabilities.................................... 193 178
Current portion of capital lease obligations........... 218 274
Current portion of long-term debt...................... 177 288
------ ------
Total current liabilities................................... 1,546 1,603
Long-term portion of capital lease obligations.............. 1,557 1,565
Long-term debt.............................................. 637 329
Commitments and contingencies (Note 4)

Shareholders' equity:

Common stock: $100 par value; 1,000,000 shares
authorized; 500 shares issued and outstanding......... 50 50
Retained earnings...................................... 2,214 2,750
------ ------
Total shareholders' equity.................................. 2,264 2,800
------ ------
$6,004 $6,297
====== ======
</TABLE>

See accompanying notes.
F-60
<PAGE> 133

MADERA DISPOSAL SYSTEMS, INC.

STATEMENTS OF INCOME AND RETAINED EARNINGS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------
1995 1996 1997
------ ------ ------
<S> <C> <C> <C>
Revenues.................................................... $7,008 $7,770 $7,845
Operating expenses:
Cost of operations..................................... 5,288 5,512 5,289
Selling, general and administrative.................... 996 969 1,041
Depreciation and amortization.......................... 467 585 627
------ ------ ------
Income from operations...................................... 257 704 888
Interest expense............................................ (237) (259) (280)
Other income, net........................................... 68 113 173
------ ------ ------
Net income.................................................. 88 558 781
Retained earnings, beginning of year........................ 1,863 1,656 2,214
Distributions to shareholders............................... (295) -- (245)
------ ------ ------
Retained earnings, end of year.............................. $1,656 $2,214 $2,750
====== ====== ======
Pro forma income taxes (unaudited -- Note 7)................ $ (30) $ (208) $ (295)
------ ------ ------
Pro forma net income (unaudited -- Note 7).................. $ 58 $ 350 $ 486
====== ====== ======
</TABLE>

See accompanying notes.
F-61
<PAGE> 134

MADERA DISPOSAL SYSTEMS, INC.

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------
1995 1996 1997
----- ------ ------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................ $ 88 $ 558 $ 781
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization.......................... 467 585 627
Gain on sale of property & equipment................... (13) (37) (71)
Changes in operating assets and liabilities:
Accounts receivable, net............................. (252) (23) 97
Receivables from shareholders........................ (21) (33) (13)
Prepaid expenses and other assets.................... -- (52) 2
Other assets......................................... (2) (9) (3)
Accounts payable..................................... 265 (29) (106)
Deferred revenue..................................... 4 16 11
Accrued liabilities.................................. 105 44 (15)
----- ------ ------
Net cash provided by operating activities:.................. 641 1,020 1,310
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures for property and equipment........... (274) (902) (183)
Proceeds from sale of assets.............................. 13 97 140
----- ------ ------
Net cash used in investing activities....................... (261) (805) (43)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt.............................. 265 591 --
Principal payments on long-term debt and capital lease
obligations............................................ (576) (351) (559)
Cash distributions made to shareholders................... (295) -- (245)
----- ------ ------
Net cash provided by (used in) financing activities......... (606) 240 (804)
----- ------ ------
Net increase (decrease) in cash and equivalents............. (226) 455 463
Cash and equivalents:
Beginning of year......................................... 835 609 1,064
----- ------ ------
End of year............................................... $ 609 $1,064 $1,527
===== ====== ======
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION AND
NON-CASH TRANSACTIONS:
Cash paid for interest...................................... $ 237 $ 237 $ 279
===== ====== ======
Capital lease obligations and long-term debt incurred for
the purchase of property and equipment.................... $ 854 $ -- $ 426
===== ====== ======
</TABLE>

See accompanying notes.
F-62
<PAGE> 135

MADERA DISPOSAL SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
(IN THOUSANDS)

1. ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BUSINESS

Madera Disposal Systems, Inc. ("Madera") is a regional, integrated,
non-hazardous solid waste services company that provides collection, transfer
disposal and recycling services to residential, commercial and industrial
customers. Madera Landfill is contracted by the County of Madera to operate the
Fairmead, the North Fork Transfer Station and the materials recovery facility
(aka, Mammoth Recycling Facility), all of which are located in the County of
Madera, State of California. Madera also holds an exclusive contract with the
County of Madera to collect solid waste within the unincorporated areas of the
County of Madera. The contracts continue in force and effect until August 2004,
and will automatically be extended for one five year period unless Madera is
then in material breach or default of its obligations under the materials
recovery facility contract. All contracts may be extended for additional periods
and upon terms as the County of Madera and Madera may mutually agree upon.

On November 9, 1993, Madera entered into an agreement with the County of
Madera, whereby Madera was to design, permit, finance, construct, equip, staff,
operate and maintain a materials recovery facility (the "Facility") at the
County's Fairmead Landfill for the purpose of providing the County of Madera
with a guaranteed reduction in the quantity of municipal solid waste requiring
landfill disposal. The Facility was to be designed, constructed and operated to
receive all municipal solid waste from the Cities of Madera and Chowchilla and
the unincorporated areas of the County of Madera. It was also to meet the
twenty-five percent (25%) waste reduction requirements of Assembly Bill 939
(Chapter 1095 of the Statutes of 1989) for the Cities of Madera and Chowchilla
and the County of Madera by January 11, 1995, through the recycling of recovered
material, and work toward the waste reduction requirements of fifty percent
(50%) that each jurisdiction must achieve by January 1, 2000. The Facility
became operational on August 15, 1994.

The County of Madera will compensate Madera for its capital costs incurred
in designing, permitting, financing, constructing and equipping the Facility.
These costs were $1,661 and are included in property and equipment in the
accompanying balance sheets. The County of Madera will reimburse Madera for the
equipment and interest costs over a ten year operational period. The County of
Madera will also reimburse Madera for its other operational costs incurred in
connection with the staffing, maintaining and operating of the materials
recovery facility. All of the aforementioned costs are reimbursed to Madera
through receipt of a specified portion of waste disposal fees collected by
Madera on behalf of the County of Madera for landfill operations.

At the termination of the contracts described above, the improvements made
by Madera become the sole and exclusive property of the County of Madera,
subject only to the County of Madera's continuing obligation to pay or reimburse
the Company for any remaining unamortized capital costs of the Facility.

In 1995, Madera started a new line of business which provided clean-up and
waste removal services to residential and commercial construction businesses.
Due to continued losses, in July 1997 Madera ceased operations in this line of
business. The estimated fair value of the remaining assets of the business is
reflected in the accompanying balance sheets as assets held for sale at December
31, 1997. For the years ended December 31, 1995, 1996, and 1997, this business
had revenues of $531, $785 and $193, respectively, and had operating losses of
$290, $397, and $215, respectively.

F-63
<PAGE> 136
MADERA DISPOSAL SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
(IN THOUSANDS)

Madera entered into an exclusive franchise agreement with the City of
Chowchilla on April 8, 1996, whereby Madera was granted the exclusive right and
franchise to collect, haul, and dispose of all solid waste, recyclable solid
waste, and green waste within the city limits of the City of Chowchilla. The
term of this franchise shall continue in force and effect for a period of seven
years, and the City of Chowchilla may renew and extend the franchise for an
additional period of five years or more.

SALE OF THE COMPANY

Effective February 1, 1998, Madera's shareholders entered into an agreement
to sell their stock to Waste Connections, Inc. ("WCI") for cash and stock in
WCI.

USE OF ESTIMATES

CASH EQUIVALENTS

Madera considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject Madera to concentrations of
credit risks consist primarily of accounts receivable. Credit risk on accounts
receivable is minimized as a result of the large and diverse nature of Madera's
customer base. Madera maintains an allowance for losses based on the expected
collectibility of accounts receivable. Credit losses have been within
management's expectations.

PROPERTY AND EQUIPMENT

The estimated useful lives are as follows:

<TABLE>
<S> <C>
Machinery and equipment............................... 6 - 10 years
Leasehold improvements................................ 10 - 40 years
Furniture and fixtures................................ 6 - 10 years
</TABLE>

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying values of cash and equivalents approximate their fair values
as of December 31, 1996 and 1997. The carrying values of the long-term debt and
capital lease obligations (Notes 3

F-64
<PAGE> 137
MADERA DISPOSAL SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
(IN THOUSANDS)

and 4) approximate their fair values as of December 31, 1996 and 1997, based on
current incremental borrowing rates for similar types of borrowing arrangements.

REVENUE RECOGNITION

Madera recognizes revenues as services are provided. Certain customers are
billed in advance and, accordingly, recognition of the related revenues is
deferred until the services are provided.

INCOME TAXES

Madera operates under Subchapter S of the Internal Revenue Code for federal
and state income tax reporting purposes. Consequently, all of the income tax
attributes and liabilities of the Madera's operations flow through to the
individual shareholders.

CLOSURE AND POST-CLOSURE COSTS

Under regulations pursuant to which the permit for the Fairmead Landfill
was issued, Madera and Madera County, as operator and owner, respectively, are
jointly liable for closure and post-closure liabilities with respect to the
landfill. Madera has not accrued for such liabilities because Madera County, as
required by state law, has established a special fund, into which a designated
portion of tipping fee surcharges are deposited, to pay such liabilities.
Consequently, management of Madera does not believe Madera has any financial
obligation for closure and post-closure costs for the Fairmead Landfill as of
December 31, 1997.

2. PROPERTY AND EQUIPMENT

Property and equipment as of December 31, 1996 and 1997 consists of the
following:

<TABLE>
<CAPTION>
1996 1997
------ ------
<S> <C> <C>
Machinery and equipment..................................... $5,480 $5,777
Leasehold improvements...................................... 498 500
Furniture and fixtures...................................... 137 133
------ ------
6,115 6,410
Less accumulated depreciation and amortization.............. 2,315 2,774
------ ------
$3,800 $3,636
====== ======
</TABLE>

3. LONG-TERM DEBT

Long-term debt as of December 31, 1996 and 1997 consists of the following:

<TABLE>
<CAPTION>
1996 1997
---- ----
<S> <C> <C>
Equipment financing notes payable bearing interest at
various fixed and variable rates (ranging from 6.0% to 12.9%
at December 31, 1997); monthly payments of principal and
interest aggregating $16; maturing at various dates through
August 31, 2001; secured by equipment with net book values
aggregating $522 as of December 31, 1997.................... $664 $467
Notes payable to related parties bearing interest at 10.0%;
monthly payments of interest; maturing December 1, 1998..... 150 150
---- ----
814 617
Less: Current portion....................................... 177 288
---- ----
Long-term debt.............................................. $637 $329
==== ====
</TABLE>

F-65
<PAGE> 138
MADERA DISPOSAL SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
(IN THOUSANDS)

One of the equipment financing notes, with an outstanding balance of $236
as of December 31, 1997, contains certain restrictive covenants, which among
other things require that specified financial balances and ratios be maintained,
restrict the payment of dividends and prohibit the incurrence of additional
indebtedness. As of December 31, 1997, Madera was in compliance with the
covenants.

As of December 31, 1997, aggregate contractual future principal payments by
calendar year on long-term debt are due as follows:

4. COMMITMENTS AND CONTINGENCIES

COMMITMENTS

Capital Leases

Madera leases certain equipment under capital leases. As of December 31,
1996 and 1997, the following amounts are included in property and equipment as
assets under these capital leases:

<TABLE>
<CAPTION>
1996 1997
------ ------
<S> <C> <C>
Cost..................................................... $2,235 $2,605
Less: accumulated amortization........................... 527 780
------ ------
Net assets under capital leases.......................... $1,708 $1,825
====== ======
</TABLE>

The future minimum lease payments under these capital leases along with the
present value of the minimum lease payments as of December 31, 1997 are as
follows:

<TABLE>
<CAPTION>
MINIMUM LEASE PAYMENTS
YEAR ENDING DECEMBER 31:
------------------------
<S> <C>
1998.............................................. $ 448
1999.............................................. 489
2000.............................................. 427
2001.............................................. 352
2002.............................................. 294
Thereafter........................................ 494
------
Total minimum lease payments................................ 2,504
Less amount representing interest........................... 665
------
Present value of minimum lease payments..................... 1,839
Less current portion........................................ 274
------
Long-term portion........................................... $1,565
======
</TABLE>

OPERATING LEASES

Madera leases its facilities and certain equipment under cancelable
operating leases for periods of one year or less. Rent expense under all
operating leases during the years ended December 31, 1995, 1996 and 1997
amounted to $47, $41 and $33, respectively.

F-66
<PAGE> 139
MADERA DISPOSAL SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
(IN THOUSANDS)

PERFORMANCE BONDS AND LETTERS OF CREDIT

Municipal solid waste collection contracts may require performance bonds to
secure contractual performance. As of December 31, 1997, Madera had provided
customers and various regulatory authorities with bonds of approximately $200 to
secure its obligations. If Madera were unable to obtain surety bonds in
sufficient amounts or at acceptable rates, it could be precluded from entering
into additional municipal solid waste collection contracts or obtaining or
retaining landfill operating permits.

ENVIRONMENTAL RISKS

Madera is subject to liability for any environmental damage that its solid
waste facilities may cause to neighboring landowners, particularly as a result
of the contamination of drinking water sources or soil, including damage
resulting from conditions existing prior to the acquisition of such facilities
by Madera. Madera may also be subject to liability for any off-site
environmental contamination caused by pollutants or hazardous substances whose
transportation, treatment or disposal was arranged by Madera or its
predecessors. Any substantial liability for environmental damage incurred by
Madera could have a material adverse effect on Madera's financial condition,
results of operations or cash flows.

LEGAL PROCEEDINGS

In the normal course of its business and as a result of the extensive
governmental regulation of the solid waste industry, Madera may periodically
become subject to various judicial and administrative proceeding involving
federal, state or local agencies. In these proceedings, an agency may seek to
impose fines on Madera or to revoke or deny renewal of an operating permit held
by Madera. From time to time Madera may also be subject to actions brought by
citizens' groups or adjacent landowners in connection with the permitting and
licensing of landfills and transfer stations, or alleging environmental damage
or violations of the permits and licenses pursuant to which Madera operates.

In addition, Madera may become party to various claims and suits pending
for alleged damages to persons and property, alleged violations of certain laws
and alleged liabilities arising out of matters occurring during the normal
operation of the waste management business. However, as of December 31, 1997,
there is no current proceeding or litigation involving Madera that Madera
believes will have a material adverse impact on Madera's business, financial
condition, results of operations or cash flows.

5. RELATED PARTY TRANSACTIONS

Madera performs repair services on equipment owned and operated by
shareholders of Madera. Revenues relating to these activities were $41, $60 and
$51 for the years ended December 31, 1995, 1996 and 1997, respectively. As of
December 31, 1996 and 1997, Madera has receivables of $100 and $113,
respectively, relating to these activities.

6. 401(k) PLAN

Madera has a voluntary savings and investment plan (the "401(k) Plan"). The
401(k) Plan is available to all eligible employees of Madera. Under the 401(k)
Plan Madera is required to match 100% of employees' contributions up to a
maximum of 3% of the employees' wages. During the years ended December 31, 1995,
1996 and 1997, Madera's 401(k) Plan expenses were approximately $78, $107 and
$108, respectively.

F-67
<PAGE> 140
MADERA DISPOSAL SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
(IN THOUSANDS)

7. PRO FORMA INCOME TAX INFORMATION (UNAUDITED)

The following unaudited pro forma information reflects income tax expense
(benefit) as if Madera had been subject to federal and state income taxes:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
1995 1996 1997
------ ------ ------
<S> <C> <C> <C>
Current:
Federal........................................... $(16) $(19) $197
State............................................. -- 12 57
Deferred:
Federal........................................... 32 188 33
State............................................. 14 27 8
---- ---- ----
Pro forma income taxes.............................. $ 30 $208 $295
==== ==== ====
</TABLE>

Madera's pro forma deferred income tax asset of approximately $20 and $54
at December 31, 1996 and 1997, respectively, relates principally to differences
in the recognition of bad debt expenses, state franchise taxes and certain other
temporary differences. Madera also has pro forma deferred tax liabilities at
December 31, 1996 and 1997 of approximately $534 and $570, respectively, which
relate to differences between tax and financial methods of depreciation.

8. SUBSEQUENT EVENTS

On January 12, 1998, Madera distributed $131 to its shareholders.

F-68
<PAGE> 141

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Board of Directors and Shareholders
Arrow Sanitary Service, Inc.

We have audited the accompanying balance sheet of Arrow Sanitary Service,
Inc. as of September 30, 1997, and the related statement of income and retained
earnings, and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Arrow Sanitary Service, Inc.
at September 30, 1997, and the results of its operations and its cash flows for
the year then ended, in conformity with generally accepted accounting
principles.

/s/ ERNST & YOUNG LLP

Sacramento, California
July 8, 1998

F-69
<PAGE> 142

ARROW SANITARY SERVICE, INC.

BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

ASSETS

<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1997 1998
------------- -----------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents................................. $ 205 $ 274
Accounts receivable....................................... 520 694
Prepaid expenses and other current assets................. 37 48
------ ------
Total current assets.............................. 762 1,016
Property and equipment, net................................. 815 926
Intangible assets, net...................................... 121 118
Other assets................................................ 48 13
------ ------
$1,746 $2,073
====== ======

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 470 $ 439
Deferred revenue.......................................... 11 11
Accrued liabilities....................................... 151 213
Current portion of long-term debt......................... 168 154
------ ------
Total current liabilities......................... 800 817
Long-term portion of capital lease obligations.............. -- 45
Long-term debt.............................................. 429 450
Deferred income taxes....................................... 34 46
Commitments and contingencies (Note 4)
Shareholders' equity:
Common stock: no par value; 1,000 shares authorized; 600
shares issued and outstanding.......................... 47 47
Treasury stock payments................................... (25) (25)
Retained earnings......................................... 461 693
------ ------
Total shareholders' equity........................ 483 715
------ ------
$1,746 $2,073
====== ======
</TABLE>

See accompanying notes.
F-70
<PAGE> 143

ARROW SANITARY SERVICE, INC.

STATEMENTS OF INCOME AND RETAINED EARNINGS

(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED MARCH 31,
SEPTEMBER 30, ----------------
1997 1997 1998
------------- ------ ------
(UNAUDITED)
<S> <C> <C> <C>
Revenues.................................................. $6,209 $2,872 $3,148
Operating expenses:
Cost of operations...................................... 4,970 2,080 2,255
Selling, general and administrative..................... 776 448 369
Depreciation and amortization........................... 143 70 85
------ ------ ------
Income from operations.................................... 320 274 439
Interest expense.......................................... (72) (39) (30)
Other income (expense), net............................... (2) (5) 40
------ ------ ------
Income before income taxes................................ 246 230 449
Income tax expense........................................ (117) (98) (217)
------ ------ ------
Net income................................................ 129 132 232
Retained earnings, beginning of period.................... 332 332 461
------ ------ ------
Retained earnings, end of period.......................... $ 461 $ 464 $ 693
====== ====== ======
</TABLE>

See accompanying notes.
F-71
<PAGE> 144

ARROW SANITARY SERVICE, INC.

STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED MARCH 31,
SEPTEMBER 30, ----------------
1997 1997 1998
------------- ------ ------
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................................... $ 129 $ 132 $ 232
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization......................... 143 70 85
Deferred income taxes................................. 34 -- 12
Gain on sale of property and equipment................ (2) -- --
Changes in operating assets and liabilities:
Accounts receivable................................. (2) (105) (174)
Prepaid expenses and other current assets........... 19 17 (11)
Other assets........................................ 1 2 35
Accounts payable.................................... 43 (46) (31)
Accrued liabilities................................. 70 110 62
----- ----- -----
Net cash provided by operating activities................ 435 180 210
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures for property and equipment.......... (117) (80) (134)
Treasury stock payments.................................. (5) -- --
----- ----- -----
Net cash used in investing activities...................... (122) (80) (134)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt............................. -- 200 97
Principal payments on long-term debt..................... (191) (298) (104)
----- ----- -----
Net cash used in financing activities...................... (191) (98) (7)
----- ----- -----
Net increase in cash....................................... 122 2 69
Cash and cash equivalents, beginning of period............. 83 83 205
----- ----- -----
Cash and cash equivalents, end of period................... $ 205 $ 85 $ 274
===== ===== =====
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION AND
NON-CASH TRANSACTIONS:
Cash paid for interest..................................... $ 74 $ 39 $ 33
===== ===== =====
</TABLE>

See accompanying notes.
F-72
<PAGE> 145

ARROW SANITARY SERVICE, INC.

NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(DOLLARS IN THOUSANDS)
(INFORMATION RELATING TO MARCH 31, 1998 AND
THE SIX MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

1. ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BUSINESS

Arrow Sanitary Service, Inc. (the "Company") is a regional, integrated,
non-hazardous solid waste services company that provides collection, hauling and
disposal of recyclable materials for residential and commercial customers in
various counties of Oregon and Washington in and around Portland, Oregon.

SALE OF THE COMPANY

On June 17, 1998, the Company's shareholders entered into an agreement to
sell all capital stock in the Company to Waste Connections, Inc. ("WCI") for
cash and common stock of WCI.

INTERIM FINANCIAL INFORMATION

The unaudited interim financial statements as of March 31, 1998 and for the
six months ended March 31, 1997 and 1998 have been prepared in accordance with
generally accepted accounting principles for interim financial information.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
Operating results for the six months ended March 31, 1998 are not necessarily
indicative of the results that may be expected for the year ended September 30,
1998.

USE OF ESTIMATES

CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to
concentrations of credit risk consist primarily of accounts receivable. Credit
risk on accounts receivable is minimized as a result of the large and diverse
nature of the Company's customer base. Credit losses have been within
management's expectations.

PROPERTY AND EQUIPMENT

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1997
(DOLLARS IN THOUSANDS)
(INFORMATION RELATING TO MARCH 31, 1998 AND
THE SIX MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

1. ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
resulting from property disposals are included in other income (expense).
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets, or lease term, whichever is shorter.

The estimated useful lives of property and equipment are as follows:

<TABLE>
<S> <C>
Buildings.............................................. 30 years
Machinery and equipment................................ 3 - 10 years
Rolling stock.......................................... 10 years
Furniture and fixtures................................. 3 - 6 years
Containers............................................. 5 - 12 years
</TABLE>

INTANGIBLE ASSETS

Intangible assets are comprised of the following at September 30, 1997:

<TABLE>
<S> <C>
Goodwill.................................................... $126
Covenant not to compete..................................... 12
----
138
Accumulated amortization.................................... (17)
----
$121
====
</TABLE>

Goodwill represents the excess of the purchase price over the fair value of
the net assets of entities previously acquired by the Company and is amortized
on a straight-line basis over the period of expected benefit of 40 years. The
covenant not to compete is amortized on a straight-line basis over the period of
expected benefit of 5 years.

REVENUE RECOGNITION

The Company recognizes revenues as services are provided. Certain customers
are billed in advance and, accordingly, recognition of the related revenues is
deferred until the services are provided.

INCOME TAXES

The Company uses the liability method to account for income taxes. Under
this method, deferred tax assets and liabilities are determined based on
differences between the financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse.

SIGNIFICANT CUSTOMERS AND SUPPLIERS

The Company has three major customers which represent 21%, 14% and 11% of
total sales, respectively, for the year ended September 30, 1997. In addition,
the Company purchases a substantial portion of its recyclable materials and
equipment from four major suppliers.

F-74
<PAGE> 147
ARROW SANITARY SERVICE, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1997
(DOLLARS IN THOUSANDS)
(INFORMATION RELATING TO MARCH 31, 1998 AND
THE SIX MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

2. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1997 1998
------------- -----------
(UNAUDITED)
<S> <C> <C>
Land.............................................. $ 121 $ 121
Buildings......................................... 168 168
Machinery and equipment........................... 480 593
Rolling stock..................................... 1,026 1,028
Furniture and fixtures............................ 104 109
Containers........................................ 296 342
------- -------
2,195 2,361
Less accumulated depreciation and amortization.... (1,380) (1,435)
------- -------
$ 815 $ 926
======= =======
</TABLE>

3. FINANCING ARRANGEMENTS

BANK LINE OF CREDIT

The Company maintains a revolving line of credit with a financial
institution. Under the agreement, the Company may borrow an amount up to $150.
Interest on the revolving line of credit accrues at the financial institution's
prime rate (8.5% at September 30, 1997) plus 1.5%. The agreement provides that
the Company comply with various financial and other covenants. The line of
credit had no amounts outstanding at September 30, 1997.

LONG-TERM DEBT

Long-term debt as of September 30, 1997 consists of the following:

<TABLE>
<S> <C>
Contract financing notes payable bearing interest at 9%;
payable in monthly installments of principal and interest
(ranging from $1 to $2); maturing between October 20, 1998
and November 15, 2004..................................... $159
Mortgage financing notes payable bearing interest at 8.25%;
payable in monthly installments of principal and interest
of $1; maturing on January 20, 2022; secured by certain
real estate............................................... 139
Equipment financing notes payable bearing interest (ranging
from 8.5% to 10.75%); payable in monthly installments of
principal (ranging from $2 to $5) plus interest; maturing
on March 20, 1998 and October 12, 2000; secured by the
Company's accounts receivable, inventory, equipment, and
certain other assets...................................... 299
----
597
Less: current portion....................................... 168
----
Long-term debt.............................................. $429
====
</TABLE>

One of the equipment financing notes, with no outstanding balance at
September 30, 1997, contains certain restrictive covenants, which among other
things require that specified financial

F-75
<PAGE> 148
ARROW SANITARY SERVICE, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1997
(DOLLARS IN THOUSANDS)
(INFORMATION RELATING TO MARCH 31, 1998 AND
THE SIX MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

3. FINANCING ARRANGEMENTS (CONTINUED)
balances and ratios be maintained, restrict the payment of dividends and
prohibit the incurrence of additional indebtedness.

As of September 30, 1997, aggregate contractual future principal payments
by fiscal year on long-term debt are due as follows:

<TABLE>
<S> <C>
1998........................................................ $168
1999........................................................ 121
2000........................................................ 81
2001........................................................ 27
2002........................................................ 26
Thereafter.................................................. 174
----
$597
====
</TABLE>

4. COMMITMENTS AND CONTINGENCIES

COMMITMENTS

Operating Leases

The Company leases its facilities and certain equipment under noncancelable
operating leases. Rent expense under these agreements approximated $50 for the
year ended September 30, 1997.

The future minimum lease payments under these agreements as of September
30, 1997 are as follows:

<TABLE>
<S> <C>
1998........................................................ $ 54
1999........................................................ 54
2000........................................................ 49
2001........................................................ 48
2002........................................................ 48
Thereafter.................................................. 494
----
$747
====
</TABLE>

CONTINGENCIES

Legal Proceedings

In the normal course of its business and as a result of the extensive
governmental regulation of the solid waste industry, the Company may
periodically become subject to various judicial and administrative proceedings
involving federal, state or local agencies. In these proceedings, an agency may
seek to impose fines on the Company or to revoke or deny renewal of an operating
permit held by the Company. From time to time the Company may also be subject to
actions brought by citizens' groups or adjacent landowners in connection with
the permitting and licensing of landfills and transfer stations, or alleging
environmental damage or violations of the permits and licenses pursuant to which
the Company operates.

F-76
<PAGE> 149
ARROW SANITARY SERVICE, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1997
(DOLLARS IN THOUSANDS)
(INFORMATION RELATING TO MARCH 31, 1998 AND
THE SIX MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

4. COMMITMENTS AND CONTINGENCIES (CONTINUED)
In addition, the Company may become party to various claims and suits
pending for alleged damages to persons and property, alleged violations of
certain laws and alleged liabilities arising out of matters occurring during the
normal operation of the waste management business. However, as of September 30,
1997, there is no current proceeding or litigation involving the Company that
the Company believes will have a material adverse impact on the Company's
business, financial condition, results of operations or cash flows.

Employees

Approximately 11 of the Company's route drivers are represented by the
Teamsters Union. The Company entered into a three-year collective bargaining
agreement in March 1998. The Company is not aware of any other organizational
efforts among its employees and believes that its relations with its employees
are good.

5. 401(k) PLAN

The Company has a voluntary savings and investment plan (the "401(k)
Plan"). The 401(k) Plan is available to all eligible employees of the Company.
Under the 401(k) Plan the Company is required to match 3% of employees'
contributions up to a maximum of 6% of the employees' wages once the employee
contributes a minimum of 3%. The Company will match 100% of employee
contributions between 3 and 6%. Sixteen of twenty-one eligible employees
participated in the plan with minimum contributions of at least 3%. During the
year ended September 30, 1997, the Company's 401(k) Plan expense was
approximately $35.

6. INCOME TAXES

The provision for income taxes for the year ended September 30, 1997
consists of the following:

<TABLE>
<S> <C>
Current:
Federal................................................... $ 60
State..................................................... 23

Deferred:
Federal................................................... 29
State..................................................... 5
----
$117
====
</TABLE>

Deferred taxes result from temporary differences in the recognition of
certain expense items for income tax and financial reporting purposes. The
Company's deferred taxes as of September 30, 1997 are substantially comprised of
depreciation deducted for tax purposes that will be recorded in future periods
for financial reporting purposes.

F-77
<PAGE> 150
ARROW SANITARY SERVICE, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1997
(DOLLARS IN THOUSANDS)
(INFORMATION RELATING TO MARCH 31, 1998 AND
THE SIX MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

6. INCOME TAXES (CONTINUED)
The principal reasons for the difference between the effective income tax
rate and the federal statutory income tax rate are as follows:

<TABLE>
<S> <C>
Federal expense expected at statutory rates................. $ 84
State and local income taxes, net of Federal benefit........ 15
Officers life insurance expense............................. 17
Other....................................................... 1
----
$117
====
</TABLE>

The Company paid $10 for income taxes during the year ended September 30,
1997.

7. YEAR 2000 (UNAUDITED)

The Company will need to modify or replace portions of its software so that
its computer systems will function properly with respect to dates in the year
2000 ("Year 2000") and thereafter. To date, the Company has not incurred any
costs related to the Year 2000 project. The Company does not believe that its
expenditures relating to the Year 2000 project will be material. However, if the
required Year 2000 modifications and conversions are not made or are not
completed in a timely manner, the Year 2000 issue could materially affect the
Company's operations.

