<PAGE> 1
THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND THE ATTACHED PROSPECTUS
IS NOT COMPLETE AND MAY BE CHANGED. THIS PROSPECTUS SUPPLEMENT AND THE
ATTACHED PROSPECTUS ARE NOT AN OFFER TO SELL THESE SECURITIES AND WE ARE
NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE
OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS SUPPLEMENT ISSUED JULY 28, 2000 (SUBJECT TO COMPLETION)
TO PROSPECTUS DATED SEPTEMBER 30, 1999
[LOGO]
--------------------------------------------------------------------------------
3,500,000 SHARES
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 3,500,000 shares of
common stock.
Our common stock is traded on the Nasdaq National Market under the symbol
"WCNX." On July 27, 2000 the last reported sale price of our common stock on the
Nasdaq National Market was $21 3/16 per share.
INVESTING IN THE COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 7 OF THIS PROSPECTUS SUPPLEMENT AND PAGE 4 OF THE ATTACHED PROSPECTUS.
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.
<TABLE>
<CAPTION>
PROCEEDS,
PUBLIC BEFORE EXPENSES,
OFFERING UNDERWRITING TO WASTE
PRICE DISCOUNTS CONNECTIONS
<S> <C> <C> <C>
Per Share $ $ $
Total $ $ $
</TABLE>
The underwriters may purchase up to 525,000 additional shares from Waste
Connections at the public offering price, less underwriting discounts and
commissions, to fulfill over-allotments that occur during the offering process.
The underwriters expect to deliver the shares of common stock against payment in
Baltimore, Maryland on , 2000.
DEUTSCHE BANC ALEX. BROWN
PAINEWEBBER INCORPORATED
SALOMON SMITH BARNEY
PROSPECTUS DATED , 2000.
<PAGE> 2
This prospectus contains registered service marks, trademarks and trade names of
Waste Connections, including the Waste Connections, Inc. name and logo.
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<PAGE> 3
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement contains the terms of this offering. A
description of our capital stock is contained in the attached prospectus. This
prospectus supplement, or the information incorporated by reference in this
prospectus supplement, may add, update or change information in the attached
prospectus. If information in this prospectus supplement, or the information
incorporated by reference in this prospectus supplement, is inconsistent with
the attached prospectus, this prospectus supplement, or the information
incorporated by reference in this prospectus supplement, will apply and will
supersede the information in the attached prospectus.
PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights some information from this prospectus supplement
and the attached prospectus. These documents may not contain all of the
information that is important to you. To understand this offering fully, you
should read this prospectus supplement and the attached prospectus carefully,
including the risk factors and the financial statements incorporated by
reference herein. You should also read and consider the information in the
documents we have referred you to in "Where You Can Find More Information," in
the attached prospectus. Unless otherwise specified, all references to "Waste
Connections" 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 54
collection operations, 18 transfer stations and 11 solid waste landfills and
operate an additional six transfer stations, six solid waste landfills and 17
recycling facilities. As of June 30, 2000, we served more than 600,000
commercial, industrial and residential customers in 15 states: California,
Colorado, Iowa, Kansas, Minnesota, Montana, Nebraska, New Mexico, Oklahoma,
Oregon, South Dakota, Texas, Utah, Washington, and Wyoming. Over 60% of our
revenues for the six months ended June 30, 2000, were generated in exclusive
markets, the majority of which were from exclusive arrangements, including
franchise agreements, long-term municipal contracts and governmental
certificates.
We have targeted secondary markets of the Western U.S. because we believe
that: (1) there is less competition in these markets from large,
well-capitalized solid waste services companies; (2) these markets have strong
projected economic and population growth rates; (3) a large number of
independent solid waste services companies suitable for acquisition by us are
located in these markets; and (4) there is a greater opportunity to enter into
exclusive arrangements in these markets.
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 these exclusive 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.
OUR COMPETITIVE ADVANTAGES
Our objective is to build a leading integrated solid waste services company
in secondary markets of the Western U.S. Our primary competitive advantages
include:
- Favorable growth conditions. Our focus on secondary markets of the
Western U.S. allows us to benefit from favorable conditions for both
organic growth and growth via our
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acquisition program. In many of our markets, demographic trends have
resulted in above average growth in population, commercial activity and
waste volumes. In addition, the higher degree of fragmentation within our
markets relative to the more densely populated markets in the Eastern
U.S. continues to support our ability to execute an opportunistic and
disciplined acquisition strategy.
