<PAGE> 1
[LOGO]
- --------------------------------------------------------------------------------
$200,000,000
- --------------------------------------------------------------------------------
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.
From time to time, we may issue any of the following securities:
- debt securities
- preferred stock
- common stock
We will provide the specific terms of these securities in one or more
supplements to this prospectus. You should read this prospectus and any
prospectus supplement carefully before you invest.
Our common stock is traded on the Nasdaq National Market under the symbol
"WCNX." The applicable prospectus supplement will contain information, where
applicable, as to any other listing on the Nasdaq National Market or any
securities exchange of the securities covered by the prospectus supplement.
We may sell the securities directly to investors, through agents designated from
time to time or to or through underwriters or dealers. See "Plan of
Distribution." If any underwriters are involved in the sale of any securities in
respect of which this prospectus is being delivered, the names of such
underwriters and any applicable commissions or discounts will be set forth in a
prospectus supplement. The net proceeds we expect to receive from such sale also
will be set forth in a prospectus supplement.
This prospectus may not be used to offer or sell any securities unless
accompanied by a prospectus supplement.
INVESTING IN THE SECURITIES OFFERED UNDER THIS PROSPECTUS INVOLVES RISKS. SEE
"RISK FACTORS" BEGINNING ON PAGE 4.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION 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.
Prospectus dated September 30, 1999.
<PAGE> 2
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.
Waste Connections' executive offices are located at 2260 Douglas Boulevard,
Suite 280, Roseville, California 95661. Our telephone number is (916) 772-2221.
ABOUT THIS PROSPECTUS
This prospectus is part of a Registration Statement that we filed with the
Securities and Exchange Commission (the "SEC"), which registers the distribution
of the securities offered under this prospectus. The Registration Statement,
including the attached exhibits and schedules, contains additional information
about our company and the securities. The Registration Statement can be read at
the SEC's web site or at the offices mentioned under the heading "Where You Can
Find More Information."
The Registration Statement uses a "shelf" registration process. Under the
shelf process, we may, from time to time over approximately the next two years,
sell debt securities, preferred stock and common stock, either separately or in
units, in one or more offerings, up to a total dollar amount of $200,000,000 or
the equivalent of this amount in foreign currencies or foreign currency units.
This prospectus provides you with a general description of the securities
we may offer. Each time we sell securities, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering. The prospectus supplement may also add, update or change information
contained in this prospectus. You should read both this prospectus and any
prospectus supplement, together with additional information described under the
heading "Where You Can Find More Information."
You should rely only on the information in this prospectus and in any
prospectus supplement, including any information incorporated by reference. We
have not authorized anyone to provide you with different information. We may
only use this prospectus to sell securities if it is accompanied by a prospectus
supplement. We are only offering the securities in states where offers are
permitted. You should not assume that the information in this prospectus or any
prospectus supplement is accurate at any date other than the date on the cover
page of these documents.
This prospectus contains registered service marks, trademarks and trade names of
Waste Connections, including the Waste Connections, Inc. name and logo.
3
<PAGE> 3
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.
Any or all of the following risks could materially and adversely affect our
business, financial condition and results of operations. As a result, 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. Our actual results could differ materially from those
anticipated in the forward-looking statements as a result of the risks described
below and elsewhere in this prospectus and other factors that we cannot now
foresee.
WE MAY HAVE DIFFICULTY EXECUTING OUR GROWTH STRATEGY
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.
RAPID GROWTH MAY STRAIN OUR MANAGEMENT, OPERATIONAL, FINANCIAL AND OTHER
RESOURCES
From inception through September 22, 1999, we acquired 90 solid waste
services related businesses. 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.
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 we encounter in the
integration process could materially and adversely affect our business and
financial results.
OUR GROWTH MAY BE LIMITED BY THE INABILITY TO MAKE ACQUISITIONS ON ATTRACTIVE
TERMS
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 PURCHASERS, SOME OF WHICH HAVE
GREATER FINANCIAL RESOURCES THAN WASTE CONNECTIONS
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. Increased competition for acquisition candidates may make
fewer acquisition opportunities available to us, and may cause us to
4
<PAGE> 4
make acquisitions on less attractive terms, such as higher purchase prices.
Acquisition costs may increase to levels beyond our financial capability or to
levels 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, we may find it difficult to
make acquisitions on attractive terms.
TIMING AND STRUCTURE OF ACQUISITIONS MAY CAUSE FLUCTUATIONS IN OUR QUARTERLY
RESULTS
We are not always able to control the timing of our acquisitions. Obtaining
third party consents and regulatory approvals, completing due diligence on the
acquired businesses, and finalizing transaction terms and documents are not
entirely within our control and may take longer than we anticipate, causing
certain transactions to be delayed. Our inability to complete acquisitions in
the time frames that we expect may adversely affect our business, financial
condition and operating results. In addition, whether we account for an
acquisition using the purchase or the pooling-of-interests method determines how
the acquisition affects our financial results.
WE HAVE ONLY A LIMITED OPERATING HISTORY FROM WHICH YOU MAY EVALUATE OUR
BUSINESS AND PROSPECTS
Waste Connections was formed in September 1997 and commenced operations on
October 1, 1997. Accordingly, 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
senior management team may not be able to manage Waste Connections successfully
or to implement our operating and growth strategies.
WE MAY BE UNABLE TO COMPETE EFFECTIVELY WITH GOVERNMENTAL SERVICE PROVIDERS AND
LARGER AND BETTER CAPITALIZED COMPANIES
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.
WE MAY LOSE CONTRACTS THROUGH COMPETITIVE BIDDING, EARLY TERMINATION OR
GOVERNMENTAL ACTION
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"). Annexation would
5
<PAGE> 5
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 from 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 MAY NOT HAVE ENOUGH CAPITAL OR BE ABLE TO RAISE ENOUGH ADDITIONAL CAPITAL ON
SATISFACTORY TERMS TO MEET OUR CAPITAL REQUIREMENTS
Continued growth will require additional capital. We expect to finance
future acquisitions through cash from operations, borrowings under our credit
facility, issuing additional 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 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 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 DEPEND SIGNIFICANTLY ON THE SERVICES OF THE MEMBERS OF OUR SENIOR MANAGEMENT
TEAM, AND 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.
THE GEOGRAPHIC CONCENTRATION OF OUR BUSINESS MAKES OUR OPERATING RESULTS
VULNERABLE TO DOWNTURNS IN REGIONAL ECONOMIES
We operate in 14 states: California, Idaho, Iowa, Kansas, Minnesota,
Nebraska, New Mexico, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington
and Wyoming. We expect to focus our operations on the Western U.S. for at least
the foreseeable future. A significant portion of our revenues are derived from
services provided in Washington. 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. We
may not complete enough acquisitions in other markets to lessen our geographic
concentration.