F-78
<PAGE> 151

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Stockholders
Shrader Refuse and Recycling Service Company

We have audited the accompanying balance sheets of Shrader Refuse and
Recycling Service Company as of September 30, 1996 and 1997, and the related
statements of income, stockholders' equity and cash flows for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Shrader Refuse and Recycling
Service Company at September 30, 1996 and 1997, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

GRANT THORNTON LLP

Lincoln, Nebraska
August 24, 1998

F-79
<PAGE> 152

SHRADER REFUSE AND RECYCLING SERVICE COMPANY

BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

ASSETS

<TABLE>
<CAPTION>
SEPTEMBER 30,
---------------- JUNE 30,
1996 1997 1998
------ ------ -------------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents................................ $ 287 $ 116 $ 342
Marketable equity securities............................. 246 403 576
Accounts receivable, less allowance for doubtful accounts
of $29 and $32 at September 30, 1996 and 1997,
respectively.......................................... 674 897 808
Prepaid expenses......................................... 37 69 79
------ ------ ------
Total current assets............................. 1,244 1,485 1,805
Property and equipment, net................................ 3,939 5,195 5,112
Goodwill, net.............................................. 223 214 209
Other assets............................................... 122 157 208
------ ------ ------
$5,528 $7,051 $7,334
====== ====== ======

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable......................................... $ 244 $ 202 $ 323
Accrued liabilities...................................... 100 103 117
Current portion of long-term debt........................ 763 703 703
Current portion of capital lease obligations............. 18 97 97
------ ------ ------
Total current liabilities........................ 1,125 1,105 1,240
Long-term debt, net of current portion..................... 1,676 1,258 959
Capital lease obligations, net of current portion.......... 338 1,583 1,511
Commitments and contingencies (Note F)
Stockholders' equity:
Common stock: $1 par value; 10,000 shares authorized;
8,571 shares issued and outstanding................. 9 9 9
Retained earnings........................................ 2,338 3,012 3,465
Net unrealized gain on marketable equity securities...... 42 84 150
------ ------ ------
Total stockholders' equity....................... 2,389 3,105 3,624
------ ------ ------
$5,528 $7,051 $7,334
====== ====== ======
</TABLE>

The accompanying notes are an integral part of these statements.
F-80
<PAGE> 153

SHRADER REFUSE AND RECYCLING SERVICE COMPANY

STATEMENTS OF INCOME
(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE
YEAR ENDED MONTHS ENDED
SEPTEMBER 30, JUNE 30,
---------------- ----------------
1996 1997 1997 1998
------ ------ ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenues............................................. $5,461 $6,896 $5,027 $5,382
Operating expenses:
Cost of operations................................. 3,861 4,601 3,241 3,479
Selling, general and administrative................ 516 567 426 425
Depreciation and amortization...................... 565 770 546 697
------ ------ ------ ------
4,942 5,938 4,213 4,601
------ ------ ------ ------
Income from operations............................... 519 958 814 781
Other income (expense):
Interest expense................................... (206) (292) (219) (287)
Other income, net.................................. 35 59 19 19
------ ------ ------ ------
(171) (233) (200) (268)
------ ------ ------ ------
Net income........................................... $ 348 $ 725 $ 614 $ 513
====== ====== ====== ======
Pro forma income taxes (unaudited) (Note G).......... $ 141 $ 290 $ 245 $ 206
------ ------ ------ ------
Pro forma net income (unaudited) (Note G)............ $ 207 $ 435 $ 369 $ 307
====== ====== ====== ======
</TABLE>

The accompanying notes are an integral part of these statements.
F-81
<PAGE> 154

SHRADER REFUSE AND RECYCLING SERVICE COMPANY

STATEMENT OF STOCKHOLDERS' EQUITY
YEARS ENDED SEPTEMBER 30, 1996 AND 1997
AND THE NINE MONTHS ENDED JUNE 30, 1998
(INFORMATION RELATED TO THE NINE MONTHS ENDED JUNE 30, 1998 IS UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
NET
UNREALIZED
GAIN (LOSS) ON
COMMON STOCK MARKETABLE TOTAL
--------------- RETAINED EQUITY STOCKHOLDERS'
SHARES AMOUNT EARNINGS SECURITIES EQUITY
------ ------ -------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Balance October 1, 1995................. 8,571 $9 $2,154 $ (2) $2,161
Net income.............................. -- -- 348 -- 348
Distributions to stockholders........... -- -- (164) -- (164)
Change in net unrealized gain (loss) on
marketable equity securities.......... -- -- -- 44 44
----- -- ------ ---- ------
Balance at September 30, 1996........... 8,571 9 2,338 42 2,389
Net income.............................. -- -- 725 -- 725
Distributions to stockholders........... -- -- (51) -- (51)
Change in net unrealized gain (loss) on
marketable equity securities.......... -- -- -- 42 42
----- -- ------ ---- ------
Balance at September 30, 1997........... 8,571 9 3,012 84 3,105
Net income.............................. -- -- 513 -- 513
Distributions to stockholders........... -- -- (60) -- (60)
Change in net unrealized gain (loss) on
marketable equity securities.......... -- -- -- 66 66
----- -- ------ ---- ------
Balance at June 30, 1998................ 8,571 $9 $3,465 $150 $3,624
===== == ====== ==== ======
</TABLE>

The accompanying notes are an integral part of this statement.
F-82
<PAGE> 155

SHRADER REFUSE AND RECYCLING SERVICE COMPANY

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE
YEAR ENDED MONTHS ENDED
SEPTEMBER 30, JUNE 30,
----------------- ----------------
1996 1997 1997 1998
------- ------ ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................ $ 348 $ 725 $ 614 $ 513
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization.......................... 565 770 546 697
Realized (gain) loss on marketable equity securities... 8 (23) (19) (19)
Gain on sale of property and equipment................. (6) (8) -- --
Changes in operating assets and liabilities:
Accounts receivable, net............................. (25) (223) (49) 89
Prepaid expenses..................................... 16 (32) (7) (10)
Other assets......................................... (6) (35) (85) (51)
Accounts payable..................................... 73 (42) (30) 121
Accrued liabilities.................................. 23 3 18 14
------- ------ ------ ------
Net cash provided by operating activities......... 996 1,135 988 1,354
------- ------ ------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures for property and equipment........... (2,010) (655) (395) (609)
Proceeds from sale of property and equipment.............. 6 26 -- --
Purchases of marketable equity securities................. (272) (307) (273) (232)
Proceeds from sale of marketable equity securities........ 81 215 184 144
------- ------ ------ ------
Net cash used in investing activities............. (2,195) (721) (484) (697)
------- ------ ------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt.............................. 1,777 300 120 250
Principal payments on long-term debt and capital lease
obligations............................................ (518) (834) (617) (621)
Cash distributions made to stockholders................... (164) (51) (39) (60)
------- ------ ------ ------
Net cash provided by (used in) financing
activities...................................... 1,095 (585) (536) (431)
------- ------ ------ ------
Net change in cash and cash equivalents..................... (104) (171) (32) 226
Cash and cash equivalents:
Beginning of period....................................... 391 287 287 116
------- ------ ------ ------
End of period............................................. $ 287 $ 116 $ 255 $ 342
======= ====== ====== ======
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION AND
NON-CASH TRANSACTIONS:
Cash paid for interest.................................... $ 206 $ 299 $ 219 $ 287
======= ====== ====== ======
Capital lease obligations incurred for the purchase of
property and equipment................................. $ 376 $1,380 $1,380 $ --
======= ====== ====== ======
</TABLE>

The accompanying notes are an integral part of these statements.
F-83
<PAGE> 156

SHRADER REFUSE AND RECYCLING SERVICE COMPANY

NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996 AND 1997
(DOLLARS IN THOUSANDS)
(INFORMATION RELATING TO JUNE 30, 1998 AND THE NINE
MONTHS ENDED JUNE 30, 1997 AND 1998 IS UNAUDITED.)

NOTE A -- ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Organization and Business

Shrader Refuse and Recycling Service Company (the "Company") is a
non-hazardous solid waste services company that provides collection, hauling,
disposal and recycling services to residential and commercial customers in
various counties of Nebraska.

The Company derives a portion of its revenue from exclusive municipal
contracts, of which a significant number will be subject to competitive bidding
at some time in the future. The Company intends to bid on additional municipal
contracts as a means of adding customers. There can be no assurance that the
Company will be the successful bidder to obtain or retain contracts that come up
for competitive bidding.

2. Sale of the Company

On July 31, 1998, the Company's stockholders sold all capital stock of the
Company to Waste Connections, Inc. ("WCI") for cash and common stock of WCI.

3. Interim Financial Information

The unaudited interim financial statements as of June 30, 1998 and for the
nine months ended June 30, 1997 and 1998 have been prepared in accordance with
generally accepted accounting principles for interim financial information.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
Operating results for the nine months ended June 30, 1998 are not necessarily
indicative of the results that may be expected for the year ending September 30,
1998.

4. Use of Estimates

5. Cash Equivalents

The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.

6. Concentrations of Credit Risk

F-84
<PAGE> 157
SHRADER REFUSE AND RECYCLING SERVICE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1996 AND 1997
(DOLLARS IN THOUSANDS)
(INFORMATION RELATING TO JUNE 30, 1998 AND THE NINE
MONTHS ENDED JUNE 30, 1997 AND 1998 IS UNAUDITED.)

NOTE A -- ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
7. Marketable Equity Securities

The Company's marketable equity securities are classified as "available for
sale" and stated at market value. Unrealized holding gains and losses on such
securities are reported as a separate component of stockholders' equity until
realized.

Gains and losses on the disposition of marketable equity securities are
determined using the first-in, first-out method. Declines in the fair value of
individual securities below their cost that are other than temporary are
recorded as realized losses through a charge to income.

8. Property and Equipment

Property and equipment are stated at cost. Improvements or betterments
which significantly extend the life of an asset are capitalized. Expenditures
for maintenance and repair costs are charged to operations as incurred. The cost
of assets retired or otherwise disposed of and the related accumulated
depreciation are eliminated from the accounts in the year of disposal. Gains and
losses resulting from property disposals are included in other income or
expense. Depreciation is computed using the straight-line method over the
estimated useful lives of the assets, or lease term, whichever is shorter.

The estimated useful lives of property and equipment are as follows:

<TABLE>
<S> <C>
Buildings under capital leases.......................... 10 years
Machinery and equipment................................. 3-10 years
Rolling stock........................................... 5-10 years
Containers.............................................. 5-12 years
</TABLE>

9. Goodwill

Goodwill represents the excess of the purchase price over the fair value of
the tangible net assets of entities previously acquired by the Company and is
amortized on a straight-line basis over the period of expected benefit of 40
years.

10. Revenue Recognition

The Company recognizes revenues as services are provided. Certain customers
are billed in advance and, accordingly, recognition of the related revenues is
deferred until the services are provided.

11. Income Taxes

The Company operates under Subchapter "S" of the Internal Revenue Code for
federal and state income tax reporting purposes. Consequently, all of the income
tax attributes and liabilities of the Company's operations flow through to the
individual shareholders.

F-85
<PAGE> 158
SHRADER REFUSE AND RECYCLING SERVICE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1996 AND 1997
(DOLLARS IN THOUSANDS)
(INFORMATION RELATING TO JUNE 30, 1998 AND THE NINE
MONTHS ENDED JUNE 30, 1997 AND 1998 IS UNAUDITED.)

NOTE A -- ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
12. Significant Customer

The Company has one major customer which represents 16% of total revenues
for the year ended September 30, 1997.

NOTE B -- MARKETABLE EQUITY SECURITIES

At September 30, 1996 and 1997, the aggregate market value of marketable
equity securities exceeded their aggregate cost by $42 and $84, respectively.
Gross unrealized gains totaled $44 and $89 and gross unrealized losses totaled
$2 and $5 at September 30, 1996 and 1997, respectively.

Proceeds from sales of marketable equity securities during the years ended
September 30, 1996 and 1997 were $81 and $215, respectively. Gross gains of $4
and gross losses of $12 were realized on sales during 1996. Gross gains of $37
and gross losses of $14 were realized on sales during 1997.

NOTE C -- PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30,
---------------- JUNE 30,
1996 1997 1998
------ ------ -------------
(UNAUDITED)
<S> <C> <C> <C>
Buildings under capital leases..................... $ 376 $1,756 $1,756
Machinery and equipment............................ 440 455 471
Rolling stock...................................... 3,359 3,656 4,009
Containers......................................... 1,781 2,089 2,328
------ ------ ------
5,956 7,956 8,564
Less accumulated depreciation and amortization..... 2,017 2,761 3,452
------ ------ ------
$3,939 $5,195 $5,112
====== ====== ======
</TABLE>

NOTE D -- GOODWILL

Goodwill is comprised of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30,
---------------- JUNE 30,
1996 1997 1998
------ ------ -------------
(UNAUDITED)
<S> <C> <C> <C>
Goodwill........................................... $ 351 $ 351 $ 351
Accumulated amortization........................... 128 137 142
------ ------ ------
$ 223 $ 214 $ 209
====== ====== ======
</TABLE>

F-86
<PAGE> 159
SHRADER REFUSE AND RECYCLING SERVICE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1996 AND 1997
(DOLLARS IN THOUSANDS)
(INFORMATION RELATING TO JUNE 30, 1998 AND THE NINE
MONTHS ENDED JUNE 30, 1997 AND 1998 IS UNAUDITED.)

NOTE E -- FINANCING ARRANGEMENTS

<TABLE>
<CAPTION>
SEPTEMBER 30,
---------------- JUNE 30,
1996 1997 1998
------ ------ -------------
(UNAUDITED)
<S> <C> <C> <C>
Notes payable to bank bearing interest at rates
ranging from 7.75% to 9.50%, payable in monthly
installments of principal and interest; maturing
through August 2001.............................. $2,244 $1,766 $1,467
Note payable to related party, with interest at 9%
per annum payable quarterly until monthly
installments of principal and interest commence
on November 1997. This note matures July 2003 and
is without collateral............................ 195 195 195
------ ------ ------
2,439 1,961 1,662
Less current portion............................... 763 703 703
------ ------ ------
Long-term debt, net of current portion............. $1,676 $1,258 $ 959
====== ====== ======
</TABLE>

On July 1, 1998, the Company entered into an $875 credit facility with a
bank maturing December 2001. The credit facility is a line of credit through
January 1, 1999, whereupon all borrowings under the facility will be refinanced
on a note payable due in monthly installments through December 2001. Borrowings
bear interest at 8.0% per annum. During July 1998, the Company utilized all of
the credit facility for equipment purchases.

The notes payable to bank and the credit facility are collateralized by
substantially all of the Company's assets and the personal guarantees of the
stockholders. The Company is subject to certain restrictive covenants with the
bank, which among other things, require that a specified debt service coverage
ratio be maintained and restrict the payment of dividends solely to amounts
sufficient to meet the tax requirements of the stockholders relative to the
Company's status as a Subchapter "S" Corporation. The Company was in compliance
with or received waivers of the covenant requirements for the year ended
September 30, 1997.

As of September 30, 1997, aggregate contractual future principal payments
by fiscal year are due as follows:

<TABLE>
<S> <C>
1998................................................ $ 703
1999................................................ 546
2000................................................ 355
2001................................................ 284
2002................................................ 39
Thereafter.......................................... 34
------
$1,961
======
</TABLE>

In conjunction with the acquisition of the Company by WCI on July 31, 1998,
all of the outstanding long-term debt of the Company was repaid.

F-87
<PAGE> 160
SHRADER REFUSE AND RECYCLING SERVICE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1996 AND 1997
(DOLLARS IN THOUSANDS)
(INFORMATION RELATING TO JUNE 30, 1998 AND THE NINE
MONTHS ENDED JUNE 30, 1997 AND 1998 IS UNAUDITED.)

NOTE F -- COMMITMENTS AND CONTINGENCIES

COMMITMENTS

Leases

The Company leases three facilities from a related party under two ten-year
leases expiring in 2005 and 2007. For financial reporting purposes, minimum
lease rentals relating to the facilities have been capitalized. The related
assets and obligations have been recorded using the Company's implicit borrowing
rate at the inception of the leases. The following amounts are included in
property and equipment as buildings under capital leases:

<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------- JUNE 30,
1996 1997 1998
---- ------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Buildings.................................... $376 $1,756 $1,756
Less accumulated amortization................ 38 121 253
---- ------ ------
$338 $1,635 $1,503
==== ====== ======
</TABLE>

The following is a schedule by fiscal years of future minimum lease
payments under capital leases together with the present value of the net minimum
lease payments as of September 30, 1997:

<TABLE>
<S> <C>
1998........................................................ $ 321
1999........................................................ 321
2000........................................................ 321
2001........................................................ 321
2002........................................................ 321
Thereafter.................................................. 1,368
------
Total minimum lease payments................................ 2,973
Less amount representing interest........................... 1,293
------
$1,680
======
Current portion............................................. $ 97
Long-term portion........................................... 1,583
------
$1,680
======
</TABLE>

Prior to entering into the current leases, the Company leased these
facilities on a month-to-month basis from the related party. The Company
recognized rent expense of $171 and $117 in fiscal 1996 and 1997, respectively.
Total rent and minimum lease payments to the related party during fiscal 1996
and 1997 were $249 and $260, respectively.

In conjunction with the acquisition of the Company by WCI on July 31, 1998,
the current leases were terminated, two of the three facilities were acquired
and the remaining facility was leased under a two-year lease with an option to
extend for an additional two years through July 2002.

F-88
<PAGE> 161
SHRADER REFUSE AND RECYCLING SERVICE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1996 AND 1997
(DOLLARS IN THOUSANDS)
(INFORMATION RELATING TO JUNE 30, 1998 AND THE NINE
MONTHS ENDED JUNE 30, 1997 AND 1998 IS UNAUDITED.)

NOTE F -- COMMITMENTS AND CONTINGENCIES (CONTINUED)
Noncompete Agreement

The Company has a noncompete agreement with a related party that requires
the Company to pay $4 a month through October 1997 provided the related party
abides by the noncompete agreement. The Company paid the related party $44 in
each of the fiscal years ended September 30, 1996 and 1997.

CONTINGENCIES

Legal Proceedings

In the normal course of its business and as a result of the extensive
governmental regulation of the solid waste industry, the Company may
periodically become subject to various judicial and administrative proceedings
involving federal, state or local agencies. In these proceedings, an agency may
seek to impose fines on the Company or to revoke or deny renewal of an operating
permit held by the Company. From time to time the Company may also be subject to
actions brought by citizens' groups or adjacent landowners in connection with
the permitting and licensing of landfills and transfer stations, or alleging
environmental damage or violations of the permits and licenses pursuant to which
the Company operates.

In addition, the Company may become party to various claims and suits
pending for alleged damages to persons and property, alleged violations of
certain laws and alleged liabilities arising out of matters occurring during the
normal operation of the waste management business. As of September 30, 1997,
there is no current proceeding or litigation involving the Company that the
Company believes will have a material adverse impact on the Company's business,
financial condition, results of operations or cash flows.

NOTE G -- PRO FORMA INCOME TAX INFORMATION (UNAUDITED)

Unaudited pro forma information reflects income tax expense as if the
Company had been subject to federal and state income taxes. The pro forma
provisions for income taxes for the years ended September 30, 1996 and 1997 and
the nine month periods ended June 30, 1997 and 1998 differ from the amounts
computed by applying the applicable statutory federal income tax rate (34%) to
income before income taxes due to state income taxes and certain non-deductible
expenses.

F-89
<PAGE> 162
SHRADER REFUSE AND RECYCLING SERVICE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1996 AND 1997
(DOLLARS IN THOUSANDS)
(INFORMATION RELATING TO JUNE 30, 1998 AND THE NINE
MONTHS ENDED JUNE 30, 1997 AND 1998 IS UNAUDITED.)

NOTE G -- PRO FORMA INCOME TAX INFORMATION (UNAUDITED) (CONTINUED)
The following is a summary of pro forma income taxes for the years ended
September 30, 1996 and 1997:

<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
--------------
1996 1997
----- -----
<S> <C> <C>
Current:
Federal................................................... $ 47 $ 66
State..................................................... 10 14
Deferred:
Federal................................................... 69 171
State..................................................... 15 39
---- ----
Pro forma income taxes...................................... $141 $290
==== ====
</TABLE>

The Company's pro forma deferred income tax liabilities of approximately
$739 and $949 at September 30, 1996 and 1997, respectively, relate principally
to differences between tax and financial methods of reporting depreciation
expense and the use of the cash method of accounting for income tax purposes
which gives rise to differences between financial statement and tax return
recognition of receivables, prepaid expenses, accounts payable and accrued
liabilities.

NOTE H -- FINANCIAL INSTRUMENTS

The following estimated fair value information pertains to the Company's
financial instruments and does not purport to represent the aggregate net fair
value of the Company.

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to estimate
that value:

Cash and cash equivalents: The carrying amount approximates fair value
because of the short maturity of those instruments.

Marketable equity securities: Quoted market prices for the Company's
marketable equity securities are used to estimate fair value.

Long-term debt and capital lease obligations: Current incremental borrowing
rates for similar type borrowings are used to estimate the fair value of the
Company's long-term debt and capital lease obligations.

F-90
<PAGE> 163
SHRADER REFUSE AND RECYCLING SERVICE COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1996 AND 1997
(DOLLARS IN THOUSANDS)
(INFORMATION RELATING TO JUNE 30, 1998 AND THE NINE
MONTHS ENDED JUNE 30, 1997 AND 1998 IS UNAUDITED.)

NOTE H -- FINANCIAL INSTRUMENTS (CONTINUED)
The carrying amounts and estimated fair values of the Company's financial
instruments are as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996 SEPTEMBER 30, 1997
--------------------- ---------------------
ESTIMATED ESTIMATED
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- --------- -------- ---------
<S> <C> <C> <C> <C>
Financial Assets:
Cash and cash equivalents..................... $ 287 $ 287 $ 116 $ 116
Marketable equity securities.................. 246 246 403 403
Financial Liabilities:
Long-term debt................................ 2,439 2,528 1,961 1,970
Capital lease obligations..................... 356 486 1,680 2,038
</TABLE>

F-91
<PAGE> 164

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

The Members
Contractor's Waste Removal, L.C.

We have audited the accompanying balance sheet of Contractor's Waste
Removal, L.C. as of December 31, 1997, and the related statements of operations
and change in members' deficit and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Contractor's Waste Removal,
L.C. at December 31, 1997, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.

/s/ ERNST & YOUNG LLP

Sacramento, California
August 26, 1998

F-92
<PAGE> 165

CONTRACTOR'S WASTE REMOVAL, L.C.

BALANCE SHEETS
(IN THOUSANDS)

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
------------ -----------
(UNAUDITED)
<S> <C> <C>
Current assets:
Accounts receivable, net of allowance for doubtful
accounts of $75........................................ $ 256 $ 222
Property and equipment:
Containers................................................ 1,332 1,703
Furniture and fixtures.................................... 104 104
Vehicles.................................................. 454 562
------ ------
1,890 2,369
Less: accumulated depreciation and amortization............. 316 375
------ ------
1,574 1,994
Other assets................................................ 34 14
------ ------
$1,864 $2,230
====== ======

LIABILITIES AND MEMBERS' DEFICIT
Current liabilities:
Overdraft on bank balance................................. $ 35 $ 38
Accounts payable.......................................... 291 135
Accrued liabilities....................................... 121 71
Lines of credit........................................... 392 392
Current portion of long-term debt......................... 510 1,025
Current portion of notes payable to members............... 50 50
Current portion of capital lease obligations.............. 59 59
------ ------
Total current liabilities......................... 1,458 1,770
Long-term debt.............................................. 375 518
Notes payable to members.................................... 95 95
Capital lease obligations................................... 180 178
Commitments and contingencies (Note 6)
Members' deficit............................................ (244) (331)
------ ------
$1,864 $2,230
====== ======
</TABLE>

See accompanying notes.
F-93
<PAGE> 166

CONTRACTOR'S WASTE REMOVAL, L.C.

STATEMENTS OF OPERATIONS AND CHANGE IN MEMBERS' DEFICIT
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, --------------
1997 1997 1998
------------ ----- -----
(UNAUDITED)
<S> <C> <C> <C>
Revenues.................................................... $1,903 $ 377 $ 438
Operating expenses:
Cost of operations........................................ 1,234 262 315
Selling, general and administrative....................... 359 67 97
Depreciation and amortization............................. 202 48 59
------ ----- -----
Income (loss) from operations............................... 108 -- (33)
Interest expense............................................ (178) (40) (54)
------ ----- -----
Net loss.................................................... (70) (40) (87)
Members' withdrawals........................................ (14) -- --
------ ----- -----
Net change in members' deficit.............................. (84) (40) (87)
Members' deficit, beginning of period....................... (160) (160) (244)
------ ----- -----
Members' deficit, end of period............................. $ (244) $(200) $(331)
====== ===== =====
</TABLE>

See accompanying notes.
F-94
<PAGE> 167

CONTRACTOR'S WASTE REMOVAL, L.C.

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, --------------
1997 1997 1998
------------ ----- -----
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $ (70) $ (40) $ (87)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation and amortization.......................... 202 48 59
Changes in operating assets and liabilities:
Accounts receivable, net............................. (83) (18) 34
Other assets......................................... (27) (1) 20
Accounts payable..................................... 105 (81) (156)
Accrued liabilities.................................. 18 (13) (50)
----- ----- -----
Net cash provided by (used in) operating activities.... 145 (105) (180)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures for property and equipment........... (235) -- --
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt and notes payable to
members................................................ 435 229 208
Principal payments on long-term debt and notes payable to
members................................................ (309) (146) (29)
Principal payments on capital lease obligations........... (45) (12) (2)
Member withdrawals........................................ (14) -- --
----- ----- -----
Net cash provided by financing activities................... 67 71 177
----- ----- -----
Net change in overdraft in bank balances.................... (23) (34) (3)
Overdraft in bank balances at beginning of period........... (12) (12) (35)
----- ----- -----
Overdraft in bank balances at end of period................. $ (35) $ (46) $ (38)
===== ===== =====
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest...................................... $ 151 $ 40 $ 54
===== ===== =====
</TABLE>

See accompanying notes.
F-95
<PAGE> 168

CONTRACTOR'S WASTE REMOVAL, L.C.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
(IN THOUSANDS)
(INFORMATION RELATING TO MARCH 31, 1998 AND
THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

1. ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BUSINESS

Contractor's Waste Removal, L.C. (the "Company") is a Utah limited
liability company. The Company is a non-hazardous solid waste services company
that provides collection, hauling and disposal of materials primarily for
commercial customers in various counties in the State of Utah.

Upon the sale or liquidation of the Company, the members have verbally
agreed that each member will receive an amount equal to their original
contribution basis in the Company as a first priority distribution after payment
of all debt and other obligations of the Company including any notes payable to
members. Remaining proceeds, if any, will be split between the members based
upon their respective ownership percentages of the Company.

INTERIM FINANCIAL INFORMATION

The unaudited interim financial statements as of March 31, 1998 and for the
three months ended March 31, 1997 and 1998 have been prepared in accordance with
generally accepted accounting principles for interim financial information.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
Operating results for the three months ended March 31, 1998 are not necessarily
indicative of the results that may be expected for the year ended December 31,
1998.

USE OF ESTIMATES

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to
concentrations of credit risks consist primarily of accounts receivable. Credit
risk on accounts receivable is minimized as a result of the large and diverse
nature of the Company's customer base. The Company does maintain an allowance
for such credit losses. Credit losses have been within management's
expectations.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Improvements or betterments
which significantly extend the life of an asset are capitalized. Expenditures
for maintenance and repair costs are charged to operations as incurred.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets, or lease term, whichever is shorter.

The estimated useful lives are as follows:

<TABLE>
<S> <C>
Containers............................................. 10-12 years
Furniture and fixtures................................. 3-5 years
Vehicles............................................... 5 years
</TABLE>

F-96
<PAGE> 169
CONTRACTOR'S WASTE REMOVAL, L.C.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
(IN THOUSANDS)
(INFORMATION RELATING TO MARCH 31, 1998 AND
THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

REVENUE RECOGNITION

The Company recognizes revenues as services are provided.

INCOME TAXES

In conformity with the Internal Revenue Code and applicable state and local
tax statutes, taxable income or loss of the Company is required to be reported
in the tax returns of the individual members and, accordingly, no provision has
been made in the accompanying financial statements for any federal, state, or
local income taxes.

2. SHORT-TERM BORROWINGS

The Company maintains four revolving lines of credit (the "Lines") with a
financial institution. Under the Lines, the Company may borrow an amount up to
$410. Borrowings under the Lines bear interest at the financial institution's
prime rate (8.5% at December 31, 1997) plus 3.25%. The Lines are secured by the
Company's accounts receivable and equipment and are personally guaranteed by the
members. The Lines had $392 in the aggregate outstanding at December 31, 1997.

3. LONG-TERM DEBT

Long-term debt as of December 31, 1997 consists of the following:

<TABLE>
<S> <C>
Unsecured notes payable to private individuals bearing
interest at 10%; payable in monthly installments of
interest with the principal amount due at maturity;
maturing on May 31, 1998 and July 3, 2010................. $ 282
Equipment financing notes payable; bearing interest at rates
ranging from 8.9% to 13%; payable in monthly installments
of principal plus interest; maturing June 4, 2000 through
June 1, 2003; secured by property and equipment and
personally guaranteed by the members...................... 584
Other....................................................... 19
------
885
Less: current portion....................................... 510
------
Long-term debt.............................................. $ 375
======
</TABLE>

As of December 31, 1997, aggregate contractual future principal payments by
fiscal year on long-term debt are due as follows:

<TABLE>
<S> <C>
1998........................................................ $ 510
1999........................................................ 101
2000........................................................ 101
2001........................................................ 54
2002........................................................ 14
Thereafter.................................................. 105
------
$ 885
======
</TABLE>

F-97
<PAGE> 170
CONTRACTOR'S WASTE REMOVAL, L.C.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
(IN THOUSANDS)
(INFORMATION RELATING TO MARCH 31, 1998 AND
THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

4. NOTES PAYABLE TO MEMBERS

The Company has various notes payable to members which bear interest at
rates ranging from 11% to 13% payable in monthly installments of principal and
interest. The notes mature on January 1, 1998 through July 1, 2005.

As of December 31, 1997, aggregate contractual future principal payments by
fiscal year on notes payable to members are due as follows:

<TABLE>
<S> <C>
1998........................................................ $ 50
1999........................................................ 15
2000........................................................ 13
2001........................................................ 15
2002........................................................ 14
Thereafter.................................................. 38
------
$ 145
======
</TABLE>

5. CAPITAL LEASE OBLIGATION

Property and equipment includes $443 of equipment under capital lease as of
December 31, 1997. Accumulated amortization for such equipment was $47 as of
December 31, 1997.

The future minimum lease payments under the capital lease along with the
present value of the minimum lease payments as of December 31, 1997 are as
follows:

Minimum lease payments
Year ending December 31:

<TABLE>
<S> <C>
1998........................................................ $ 83
1999........................................................ 77
2000........................................................ 77
2001........................................................ 53
----
Total minimum lease payments................................ 290
Less amount representing interest........................... 51
----
Present value of minimum lease payments..................... 239
Current portion............................................. 59
----
Amounts due after one year.................................. $180
====
</TABLE>

6. COMMITMENTS AND CONTINGENCIES

COMMITMENTS

Operating Leases

The Company leases its facilities and certain equipment under
non-cancellable operating leases for periods ranging from 1 to 3 years. Rent
expense under operating leases was approximately $31 for the year ended December
31, 1997. The future minimum lease payments under operating leases are $28, $29
and $15 for the years ended December 31, 1998, 1999, and 2000, respectively.

F-98
<PAGE> 171
CONTRACTOR'S WASTE REMOVAL, L.C.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
(IN THOUSANDS)
(INFORMATION RELATING TO MARCH 31, 1998 AND
THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998 IS UNAUDITED)

CONTINGENCIES

Legal Proceedings

In addition, the Company may become party to various claims and suits
pending for alleged damages to persons and property, alleged violations of
certain laws and alleged liabilities arising out of matters occurring during the
normal operation of the waste management business. However, as of December 31,
1997, there is no current proceeding or litigation involving the Company that
the Company believes will have a material adverse impact on the Company's
business, financial condition, results of operations and cash flows.

7. RELATED PARTY TRANSACTIONS

During the year ended December 31, 1997, the Company purchased
approximately $98 of containers from a Company 50% owned by a member.

8. YEAR 2000 (UNAUDITED)

9. SUBSEQUENT EVENTS

ACQUISITION OF UTAH DUMPSTER

The Company entered into an agreement effective January 1, 1998 to purchase
the assets of Utah Dumpster, a non-hazardous solid waste services company, for
total consideration of $600 (consisting primarily of assumed liabilities of Utah
Dumpster). The acquisition will be accounted for as a purchase. No amounts have
been included in the accompanying December 31, 1997 financial statements with
respect to the assets, liabilities, or operations of Utah Dumpster. The
operations of Utah Dumpster have been included in the Company's unaudited
statements of operations for the three months ended March 31, 1998.

SALE OF THE COMPANY

On June 1, 1998, the Company's Members entered into an agreement to sell
all of the Company membership interests to Waste Connections, Inc. ("WCI") for
cash and stock of WCI.

F-99
<PAGE> 172

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Board of Directors and Stockholders
Curry Transfer and Recycling, Inc.

We have audited the accompanying consolidated balance sheet of Curry
Transfer and Recycling, Inc. as of December 31, 1997, and the related
consolidated statements of income and retained earnings, and cash flows for the
year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Curry Transfer
and Recycling, Inc. at December 31, 1997, and the consolidated results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.

/s/ ERNST & YOUNG LLP
Sacramento, California
July 31, 1998

F-100
<PAGE> 173

CURRY TRANSFER AND RECYCLING, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE ACCOUNTS)

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
------------ -----------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents................................. $ 225 $ 297
Marketable securities..................................... 460 478
Accounts receivable....................................... 388 379
Prepaid expenses and other current assets................. 78 49
------ ------
Total current assets.............................. 1,151 1,203
Property and equipment, net................................. 1,244 1,269
Intangible assets, net...................................... 110 107
Other assets................................................ 185 167
------ ------
$2,690 $2,746
====== ======

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable.......................................... $ 122 $ 114
Accrued expenses.......................................... 97 104
Accrued income taxes...................................... 159 172
Deferred revenue.......................................... 205 206
Current portion of long-term debt......................... 213 200
Current portion of capital lease obligations.............. 90 101
------ ------
Total current liabilities......................... 886 897
Long-term debt, net of current portion...................... 222 175
Capital lease obligations, net of current portion........... 141 141
Deferred income taxes....................................... 85 85
Commitments and contingencies (Note 5)
Stockholders' equity:
Common stock; no par value; 2,500 shares authorized,
issued and outstanding................................. 67 67
Retained earnings......................................... 1,604 1,660
Unrealized holding gains on marketable securities......... 39 75
Treasury stock agreement.................................. (354) (354)
------ ------
Total stockholders' equity.................................. 1,356 1,448
------ ------
$2,690 $2,746
====== ======
</TABLE>

See accompanying notes.
F-101
<PAGE> 174

CURRY TRANSFER AND RECYCLING, INC.

CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, ----------------
1997 1997 1998
------------ ------ ------
(UNAUDITED)
<S> <C> <C> <C>
Revenues.................................................. $3,617 $ 800 $ 795
Operating expenses:
Cost of operations...................................... 2,259 548 481
Selling, general and administrative..................... 655 147 159
Depreciation and amortization........................... 260 61 69
------ ------ ------
Income from operations.................................... 443 44 86
Other income (expense):
Interest and dividend income............................ 25 2 7
Interest expense........................................ (75) (9) (12)
Gain on sale of assets.................................. 41 -- 9
Other income............................................ 23 -- --
------ ------ ------
Income before income taxes................................ 457 37 90
Income tax provision...................................... 183 15 34
------ ------ ------
Net income................................................ 274 22 56
Retained earnings, beginning of period.................... 1,330 1,330 1,604
------ ------ ------
Retained earnings, end of period.......................... $1,604 $1,352 $1,660
====== ====== ======
</TABLE>

See accompanying notes.
F-102
<PAGE> 175

CURRY TRANSFER AND RECYCLING, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, ------------
1997 1997 1998
------------ ---- ----
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.................................................. $ 274 $ 22 $ 56
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization............................. 260 61 69
Deferred income taxes..................................... 9 -- --
Gain on sale of assets.................................... (41) -- (9)
Changes in operating assets and liabilities:
Accounts receivable.................................... (26) (22) 9
Prepaid expenses and other assets...................... (16) (29) 29
Accounts payable....................................... (3) (21) (8)
Accrued expenses....................................... 16 44 7
Accrued income taxes................................... 88 15 13
Deferred revenue....................................... 17 5 1
----- ---- ----
Net cash provided by operating activities................... 578 75 167
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment....................... (218) (9) (19)
Proceeds from sale of property and equipment.............. 89 -- 22
Purchases of marketable securities........................ (125) (52) (18)
Proceeds from sale of marketable securities............... 72 -- --
----- ---- ----
Net cash used in investing activities....................... (182) (61) (15)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt................................ $(156) $(14) $(51)
Proceeds from long-term debt.............................. -- --
Payments of revolving line of credit...................... (32) (23) --
Payments for acquisition of treasury stock................ (30) (8)
Payments on capital lease obligations..................... (71) (6) (29)
----- ---- ----
Net cash used in financing activities....................... (289) (51) (80)
----- ---- ----
Net increase (decrease) in cash and cash equivalents........ 107 (37) 72
Cash and cash equivalents, beginning of period.............. 118 118 225
----- ---- ----
Cash and cash equivalents, end of period.................... $ 225 $ 81 $297
===== ==== ====
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION AND
NON-CASH TRANSACTIONS:
Cash paid for interest.................................... $ 49
=====
Cash paid for income taxes................................ $ 131
=====
Purchase of equipment with capital lease obligations...... $ 182
=====
Sale of land for note receivable............................ $ 27
=====
</TABLE>

See accompanying notes.
F-103
<PAGE> 176

CURRY TRANSFER AND RECYCLING, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(INFORMATION RELATING TO MARCH 31, 1998 AND THE THREE MONTHS ENDED
MARCH 31, 1997 AND 1998 IS UNAUDITED)

1. ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BUSINESS

Curry Transfer and Recycling, Inc. ("CTR") provides full service waste
disposal to residential and commercial customers in the Curry County, Oregon
area including the cities of Brookings, Gold Beach, and Port Orford and the
unincorporated areas of Curry County under exclusive franchise agreements that
expire from 2009 to 2011.