- Exclusive customer relationships. For the six months ended June 30, 2000,
over 60% of our revenues were generated in exclusive markets, the
majority of which were pursuant to contracts that grant us the exclusive
right to provide our services within a specific geographic region at
established rates. The duration of these contracts generally ranges from
three years to perpetuity. The exclusive nature of our contracts combined
with their long duration provides operating and financial stability as we
focus on optimizing our collection, transfer and disposal activities.
- Integrated operations. Our operating strategy emphasizes the integration
of activities within 18 market areas. This strategy results in efficient
utilization of collection, transfer and disposal assets within a specific
market area. While daily operating activities are managed on a local
basis, we have implemented company-wide information systems that enable
management to monitor operating and financial results from our district,
regional and corporate offices.
- Unique disposal position. All of the solid waste we collect is disposed
at either: (1) company-owned or operated landfills; (2) municipally-owned
landfills; or (3) third party landfills pursuant to regulatory flow
control requirements. None of the solid waste we collect within an
operating district is disposed of at a landfill owned by a competitor
that also operates in that district. In our exclusive markets, we believe
that controlling the waste stream by providing collection services is
often more important than owning or operating landfills since
regulations, in some cases, dictate the disposal facility to be used.
Within our competitive markets, we optimize our competitive position by
disposing of collected waste volumes at company-owned or operated or
municipally-owned landfills. For the six months ended June 30, 2000,
approximately 66% of the solid waste we collected in our competitive
markets was disposed of, or internalized, at landfills we owned or
operated.
- Strong management team and proven ability to execute. Our management team
has extensive experience in acquiring, integrating and operating solid
waste services businesses in the Western U.S. For the three months ended
June 30, 2000, when compared to the same period in 1999, our management
team increased revenues to approximately $76 million from $40.9 million
and increased EBITDA and operating income margins to 33.6% and 25%,
respectively, from 29.9% and 22.3%.
------------------------------------
Waste Connections' executive offices are located at 620 Coolidge Drive,
Suite 350, Folsom, California 95630. Our telephone number is (916) 608-8200.
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RECENT DEVELOPMENTS
Acquisitions
In the quarter ended June 30, 2000, we completed six acquisitions
representing net annualized revenues of approximately $36.1 million. In our
largest transactions, we acquired collection, transfer and landfill operations
in Wichita and Garden City, Kansas, from Allied Waste Industries ("Allied") and
purchased Allied's collection operations in Des Moines, Iowa, Miles City,
Montana and Casper, Wyoming. With the purchase of Allied's Wichita and Garden
City, Kansas, operations, we became the largest collection company in those
markets. In this transaction we also obtained rights to construct a
strategically located transfer station that will allow us to achieve significant
integration of our operations and improve operating margins. We expect to
complete construction of this transfer station in 2001. We also completed
tuck-in acquisitions in California, Colorado, Minnesota, New Mexico and Texas.
New Senior Credit Facility
On May 16, 2000, we entered into a new five-year credit facility with a
group of banks, which increased our borrowing capacity to $385 million and
modified certain covenants. In connection with the sale of the common stock
offered by this prospectus supplement and the attached prospectus, we expect to
increase our borrowing capacity under this credit facility to $405 million. As
of June 30, 2000, the aggregate outstanding principal indebtedness under the
credit facility was approximately $347.9 million, and another approximately
$25.3 million was committed to letters of credit providing security for
tax-exempt financings and other financial obligations.
Unaudited Results for the Quarter Ended June 30, 2000
On July 26, 2000, we announced the unaudited results of our operations
during the quarter ended June 30, 2000. We reported that revenues increased
85.9% to $76 million from $40.9 million for the same quarter in 1999. Income
from operations increased 108% to $18.9 million from $9.1 million and diluted
net income per share increased 36.4% to $0.30 from $0.22 in the comparable
period in 1999, excluding non-cash stock compensation expenses, acquisition
related expenses and loss on sale of assets.
THE OFFERING
The following information, and similar information throughout this
prospectus supplement and the attached prospectus relating to shares to be
outstanding after this offering, assumes that the underwriters do not exercise
the option granted by us to purchase up to 525,000 additional shares. The shares
shown below as being outstanding after this offering exclude 2,191,907 shares of
common stock issuable upon the exercise of warrants and options outstanding as
of June 30, 2000. These warrants and options have a weighted average exercise
price of $11.76 per share.