SEASONAL FLUCTUATIONS MAY ADVERSELY AFFECT OUR BUSINESS AND FINANCIAL RESULTS
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. Adverse winter weather
conditions slow waste collection activities, resulting in higher labor and
operational costs. Greater precipitation in the
6
<PAGE> 6
winter increases the weight of collected waste, resulting in higher disposal
costs, which are calculated on a per ton basis. Because of these factors, we
expect operating income to be generally lower in the winter months.
EXTENSIVE AND EVOLVING ENVIRONMENTAL LAWS AND REGULATIONS MAY ADVERSELY AFFECT
OUR BUSINESS
Environmental laws and regulations have been enforced more and more
stringently in recent 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 described 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.
- WE MAY BE UNABLE TO OBTAIN AND MAINTAIN LICENSES OR PERMITS AND ZONING,
ENVIRONMENTAL AND/OR OTHER LAND USE APPROVALS THAT WE NEED TO OWN AND
OPERATE OUR LANDFILLS
These licenses or permits and approvals are difficult and time-consuming
to obtain and renew, and elected officials and citizens' groups
frequently oppose them. Failure to obtain and maintain the permits and
approvals we need to own or operate landfills (including increasing their
capacity) could materially and adversely affect our business and
financial condition.
- EXTENSIVE REGULATIONS THAT GOVERN THE DESIGN, OPERATION AND CLOSURE OF
LANDFILLS MAY ADVERSELY AFFECT OUR BUSINESS
These regulations include the regulations ("Subtitle D Regulations") that
establish minimum federal requirements adopted by the U.S. Environmental
Protection Agency in October 1991 under Subtitle D of the Resource
Conservation and Recovery Act of 1976. 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.
- WE MAY BE SUBJECT IN THE NORMAL COURSE OF BUSINESS TO JUDICIAL AND
ADMINISTRATIVE PROCEEDINGS INVOLVING FEDERAL, STATE OR LOCAL AGENCIES OR
CITIZENS' GROUPS, WHICH COULD ADVERSELY AFFECT OUR BUSINESS
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.
7
<PAGE> 7
- WE MAY INCUR LIABILITIES FOR ENVIRONMENTAL DAMAGE
We are 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 the
liabilities fully. 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.
OUR GROWTH MAY BE LIMITED BY THE INABILITY TO OBTAIN NEW LANDFILLS AND EXPAND
EXISTING ONES
We currently own and operate a number of landfills. 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.
OUR ACCRUALS FOR OUR LANDFILL CLOSURE AND POST-CLOSURE COSTS MAY BE INADEQUATE
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 the
8
<PAGE> 8
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.
WE MAY INCUR ADDITIONAL 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 amount 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.
FAILURE TO COMPLY WITH COVENANTS AND CONDITIONS OF OUR CREDIT FACILITY COULD
ADVERSELY AFFECT OUR BUSINESS
Our credit facility requires us to obtain the consent of the lending banks
before acquiring any other business for more than $20 million in cash and
assumed debt. If we are not able to obtain our banks' consent to acquisitions of
this size, we may not be able to complete them, 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 these 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.
FLUCTUATIONS IN PRICES FOR RECYCLED COMMODITIES MAY ADVERSELY AFFECT OUR
OPERATING RESULTS
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 adversely affect our operating results.
STOCKHOLDERS WILL EXPERIENCE DILUTION WHEN WE ISSUE ADDITIONAL SHARES OF OUR
COMMON STOCK
Investors will experience dilution when we issue common stock on the
exercise of outstanding stock options and warrants or as consideration for
acquisitions. We have registered 12,644,165 additional shares of common stock
since our May 1998 initial public offering to be issued from time to time in
connection with acquisitions and have issued 6,444,570 of these shares as of the
date of this prospectus. When all of these shares have been issued, we expect to
register additional shares of common stock for acquisitions in the future. We
also issued an additional 3,999,307 shares of common stock in a follow-on public
offering in February 1999, and we may make additional primary public offerings
of our common stock in the future. These future issuances may cause additional
dilution.
9
<PAGE> 9
PROVISIONS IN OUR CHARTER AND BYLAWS MAY DETER CHANGES IN CONTROL THAT COULD
BENEFIT OUR STOCKHOLDERS
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 our stockholders' ability to approve
transactions that they believe are in their best interests.
WE DO NOT INTEND TO PAY CASH DIVIDENDS ON THE COMMON STOCK
We intend to retain all earnings to help fund the operation and expansion
of our business. In addition, our credit facility prohibits us from paying cash
dividends without the consent of our lenders.
FAILURE TO MAKE TIMELY YEAR 2000 MODIFICATIONS MAY AFFECT OUR OPERATIONS
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 have completed Year 2000 conversions at the
following locations: Vancouver, Idaho Falls, Oregon Paper Fibers, Mountain Home,
Layton, Orem, Price, Amador, Madera, Kingsburg, Riverdale, Mammoth, Brookings,
Florence, Yakima and Heartland, at a total cost of approximately $125,000.
Upcoming Year 2000 conversions relating to recent acquisitions include Denver
and Las Cruces, at an estimated additional cost of approximately $25,000. These
will be concluded before the end of 1999. Additional acquisitions in the future
may require additional Year 2000 conversions, at additional cost. 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 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.
10
<PAGE> 10
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The ratio of earnings to combined fixed charges and preferred stock
dividends for Waste Connections are set forth below for the periods indicated.
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED
----------------------------------------------- JUNE 30,
1994 1995 1996 1997 1998 1999
------- ------- ------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
combined fixed charges and
preferred stock
dividends................. 3.1 8.3 2.9 N/A(1) 2.2 1.9
Pro Forma ratio of earnings
to combined fixed charges
and preferred stock
dividends(2).............. 1.9 1.6
</TABLE>
- ----------------
(1) For the year ended December 31, 1997, the Company's earnings were inadequate
to cover combined fixed charges and preferred stock dividends. The coverage
deficiency was $3,433,000.
(2) Gives effect to our acquisitions of Columbia Resource Co., LP and Finley
Buttes Limited Partnership and International Environmental Industries, Inc.
as if such acquisitions occurred on January 1, 1998.
For purposes of calculating the ratios, fixed charges consist of interest
on debt, amortization of discount on debt, and the interest portion of rental
expense on operating leases.
The ratio of earnings to fixed charges is calculated as follows:
(income before extraordinary charges and income taxes) + (fixed charges) -
(capitalized interest)
(fixed charges)
USE OF PROCEEDS
Unless the applicable prospectus supplement states otherwise, we intend to
use the net proceeds from the sale of the offered securities to reduce our
outstanding indebtedness under our credit facility, to finance acquisitions, for
capital expenditures and for 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.