Oregon Waste Technology, Inc. ("OWT"), a wholly-owned subsidiary of CTR,
provides sani-can rentals, septic tank pumping, and drain maintenance to the
general public in the Curry County area including the cities of Brookings, Gold
Beach, and Port Orford and the unincorporated areas of Curry County.

SALE OF THE COMPANY

On June 25, 1998, the Company's stockholders entered into an agreement to
sell all capital stock in the Company to Waste Connections, Inc. ("WCI") for
cash.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements includes the accounts of CTR and OWT
(collectively, "the Company"). All significant intercompany transactions and
balances have been eliminated in consolidation.

INTERIM FINANCIAL INFORMATION

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. Actual results could differ from those
estimates.

CASH EQUIVALENTS

The Company considers all highly liquid investments with original
maturities of three months or less to be cash equivalents.

F-104
<PAGE> 177
CURRY TRANSFER AND RECYCLING, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(INFORMATION RELATING TO MARCH 31, 1998 AND THE THREE MONTHS ENDED
MARCH 31, 1997 AND 1998 IS UNAUDITED)

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Expenditures for maintenance,
repairs, and minor renewals are charged to operations as incurred. Improvements
and betterments that significantly extend the life of an asset are capitalized.

Depreciation is calculated using the straight-line method over the
estimated useful life of the asset. Machinery and equipment have lives between 5
and 10 years. Buildings and improvements have lives between 15 and 30 years.
Assets purchased under capital leases are depreciated using the straight-line
method over the estimated useful life of the asset or the lease term, whichever
is shorter.

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to
concentrations of credit risk consist primarily of accounts receivable. The
Company grants credit to qualified local customers and generally does not
require collateral. Credit risk on accounts receivable is minimized as a result
of the large and diverse nature of the Company's customer base. Credit losses
have been within management's expectations.

INTANGIBLE ASSETS

Intangible assets are comprised of the following at December 31, 1997:

<TABLE>
<S> <C>
Goodwill.................................................... $ 137
Franchise agreements........................................ 235
Covenants not to compete.................................... 27
Other....................................................... 1
-----
400
Accumulated amortization.................................... (290)
-----
$ 110
=====
</TABLE>

Goodwill represents the excess of the purchase price over the fair value of
the net assets of entities previously acquired by the Company and is amortized
on a straight-line basis over the period of expected benefit of 40 years.
Franchise agreements are amortized on a straight-line basis over the period of
expected benefits of 9 to 10 years. The covenants not to compete are amortized
on a straight-line basis over the period of expected benefit.

REVENUE RECOGNITION

The Company recognizes revenues as services are provided. Certain customers
are billed in advance and, accordingly, recognition of the related revenues is
deferred until the services are provided.

INCOME TAXES

The Company uses the liability method to account for income taxes. Under
this method, deferred tax assets and liabilities are determined based on
differences between the financial

F-105
<PAGE> 178
CURRY TRANSFER AND RECYCLING, INC.

reporting and tax bases of assets and liabilities and are measured using the
enacted tax rates and laws that will be in effect when the differences are
expected to reverse.

2. MARKETABLE SECURITIES

Marketable securities consist of the following at December 31, 1997:

<TABLE>
<CAPTION>
APPROXIMATE
ORIGINAL FAIR MARKET
NUMBER OF SHARES COST VALUE
---------------- -------- -----------
<S> <C> <C> <C>
Nuveen Municipal Bond Fund............ 30,640 $298 $340
====== ==== ====
Putnam Investments Mutual funds....... 4,351 $ 96 $ 96
====== ==== ====
Nuveen Growth and Income Fund......... 835 $ 21 $ 19
====== ==== ====
Certificate of deposit................ N/A $ 5 $ 5
====== ==== ====
</TABLE>

For the year ended December 31, 1997, a gain of $3 was realized using the
average cost of shares sold.

The Nuveen Municipal Bond Fund shares are classified as available for sale
marketable debt securities.

Total approximate fair market values of marketable securities at December
31, 1997 were $460, and were determined using quoted market prices. The net
unrealized holding gains on available for sale securities have been included as
a separate component of stockholders' equity and increased $9 during 1997.

3. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
------------ -----------
(UNAUDITED)
<S> <C> <C>
Land............................................. $ 112 $ 112
Buildings........................................ 340 340
Machinery and equipment.......................... 2,080 2,170
Leased machinery and equipment................... 423 424
------- -------
2,955 3,046
Less: accumulated depreciation................... (1,711) (1,777)
------- -------
Total fixed assets, net................ $ 1,244 $ 1,269
======= =======
</TABLE>

F-106
<PAGE> 179
CURRY TRANSFER AND RECYCLING, INC.

4. LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS

LONG-TERM DEBT

Long-term debt consists of the following at December 31, 1997:

<TABLE>
<S> <C>
Mortgage payable to an individual; bearing interest at
10.25%; payable in monthly installments of $1 through June
26, 2001; secured by land with a net book value of $12 at
December 31, 1997......................................... $ 32
Notes payable to lending institutions; bearing interest
ranging from 8.75 to 11%; payable in monthly installments
ranging from $1 to $2 through December 18, 1999; secured
by various equipment and vehicles with a net book value of
$104 at December 31, 1997................................. 54
Note payable to banks; bearing interest ranging from 1.75%
over prime to 14%; payable in one payment of $112 on
September 18, 1998 and monthly installments ranging from
$1 to $2 through February 10, 1999; secured by equipment
and various vehicles with a net book value of $18 at
December 31, 1997, and 30,424 shares of marketable
securities (Note 2)....................................... 135
Note payable to an individual interest imputed at 8%,
payable in monthly installments of $2,500 through December
15, 2007 under a stock purchase agreement secured by
treasury stock............................................ 214
-----
Total long-term debt.............................. 435
Less: current portion....................................... (213)
-----
$ 222
=====
</TABLE>

As of December 31, 1997, the Company has the ability to borrow an
additional $65 on one of its notes payable to a bank.

As of December 31, 1997, aggregate contractual future principal payments by
calendar year on long-term debt are due as follows:

<TABLE>
<S> <C>
1998........................................................ $213
1999........................................................ 60
2000........................................................ 37
2001........................................................ 30
2002........................................................ 30
Thereafter.................................................. 65
----
$435
====
</TABLE>

CAPITAL LEASE OBLIGATIONS

Capital lease obligations consist of the following at December 31, 1997:

<TABLE>
<S> <C>
Capital lease obligations payable to banks at an imputed
interest rate ranging from 9.75% to 13% payable in monthly
installments ranging from $0.5 to $2 through June 14,
2002; secured by various equipment. vehicles and buildings
with a net book value of $365 at December 31, 1997........ $231
----
Total present value of capital lease obligations............ 231
Less: current portion....................................... (90)
----
$141
====
</TABLE>

F-107
<PAGE> 180
CURRY TRANSFER AND RECYCLING, INC.

As of December 31, 1997, aggregate contractual future lease payments on
capital lease obligations by calendar year are due as follows:

<TABLE>
<S> <C>
1998........................................................ $107
1999........................................................ 75
2000........................................................ 60
2001........................................................ 13
2002........................................................ 7
----
Total payments on capital lease obligations................. 262
Less: amount representing interest.......................... (31)
----
Present value of capital lease obligations.................. $231
====
</TABLE>

5. COMMITMENTS AND CONTINGENCIES

OPERATING LEASES

The Company leases certain office equipment. Office equipment and property
is rented under cancellable, month-to-month leases.

The Company currently leases land, under a month-to-month operating lease,
from a stockholder. The monthly rent expense is $3.

The Company leases two garbage trucks under a month-to-month operating
lease from an affiliated company. The monthly rent expense is $5.

The Company leases a transfer station, under an operating lease which
terminates in December 1998. Future minimum rental payments required under the
transfer station lease are $7 in 1998.

Rent expense for the year ended December 31, 1997 was $133.

ENVIRONMENTAL RISKS

The Company is subject to liability for environmental damage that the solid
waste facilities it operates may cause to neighboring landowners, particularly
as a result of the contamination of drinking water sources or soil, including
damage resulting from conditions existing prior to use of such facilities by the
Company. The Company may also be subject to liability for any off-site
environmental contamination caused by pollutants or hazardous substances whose
transportation, treatment or disposal was arranged by the Company or its
predecessors. Any substantial liability for environmental damage incurred by the
Company could have a material adverse effect on the Company's financial
condition, results of operations or cash flows.

LEGAL PROCEEDINGS

In the normal course of its business and as a result of the extensive
governmental regulation of the solid waste industry, the Company may
periodically become subject to various judicial and administrative proceedings
involving federal, state or local agencies. In these proceedings, an agency may
seek to impose fines on the Company or to revoke or deny renewal of an operating
permit held by the Company. From time to time the Company may also be subject to
actions brought
F-108
<PAGE> 181
CURRY TRANSFER AND RECYCLING, INC.

by citizens' groups or adjacent landowners in connection with the permitting and
licensing of landfills and transfer stations, or alleging environmental damage
or violations of the permits and licenses pursuant to which the Company
operates.

In addition, the Company may become party to various claims and suits
pending for alleged damages to persons and property, alleged violations of
certain laws and alleged liabilities arising out of matters occurring during the
normal operation of the waste management business. However, as of December 31,
1997, there is no current proceeding or litigation involving the Company that
the Company believes will have a material adverse impact on the Company's
business, financial condition, results of operations or cash flows.

6. TREASURY STOCK AGREEMENT

In November 1993, CTR entered into an agreement to purchase 1,225 shares of
common stock held by one of its stockholders at $368 per share. At December 31,
1997, CTR had paid $139 for 378 shares of stock. The agreement allows for
adjustments to the price per share based on certain future events and requires
the shares to be held in an escrow account pending the Company's payments on a
note payable issued to the former shareholder in connection with the agreement.
As of December 31, 1997, 928 shares were held in escrow.

At December 31, 1997, $354 has been recorded as a contra-equity account,
which reflects $139 of payments made to the former stockholder through December
31, 1997 and a $215 note payable due to the former stockholder (discounted to
its net present value assuming 8% imputed interest).

Subsequent to December 31, 1997, CTR made five payments totaling $13 under
the terms of this agreement, and the entire balance was paid in connection with
the sale of the Company on June 25, 1998.

7. INCOME TAXES

The provision for income taxes for the year ended December 31, 1997
consists of the following:

<TABLE>
<S> <C>
Current:
Federal................................................... $140
State..................................................... 34
Deferred:
Federal................................................... 8
State..................................................... 1
----
$183
====
</TABLE>

Deferred taxes result from temporary differences in the recognition of
certain revenue and expense items for income tax and financial reporting
purposes. The Company's deferred taxes as of December 31, 1997 are substantially
comprised of depreciation deducted for tax purposes that will be recorded in
future periods for financial reporting purposes.

F-109
<PAGE> 182
CURRY TRANSFER AND RECYCLING, INC.

The principal reasons for the difference between the effective income tax
rate and the federal statutory income tax rate are as follows:

<TABLE>
<S> <C>
Federal expense expected at statutory rates................. $155
State and local income taxes, net of Federal benefit........ 23
Other....................................................... 5
----
$183
====
</TABLE>

8. 401(k) PLAN

The Company has a voluntary savings and investment plan (the "Plan"). The
Plan is available to all eligible employees of the Company. Eligible employees
are those which have been employed with the Company for a year or more. The
employees are not required to contribute to the Plan. During the year ended
December 31, 1997, twelve of the nineteen eligible employees participated in the
Plan and the Company's expense was $11.

9. TRUST AGREEMENTS

During 1997, the Company acted as an agent for Curry County, Oregon,
pursuant to two trust agreements by and between the Company, various local
governmental agencies, and a national bank (the "Agreements"). The Agreements
require the Company to collect rates established by Curry County from customers
and remit such funds to the trusts established to provide closure/post closure
funding for two landfills located in or around Curry County, Oregon. No trust
assets or liabilities have been recorded in the Company's financial statements
as of December 31, 1997.

10. YEAR 2000 (UNAUDITED)

The Company will need to modify or replace portions of its software so that
its computer systems will function properly with respect to dates in the year
2000 ("Year 2000") and thereafter. To date, the company has not incurred any
costs related to the Year 2000 project. The Company does not believe that its
expenditures relating to the Year 2000 project will be material. However, if the
required Year 2000 modifications and conversions are not made or are not
completed in a timely manner, the Year 2000 issue could materially affect the
Company's operations.

F-110
<PAGE> 183

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Stockholders
B&B Sanitation

We have audited the accompanying combined balance sheet of B&B Sanitation
(See Note A1) as of December 31, 1997, and the related combined statements of
earnings, stockholders' deficit, and cash flows for the year then ended. These
financial statements are the responsibility of the Companies' management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of B&B
Sanitation as of December 31, 1997, and the combined results of their operations
and their combined cash flows for the year then ended in conformity with
generally accepted accounting principles.

GRANT THORNTON LLP

Oklahoma City, Oklahoma
October 1, 1998

F-111
<PAGE> 184

B&B SANITATION

COMBINED BALANCE SHEETS
(IN THOUSANDS)

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
------------ -----------
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS
Cash................................................... $ 28 $ 2
Accounts receivable.................................... 200 194
------ ------
Total current assets........................... 228 196
PROPERTY AND EQUIPMENT -- AT COST, net................... 925 975
RESTRICTED INVESTMENTS................................... 41 41
OTHER ASSETS............................................. 32 26
------ ------
$1,226 $1,238
====== ======

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Accounts payable....................................... $ 26 $ 75
Current portion of long-term debt...................... 364 371
Accrued liabilities.................................... 33 26
------ ------
Total current liabilities...................... 423 472
LONG-TERM DEBT, less current maturities.................. 798 774
LANDFILL CLOSURE LIABILITY............................... 458 477
COMMITMENTS AND CONTINGENCIES (note F)................... -- --
STOCKHOLDERS' DEFICIT
Common stock........................................... $ 3 $ 3
Accumulated deficit.................................... (456) (488)
------ ------
(453) (485)
------ ------
$1,226 $1,238
====== ======
</TABLE>

The accompanying notes are an integral part of these statements.
F-112
<PAGE> 185

B&B SANITATION

COMBINED STATEMENTS OF EARNINGS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, ------------
1997 1997 1998
------------ ---- ----
(UNAUDITED)
<S> <C> <C> <C>
Revenues.................................................... $1,965 $439 $497
Operating expenses
Cost of operations........................................ 1,074 262 275
Selling, general, and administrative expenses............. 320 75 91
Depreciation.............................................. 259 58 63
------ ---- ----
Total Operating Expenses.......................... 1,653 395 429
------ ---- ----
Operating income.................................. 312 44 68
Other income (expense)
Interest.................................................. (108) (25) (27)
Other..................................................... 1 -- --
------ ---- ----
Total other income (expense)...................... (107) (25) (27)
------ ---- ----
NET EARNINGS...................................... $ 205 $ 19 $ 41
------ ---- ----
Pro forma income tax expense (unaudited) (Note I)........... $ 78 $ 7 $ 16
------ ---- ----
Pro forma net earnings (unaudited) (Note I)................. $ 127 $ 12 $ 25
====== ==== ====
</TABLE>

The accompanying notes are an integral part of these statements.
F-113
<PAGE> 186

B&B SANITATION

COMBINED STATEMENT OF STOCKHOLDERS' DEFICIT
(IN THOUSANDS)

<TABLE>
<CAPTION>
COMMON ACCUMULATED
STOCK DEFICIT TOTAL
------ ----------- -----
<S> <C> <C> <C>
Balance at January 1, 1997............................... $3 $(532) $(529)
Distributions............................................ -- (139) (139)
Contributions............................................ -- 10 10
Net earnings............................................. -- 205 205
-- ----- -----
Balance at December 31, 1997............................. 3 (456) (453)
Distributions, net (unaudited)........................... -- (73) (73)
Net earnings (unaudited)................................. -- 41 41
-- ----- -----
Balance at March 31, 1998 (unaudited).................... $3 $(488) $(485)
== ===== =====
</TABLE>

The accompanying notes are an integral part of this statement.
F-114
<PAGE> 187

B&B SANITATION

COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, --------------
1997 1997 1998
------------ ----- -----
(UNAUDITED)
<S> <C> <C> <C>
Increase (Decrease) in Cash
Cash flows from operating activities
Net earnings........................................... $ 205 $ 19 $ 41
Adjustments to reconcile net earnings to net cash
provided by operations
Depreciation........................................ 259 57 63
Change in assets and liabilities
Accounts receivable............................... (45) (18) 6
Other assets...................................... (19) (20) 6
Accounts payable.................................. 10 61 49
Accrued liabilities............................... 16 2 (7)
Landfill closure liability........................ 56 11 19
----- ----- -----
Net cash provided by operations................ 482 112 177
Cash flows from investing activities
Purchase of property and equipment..................... (383) (120) (113)
Purchase of investments................................ (41) -- --
----- ----- -----
Net cash used in investing activities.......... (424) (120) (113)
Cash flows from financing activities
Proceeds from long-term debt........................... 329 39 --
Payments on long-term debt............................. (253) -- (17)
Distributions to stockholders.......................... (139) (24) (73)
Contributions by stockholders.......................... 10 -- --
----- ----- -----
Net cash provided by (used in) financing
activities................................... (53) 15 (90)
----- ----- -----
NET INCREASE (DECREASE) IN CASH................ 5 7 (26)
Cash at beginning of period.............................. 23 23 28
----- ----- -----
Cash at end of period.................................... $ 28 $ 30 $ 2
----- ----- -----
Cash paid during the period for interest................. $ 109 $ 25 $ 27
===== ===== =====
</TABLE>

The accompanying notes are an integral part of these statements.
F-115
<PAGE> 188

B&B SANITATION

NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)

NOTE A -- BASIS OF PRESENTATION AND NATURE OF OPERATIONS

The accompanying combined financial statements include the accounts of B&B
Sanitation, Inc. ("B&B"), Red Carpet Landfill, Inc. ("Red Carpet"), and Darlin
Equipment, Inc. ("Darlin"), collectively referred to as "B&B Sanitation" or the
"Company" which are all owned by the same two shareholders. All significant
intercompany balances and transactions have been eliminated.

B&B's principal operations consist of collection, transfer, and disposal of
nonhazardous solid waste for commercial and residential customers. Red Carpet's
principal operations consist of the operation of the landfill in which B&B
disposes of waste. Darlin's principal operations consist of leasing heavy
equipment to Red Carpet.

NOTE B -- SUMMARY OF ACCOUNTING POLICIES

The summary of the significant accounting policies applied in the
preparation of the accompanying combined financial statements follows.

1. Property and Equipment

Depreciation is provided principally on accelerated methods over estimated
useful lives ranging from three to ten years.

2. Income Taxes

In accordance with B&B's, Red Carpet's, and Darlin's elections under
Subchapter S of the Internal Revenue Code, corporate taxable income is generally
treated as passing directly through to the owners and is not subject to income
tax at the corporate level. Accordingly, no provision has been made for income
taxes.

3. Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures; accordingly,
actual results could differ from those estimates.

4. Revenue Recognition

Revenues are recognized as services are provided.

5. Closure and Post-Closure Costs

The Companies have a financial obligation relating to closure and
post-closure costs of its disposal facilities. The Companies have accrued for
these future obligations relating to closure and post-closure costs of its
landfill (generally for a term of thirty years after final closure of the
landfill), based on engineering estimates of current costs of remediation and
consumption of permitted landfill airspace and the remaining useful airspace
volume on the landfill.

6. Restricted Investments

The Companies have placed certain monies to be used only for landfill
closure and post-closure liabilities in a trust account for the benefit of the
State of Oklahoma. The Companies' securities held as restricted investments are
classified as trading and are recorded at fair value on the balance sheet with
the change in fair value for the period included in earnings. The securities
have a fair value of $40 at December 31, 1997 with gross unrealized gains of $0
and gross unrealized losses of $1.

F-116
<PAGE> 189
B&B SANITATION

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)

NOTE B -- SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
7. Accounts Receivable

The Companies consider accounts receivable to be fully collectible;
accordingly, no allowance for doubtful accounts is required. If amounts become
uncollectible, they will be charged to operations when that determination is
made.

8. Interim Financial Information

NOTE C -- PROPERTY AND EQUIPMENT

At December 31, 1997, property and equipment consisted of the following:

<TABLE>
<S> <C>
Equipment................................................... $2,140
Landfill.................................................... 83
Modular buildings........................................... 14
------
2,237
Less accumulated depreciation............................. 1,385
------
852
Land........................................................ 73
------
$ 925
======
</TABLE>

NOTE D -- LONG-TERM DEBT

Long-term debt consists of the following at December 31, 1997:

<TABLE>
<S> <C>
Note payable to bank; payable in monthly installments of
$29, including interest at prime plus 1% (9.5% at December
31, 1997) through May 2001; collateralized by equipment,
accounts receivable, land, and stock of the Companies....... $ 983
Line of credit with bank, monthly interest payments at 9.5%
with principal due May 1998; collateralized by trucks and
equipment................................................... 80
Note payable to individual; payable in monthly installments
of principal and interest at 10.06% through June 2006;
uncollateralized............................................ 34
Note payable to individual; payable in monthly installments
of principal and interest at 8% through March 2001;
uncollateralized............................................ 30
Note payable to individual; payable in monthly installments
of principal and interest at 9% through July 2002;
uncollateralized............................................ 22
Note payable to finance company, payable in monthly
installments of principal and interest at 4.8% through May
2000; collateralized by vehicle............................. 13
----------
1,162
Less current maturities................................... 364
----------
$ 798
==========
</TABLE>

F-117
<PAGE> 190
B&B SANITATION

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)

NOTE D -- LONG-TERM DEBT (CONTINUED)
Aggregate annual maturities of long-term debt for years ending December 31
are as follows:

<TABLE>
<S> <C>
1998........................................................ $ 364
1999........................................................ 312
2000........................................................ 338
2001........................................................ 113
2002........................................................ 6
2003 and thereafter......................................... 29
------
$1,162
======
</TABLE>

The note payable to bank contains certain covenants, the most significant
of which are restrictions on personal draws and salaries of the owners and
maintaining no less than a 125% debt service coverage ratio, as defined.

NOTE E -- COMMON STOCK

The following is a description of the common stock for the Companies:

<TABLE>
<S> <C>
B&B $1 par value; authorized, 50,000 shares; issued and
outstanding, 500 shares
Red Carpet $1 par value; authorized, 1,000 shares; issued and
outstanding, 1,000 shares
Darlin $1 par value; authorized, 1,000 shares, issued and
outstanding, 1,000 shares
</TABLE>

NOTE F -- COMMITMENTS AND CONTINGENCIES

The Companies are subject to liability for any environmental damage that
its solid waste facilities may cause to neighboring landowners or residents,
particularly as a result of the contamination of soil, groundwater, or surface
water, and especially drinking water. The Companies may also be subject to
liability for any off-site environmental contamination caused by pollutants or
hazardous substances whose transportation, treatment, or disposal was performed
by the Companies. Any substantial liability for environmental damage incurred by
the Companies could have a material adverse effect on their financial condition,
results of operations, or cash flows. As of December 31, 1997, the Companies are
not aware of any such environmental liabilities.

The Companies have four operating lease agreements under which the
Companies lease heavy trucks over periods ranging from 48 to 60 months. These
agreements provide for monthly lease payments over the term of the leases and
options to purchase the trucks for fair value at the end of the lease term.
Lease expense was approximately $97 for the year ended December 31, 1997. The
future minimum annual rental commitments on operating leases are as follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31
-----------------------
<S> <C>
1998............................................... $ 91
1999............................................... 76
2000............................................... 46
2001............................................... 4
----
$217
====
</TABLE>

F-118
<PAGE> 191
B&B SANITATION

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)

NOTE G -- EMPLOYEE BENEFIT PLAN

The Companies have a defined contribution 401(k) savings and retirement
plan in effect for all qualifying employees. General and administrative expense
includes $18 for the year ended December 31, 1997 for this plan. The Companies
match employee contributions at rates determined by management.

NOTE H -- SUBSEQUENT EVENT

On June 5, 1998, the Companies were acquired by Waste Connections, Inc. for
approximately $4,600, including liabilities of the Companies of approximately
$1,400 which were paid off at closing.

NOTE I -- PRO FORMA INCOME TAX INFORMATION (UNAUDITED)

Unaudited pro forma information reflects income tax expense as if the
Companies had been subject to federal and state income taxes on a combined
basis. The pro forma provisions for income taxes for the year ended December 31,
1997 and the three month period ended March 31, 1997 and 1998 differ from the
amounts computed by applying the applicable statutory federal income tax rate
(34%) to income before income taxes primarily due to state income taxes.

The following is a summary of pro forma income taxes for the year ended
December 31, 1997:

<TABLE>
<S> <C>
Current:
Federal................................................... $ 85
State..................................................... 5
Deferred:
Federal................................................... (11)
State..................................................... (1)
----
Pro forma income taxes...................................... $ 78
====
</TABLE>

The Companies' pro forma deferred income tax assets of approximately $268
at December 31, 1997 relate principally to the use of the cash method of
accounting for income tax purposes and certain landfill closure liabilities not
recognized for tax purposes.

F-119
<PAGE> 192

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Stockholders
J & J Sanitation

We have audited the accompanying combined balance sheet of J & J Sanitation (See
Note A 1.) as of December 31, 1997, and the related combined statements of
operations, stockholders' and partners' deficit, and cash flows for the year
then ended. These financial statements are the responsibility of J & J
Sanitation's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the combined financial position of J & J Sanitation at
December 31, 1997, and the combined results of their operations and their
combined cash flows for the year then ended in conformity with generally
accepted accounting principles.

GRANT THORNTON LLP

Lincoln, Nebraska
October 7, 1998

F-120
<PAGE> 193

J & J SANITATION

COMBINED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1997 1998
------------ -----------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents................................. $ 28 $ 48
Accounts receivable, less allowance for doubtful accounts
of $14 at December 31, 1997............................ 184 220
Prepaid expenses.......................................... 9 14
------ ------
Total current assets.............................. 221 282
Property and equipment, net................................. 1,120 1,054
------ ------
$1,341 $1,336
====== ======

LIABILITIES AND STOCKHOLDERS' AND PARTNERS' DEFICIT
Current liabilities:
Accounts payable.......................................... $ 96 $ 154
Deferred revenue.......................................... 28 14
Accrued liabilities....................................... 53 54
Note payable.............................................. -- 9
Current portion of long-term debt......................... 67 60
Current portion of capital lease obligations.............. 129 112
------ ------
Total current liabilities......................... 373 403
Long-term debt, net of current portion...................... 616 647
Capital lease obligations, net of current portion........... 372 323
Commitments and contingencies (Note D)
Stockholders' and partners' deficit:
J & J Sanitation Inc. -- common stock: $10 par value;
1,000 shares authorized, issued and outstanding........ 10 10
Big Red Roll Off Inc. -- common stock: $10 par value;
1,000 shares authorized, issued and outstanding........ 10 10
Paid in capital........................................... 77 77
Accumulated deficit....................................... (40) (62)
Partners' deficit -- J & J Sanitation of South Dakota..... (77) (72)
------ ------
Total stockholders' and partners' deficit......... (20) (37)
------ ------
$1,341 $1,336
====== ======
</TABLE>

The accompanying notes are an integral part of these statements.
F-121
<PAGE> 194

J & J SANITATION

COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED JUNE 30,
DECEMBER 31, ---------------
1997 1997 1998
------------ ------ ------
(UNAUDITED)
<S> <C> <C> <C>
Revenues.................................................... $2,346 $1,162 $1,210
Operating expenses:
Cost of operations........................................ 1,789 884 854
Selling, general and administrative....................... 319 135 213
Depreciation and amortization............................. 197 101 107
------ ------ ------
2,305 1,120 1,174
------ ------ ------
Income from operations................................. 41 42 36
Interest expense............................................ 108 55 53
------ ------ ------
Loss before income taxes............................... (67) (13) (17)
Income tax benefit.......................................... -- -- --
------ ------ ------
NET LOSS............................................... $ (67) $ (13) $ (17)
====== ====== ======
Pro forma income tax benefit (unaudited) (Note E)........... $ -- $ -- $ --
====== ====== ======
Pro forma net loss (unaudited) (Note E)..................... $ (67) $ (13) $ (17)
====== ====== ======
</TABLE>

The accompanying notes are an integral part of these statements.
F-122
<PAGE> 195

J & J SANITATION

COMBINED STATEMENT OF STOCKHOLDERS' AND PARTNERS' EQUITY

YEAR ENDED DECEMBER 31, 1997 AND THE SIX MONTHS ENDED JUNE 30, 1998
(INFORMATION RELATED TO THE SIX MONTHS ENDED JUNE 30, 1998 IS UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
TOTAL
J & J SANITATION, BIG RED STOCKHOLDERS'
INC. ROLL OFF INC. AND
COMMON STOCK COMMON STOCK PARTNERS' PARTNERS'
----------------- --------------- PAID-IN ACCUMULATED EQUITY EQUITY
SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT (DEFICIT) (DEFICIT)
------- ------- ------ ------ ------- ----------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1,
1997................ -- $-- -- $-- $-- $ -- $ 11 $ 11
Issuance of common
stock............... -- -- 1,000 10 15 -- -- 25
Exchange of partners'
equity for common
stock............... 1,000 10 -- -- 46 -- (56) --
Net loss.............. -- -- -- -- -- (40) (27) (67)
Partners' drawings.... -- -- -- -- -- -- (5) (5)
Contributions from
stockholders........ -- -- -- -- 16 -- -- 16
----- --- ----- --- --- ---- ---- ----
Balance at December
31, 1997............ 1,000 10 1,000 10 77 (40) (77) (20)
Net income (loss)..... -- -- -- -- -- (22) 5 (17)
----- --- ----- --- --- ---- ---- ----
Balance at June 30,
1998................ 1,000 $10 1,000 $10 $77 $(62) $(72) $(37)
===== === ===== === === ==== ==== ====
</TABLE>

The accompanying notes are an integral part of this statement.
F-123
<PAGE> 196

J & J SANITATION

COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED JUNE 30,
DECEMBER 31, -------------
1997 1997 1998
------------ ----- ----
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $ (67) $ (13) $(17)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization.......................... 197 101 107
Changes in operating assets and liabilities:
Accounts receivable, net............................... (6) (17) (36)
Prepaid expenses....................................... (3) (10) (5)
Accounts payable....................................... 16 85 58
Deferred revenue....................................... 4 (12) (14)
Accrued liabilities.................................... 15 2 1
----- ----- ----
Net cash provided by operating activities......... 156 136 94
----- ----- ----
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures for property and equipment........... (138) (4) (53)
----- ----- ----
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt and notes payable............ 635 -- 76
Principal payments on long-term debt and capital lease
obligations............................................ (694) (142) (97)
Issuance of common stock.................................. 25 25 --
Contributions from stockholders........................... 16 -- --
Partners' drawings........................................ (5) -- --
----- ----- ----
Net cash used in financing activities............. (23) (117) (21)
----- ----- ----
Net change in cash and cash equivalents..................... (5) 15 20
Cash and cash equivalents:
Beginning of period....................................... 33 33 28
----- ----- ----
End of period............................................. $ 28 $ 48 $ 48
===== ===== ====
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION AND
NON-CASH TRANSACTIONS:
Cash paid for interest.................................... $ 108 $ 55 $ 53
Capital lease obligations incurred for the purchase of
property and equipment................................. 88 88 --
Partners' equity exchanged for J & J Sanitation Inc.
common stock........................................... 56 56 --
</TABLE>

The accompanying notes are an integral part of these statements.
F-124
<PAGE> 197

J & J SANITATION

NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(INFORMATION RELATING TO JUNE 30, 1998 AND THE SIX
MONTHS ENDED JUNE 30, 1997 AND 1998 IS UNAUDITED)
(DOLLARS IN THOUSANDS)

NOTE A -- ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Presentation and Organization and Business

The combined financial statements include the accounts of J & J Sanitation
Inc., Big Red Roll Off Inc. and J & J Sanitation of South Dakota (a
partnership), collectively referred to as "J & J Sanitation". These entities are
under common control. All material intercompany accounts and transactions have
been eliminated.

J & J Sanitation is a non-hazardous solid waste services company that
provides collection, hauling, disposal and recycling services to residential and
commercial customers in various counties of Nebraska and South Dakota.

J & J Sanitation derives a portion of its revenue from exclusive municipal
contracts, of which a significant number will be subject to competitive bidding
at some time in the future. J & J Sanitation intends to bid on additional
municipal contracts as a means of adding customers. There can be no assurance
that J & J Sanitation will be the successful bidder to obtain or retain
contracts that come up for competitive bidding.