<TABLE>
<S> <C>
Common stock offered by Waste Connections................... 3,500,000 shares
Common stock to be outstanding after this offering.......... 25,070,526 shares
Use of proceeds............................................. Reduction of existing indebtedness,
future acquisitions, capital
expenditures and working capital
Nasdaq National Market symbol............................... WCNX
</TABLE>
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WASTE CONNECTIONS, INC.
SUMMARY FINANCIAL DATA
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
-------------------------- --------------------------
1998 1999 1999 2000
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA(1):
Revenues...................................... $ 99,624 $ 184,225 $ 33,178 $ 64,011
Operating Expenses:
Cost of operations.......................... 71,635 112,686 21,636 36,804
Selling, general and administrative......... 9,967 15,754 2,928 5,391
Depreciation and amortization............... 8,008 14,769 2,563 5,986
Stock compensation.......................... 632 265 70 54
Acquisition related(2)...................... -- 9,003 7,800 150
----------- ----------- ----------- -----------
Income (loss) from operations................. 9,382 31,748 (1,819) 15,626
Interest expense.............................. (3,458) (11,531) (1,057) (5,894)
Other income(expense), net.................... 410 (66) (36) 6
----------- ----------- ----------- -----------
Income (loss) before income tax provision..... 6,334 20,151 (2,912) 9,738
Income tax provision.......................... (3,040) (10,924) (1,367) (4,048)
Extraordinary item(3)......................... (1,027) -- -- --
----------- ----------- ----------- -----------
Net income (loss)............................. $ 2,267 $ 9,227 $ (4,279) $ 5,690
=========== =========== =========== ===========
Redeemable convertible preferred stock
accretion................................... (917) -- -- --
----------- ----------- ----------- -----------
Net income (loss) applicable to common
stockholders................................ $ 1,350 $ 9,227 $ (4,279) $ 5,690
=========== =========== =========== ===========
Diluted net income (loss) per share........... $ 0.11 $ 0.46 $ (0.27) $ 0.26
=========== =========== =========== ===========
Shares used in calculating diluted net income
(loss) per share............................ 12,323,990 19,929,539 15,980,164 21,976,094
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, 2000
DECEMBER 31, -------------------------
1999 ACTUAL AS ADJUSTED(4)
------------ -------- --------------
<S> <C> <C> <C>
BALANCE SHEET DATA(1):
Cash and equivalents...................................... $ 2,393 $ 2,657 $ 2,657
Working capital (deficit)................................. (10,149) (4,788) (4,788)
Property and equipment, net............................... 335,260 339,570 339,570
Total assets.............................................. 617,958 648,171 648,171
Long-term debt............................................ 275,145 303,010 233,312
Total stockholders' equity................................ 218,521 224,645 294,343
</TABLE>
---------------
(1) Waste Connections' historical financial statements have been retroactively
restated to reflect the acquisitions consummated through March 31, 2000
which were accounted for using the pooling-of-interests method.
(2) Acquisition related expenses consist of direct merger related expenses for
acquisitions accounted for using the pooling-of-interests method.
(3) Extraordinary item represents the expense from early extinguishment of debt,
net of income tax effects.
(4) Adjusted to reflect the sale of the common stock offered by Waste
Connections through this prospectus supplement and the attached prospectus
at an assumed public offering price of $21.1875 per share and the
application of the estimated net proceeds therefrom. See "Use of Proceeds."
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<PAGE> 7
RISK FACTORS
You should carefully consider the risks described below and beginning on
page 4 of the attached prospectus before making an investment decision. The
risks and uncertainties described below and in the attached prospectus 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 and those described in the attached
prospectus 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 supplement and the attached prospectus also contain
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 supplement and the attached 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
availability of capital to support our growth, 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 and the strength of
demand for our services.
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.
RAPID GROWTH MAY STRAIN OUR MANAGEMENT, OPERATIONAL, FINANCIAL AND OTHER
RESOURCES
From inception through June 30, 2000, we acquired 103 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.
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
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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 common 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 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 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.