DESCRIPTION OF DEBT SECURITIES
We may from time to time offer and sell debt securities (the "Debt
Securities"), consisting of debentures, notes and/or other unsecured evidences
of indebtedness. The Debt Securities will be either our unsecured senior debt
securities (the "Senior Debt Securities"), or our unsecured subordinated debt
securities (the "Subordinated Debt Securities"). The Senior Debt Securities will
be issued under an Indenture (the "Senior Indenture") between us and a trustee
(the "Senior Trustee"). The Senior Debt Securities will be our direct, unsecured
obligations and will rank equally with all of our outstanding unsecured senior
indebtedness. The Subordinated Debt Securities will be issued under a second
indenture (the "Subordinated Indenture") between us and a trustee (the
"Subordinated Trustee"), which may be the same as the Senior Trustee. The
Subordinated Debt Securities will be our direct, unsecured obligations and,
unless otherwise specified in the prospectus supplement relating to a particular
11
<PAGE> 11
series of Subordinated Securities offered by such prospectus supplement, will be
subject to the subordination provisions. The Senior Indenture and the
Subordinated Indenture are together called the "Indentures," and the Senior
Trustee and the Subordinated Trustee are together called the "Trustee."
The following summary of certain provisions of the Indentures is not
complete. You should refer to the form of each Indenture, copies of which are
exhibits to the Registration Statement. Section references below are to the
section in the applicable Indenture. Capitalized terms have the meanings
assigned to them in the applicable Indenture. The referenced sections of the
Indentures and the definitions of capitalized terms are incorporated by
reference.
The following section describes certain general terms and provisions of the
Debt Securities. The particular terms of the Debt Securities offered by any
prospectus supplement will be described in the applicable prospectus supplement.
Other than as may be indicated in the applicable prospectus supplement, no
provisions of the Indentures afford holders of the Debt Securities protection in
the event of a highly leveraged transaction involving Waste Connections.
General. The Indentures do not limit the aggregate principal amount of Debt
Securities that we may issue. Each Indenture provides that Debt Securities of
any series may be issued under it up to the aggregate principal amount
authorized from time to time by us and may be denominated in any currency or
currency unit that we designate. Neither the Indentures nor the Debt Securities
will limit or otherwise restrict the amount of other indebtedness that we may
incur or the other securities that we or any of our subsidiaries may issue
(section 3.01).
Debt Securities of a series may be issuable in registered form without
coupons ("Registered Securities"), in bearer form with or without coupons
attached ("Bearer Securities") or in the form or one or more global securities
in registered or bearer form (each, a "Global Security"). Bearer Securities, if
any, will be offered only to non-United States persons and to offices located
outside the United States of certain United States financial institutions.
The prospectus supplement relating to each series of Debt Securities being
offered will specify the particular terms of those Debt Securities. The terms
may include:
- the title and type of the Debt Securities;
- any limit on the aggregate principal amount of the Debt Securities or
aggregate initial public offering price;
- the priority of payment of the Debt Securities;
- the price or prices (which may be expressed as a percentage of the
aggregate principal amount thereof) at which the Debt Securities will be
issued;
- the date or dates on which the principal and premium, if any, of the Debt
Securities are payable;
- the interest rate or rates (which may be fixed or variable) of the Debt
Securities, if any;
- the Interest Payment Date or Dates, if any, or the method or methods by
which such dates may be determined, if any, the date or dates on which
payment of interest, if any, will commence, and the Regular Record Dates
for such Interest Payment Dates;
- the extent to which any of the Debt Securities will be issuable in
temporary or permanent global form, or the manner in which any interest
payable on a temporary or permanent Global Debt Security will be paid;
12
<PAGE> 12
- each office or agency where, subject to the terms of the applicable
Indenture, the Debt Securities may be presented for registration or
transfer or exchange;
- the place or places where, subject to the terms of the applicable
Indenture, the principal (and premium, if any) and interest, if any, on
the Debt Securities will be payable;
- the date or dates, if any, after which the Debt Securities may be
redeemed or purchased in whole or in part, at our option or mandatorily
pursuant to any sinking, purchase or analogous fund or may be required to
be purchased or redeemed at the option of the holder, and the redemption
or repayment price or prices;
- the denomination or denominations in which the Debt Securities will be
issuable;
- the currency, currencies or units based on or related to currencies for
which the Debt Securities may be purchased and the currency, currencies
or currency units in which the principal of, premium, if any, and any
interest on such Debt Securities may be payable;
- whether the Debt Securities will be convertible into shares of Common or
Preferred Stock and if so, the terms of such conversion;
- any index used to determine the amount of payments of principal of,
premium, if any, and interest on the Debt Securities;
- whether any of the Debt Securities are to be issuable as Bearer
Securities and/or Registered Securities, and if issuable as Bearer
Securities, any limitations on issuance of such Bearer Securities and any
provisions regarding the transfer or exchange of such Bearer Securities
(including exchange for registered Debt Securities of the same series);
- the payment of any additional amounts with respect to the Debt
Securities;
- whether any of the Debt Securities will be issued as Original Issue
Discount Securities (as defined below);
- information with respect to book-entry procedures, if any;
- any additional covenants or Events of Default not currently set forth in
the applicable Indenture; and
- any other terms of the Debt Securities not inconsistent with the
provisions of the applicable Indenture.
If any of the Debt Securities are sold for one or more foreign currencies
or foreign currency units or if the principal of, premium, if any, or interest
on any series of Debt Securities is payable in one or more foreign currencies or
foreign currency units, the restrictions, elections, tax consequences, specific
terms and other information with respect to such issue of Debt Securities and
such currencies or currency units will be set forth in the applicable prospectus
supplement (section 3.01).
Debt Securities may be issued as original issue discount Debt Securities
(bearing no interest or interest at a rate that at the time of issuance is below
market rates) ("Original Issue Discount Securities"), to be sold at a
substantial discount below their stated principal amount. There may not be any
periodic payments of interest on Original Issue Discount Securities. In the
event of an acceleration of the maturity of any Original Issue Discount
Security, the amount payable to the holder of such Original Issue Discount
Security upon such acceleration will be determined in accordance with the
prospectus supplement, the terms of such security and the Indenture, but will be
an amount less than the amount payable at the maturity of the principal of such
Original Issue Discount Security (section 7.02). The federal income tax
considerations with respect to Original Issue Discount Securities will be
explained in the prospectus supplement we prepare for the Original Issue
Discount Securities.
13
<PAGE> 13
Consolidation, Merger of Sale of Assets. Each Indenture provides that we
may, without the consent of the holders of any of the Debt Securities
outstanding under the applicable Indenture, consolidate with, merge into or
transfer our assets substantially as an entirety to any person, provided that:
- any successor assumes our obligations on the applicable Debt Securities
and under the applicable Indenture;
- after giving effect to the transaction, there is no Default or Event of
Default that is continuing; and
- certain other conditions under the applicable Indenture are met (section
10.1).
Accordingly, such consolidation, merger or transfer of assets substantially
as an entirety, which meets the conditions described above, would not create any
Event of Default which would entitle holders of the Debt Securities, or the
Trustee on their behalf, to take any of the actions described below under
"-- Events of Default, Waivers, Etc."
Leveraged and Other Transactions. The Indentures and the Debt Securities do
not contain, among other things, provisions that would protect holders of the
Debt Securities in the event of a highly leveraged or other transaction
involving Waste Connections that could adversely affect the holders of Debt
Securities.