2. Sale of J & J Sanitation

On July 31, 1998, all capital stock and partnership net assets of J & J
Sanitation were sold to Waste Connections, Inc. ("WCI") for cash and common
stock of WCI.

3. Interim Financial Information

The unaudited interim financial statements as of June 30, 1998 and for the
six months ended June 30, 1997 and 1998 have been prepared in accordance with
generally accepted accounting principles for interim financial information.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
Operating results for the six months ended June 30, 1998 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1998.

4. Use of Estimates

5. Cash Equivalents

J & J Sanitation considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.

F-125
<PAGE> 198
J & J SANITATION

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
(INFORMATION RELATING TO JUNE 30, 1998 AND THE SIX
MONTHS ENDED JUNE 30, 1997 AND 1998 IS UNAUDITED)
(DOLLARS IN THOUSANDS)

NOTE A -- ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
6. Concentrations of Credit Risk

Financial instruments that potentially subject J & J Sanitation to
concentrations of credit risk consist primarily of accounts receivable. Credit
risk on accounts receivable is minimized as a result of the large and diverse
nature of J & J Sanitation's customer base. Credit losses have been within
management's expectations.

7. Property and Equipment

Property and equipment are stated at cost. Improvements or betterments
which significantly extend the life of an asset are capitalized. Expenditures
for maintenance and repair costs are charged to operations as incurred. The cost
of assets retired or otherwise disposed of and the related accumulated
depreciation are eliminated from the accounts in the year of disposal. Gains and
losses resulting from property disposals are included in other income or
expense. Depreciation is computed using the straight-line method over the
estimated useful lives of the assets, or lease term, whichever is shorter.

The estimated useful lives of property and equipment are as follows:

<TABLE>
<S> <C>
Machinery and equipment................................ 3 - 10 years
Rolling stock.......................................... 5 - 10 years
Containers............................................. 5 - 12 years
</TABLE>

8. Revenue Recognition

J & J Sanitation recognizes revenues as services are provided. Certain
customers are billed in advance and, accordingly, recognition of the related
revenues is deferred until the services are provided.

9. Income Taxes

Big Red Roll Off Inc. uses the liability method to account for income
taxes. Under this method, deferred tax assets and liabilities are determined
based on differences between the financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse.

J & J Sanitation Inc. operates under Subchapter "S" of the Internal Revenue
Code and J & J Sanitation of South Dakota operates as a partnership for federal
and state income tax reporting purposes. Consequently, all of the income tax
attributes and liabilities from the operations of J & J Sanitation Inc. and
J & J Sanitation of South Dakota flow through to the individual shareholders or
partners.

10. Fair Value of Financial Instruments

The carrying values of the long-term debt (Note C) and capital lease
obligations (Note D) approximate their fair values as of December 31, 1997 based
on current incremental borrowing rates for similar types of borrowing
arrangements.
F-126
<PAGE> 199
J & J SANITATION

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
(INFORMATION RELATING TO JUNE 30, 1998 AND THE SIX
MONTHS ENDED JUNE 30, 1997 AND 1998 IS UNAUDITED)
(DOLLARS IN THOUSANDS)

NOTE A -- ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
11. Significant Customer

The Company has one major customer which represents 11% of total revenues
for the year ended December 31, 1997.

NOTE B -- PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1997 1998
------------ -----------
(UNAUDITED)
<S> <C> <C>
Rolling stock.................................... $1,107 $1,074
Containers....................................... 287 287
Other............................................ 161 214
------ ------
1,555 1,575
Less accumulated depreciation and amortization... 435 521
------ ------
$1,120 $1,054
====== ======
</TABLE>

NOTE C -- FINANCING ARRANGEMENTS

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1997 1998
------------ -----------
(UNAUDITED)
<S> <C> <C>
Notes payable to banks bearing interest at fixed
and variable rates ranging from 7.9% to 10% at
December 31, 1997, payable in monthly
installments of principal and interest;
maturing through January 2008.................. $683 $707
Less current portion............................. 67 60
---- ----
Long-term debt, net of current portion........... $616 $647
==== ====
</TABLE>

At the end of 1997, J & J Sanitation entered into a new credit arrangement
with a bank which included a $60 line of credit maturing December 31, 1998 and a
term note for $625 maturing January 2008. Borrowings bear interest at a variable
rate based on the bank's index rate less 1.75% to 1.80%. The initial rates of
the line of credit and term note were 10% and 9.95%, respectively. The term note
was used for refinancing certain notes payable to banks, equipment purchases and
general operating purposes. At December 31, 1997, no amounts were outstanding on
the line of credit.

The notes payable to banks and the line of credit are collateralized by
substantially all of J & J Sanitation's assets. J & J Sanitation is subject to
certain restrictive covenants with its primary lender, which among other things,
limit the incurring of additional indebtedness without the lender's written
approval.

Subsequent to December 31, 1997, aggregate contractual future principal
payments by year are $67 in 1998, $63 in 1999, $49 in 2000, $54 in 2001, $57 in
2002 and $393 thereafter.

F-127
<PAGE> 200
J & J SANITATION

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
(INFORMATION RELATING TO JUNE 30, 1998 AND THE SIX
MONTHS ENDED JUNE 30, 1997 AND 1998 IS UNAUDITED)
(DOLLARS IN THOUSANDS)

NOTE C -- FINANCING ARRANGEMENTS (CONTINUED)
In conjunction with the acquisition of J & J Sanitation by WCI on July 31,
1998, all of the outstanding long-term debt of J & J Sanitation was repaid.

NOTE D -- COMMITMENTS AND CONTINGENCIES

COMMITMENTS

Leases

J & J Sanitation leases certain rolling stock under long-term leases
expiring through 2002 which have been capitalized. The related assets and
obligations have been recorded using J & J Sanitation's implicit borrowing rate
at the inception of the leases. At the expirations of such leases, J & J
Sanitation has the option to purchase the rolling stock at an agreed-upon
residual value.

The following amounts are included in property and equipment as rolling
stock under capital leases:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1997 1998
------------ -----------
(UNAUDITED)
<S> <C> <C>
Rolling stock.................................... $690 $657
Less accumulated amortization.................... 200 236
---- ----
$490 $421
==== ====
</TABLE>

The following is a schedule by years of future minimum lease payments under
capital leases together with the present value of the net minimum lease payments
as of December 31, 1997:

<TABLE>
<S> <C>
1998........................................................ $171
1999........................................................ 131
2000........................................................ 148
2001........................................................ 133
2002........................................................ 18
----
Total minimum lease payments................................ 601
Less amount representing interest........................... 100
----
$501
====
Current portion............................................. $129
Long-term portion........................................... 372
----
$501
====
</TABLE>

J & J Sanitation also leases certain facilities and other equipment under
operating leases expiring through 1999. Minimum rental payments under such
operating leases in 1998, 1999 and in the aggregate are $5, $2 and $7,
respectively. J & J Sanitation recognized rent expense under these operating
leases totaling $39 in 1997.

In conjunction with the acquisition of J & J Sanitation by WCI on July 31,
1998, the rolling stock under capital leases was acquired at values
approximating the capital lease obligation at that date and the related leases
were terminated.

F-128
<PAGE> 201
J & J SANITATION

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
(INFORMATION RELATING TO JUNE 30, 1998 AND THE SIX
MONTHS ENDED JUNE 30, 1997 AND 1998 IS UNAUDITED)
(DOLLARS IN THOUSANDS)

NOTE D -- COMMITMENTS AND CONTINGENCIES (CONTINUED)
CONTINGENCIES

Legal Proceedings

In the normal course of its business and as a result of the extensive
governmental regulation of the solid waste industry, J & J Sanitation may
periodically become subject to various judicial and administrative proceedings
involving federal, state or local agencies. In these proceedings, an agency may
seek to impose fines on J & J Sanitation or to revoke or deny renewal of an
operating permit held by J & J Sanitation. From time to time J & J Sanitation
may also be subject to actions brought by citizens' groups or adjacent
landowners in connection with the permitting and licensing of landfills and
transfer stations, or alleging environmental damage or violations of the permits
and licenses pursuant to which J & J Sanitation operates.

In addition, J & J Sanitation may become party to various claims and suits
pending for alleged damages to persons and property, alleged violations of
certain laws and alleged liabilities arising out of matters occurring during the
normal operation of the waste management business. As of December 31, 1997,
there is no current proceeding or litigation involving J & J Sanitation that
management believes will have a material adverse impact on J & J Sanitation's
business, financial condition, results of operations or cash flows.

NOTE E -- INCOME TAXES

Unaudited pro forma information reflects income taxes as if all of J & J
Sanitation had been subject to federal and state income taxes.

The income tax benefit and unaudited pro forma income tax benefit for the
year ended December 31, 1997 differs from the amounts computed by applying the
applicable statutory federal income tax rate (34%) to loss before income taxes
as follows:

<TABLE>
<CAPTION>
PRO FORMA
INCOME TAX INCOME TAX
BENEFIT BENEFIT
---------- -----------
(UNAUDITED)
<S> <C> <C>
Income tax benefit at the statutory rate............. 34.0% 34.0%
Income taxed at shareholder level.................... (34.0) --
Valuation allowance.................................. -- (34.0)
----- -----
--% --%
===== =====
</TABLE>

Unaudited pro forma deferred income tax assets at December 31, 1997 are
fully offset by a valuation allowance as there is no assurance the deferred tax
assets would be realized. Unaudited pro forma deferred tax assets arise
principally from the loss in the current year, differences between tax and
financial methods of reporting depreciation expense, and the use of the cash
method of accounting for income tax purposes which gives rise to differences
between financial statement and tax return recognition of receivables, prepaid
expenses, accounts payable and accrued liabilities.

F-129
<PAGE> 202
J & J SANITATION

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
(INFORMATION RELATING TO JUNE 30, 1998 AND THE SIX
MONTHS ENDED JUNE 30, 1997 AND 1998 IS UNAUDITED)
(DOLLARS IN THOUSANDS)

NOTE F -- RELATED PARTY TRANSACTIONS

Great Plains Recycling Inc. (GPR) has an arrangement with J & J Sanitation
to perform solid waste processing, recyclable recovery, transfer and disposal
services. J & J Sanitation's stockholders and partners are majority owners of
GPR. Cost of operations in the combined statement of operations for 1997
includes a charge of $672 for these services. At December 31, 1997, J & J
Sanitation owes GPR $84 which is included in accounts payable.

In conjunction with the acquisition of J & J Sanitation by WCI on July 31,
1998, WCI entered into a long-term agreement with GPR to provide comparable
services. WCI also has the option to acquire GPR effective November 1999
provided GPR achieves defined levels of profitability.

F-130
<PAGE> 203

REPORT OF INDEPENDENT AUDITORS

Board of Directors and Stockholders
Amador Disposal Services, Inc. and
Mother Lode Sani-Hut, Inc.

In our opinion, the accompanying combined balance sheet and the related
combined statements of operations and retained earnings and of cash flows
present fairly, in all material respects, the combined financial position of
Amador Disposal Services, Inc. and Mother Lode Sani-Hut, Inc. (collectively, the
Companies) at June 30, 1998, and the combined results of their operations and
their cash flows for the year then ended, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Companies' management; our responsibility is to express an opinion on these
financial statements based on our audit. We conducted our audit of these
statements in accordance with generally accepted auditing standards, which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.

/s/ PricewaterhouseCoopers LLP

Sacramento, California
December 30, 1998

F-131
<PAGE> 204

AMADOR DISPOSAL SERVICES, INC. AND MOTHER LODE SANI-HUT, INC.

COMBINED BALANCE SHEETS

ASSETS

<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
1998 1998
---------- -------------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents................................. $ 162,963 $ 239,048
Trade accounts receivable, net............................ 183,369 190,386
Prepaid expenses and other current assets................. 17,680 76,202
---------- ----------
Total current assets.............................. 364,012 505,636
Property, plant and equipment, net.......................... 2,174,042 2,106,705
Other assets................................................ 30,000 30,000
---------- ----------
Total assets...................................... $2,568,054 $2,642,341
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt......................... 42,631 38,055
Accounts payable.......................................... 95,249 86,984
Accrued liabilities....................................... 100,251 144,640
---------- ----------
Total current liabilities......................... 238,131 269,679
Long-term debt, net......................................... 1,164,720 1,157,766
---------- ----------
Total liabilities................................. 1,402,851 1,427,445
---------- ----------
Commitments and contingencies (Note 5)
Stockholders' equity:
Common stock, no par value; 2,500 shares authorized,
issued and outstanding................................. 181,000 181,000
Common stock, $100 par value; 5,000 shares authorized, 75
shares issued and outstanding.......................... 7,500 7,500
Additional paid-in capital................................ 118,430 118,430
Retained earnings......................................... 858,273 907,966
---------- ----------
Total stockholders' equity........................ 1,165,203 1,214,896
---------- ----------
Total liabilities and stockholders' equity........ $2,568,054 $2,642,341
========== ==========
</TABLE>

The accompanying notes are an integral part of the financial statements.
F-132
<PAGE> 205

AMADOR DISPOSAL SERVICES, INC. AND MOTHER LODE SANI-HUT, INC.

COMBINED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED SEPTEMBER 30,
JUNE 30, ----------------------
1998 1997 1998
---------- ---------- --------
(UNAUDITED)
<S> <C> <C> <C>
REVENUES............................................. $2,996,013 $ 758,169 $845,601
OPERATING EXPENSES:
Cost of operations................................. 2,123,800 532,296 563,277
General and administrative......................... 507,256 110,777 129,165
Depreciation and amortization...................... 311,731 70,562 73,656
---------- ---------- --------
Income from operations..................... 53,226 44,534 79,503
OTHER INCOME AND EXPENSE:
Interest expense................................... (115,702) (25,929) (29,220)
Other (expense) income, net........................ (18,810) 721 1,010
---------- ---------- --------
(Loss) income before income taxes.......... (81,286) 19,326 51,293
Income tax provision................................. 1,600 1,600 1,600
---------- ---------- --------
Net (loss) income.......................... (82,886) 17,726 49,693
Balance of retained earnings, beginning of period.... 991,159 989,823 858,273
Dividends paid..................................... (50,000) -- --
---------- ---------- --------
Balance of retained earnings, end of period.......... $ 858,273 $1,007,549 $907,966
========== ========== ========
Pro forma income tax (benefit) provision (unaudited)
(Note 8)........................................... $ (19,224) $ 4,059 $ 10,901
========== ========== ========
Pro forma net (loss) income (unaudited) (Note 8)..... $ (62,062) $ 15,267 $ 40,392
========== ========== ========
</TABLE>

The accompanying notes are an integral part of the financial statements.
F-133
<PAGE> 206

AMADOR DISPOSAL SERVICES, INC. AND MOTHER LODE SANI-HUT, INC.

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED SEPTEMBER 30,
JUNE 30, ---------------------
1998 1997 1998
---------- --------- --------
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net (loss) income................................... $ (82,886) $ 17,726 $ 49,693
Adjustments to reconcile net (loss) income to cash
provided by operating activities:
Depreciation and amortization.................... 311,731 70,562 73,656
Loss (gain) on disposals of property and
equipment...................................... 21,152 204 (159)
Cash provided by or (used in) changes in
operating assets and liabilities, net:
Accounts receivable............................ (21,226) 2,323 (7,018)
Prepaid expenses............................... 7,597 (54,963) (58,520)
Other assets................................... -- 8,367 --
Accounts payable............................... 8,671 13,030 (8,265)
Accrued liabilities............................ (1,283) 29,807 44,389
--------- --------- --------
Net cash provided by operating activities... 243,756 87,056 93,776
--------- --------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of property and equipment.............. (306,658) (256,727) (9,160)
Proceeds from the sale of equipment................. 1,180 700 3,000
--------- --------- --------
Net cash used in investing activities....... (305,478) (256,027) (6,160)
--------- --------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt........................ 258,000 258,000 --
Principal payments on long-term debt................ (67,893) (14,640) (11,531)
Dividends paid...................................... (50,000) -- --
--------- --------- --------
Net cash provided by (used in) financing
activities................................ 140,107 243,360 (11,531)
--------- --------- --------
Net increase in cash balance................ 78,385 74,389 76,085
Cash and cash equivalents at beginning of period...... 84,578 84,578 162,963
--------- --------- --------
Cash and cash equivalents at end of period............ $ 162,963 $ 158,967 $239,048
========= ========= ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest.............................. $ 115,136 $ 26,042 $ 29,220
========= ========= ========
Cash paid for income taxes.......................... $ 2,412 $ 683 $ 400
========= ========= ========
</TABLE>

The accompanying notes are an integral part of the financial statements.
F-134
<PAGE> 207

AMADOR DISPOSAL SERVICES, INC. AND MOTHER LODE SANI-HUT, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

BASIS OF COMBINATION

The combined financial statements include the accounts of Amador Disposal
Services, Inc. (Amador Disposal) and Mother Lode Sani-Hut, Inc. (Mother Lode)
(and collectively, the Companies). Amador Disposal and Mother Lode have common
management which exercise significant influence over their operations. All
material intercompany balances and transactions have been eliminated in
combination.

BUSINESS AND ORGANIZATION

The Companies, both California corporations, are regional, integrated,
non-hazardous solid waste services companies that provide containers,
collection, transfer, disposal, recycling and landfill services to commercial
and residential customers in Northern California.

INTERIM FINANCIAL INFORMATION (UNAUDITED)

The interim combined financial statements as of September 30, 1998 and for
the three month periods ended September 30, 1997 and 1998 have been prepared in
accordance with generally accepted accounting principles for interim financial
information. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the three months ended September 30,
1998 are not necessarily indicative of the results that may be expected for the
year ending June 30, 1999.

CASH AND CASH EQUIVALENTS

The Companies consider all highly liquid investments with maturities of 3
months or less when purchased to be cash equivalents for purposes of the
combined statements of cash flows.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost. Improvements or
betterments which significantly extend the life of the assets are capitalized.
Interest costs are also capitalized on self-constructed assets. Expenditures for
maintenance and repairs are charged against operations as incurred. The cost of
assets retired or otherwise disposed of and the related accumulated depreciation
are eliminated from the accounts in the year of disposal. Gains or losses
resulting from property disposal are included in other income (expense).
Depreciation is computed using the straight-line method over the following
estimated useful lives of the assets:

<TABLE>
<S> <C>
Building................................................ 30 years
Containers, machinery and equipment..................... 3-10 years
Rolling stock and vehicles.............................. 5-7 years
</TABLE>

REVENUE RECOGNITION

Revenues are recognized as services are provided.

F-135
<PAGE> 208
AMADOR DISPOSAL SERVICES, INC. AND MOTHER LODE SANI-HUT, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

INCOME TAXES

The Companies have elected to be taxed under the provisions of Subchapter S
of the Internal Revenue Code for federal and California state income tax
purposes. Under S corporation status, the Companies' income is taxable to the
stockholders, with only minimal state income taxes charged to the Companies.

CLOSURE AND POST-CLOSURE COSTS

Pursuant to a contract with Amador County to operate the Amador County
Solid Waste Sanitary Landfill (Landfill), Amador Disposal is responsible to
provide specified levels of cover on designated cells on the Landfill in the
normal course of operations; however, the Companies are not responsible for
closure and post-closure activities. The responsibility for closure and
post-closure liabilities is that of Amador County. Consequently, the management
does not believe the Companies have any material financial obligation for
closure and post-closure costs for the Landfill.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value of cash and cash equivalents approximates fair value
because of the short-term maturity of these instruments. The carrying values of
the notes payable approximate their fair values as of June 30, 1998, and
September 30, 1997 and 1998, based on current incremental borrowing rates for
similar types of borrowing arrangements.

USE OF ESTIMATES

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Companies to
concentrations of credit risks consist primarily of accounts receivable. Credit
risk on accounts receivable is minimized as the Companies' customer base
consists largely of numerous customers with small individual balances. The
Companies maintain allowances for losses based on the expected collectibility of
accounts receivable. Credit losses have been within management's expectations.

The Companies operate under various franchise agreements with local
municipalities. Approximately $1,693,000 or 56% of revenues for the year ended
June 30, 1998, was earned from customers in municipalities covered by five
franchise agreements, which expire from 1998 through 2022, inclusive of options
to extend. One of the five franchise agreements was not renewed upon its
expiration on June 30, 1998. For the year ended June 30, 1998, revenue earned
under this franchise agreement was approximately $425,000.

2. TRADE ACCOUNTS RECEIVABLE:

Trade accounts receivable is presented net of an allowance for doubtful
accounts of approximately $15,000 each at June 30, 1998, and September 30, 1997
and 1998.

F-136
<PAGE> 209
AMADOR DISPOSAL SERVICES, INC. AND MOTHER LODE SANI-HUT, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

3. PROPERTY, PLANT AND EQUIPMENT:

<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
1998 1998
----------- -------------
(UNAUDITED)
<S> <C> <C>
Land and buildings............................. $ 1,268,548 $ 1,271,910
Containers, machinery and equipment............ 652,069 652,069
Rolling stock and vehicles..................... 1,760,102 1,735,761
----------- -----------
3,680,719 3,659,740
Less accumulated depreciation.................. (1,506,677) (1,553,035)
----------- -----------
$ 2,174,042 $ 2,106,705
=========== ===========
</TABLE>

4. LONG-TERM DEBT:

Long-term debt as of June 30 and September 30, 1998, consists of the
following:

<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
1998 1998
---------- -------------
(UNAUDITED)
<S> <C> <C>
Notes payable to individuals, interest at prime plus
1.5% (10% at June 30, 1998 and September 30, 1998),
payable in monthly installments, principal due
September 2001, guaranteed by the stockholders of
Amador Disposal....................................... $ 950,000 $ 950,000
Notes payable to individuals, interest at prime (8% at
June 30, 1998 and September 30, 1998), payable in
monthly installments of principal and interest of
$2,208 through September 2007, collateralized by a
deed of trust on certain real property................ $ 172,804 $ 169,614
Note payable, interest at prime plus 2% (10.5% at June
30, 1998 and September 30, 1998), payable in monthly
installments of principal and interest of $655 through
April 1999, collateralized by certain equipment....... $ 6,106 $ 4,285
Note payable, interest at 10.5%, payable in monthly
installments of principal and interest of $560 through
October 2002, collateralized by certain equipment..... $ 23,306 $ 22,229
Contract payable, interest at 10.5%, payable in monthly
installments of principal and interest of $1,078
through October 2002, collateralized by certain
equipment............................................. $ 44,873 $ 42,797
Contract payable, interest at prime plus 2% (10.25% at
June 30, 1998 and September 1998), payable in monthly
installments of principal and interest of $1,200
through March 1999, collateralized by certain
equipment............................................. 10,262 6,896
---------- ----------
1,207,351 1,195,821
Less current portion 42,631 38,055
---------- ----------
Total long-term debt $1,164,720 $1,157,766
========== ==========
</TABLE>

F-137
<PAGE> 210
AMADOR DISPOSAL SERVICES, INC. AND MOTHER LODE SANI-HUT, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

Maturities of long-term debt are as follows:

<TABLE>
<CAPTION>
YEAR ENDING AMOUNT
----------- ----------
<S> <C>
1999.................................................. $ 42,631
2000.................................................. 28,799
2001.................................................. 981,585
2002.................................................. 34,647
2003.................................................. 24,485
Thereafter............................................ 95,204
----------
$1,207,351
==========
</TABLE>

5. COMMITMENTS AND CONTINGENCIES

COMMITMENTS

Franchise Agreements, Contracts and Permits

The Companies have various franchise agreements with the counties and
cities that they serve. These franchise agreements typically require a franchise
fee of two to five percent of gross annual revenues earned in that jurisdiction,
or a fee per collection truck operated in that jurisdiction during the year, to
be paid to the municipality. These franchise agreements expire between April
2000 and October 2022, inclusive of options to extend.

The Companies also have contracts to operate the Landfill and a Materials
Recovery Facility (Facility) at the Landfill, expiring July 2002 and March 2016,
respectively, with an option to extend for the Facility. The disposal fee at the
Landfill and the related surcharge fees vary with the type of refuse. Surcharge
fees collected as a part of the landfill revenue are payable to Amador County.
The landfill rate schedule for the Facility is determined by Amador County
annually.

CONTINGENCIES

Environmental Risks

The Companies may be subject to liability for any environmental damage
that their solid waste facilities may cause to neighboring landowners or
residents, particularly as a result of the contamination of soil, groundwater or
surface water, and especially drinking water, including damage resulting from
conditions existing prior to the acquisition of such land and facilities by the
Companies. The Companies may also be subject to liability for any off-site
environmental contamination cause by pollutants or hazardous substance whose
transportation, treatment or disposal was arranged by the Companies. Any
substantial liability for environmental damage incurred by the Companies could
have a material adverse effect on the Companies' combined financial condition,
results of operations or cash flows. As of June 30, 1998 and September 30, 1998,
the Companies are not aware of any such environmental liabilities.

Legal Proceedings

In the normal course of their business and as a result of the
extensive governmental regulations of the solid waste industry, the Companies
are periodically subject to various judicial and administrative proceedings
involving federal, state or local agencies. In these proceedings, an agency may
seek to impose fines on the Companies or to revoke or deny renewal of an
operating permit held by the Companies. From time to time the Companies are also
subject to actions brought by citizens' groups or adjacent landowners or
residents alleging environmental damage or violations of the permits and
licenses pursuant to which the Companies operate. In addition, the Companies
F-138
<PAGE> 211
AMADOR DISPOSAL SERVICES, INC. AND MOTHER LODE SANI-HUT, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

are parties to various claims and suits pending for alleged damages to persons
and property, alleged violations of certain laws and alleged liabilities arising
out of matters occurring during the normal operation of the waste management
business. However, as of June 30, 1998 and September 30, 1998, there is no
current proceedings or litigation involving the Companies that the Companies
believe will have a material adverse impact on the Companies' business, combined
financial position, results of operations and cash flows.

6. PENSION PLAN:

Amador Disposal has a defined contribution pension plan for eligible
employees with at least 1,000 hours within one year of employment. Amador
Disposal contributes up to 10% of participants' compensation, which vest based
on years of employment over seven years. Pension expense was approximately
$49,000 for the year ended June 30, 1998, and approximately $12,000 and $13,000
for the three months ended September 30, 1997 and 1998, respectively.

7. SALE OF THE COMPANIES:

On December 30, 1998, the shareholders of the Companies sold their
stock to Waste Connections, Inc. (WCI), a publicly traded company. WCI intends
to account for the acquisition using the purchase method.

8. PRO FORMA INCOME TAX INFORMATION (UNAUDITED):

As described in Note 1, the Companies operate under Subchapter S of
the Internal Revenue Code and are not subject to federal or state income taxes.
Upon the sale of the Companies stock by the Companies stockholders to WCI (Note
7), the Subchapter S election will be terminated. As a result, the Companies
will be subject to corporate income taxes subsequent to the termination of the S
corporation status.

The following unaudited pro forma information reflects income tax
(benefit) expense for the year ended June 30, 1998 as if the Companies had been
subject to federal and state income taxes:

<TABLE>
<S> <C>
Federal taxes:
Current................................................ $ --
Deferred............................................... (15,887)
State taxes:
Current................................................ 1,600
Deferred............................................... (4,937)
--------
Pro forma income tax benefit................... $(19,224)
--------
</TABLE>

The pro forma provision for income taxes for the year ended June 30,
1998 differs from the amounts computed by applying the applicable statutory
federal income tax rate (34%) to loss before income taxes due to graduated
income tax rates.

The Companies' unaudited pro forma deferred tax liability at June 30,
1998 would be approximately $11,000 which relates primarily to differences
between tax and financial methods of depreciation.

F-139
<PAGE> 212

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Board of Directors and Shareholders
Butler County Landfill, Inc.
Kobus Construction, Inc.

We have audited the accompanying combined balance sheet of Butler
County Landfill, Inc. and Kobus Construction, Inc. (collectively the
"Companies") as of December 31, 1997, and the related combined statements of
income and retained earnings, and cash flows for the year then ended. These
financial statements are the responsibility of the Companies' management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the combined financial position of the
Companies at December 31, 1997, and the combined results of their operations and
their cash flows for the year ended December 31, 1997, in conformity with
generally accepted accounting principles.

/s/ ERNST & YOUNG LLP

Sacramento, California
December 30, 1998

F-140
<PAGE> 213

BUTLER COUNTY LANDFILL, INC. AND KOBUS CONSTRUCTION, INC.

COMBINED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1997 1998
------------ -------------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents................................. $ 33 $ 47
Short-term investments.................................... 28 47
Accounts receivable....................................... 344 428
Prepaid expenses and other current assets................. 84 107
------ ------
Total current assets.............................. 489 629
Property, plant and equipment, net.......................... 3,219 3,124
Restricted assets........................................... 352 331
Other assets................................................ 18 20
------ ------
$4,078 $4,104
====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings..................................... $ 27 $ --
Accounts payable.......................................... 114 107
Accrued liabilities....................................... 280 168
Current portion of closure and post closure costs......... 94 46
Current portion of long-term debt......................... 452 608
------ ------
Total current liabilities......................... 967 929
Long-term debt.............................................. 960 816
Closure and post closure costs.............................. 361 474
Commitments and contingencies (Note 5)
Shareholders' equity:
Common stock: at par value; 10,100 shares authorized; 300
shares issued and outstanding.......................... 10 10
Additional paid-in capital................................ 2 2
Retained earnings......................................... 1,778 1,873
------ ------
Total shareholders' equity........................ 1,790 1,885
------ ------
$4,078 $4,104
====== ======
</TABLE>

See accompanying notes.
F-141
<PAGE> 214

BUTLER COUNTY LANDFILL, INC. AND KOBUS CONSTRUCTION, INC.

COMBINED STATEMENTS OF INCOME AND RETAINED EARNINGS
(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30,
DECEMBER 31, ------------------
1997 1997 1998
------------ ------- -------
(UNAUDITED)
<S> <C> <C> <C>
Revenues.................................................. $3,010 $2,470 $2,419
Operating expenses:
Cost of operations...................................... 1,898 1,604 1,659
Depreciation and amortization........................... 631 470 408
Selling, general and administrative..................... 236 183 130
------ ------ ------
Income from operations.................................... 245 213 222
Interest expense.......................................... (180) (137) (109)
Other income (expense), net............................... 43 5 109
------ ------ ------
Net income................................................ 108 81 222
Retained earnings, beginning of period.................... 1,820 1,820 1,778
Distributions to shareholders............................. (150) (121) (127)
------ ------ ------
Retained earnings, end of period.......................... $1,778 $1,780 $1,873
====== ====== ======
Pro forma income taxes (unaudited -- Note 6).............. $ (42) $ (32) $ (86)
====== ====== ======
Pro forma net income (unaudited -- Note 6)................ $ 66 $ 49 $ 136
====== ====== ======
</TABLE>

See accompanying notes.
F-142
<PAGE> 215

BUTLER COUNTY LANDFILL, INC. AND KOBUS CONSTRUCTION, INC.

COMBINED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30,
DECEMBER 31, ------------------
1997 1997 1998
------------ -------- ------
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.............................................. $ 108 $ 81 $ 222
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization........................ 631 470 408
Gain on sale of property, plant and equipment........ (5) (4) (51)
Closure and post closure expenses.................... 101 75 65
Changes in operating assets and liabilities:
Accounts receivable................................ (38) (46) (84)
Prepaid expenses and other current assets.......... 20 34 (23)
Accounts payable................................... (17) 38 (7)
Accrued liabilities................................ 106 105 (112)
----- ------- -----
Net cash provided by operating activities............... 906 753 418
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures for property, plant and
equipment............................................ (385) (283) (473)
Proceeds from the sale of property, plant and
equipment............................................ 162 81 212
Purchases of short-term investments..................... -- -- (19)
Change in restricted assets............................. (237) (198) 21
Change in other assets.................................. (3) (3) (2)
----- ------- -----
Net cash used in investing activities................... (463) (403) (261)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt............................ 608 604 436
Principal payments on short-term borrowings and long-
term debt............................................ (972) (831) (452)
Distributions to shareholders........................... (150) (121) (127)
----- ------- -----
Net cash used in financing activities..................... (514) (348) (143)
----- ------- -----
Net (decrease) increase in cash and cash equivalents...... (71) 2 14
Cash and cash equivalents, beginning of period............ 104 104 33
----- ------- -----
Cash and cash equivalents, end of period.................. $ 33 $ 106 $ 47
===== ======= =====
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION AND
NON-CASH TRANSACTIONS:
Cash paid for interest.................................... $ 180 $ 137 $ 109
===== ======= =====
</TABLE>

See accompanying notes.
F-143
<PAGE> 216

BUTLER COUNTY LANDFILL, INC. AND KOBUS CONSTRUCTION, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
(INFORMATION RELATING TO SEPTEMBER 30, 1998 AND
THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998 IS UNAUDITED)

1. ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BUSINESS

Butler County Landfill, Inc. ("Butler") is a solid waste company that owns
and operates a landfill in Butler County, Nebraska. Kobus Construction Inc.
("Kobus") is a solid waste company that provides collection, transfer and
disposal services to residential and commercial customers in Butler County,
Nebraska.

BASIS OF COMBINATION

The combined financial statements include the accounts of Butler and Kobus
(collectively, the "Companies") as a result of their common ownership.
Significant inter-company balances and transactions between the Companies have
been eliminated in combination.

SALE OF THE COMPANIES

On December 11, 1998, the Companies' shareholders entered into an agreement
to sell all capital stock of the Companies to Waste Connections, Inc. ("WCI")
for cash and common stock of WCI.

