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Waste Connections Reports Fourth Quarter and 2005 Results and Provides 2006 Outlook

- Reports record 2005 revenue and income of $721.9 million and $84.5 million, respectively

- Reports 2005 free cash flow of $97.3 million, or 13.5% of revenue

- Acquires approximately $55 million annualized revenue in 2005

- Repurchases $113.8 million of common stock during the year

- Recently opens new landfills in Kansas, Colorado and Kentucky

- Expects more than 10% revenue growth in 2006 excluding additional acquisitions

PRNewswire-FirstCall
FOLSOM, Calif.
Feb 13, 2006

Waste Connections, Inc. today announced fourth quarter net income of $18.7 million and earnings per share of $0.40 on a diluted basis of 47.3 million shares, compared to income from continuing operations of $15.0 million and diluted earnings per share from continuing operations of $0.30 in the year ago period. Net income for the fourth quarter of 2005 included a non-cash charge of approximately $1.6 million ($1.0 million net of taxes) for the previously announced accelerated vesting of outstanding stock options. Income from continuing operations in the year ago period included approximately $6.1 million of pre-tax expenses ($3.8 million net of taxes) resulting from a non-cash charge associated with the early redemption of a $200 million term loan, a non-cash loss on sale of assets and increased self insurance reserves.

Revenue for the fourth quarter of 2005 was $188.4 million, a 16.0% increase over revenue of $162.5 million in the year ago period. Management noted that revenue for the fourth quarter of 2005 included almost $4 million associated with low margin operations in Vancouver, Washington, acquired from Waste Management, and with no margin pass-thru revenue related to the transportation portion of certain special waste disposal projects.

Operating income for the fourth quarter of 2005, including the $1.6 million non-cash charge for accelerated vesting of outstanding stock options, was $39.3 million versus operating income of $32.7 million in the fourth quarter of 2004, including $4.5 million in 2004 related to the non-cash loss on sale of assets and increased self insurance reserves. Management also noted that in addition to the options acceleration charge, current period results included approximately $1 million higher than anticipated costs related both to development of a general liability claim and to an increased allowance for doubtful accounts.

For the year ended December 31, 2005, revenue was $721.9 million, a 15.6% increase over revenue of $624.5 million in the year ago period. On a reported basis, operating income was $168.0 million compared to $151.7 million in the prior year. Including all previously noted items, income from continuing operations for 2005 was $84.5 million, or $1.75 per share on a diluted basis compared to income from continuing operations of $73.4 million, or $1.52 per share on a diluted basis, in the prior year. Results in the prior year also included a $1.5 million pre-tax expense ($1.1 million net of taxes) for early redemption of convertible notes taken in the second quarter.

"We are extremely pleased with 2005's results, especially considering the cost pressures we faced throughout the year. We executed well on many levels as evidenced by the strength of our price and volume growth, award of our first rail-haul disposal contract, construction of three new landfills, acquisition of approximately $55 million of annualized revenue, repurchase of almost 7% of outstanding common stock, generation of near record free cash flow despite increased capital expenditures and cash taxes, and refinancing of our credit facility to position us for continued growth," said Ronald J. Mittelstaedt, Chairman and Chief Executive Officer. "Looking ahead, with the expiration of our fixed-price fuel supply contract at the end of 2005, increased fuel costs will pressure margins in 2006. To recover or offset rising costs, we are focused more on increasing permanent pricing rather than surcharges, which better enables us to retain price increases should the cost of certain items, such as fuel, decline from recent levels. This pricing strategy should produce solid improvement in margins during 2006, normalized for fuel, and position us well to accelerate growth on a reported basis in 2007 once year-over-year costs become more comparable."

2006 OUTLOOK

Waste Connections also announced its outlook for 2006. The Company's outlook excludes the impact of any additional acquisitions and assumes $100 million of common stock is repurchased during the year. The Company's outlook also assumes: (1) direct fuel cost as a percentage of revenue increases approximately 200 basis points primarily due to the expiration of a fixed- price fuel supply contract at the end of 2005; and (2) approximately $4 million of costs related to restricted stock and stock options expensing included in SG&A. The outlook provided below is forward looking, and actual results may differ materially depending on risks and uncertainties detailed at the end of this release and in our periodic SEC filings.