Modification of the Indenture; Waiver of Covenants. Each Indenture provides
that, with the consent of the holders of not less than a majority in aggregate
principal amount of the outstanding Debt Securities of each affected series,
modifications and alterations of such Indenture may be made that affect the
rights of the holders of such Debt Securities. However, no such modification or
alteration may be made without the consent of the holder of each Debt Security
so affected which would, among other things:
- Change the maturity of the principal of, or of any installment of
interest (or premium, if any) on, any Debt Security issued pursuant to
such Indenture;
- Change the principal amount thereof, premium thereon, if any, or interest
thereon;
- Change the method of calculation of interest or the currency of payment
of principal or interest (or premium, if any) thereon;
- Reduce the minimum rate of interest thereon;
- Impair the right to bring suit for the enforcement of any such payment on
or with respect to any such Debt Security;
- Reduce the amount of principal of an Original Issue Discount Security
that would be due and payable upon an acceleration of the maturity
thereof;
- Reduce the above-stated percentage in principal amount of outstanding
Debt Securities required to modify or alter such Indenture (section
9.02); or
- Change our obligation to maintain an office or agency as required by the
applicable Indenture.
Global Securities. The Debt Securities of a series may be issued in the
form of one or more Global Securities that will be deposited with a Depositary
or its nominee identified in the applicable prospectus supplement. In such a
case, one or more Global Securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate principal amount
of outstanding Debt Securities of the series to be represented by the Global
Security or Securities. Unless and until it is exchanged in whole or in part for
Debt Securities in definitive registered form, a Global Security may not be
registered for transfer or exchange except as a
14
<PAGE> 14
whole by the Depositary for the Global Security to a nominee for the Depositary
(section 3.05) and except in the circumstances described in the applicable
prospectus supplement.
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities and certain limitations and restrictions
relating to a series of Bearer Securities in the form of one or more Global
Securities will be described in the applicable prospectus supplement.
Event of Default, Waivers, Etc. An Event of Default with respect to the
Senior Debt Securities of any series, and a Default with respect to the
Subordinated Debt Securities of any series, is defined in the applicable
Indentures as:
(i) Default in the payment of principal of or premium, if any, on any
Debt Security of that series when due;
(ii) Default in the payment of interest on any Debt Security of that
series when due, which continues for 30 days;
(iii) Default in the performance by us of any of our other covenants
in the applicable Indenture with respect to the Debt Securities of such
series, which continues for 90 days after written notice;
(iv) Certain events of bankruptcy, insolvency or reorganization of our
company; and
(v) Any other event that may be specified in a prospectus supplement
with respect to any series of Debt Securities (section 7.01 of the Senior
Indenture; section 7.07 of the Subordinated Indenture).
If an Event of Default with respect to any series of Senior Debt Securities
or a Default specified in clauses (iv) and (v) of this section with respect to
the Subordinated Debt Securities occurs and is continuing, either the Trustee or
the holders of not less than 25% in aggregate principal amount of the Debt
Securities of such series outstanding may declare the principal amount (or if
such Debt Securities are Original Issue Discount Securities, such portion of the
principal mount as may be specified in the terms of that series) of all Debt
Securities of that series to be immediately due and payable. The holders of a
majority in aggregate principal amount of the Debt Securities of any series may
waive such Event of Default or Default, as applicable, resulting in acceleration
of such Debt Securities, but only if all events of Default or Default, as
applicable, with respect to the Debt Securities of such series have been
remedied and all payments due (other than those due as a result of acceleration)
have been made (sections 7.02 and 7.13).
If an Event of Default with respect to the Senior Debt Securities or a
Default with respect to the Subordinated Debt Securities occurs and is
continuing, the Trustee may, in its discretion, and at the written request of
holders of not less than a majority in aggregate principal amount of the Debt
Securities of any series, and upon reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance with such request and
subject to certain other conditions set forth in the applicable Indenture will,
proceed to protect the rights of the holders of all the Debt Securities of such
series (sections 7.03 and 7.07). Prior to acceleration of maturity of the Debt
Securities of any series outstanding under the applicable Indenture, the holders
of a majority in aggregate principal amount of such Debt Securities may waive
any past default under the applicable Indenture except a default in the payment
of principal of, premium, if any, or interest on the Debt Securities of such
series (section 7.02).
The Indentures provide that upon the occurrence of an Event of Default with
respect to the Senior Debt Securities specified in clauses (i) or (ii) of this
section or a Default with respect to the Subordinated Debt Securities specified
in clauses (i) or (ii) of this section, we will, upon demand of the Trustee, pay
to it, for the benefit of the holder of any such Debt Security, the whole amount
then due and payable on such Debt Securities for principal, premium, if any, and
15
<PAGE> 15
interest. The Indentures further provide that that if we fail to pay such amount
upon such demand, the Trustee may, among other things, institute a judicial
proceeding for the collection of the amount due (section 7.03).
The Indentures also provide that notwithstanding any other provision of the
applicable Indenture, the holder of any Debt Security of any series will have
the right to institute suit for the enforcement of any payment of principal of,
premium, if any, and interest on such Debt Securities when due and that such
right will not be impaired without the consent of such holder (section 7.08).
We are required to file annually with the applicable Trustee a written
statement as to the existence or non-existence of defaults under the Indentures
or the Debt Securities (section 5.05).
Subordination of the Subordinated Debt Securities. The Subordinated Debt
Securities will be our direct, unsecured obligations and, unless otherwise
specified in the prospectus supplement relating to a particular series of
Subordinated Debt Securities offered by such prospectus supplement, will be
subject to the subordination provisions described in this section. Upon any
distribution of our assets due to any dissolution, winding up, liquidation or
reorganization, the payment of the principal of, premium, if any, and interest
on the Subordinated Debt Securities is to be subordinated in right of payment to
all Senior Indebtedness. In certain events of bankruptcy or insolvency, the
payment of the principal of and interest on the Subordinated Debt Securities
will, to the extent provided in the Subordinated Indenture, also be effectively
subordinated in right of payment to all General Obligations (as defined below).
Upon any distribution of our assets due to any dissolution, winding up,
liquidation or reorganization, the holders of Senior Indebtedness will first be
entitled to receive payment in full of all amounts due or to become due before
the holders of the Subordinated Debt Securities will be entitled to receive any
payment in respect of the Subordinated Debt Securities. If upon any such payment
or distribution of assets, after giving effect to such subordination provisions
in favor of the holders of Senior Indebtedness, (i) there remain any amounts of
cash, property or securities available for payment or distribution in respect of
the Subordinated Debt Securities ("Excess Proceeds") and (ii) if, at such time,
any creditors in respect of General Obligations have not received payment in
full of all amounts due or to become due on or in respect of such General
Obligations, then such Excess Proceeds will first be applied to pay or provide
for the payment in full of such General Obligations before any payment or
distribution may be made in respect of the Subordinated Debt Securities
(sections 14.02 and 14.09).