INTERIM FINANCIAL INFORMATION

The unaudited interim combined financial statements as of September 30,
1998 and for the nine months ended September 30, 1997 and 1998 have been
prepared in accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the nine months ended September 30,
1998 are not necessarily indicative of the results that may be expected for the
year ending December 31, 1998.

USE OF ESTIMATES

CASH EQUIVALENTS

The Companies consider all highly liquid investments with an original
maturity of three months or less to be cash equivalents.

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Companies to
concentrations of credit risk consist primarily of accounts receivable. Credit
risk on accounts receivable is minimized as a result of the large and diverse
nature of the Companies' customer bases. Historically, credit losses have been
immaterial.

F-144
<PAGE> 217
BUTLER COUNTY LANDFILL, INC. AND KOBUS CONSTRUCTION, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
(INFORMATION RELATING TO SEPTEMBER 30, 1998 AND
THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998 IS UNAUDITED)

PROPERTY, PLANT AND EQUIPMENT

The estimated useful lives of property, plant and equipment (excluding
landfill related assets) are as follows:

<TABLE>
<S> <C>
Building and land improvements...................... 15 - 39 years
Equipment and vehicles.............................. 3 - 7 years
</TABLE>

Capitalized landfill costs include expenditures for land and related
airspace, permitting costs and preparation costs. Landfill permitting and
preparation costs represent only direct costs related to those activities,
including legal, engineering and construction. Interest is capitalized on
landfill permitting and construction projects and other projects under
development while the assets are undergoing activities to ready them for their
intended use. The interest capitalization rate is based on the Companies'
weighted average cost of indebtedness. Landfill permitting, acquisition and
preparation costs, excluding the estimated residual value of land, are amortized
as permitted airspace of the landfill is consumed. Landfill preparation costs
include the costs of construction associated with excavation, liners, site berms
and the installation of leak detection and leachate collection systems. In
determining the amortization rate for a landfill, preparation costs include the
total estimated costs to complete construction of the landfills' permitted
capacity. Units-of-production amortization rates are determined annually for the
Companies' operating landfill. The rates are based on estimates provided by the
Companies' outside engineers and consider the information provided by surveys
which are performed at least annually.

LONG-LIVED ASSETS

The Companies continually evaluate the value and future benefits of
their long-lived assets. The Companies assess recoverability based on estimates
of future undiscounted cash flows. Under this approach, the carrying value would
be reduced to fair value if it becomes probable that the Companies' best
estimates for expected undiscounted future cash flows would be less than the
carrying amount of the long-lived assets. Through December 31, 1997, there were
no adjustments to the carrying amounts of long-lived assets resulting from these
evaluations.

RESTRICTED ASSETS

The Companies are required to fund certain portions of their estimated
closure and post closure liabilities. These amounts are held in a trust account
restricted for expenditures on closure and post closure costs.

During 1997, the Companies were awarded two grants from the Nebraska
Department of Environmental Quality ("DEQ") totaling $184 for the purchase of
composting and recycling equipment. Grant funds of $96 were received in 1997,
however at year end no expenditures had

F-145
<PAGE> 218
BUTLER COUNTY LANDFILL, INC. AND KOBUS CONSTRUCTION, INC.

been made. During 1996, the Companies received a $25 grant from the DEQ for the
abatement of scrap tires collected at the landfill. As of December 31, 1997, $17
had been received under this grant and had not been spent.

As of December 31, 1997, restricted assets consist of the following:

<TABLE>
<S> <C>
Unspent funds received under DEQ grants..................... $113
Closure and post closure trust fund amounts................. 239
----
$352
====
</TABLE>

CLOSURE AND POST CLOSURE COSTS

Accrued closure and post-closure costs include the current and non-current
portion of accruals associated with obligations for closure and post-closure
monitoring and maintenance of the landfill. The Companies, based as input from
outside engineers, estimate future closure and post-closure monitoring and
maintenance costs for sold waste landfills based on its interpretation of the
technical standards of the U.S. Environmental Protection Agency's Subtitle D
regulations and the air emissions standards under the Clean Air Act as they are
being applied on a state-by-state basis. 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 closure and post-closure monitoring and maintenance requirements in the U.S.
consider final capping of the site, 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. Reviews of the future requirements for closure and
post-closure monitoring and maintenance costs for the Companies' operating
landfills are performed by the Companies' consulting engineers at least annually
and are the basis upon which the Companies' estimates of these future costs and
the related accrual rates are revised. The Companies provides accruals for these
estimated costs as the remaining permitted airspace of such facilities is
consumed. The State of Nebraska requires a specified portion of these accrued
closure and post-closure obligations to be funded at any point in time.

REVENUE RECOGNITION

The Companies recognize revenues as services are provided related to
hauling and disposal and upon the receipt and acceptance of waste material at
its landfill and materials recovery facility.

INCOME TAXES

The Companies operate under Subchapter S of the Internal Revenue Code for
federal and state income tax reporting purposes. Consequently all of the income
tax attributes and liabilities of the Companies' operations flow through to the
individual shareholders and no provision for income taxes has been made in the
combined financial statements.

F-146
<PAGE> 219
BUTLER COUNTY LANDFILL, INC. AND KOBUS CONSTRUCTION, INC.

2. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment as of December 31, 1997 and September 30,
1998 consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1997 1998
------------ -------------
(UNAUDITED)
<S> <C> <C>
Buildings and land improvements................ $ 737 $ 870
Landfill related assets........................ 2,982 2,982
Equipment and vehicles......................... 1,796 1,780
------- -------
5,515 5,632
Less accumulated depreciation and
amortization................................. (2,296) (2,508)
------- -------
$ 3,219 $ 3,124
======= =======
</TABLE>

3. SHORT-TERM BORROWINGS

The Companies maintain an equipment line of credit (the "Line") with a
financial institution. Under the Line, the Companies may borrow an amount up to
$100 for the purchase of equipment. Interest on the Line is payable at 9.5%
semi-annually. All outstanding principal plus accrued interest was paid off on
January 15, 1998. The Line was secured by substantially all of the Companies'
assets and was also guaranteed by the Companies' shareholders.

4. LONG-TERM DEBT

Long-term debt as of December 31, 1997 consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
1997
------------
<S> <C>
Construction note payable bearing interest at 10.75%;
payable in monthly installments of principal and interest
of $30; maturing December 2000; secured by the landfill
and Materials Recovery Facility with a net carrying value
of $854 as of December 31, 1997........................... $ 908
Notes payable bearing various rates of interest (ranging
from 8.75% to 9.5%), payable in monthly installments of
principal and interest (aggregating $23), maturing at
various dates through February 2002; secured by
substantially all of the Companies' assets................ 308
Note payable bearing interest at 6%; payable in annual
installments of principal and interest of $10; maturing
February 1, 2012; secured by land with a net carrying
value of $125 as of December 31, 1997..................... 97
Equipment financing notes payable bearing interest at
various rates (ranging from 9.5% to 9.9%); payable in
monthly installments of principal and interest
(aggregating $4); maturing through November 2000; secured
by substantially all of the Companies' assets............. 99
------
1,412
Less current portion........................................ 452
------
Long-term debt.............................................. $ 960
======
</TABLE>

F-147
<PAGE> 220
BUTLER COUNTY LANDFILL, INC. AND KOBUS CONSTRUCTION, INC.

As of December 31, 1997, aggregate contractual future principal payments by
calendar year on long-term debt are due as follows:

<TABLE>
<S> <C>
1998........................................................ $ 452
1999........................................................ 465
2000........................................................ 392
2001........................................................ 18
2002........................................................ 10
Thereafter.................................................. 75
------
$1,412
======
</TABLE>

5. COMMITMENTS AND CONTINGENCIES

COMMITMENTS

Operating Leases

The Companies leases certain equipment under cancelable and noncancelable
operating leases. Rent expense under these agreements amounted to $106 for the
year ended December 31, 1997.

As of December 31, 1997, future minimum lease payments under these
noncancelable operating leases, by calendar year, are as follows:

CONTINGENCIES

Environmental Risks

The Companies are subject to liability for any environmental damage that
the solid waste facilities they operate may cause to neighboring landowners,
particularly as a result of the contamination of drinking water sources or soil,
including damage resulting from conditions existing prior to the operation of
such facilities by the Companies. The Companies may also be subject to liability
for any off-site environmental contamination caused by pollutants or hazardous
substances whose transportation, treatment or disposal was arranged by the
Companies. Any substantial liability for environmental damage incurred by the
Companies could have a material adverse effect on the Companies' combined
financial condition, results of operations or cash flows.

Legal Proceedings

In the normal course of their business and as a result of the extensive
governmental regulation of the solid waste industry, the Companies may
periodically become subject to various judicial and administrative proceedings
involving federal, state or local agencies. In these proceedings, an agency may
seek to impose fines on the Companies or to revoke or deny renewal of an
operating
F-148
<PAGE> 221
BUTLER COUNTY LANDFILL, INC. AND KOBUS CONSTRUCTION, INC.

permit held by the Companies. From time to time the Companies may also be
subject to actions brought by citizens' groups or adjacent landowners in
connection with the permitting and licensing of landfills and transfer stations,
or alleging environmental damage or violations of the permits and licenses
pursuant to which the Companies operates.

In addition, the Companies may become party to various claims and suits
pending for alleged damages to persons and property, alleged violations of
certain laws and alleged liabilities arising out of matters occurring during the
normal operation of the waste management business. However, as of December 31,
1997 and September 30 1998, there are no current proceedings or litigation
involving the Companies that the Companies believe will have a material adverse
impact on the Companies' business, financial condition, results of operations or
cash flows.

6. PRO FORMA INCOME TAX INFORMATION (UNAUDITED)

As described in Note 1, the Companies operate under Subchapter S of the
Internal Revenue Code and are not subject to Federal income taxes. The pro form
income taxes represent estimates of income tax expense had the Companies filed
income tax returns as regular corporations.

The pro forma provisions for income taxes for the year ended December 31,
1997 and the nine months ended September 30, 1997 and 1998, differ from the
amounts computed by applying the applicable statutory federal income tax rate
(34%) to income before income taxes due primarily to state franchise taxes.

7. YEAR 2000 (UNAUDITED)

The Companies will need to modify or replace portions of its software so
that its computer systems will function properly with respect to dates in the
year 2000 ("Year 2000") and thereafter. To date, the Companies have not incurred
any costs related to the Year 2000 project. The Companies do not believe that
their expenditures relating to the Year 2000 project will be material. However,
if the required Year 2000 modifications and conversions are not made or are not
completed in a timely manner, the Year 2000 issue could materially affect the
Companies' operations.

F-149
<PAGE> 222
BUTLER COUNTY LANDFILL, INC. AND KOBUS CONSTRUCTION, INC.

[THIS PAGE INTENTIONALLY LEFT BLANK]

F-150
<PAGE> 223

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Board of Directors and Stockholders

Waste Connections, Inc.

We have audited the supplemental consolidated balance sheets of Waste
Connections, Inc., and Predecessors (resulting from the consolidation of Waste
Connections, Inc. and Murrey's Disposal Company, Inc., American Disposal
Company, Inc., D.M. Disposal Co., Inc. and Tacoma Recycling Company, Inc.,
collectively the "Murrey Companies") as of December 31, 1996 and 1997 and the
related supplemental consolidated statements of operations, redeemable stock and
stockholders' equity, and cash flows for each of the three years in the period
ended December 31, 1997 which appear on pages F-152 through F-160 herein as
listed in the accompanying Index to Financial Statements. The supplemental
consolidated financial statements give retroactive effect to the mergers of
Waste Connections, Inc. and the Murrey Companies on January 19, 1999, which have
been accounted for using the pooling-of-interests method as described in the
notes to the supplemental consolidated financial statements. These supplemental
financial statements are the responsibility of the management of Waste
Connections, Inc. Our responsibility is to express an opinion on these
supplemental financial statements based on our audits.

In our opinion, based on our audits, the supplemental consolidated
financial statements referred to above present fairly, in all material respects,
the consolidated financial position of Waste Connections, Inc. at December 31,
1996 and 1997, and the consolidated results of its operations and its cash flows
for each of the three years in the period ended December 31, 1997, after giving
retroactive effect to the mergers of the Murrey Companies, as described in the
notes to the supplemental consolidated financial statements, in conformity with
generally accepted accounting principles.

/s/ ERNST & YOUNG LLP

Sacramento, California

January 19, 1999

F-151
<PAGE> 224

WASTE CONNECTIONS, INC. AND PREDECESSORS

SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

ASSETS

<TABLE>
<CAPTION>
WASTE CONNECTIONS, INC.
PREDECESSORS SUPPLEMENTAL CONSOLIDATED
COMBINED -------------------------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1996 (NOTE 1) 1996 1997 1998
------------- ------------ ------------ -------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Current assets:
Cash and equivalents................................. $ 102 $ 81 $ 946 $ 1,495
Accounts receivable, less allowance for doubtful
accounts of $472 at September 30, 1998 and $93 and
$62 at December 31, 1997 and 1996, respectively
($81 predecessors combined in 1996)................ 2,650 2,333 6,719 12,410
Prepaid expenses and other current assets............ 339 119 437 783
------- ------- ------- --------
Total current assets.......................... 3,091 2,533 8,102 14,688
Property and equipment, net............................ 5,069 12,529 19,004 32,809
Intangible assets, net................................. 6,762 -- 11,412 84,685
Other assets........................................... 369 3 58 2,221
------- ------- ------- --------
$15,291 $15,065 $38,576 $134,403
======= ======= ======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings................................ $ -- $ 1,609 $ 1,628 $ 620
Accounts payable..................................... 1,025 1,108 4,226 8,340
Advances from a related party........................ -- 818 543 543
Deferred revenue..................................... 564 765 1,516 2,933
Accrued liabilities.................................. 634 705 1,657 4,453
Income taxes payable................................. -- 321 228 277
Current portion of notes payable..................... -- -- -- 1,256
Current portion of long-term debt.................... 54 928 873 751
Other current liabilities............................ 119 -- 251 346
------- ------- ------- --------
Total current liabilities..................... 2,396 6,254 10,922 19,519
Other long term liabilities............................ -- -- 702 1,496
Long-term debt......................................... 89 1,851 11,669 44,451
Deferred income taxes.................................. -- 702 820 1,037
Commitments and contingencies (Note 9)
Redeemable convertible preferred stock: $.01 par value;
2,500,000 shares authorized; 2,499,998 shares issued
and outstanding at December 31, 1997; no shares
issued and outstanding at September 30, 1998
(aggregate liquidation preference of $10,500 at
December 31, 1997)................................... -- -- 7,523 --
Net intercompany balance............................... 12,806 -- -- --
Stockholders' equity:
Preferred stock: $.01 par value; 7,500,000 shares
authorized at December 31, 1997, 10,000,000 shares
authorized at September 30, 1998; none issued and
outstanding........................................ -- -- -- --
Common stock: $.01 par value; 50,000,000 shares
authorized; 2,888,880, 5,188,880 and 12,093,512
shares issued and outstanding at December 31, 1996
and 1997, and September 30, 1998, respectively..... -- 29 52 121
Additional paid-in capital............................. -- 471 5,576 66,415
Stockholder notes receivable........................... -- -- (82) --
Deferred stock compensation............................ -- -- -- (499)
Retained earnings...................................... -- 5,758 1,394 1,863
------- ------- ------- --------
Total stockholders' equity.................... -- 6,258 6,940 67,900
------- ------- ------- --------
$15,291 $15,065 $38,576 $134,403
======= ======= ======= ========
</TABLE>

See accompanying notes.

F-152
<PAGE> 225

WASTE CONNECTIONS, INC. AND PREDECESSORS

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 1997 (AUDITED)

AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998 (UNAUDITED)

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
WASTE CONNECTIONS, INC.
PREDECESSORS SUPPLEMENTAL CONSOLIDATED
COMBINED NINE --------------------------------------------
MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 YEAR ENDED ------------------------
(NOTE 1) DECEMBER 31, 1997 1997 1998
------------- ----------------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenues..................................... $18,114 $ 35,111 $ 21,477 $ 59,868
Operating expenses:
Cost of operations......................... 14,753 27,836 16,933 43,344
Selling, general and administrative........ 3,009 2,942 1,653 5,388
Depreciation and amortization.............. 1,083 1,725 1,350 4,333
Start-up and integration................... -- 493 -- --
Stock compensation......................... -- 4,395 -- 561
------- ---------- ---------- -----------
Income (loss) from operations................ (731) (2,280) 1,541 6,242
Interest expense............................. (456) (1,415) (247) (1,850)
Other income (expense), net.................. 14 247 150 (97)
------- ---------- ---------- -----------
Income (loss) before income taxes............ (1,173) (3,448) 1,444 4,295
Income tax provision......................... -- (302) (512) (1,927)
------- ---------- ---------- -----------
Income (loss) before extraordinary item...... (1,173) (3,750) 932 2,368
Extraordinary item -- early extinguishment of
debt, net of tax benefit of $165........... -- -- -- (815)
------- ---------- ---------- -----------
Net income (loss)............................ $(1,173) $ (3,750) $ 932 $ 1,553
======= ========== ========== ===========
Redeemable convertible preferred stock
accretion.................................. (531) -- (917)
---------- ---------- -----------
Net income (loss) applicable to common
stockholders............................... $ (4,281) $ 932 $ 636
========== ========== ===========
Basic income (loss) per common share:
Income (loss) before extraordinary item.... $ (0.90) $ 0.32 $ 0.17
Extraordinary item......................... -- -- (0.10)
---------- ---------- -----------
Net income (loss) per common share......... $ (0.90) $ 0.32 $ 0.07
========== ========== ===========
Diluted income (loss) per common share:
Income (loss) before extraordinary item.... $ (0.90) $ 0.32 $ 0.14
Extraordinary item......................... -- -- (0.08)
---------- ---------- -----------
Net income (loss) per common share......... $ (0.90) $ 0.32 $ 0.06
========== ========== ===========
Shares used in calculating basic net income
(loss) per share........................... 4,761,447 2,888,880 8,365,412
========== ========== ===========
Shares used in calculating diluted net income
(loss) per share........................... 4,761,447 2,888,880 10,327,538
========== ========== ===========
Pro forma basic net income (loss) per
share...................................... $ (0.52) $ 0.16
========== ===========
Shares used in calculating pro forma basic
net income (loss) per share................ 7,261,445 10,006,437
========== ===========
Pro forma diluted net income per share....... $ 0.05
===========
Shares used in calculating pro forma diluted
net income per share....................... 11,591,273
===========
</TABLE>

See accompanying notes.

F-153
<PAGE> 226

WASTE CONNECTIONS, INC. AND PREDECESSORS

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

YEAR ENDED DECEMBER 31, 1996

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
PREDECESSORS
-----------------------------------
THE DISPOSAL
GROUP
COMBINED PREDECESSORS WASTE CONNECTIONS, INC.
PERIOD FROM COMBINED PERIOD SUPPLEMENTAL
JANUARY 1, 1996 ENDED CONSOLIDATED
THROUGH DECEMBER 31, 1996 YEAR ENDED
JULY 31, 1996 (NOTE 1) DECEMBER 31, 1996
--------------- ----------------- -----------------------
<S> <C> <C> <C>
Revenues.............................. $8,738 $13,422 $ 25,024
Operating expenses:
Cost of operations.................. 6,174 11,420 20,465
Selling, general and
administrative................... 2,126 1,649 2,142
Depreciation and amortization....... 324 962 1,236
------ ------- ----------
Income (loss) from operations......... 114 (609) 1,181
Interest expense...................... (12) (225) (284)
Other income (expense), net........... 2,661 (147) 309
------ ------- ----------
Income (loss) before income taxes..... 2,763 (981) 1,206
Income tax (provision) benefit........ (505) -- (543)
------ ------- ----------
Net income (loss)..................... $2,258 $ (981) $ 663
====== ======= ==========
Basic and diluted net income per
share............................... $ 0.23
==========
Shares used in per share
calculation......................... 2,888,880
==========
</TABLE>

See accompanying notes.

F-154
<PAGE> 227

WASTE CONNECTIONS, INC. AND PREDECESSORS

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

YEAR ENDED DECEMBER 31, 1995

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
PREDECESSORS
----------------------------------------------
FIBRES
INTERNATIONAL, WASTE
INC. CONNECTIONS,
THE DISPOSAL PERIOD FROM INC.
GROUP JANUARY 1, PREDECESSORS SUPPLEMENTAL
COMBINED 1995 ONE MONTH CONSOLIDATED
YEAR ENDED THROUGH ENDED YEAR ENDED
DECEMBER 31, NOVEMBER 30, DECEMBER 31, DECEMBER 31,
1995 1995 1995 (NOTE 1) 1995
------------ -------------- -------------- ------------
<S> <C> <C> <C> <C>
Revenues............................... $19,660 $7,340 $595 $ 27,786
Operating expenses:
Cost of operations................... 16,393 5,653 527 20,859
Selling, general and
administrative.................... 3,312 823 72 2,101
Depreciation and amortization........ 628 715 74 923
------- ------ ---- ----------
Income (loss) from operations.......... (673) 149 (78) 3,903
Interest expense....................... (206) (162) (1) (198)
Other income, net...................... -- 98 5 210
------- ------ ---- ----------
Income (loss) before income taxes...... (879) 85 (74) 3,915
Income tax (provision) benefit......... 298 (29) -- (690)
------- ------ ---- ----------
Net income (loss)...................... $ (581) $ 56 $(74) $ 3,225
======= ====== ==== ==========
Basic and diluted net income per
share................................ $ 1.12
==========
Shares used in per share calculation... 2,888,880
==========
</TABLE>

See accompanying notes.

F-155
<PAGE> 228

WASTE CONNECTIONS, INC. AND PREDECESSORS

SUPPLEMENTAL CONSOLIDATED STATEMENT OF REDEEMABLE STOCK

AND STOCKHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997 (AUDITED)

AND NINE MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
WASTE CONNECTIONS, INC. SUPPLEMENTAL CONSOLIDATED
------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
REDEEMABLE --------------------------------
CONVERTIBLE REDEEMABLE
PREFERRED STOCK COMMON STOCK COMMON STOCK ADDITIONAL
-------------------- -------------------- ------------------- PAID-IN
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL
---------- ------- ---------- ------- ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994.... -- $ -- -- $ -- 2,888,880 $ 29 $ 471
Dividends paid.................. -- -- -- -- -- -- --
Net income...................... -- -- -- -- -- -- --
---------- ------- ---------- ------- ---------- ---- -------
Balance at December 31, 1995.... -- -- -- -- 2,888,880 29 471
Net income...................... -- -- -- -- -- -- --
---------- ------- ---------- ------- ---------- ---- -------
Balance at December 31, 1996.... -- -- -- -- 2,888,880 29 471
Sale of redeemable convertible
preferred stock............... 2,499,998 6,992 -- -- -- -- --
Sale of common stock............ -- -- -- -- 2,300,000 23 4,395
Issuance of common stock
warrants...................... -- -- -- -- -- -- 710
Issuance of stockholder notes
receivable.................... -- -- -- -- -- -- --
Accretion of redeemable
convertible preferred stock... -- 531 -- -- -- -- --
Dividends paid.................. -- -- -- -- -- -- --
Net loss........................ -- -- -- -- -- -- --
---------- ------- ---------- ------- ---------- ---- -------
Balances at December 31, 1997... 2,499,998 7,523 -- -- 5,188,880 52 5,576
Exercise of warrants
(unaudited)................... -- -- -- -- 50,000 -- 140
Payment of stockholder notes
receivable.................... -- -- -- -- -- -- --
Issuance of redeemable common
stock (unaudited)............. -- -- 1,000,000 7,500 -- -- --
Issuance of common stock
warrants (unaudited).......... -- -- -- -- -- -- 2,388

<CAPTION>
WASTE CONNECTIONS, INC. SUPPLEMENTAL CONSOLIDATED
---------------------------------------------------
STOCKHOLDERS' EQUITY
---------------------------------------------------
RETAINED
STOCKHOLDER DEFERRED EARNINGS
NOTES STOCK (ACCUMULATED
RECEIVABLE COMPENSATION DEFICIT) TOTAL
----------- ------------ ------------ -------
<S> <C> <C> <C> <C>
Balance at December 31, 1994.... $ -- $ -- $ 1,920 $ 2,420
Dividends paid.................. -- -- (50) (50)
Net income...................... -- -- 3,225 3,225
---- ----- ------- -------
Balance at December 31, 1995.... -- -- 5,095 5,595
Net income...................... -- -- 663 663
---- ----- ------- -------
Balance at December 31, 1996.... -- -- 5,758 6,258
Sale of redeemable convertible
preferred stock............... -- -- -- --
Sale of common stock............ -- -- -- 4,418
Issuance of common stock
warrants...................... -- -- -- 710
Issuance of stockholder notes
receivable.................... (82) -- -- (82)
Accretion of redeemable
convertible preferred stock... -- -- (531) (531)
Dividends paid.................. -- -- (83) (83)
Net loss........................ -- -- (3,750) (3,750)
---- ----- ------- -------
Balances at December 31, 1997... (82) -- 1,394 6,940
Exercise of warrants
(unaudited)................... -- -- -- 140
Payment of stockholder notes
receivable.................... 82 -- -- 82
Issuance of redeemable common
stock (unaudited)............. -- -- -- --
Issuance of common stock
warrants (unaudited).......... -- -- -- 2,388
</TABLE>

See accompanying notes.

F-156
<PAGE> 229

WASTE CONNECTIONS, INC. AND PREDECESSORS

SUPPLEMENTAL CONSOLIDATED STATEMENT OF REDEEMABLE STOCK

AND STOCKHOLDERS' EQUITY (CONTINUED)

YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997 (AUDITED)

AND NINE MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
WASTE CONNECTIONS, INC. SUPPLEMENTAL CONSOLIDATED
------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
REDEEMABLE --------------------------------
CONVERTIBLE REDEEMABLE
PREFERRED STOCK COMMON STOCK COMMON STOCK ADDITIONAL
-------------------- -------------------- ------------------- PAID-IN
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL
---------- ------- ---------- ------- ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Accretion of redeemable
convertible preferred stock
(unaudited)................. -- $ 917 -- $ -- -- $ -- $ --
Deferred stock compensation
associated with stock
options (unaudited)......... -- -- -- -- -- -- 821
Amortization of deferred stock
compensation (unaudited).... -- -- -- -- -- -- --
Common stock sold in
connection with IPO
(unaudited)................. -- -- -- -- 2,300,000 23 23,963
Issuance of common stock
(unaudited)................. -- -- -- -- 1,054,634 11 17,783
Preferred stock dividend
(unaudited)................. -- (161) -- -- -- -- --
Conversion of redeemable
preferred stock
(unaudited)................. (2,499,998) (8,279) -- -- 2,499,998 25 8,254
Conversion of redeemable
common stock (unaudited).... (1,000,000) (7,500) 1,000,000 10 7,490
Dividends paid (unaudited).... -- -- -- -- -- -- --
Net income (unaudited)........ -- -- -- -- -- -- --
---------- ------- ---------- ------- ---------- ---- -------
Balances at September 30, 1998
(unaudited)................. -- $ -- -- $ -- 12,093,512 $121 $66,415
========== ======= ========== ======= ========== ==== =======

<CAPTION>
WASTE CONNECTIONS, INC. SUPPLEMENTAL CONSOLIDATED
---------------------------------------------------
STOCKHOLDERS' EQUITY
---------------------------------------------------
RETAINED
STOCKHOLDER DEFERRED EARNINGS
NOTES STOCK (ACCUMULATED
RECEIVABLE COMPENSATION DEFICIT) TOTAL
----------- ------------ ------------ -------
<S> <C> <C> <C> <C>
Accretion of redeemable
convertible preferred stock
(unaudited)................. $ -- $ -- $ (917) $ (917)
Deferred stock compensation
associated with stock
options (unaudited)......... -- (821) -- --
Amortization of deferred stock
compensation (unaudited).... -- 322 -- 322
Common stock sold in
connection with IPO
(unaudited)................. -- -- -- 23,986
Issuance of common stock
(unaudited)................. -- -- -- 17,794
Preferred stock dividend
(unaudited)................. -- -- -- --
Conversion of redeemable
preferred stock
(unaudited)................. -- -- -- 8,279
Conversion of redeemable
common stock (unaudited).... -- -- -- 7,500
Dividends paid (unaudited).... -- -- (167) (167)
Net income (unaudited)........ -- -- 1,553 1,553
---- ----- ------- -------
Balances at September 30, 1998
(unaudited)................. $ -- $(499) $ 1,863 $67,900
==== ===== ======= =======
</TABLE>

See accompanying notes.

F-157
<PAGE> 230

WASTE CONNECTIONS, INC. AND PREDECESSORS

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF CASH FLOWS

YEAR ENDED DECEMBER 31, 1997 (AUDITED)

AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998 (UNAUDITED)

(IN THOUSANDS)

<TABLE>
<CAPTION>
WASTE CONNECTIONS, INC.
PREDECESSORS SUPPLEMENTAL CONSOLIDATED
COMBINED ----------------------------------
NINE NINE MONTHS
MONTHS ENDED SEPTEMBER
ENDED YEAR ENDED 30,
SEPTEMBER 30, DECEMBER 31, ------------------
1997 (NOTE 1) 1997 1997 1998
-------------- ------------ ------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).......................................... $(1,173) $ (3,750) $ 932 $ 1,553
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Gain on sale of assets................................... (4) -- -- --
Depreciation and amortization............................ 1,083 1,725 1,056 4,333
Deferred income taxes.................................... -- (413) -- --
Amortization of debt issuance costs, debt guarantee fees
and accretion of discount on long-term debt............ -- 860 -- 176
Stock compensation....................................... -- 4,395 -- 562
Gain on sale of land..................................... -- -- (8)
Extraordinary item -- extinguishment of debt............. -- -- -- 981
Changes in operating assets and liabilities, net of
effects from acquisitions:
Accounts receivable, net............................... (604) (1,467) (562) (1,574)
Prepaid expenses and other current assets.............. (74) (11) (616) (180)
Accounts payable....................................... (221) 3,116 1,004 1,092
Deferred revenue....................................... (137) 323 95 839
Accrued liabilities.................................... (450) 928 26 278
Accrued losses on acquired contracts................... -- (65) -- (241)
Income taxes payable..................................... -- (93) 426 49
------- -------- ------- --------
Net cash provided by (used in) operating activities........ (1,580) 5,548 2,361 7,860
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment............... 188 -- -- 58
Payments for acquisitions, net of cash acquired............ -- (14,393) (100) (44,185)
Prepaid acquisition costs.................................. -- (20) -- --
Capital expenditures for property and equipment............ (735) (2,372) (2,106) (3,799)
Proceeds from sale of land................................. -- -- -- 625
Net change in other assets................................. 22 (47) (117) 57
Proceeds from stockholder notes receivable................. -- -- -- 82
Issuance of stockholder notes receivable................... -- (82) -- --
------- -------- ------- --------
Net cash used in investing activities....................... (525) (16,914) (2,323) (47,162)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net intercompany balance................................... 2,142 -- -- --
Proceeds from short-term borrowings........................ -- 600 -- --
Proceeds from long-term debt............................... -- 8,914 2,021 58,253
Principal payments on notes payable........................ (38) (2,724) -- (407)
Principal payments on long-term debt....................... -- (1,085) (302) (40,185)
Proceeds from sale of redeemable convertible preferred
stock.................................................... -- 6,992 -- --
Proceeds from sale of common stock......................... -- 23 -- 24,126
Net change in short term borrowings........................ -- 19 (812) (1,008)
Net change in advances from a related party................ -- (275) (275) --
Payment of dividends....................................... -- (83) -- (328)
Debt issuance costs........................................ -- (150) -- (600)
------- -------- ------- --------
Net cash provided by financing activities................... 2,104 12,231 632 39,851
------- -------- ------- --------
Net increase (decrease) in cash............................. (1) 865 670 549
Cash at beginning of period................................. 102 81 81 946
------- -------- ------- --------
Cash at end of period....................................... $ 101 $ 946 $ 751 $ 1,495
======= ======== ======= ========
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION AN
NON-CASH TRANSACTIONS:
Cash paid for interest..................................... $ -- $ 541 $ 247 $ 1,214
======= ======== ======= ========
Cash paid for income taxes................................. $ -- $ 744 $ 277 $ 897
======= ======== ======= ========
Redeemable convertible preferred stock accretion........... $ 531 $ -- $ 917
======== ======= ========
Issuance of notes payable for land and buildings........... $ 315 $ -- $ --
======== ======= ========
In connection with acquisitions, the Company assumed
liabilities as follows:
Fair value of assets acquired.............................. $ 20,140 $ 300 $ 91,103
Cash paid for acquisitions (including acquisition costs)... (14,393) (100) (44,185)
-------- ------- --------
Liabilities assumed, stock and notes payable to sellers.... $ 5,747 $ 200 $ 46,918
======== ======= ========
</TABLE>

See accompanying notes.