  -- Revenue is estimated to range between $795 million and $805 million.
     This assumes internal growth of approximately 6.0%, excluding the
     impact of commodities, with between 4.0% and 4.5% from price and
     surcharges, and the remainder from volume.
  -- Selling, general and administrative expense, which includes stock
     compensation expense, is estimated at approximately 9.9% of revenue,
     subject to quarterly fluctuations.
  -- Depreciation and amortization is estimated at approximately 9.0% of
     revenue, subject to quarterly fluctuations.
  -- Operating income, which includes the previously noted impact from
     rising fuel and stock compensation costs, is estimated at approximately
     22.0% of revenue, subject to quarterly fluctuations.
  -- Operating income before depreciation and amortization, a non-GAAP
     financial measure, is estimated to range between $245 million and $250
     million, or approximately 31.0% of revenue.
  -- Interest expense is estimated at approximately $31.5 million based on
     projected all-in borrowing costs.
  -- Minority interest expense is estimated at approximately 1.6% of
     revenue, subject to quarterly fluctuations.
  -- Effective tax rate is expected to be 36.3%, subject to quarterly
     fluctuations.
  -- Net cash provided by operating activities is estimated to be between
     24% and 25% of revenue, subject to quarterly fluctuations.
  -- Capital expenditures are estimated to be approximately $90 million, of
     which approximately $10 million primarily relate to the construction of
     a new transfer station and purchase of related equipment for the
     long-term, rail-haul disposal contract with the City of Port Angeles,
     Washington, and construction of a new collection facility in Pierce
     County, Washington.

Waste Connections will be hosting a conference call related to fourth quarter earnings and 2006 outlook on February 14th at 8:30 A.M. Eastern Time. The call will be broadcast live over the Internet at www.streetevents.com and through a link on our web site at www.wasteconnections.com. A playback of the call will be available at both of these sites.

Waste Connections, Inc. is an integrated solid waste services company that provides solid waste collection, transfer, disposal and recycling services in mostly secondary markets in the Western and Southern U.S. The Company serves more than one million residential, commercial and industrial customers from a network of operations in 23 states. The Company also provides intermodal services for the movement of containers in the Pacific Northwest. Waste Connections, Inc. was founded in September 1997 and is headquartered in Folsom, California.

For more information, visit the Waste Connections web site at www.wasteconnections.com. Copies of financial literature, including this release, are available on the Waste Connections web site or through contacting us directly at (916) 608-8200.

For non-GAAP measures, see accompanying Non-GAAP Reconciliation Schedule.

In the second quarter of 2005, Waste Connections classified as discontinued operations the results of certain operations in Utah and California that were exited during the quarter. In 2004, Waste Connections classified as discontinued operations the results of its Georgia operations and certain operations in Eastern Washington that were sold. Results for the fourth quarter of 2004 and twelve months ended December 31, 2004 and 2005 have been reclassified to present the results for these operations as discontinued operations.