In addition, no payment may be made on the Subordinated Debt Securities, or
in respect of any redemption, retirement, purchase or other acquisition of any
of the Subordinated Debt Securities, at any time in the event:
- there is a default in the payment of the principal of, premium, if any,
interest on or otherwise in respect of any Senior Indebtedness; or
- any event of default with respect to any Senior Indebtedness has occurred
and is continuing or would occur as a result of such payment on the
Subordinated Debt Securities or any redemption, retirement, purchase or
other acquisition of any of the Subordinated Debt Securities, permitting
the holders of such Senior Indebtedness to accelerate the maturity
thereof (section 14.03).
Except as described above, our obligation to make payments of the principal
of, premium, if any, or interest on the Subordinated Debt Securities will not be
affected (section 14.04).
By reason of the subordination in favor of the holders of Senior
Indebtedness, in the event of a distribution of assets upon any dissolution,
winding up, liquidation or reorganization, our creditors who are not holders of
Senior Indebtedness or the Subordinated Debt Securities may
16
<PAGE> 16
recover less, proportionately, than holders of Senior Indebtedness and may
recover more, proportionately, than holders of the Subordinated Debt Securities.
Subject to payment in full of all Senior Indebtedness, the holders of
Subordinated Debt Securities will be subrogated to the rights of the holders of
Senior Indebtedness to receive payments or distributions of cash, property or
securities of our company applicable to Senior Indebtedness. Subject to payment
in full of all General Obligations, the holders of the Subordinated Debt
Securities will be subrogated to the rights of the creditors in respect of
General Obligations to receive payments or distributions of cash, property or
securities of our company applicable to such creditors in respect of General
Obligations (sections 14.02 and 14.09).
"Senior Indebtedness" for purposes of the Subordinated Indenture is the
principal of, premium, if any, and interest on:
- all of our indebtedness for money borrowed (other than (i) the
Subordinated Debt Securities and (ii) the Junior Subordinated
Indebtedness (as defined below)) whether outstanding on the date of
execution of the Subordinated Indenture or created, assumed or incurred
after that date, except such indebtedness as is by its terms expressly
stated to be not superior in right of payment to the Subordinated Debt
Securities or to rank equally with the Subordinated Debt Securities; and
- any deferrals, renewals or extensions of any such Senior Indebtedness.
The term "indebtedness for money borrowed" as used in this prospectus
includes, without limitation, any obligation of, or any obligation guaranteed by
us for the repayment of borrowed money, whether or not evidenced by bonds,
debentures, notes or other written instruments, and any deferred obligation for
the payment of the purchase price of property or assets. The Subordinated
Indenture does not limit our issuance of additional Senior Indebtedness.
The Subordinated Debt Securities will rank senior in right of payment to
our Junior Subordinated Indebtedness upon any distribution of our assets due to
any dissolution, winding up, liquidation or reorganization, to the extent
provided in the instruments creating our Junior Subordinated Indebtedness.
"Junior Subordinated Indebtedness" is the principal of, premium, if any, and
interest on:
- all of our indebtedness for money borrowed whether outstanding on the
date of the execution of the Subordinated Indenture or created, assumed
or incurred after that date that is by its terms subordinated to the
Subordinated Debt Securities; and
- any deferrals, renewals or extensions of any of such Junior Subordinated
Indebtedness.
Unless otherwise specified in the prospectus supplement relating to a
particular series of Subordinated Debt Securities offered thereby, the term
"General Obligations" means all obligations to make payment on account of claims
in respect of derivative products such as interest and foreign exchange rate
contracts, commodity contracts and similar arrangements, other than:
(i) obligations on account of Senior Indebtedness;
(ii) obligations on account of indebtedness for money borrowed
ranking equal with or subordinate to the Subordinated Debt Securities; and
(iii) obligations which by their terms are expressly stated not to be
senior in right of payment to the Subordinated Debt Securities or to rank
equally with the Subordinated Debt Securities.
17
<PAGE> 17
Unless otherwise specified in the prospectus supplement relating to any
series of Subordinated Debt Securities, payment of principal of the Subordinated
Debt Securities may be accelerated only in case of the bankruptcy, insolvency or
reorganization of our company.
Concerning the Trustee, we and certain of our affiliates maintain a banking
relationship with the Trustee and its affiliates. The Trustee also acts as the
transfer agent, registrar and dividend disbursing agent for our common stock.
DESCRIPTION OF PREFERRED STOCK
The following summary describes the general terms of the preferred stock,
$0.01 par value (the "Preferred Stock"), to which any prospectus supplement may
relate. Certain terms of any series of the Preferred Stock offered by any
prospectus supplement will be described in such prospectus supplement. If so
indicated in the prospectus supplement, the terms of that series may differ from
the terms described below. The provisions of the Preferred Stock described below
are not complete. You should refer to our Amended and Restated Certificate of
Incorporation (the "Certificate") and any certificate of amendment to the
Certificate or certificate of designations filed with the SEC in connection with
the offering of Preferred Stock.
General. Under our Certificate, our Board of Directors has the authority,
without further stockholder action, to issue from time to time Preferred Stock
in one or more series and for such consideration as may be fixed from time to
time by our Board of Directors. Our Board also has the authority to fix and
determine, in the manner provided by law, the relative rights and preferences of
the shares of any series so established, such as dividend and voting rights. Our
Certificate authorizes 7,500,000 shares of Preferred Stock. Prior to the
issuance of each series of Preferred Stock, our Board will adopt resolutions
creating and designating the series as a series of Preferred Stock.
The Preferred Stock will have the dividend, liquidation, redemption, voting
and conversion rights set forth below unless otherwise specified in the
applicable prospectus supplement. You should read the prospectus supplement
relating to the particular series of Preferred Stock offered thereby for
specific terms, including:
- the designation, stated value and liquidation preference of such
Preferred Stock and the number of shares offered;
- the initial public offering price at which such shares will be issued;
- the dividend rate or rates (or method of calculation), the dividend
periods, the date on which dividends will be payable and whether such
dividends will be cumulative or noncumulative and, if cumulative, the
dates from which dividends will begin to cumulate;
- any redemption or sinking fund provisions;
- any conversion provisions; and
- any additional voting, dividend, liquidation, redemption, sinking fund
and other rights, preferences, privileges, limitations and restrictions
on such Preferred Stock.
No shares of Preferred Stock are currently outstanding. The Preferred Stock
will, when issued, be fully paid and nonassessable and have no preemptive
rights. Unless otherwise specified in the applicable prospectus supplement, the
shares of each series of Preferred Stock will upon issuance rank equally in all
respects with each other then outstanding series of Preferred Stock. Unless
otherwise specified in the applicable prospectus supplement, Bank Boston N.A.,
c/o Boston EquiServe, L.P., will be the transfer agent and registrar for the
Preferred Stock.