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<PAGE> 9
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, our interest expense would increase and 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. If we are unable to obtain additional equity
and/or debt financing on attractive terms, our rate of growth through
acquisitions may decline. 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 AND SEASONAL FLUCTUATIONS MAY
ADVERSELY AFFECT OUR BUSINESS AND FINANCIAL RESULTS
Our business and financial results would be harmed by downturns in the
general economy of the Western U.S. and other factors affecting the region, such
as state regulations affecting the solid waste services industry and severe
weather conditions. 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 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.
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<PAGE> 10
- 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.
- 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
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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 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.
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<PAGE> 12
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 $25 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.
PURCHASERS OF SHARES IN THIS OFFERING WILL SUFFER IMMEDIATE DILUTION
As of March 31, 2000, we had a negative net tangible book value. Net
tangible book value represents the amount of our total tangible assets less
total liabilities. Purchasers of shares of common stock offered by this
prospectus supplement and the attached prospectus will suffer immediate
substantial dilution in the net tangible book value per share purchased in this
offering, while existing shareholders will experience an increase in net
tangible book value of shares of common stock that they own.
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 6,852,009 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.
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.
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<PAGE> 13
USE OF PROCEEDS
We estimate that we will receive net proceeds from the sale of the
3,500,000 shares of common stock offered by Waste Connections through this
prospectus supplement and the attached prospectus at an assumed public offering
price of $21.1875 per share (after deducting underwriting discounts and
commissions and estimated offering expenses) of $69.7 million ($80.3 million if
the underwriters exercise their over-allotment option).
We intend to use the net proceeds to reduce outstanding indebtedness under
our credit facility with a group of banks. Approximately $347.9 million was
outstanding under that facility as of June 30, 2000, and another approximately
$25.3 million was committed to letters of credit providing security for
tax-exempt financings or other financial obligations. Our credit facility
provides for borrowing capacity of up to $385 million, presently bears interest
based on either an adjusted prime rate or the Eurodollar rate plus applicable
margin (the weighted average applicable rate was approximately 9.3% as of June
30, 2000) and will mature in 2005. 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. In connection
with the sale of the common stock offered by this prospectus supplement and the
attached prospectus, we expect to increase our borrowing capacity under this
credit facility to $405 million.
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............................................... $ 24.00 $ 16.50
Second Quarter.............................................. 32.13 22.00
Third Quarter............................................... 31.00 19.13
Fourth Quarter.............................................. 20.94 10.50
2000
First Quarter............................................... $ 14.94 $ 9.25
Second Quarter.............................................. 19.75 11.75
Third Quarter (through July 27, 2000)....................... 23.375 17.125
</TABLE>
On July 27, 2000, the last sale price of the common stock as reported by
the Nasdaq National Market was $21.1875 per share. On that date, there were
approximately 129 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.
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<PAGE> 14
CAPITALIZATION
The following table sets forth, as of March 31, 2000, (i) the long-term
debt and capitalization of Waste Connections on an historical basis, and (ii)
the long-term debt and capitalization of Waste Connections as adjusted, giving
effect to our sale of the 3,500,000 shares offered by Waste Connections at an
assumed offering price of $21.1875 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." You should read this table in conjunction with our financial
statements and notes which are incorporated by reference in the attached
prospectus.
<TABLE>
<CAPTION>
MARCH 31, 2000
-----------------------------
ACTUAL AS ADJUSTED(1)
-------- -----------------
(IN THOUSANDS)
<S> <C> <C>
Long-term debt, net.................................. $303,010 $233,312
Stockholders' 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; 21,338,269 shares issued and
outstanding actual; 24,838,269 shares issued and
outstanding as adjusted(2)...................... 213 248
Additional paid-in capital........................... 209,554 279,217
Deferred stock compensation(3)....................... (109) (109)
Retained earnings.................................... 14,987 14,987
-------- ------------
Total stockholders' equity........................... 224,645 294,343
-------- ------------
Total capitalization....................... $527,655 $527,655
-------- ------------
-------- ------------
</TABLE>
---------------
(1) The estimated net proceeds from this offering will be used to reduce our
then outstanding indebtedness. As of June 30, 2000, the aggregate
outstanding principal indebtedness under the credit facility was
approximately $347.9 million and another approximately $25.3 million was
committed to letters of credit providing security for tax-exempt financing
or other financial obligations.
(2) Excludes 2,203,810 shares issuable upon the exercise of options and warrants
outstanding at March 31, 2000, at a weighted average exercise price of
$11.79 per share.
(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.