Certain statements contained in this press release are forward-looking in nature. These statements can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," "anticipates," or the negative thereof or comparable terminology, or by discussions of strategy. Waste Connections' business and operations are subject to a variety of risks and uncertainties and, consequently, actual results may differ materially from those projected by any forward-looking statements. Factors that could cause actual results to differ from those projected include, but are not limited to, the following: (1) Waste Connections may be unable to compete effectively with larger and better capitalized companies and governmental service providers, which may result in reduced volume and revenues and lower profits; (2) the expiration of its fuel purchase contract and increased fuel prices may adversely affect Waste Connections' business and reduce its operating margins; (3) increases in labor and disposal and related transportation costs could impact Waste Connections' financial results; (4) efforts by labor unions could divert management attention and adversely affect Waste Connections' operating results; (5) increases in Waste Connections' insurance costs and the amount that it self-insures for various risks could reduce its operating margins and reported earnings; (6) Waste Connections' inability to recover or offset rising costs, especially by increasing permanent pricing as opposed to implementing temporary surcharges, may affect its ability to expand future operating margins; (7) Waste Connections may lose contracts through competitive bidding, early termination or governmental action, which would cause its volumes and revenues to decline; (8) Waste Connections' financial and operating performance may be affected by the inability to renew landfill operating permits, obtain new landfills and expand existing ones; (9) the geographic concentration of Waste Connections' business makes its pricing growth and operating results vulnerable to economic and seasonal factors affecting the regions in which it operates; (10) unusually adverse weather conditions may interfere with Waste Connections' operations, harming its operating results; (11) competition for acquisition candidates, consolidation within the waste industry and economic and market conditions may limit Waste Connections' ability to grow through acquisitions; (12) Waste Connections' growth and future financial performance depend significantly on its ability to integrate acquired businesses into its organization and operations; (13) Waste Connections' acquisitions may not be successful, resulting in changes in strategy, operating losses or a loss on sale of the business acquired; (14) because it depends on railroads for its intermodal operations, Waste Connections' operating results and financial condition are likely to be adversely affected by any reduction or deterioration in rail service; (15) Waste Connections' intermodal business could be adversely affected by steamship lines diverting business to ports other than those it services, or by heightened security measures or actual or threatened terrorist attacks; and (16) Waste Connections depends significantly on the services of the members of its senior and district management team, and the departure of any of those persons could cause its operating results to suffer. These risks and uncertainties, as well as others, are discussed in greater detail in Waste Connections' filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K/A. There may be additional risks of which Waste Connections is not presently aware or that it currently believes are immaterial which could have an adverse impact on its business. Waste Connections makes no commitment to revise or update any forward-looking statements in order to reflect events or circumstances that may change.

                         WASTE CONNECTIONS, INC.
                    CONSOLIDATED STATEMENTS OF INCOME
         THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2004 AND 2005
                               (Unaudited)
            (in thousands, except share and per share amounts)


                              Three months ended      Twelve months ended
                                December 31,             December 31,
                              2004        2005         2004         2005

  Revenues                 $162,495    $188,445     $624,544    $721,899
  Operating expenses:
    Cost of operations       97,208     111,068      354,901     416,883
    Selling, general and
     administrative          15,703      20,470       61,223      72,395
    Depreciation and
     amortization            14,645      17,511       54,630      64,788
    Loss (gain) on
     disposal of assets       2,276         116        2,120       (216)
  Operating income           32,663      39,280      151,670     168,049

  Interest expense          (4,799)     (6,946)     (21,724)    (23,489)
  Minority interests        (2,525)     (3,150)     (11,520)    (12,422)
  Other income
   (expense), net           (1,417)         223      (2,817)         450
  Income from continuing
   operations before
   income tax                23,922      29,407      115,609     132,588

  Income tax provision      (8,951)    (10,706)     (42,251)    (48,066)
  Income from continuing
   operations                14,971      18,701       73,358      84,522
  Loss on discontinued
   operations, net of tax     (524)          --      (1,087)       (579)

  Net income                $14,447     $18,701      $72,271     $83,943

  Basic earnings per
   common share:
    Continuing operations     $0.31       $0.41        $1.57       $1.81
    Discontinued operations  (0.01)          --       (0.02)      (0.01)
    Net income per common
     share                    $0.30       $0.41        $1.55       $1.80

  Diluted earnings per
   common share(a):
    Continuing operations     $0.30       $0.40        $1.52       $1.75
    Discontinued operations  (0.01)          --       (0.02)      (0.01)
    Net income per common
     share                    $0.29       $0.40        $1.50       $1.74

  Shares used in the per
   share calculations:
    Basic                47,908,324  46,096,009   46,581,441  46,700,649
    Diluted              49,304,869  47,316,277   49,470,217  48,211,301


        (a) 2004 diluted earnings per share assumes conversion of the 5.5%
        Convertible Subordinated Notes due 2006 prior to their redemption
        on April 15, 2004.  The interest expense related to these notes,
        net of tax effects, for the three and twelve months ended December
        31, 2004 was $0 and $1,707, respectively.