18
<PAGE> 18
Rank. Any series of the Preferred Stock will, with respect to dividend
rights and rights on liquidation, winding up or dissolution, rank:
- senior to all classes of Common Stock and to all equity securities issued
by us, the terms of which specifically provide that the equity securities
will rank junior to the Preferred Stock;
- equally with all equity securities issued by us, the terms of which
specifically provide that the equity securities will rank equally with
the Preferred Stock; and
- junior to all equity securities issued by us, the terms of which
specifically provide that the equity securities will rank senior to the
Preferred Stock.
Dividends. The holders of the Preferred Stock will be entitled to receive,
when, as and if declared by our Board, dividends at such rates and on such dates
as will be specified in the applicable prospectus supplement. Such rates may be
fixed or variable or both. If variable, the formula used for determining the
dividend rate for each dividend period will be specified in the applicable
prospectus supplement. Dividends will be payable to the holders of record as
they appear on our stock books on such record dates as will be fixed by our
Board. Dividends may be paid in the form of cash, Preferred Stock (of the same
or a different series) or Common Stock, in each case as specified in the
applicable prospectus supplement.
Dividends on any series of the Preferred Stock may be cumulative or
noncumulative, as specified in the applicable prospectus supplement. If the
dividends on a series of the Preferred Stock are noncumulative ("Noncumulative
Preferred Stock"), and our Board fails to declare a dividend payable on a
dividend payment date, then the holders of such Preferred Stock will have no
right to receive a dividend in respect to the dividend period relating to such
dividend payment date, and we will not be obligated to pay the dividend accrued
for such period, whether or not dividends on such Preferred Stock are declared
or paid on any future dividend payment dates.
We will not declare or pay or set apart for payment any dividends on any
series of the Preferred Stock that rank, as to dividends, on a parity with or
junior to the outstanding Preferred Stock of any series unless (i) if such
outstanding Preferred Stock has a cumulative dividend ("Cumulative Preferred
Stock"), full cumulative dividends have been or contemporaneously are declared
and paid or declared and a sum sufficient for the payment thereof set apart for
such payment on such Preferred Stock for all dividend periods terminating on or
prior to the date of payment of any such dividends on such other series of the
Preferred Stock or (ii) if such outstanding Preferred Stock is Noncumulative
Preferred Stock, full dividends for the then-current dividend period on such
Preferred Stock have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for such payment.
Until full dividends are paid (or declared and payment is set aside) on the
Preferred Stock ranking equal as to dividends, then:
- we will declare any dividends pro rata among the Preferred Stock of each
series and any Preferred Stock ranking equal to such Preferred Stock as
to dividends (i.e., the dividends we declare per share on each series of
such Preferred Stock will bear the same relationship to each other that
the full accrued dividends per share on each such series of the Preferred
Stock (which will not, if such Preferred Stock is Noncumulative Preferred
Stock, include any accumulation in respect to unpaid dividends for prior
dividend periods) bear to each other);
- other than such pro rata dividends, we will not declare or pay any
dividends or declare or make any distributions upon any security ranking
junior to or equal with the Preferred Stock as to dividends or upon
liquidation (except dividends on common stock payable in common stock,
dividends or distributions paid for with securities ranking junior to the
19
<PAGE> 19
Preferred Stock as to dividends and upon liquidation and cash in lieu of
fractional shares in connection with such dividends); and
- we will not redeem, purchase or otherwise acquire (or set aside money for
a sinking fund for) Common Stock or any other securities ranking junior
to or equal with the Preferred Stock as to dividends or upon liquidation
(except by conversion into or exchange for stock junior to the Preferred
Stock as to dividends and upon liquidation).
We will not owe any interest, or any money in lieu of interest, on any
dividend payment on any series of the Preferred Stock that may be past due.
Redemption. A series of the Preferred Stock may be redeemable, in whole or
in part, at our option, and may be subject to mandatory redemption pursuant to a
sinking fund or otherwise, in each case upon terms, at the times and at the
redemption prices specified in the applicable prospectus supplement. Redeemed
shares of the Preferred Stock will become authorized but unissued shares of
Preferred Stock that we may issue in the future.
The prospectus supplement relating to a series of Preferred Stock that is
subject to mandatory redemption will specify the number of shares of such
Preferred Stock that we will redeem each year and the redemption price per
share. If shares of Preferred Stock are redeemed, we will pay all accrued and
unpaid dividends thereon (which will not, if such Preferred Stock is
Noncumulative Preferred Stock, include any accumulation in respect of unpaid
dividends for prior dividend periods) up to but excluding the date of
redemption. The redemption price may be payable in cash or other property, as
specified in the applicable prospectus supplement. If the redemption price for
the Preferred Stock of any series is payable only from the net proceeds of the
issuance of our capital stock, the terms of such Preferred Stock may provide
that, if no such capital stock will have been issued or to the extent the net
proceeds from any issuance are insufficient to pay in full the aggregate
redemption price then due, such Preferred Stock will automatically and
mandatorily be converted into shares of our applicable capital stock pursuant to
conversion provisions specified in the applicable prospectus supplement.
If fewer than all the outstanding shares of Preferred Stock of any series
are to be redeemed, our Board will determine the number of shares to be
redeemed. We will redeem the shares pro rata from the holders of record of such
shares in proportion to the number of such shares held by such holders (with
adjustments to avoid redemption of fractional shares) or by lot or by any other
method as may be determined by our Board.
Even though the terms of a series of the Cumulative Preferred Stock may
permit redemption of such Cumulative Preferred Stock in whole or in part, if any
dividends, including accumulated dividends, on that series are past due:
- we will not redeem any Preferred Stock of that series unless we
simultaneously redeem all outstanding Preferred Stock of that series; and
- we will not purchase or otherwise acquire any Preferred Stock of that
series.
The prohibition discussed in the preceding sentence will not prohibit us
from purchasing or acquiring Preferred Stock of that series pursuant to a
purchase or exchange offer if we make the offer on the same terms to all holders
of that series.
Conversion Rights. The prospectus supplement relating to a series of
convertible Preferred Stock will describe the terms on which shares of such
series are convertible into our Common Stock, or another series of Preferred
Stock.
Rights Upon Liquidation. Unless the applicable prospectus supplement states
otherwise, if we voluntarily or involuntarily liquidate, dissolve or wind up our
business, the holders of the Preferred Stock will be entitled to receive out of
our assets available for distribution to
20
<PAGE> 20
stockholders, before any distribution of assets is made to holders of our common
stock or any other class or series of shares ranking junior to such Preferred
Stock upon liquidation, liquidating distributions in the amount of the
liquidation preference of such Preferred Stock plus accrued and unpaid dividends
(which will not, if such Preferred Stock is Noncumulative Preferred Stock,
include any accumulation in respect of unpaid dividends for prior dividend
periods). If we voluntarily or involuntarily liquidate, dissolve or wind up our
business, the amounts payable with respect to the Preferred Stock of any series
and any of our other securities ranking equal as to any such distribution are
not paid in full, the holders of such Preferred Stock and of such other shares
will share ratably in any such distribution of our assets in proportion to the
full respective preferential amounts to which they are entitled. After payment
of the full amount of the liquidating distribution to which they are entitled,
the holders of the Preferred Stock of any series will not be entitled to any
further participation in any distribution of our assets.