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<PAGE> 15
BUSINESS
INDUSTRY OVERVIEW
We estimate that the U.S. solid waste services industry generated revenues
of approximately $40 billion in 1999. 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. 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> 16
Despite ongoing consolidation, the solid waste services industry remains
primarily regional in nature and highly fragmented. Based on published industry
sources, approximately 20% 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. 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 advantageous
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
- 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 24 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.
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<PAGE> 17
- 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.
- Expansion Through Acquisitions. We intend to expand 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 "tucked in"
to existing operations.
We intend to expand into new geographic regions 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 believe that many "tuck-in" acquisition opportunities exist within our
current and targeted market areas. For example, we have identified more
than 400 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.
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 63 operating locations, which are
grouped into three regions: Pacific Northwest, Western and Central. We
reorganized our business into these three regions in May 2000, balancing
them on the basis of their respective geographic characteristics,
interstate waste flow, revenue base, employee base, regulatory structure
and acquisition opportunities. Each region has a Regional Vice President,
reporting directly to the corporate management, who is responsible for
operations in that region and who supervises a regional controller and
regional business development staff.
Our regions serve a total of 18 market areas, divided into 63 districts.
Our district managers have autonomous service and decision-making
authority for their districts and are responsible for maintaining service
quality, promoting safety in the operations, implementing marketing
programs, and overseeing day-to-day operations, including contract
administration. District managers also help identify acquisition
candidates and are
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<PAGE> 18
responsible for integrating them into our operations and obtaining the
permits and other governmental approvals required for us to operate the
acquired business.
- 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 regional management operates with a high
degree of autonomy, our senior officers monitor regional and district
operations and require adherence to our accounting, purchasing, marketing
and internal control policies, particularly with respect to financial
matters. Our executive officers regularly review the performance of
regional and 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 asset 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
We currently operate in 15 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 other than competitors in the market area,
if any; 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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<PAGE> 19
- 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 cash 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. Our
senior management team has a proven track record in integrating acquisitions.
SERVICES
COMMERCIAL, INDUSTRIAL AND RESIDENTIAL WASTE SERVICES
We serve more than 600,000 commercial, industrial and residential
customers. Our services are generally provided under one of the following: (a)
governmental certificates, (b) exclusive franchise agreements, (c) exclusive
municipal contracts, (d) commercial and industrial service agreements, (e)
residential subscriptions and (f) residential contracts.
Governmental certificates, exclusive franchise agreements and exclusive
municipal contracts grant us rights to provide services within specified areas
at established rates. Governmental certificates are generally perpetual in
duration. Our exclusive franchise agreements have remaining terms ranging from
10 to 41 years, and our exclusive municipal contracts generally have shorter
contract terms.
We provide commercial and industrial services, other than those we perform
under governmental certificates, franchise agreements or municipal contracts,
under agreements with terms ranging from one to 10 years. 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.
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<PAGE> 20
We also provide residential waste services 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
We have an active program to acquire, develop, own and operate transfer
stations in markets proximate to our operations. Currently, we own and operate
transfer stations in California, Colorado, Nebraska, Oregon and Washington, and
we are constructing a transfer station in Kansas. In addition, we operate but do
not own other transfer stations in California, Oregon and Washington. The
transfer stations receive, compact, and transfer solid waste to be transported
by larger vehicles to landfills. We believe that the transfer stations benefit
us 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
We seek 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 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 our 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.
Currently, we own and operate landfills in Colorado, Kansas, Minnesota,
Nebraska, New Mexico, Oklahoma and Oregon. In addition, we operate, but do not
own, landfills in California,
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Nebraska and New Mexico. All landfills that we own or operate are Subtitle D
landfills. The following table includes information for each landfill, as of
June 30, 2000.