F-158
<PAGE> 231

WASTE CONNECTIONS, INC. AND PREDECESSORS

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

YEAR ENDED DECEMBER 31, 1996

(IN THOUSANDS)

<TABLE>
<CAPTION>
PREDECESSORS
------------------------------- WASTE
THE DISPOSAL CONNECTIONS, INC.
GROUP COMBINED PREDECESSORS SUPPLEMENTAL
PERIOD FROM COMBINED CONSOLIDATED
JANUARY 1, PERIOD ENDED YEAR ENDED
1996 THROUGH DECEMBER 31, DECEMBER 31,
JULY 31, 1996 1996 (NOTE 1) 1996
-------------- ------------- ------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)................................. $2,258 $ (981) $ 663
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating
activities:
Depreciation and amortization.................. 324 962 1,236
Deferred income taxes.......................... 298 -- (19)
Changes in operating assets and liabilities,
net of effects from acquisitions:
Accounts receivable, net..................... 1,201 (1,992) 63
Prepaid expenses and other current assets.... (2) (104) (36)
Accounts payable............................. (45) 713 932
Deferred revenue............................. (522) 421 42
Accrued liabilities.......................... (987) 428 129
Income taxes payable......................... -- -- (232)
------ ------- -------
Net cash provided by (used in) operating
activities..................................... 2,525 (553) 2,778
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment...... -- 117 --
Capital expenditures for property and equipment... (7) (282) (4,790)
Net change in other assets........................ -- 33 31
------ ------- -------
Net cash used in investing activities............... (7) (132) (4,759)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net intercompany balance.......................... -- 642 --
Proceeds from long-term debt...................... 142 -- 1,418
Principal payments on long-term debt.............. (427) -- (615)
Principal payments on notes payable............... -- (39) --
Net change in short-term borrowings............... -- -- 659
Net change in advances to related party........... -- -- (259)
------ ------- -------
Net cash provided by (used in) financing
activities........................................ (285) 603 1,203
------ ------- -------
Net increase (decrease) in cash..................... 2,233 (82) (778)
Cash at beginning of period......................... 961 184 859
------ ------- -------
Cash at end of period............................... $3,194 $ 102 $ 81
====== ======= =======
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION
AND NON-CASH TRANSACTIONS:
Cash paid for interest............................ $ -- $ -- $ 284
====== ======= =======
Cash paid for income taxes........................ $ -- $ -- $ 792
====== ======= =======
Issuance of notes payable for land and
buildings...................................... $ -- $ -- $ 260
====== ======= =======
</TABLE>

See accompanying notes.

F-159
<PAGE> 232

WASTE CONNECTIONS, INC. AND PREDECESSORS

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

YEAR ENDED DECEMBER 31, 1995

(IN THOUSANDS)

<TABLE>
<CAPTION>
PREDECESSORS
-------------------------------------------------- WASTE
FIBRES CONNECTIONS,
THE DISPOSAL INTERNATIONAL, INC. INC.
GROUP PERIOD FROM PREDECESSORS SUPPLEMENTAL
COMBINED JANUARY 1, 1995 ONE MONTH CONSOLIDATED
YEAR ENDED THROUGH ENDED YEAR ENDED
DECEMBER 31, NOVEMBER 30, DECEMBER 31, DECEMBER 31,
1995 1995 1995 (NOTE 1) 1995
------------ ------------------- ------------- -----------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).......................... $ (581) $ 56 $(74) $ 3,225
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Loss on sale of assets................... 18 -- -- --
Depreciation and amortization............ 628 778 74 923
Deferred income taxes.................... (298) -- -- 147
Changes in operating assets and
liabilities, net of effects from
acquisitions:
Accounts receivable, net.............. 592 59 10 (31)
Prepaid expenses and other
current assets........................ (18) -- (30) (83)
Accounts payable...................... (49) 53 (30) (156)
Deferred revenue...................... 65 30 (26) 68
Accrued liabilities................... 2,218 47 20 (352)
Income taxes payable.................. -- -- -- 383
------- ------- ---- -------
Net cash provided by (used in) operating
activities............................ 2,575 1,023 (56) 4,124
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures for property and
equipment............................. (87) (827) -- (3,025)
Net change in other assets............... -- 3 10 (18)
------- ------- ---- -------
Net cash provided by (used in) investing
activities............................ (87) (824) 10 (3,043)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt............. 306 -- -- 750
Principal payments on long-term debt..... (2,037) (288) -- (1,383)
Net change in short-term borrowings...... -- -- -- (77)
Net change in advances from a related
party................................. -- -- -- 189
Payment of dividends..................... -- -- -- (50)
Principal payments on notes payable...... -- -- (2) --
------- ------- ---- -------
Net cash used in financing activities.... (1,731) (288) (2) (571)
------- ------- ---- -------
Net increase (decrease) in cash............ 757 (89) (48) 510
Cash at beginning of period................ 204 321 232 349
------- ------- ---- -------
Cash at end of period...................... $ 961 $ 232 $184 $ 859
======= ======= ==== =======
SUPPLEMENTARY DISCLOSURES OF CASH FLOW
INFORMATION AND NON-CASH TRANSACTIONS:
Cash paid for interest................... $ -- $ -- $ -- $ 198
======= ======= ==== =======
Cash paid for income taxes............... $ -- $ -- $ -- $ 160
======= ======= ==== =======
</TABLE>

See accompanying notes.

F-160
<PAGE> 233

WASTE CONNECTIONS, INC. AND PREDECESSORS

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1997

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

(INFORMATION RELATING TO SEPTEMBER 30, 1998 AND

THE NINE MONTHS ENDED SEPTEMBER 30, 1998 IS UNAUDITED)

1. ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Business

Basis of Presentation

These supplemental consolidated financial statements include the
accounts of WCI and its wholly-owned subsidiaries. The consolidated entity is
referred to herein as the Company. All intercompany accounts and transactions
have been eliminated in consolidation.

As more fully described in Note 2, on January 19, 1999, the Company
entered into a business combination with the Murrey Companies. The business
combination has been accounted for as pooling-of-interests and the historical
consolidated financial statements of the Company and its predecessors for all
years prior to the business combination have been restated in the accompanying
supplemental consolidated financial statements to include the financial
positions, results of operations and cash flows of the Murrey Companies. The
supplemental financial statements will become the historical financial
statements of the Company upon issuance of financial statements for a subsequent
period that includes the date of the merger.

The supplemental consolidated financial statements of the Company
include reclassifications made to conform financial statement presentation of
the Murrey Companies to that of Waste Connections, Inc.

The entities the Company acquired in September 1997 from
Browning-Ferris Industries, Inc. ("BFI") are collectively referred to herein as
the Company's predecessors. BFI acquired the predecessor operations at various
times during 1995 and 1996, and prior to being acquired by BFI, the predecessors
operated as separate stand-alone businesses.

During the periods in which the Company's predecessors operated as
wholly owned subsidiaries of BFI, they maintained intercompany accounts with BFI
for recording intercompany charges for costs and expenses, intercompany
purchases of equipment and additions under capital leases and intercompany
transfers of cash, among other transactions. It is not feasible to ascertain the
amount of related interest expense that would have been recorded in the
historical financial statements had the predecessors been operated as
stand-alone entities. Charges for interest expense were allocated to the
Company's predecessors by BFI as disclosed in the accompanying Statement of
Operations. The interest expense allocations from BFI are based on formulas that
do not necessarily correspond with the balances in the related intercompany
accounts. Moreover, the financial position and results of operations of the
predecessors during this period may not necessarily be indicative of the
financial position or results of operations that would have been realized had
the predecessors been operated as stand-alone entities. For the periods in which
the predecessors operated as wholly owned subsidiaries of BFI, the statements of
operations include amounts allocated by BFI to the

F-161
<PAGE> 234

WASTE CONNECTIONS, INC. AND PREDECESSORS

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

(INFORMATION RELATING TO SEPTEMBER 30, 1998 AND

THE NINE MONTHS ENDED SEPTEMBER 30, 1998 IS UNAUDITED)

predecessors for selling, general and administrative expenses based on certain
allocation methodologies which management of the Company believes are
reasonable.

Due to the manner in which BFI intercompany transactions were recorded
as described above, it is not feasible to present a detailed analysis of
transactions reflected in the net intercompany balance with BFI. The change in
the predecessors' combined intercompany balance with BFI (net of income (loss)
and initial investment in the acquired companies) was $642 and $2,142 during the
period ended December 31, 1996 and the nine months ended September 30, 1997,
respectively.

The accompanying statements of operations and cash flows for the
Company's predecessors for the years ended December 31, 1995, 1996 and 1997 are
comprised of the following entities for the periods indicated:

<TABLE>
<S> <C>
YEAR ENDED DECEMBER 31, 1995:
The Disposal Group Combined.... Year ended December 31, 1995
Fibres International, Inc...... January 1, 1995 through November 30, 1995 (BFI
acquisition date)
Predecessors................... One month ended December 31, 1995 (represents the results
of operations of Fibres International, Inc. subsequent to
the BFI acquisition date)
YEAR ENDED DECEMBER 31, 1996:
The Disposal Group Combined.... January 1, 1996 through July 31, 1996 (BFI acquisition
date)
Predecessors Combined.......... Period ended December 31, 1996 (represents the combined
results of operations of The Disposal Group subsequent to
the BFI acquisition date and the operations for the year
ended December 31, 1996 of Fibres International, Inc.
which was acquired by BFI in 1995)
YEAR ENDED DECEMBER 31, 1997:
Predecessors Combined.......... Nine months ended September 30, 1997 (represents the
combined results of operations for the nine month period
of the entities acquired by BFI in 1995 and 1996
described above)
</TABLE>

F-162
<PAGE> 235

WASTE CONNECTIONS, INC. AND PREDECESSORS

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

(INFORMATION RELATING TO SEPTEMBER 30, 1998 AND

THE NINE MONTHS ENDED SEPTEMBER 30, 1998 IS UNAUDITED)

For periods prior to WCI's incorporation on September 9, 1997, the
supplemental consolidated financial statements of the Company consist solely of
the Murrey Companies. The financial statements of the Murrey Companies include
the combined accounts of Murrey's Disposal Company, Inc. ("Murrey's"), American
Disposal Company, Inc. ("American"), D.M. Disposal Co., Inc. ("DM"), and Tacoma
Recycling Company, Inc. ("Tacoma") as a result of their common management which
exercises significant influence over their operations. Significant intercompany
balances and transactions between the Murrey Companies have been eliminated in
combination.

Interim Financial Information

The unaudited interim consolidated financial statements as of September 30,
1998 and for the nine months ended September 30, 1997 and 1998 have been
prepared in accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the nine months ended September 30,
1998 are not necessarily indicative of the results that may be expected for the
year ended December 31, 1998.

Use of Estimates

Cash Equivalents

The Company considers all highly liquid investments with a maturity of
three months or less at purchase to be cash equivalents.

Common Stock Valuation

In connection with the Company's organization and initial capitalization in
September 1997, the Company sold 2.3 million shares of common stock for $.01 per
share to certain directors, consultants, and management. As a result, the
Company recorded a non-recurring, non-cash stock compensation charge of $4,395
in the accompanying statement of operations, representing the difference between
the amount paid for the shares and the estimated fair value of the shares of
$1.92 per share on the date of sale. The estimated fair value of the common
shares was determined by the Company based on an independent valuation of the
common stock.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to
concentrations of credit risks consist primarily of accounts receivable. Credit
risk on accounts receivable is minimized as a result

F-163
<PAGE> 236

WASTE CONNECTIONS, INC. AND PREDECESSORS

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

(INFORMATION RELATING TO SEPTEMBER 30, 1998 AND

THE NINE MONTHS ENDED SEPTEMBER 30, 1998 IS UNAUDITED)

of the large and diverse nature of the Company's customer base. The Company
maintain allowances for losses based on the expected collectibility of accounts
receivable. Credit losses have been within management's expectations.

Property and Equipment

The estimated useful lives are as follows:

<TABLE>
<S> <C>
Buildings.............................................. 20 years
Machinery and equipment................................ 3 - 15 years
Rolling stock.......................................... 10 years
Containers............................................. 5 - 15 years
Furniture and fixtures................................. 3 - 6 years
</TABLE>

In connection with acquisitions (Note 2), the Company acquired certain used
property and equipment. This used property and equipment is being depreciated
using the straight-line method over its estimated remaining useful lives, which
range from one to twelve years.

Goodwill

F-164
<PAGE> 237

WASTE CONNECTIONS, INC. AND PREDECESSORS

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

(INFORMATION RELATING TO SEPTEMBER 30, 1998 AND

THE NINE MONTHS ENDED SEPTEMBER 30, 1998 IS UNAUDITED)

The Company continually evaluates the value and future benefits of its
intangibles. The Company assesses recoverability from future operations using
income from operations of the related acquired business as a measure. Under this
approach, the carrying value would be reduced if it becomes probable that the
Company's best estimate for expected future cash flows of the related business
would be less than the carrying amount of the intangible over the remaining
amortization period. Through September 30, 1998, there were no adjustments to
the carrying amounts of intangibles resulting from these evaluations.

Fair Value of Financial Instruments

The carrying values of cash and cash equivalents approximate their fair
values as of the periods presented. The carrying values of the line of credit
(Note 7), short-term borrowings (Note 6) and other long-term debt (Note 8)
approximate their fair values as of December 31, 1997 and September 30, 1998,
based on current incremental borrowing rates for similar types of borrowing
arrangements.

Income Taxes

The Company, The Disposal Group, Fibres International, Inc., and DM use the
liability method to account for income taxes. Under this method, deferred tax
assets and liabilities are determined based on differences between the financial
reporting and tax bases of assets and liabilities and are measured using the
enacted tax rates and laws that will be in effect when the differences are
expected to reverse.

Revenue Recognition

Revenues are recognized as services are provided. Certain customers are
billed in advance and, accordingly, recognition of the related revenues is
deferred until the services are provided.

Start-Up and Integration Expenses

F-165
<PAGE> 238

WASTE CONNECTIONS, INC. AND PREDECESSORS

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

(INFORMATION RELATING TO SEPTEMBER 30, 1998 AND

THE NINE MONTHS ENDED SEPTEMBER 30, 1998 IS UNAUDITED)

As described in Note 12, the Company issued warrants during the period from
inception (September 9, 1997) through December 31, 1997 to a bank in connection
with a line of credit and term loan payable, and to certain directors and
stockholders of the Company in connection with their guarantee of certain of the
Company's debt obligations. The fair value of these warrants is being amortized
into interest expense. During the period from inception (September 9, 1997)
through December 31, 1997, $710 relating to these warrants is included in
interest expense in the accompanying statement of operations of the Company.

Stock-Based Compensation

Per Share Information

In 1997, the Financial Accounting Standards Board ("FASB")issued Statement
No. 128, Earnings per Share. Statement 128 replaced the calculation of primary
and fully diluted earnings per share with basic and diluted earnings per share.
Unlike primary earnings per share, basic earnings per share excludes any
dilutive effects of options, warrants and convertible securities. Diluted
earnings per share is very similar to the previously reported fully diluted
earnings per share. All earnings per share amounts have been presented on the
basis set forth in Statement 128 (Note 14). Earnings per share data have not
been presented for the predecessor operations because such data is not
meaningful.

Pro-forma basic net income (loss) per share is computed by dividing the net
income (loss) by the sum of the weighted average number of shares of common
stock outstanding and common shares issuable upon the conversion of all
outstanding shares of Redeemable Convertible Preferred Stock (Note 11) as though
such conversion occurred at the beginning of the period.

Pro-forma diluted net income per share is computed by dividing net income
by the sum of the weighted average number of shares of common stock outstanding,
common shares issuable upon conversion of all outstanding shares of Redeemable
Convertible Preferred Stock (Note 11) as though such conversion occurred at the
beginning of the period, and common shares issuable upon the exercise of
outstanding common stock options and warrants (calculated using the treasury
stock method.)

Closure and Post-Closure Costs

F-166
<PAGE> 239

WASTE CONNECTIONS, INC. AND PREDECESSORS

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

(INFORMATION RELATING TO SEPTEMBER 30, 1998 AND

THE NINE MONTHS ENDED SEPTEMBER 30, 1998 IS UNAUDITED)

Landfill, Inc. in Oklahoma. Red Carpet is engaged in landfilling of municipal
solid waste and other acceptable waste streams in the county of Major, Oklahoma.
As a result of the acquisition, the Company is required to accrue for closure
and post-closure costs related to the landfill. Accrued closure and post-closure
costs include the current and non-current portion of accruals associated with
obligations for closure and post-closure of the landfill. The Company, based as
input from its outside engineers, estimates its future closure and post-closure
monitoring and maintenance costs for solid waste landfills based on its
interpretation of the technical standards of the U.S. Environmental Protection
Agency's Subtitle D regulations and the air emissions standards under the Clean
Air Act as they are being applied on a state-by-state basis. 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 closure and post-closure monitoring and
maintenance requirements in the U.S. consider final capping of the site, 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. Reviews of the future requirements
for closure and post-closure monitoring and maintenance costs for the Company's
operating landfills are performed by the Company's consulting engineers at least
annually and are the basis upon which the Company's estimates of these future
costs and the related accrual rates are revised. The Company provides accruals
for these estimated costs as the remaining permitted airspace of such facilities
is consumed. As of September 30, 1998, the Company estimates that total closure
and post closure costs relating to the Red Carpet Landfill will be approximately
$929,000, of which approximately $491,000 has been accrued as of September 30,
1998 and included in other long-term liabilities in the accompanying balance
sheet. The states in which the Company operates its landfills require a
specified portion of these accrued closure and post-closure obligations to be
funded at any point in time.

New Accounting Pronouncements

F-167
<PAGE> 240

WASTE CONNECTIONS, INC. AND PREDECESSORS

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

(INFORMATION RELATING TO SEPTEMBER 30, 1998 AND

THE NINE MONTHS ENDED SEPTEMBER 30, 1998 IS UNAUDITED)

comparative information for earlier years must be restated. The Company
anticipates that implementing the provisions of Statement 131 will not have a
significant impact on the Company's existing disclosures.

2. BUSINESS COMBINATIONS AND ACQUISITIONS

The Murrey Companies

On January 19, 1999, the Company consummated a business combination with
the Murrey Companies which included the exchange of 2,888,880 shares of Waste
Connections, Inc. common stock for all outstanding shares of the Murrey
Companies. This business combination will be accounted for as pooling-of
interests, and accordingly, the historical financial statements of the Company
have been restated on a supplemental basis to include the consolidated financial
statements of Waste Connections, Inc. and the Murrey Companies for all periods
presented.

The supplemental consolidated financial statements have been prepared to
give retroactive effect to the business combination with the Murrey Companies.
Generally accepted accounting principles prohibit giving effect to a consummated
business combination accounted for by the pooling-of-interests method in
financial statements that do not include the date of consummation. The
accompanying supplemental consolidated financial statements do not extend
through the date of consummation, however, they will become the historical
consolidated financial statements of the Company after financial statements
covering the date of consummation of the business combinations are issued.

In connection with the business combination with the Murrey Companies, the
Company incurred transaction related costs of approximately $6.5 million which
will be to charged to operations in the period during which the merger is
consummated.

F-168
<PAGE> 241

WASTE CONNECTIONS, INC. AND PREDECESSORS

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

(INFORMATION RELATING TO SEPTEMBER 30, 1998 AND

THE NINE MONTHS ENDED SEPTEMBER 30, 1998 IS UNAUDITED)

The table below sets forth the combined revenues and net income (loss) for
the years ended December 31, 1995, 1996 and 1997 and the nine months ended
September 30, 1997 and 1998 (in thousands):

<TABLE>
<CAPTION>
WASTE THE MURREY SUPPLEMENTAL
CONNECTIONS, INC. COMPANIES CONSOLIDATED
----------------- ---------- ------------
<S> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1995:
Revenues................................. $ -- $27,786 $27,786
Net income............................... -- 3,225 3,225
YEAR ENDED DECEMBER 31, 1996:
Revenues................................. -- 25,024 25,024
Net income............................... -- 663 663
YEAR ENDED DECEMBER 31, 1997:
Revenues................................. 6,237 28,874 35,111
Net income (loss)........................ (5,066) 1,316 (3,750)
NINE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED):
Revenues................................. -- 21,477 21,477
Net income............................... -- 932 932
NINE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED):
Revenues................................. 35,336 24,532 59,868
Net income............................... 802 751 1,553
</TABLE>

Browning-Ferris Industries Related

On September 29, 1997, the Company purchased all of the outstanding stock
of Browning-Ferris Industries of Washington, Inc. and Fibres International, Inc.
from BFI (collectively the "Acquisitions"). The total purchase price for the
Acquisitions was approximately $15,036, comprised principally of $11,493 in cash
and promissory notes payable to BFI totaling $3,543. Of the combined $15,036
purchase price, $9,578 was recorded as goodwill and $150 was assigned to a non-
competition agreement. The Acquisitions were accounted for in accordance with
the purchase method of accounting and, accordingly, the net assets acquired were
included in the Company's consolidated balance sheet based upon their estimated
fair values on the date of the Acquisitions. The Company's consolidated
statement of operations includes the revenues and expenses of the acquired
businesses after the effective date of the transaction.

F-169
<PAGE> 242

WASTE CONNECTIONS, INC. AND PREDECESSORS

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

(INFORMATION RELATING TO SEPTEMBER 30, 1998 AND

THE NINE MONTHS ENDED SEPTEMBER 30, 1998 IS UNAUDITED)

Certain items affecting the purchase price and the allocation are
preliminary. A summary of the preliminary purchase price allocation as of
December 31, 1997 for the Acquisitions is as follows:

<TABLE>
<S> <C>
Acquired assets:
Accounts receivable..................................... $ 2,919
Prepaid expenses and other current assets............... 287
Property and equipment.................................. 4,106
Goodwill................................................ 9,578
Non-competition agreement............................... 150
Assumed liabilities:
Deferred revenue........................................ (428)
Accounts payable and accrued liabilities................ (26)
Accrued losses on acquired contracts.................... (1,018)
Deferred income taxes................................... (532)
-------
$15,036
=======
</TABLE>

Madera Disposal Systems, Inc.

F-170
<PAGE> 243

WASTE CONNECTIONS, INC. AND PREDECESSORS

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

(INFORMATION RELATING TO SEPTEMBER 30, 1998 AND

THE NINE MONTHS ENDED SEPTEMBER 30, 1998 IS UNAUDITED)

Certain items affecting the purchase price and the allocation are
preliminary. A summary of the preliminary purchase price allocation for the
Madera acquisition is as follows:

<TABLE>
<S> <C>
Acquired assets:
Cash.................................................... $ 1,388
Accounts receivable..................................... 905
Prepaid expenses and other current assets............... 141
Property and equipment.................................. 2,100
Long-term franchise agreements and contracts............ 725
Goodwill................................................ 14,580
Assumed liabilities:
Accounts payable and accrued liabilities................ (1,120)
Accrued losses on acquired contracts.................... (306)
Notes payable........................................... (200)
-------
$18,213
=======
</TABLE>

Arrow Sanitary Service, Inc.

Certain items affecting the purchase price and the allocation are
preliminary. A summary of the preliminary purchase price allocation for the
Arrow acquisition is as follows:

<TABLE>
<S> <C>
Acquired assets:
Accounts receivable..................................... $ 575
Prepaid expenses and other current assets............... 10
Property and equipment.................................. 313
Covenant not to compete................................. 50
Goodwill................................................ 10,528
Assumed liabilities:
Accounts payable and accrued liabilities................ (221)
-------
$11,255
=======
</TABLE>

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WASTE CONNECTIONS, INC. AND PREDECESSORS

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(INFORMATION RELATING TO SEPTEMBER 30, 1998 AND
THE NINE MONTHS ENDED SEPTEMBER 30, 1998 IS UNAUDITED)

Island Disposal

During 1997, the Murrey Companies purchased substantially all of the assets
of Island Disposal (effective May 2, 1997) and Environmental Waste Systems and
Olympic Disposal (both effective December 1, 1997) (collectively the "Murrey
Acquisitions"). The total purchase price for the Murrey Acquisitions was
approximately $3,100, comprised of $2,900 in cash and promissory notes payable
to the sellers totaling $200. Of the combined $3,100 purchase price, $1,791 was
recorded as goodwill and $80 was assigned to non-competition agreements. The
Murrey Acquisitions were accounted for in accordance with the purchase method of
accounting and, accordingly, the net assets acquired were included in the Murrey
Companies' combined balance sheet based upon their estimated fair values on the
date of the Acquisitions. The Murrey Companies' combined statement of operations
includes the revenues and expenses of the acquired businesses after the
effective date of the transactions.

Certain items affecting the purchase price and the allocation are
preliminary. A summary of the preliminary purchase price allocation as of
December 31, 1997, for the Murrey Acquisitions is as follows:

The following unaudited pro forma information shows the results of the
supplemental consolidated operations as though the Murrey Acquisitions had
occurred as of January 1, 1996:

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
-----------------
1996 1997
------- -------
(UNAUDITED)
<S> <C> <C>
Revenue.......................................... $27,485 $37,343
======= =======
Net income (loss)................................ $ 706 $(3,972)
======= =======
</TABLE>

The pro forma results have been prepared for comparative purposes only and
are not necessarily indicative of the actual results of operations had the
Murrey Acquisitions occurred on January 1, 1996, or the results of future
operations. Furthermore, the pro forma results do not give effect to all cost
savings or incremental costs that may occur as a result of the integration and
consolidation of the Murrey Acquisitions.

F-172
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WASTE CONNECTIONS, INC. AND PREDECESSORS

Predecessor Acquisitions

<TABLE>
<CAPTION>
FIBRES THE DISPOSAL
INTERNATIONAL, INC. GROUP COMBINED
------------------- --------------
<S> <C> <C>
Tangible assets acquired................. $5,076 $2,076
Goodwill................................. 4,187 2,671
Assumed liabilities...................... (969) (33)
------ ------
$8,294 $4,714
====== ======
</TABLE>

3. INTANGIBLE ASSETS

Intangible assets as of December 31, 1996 and 1997 and September 30, 1998
consist of the following:

<TABLE>
<CAPTION>
PREDECESSORS WCI SUPPLEMENTAL CONSOLIDATED
COMBINED -----------------------------
DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1996 1997 1998
------------ ------------ -------------
(UNAUDITED)
<S> <C> <C> <C>
Goodwill, net................... $6,762 $11,191 $82,985
Long-term franchise agreements
and contracts................. -- -- 1,048
Non-competition agreement, net.. -- 221 652
------ ------- -------
$6,762 $11,412 $84,685
====== ======= =======
</TABLE>

Related to certain of the acquisitions (Note 2), the Company acquired
certain long-term franchise agreements and contracts. The estimated fair value
of the acquired long-term franchise agreements and contracts was determined by
management based on the discounted net cash flows associated with the agreements
and contracts. The amounts assigned to the franchise agreements and contracts is
being amortized on a straight-line method over the remaining term of the related
agreements (11 years).

Related to certain of the acquisitions (Note 2), the Company entered into
non-competition agreements. The estimated fair value of the non-competition
agreement was determined by management based on the discounted adjusted
operating income stream that would have otherwise been subject to competition.
The amount assigned to the non-competition agreement is being amortized on a
straight-line method over the term of the agreement (five years).

Accumulated amortization on intangible assets amounted to $81 as of
December 31, 1997 ($279 in 1996) and $1,095 as of September 30, 1998.

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WASTE CONNECTIONS, INC. AND PREDECESSORS

4. PROPERTY AND EQUIPMENT

Property and equipment as of December 31, 1996 and 1997 and September 30,
1998 consists of the following:

<TABLE>
<CAPTION>
PREDECESSORS WCI SUPPLEMENTAL CONSOLIDATED
COMBINED ---------------------------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1996 1996 1997 1998
------------ ------------ ------------ -------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Land and buildings....... $2,314 $ 6,316 $ 6,668 $ 9,848
Machinery and equipment.. 146 3,518 3,840 5,344
Rolling stock............ 2,068 6,134 9,923 16,480
Containers............... 1,084 3,140 6,375 11,632
Furniture and fixtures... 137 231 322 1,093
------ ------- ------- --------
5,749 19,339 27,128 44,397
Less accumulated
depreciation........... (680) (6,810) (8,124) (11,588)
------ ------- ------- --------
$5,069 $12,529 $19,004 $ 32,809
====== ======= ======= ========
</TABLE>

5. OTHER ASSETS

Other assets as of December 31, 1996 and 1997 and September 30, 1998
consist of the following:

6. SHORT-TERM BORROWINGS

Short-term borrowings consist of various revolving and non-revolving
lines-of-credit with banks, bearing interest at variable rates (ranging from
9.0% to 9.25% as of December 31, 1997) and mature at various dates through
November 30, 1998. The lines of credit are secured by all cash accounts held
with the banks by the Murrey Companies, which totaled $126 as of December 31,
1997. All available amounts under these lines-of-credit were outstanding as of
December 31, 1997.

Certain of these lines-of-credit contain certain restrictive covenants,
which among other things require that specified financial balances and ratios be
maintained by the Murrey Companies. As of December 31, 1997, the Murrey
Companies were in compliance with the covenants.

7. LINE OF CREDIT

On September 30, 1997, WCI obtained a revolving line of credit (the "Line")
from a bank (the "Bank"). The maximum amount available under the terms of the
Line was $2,000 and borrowings

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WASTE CONNECTIONS, INC. AND PREDECESSORS

bore interest based on the prime rate plus 1.5% (aggregating 10.0% at December
31, 1997). Interest was payable monthly and the Line was to expire on September
29, 1998. Borrowings under the Line were secured by substantially all of WCI's
assets and were subordinate to the notes payable to BFI (Note 8) with respect to
certain specified assets. The Line was personally guaranteed by certain officers
and stockholders of WCI (Note 12). As of December 31, 1997, $600 was outstanding
under the Line.

Management of WCI used borrowings from a new credit facility obtained in
January 1998 (Note 15) to pay off amounts outstanding under the Line, and as
such, these amounts have been included in long-term debt as of December 31,
1997.

8. LONG-TERM DEBT

Long-term debt consists of the following as of December 31, 1996 and 1997.

<TABLE>
<CAPTION>
1996 1997
------ -------
<S> <C> <C>
Term loan payable to the Bank bearing interest at the Bank's
prime rate plus 2.0% (aggregating 10.5% as of December 31,
1997); monthly principal payments of $76 plus interest
beginning October 1997 through August 2002; all
outstanding principal and interest are due September 2002;
secured by substantially all of WCI's assets; subordinate
to the notes payable to BFI with respect to certain
specified assets.......................................... $ -- $ 5,343
Note payable to a bank bearing interest at a variable rate
(approximately 8.5% as of December 31, 1997); monthly
payments of principal and interest of $25; maturing in
November, 2007; secured by certain cash accounts and a
pledge of one of the Murrey Companies exclusive franchise
agreements................................................ -- 2,000
Notes payable to a bank bearing interest at various fixed
rates (ranging from 9.1% to 9.2% as of December 31, 1997);
monthly payments of principal and interest aggregating $25
and one-time payments of $470 and $751 in September, 2000
and May, 2001, respectively; maturing at various dates
between September, 2000 and May, 2001; secured by land and
buildings with a net book value of approximately $2,548 as
of December 31, 1997...................................... 1,752 1,544
Equipment financing notes payable bearing interest at
various rates (ranging from 8.6% to 8.8% as of December
31, 1997); monthly payments of principal and interest
aggregating $25; maturing at various dates through
September, 2001; secured by equipment with an aggregate
net book value of approximately $984 as of December 31,
1997...................................................... 567 822
Note payable to a bank bearing interest at 8.6%; monthly
payments of principal and interest aggregating $13;
maturing in October, 2001; secured by equipment with a net
book value of approximately $533 as of December 31, 1997
and certain cash accounts................................. -- 632
</TABLE>

F-175
<PAGE> 248
WASTE CONNECTIONS, INC. AND PREDECESSORS

<TABLE>
<CAPTION>
1996 1997
------ -------
<S> <C> <C>
Notes payable to sellers bearing interest at various rates
(ranging from 8.5% to 9.0% as of December 31, 1997);
monthly principal and interest payments of $9; maturing at
various dates between February, 2001 and October, 2007;
secured by land and buildings with a net book value of
approximately $908 as of December 31, 1997................ 218 471
Note payable to BFI bearing interest at 6.0%; all
outstanding principal and interest are due December 1997;
secured by substantially all of WCI's accounts
receivable................................................ -- 319
Note payable to BFI bearing interest at 10.0%; quarterly
payments of interest beginning December 1997; all
outstanding principal and interest are due March 1998;
secured by substantially all of WCI's assets.............. -- 500
Unsecured notes payable to seller bearing interest at 8.0%
as of December 31, 1997; monthly principal and interest
payments of $4; maturing in June, 2002.................... -- 189
Line of credit (Note 7)..................................... -- 600
Others...................................................... 242 122
------ -------
2,779 12,542
Current portion............................................. 928 873
------ -------
$1,851 $11,669
====== =======
</TABLE>

The term loan payable to the Bank and the notes payable to BFI were
personally guaranteed by certain officers and stockholders of the Company (Note
12).

As of December 31, 1997, aggregate contractual future principal payments by
calendar year on long-term debt are due as follows:

<TABLE>
<S> <C>
1998...................................................... $ 2,609
1999...................................................... 1,697
2000...................................................... 1,973
2001...................................................... 2,149
2002...................................................... 1,325
Thereafter................................................ 2,789
-------
$12,542
=======
</TABLE>

Management used borrowings from a new credit facility obtained in January
1998 (Note 15) to pay off all amounts outstanding under the term loan payable to
the Bank and all notes payable to BFI, and as such, these amounts have been
classified as long-term debt as of December 31, 1997.

F-176
<PAGE> 249
WASTE CONNECTIONS, INC. AND PREDECESSORS

balance sheet. The capital expenditures funded by the bonds are expected to be
substantially completed by December 31, 1998.

9. COMMITMENTS AND CONTINGENCIES

COMMITMENTS

Leases

The Company leases its facilities and certain equipment under
non-cancelable operating leases for periods ranging from one to five years.
Combined rent expense for the predecessor operations was $398, $412, and $441
for the years ended December 31, 1995 and 1996, and the nine months ended
September 30, 1997, respectively. The Company's supplemental consolidated rent
expense under operating leases during the years ended December 31, 1995, 1996
and 1997 was $319, $170 and $235, respectively.