Voting Rights. Except as described in this section or in the applicable
prospectus supplement, or except as expressly required by applicable law, the
holders of the Preferred Stock will not be entitled to vote. If the holders of a
series of Preferred Stock are entitled to vote and the applicable prospectus
supplement does not state otherwise, each such share will be entitled to one
vote on matters on which holders of such series of the Preferred Stock are
entitled to vote. For any series of Preferred Stock having one vote per share,
the voting power of such series, on matters on which holders of such series and
holders of other series of Preferred Stock are entitled to vote as a single
class, will depend on the number of shares in such series, not the aggregate
stated value, liquidation preference or initial offering price of the shares of
such series of Preferred Stock.
Unless we receive the consent of the holders of an outstanding series of
Preferred Stock and the outstanding shares of all other series of Preferred
Stock which (i) rank equal with such series either as to dividends or the
distribution of assets upon liquidation, dissolution or winding up of our
business and (ii) have voting rights that are exercisable and that are similar
to those of such series, we will not:
- authorize, create or issue, or increase the authorized or issued amount
of, any class or series of stock ranking prior to such outstanding
Preferred Stock with respect to payment of dividends or the distribution
of assets upon liquidation, dissolution or winding up of our business; or
- amend, alter or repeal, whether by merger, consolidation or otherwise,
the provisions of our Certificate or of the resolutions contained in any
certificate of designations creating such series of Preferred Stock so as
to materially and adversely affect any right, preference privilege or
voting power of such outstanding Preferred Stock.
This consent must be given by the holders of a majority of all such
outstanding Preferred Stock described in the preceding sentence, voting together
as a single class. We will not be required to obtain this consent with respect
to the actions listed in the second bullet point above, however, if we only (i)
increase the amount of the authorized Preferred Stock, (ii) create and issue
another series of Preferred Stock, or (iii) increase the amount of authorized
shares of any series of Preferred Stock, if such Preferred Stock in each case
ranks equal with or junior to the Preferred Stock with respect to the payment of
dividends and the distribution of assets upon liquidation, dissolution or
winding up of our business.
DESCRIPTION OF COMMON STOCK
This section describes the general terms and provisions of the shares of
our common stock, par value $0.01 per share (the "Common Stock"). The summary is
not complete and is qualified in its entirety by reference to the description of
the Common Stock incorporated by reference in this prospectus. See
"Incorporation by Reference." We have also filed our
21
<PAGE> 21
Certificate and our bylaws as exhibits to the Registration Statement. You should
read our Certificate and our bylaws for additional information before you buy
any Common Stock. See "Where You Can Find More Information."
General. As of September 15, 1999, our authorized Common Stock was
50,000,000 shares, of which 20,683,888 shares were issued and outstanding.
Dividends. Holders of Common stock are entitled to receive pro rata
dividends when, as and if declared by our Board of Directors out of any funds
that we can legally use to pay dividends. We may pay dividends in cash, stock or
other property. In certain cases, holders of Common Stock may not receive
dividends until we have satisfied our obligations to any holders of outstanding
Preferred Stock. If we liquidate, dissolve or wind up our business, the holders
of Preferred Stock will receive an amount per share equal to the amount fixed
and determined by our Board of Directors, plus any amount equal to all the
dividends accrued on the Preferred Stock, before any distribution will be made
on the Common Stock.
Voting Rights. Each share of Common Stock is entitled to one vote on each
matter submitted to a vote of stockholders. The holders of the Common Stock have
noncumulative voting rights, which means that, subject to the rights of the
holders of a series of Preferred Stock, if any, to elect one or more directors,
as set forth in our Certificate or the certificate of designations creating such
series, the holders of more than 50% of the shares of Common Stock voting for
the election of directors can elect 100% of the directors standing for election
at any meeting if they choose to do so. In such event, the holders of the
remaining shares of Common Stock voting for the election of directors will not
be able to elect any person or persons to our Board of Directors.
Other Rights. The Common Stock has no conversion rights and is not
redeemable. The holders of the Common Stock do not have any preemptive rights to
subscribe for additional shares of our stock or other securities of ours except
as may be granted by our Board of Directors. There is no restriction on our
purchase of shares of Common Stock except for certain regulatory limits.
Fully Paid. The issued and outstanding shares of Common Stock are fully
paid and nonassessable (i.e., the full purchase price for the outstanding shares
of Common Stock has been paid and the holders of such shares will not be
assessed any additional monies for such shares).
Listing. The Common Stock is listed on the Nasdaq National Market under the
symbol "WCNX." Bank Boston N.A., c/o Boston EquiServe, L.P. is the transfer
agent, registrar and dividend reimbursing agent for the Common Stock.
Certain Statutory, Charter and Bylaw Provisions. Our 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.
22
<PAGE> 22
PLAN OF DISTRIBUTION
The Securities may be distributed from time to time in one or more
transactions at a fixed price or prices (which may be changed from time to
time), at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. Each prospectus
supplement will describe the method of distribution of the Securities offered
therein.
We may sell Securities directly, through agents designated from time to
time, through underwriting syndicates led by one or more managing underwriters
or through one or more underwriters acting alone. Each prospectus supplement
will describe the terms of the Securities to which that prospectus supplement
relates, the name or names of any underwriters or agents with whom we have
entered into arrangements with respect to the sale of such Securities, the
public offering or purchase price of such Securities and the net proceeds we
will receive from such sale. In addition, each prospectus supplement will
describe any underwriting discounts and other items constituting underwriters'
compensation, any discounts and commissions allowed or paid to dealers, if any,
any commissions allowed or paid to agents, and the securities exchange or
exchanges, if any, on which such Securities will be listed. Dealer trading may
take place in certain of the Securities, including Securities not listed on any
securities exchange.
If so indicated in the applicable prospectus supplement, we will authorize
underwriters or agents to solicit offers by certain institutions to purchase
Securities from us, pursuant to delayed delivery contracts providing for payment
and delivery at a future date. Institutions with which such contracts may be
made include, among others:
- commercial and savings banks;
- insurance companies;
- pension funds;
- investment companies; and
- educational and charitable institutions.
In all cases, such institutions must be approved by us. Unless otherwise
set forth in the applicable prospectus supplement, the obligations of any
purchaser under any such contract will not be subject to any conditions except
that (i) the purchase of the Securities will not at the time of delivery be
prohibited under the laws of the jurisdiction to which such purchaser is
subject, and (ii) if the Securities are also being sold to underwriters acting
as principals for their own account, the underwriters will have purchased such
Securities not sold for delayed delivery. The underwriters and such other
persons will not have any responsibility in respect of the validity or
performance of such contracts.