<TABLE>
<CAPTION>
TONS PER DAY
ACRES CURRENTLY
TOTAL PERMITTED PERMITTED TO
LANDFILL STATE ACRES FOR DISPOSAL ACCEPT
-------- ----- ----- ------------ -------------
<S> <C> <C> <C> <C>
Amador County......................................... CA 272 67 no limit
Fairmead.............................................. CA 160 77 395
Denver Regional....................................... CO 340 120 no limit
Finney County......................................... KS 220 67 no limit
Nobles County......................................... MN 98 44 no limit
Butler County......................................... NE 282 84 no limit
Coalition............................................. NE 160 44 no limit
G&P................................................... NE 160 25 no limit
Nebraska Ecology...................................... NE 40 20 no limit
Camino Real........................................... NM 505 480 no limit
Sand Point............................................ NM 330 98 no limit
Lea County............................................ NM 325 68 no limit
Red Carpet............................................ OK 202 40 350
Oklahoma.............................................. OK 210 138 no limit
Finley-Buttes......................................... OR 1,800 476 no limit
Wasco County.......................................... OR 511 160 no limit
Fort Bliss............................................ TX 40 35 no limit
</TABLE>
We monitor the available permitted in-place disposal capacity of our
landfills on an ongoing basis and evaluate whether to seek permits 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 we will be
able to obtain the necessary approvals and permits required for the expansion
and the costs and time 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 own and operate 17 recycling facilities and sell other collected recyclable
materials to third parties for processing before resale. We often share the
profits from our resale of recycled materials with other parties to our
recycling contracts. For example, certain of our municipal recycling contracts
in Washington, 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 for recycled materials, we have adopted a
pricing strategy of 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.
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<PAGE> 22
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 many 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 we have
grown to date primarily through acquisitions, we 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 have added 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.
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<PAGE> 23
MANAGEMENT
EXECUTIVE OFFICERS, DIRECTORS AND OTHER KEY EMPLOYEES
The following table sets forth certain information concerning Waste
Connections' executive officers, directors and other key employees as of July
28, 2000:
<TABLE>
<CAPTION>
NAME AGE POSITIONS
---- --- ---------
<S> <C> <C>
Ronald J. 37 President, Chief Executive Officer and Chairman
Mittelstaedt(1)(2).........
Steven F. Bouck.............. 43 Executive Vice President and Chief Financial Officer
Darrell W. Chambliss......... 35 Executive Vice President -- Operations and Secretary
Michael R. Foos.............. 34 Vice President -- Finance and Chief Accounting
Officer
David M. Hall................ 43 Vice President -- Business Development
Eric J. Moser................ 33 Vice President, Corporate Controller and Treasurer
Jerri L. Hunt................ 48 Vice President -- Human Resources and Risk
Management
James M. Little.............. 38 Vice President -- Engineering
K. Don Allen................. 41 Regional Vice President -- Central Region
Eugene V. Dupreau............ 52 Regional Vice President -- Western Region; Director
Eric M. Merrill.............. 47 Regional Vice President -- Pacific Northwest Region
Michael W. Harlan(1)(2)(3)... 39 Director
William J. 52 Director
Razzouk(1)(2)(3)...........
</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 approximately 13 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.
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<PAGE> 24
Darrell W. Chambliss, Executive Vice President -- Operations and Secretary,
has been employed by 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, Vice President -- Finance and Chief Accounting Officer,
has been employed by 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 13 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 Southwest Missouri
State University.
Eric J. Moser, Vice President, Corporate Controller and Treasurer, has been
employed by Waste Connections 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
company, landfill and transfer station. Mr. Moser holds a B.S. in Accounting
from Illinois State University.
Jerri L. Hunt has been Vice President -- Human Resources and Risk
Management since December 1999. From 1994 to 1999, Ms. Hunt held various
positions with First Union National Bank (including the Money Store, which was
acquired by First Union National Bank), most recently Vice President of Human
Resources in which she managed all aspects of human resources for over 5,000
employees located throughout the United States. From 1989 to 1994, Ms. Hunt
served as Manager of Human Resources and Risk Management for BFI, where she was
responsible for all aspects of human resources and safety and environmental
compliance matters. Ms. Hunt also served as a Human Resources Supervisor for
United Parcel Service from
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<PAGE> 25
1976 to 1989. She holds a B.A. in Human Resources from California State
University, Sacramento and a M.S. in Human Resources from Golden Gate
University.
James M. Little has been Vice President -- Engineering since September
1999. Mr. Little held various management positions with Waste Management, Inc.
(including USA Waste Services, Inc., which was acquired by Waste Management,
Inc. and Chambers Development Co. Inc., which was acquired by USA Waste
Services, Inc.) from January 1990 to September 1999, including most recently
Division Manager in Ohio, where he was responsible for the operations of 10
operating companies in the Northern Ohio area. Mr. Little holds both a B.S. and
M.S. in Geology from Slippery Rock University of Pennsylvania.