                         WASTE CONNECTIONS, INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                               (Unaudited)
            (in thousands, except share and per share amounts)


                                                 December 31,  December 31,
                                                     2004          2005
  ASSETS
  Current assets:
   Cash and equivalents                             $3,610         $7,514
   Accounts receivable, less allowance for doubtful
      accounts of $2,414 and $2,826 at
      December 31, 2004 and December 31, 2005,
      respectively                                  80,864         94,438
   Deferred tax assets                                  --          5,145
   Prepaid expenses and other current assets        17,008         17,279
       Total current assets                        101,482        124,376

  Property and equipment, net                      640,730        700,508
  Goodwill                                         642,773        723,120
  Intangible assets, net                            68,741         87,651
  Restricted assets                                 14,159         13,888
  Other assets, net                                 23,598         26,764
                                                $1,491,483     $1,676,307

  LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
   Accounts payable                                $34,280        $54,795
   Book overdraft                                    8,661          8,869
   Accrued liabilities                              37,944         44,522
   Deferred revenue                                 24,155         30,957
   Current portion of long-term debt and
    notes payable                                    9,266         10,858
       Total current liabilities                   114,306        150,001

  Long-term debt and notes payable                 489,343        586,104
  Other long-term liabilities                        9,020         20,478
  Deferred tax liabilities                         146,871        175,167
       Total liabilities                           759,540        931,750

  Commitments and contingencies
  Minority interests                                24,421         26,357

  Stockholders' equity:
  Preferred stock: $0.01 par value; 7,500,000
   shares authorized; none issued and outstanding       --             --
  Common stock: $0.01 par value; 100,000,000
   shares authorized; 47,605,791 and 45,924,686
   shares issued and outstanding at December 31,
   2004 and December 31, 2005, respectively            476            459
  Additional paid-in capital                       444,404        373,382
  Deferred stock compensation                      (1,598)        (2,234)
  Treasury stock at cost, 106,600 shares
  outstanding at December 31, 2005                      --        (3,672)
  Retained earnings                                261,365        345,308
  Accumulated other comprehensive income             2,875          4,957
   Total stockholders' equity                      707,522        718,200
                                                $1,491,483     $1,676,307


                         WASTE CONNECTIONS, INC.
             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
              TWELVE MONTHS ENDED DECEMBER 31, 2004 AND 2005
                               (Unaudited)
                          (Dollars in thousands)

                                                     Twelve months ended
                                                          December 31,
                                                      2004           2005


  Cash flows from operating activities:
  Net income                                       $72,271        $83,943
  Adjustments to reconcile net income to
   net cash provided by operating activities:
    Loss (gain) on disposal of assets                2,398          (413)
    Gain on disposal of operations                    (68)             --
    Depreciation                                    54,470         61,968
    Amortization of intangibles                      2,477          3,070
    Deferred income taxes, net of acquisitions      26,566          (792)
    Minority interests                              11,520         12,422
    Amortization of debt issuance costs              3,685          2,001
    Stock-based compensation                           972          2,826
    Interest income on restricted cash               (275)          (390)
    Closure and post-closure accretion                 421            681
    Tax benefit on the exercise of stock options     8,195          7,338
    Net change in operating assets and
     liabilities, net of acquisitions              (1,842)         27,158
  Net cash provided by operating activities        180,790        199,812

  Cash flows from investing activities:
    Payments for acquisitions, net of cash
     acquired                                     (46,784)       (80,849)
    Capital expenditures for property and
     equipment                                    (71,201)       (97,482)
    Proceeds from disposal of assets                 2,088          5,254
    Decrease in restricted cash, net of
     interest income                                 3,405            661
    Decrease (increase) in other assets                 27          (856)
  Net cash used in investing activities          (112,465)      (173,272)