Any underwriter or agent participating in the distribution of the
Securities may be deemed to be an underwriter, as that term is defined in the
Securities Act of 1933, of the Securities so offered and sold and any discounts
or commissions received by them, and any profit realized by them on the sale or
resale of the Securities may be deemed to be underwriting discounts and
commissions under the Securities Act of 1933.
Except as indicated in the applicable prospectus supplement, the Securities
are not expected to be listed on a securities exchange, except for the Common
Stock, which is listed on the Nasdaq National Market, and any underwriters or
dealers will not be obligated to make a market in Securities. We cannot predict
the activity or liquidity of any trading in the Securities.
23
<PAGE> 23
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document that we file at the
SEC's public reference rooms in Washington, D.C., Chicago, Illinois and New
York, New York. Please call the SEC at 1-800-732-0330 for more information on
the public reference rooms. Our SEC filings are also available to the public
from commercial document retrieval services and at the web site that the SEC
maintains at "http://www.sec.gov." Our common stock is listed on the Nasdaq
National Market, and you may also inspect and copy our SEC filings at the
offices of the National Association of Securities Dealers, Inc. located at 1735
K Street, N.W., Washington, D.C. 20549.
This prospectus is part of a registration statement on Form S-3 that we
have filed with the SEC under the Securities Act of 1933. This prospectus omits
part of the registration statement, as permitted by the rules and regulations of
the SEC. You may inspect and copy the registration statement, including
exhibits, at the SEC's public reference rooms or from its web site. Our
statements in this prospectus about the contents of any contract or other
document are not necessarily complete. You should refer to the copies of the
documents filed as exhibits to the registration statement for complete
information.
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with the SEC, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings we make with the
SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 prior to the termination of this offering:
A. Annual Report on Form 10-K for the year ended December 31, 1998.
B. Quarterly Report on Form 10-Q/A for the quarter ended September
30, 1998.
C. Quarterly Report on Form 10-Q for the quarter ended March 31,
1999.
D. Quarterly Report on Form 10-Q/A for the quarter ended March 31,
1999.
E. Quarterly Report on Form 10-Q for the quarter ended June 30,
1999.
F. Report on Form 8-K/A filed July 16, 1998.
G. Report on Form 8-K/A filed September 11, 1998.
H. Report on Form 8-K filed January 5, 1999.
I. Report on Form 8-K filed January 13, 1999.
J. Report on Form 8-K filed February 2, 1999.
K. Report on Form 8-K/A filed April 5, 1999.
L. Report on Form 8-K filed April 14, 1999.
M. Report on Form 8-K/A filed April 29, 1999.
N. Report on Form 8-K filed May 7, 1999.
O. Report on Form 8-K/A filed July 15, 1999.
P. Report on Form 8-K filed August 5, 1999.
Q. Report on Form 8-K filed August 25, 1999.
R. Report on Form 8-K filed August 31, 1999.
S. Report on Form 8-K/A filed September 2, 1999.
T. Report on Form 8-K filed September 15, 1999.
U. The description of our common stock contained in our registration
statement on Form 8-A, File No. 0-23981, filed under the
Securities Exchange Act of 1934.
24
<PAGE> 24
You may request a copy of these filings at no cost, by writing or
telephoning the office of Steven F. Bouck, Waste Connections, Inc., 2260 Douglas
Boulevard, Suite 280, Roseville, California 95661, telephone (916) 772-2221.
You should rely only on the information incorporated by reference or
provided in this prospectus, any prospectus supplement and the registration
statement. We have not authorized anyone to provide you with different
information. You should not assume that the information in this prospectus and
any prospectus supplement is accurate as of any date other than the date on the
front of the document.
LEGAL MATTERS
Shartsis, Friese & Ginsburg LLP, San Francisco, California, has issued an
opinion on the validity of the Securities we are offering. Certain partners and
associate attorneys of Shartsis, Friese & Ginsburg LLP own an aggregate of 3,400
shares of our common stock. Certain statements pertaining to our G certificates
awarded by the WUTC that appear in this prospectus will be passed upon for us by
Williams, Kastner & Gibbs PLLC, Seattle, Washington.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our historical and
supplemental financial statements and schedule included in our Annual Report on
Form 10-K for the year ended December 31, 1998, our restated financial
statements and schedules included in our Current Reports on Form 8-K filed
August 5, 1999 and September 15, 1999 (which give retroactive effect to
poolings-of-interests consummated through March 31, 1999 and June 30, 1999,
respectively), the combined financial statements of the Murrey Companies
included in our Current Reports on Form 8-K and Form 8-K/A filed February 2,
1999 and April 5, 1999, respectively, and the financial statements of Arrow
Sanitary Service, Inc. included in our Current Report on Form 8-K/A filed July
16, 1998, as set forth in their reports, which are incorporated by reference in
this prospectus and elsewhere in the registration statement. Such financial
statements and schedules are incorporated by reference in reliance on Ernst &
Young LLP's reports, given on their authority as experts in accounting and
auditing.
Perkins & Company, P.C., independent auditors, have audited the combined
financial statements of Columbia Resource Co., L.P. and Finley-Buttes Limited
Partnership included in our Current Report on Form 8-K/A filed April 29, 1999,
as set forth in their report, which is incorporated by reference in this
prospectus and elsewhere in the registration statement. Such financial
statements are incorporated by reference in reliance on Perkins & Company,
P.C.'s report, given on their authority as experts in accounting and auditing.
Grant Thornton LLP, independent certified public accountants, have audited
the financial statements of Shrader Refuse and Recycling Company included in our
Current Report on Form 8-K/A filed September 11, 1998, as set forth in their
report, which is incorporated by reference in this prospectus and elsewhere in
the registration statement. Such financial statements are incorporated by
reference in reliance on Grant Thornton LLP's report, given on their authority
as experts in accounting and auditing.
PricewaterhouseCoopers LLP, independent accountants, have audited the
combined financial statements of International Environmental Industries, Inc.
and subsidiary and JOS Enterprises Ltd. included in our Current Report on Form
8-K/A dated August 11, 1999 and filed September 2, 1999, as set forth in their
report, which is incorporated by reference in this prospectus and elsewhere in
the registration statement. Such financial statements are incorporated by
reference in reliance on PricewaterhouseCoopers LLP's report, given on their
authority as experts in accounting and auditing.
25
<PAGE> 25
YOU SHOULD RELY ONLY ON THE INFORMATION 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>
Waste Connections..................... 3
About this Prospectus................. 3
Risk Factors.......................... 4
Ratio of Earnings to Fixed Charges.... 11
Use of Proceeds....................... 11
Description of Debt Securities........ 11
Description of Preferred Stock........ 17
Description of Common Stock........... 21
Plan of Distribution.................. 23
Where You Can Find More
Information......................... 24
Incorporation by Reference............ 24
Legal Matters......................... 25
Experts............................... 25
</TABLE>
[LOGO]
$200,000,000
Prospectus
September 30, 1999