K. Don Allen has been Regional Vice President -- Central Region since May
1, 2000. Prior to that since February 1999 he was Vice President -- Great Plains
Division. Mr. Allen has more than 20 years of experience in the solid waste
industry. Most recently, he was Regional Vice President for the Ohio and West
Virginia Region of Waste Management, Inc. In that position, he oversaw all
operations and business development, including hauling and landfill operations.
From August 1995 to July 1998, he held management positions at USA Waste
Services, Inc., including Divisional Vice President of Ohio, overseeing
multi-site operations for solid waste disposal and landfill operations. Prior to
his employment by USA Waste, Mr. Allen was employed for 12 years by
Browning-Ferris Industries, Inc., holding various marketing development and
management positions from 1978 to 1990.
Eugene V. Dupreau has been a director of Waste Connections since February
23, 1998. He joined us as Vice President -- California Division on that date and
became Regional Vice President -- Western Region on May 1, 2000. 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 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.
Eric M. Merrill has been Regional Vice President -- Pacific Northwest
Region since May 1, 2000. Prior to that since February 1999 he was Vice
President -- Pacific Northwest Division. Mr. Merrill joined Waste Connections in
March 1998 as District Vice President for our Vancouver, Washington operations.
Mr. Merrill has more than 10 years of experience in the solid waste and
recycling industry. He served as Regional Vice President -- Sales and Marketing
for Waste Management, Inc. from August 1996 to March 1998, where he was
responsible for sales, municipal marketing and customer service for Washington,
Oregon and Idaho. As Group Project Manager for Waste Management -- West Group,
from June 1995 to August 1996, he was responsible for business development,
acquisitions and transfer station facility permitting, design, and construction.
From October 1988 to June 1995, he held various management positions with Waste
Management, including Division President of three operations in Washington and
Northern Idaho. Mr. Merrill holds a BS degree in Accounting from the University
of Oregon.
Michael W. Harlan has been a director of Waste Connections since January
30, 1998. He is Senior Vice President, Chief Financial Officer and a director of
U.S. Concrete, Inc., a company focused on acquiring businesses in the ready-mix
concrete industry. 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
S-25
<PAGE> 26
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 of PlanetRx, an
e-commerce company focused on healthcare, filling of prescriptions,
over-the-counter medicines, health and beauty products and medical supplies. He
was also Chief Executive Officer of that company from September 1998 until April
2000. 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 PNV.Net 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.
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,
2001. 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, 2002. The term of office of the
third class (currently comprised of Ronald J. Mittelstaedt) 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.
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 and the Audit Committee, and both members of the
Compensation Committee, are independent directors who are not employees of Waste
Connections or one of our subsidiaries.
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<PAGE> 27
PLAN OF DISTRIBUTION
Subject to the terms and conditions of the underwriting agreement, the
underwriters, named below through their representatives Deutsche Bank Securities
Inc., PaineWebber Incorporated and Salomon Smith Barney Inc., have severally
agreed to purchase from us the following respective number of shares of common
stock at the public offering price less underwriting discounts and commissions
set forth on the cover page of this prospectus supplement.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
----------- ---------
<S> <C>
Deutsche Bank Securities Inc................................
PaineWebber Incorporated....................................
Salomon Smith Barney Inc. ..................................
---------
Total.............................................
=========
</TABLE>
The underwriting agreement provides that the obligations of the
underwriters are subject to certain conditions precedent and that the
underwriters will purchase all of the shares of the common stock offered by this
prospectus supplement and the attached prospectus, other than those covered by
the over-allotment option described below, if any are purchased. The shares of
common stock offered by the underwriters pursuant to this prospectus supplement
and the attached 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. The underwriters may
allow, and these dealers may re-allow, a discount of not more than $ per
share to other dealers. The representatives of the underwriters may change the
public offering price after the common stock is released for sale to the public.
The underwriters may sell more shares than the total number set forth in
the table above. To cover these sales, we have granted the underwriters an
option to purchase up to 525,000 additional shares of common stock from Waste
Connections at the public offering price less the underwriting discounts and
commissions set forth in the table below. The underwriters may exercise this
option for 30 days after the date of this prospectus supplement 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 3,500,000, and we 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 3,500,000 shares are being offered. The underwriting fee is equal to
the public offering price per share of common stock less the amount paid by the
underwriters to us per share of common stock. The underwriting fee is % of
the public offering price. We have agreed to pay the underwriters the following
fees, assuming either no exercise or full exercise by the underwriters of the
underwriters' over-allotment option:
<TABLE>
<CAPTION>
TOTAL FEES
--------------------------------------------
WITHOUT EXERCISE OF WITH FULL EXERCISE OF
FEE PER OVER-ALLOTMENT OVER-ALLOTMENT
SHARE OPTION OPTION
------- ------------------- ---------------------
<S> <C> <C> <C>
Fees paid by Waste Connections....