As of December 31, 1997, future minimum lease payments under these leases,
by calendar year, are as follows:

<TABLE>
<S> <C>
1998........................................................ $ 393
1999........................................................ 382
2000........................................................ 359
2001........................................................ 247
2002........................................................ 97
Thereafter.................................................. 355
------
$1,833
======
</TABLE>

Performance Bonds and Letters of Credit

Municipal solid waste collection contracts may require performance bonds or
other means of financial assurance to secure contractual performance. As of
December 31, 1997, WCI had provided customers and various regulatory authorities
with bonds and letters of credit of approximately $800 to secure its
obligations. The Company's new credit facility (Note 15) provides for the
issuance of letters of credit in an amount up to $5,000, but any letters of
credit issued reduce the availability of borrowings for acquisitions or other
general corporate purposes. If the Company were unable to obtain surety bonds or
letters of credit in sufficient amounts or at acceptable rates, it could be
precluded from entering into additional municipal solid waste collection
contracts or obtaining or retaining landfill operating permits.

CONTINGENCIES

Environmental Risks

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<PAGE> 250
WASTE CONNECTIONS, INC. AND PREDECESSORS

substances whose transportation, treatment or disposal was arranged by the
Company or its predecessors. Any substantial liability for environmental damage
incurred by the Company could have a material adverse effect on the Company's
financial condition, results of operations or cash flows. As of December 31,
1997 and September 30, 1998, the Company is not aware of any such environmental
liabilities.

Legal Proceedings

In addition, the Company may become party to various claims and suits
pending for alleged damages to persons and property, alleged violations of
certain laws and alleged liabilities arising out of matters occurring during the
normal operation of the waste management business. However, as of December 31,
1997 and September 30, 1998 there is no current proceeding or litigation that
the Company believes will have a material adverse impact on it's business,
financial condition, results of operations or cash flows.

Disposal Site

The Company has been informed that the Hidden Valley Landfill which is
currently utilized by the Murrey Companies for disposal of waste collected in
Pierce County, Washington is currently operating under a Consent Decree with the
Washington State Department of Ecology and the Environmental Protection Agency.
Under the terms of the Consent Decree the Hidden Valley Landfill is required to
be closed on or before December 31, 1998; after which all of the waste collected
by the Murrey Companies in Pierce County will be long hauled to an alternate
disposal site until the new solid waste landfill in Pierce County is opened. The
new landfill is projected to open in November 1999. Management of the Company
does not believe that the closure of the Hidden Valley Landfill will have a
material adverse impact on it's business, financial position, results of
operations or cash flows.

Employees

Approximately 55 drivers and mechanics at WCI's Vancouver, Washington
operation are represented by the Teamsters Union, with which Browning-Ferris
Industries of Washington, Inc., the Company's predecessor in Vancouver, entered
a four-year collective bargaining agreement in January 1997. Approximately 11
drivers at Arrow Sanitary Services, Inc. ("Arrow"), a wholly owned

F-178
<PAGE> 251
WASTE CONNECTIONS, INC. AND PREDECESSORS

subsidiary of the Company, are represented by the Teamsters Union, with which
Arrow entered into a three-year collective bargaining agreement in March 1998.
In addition, in July 1997, the employees at the Company's facility in Issaquah,
Washington, adopted a measure to select a union to represent them in labor
negotiations with management. The union and management operated under a one-year
negotiating agreement, that ended July 27, 1998.

10. EMPLOYEE BENEFIT PLAN

The Murrey Companies have a voluntary savings and investment plan (the
"401(k) Plan"). The 401(k) Plan is available to all eligible, non-union
employees of the Murrey Companies. Under the 401(k) Plan, the Murrey Companies'
contributions are at the discretion of management. During the years ended
December 31, 1995, 1996 and 1997, the Murrey Companies' 401(k) Plan expense was
approximately $246, $267 and $316, respectively.

11. REDEEMABLE CONVERTIBLE PREFERRED STOCK

In September 1997, the Company received net proceeds of $6,992 from the
sale of 2,499,998 shares of redeemable convertible preferred stock (the
"Preferred Stock"). The Preferred Stock accrues cumulative dividends at the rate
of $.098 per share annually. Accumulated and unpaid dividends on Preferred Stock
amounted to $61 as of December 31, 1997. The Preferred Stock and any accumulated
and unpaid dividends are convertible at the holder's option into shares of the
Company's common stock at the calculated rate of $2.80 per share divided by the
"Conversion Price" subject to certain anti-dilution adjustments. Each share was
automatically converted into common stock immediately upon the closing of the
Company's initial public offering of common stock at a Conversion Price of $2.80
per share.

The preferred stockholders are entitled to one vote for each share of
common stock into which such shares can be converted, and are also entitled to
liquidation preferences equal to the greater of

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<PAGE> 252
WASTE CONNECTIONS, INC. AND PREDECESSORS

the initial purchase price per share ($2.80) plus any accumulated and unpaid
dividends, plus the greater of $4.20 per share or an amount which equals an
internal rate of return of 50% to the investor. After receiving such preference,
the holders of the preferred stock share remaining proceeds with the common
stockholders on an as converted basis.

12. STOCKHOLDERS' EQUITY

Common Stock

Of the 47,759,030 shares of common stock authorized but unissued as of
December 31, 1997, the following shares were reserved for issuance:

<TABLE>
<S> <C>
Preferred Stock.......................................... 2,521,874
Madera acquisition (Note 2).............................. 1,200,000
Stock option plan........................................ 1,200,000
Stock purchase warrants.................................. 1,056,000
---------
5,977,874
=========
</TABLE>

Stockholder Notes Receivable

Stock Options

In November 1997, WCI's Board of Directors adopted a stock option plan in
which all officers, employees, directors and consultants may participate (the
"Option Plan"). Options granted under the Option Plan may either be incentive
stock options or nonqualified stock options (the "Options") and they will
generally have a term of 10 years from the date of grant and will vest over
periods determined at the date of grant. The exercise prices of the options are
determined by the Company's Board of Directors and will be at least 100% or 110%
of the fair market value of the Company's common stock on the date of grant as
provided for in the Option Plan.

In connection with the Option Plan, WCI's Board of Directors approved the
reservation of 1,200,000 shares of common stock for issuance thereunder. As of
December 31, 1997 and September 30, 1998, 35,000 options to purchase common
stock were exercisable under the Option Plan. In addition, as of December 31,
1997 and September 30, 1998, options for 671,500 and 160,450 shares,
respectively of common stock were available for future grants under the Option
Plan.

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<PAGE> 253
WASTE CONNECTIONS, INC. AND PREDECESSORS

A summary of WCI's stock option activity and related information during the
period from inception (September 9, 1997) through December 31, 1997 and the nine
months ended September 30, 1998 is presented below:

<TABLE>
<CAPTION>
NUMBER OF WEIGHTED AVERAGE
SHARES (OPTIONS) EXERCISE PRICE
---------------- ----------------
<S> <C> <C>
Outstanding at inception.................... -- $ --
Granted..................................... 528,500 4.92
Forfeited................................... -- --
Exercised................................... -- --
---------
Outstanding as of December 31, 1997......... 528,500 4.92
Granted (unaudited)......................... 511,050 9.59
Forfeited (unaudited)....................... -- --
Exercised (unaudited)....................... -- --
---------
Outstanding as of September 30, 1998
(unaudited)............................... 1,039,550 7.21
=========
</TABLE>

The following table summarizes information about stock options outstanding
as of December 31, 1997 and September 30, 1998:

<TABLE>
<CAPTION>
DECEMBER 31, 1997 SEPTEMBER 30, 1998
------------------ --------------------
WEIGHTED WEIGHTED
AVERAGE AVERAGE
EXERCISE EXERCISE
EXERCISE RANGE SHARES PRICE SHARES PRICE
-------------- ------- -------- --------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
$ 2.80 to 5.00........................... 385,500 2.85 589,800 2.91
$ 6.00 to 9.50........................... -- -- 72,500 8.54
$10.50 to 12.50........................... 143,000 10.50 245,000 11.07
$15.19 to 19.00........................... -- -- 95,750 17.24
$21.00 to 22.13........................... -- -- 36,500 21.90
------- ----- --------- -----
528,500 4.92 1,039,550 7.21
======= ===== ========= =====
</TABLE>

The weighted average remaining contractual life of stock options
outstanding as of December 31, 1997, was 9.4 years.

Pro Forma information regarding net income and earnings per share is
required by SFAS 123, and has been determined as if the Company had accounted
for its employee stock options under the fair value method of that Statement.
The fair value for these options was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted-average
assumptions for the period from inception (September 9, 1997) through December
31, 1997: risk-free interest rate of 6%; dividend yield of zero; volatility
factor of the expected market price of the Company's common stock of .40; and a
weighted-average expected life of the option of 4 years.

F-181
<PAGE> 254
WASTE CONNECTIONS, INC. AND PREDECESSORS

different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's
pro forma net loss and pro forma basic net loss per share for the year ended
December 31, 1997 were $(3,754) and $(0.90) per share, respectively.

Stock Purchase Warrants

In September 1997, the Company issued a warrant to purchase 200,000 shares
of the Company's common stock to the Bank that provided the Line and term loan
payable (Notes 7 and 8). The exercise price of the warrant is $.01 per share.
The warrant was valued at $382 on its date of issuance using the Black-Scholes
pricing model with an assumed stock price volatility of .40, risk-free interest
rate of 6.0%, estimated fair value of the common stock of $1.92 per share and an
expected life of 7 years. The value assigned to the warrant was reflected as a
discount on long-term debt. The discount was fully accreted to interest expense
using the straight-line method over the expected term of the debt agreements
(approximately three months).

In connection with their guarantee of certain of the Company's debt
obligations (Notes 7 and 8), the Company issued warrants to purchase 841,000
shares of the Company's common stock to certain directors and stockholders of
the Company. The exercise price of the warrants is $2.80 per share. The warrants
were valued at $328 on their date of issuance using the Black-Scholes pricing
model with an assumed stock price volatility of .40, risk-free interest rate of
6.0%, estimated fair value of the common stock of $1.92 per share and expected
lives of 3 years. The value assigned to these warrants was fully amortized to
interest expense over the expected term of the debt agreements (approximately
three months).

Initial Public Offering

In May 1998, the Company sold in its initial public offering, a total of
2,300,000 shares of common stock at $12.00 per share. The net proceeds after
underwriters' commissions and fees and

F-182
<PAGE> 255
WASTE CONNECTIONS, INC. AND PREDECESSORS

other costs associated with the offering were approximately $23,986. In
connection with the offering, the redeemable convertible preferred stock was
converted into common stock, and the redemption provisions of the common stock
issued in connection with the Madera acquisition (Note 2) expired.

13. INCOME TAXES

The provision (benefit) for income taxes for the years ended December 31,
1995, 1996 and 1997 consists of the following:

<TABLE>
<CAPTION>
PREDECESSORS
---------------------------------------- PREDECESSORS
FIBRES ------------------ WCI
INTERNATIONAL, INC. THE DISPOSAL GROUP SUPPLEMENTAL
PERIOD FROM COMBINED CONSOLIDATED
THE DISPOSAL GROUP JANUARY 1, 1995 WCI SUPPLEMENTAL PERIOD FROM YEAR ENDED
COMBINED THROUGH CONSOLIDATED JANUARY 1, 1996 DECEMBER 31,
YEAR ENDED NOVEMBER 30, YEAR ENDED THROUGH ------------
DECEMBER 31, 1995 1995 DECEMBER 31, 1995 JULY 31, 1996 1996 1997
------------------ ------------------- ----------------- ------------------ ---- ----
<S> <C> <C> <C> <C> <C> <C>
Current:
Federal............ $ -- $29 $543 $207 $562 $716
State.............. -- -- -- -- -- --
Deferred:
Federal............ (298) -- 147 298 (19) (414)
State.............. -- -- -- -- -- --
----- --- ---- ---- ---- ----
$(298) $29 $690 $505 $543 $302
===== === ==== ==== ==== ====
</TABLE>

Significant components of deferred income tax assets and liabilities are as
follows as of December 31, 1996 and 1997:

<TABLE>
<CAPTION>
WCI SUPPLEMENTAL
PREDECESSORS CONSOLIDATED
COMBINED ----------------
1996 1996 1997
------------ ----- -------
<S> <C> <C> <C>
Deferred income tax assets:
Accounts receivable reserves............ $ 32 $ -- $ 8
Amortization............................ -- -- 290
Accrued expenses........................ 4 -- --
Vacation accrual........................ 2 -- 15
Net operating losses.................... 208 -- 54
------ ----- -------
Total deferred income tax assets.......... 246 -- 367
Deferred income tax liability:
Depreciation............................ -- (702) (1,187)
------ ----- -------
Net deferred income tax asset
(liability)............................. 246
Less valuation allowance.................. (246) -- --
------ ----- -------
$ -- $(702) $ (820)
====== ===== =======
</TABLE>

The differences between the Company's provision (benefit) for income taxes
as presented in the accompanying statements of operations and benefit for income
taxes computed at the federal

F-183
<PAGE> 256
WASTE CONNECTIONS, INC. AND PREDECESSORS

statutory rate is comprised of the items shown in the following table as a
percentage of pre-tax income (loss):

<TABLE>
<CAPTION>
PREDECESSORS
---------------------------------------------------------------------------
FIBRES THE DISPOSAL
INTERNATIONAL, GROUP
THE DISPOSAL INC. COMBINED
GROUP PERIOD FROM PERIOD FROM
COMBINED JANUARY 1, 1995 PREDECESSORS JANUARY 1, 1996
YEAR ENDED THROUGH ONE MONTH ENDED THROUGH
DECEMBER 31, 1995 NOVEMBER 30, 1995 DECEMBER 31, 1995 JULY 31, 1996
----------------- ----------------- ----------------- ---------------
<S> <C> <C> <C> <C>
Income tax provision
(benefit) at the
statutory rate..... (34.0%) 34.0% 34.0% 34.0%
Effect of valuation
allowance.......... -- -- (34.0%) (16.0%)
----- ---- ----- -----
(34.0%) 34.0% -- 18.0%
===== ==== ===== =====
</TABLE>

<TABLE>
<CAPTION>
PREDECESSORS
---------------------------------------
PREDECESSORS PREDECESSORS
COMBINED COMBINED
PERIOD ENDED NINE MONTHS ENDED
DECEMBER 31, 1996 SEPTEMBER 30, 1997
----------------- ------------------
<S> <C> <C>
Income tax benefit at the statutory rate....... (34.0%) (34.0%)
Effect of valuation allowance.................. 34.0% 34.0%
Stock compensation expense..................... -- --
----- -----
-- --
===== =====
</TABLE>

<TABLE>
<CAPTION>
WCI SUPPLEMENTAL
CONSOLIDATED
-------------------------
YEARS ENDED DECEMBER 31,
-------------------------
1995 1996 1997
------ ----- ------
<S> <C> <C> <C>
Income tax provision (benefit) at the statutory rate........ 34.0% 34.0% (34.0%)
Tax effect of companies reporting under Subchapter S........ (17.0%) 10.0% (1.0%)
Stock compensation expense.................................. -- -- 44.0%
Other....................................................... 1.0% 1.0% --
----- ---- -----
18.0% 45.0% 9.0%
===== ==== =====
</TABLE>

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<PAGE> 257
WASTE CONNECTIONS, INC. AND PREDECESSORS

14. NET INCOME (LOSS) PER SHARE INFORMATION

The following table sets forth the calculation of the numerator and
denominator used in the computation of basic and diluted net loss per share and
pro forma basic and diluted net income (loss) per share for the years ended
December 31, 1995, 1996 and 1997 and the nine months ended September 30, 1997
and 1998. The pro forma basic and diluted net income (loss) per share
calculations assume the conversion of all outstanding shares of redeemable
convertible preferred stock for the period from inception (September 9, 1997)
through December 31, 1997, and the conversion of all outstanding shares of
redeemable convertible preferred stock and redeemable common stock for the nine
months ended September 30, 1998, as if such conversions occurred as of the first
day of each period presented or the actual date of issuance, if subsequent to
the first day of the period presented.

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31, 1997 SEPTEMBER 30, 1997
----------------------- ----------------------- -----------------------
(UNAUDITED)
1995 1996
---------- ---------- PRO FORMA
BASIC BASIC BASIC BASIC BASIC DILUTED
NET INCOME NET INCOME NET LOSS NET LOSS NET INCOME NET INCOME
PER SHARE PER SHARE PER SHARE PER SHARE PER SHARE PER SHARE
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Numerator:
Income (loss) before
extraordinary item....... $ 3,225 $ 663 $ (3,750) $ (3,750) $ 932 $ 932
Redeemable convertible
preferred stock
accretion................ -- -- (531) -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Income (loss) applicable to
common stockholders
before extraordinary
item..................... $ 3,225 $ 663 $ (4,281) $ (3,750) $ 932 $ 932
========== ========== ========== ========== ========== ==========
Extraordinary item......... -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Net income (loss)
applicable to common
stockholders............. $ 3,225 $ 663 $ (4,281) $ (3,750) $ 932 $ 932
========== ========== ========== ========== ========== ==========
Denominator:
Weighted average common
shares outstanding....... 2,888,880 2,888,880 4,761,447 4,761,447 2,888,880 2,888,880
Dilutive effect of stock
options and warrants
outstanding.............. -- -- -- -- -- --
Incremental common shares
issuable upon redemption
of redeemable common
stock.................... -- -- -- -- -- --
Incremental common shares
issuable upon conversion
of preferred stock....... -- -- -- 2,499,998 -- --
---------- ---------- ---------- ---------- ---------- ----------
2,888,880 2,888,880 4,761,447 7,261,445 2,888,880 2,888,880
========== ========== ========== ========== ========== ==========

<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, 1998
---------------------------------------------------
(UNAUDITED)

PRO FORMA PRO FORMA
BASIC DILUTED BASIC DILUTED
NET INCOME NET INCOME NET INCOME NET INCOME
PER SHARE PER SHARE PER SHARE PER SHARE
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Numerator:
Income (loss) before
extraordinary item....... $ 2,368 $ 2,368 $ 2,368 $ 2,368
Redeemable convertible
preferred stock
accretion................ (917) (917) -- --
---------- ----------- ---------- -----------
Income (loss) applicable to
common stockholders
before extraordinary
item..................... $ 1,451 $ 1,451 $ 2,368 $ 2,368
========== =========== ========== ===========
Extraordinary item......... (815) (815) (815) (815)
---------- ----------- ---------- -----------
Net income (loss)
applicable to common
stockholders............. $ 636 $ 636 $ 1,553 $ 1,553
========== =========== ========== ===========
Denominator:
Weighted average common
shares outstanding....... 8,365,412 8,365,412 8,365,412 8,365,412
Dilutive effect of stock
options and warrants
outstanding.............. -- 1,584,836 -- 1,584,836
Incremental common shares
issuable upon redemption
of redeemable common
stock.................... -- 377,290 377,290 377,290
Incremental common shares
issuable upon conversion
of preferred stock....... -- -- 1,263,735 1,263,735
---------- ----------- ---------- -----------
8,365,412 10,327,538 10,006,437 11,591,273
========== =========== ========== ===========
</TABLE>

F-185
<PAGE> 258
WASTE CONNECTIONS, INC. AND PREDECESSORS

15. NEW CREDIT FACILITY

On January 30, 1998, the Company obtained a revolving credit facility from
BankBoston (the "Credit Facility"). The maximum amount available under the
Credit Facility was $25,000 including stand-by letters-of-credit and the
borrowings bore interest at various fixed and/or variable rates at the Company's
option. The Credit Facility allowed for the Company to issue up to $5,000 in
stand-by letters-of-credit. The Credit Facility required quarterly payments of
interest. The Credit Facility required the Company to pay an annual commitment
fee equal to 0.5% of the unused portion of the Credit Facility. In connection
with the Credit Facility the Company granted to an affiliate of BankBoston a
warrant to purchase 140,000 shares of the Company's common stock with an
exercise price of $2.80 per share and an expiration date of January 29, 2008.

16. RELATED PARTY TRANSACTIONS

WCI has entered into certain transactions with Continental Paper, LLC
("Continental"), in which WCI delivers to Continental all of it's collected
recyclable materials in areas in which Continental has processing facilities and
Continental pays WCI market rates for the recyclable materials. Certain of WCI's
stockholders are the majority owners of Continental. During the year

F-186
<PAGE> 259
WASTE CONNECTIONS, INC. AND PREDECESSORS

ended December 31, 1997, WCI received approximately $223 from Continental in
these transactions.

Operating Lease

The Murrey Companies lease land (on which certain of their facilities are
located) from a shareholder of the Murrey Companies. This lease is pursuant to
an informal arrangement whereby the Murrey Companies pay all of the property
taxes and other expenses associated with the leased land in lieu of monthly
rent. These payments totaled approximately $10 during each of the years ended
December 31, 1995, 1996, and 1997.

Advances

As of December 31, 1996 and 1997, the Murrey Companies any had non-interest
bearing advances payable to one of their shareholders totaling $818 and $543,
respectively.

Disposal Fees

During the years ended December 31, 1995, 1996 and 1997, the Murrey
Companies paid $7,355, $7,730, and $8,592, respectively, in disposal fees to a
landfill that is owned and operated by a company in which one of the Murrey
Companies' shareholders has an approximate 33% ownership interest.

F-187
<PAGE> 260

- ------------------------------------------------------
- ------------------------------------------------------

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WASTE
CONNECTIONS HAS NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT
FROM THAT CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS IS NOT AN OFFER TO SELL,
AND IT DOES NOT SEEK AN OFFER TO BUY, THESE SECURITIES IN ANY JURISDICTION WHERE
THE OFFER OR SALE IS NOT PERMITTED. THE INFORMATION IN THIS PROSPECTUS IS
CORRECT ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF WHEN THIS
PROSPECTUS IS DELIVERED OR THESE SECURITIES ARE SOLD.

------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary................... 3
Risk Factors......................... 9
Use of Proceeds...................... 15
Price Range of Common Stock.......... 16
Dividend Policy...................... 16
Capitalization....................... 17
Dilution............................. 18
Selected Historical, Supplemental and
Pro Forma Financial and Operating
Data............................... 19
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 25
Business............................. 36
Management........................... 52
Certain Transactions................. 59
Principal Stockholders............... 62
Description of Capital Stock......... 63
Shares Eligible for Future Sale...... 66
Plan of Distribution................. 68
Legal Matters........................ 70
Experts.............................. 70
Available Information................ 71
Index to Financial Statements........ F-1
</TABLE>

- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------

3,250,000 SHARES

[LOGO]

COMMON STOCK
-------------------
PROSPECTUS
-------------------
BT ALEX. BROWN
CIBC OPPENHEIMER
FIRST ANALYSIS
SECURITIES CORPORATION
, 1999

- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 261
APPENDIX--DESCRIPTION OF GRAPHICAL MATERIALS

INSIDE COVER

UPPER LEFT PHOTO

Caption above: "COLLECTION" - Picture of a rear end loader.

UPPER RIGHT PHOTO

Caption above: "TRANSFER" - Picture of a transfer station and transfer trailer.

LOWER LEFT PHOTO

Caption below: "DISPOSAL" - Picture of lined landfill.

LOWER RIGHT PHOTO

Caption below: "RECYCLING" - Picture of a recycling picking line.

INSIDE GATE-FOLD

OVERVIEW

Map of western United States with areas of operations highlighted and notations
of locations of the company's facilities and types of operations.
<PAGE> 262

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

<TABLE>
<S> <C>
SEC Registration Fee........................................ $ 18,572.57
NASDAQ Listing Fee*......................................... $ 17,500.00
NASD Filing Fee............................................. $ 7,180.78
Accounting Fees and Expenses*............................... $ 600,000.00
Printing and Engraving Expenses*............................ $ 200,000.00
Legal Fees and Expenses*.................................... $ 200,000.00
Transfer Agent and Registrar Fees*.......................... $ 2,500.00
Miscellaneous Expenses*..................................... $ 54,246.65
-------------
Total*...................................................... $1,100,000.00
</TABLE>

- ---------------
* Estimated.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Amended and Restated Certificate of Incorporation (the "Restated
Certificate") of Waste Connections provides that a director will not be
personally liable to Waste Connections or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law (the "Delaware Law"), which concerns unlawful
payments of dividends, stock purchases or redemptions, or (iv) for any
transaction from which the director derived an improper personal benefit. If the
Delaware Law is subsequently amended to permit further limitation of the
personal liability of directors, the liability of a director of Waste
Connections will be eliminated or limited to the fullest extent permitted by the
Delaware Law as amended.

Section 145(a) of the Delaware Law provides that a corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by the person in connection with
such action, suit or proceeding if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the person's conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which the person reasonably believed to be in or not
opposed to the best interest of the corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that the person's
conduct was unlawful.

Section 145(b) of the Delaware Law states that a corporation may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that the
person is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another
II-1
<PAGE> 263

corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by the
person in connection with the defense or settlement of such action or suit if
the person acted in good faith and in a manner the person reasonably believed to
be in or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.

Section 145(c) of the Delaware Law provides that to the extent that a
present or former director or officer of a corporation has been successful on
the merits or otherwise in defense of any action, suit or proceeding referred to
in subsections (a) and (b) of Section 145, or in defense of any claim, issue or
matter therein, such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
therewith.

Section 145(d) of the Delaware Law states that any indemnification under
subsections (a) and (b) of Section 145 (unless ordered by a court) shall be made
by the corporation only as authorized in the specific case upon a determination
that indemnification of the present or former director, officer, employee or
agent is proper in the circumstances because the person has met the applicable
standard of conduct set forth in subsections (a) and (b) of Section 145. Such
determination shall be made, with respect to a person who is a director or
officer at the time of such determination, (i) by a majority of the directors
who were not parties to such action, suit or proceeding, even though less than a
quorum, or (ii) by a committee of such directors designated by majority vote of
such directors, even though less than a quorum, or (iii) if there are no such
directors, or if such directors so direct, by independent legal counsel in a
written opinion, or (iv) by the stockholders.

Section 145(e) of the Delaware Law provides that expenses (including
attorneys' fees) incurred by an officer or director in defending any civil,
criminal, administrative or investigative action, suit or proceeding may be paid
by the corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that such
person is not entitled to be indemnified by the corporation as authorized in
Section 145. Such expenses (including attorneys' fees) incurred by former
officers and directors or other employees and agents may be so paid upon such
terms and conditions, if any, as the corporation deems appropriate.

Section 145(f) of the Delaware Law states that the indemnification and
advancement of expenses provided by, or granted pursuant to, the other
subsections of Section 145 shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of expenses may be entitled
under any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in such person's official capacity and as to action
in another capacity while holding such office.

Section 145(g) of the Delaware Law provides that a corporation shall have
the power to purchase and maintain insurance on behalf of any person who is or
was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against any liability asserted against him and incurred by such
person in any such capacity, or arising out of such person's status as such,
whether or not the corporation would have the power to indemnify such person
against such liability under the provisions of Section 145.

II-2
<PAGE> 264

Section 145(j) of the Delaware Law states that the indemnification and
advancement of expenses provided by, or granted pursuant to, Section 145 shall,
unless otherwise provided when authorized or ratified, continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.

Pursuant to Section 145 of the Delaware Law, Waste Connections has
purchased insurance on behalf of its present and former directors and officers
against any liability asserted against or incurred by them in such capacity or
arising out of their status as such. Waste Connections has entered into
indemnification agreements with each of its directors and officers providing for
mandatory indemnification and advancement of expenses to the maximum extent
permitted by the Delaware Law.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Set forth below is a listing of all sales by Waste Connections of
unregistered securities since Waste Connections was incorporated on September 9,
1997. All such sales were exempt from registration under the Securities Act,
pursuant to Section 4(2) of the Securities Act (and, as noted below, Regulation
D or Rule 701 thereunder), as they were transactions not involving a public
offering. The Company believes that each of the issuances made pursuant to
Section 4(2) was made to a sophisticated investor, who had the financial
resources to bear the information concerning Waste Connections. The
consideration paid to Waste Connections in respect of each issuance was cash,
unless otherwise indicated. Waste Connections sales described below were made by
Waste Connections without the issuance of any underwriters.

1. In September and October 1997, Waste Connections in a private
placement sold an aggregate of 2,300,000 shares of common stock at a price
of $0.01 per share and 2,499,998 shares of Series A Preferred Stock at a
price of $2.80 per share to 19 accredited investors, including certain
officers and directors of Waste Connections. Such sales were made in
accordance with Regulation D promulgated under the Securities Act.

2. In February 1998, Waste Connections issued to the shareholders of
Madera an aggregate of 1,000,000 shares of common stock and warrants to
purchase 200,000 shares of common stock at an exercise price of $4.00 per
share, all as part of the consideration for the acquisition of Madera. Such
shares and warranties were issued pursuant to Regulation D under the
Securities Act.

3. In April 1998, Waste Connections issued to Jesse's Disposal and A-1
Disposal, Inc. an aggregate of 41,818 shares of common stock, valued at
approximately $500,000, as part of the consideration for the acquisition of
certain business assets of those companies. Such shares were issued
pursuant to Regulation D under the Securities Act.

4. In May 1998, Waste Connections issued to the shareholders of
Sower's Sanitation, Inc. and Sunshine Sanitation Incorporated an aggregate
of 27,272 shares of common stock, valued at approximately $300,000, as part
of the consideration for Waste Connections' acquisition of those companies.
Such shares were issued pursuant to Regulation D under the Securities Act.

5. In May 1998, Waste Connections issued to the shareholders of T&T
Disposal, Inc. an aggregate of 13,636 shares of common stock, valued at
approximately $150,000, as part of the consideration for Waste Connections'
acquisition of that company. Such shares were issued pursuant to Regulation
D under the Securities Act.

6. In June 1998, Waste Connections issued to Contractor's Waste
Removal, L.C. an aggregate of 76,923 shares of common stock, valued at
approximately $1,000,000, as part of the consideration for Waste
Connections' acquisition of certain business assets of that company. Such
shares were issued pursuant to Regulation D under the Securities Act.

II-3
<PAGE> 265

7. In June 1998, Waste Connections issued to the shareholders of Arrow
Sanitary Services, Inc. an aggregate of 213,750 shares of common stock,
valued at approximately $3,043,800, as part of the consideration for Waste
Connections' acquisition of that company. Such shares were issued pursuant
to Regulation D under the Securities Act.

8. In July 1998, Waste Connections issued to the shareholders of
Shrader Refuse and Recycling Services Company an aggregate of 146,608
shares of common stock, valued at approximately $1,345,660, as part of the
consideration for Waste Connections' merger with that company. Such shares
were issued pursuant to Regulation D under the Securities Act.

9. In September 1998, Waste Connections issued to Youngclaus
Enterprises 6,510 shares of common stock, valued at approximately $139,000,
as part of the consideration for the acquisition of certain assets of that
business. Such shares were issued pursuant to Regulation D under the
Securities Act.

10. From September 1997 through January 19, 1999, Waste Connections
issued options to purchase an aggregate of 1,039,550 shares of common stock
to various officers and employees, with a weighted average exercise price
per share of $7.22. Such options are exercisable on various dates at prices
ranging from $2.80 to $22.125. Such options were issued pursuant to Rule
701 under the Securities Act.

11. From September 1997 through January 19, 1999, Waste Connections
issued warrants to purchase an aggregate of 1,463,935 shares to various
consultants, with a weighted average exercise price of $3.31 per share.
Such warrants are exercisable on various dates at prices ranging from $0.01
to $22.125. Such warrants were issued pursuant to Regulation D under the
Securities Act.

12. In January 1999, Waste Connections issued to certain former
shareholders of Madera an aggregate of 15,444 shares of common stock,
valued at approximately $293,000, as part of the consideration for Waste
Connections' acquisition of Madera. Such shares were issued pursuant to
Regulation D under the Securities Act.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

(a) EXHIBITS.