  Cash flows from financing activities:
    Proceeds from long-term debt                   368,500        232,631
    Principal payments on notes payable
     and long-term debt                          (388,825)      (159,688)
    Change in book overdraft                       (1,165)            208
    Proceeds from option and warrant exercises      36,959         28,716
    Distributions to minority interest holders    (11,025)       (10,486)
    Payments for repurchase of common stock       (72,889)      (113,874)
    Debt issuance costs                            (1,546)          (143)
  Net cash used in financing activities           (69,991)       (22,636)

  Net increase (decrease) in cash and equivalents  (1,666)          3,904
  Cash and equivalents at beginning of period        5,276          3,610
  Cash and equivalents at end of period             $3,610         $7,514


                          ADDITIONAL STATISTICS
             THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2005
                          (Dollars in thousands)


  Internal Growth:  The following table reflects revenue growth for
                    operations owned for at least 12 months:

                         Three Months Ended         Twelve Months Ended
                          December 31, 2005          December 31, 2005
  Price                        3.0%                       3.0%
  Volume                       2.2%                       1.6%
  Recycling                  (0.3%)                       0.1%
  Total                        4.9%                       4.7%


  Uneliminated Revenue Breakdown:

                             Three Months Ended      Twelve Months Ended
                             December 31, 2005        December 31, 2005
  Collection                $137,335     64.2%       $517,536      62.9%
  Disposal and Transfer       57,999     27.1%        227,715      27.7%
  Intermodal                  10,140      4.7%         40,761       4.9%
  Recycling and Other          8,626      4.0%         36,833       4.5%
  Total                     $214,100    100.0%       $822,845     100.0%

  Inter-company elimination  $25,655                 $100,946


  Days Sales Outstanding for the three months ended December 31, 2005:
  46 (31 net of deferred revenue)


  Internalization for the three months ended December 31, 2005:  68%


  Other Cash Flow Items for the three months ended December 31, 2005:
   Cash Interest Paid:  $ 6,400
   Cash Taxes Paid:     $11,550


  Debt to Capitalization:  45.4%
   Total Debt divided by Total Debt plus Total Stockholders' Equity:
   ($586,104 + $10,858) / ($586,104 + $10,858 + $718,200) = 45.4%


  Share Information for the three months ended December 31, 2005:

      Basic shares outstanding                 46,096,009
      Dilutive effect of options and warrants  906,801
      Dilutive effect of convertible notes     285,550
      Dilutive effect of restricted stock      27,917
      Diluted shares outstanding               47,316,277

      Shares repurchased                       649,200


                     NON-GAAP RECONCILIATION SCHEDULE
             THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2005
                              (in thousands)

Free cash flow, a non-GAAP financial measure, is provided supplementally because it is widely used by investors as a valuation and liquidity measure in the solid waste industry. Waste Connections defines free cash flow as net cash provided by operating activities, plus cash proceeds from disposal of assets, plus or minus change in book overdraft, less capital expenditures and distributions to minority interest holders. This measure is not a substitute for, and should be used in conjunction with, GAAP financial measures. Management uses free cash flow as one of the principal measures to evaluate and monitor the ongoing financial performance of our operations. Other companies may calculate free cash flow differently.

  Free cash flow reconciliation:

                                     Three Months Ended  Twelve Months Ended
                                      December 31, 2005   December 31, 2005
  Net cash provided by operating
   activities                              $50,016            $199,812
  Change in book overdraft                   3,722                 208
  Plus: Cash proceeds from disposal
   of assets                                   834               5,254
  Less: Capital expenditures for
   property and equipment                 (36,063)            (97,482)
  Less: Distributions to minority
   interest holders                        (1,960)            (10,486)
  Free cash flow                           $16,549             $97,306

  Free cash flow as % of revenues             8.8%               13.5%

SOURCE: Waste Connections, Inc.

CONTACT: Worthing Jackman of Waste Connections, Inc., +1-916-608-8266,
or worthingj@wasteconnections.com


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