</TABLE>
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<PAGE> 28
In addition, we estimate that our share of the total expenses of this
offering, excluding underwriting discounts and commissions, will be
approximately $750,000.
We have agreed to indemnify the underwriters with respect to certain
liabilities, including liabilities under the Securities Act of 1933, as amended
and to contribute to payments the underwriters may be required to make in
respect of any of these liabilities.
To facilitate the offering of the common stock, the underwriters may engage
in transactions that stabilize, maintain or otherwise affect the market price of
our common stock. Specifically, the underwriters may overallot shares of our
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 it is committed to purchase. Additionally, to
cover such overallotments or to stabilize the market price of our common stock,
the underwriters may bid for, and purchase, shares of our common stock at a
level above that which might otherwise prevail in the open market. Finally, the
representatives, on behalf of the underwriters, also may reclaim selling
concessions allowed to an underwriter or dealer, if the underwriting syndicate
repurchases shares distributed by that underwriter or dealer. Any of these
activities may maintain the market price of our common stock at a level above
which might otherwise prevail in the open market. These transactions may be
effected on the Nasdaq National Market or otherwise. The underwriters are not
required to engage in these activities, and, if commenced, any such activities
may be discontinued at any time.
We have agreed not to offer, sell, sell short, transfer, pledge or
otherwise dispose of, or enter into any transaction that is designed to, or
could be expected to, result in the disposition 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 supplement, 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 Deutsche Bank Securities Inc.
Our directors and certain of our executive officers have agreed not to
offer, sell, sell short, transfer, hypothecate, pledge or otherwise dispose of,
or enter into any transaction that is designed to, or could be expected to,
result in the disposition 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 90 days after the date of this
prospectus supplement, directly or indirectly, except with the prior written
consent of Deutsche Bank Securities Inc.
Transfers or dispositions can be made during the lock-up periods in the
case of gifts for estate planning purposes where the donee signs a lock-up
agreement.
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 representatives of the underwriters have advised us that the
underwriters do not intend to confirm sales to any account over which they
exercise discretionary authority.
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<PAGE> 29
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.
Deutsche Bank Securities Inc. has in the past provided, and it and/or other
underwriters may in the future provide, certain investment banking services to
Waste Connections. Deutsche Bank is a member of the syndicate of financial
institutions that provide our credit facility.
This offering is being made pursuant to the provisions of Rule 2710(c)(8)
of the Conduct Rules of the National Association of Securities Dealers, Inc.
LEGAL MATTERS
Shartsis, Friese & Ginsburg LLP, San Francisco, California, has issued an
opinion on the validity of the common stock we are offering. Certain partners of
Shartsis, Friese & Ginsburg LLP own an aggregate of 5,000 shares of our common
stock. Certain legal matters relating to this offering will be passed upon for
the underwriters by Brobeck, Phleger & Harrison LLP, Washington, D.C. 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.
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<PAGE> 30
[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> 31
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> 32
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
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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
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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
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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.
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- 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
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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.
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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.
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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
series of Subordinated Securities offered by such prospectus supplement, will be
subject to the
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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;
- 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;
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- 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.
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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
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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
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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
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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.
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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.
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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
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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
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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
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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.
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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.
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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.
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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.
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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
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
About this Prospectus Supplement.... S-3
Prospectus Supplement Summary....... S-3
Summary Financial Data.............. S-6
Risk Factors........................ S-7
Use of Proceeds..................... S-13
Price Range of Common Stock......... S-13
Dividend Policy..................... S-13
Capitalization...................... S-14
Business............................ S-15
Management.......................... S-23
Plan of Distribution................ S-27
Legal Matters....................... S-29
</TABLE>
PROSPECTUS
<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........ 18
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]
3,500,000 SHARES
COMMON STOCK
DEUTSCHE BANC ALEX. BROWN
PAINEWEBBER INCORPORATED
SALOMON SMITH BARNEY
Prospectus Supplement
, 2000