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
--------- -----------------------
<C> <S>
1.1-- Form of Underwriting Agreement among the Registrant and the
Underwriters
3.1* Amended and Restated Certificate of Incorporation of Waste
Connections, in effect as of the date hereof
3.2* Amended and Restated By-laws of Waste Connections, in effect
as of the date hereof
4.1* Form of Common Stock Certificate
5.1 Opinion of Shartsis, Friese & Ginsburg LLP
10.1***+ Amended and Restating Revolving Credit Agreement, dated as
of November 20, 1998, between Waste Connections and various
banks represented by BankBoston, N.A.
10.2* 1997 Stock Option Plan
10.3* Form of Option Agreement(1)
10.4* Form of Warrant Agreement(2)
10.5* Warrant Agreement and related Anti-Dilution Agreement issued
to Imperial Bank
10.6* Warrant Agreement and related Anti-Dilution Agreement issued
to BankBoston, N.A.
</TABLE>

II-4
<PAGE> 266

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
--------- -----------------------
<C> <S>
10.7* Form of Stock Purchase Agreement dated as of September 30,
1997(3)
10.8***+ Form of Third Amended and Restated Investors' Rights
Agreement dated as of December 31, 1998(3)
10.9* Employment Agreement among Waste Connections, J. Bradford
Bishop, Frank W. Cutler, James N. Cutler, Jr. and Ronald J.
Mittelstaedt, dated as of October 1, 1997
10.10* First Amended Employment Agreement between Waste Connections
and Darrell Chambliss, dated as of October 1, 1997
10.11* First Amended Employment Agreement between Waste Connections
and Michael Foos, dated as of October 1, 1997
10.12* First Amended Employment Agreement between Waste Connections
and Eric Moser, dated as of October 1, 1997
10.13* Employment Agreement between Waste Connections and Steven
Bouck, dated as of February 1, 1998
10.14* Employment Agreement between Waste Connections and Eugene V.
Dupreau, dated as of February 23, 1998
10.15* Employment Agreement between Waste Connections and Charles
B. Youngclaus, dated as of February 23, 1998
10.16+* Purchase and Sale Agreement, dated as of September 29, 1997,
between Browning-Ferris Industries, Inc., Browning-Ferris,
Inc. and Browning-Ferris Industries of Idaho, Inc., as
Sellers, and Waste Connections, Waste Connections of Idaho,
Inc. and Continental Paper Recycling, L.L.C. as Buyers
10.17+* Stock Purchase Agreement, dated as of January 26, 1998,
among Waste Connections, Waste Connections of Idaho, Inc.
and the shareholders of Waste Connections of Idaho, Inc.
10.18+* Stock Purchase Agreement, dated as of February 4, 1998,
among Waste Connections and the shareholders of Madera
Disposal Company, Inc.
10.19+* Asset Purchase Agreement, dated as of March 1, 1998, among
Waste Connections, Waste Connections of Idaho, Inc., Hunter
Enterprises, Inc. and the shareholder of Hunter Enterprises,
Inc.
10.20* Form of Indemnification Agreement entered into by Waste
Connections and each of its directors and officers
10.21+* Asset Purchase Agreement, dated as of April 8, 1998, between
Waste Connections, Waste Connections of Wyoming, Inc., A-1
Disposal, Inc., David Jones and Thomas Fries
10.22+* Asset Purchase Agreement, dated as of April 8, 1998, between
Waste Connections, Waste Connections of Wyoming, Inc. and
Gwendolyn L. Sullivan
10.23+* Stock Purchase Agreement, dated as of May 8, 1998, by and
among Waste Connections, Sunshine Sanitation, Incorporated,
Robert E. Ewing and Sherry D. Ewing
10.24+* Stock Purchase Agreement, dated as of May 8, 1998, by and
among Waste Connections, Sowers' Sanitation, Inc., James C.
Sowers and Mildred A. Sowers
10.25+* Stock Purchase Agreement, dated as of May 11, 1998, by and
among Waste Connections, T&T Disposal, Inc. and Timothy
Thomas
</TABLE>

II-5
<PAGE> 267

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
--------- -----------------------
<C> <S>
10.26+# Asset Purchase Agreement, dated as of June 1, 1998, by and
among Waste Connections, Waste Connections of Utah, Inc.,
Contractor's Waste, L.C., and Brad Kitchen, Heath Johnston
and R. Scott McQuarrie
10.27+## Stock Purchase Agreement, dated as of June 5, 1998, by and
among Waste Connections, B&B Sanitation, Inc., Red Carpet
Landfill, Inc., Darlin Equipment, Inc., Lyle J. Buller,
Larue A. Buller, the Lyle J. Buller Revocable Trust dated
10/11/96 and Larue A. Buller, Trustee of the Larue A. Buller
Revocable Trust dated 10/11/96
10.28++ Stock Purchase Agreement dated as of June 17, 1998, by and
among Waste Connections, Arrow Sanitary Service, Inc.,
Steven Giusto, Dennis Giusto, John Giusto, Michael Giusto
and Kenneth Giusto
10.29++ Stock Purchase Agreement dated as of June 25, 1998, by and
among Waste Connections, Curry Transfer and Recycling,
Oregon Waste Technology, Petty H. Smart and A. Lewis Rucker
10.30**+ Purchase and Sale Agreement dated as of June 25, 1998, by
and between Petty H. Smart and Waste Connections
10.31**+ Loan Agreement dated as of June 1, 1998, between Madera
Disposal Systems, Inc. and the California Pollution Control
Financing Authority
10.32** Employment Agreement between Waste Connections and David M.
Hall, dated as of July 8, 1998
10.33**+ Asset Purchase Agreement, dated as of July 27, 1998, by and
among Waste Connections, Waste Connections of Utah, Inc.,
Miller Containers, Inc., and Douglas L. Miller
10.34++- Agreement and Plan of Merger, dated as of July 30, 1998, by
and among Waste Connections, WCI Acquisition Corporation,
Shrader Refuse and Recycling Service Company, Duane E.
Shrader, Myrlen A. Shrader, Daniel L. Shrader, Mark S.
Shrader, Michael D. Shrader and Daren L. Shrader
10.35++- Purchase and Sale Agreement dated as of July 31, 1998, by
and between Ambler Vincent Development Company and Shrader
Refuse and Recycling Service Company
10.36**+ Asset Purchase Agreement dated as of August 21, 1998, among
Waste Connections, Waste Connection of Utah, Inc. and Joseph
E. Cunningham and Scott L. Helm
10.37**+ Asset Purchase Agreement, dated as of August 10, 1998, by
and among Waste Connections, Waste Connections of Utah,
Inc., ABC Waste Inc., and David Boren
10.38** Form of Investors' Rights Agreement, dated as of July 31,
1998(4)
10.39**+ Purchase Agreement, dated as of July 31, 1998, by and among
Waste Connections, Waste Connections of Nebraska, Inc., J &
J Sanitation Inc., Big Red Roll Off Inc., Garry L. Jeffords,
Darin R. Mueller, Leslie J. Jeffords, Leland J. Jeffords,
Bradley Rowan, Great Plains Recycling, Inc., Roma L.
Jeffords, Kristie K. Mueller, Sheri L. Jeffords and Betty L.
Hargis
10.40***+ Asset Purchase Agreement, dated as of September 18, 1998, by
and among Waste Connections, Waste Connections of Nebraska,
Inc., Affiliated Waste Services, L.L.C., Leroy's Sanitary
Service, Inc., Elden's Sanitary Service, Inc., Dennis'
Sanitary Service, Inc., LeRoy Hintz and Janice Hintz, Dennis
J. Mrsny and Mary Mrsny, and Elden W. Mrsny and Doris Mrsny
</TABLE>

II-6
<PAGE> 268

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
--------- -----------------------
<C> <S>
10.41***+ Asset Purchase Agreement, dated as of September 9, 1998, by
and among Waste Connections, Madera Disposal Systems, Inc.
and Charles B. Youngclaus
10.42***+ Asset Purchase Agreement, dated as of September 21, 1998, by
and among Waste Connections, Waste Connections of Utah,
Inc., Country Garbage Service Inc., Jay Mecham, Karl
Bankowski, and Robert Lopez
10.43***+ Asset Purchase Agreement, dated as of September 18, 1998, by
and among Waste Connections, Waste Connections of Nebraska,
Inc., Gary D. Wolff and Elizabeth L. Wolff
10.44***+ Agreement and Plan of Merger, dated as of September 21,
1998, by and among Waste Connections, WCI Acquisition
Corporation, Evergreen Waste Systems Inc., Keith H.
Alexander and Todd D. Alexander
10.45***+ Asset Purchase Agreement, dated as of September 22, 1998, by
and among Waste Connections, Curry Transfer & Recycling,
Inc., Harrell's Septic, Ralph Hirt and Renate Hirt
10.46***+ Asset Purchase Agreement, dated as of September 25, 1998, by
and among Waste Connections, Curry Transfer & Recycling,
Inc., Westlane Disposal, Loren Parker and Roberta Parker
10.47***+ Asset Purchase Agreement, dated as of October 15, 1998, by
and among Waste Connections, Waste Connections of Idaho,
Inc., R&N LLC, Rumsey Sanitation, Inc., NADL Sanitation
Inc., Bradley D. Rumsey, Emil Nejdl, and Kathy K. Rumsey
10.48***+ Purchase and Sale Agreement, dated as of October 15, 1998,
by and between R&N LLC and Waste Connections of Idaho, Inc.
10.49***+ Agreement and Plan of Merger dated as of October 22, 1998,
by and among Waste Connections, WCI Acquisition Corporation
I, WCI Acquisition Corporation II, WCI Acquisition
Corporation III, WCI Acquisition Corporation IV, Murrey's
Disposal Company, Inc., American Disposal Company, Inc.,
D.M. Disposal Co., Inc., Tacoma Recycling Company, Inc., the
Murrey Trust UTA August 5, 1993, as amended, the Bonnie L.
Murrey Revocable Trust UTA August 5, 1993, as amended,
Donald J. Hawkins and Irmgard R. Wilcox
10.50--- Purchase Agreement dated as of December 11, 1998, by and
among Waste Connections, Butler County Landfill, Inc., Kobus
Construction, Inc., Tom Kobus and Debbie Kobus
21.1 Subsidiaries of the Registrant
23.1 Consent of Shartsis, Friese & Ginsburg LLP (included in
Exhibit 5.1)
23.2 Consent of Ernst & Young LLP, Independent Auditors
23.3 Consent of Grant Thornton LLP, Independent Auditors
23.4 Consent of PricewaterhouseCoopers LLP, Independent Auditors
23.5-- Consent of Williams, Kastner & Gibbs PLLC
24.1 Power of Attorney (included in Part II of the Registration
Statement under the caption "Signatures")
</TABLE>

- ---------------
* Incorporated by reference to the exhibits filed with the Registrant's
Registration Statement on Form S-1, Registration No. 333-48029.

** Incorporated by reference to the exhibits filed with the Registrant's
Registration Statement on Form S-4, Registration No. 333-59199.

II-7
<PAGE> 269

*** Incorporated by reference to the exhibits filed with the Registrant's
Registration Statement on Form S-4, Registration No. 333-65615.

# Incorporated by reference to the exhibit filed with the Registrant's Form
8-K filed on June 15, 1998.

## Incorporated by reference to the exhibit filed with the Registrant's Form
8-K filed on June 22, 1998.

- Incorporated by reference to the exhibit filed with the Registrant's Form
8-K filed on July 1, 1998.

-- Incorporated by reference to the exhibit filed with the Registrant's Form
8-K filed on August 11, 1998.

- --- To be filed by amendment.

+ Filed without exhibits and schedules (to be provided supplementally on
request of the Commission).

++ Previously filed.

(1) Pursuant to the 1997 Stock Option Plan, Waste Connections issued options in
this form to the following officers of Waste Connections (or in certain
cases to an entity controlled by such individual) for the number of shares
of Common Stock indicated: Darrell W. Chambliss (150,000); Michael R. Foos
(150,000); Ronald J. Mittelstaedt (100,000); Eric J. Moser (85,000); Steven
F. Bouck (200,000); Eugene V. Dupreau (10,000) and Charles B. Youngclaus
(10,000). Waste Connections also issued options in this form to the
following directors of Waste Connections: Michael W. Harlan (15,000); and
William J. Razzouk (15,000).

(2) Waste Connections issued warrants in this form to the following directors of
Waste Connections (or in certain cases to an entity controlled by such
individual) for the number of shares of Common Stock indicated: James N.
Cutler, Jr. (247,000); J. Bradford Bishop (247,000); Ronald J. Mittelstaedt
(100,000). Waste Connections also issued warrants in this form as follows:
warrants to purchase 247,000 shares of Common Stock to Board consultant
Frank W. Cutler; warrants to purchase an aggregate of 200,000 shares of
Common Stock to the shareholders of Madera in connection with Waste
Connections's acquisition of Madera; warrants to purchase 66,794 shares of
Common Stock to four consultants to Waste Connections; and warrants to
purchase 50,000 shares of Common Stock to Steven Bouck.

(3) Each purchaser of shares in Waste Connections' September 1997 private
placement of 2,300,000 shares of Common Stock and 2,499,998 shares of Series
A Preferred Stock entered into a Stock Purchase Agreement and an Investors'
Rights Agreement in these forms with respect to the shares purchased.
Subsequent holders of Waste Connections' Common Stock have also become
parties to the Investors' Rights Agreement.

(4) Each of the selling shareholders of Shrader Refuse and Recycling Service
Company is a party to this Investors' Rights Agreement.

(b) FINANCIAL STATEMENT SCHEDULE.

The following Financial Statement Schedule is filed herewith and made a
part hereof:

Schedule II -- Valuation and Quantifying Accounts.

All other schedules for which provision is made in the applicable
accounting regulations of the Commission are not required under the related
instructions or are inapplicable, and therefore have been omitted.

II-8
<PAGE> 270

ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes to provide to the
Underwriters, at the closing specified in the Underwriting Agreement,
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act of 1933 shall be deemed to be part
of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-9
<PAGE> 271

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Roseville, State of
California, on January 19, 1999.

WASTE CONNECTIONS, INC.

By: /s/ RONALD J. MITTELSTAEDT
------------------------------------
Ronald J. Mittelstaedt
President, Chief Executive Officer
and Chairman

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on January 19, 1999.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ RONALD J. MITTELSTAEDT President, Chief Executive January 19, 1999
- ----------------------------------------------------- Officer and Chairman
Ronald J. Mittelstaedt

/s/ EUGENE V. DUPREAU* Director and Vice January 19, 1999
- ----------------------------------------------------- President -- Madera
Eugene V. Dupreau

/s/ MICHAEL W. HARLAN* Director January 19, 1999
- -----------------------------------------------------
Michael W. Harlan

/s/ WILLIAM J. RAZZOUK* Director January 19, 1999
- -----------------------------------------------------
William J. Razzouk

/s/ STEVEN F. BOUCK* Executive Vice President January 19, 1999
- ----------------------------------------------------- and Chief Financial Officer
Steven F. Bouck

/s/ MICHAEL R. FOOS* Vice President and January 19, 1999
- ----------------------------------------------------- Corporate Controller
Michael R. Foos

* /s/ RONALD J. MITTELSTAEDT January 19, 1999
- -----------------------------------------------------
Ronald J. Mittelstaedt
Attorney-in-Fact
</TABLE>

II-10
<PAGE> 272

WASTE CONNECTIONS, INC. AND PREDECESSORS

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(IN THOUSANDS)

<TABLE>
<CAPTION>
ADDITIONS
----------------------- DEDUCTIONS
BALANCE AT CHARGED TO CHARGED TO (WRITE-OFFS, BALANCE
BEGINNING COSTS AND OTHER NET OF AT END
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS COLLECTIONS) OF PERIOD
----------- ---------- ---------- ---------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Deducted from asset accounts:
Allowance for doubtful accounts:
Fibres International, Inc.:
January 1, 1995 through November
30, 1995..................... $ 18 $ 10 $-- $ -- $ 28
The Disposal Group Combined:
Year ended December 31, 1995.... 73 139 -- (99) 113
Period from January 1, 1996
through July 31, 1996........ 113 72 -- (94) 91
Predecessors Combined:
One month ended December 31,
1995......................... 28 -- -- -- 28
Period ended December 31,
1996......................... 28 61 -- (8) 81
Nine months ended September 30,
1997......................... 81 139 -- (97) 123
Waste Connections, Inc.:
Period from inception (September
9, 1997) through December 31,
1997......................... -- 19 -- 19
</TABLE>

II-11
<PAGE> 273

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION OF EXHIBITS NUMBER
------- ----------------------- ------
<C> <S> <C>
1.1-- Form of Underwriting Agreement among the Registrant and the
Underwriters................................................
3.1* Amended and Restated Certificate of Incorporation of Waste
Connections, in effect as of the date hereof................
3.2* Amended and Restated By-laws of Waste Connections, in effect
as of the date hereof.......................................
4.1* Form of Common Stock Certificate............................
5.1 Opinion of Shartsis, Friese & Ginsburg LLP..................
10.1***+ Amended and Restating Revolving Credit Agreement, dated as
of November 20, 1998, between Waste Connections and various
banks represented by BankBoston, N.A. ......................
10.2* 1997 Stock Option Plan......................................
10.3* Form of Option Agreement(1).................................
10.4* Form of Warrant Agreement(2)................................
10.5* Warrant Agreement and related Anti-Dilution Agreement issued
to Imperial Bank............................................
10.6* Warrant Agreement and related Anti-Dilution Agreement issued
to BankBoston, N.A. ........................................
10.7* Form of Stock Purchase Agreement dated as of September 30,
1997(3).....................................................
10.8***+ Form of Third Amended and Restated Investors' Rights
Agreement dated as of December 31, 1998(3)..................
10.9* Employment Agreement among Waste Connections, J. Bradford
Bishop, Frank W. Cutler, James N. Cutler, Jr. and Ronald J.
Mittelstaedt, dated as of October 1, 1997...................
10.10* First Amended Employment Agreement between Waste Connections
and Darrell Chambliss, dated as of October 1, 1997..........
10.11* First Amended Employment Agreement between Waste Connections
and Michael Foos, dated as of October 1, 1997...............
10.12* First Amended Employment Agreement between Waste Connections
and Eric Moser, dated as of October 1, 1997.................
10.13* Employment Agreement between Waste Connections and Steven
Bouck, dated as of February 1, 1998.........................
10.14* Employment Agreement between Waste Connections and Eugene V.
Dupreau, dated as of February 23, 1998......................
10.15* Employment Agreement between Waste Connections and Charles
B. Youngclaus, dated as of February 23, 1998................
10.16+* Purchase and Sale Agreement, dated as of September 29, 1997,
between Browning-Ferris Industries, Inc., Browning-Ferris,
Inc. and Browning-Ferris Industries of Idaho, Inc., as
Sellers, and Waste Connections, Waste Connections of Idaho,
Inc. and Continental Paper Recycling, L.L.C. as Buyers......
</TABLE>

<PAGE> 274

<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION OF EXHIBITS NUMBER
------- ----------------------- ------
<C> <S> <C>
10.17+* Stock Purchase Agreement, dated as of January 26, 1998,
among Waste Connections, Waste Connections of Idaho, Inc.
and the shareholders of Waste Connections of Idaho, Inc. ...
10.18+* Stock Purchase Agreement, dated as of February 4, 1998,
among Waste Connections and the shareholders of Madera
Disposal Company, Inc. .....................................
10.19+* Asset Purchase Agreement, dated as of March 1, 1998, among
Waste Connections, Waste Connections of Idaho, Inc., Hunter
Enterprises, Inc. and the shareholder of Hunter Enterprises,
Inc. .......................................................
10.20* Form of Indemnification Agreement entered into by Waste
Connections and each of its directors and officers..........
10.21+* Asset Purchase Agreement, dated as of April 8, 1998, between
Waste Connections, Waste Connections of Wyoming, Inc., A-1
Disposal, Inc., David Jones and Thomas Fries................
10.22+* Asset Purchase Agreement, dated as of April 8, 1998, between
Waste Connections, Waste Connections of Wyoming, Inc. and
Gwendolyn L. Sullivan.......................................
10.23+* Stock Purchase Agreement, dated as of May 8, 1998, by and
among Waste Connections, Sunshine Sanitation, Incorporated,
Robert E. Ewing and Sherry D. Ewing.........................
10.24+* Stock Purchase Agreement, dated as of May 8, 1998, by and
among Waste Connections, Sowers' Sanitation, Inc., James C.
Sowers and Mildred A. Sowers................................
10.25+* Stock Purchase Agreement, dated as of May 11, 1998, by and
among Waste Connections, T&T Disposal, Inc. and Timothy
Thomas......................................................
10.26+# Asset Purchase Agreement, dated as of June 1, 1998, by and
among Waste Connections, Waste Connections of Utah, Inc.,
Contractor's Waste, L.C., and Brad Kitchen, Heath Johnston
and R. Scott McQuarrie......................................
10.27+## Stock Purchase Agreement, dated as of June 5, 1998, by and
among Waste Connections, B&B Sanitation, Inc., Red Carpet
Landfill, Inc., Darlin Equipment, Inc., Lyle J. Buller,
Larue A. Buller, the Lyle J. Buller Revocable Trust dated
10/11/96 and Larue A. Buller, Trustee of the Larue A. Buller
Revocable Trust dated 10/11/96..............................
10.28++ Stock Purchase Agreement dated as of June 17, 1998, by and
among Waste Connections, Arrow Sanitary Service, Inc.,
Steven Giusto, Dennis Giusto, John Giusto, Michael Giusto
and Kenneth Giusto..........................................
10.29++ Stock Purchase Agreement dated as of June 25, 1998, by and
among Waste Connections, Curry Transfer and Recycling,
Oregon Waste Technology, Petty H. Smart and A. Lewis
Rucker......................................................
10.30**+ Purchase and Sale Agreement dated as of June 25, 1998, by
and between Petty H. Smart and Waste Connections............
10.31**+ Loan Agreement dated as of June 1, 1998, between Madera
Disposal Systems, Inc. and the California Pollution Control
Financing Authority.........................................
10.32** Employment Agreement between Waste Connections and David M.
Hall, dated as of July 8, 1998..............................
10.33**+ Asset Purchase Agreement, dated as of July 27, 1998, by and
among Waste Connections, Waste Connections of Utah, Inc.,
Miller Containers, Inc., and Douglas L. Miller..............
</TABLE>
<PAGE> 275

<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION OF EXHIBITS NUMBER
------- ----------------------- ------
<C> <S> <C>
10.34++- Agreement and Plan of Merger, dated as of July 30, 1998, by
and among Waste Connections, WCI Acquisition Corporation,
Shrader Refuse and Recycling Service Company, Duane E.
Shrader, Myrlen A. Shrader, Daniel L. Shrader, Mark S.
Shrader, Michael D. Shrader and Daren L. Shrader............
10.35++- Purchase and Sale Agreement dated as of July 31, 1998, by
and between Ambler Vincent Development Company and Shrader
Refuse and Recycling Service Company........................
10.36**+ Asset Purchase Agreement dated as of August 21, 1998, among
Waste Connections, Waste Connection of Utah, Inc. and Joseph
E. Cunningham and Scott L. Helm.............................
10.37**+ Asset Purchase Agreement, dated as of August 10, 1998, by
and among Waste Connections, Waste Connections of Utah,
Inc., ABC Waste Inc., and David Boren.......................
10.38** Form of Investors' Rights Agreement, dated as of July 31,
1998(4).....................................................
10.39**+ Purchase Agreement, dated as of July 31, 1998, by and among
Waste Connections, Waste Connections of Nebraska, Inc., J &
J Sanitation Inc., Big Red Roll Off Inc., Garry L. Jeffords,
Darin R. Mueller, Leslie J. Jeffords, Leland J. Jeffords,
Bradley Rowan, Great Plains Recycling, Inc., Roma L.
Jeffords, Kristie K. Mueller, Sheri L. Jeffords and Betty L.
Hargis......................................................
10.40***+ Asset Purchase Agreement, dated as of September 18, 1998, by
and among Waste Connections, Waste Connections of Nebraska,
Inc., Affiliated Waste Services, L.L.C., Leroy's Sanitary
Service, Inc., Elden's Sanitary Service, Inc., Dennis'
Sanitary Service, Inc., LeRoy Hintz and Janice Hintz, Dennis
J. Mrsny and Mary Mrsny, and Elden W. Mrsny and Doris
Mrsny.......................................................
10.41***+ Asset Purchase Agreement, dated as of September 9, 1998, by
and among Waste Connections, Madera Disposal Systems, Inc.
and Charles B. Youngclaus...................................
10.42***+ Asset Purchase Agreement, dated as of September 21, 1998, by
and among Waste Connections, Waste Connections of Utah,
Inc., Country Garbage Service Inc., Jay Mecham, Karl
Bankowski, and Robert Lopez.................................
10.43***+ Asset Purchase Agreement, dated as of September 18, 1998, by
and among Waste Connections, Waste Connections of Nebraska,
Inc., Gary D. Wolff and Elizabeth L. Wolff..................
10.44***+ Agreement and Plan of Merger, dated as of September 21,
1998, by and among Waste Connections, WCI Acquisition
Corporation, Evergreen Waste Systems Inc., Keith H.
Alexander and Todd D. Alexander.............................
10.45***+ Asset Purchase Agreement, dated as of September 22, 1998, by
and among Waste Connections, Curry Transfer & Recycling,
Inc., Harrell's Septic, Ralph Hirt and Renate Hirt..........
10.46***+ Asset Purchase Agreement, dated as of September 25, 1998, by
and among Waste Connections, Curry Transfer & Recycling,
Inc., Westlane Disposal, Loren Parker and Roberta Parker....
10.47***+ Asset Purchase Agreement, dated as of October 15, 1998, by
and among Waste Connections, Waste Connections of Idaho,
Inc., R&N LLC, Rumsey Sanitation, Inc., NADL Sanitation
Inc., Bradley D. Rumsey, Emil Nejdl, and Kathy K. Rumsey....
</TABLE>

<PAGE> 276

<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION OF EXHIBITS NUMBER
------- ----------------------- ------
<C> <S> <C>
10.48***+ Purchase and Sale Agreement, dated as of October 15, 1998,
by and between R&N LLC and Waste Connections of Idaho,
Inc.........................................................
10.49***+ Agreement and Plan of Merger dated as of October 22, 1998,
by and among Waste Connections, WCI Acquisition Corporation
I, WCI Acquisition Corporation II, WCI Acquisition
Corporation III, WCI Acquisition Corporation IV, Murrey's
Disposal Company, Inc., American Disposal Company, Inc.,
D.M. Disposal Co., Inc., Tacoma Recycling Company, Inc., the
Murrey Trust UTA August 5, 1993, as amended, the Bonnie L.
Murrey Revocable Trust UTA August 5, 1993, as amended,
Donald J. Hawkins and Irmgard R. Wilcox.....................
10.50--- Purchase Agreement dated as of December 11, 1998, by and
among Waste Connections, Butler County Landfill, Inc., Kobus
Construction, Inc., Tom Kobus and Debbie Kobus..............
21.1 Subsidiaries of the Registrant..............................
23.1 Consent of Shartsis, Friese & Ginsburg LLP (included in
Exhibit 5.1)................................................
23.2 Consent of Ernst & Young LLP, Independent Auditors..........
23.3 Consent of Grant Thornton LLP, Independent Auditors.........
23.4 Consent of PricewaterhouseCoopers LLP, Independent
Auditors....................................................
23.5-- Consent of Williams, Kastner & Gibbs PLLC...................
24.1 Power of Attorney (included in Part II of the Registration
Statement under the caption "Signatures")...................
</TABLE>

- ---------------
* Incorporated by reference to the exhibits filed with the Registrant's
Registration Statement on Form S-1, Registration No. 333-48029.

** Incorporated by reference to the exhibits filed with the Registrant's
Registration Statement on Form S-4, Registration No. 333-59199.

*** Incorporated by reference to the exhibits filed with the Registrant's
Registration Statement on Form S-4, Registration No. 333-65615.

# Incorporated by reference to the exhibit filed with the Registrant's Form
8-K filed on June 15, 1998.

## Incorporated by reference to the exhibit filed with the Registrant's Form
8-K filed on June 22, 1998.

- Incorporated by reference to the exhibit filed with the Registrant's Form
8-K filed on July 1, 1998.

-- Incorporated by reference to the exhibit filed with the Registrant's Form
8-K filed on August 11, 1998.

- --- To be filed by amendment.

+ Filed without exhibits and schedules (to be provided supplementally on
request of the Commission).

++ Previously filed.

<PAGE> 1

EXHIBIT 5.1

January 19, 1999

Waste Connections, Inc.
2260 Douglas Boulevard, Suite 280
Roseville, California 95661

Ladies and Gentlemen:

We have acted as counsel for Waste Connections, Inc. (the "Company") in
connection with its Registration Statement on Form S-1 (File No. 333-70253)
filed on January 7, 1999, with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, and Amendment No. 1 thereto, filed on
January 19, 1999, relating to up to 3,250,000 shares of the Company's Common
Stock, $0.01 par value, to be sold by the Company. We are of the opinion that
the shares being so registered for sale have been duly authorized and, when sold
and delivered as contemplated in such Registration Statement, will be validly
issued, fully paid and nonassessable.

We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to such Registration Statement.

Very truly yours,

SHARTSIS, FRIESE & GINSBURG LLP

By /s/ Carolyn S. Reiser
Carolyn S. Reiser

<PAGE> 1
EXHIBIT 21.1

SUBSIDIARIES OF WASTE CONNECTIONS, INC.

Waste Connections of Idaho, Inc., a Delaware corporation

Waste Connections of Washington, Inc., a Washington corporation

Waste Connections of Wyoming, Inc., a Delaware corporation

Madera Disposal Systems, Inc., a California corporation

Sunshine Sanitation, Incorporated, a South Dakota corporation

Sowers' Sanitation, Inc., a South Dakota corporation

Waste Connections of Utah, Inc., a Delaware corporation

B&B Sanitation, Inc., an Oklahoma corporation

Red Carpet Landfill, Inc., an Oklahoma corporation

Darlin Equipment, Inc., an Oklahoma corporation

Arrow Sanitary Service, Inc., an Oregon corporation doing business as "Oregon
Paper Fiber"

Curry Transfer and Recycling, Inc., an Oregon corporation

Waste Connections International, Inc., a Washington corporation (wholly owned
by Waste Connections of Washington, Inc.)

Oregon Waste Technology, Inc., an Oregon corporation (wholly owned by Curry
Transfer and Recycling, Inc.)

T&T Disposal, Inc., a Wyoming corporation

Waste Connections of Nebraska, Inc., a Delaware corporation

Shrader Refuse and Recycling Service Company, a Nebraska corporation

Big Red Roll Off, Inc., a Nebraska corporation

J&J Sanitation, Inc., a Nebraska corporation

Evergreen Waste Systems, Inc., an Oregon corporation

Siuslaw Disposal, Inc., an Oregon corporation

Moreland Sanitary Services, Inc., an Oregon corporation

Columbia Sanitary Services, Inc., an Oregon corporation

Mother Lode Sani-Hut, Inc., a California corporation

Amador Disposal Service, Inc., a California corporation

City Sanitation, Inc., a Utah corporation

Butler County Landfill, Inc., a Nebraska corporation

Roche & Sons, Inc., a Utah corporation

Murrey's Disposal Company, Inc., a Washington corporation

American Disposal Company, Inc. a Washington corporation

D. M. Disposal Co., Inc., a Washington corporation

Tacoma Recycling Company, Inc., a Washington corporation

<PAGE> 1

EXHIBIT 23.2

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated March 6, 1998, with respect to the consolidated
financial statements of Waste Connections, Inc. and Predecessors included in
Amendment No. 1 to the Registration Statement (Form S-1 No. 333-70253) and
related Prospectus of Waste Connections, Inc. for the registration of 3,737,500
shares of common stock.

Our audits also included the financial statement schedule of Waste Connections,
Inc. and Predecessors listed in Item 16(b). This schedule is the responsibility
of the Company's management. Our responsibility is to express an opinion based
on our audits. In our opinion, the financial statement schedule referred to
above, when considered in relation to the basic financial statements taken as a
whole, presents fairly in all material respects the information set forth
therein.

We also consent to the reference to our firm under the caption "Experts" and to
the use of our report dated October 2, 1998 (except for Note 12, as to which the
date is October 22, 1998) with respect to the combined financial statements of
the Murrey Companies included in Amendment No. 1 to the Registration Statement
(Form S-1 No. 333-70253) and related Prospectus of Waste Connections, Inc. for
the registration of 3,737,500 shares of its common stock.

We also consent to the reference to our firm under the caption "Experts" and to
the use of our report dated February 20, 1998, with respect to the financial
statements of Madera Disposal Systems, Inc. included in Amendment No. 1 to the
Registration Statement (Form S-1 No. 333-70253) and related Prospectus of Waste
Connections, Inc. for the registration of 3,737,500 shares of its common stock.

We also consent to the reference to our firm under the caption "Experts" and to
the use of our report dated July 8, 1998, with respect to the financial
statements of Arrow Sanitary Service, Inc. included in Amendment No. 1 to the
Registration Statement (Form S-1 No. 333-70253) and related Prospectus of Waste
Connections, Inc. for the registration of 3,737,500 shares of its common stock.

We also consent to the reference to our firm under the caption "Experts" and to
the use of our report dated August 26, 1998, with respect to the financial
statements of Contractor's Waste Removal, L.C., included in Amendment No. 1 to
the Registration Statement (Form S-1 No. 333-70253) and related Prospectus of
Waste Connections, Inc. for the registration of 3,737,500 shares of its common
stock.

We also consent to the reference to our firm under the caption "Experts" and to
the use of our report dated July 31, 1998, with respect to the financial
statements of Curry Transfer and Recycling, Inc., included in Amendment No. 1 to
the Registration Statement (Form S-1 No. 333-70253) and related Prospectus of
Waste Connections, Inc. for the registration of 3,737,500 shares of its common
stock.

We also consent to the reference to our firm under the caption "Experts" and to
the use of our report dated December 30, 1998, with respect to the financial
statements of Butler County Landfill, Inc. and Kobus Construction, Inc.,
included in Amendment No. 1 to the Registration Statement (Form S-1 No.
333-70253) and related Prospectus of Waste Connections, Inc. for the
registration of 3,737,500 shares of its common stock.

We also consent to the reference to our firm under the caption "Experts" and to
the use of our report dated January 19, 1999, with respect to the supplemental
consolidated financial statements of Waste Connections, Inc. and Predecessors
included in Amendment No. 1 to the Registration Statement (Form S-1 No.
333-70253) and related Prospectus of Waste Connections, Inc. for the
registration of 3,737,500 shares of common stock.

ERNST & YOUNG LLP
Sacramento, California

January 19, 1999

<PAGE> 1
EXHIBIT 23.3

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We have issued our reports dated August 24, 1998, October 1, 1998 and October
7, 1998, accompanying the financial statements of Shrader Refuse and Recycling
Service Company, B&B Sanitation, and J & J Sanitation, respectively. These
reports and financial statements are contained in the Amendment No. 1 to the
Registration Statement (Form S-1 No. 333-70253) and related Prospectus of
Waste Connections, Inc. We consent to the use of the aforementioned reports in
this Amendment No. 1 to the Registration Statement (Form S-1 No. 333-70253)
and Prospectus, and to the use of our name as it appears under the caption
"Experts."

GRANT THORNTON LLP

Lincoln, Nebraska
January 19, 1999

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EXHIBIT 23.4

CONSENT OF PRICEWATERHOUSECOOPERS LLP, INDEPENDENT AUDITORS

We consent to the inclusion in this amendment no. 1 to registration statement on
Form S-1 (File No. 333-70253) and the related prospectus of Waste Connections,
Inc. for the registration of 3,737,500 shares of common stock of our report
dated December 30, 1998, on our audit of the combined financial statements of
Amador Disposal Services, Inc. and Mother Lode Sani-Hut, Inc. We also consent to
the reference to our firm under the caption "Experts".

/s/ PricewaterhouseCoopers LLP

Sacramento, California

January 19, 1999