FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For The Fiscal Year Ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ____________________ to____________________
Commission File Number 1-3122
OGDEN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-5549268
(State or other jurisdiction of (I.R.S. Emlpoyer
incorporation or organization) Identification No.)
Two Pennsylvania Plaza, New York, N.Y. 10121
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code - (212) 868-6100
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock, par value New York Stock Exchange
$.50 per share
$1.875 Cumulative Convertible New York Stock Exchange
Preferred Stock (Series A)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES X NO______
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendments to this Form 10-K. [X]
The aggregate market value of registrant's voting stock, held by non-
affiliates based on the New York Stock Exchange closing price as reported
in the consolidated transaction reporting system as of the close of
business on March 1, 1996 was as follows:
Common Stock, par value $.50 per share $1,029,726,015
$1.875 Cumulative Convertible
Preferred Stock (Series A) $ 6,328,704
The number of shares of the registrant's Common Stock outstanding as of
March 1, 1996 was 49,579,675 shares.
The following documents are hereby incorporated by reference into this Form
10-K:
(1) Portions of the Registrant's Annual Report to Shareholders for the
year ended December 31, 1995 (Parts II and IV).
(2) Portions of the Registrant's 1996 Proxy Statement to be filed with the
Securities and Exchange Commission (Part III).
<PAGE>
PART I
Item 1. BUSINESS
Ogden Corporation, a Delaware corporation (hereinafter together with
its consolidated subsidiaries referred to as "Ogden" or the "Company"), has
its executive offices located at Two Pennsylvania Plaza, New York, New York
10121, pursuant to a lease that expires on April 30, 2008 and which
contains an option by Ogden to renew for an additional five years.
Ogden is a diversified company primarily engaged in providing a wide
range of services through its operating groups within each of its two
business segments.
Set forth in the following table is the amount of revenue
attributable to each of the groups within Ogden's Services and Projects
business segments for each of the last three fiscal years (In Thousands):
<TABLE>
YEARS ENDED DECEMBER 31,
<CAPTION>
1993 1994 1995
<S> <C> <C> <C>
SERVICES REVENUES:
ENTERTAINMENT SERVICES $242,347 $245,187 $ 301,315
AVIATION SERVICES 389,201 413,337 480,620
ENVIRONMENTAL SERVICES 122,262 140,745 145,748
TECHNOLOGY SERVICES 181,870 212,098 251,243
FACILITY MANAGEMENT
SERVICES 382,056 357,272 374,804
OTHER SERVICES 12,368 10,811 7,257
TOTAL SERVICES $1,330,104 $1,379,450 $1,560,987
PROJECTS REVENUES:
INDEPENDENT POWER $ 24,696 $ 26,368 $ 57,443
WATER AND WASTEWATER 0 0 1,742
WASTE-TO-ENERGY 432,609 459,478 494,921
GAIN ON SALE OF LIMITED
PARTNERSHIP INTERESTS 0 26,126 0
CONSTRUCTION ACTIVITIES 248,451 213,125 69,900
TOTAL PROJECTS $ 705,756 $ 725,097 $624,006
TOTAL REVENUES $2,035,860 $2,104,547 $2,184,993
</TABLE>
The above table has been reclassified to conform with the 1995
presentation.
The amounts of revenue, operating profit or loss and identifiable assets
attributable to each of Ogden's two business segments for each of the last
three fiscal years are set forth on pages 50 and 51 of Ogden's 1995 Annual
Report to Shareholders, certain specified portions of which are
incorporated herein by reference.
SERVICES
The operations of Ogden's Services business segment are
performed by Ogden Services Corporation and its subsidiaries
("Ogden Services") principally through its Entertainment
Services, Aviation Services and Other Services operating groups.
Ogden Services, through joint ventures, partnerships and
wholly-owned subsidiaries within each of the foregoing operating
groups, provides a wide range of services to private and public
facilities throughout the United States and many foreign
countries. Its principal customers include airlines,
transportation terminals, sports arenas, stadiums, banks, owners
and tenants of office buildings, state, local and Federal
governments, universities and other institutions and large
industrial organizations. In foreign countries the development,
construction, ownership and the providing of services may expose
Ogden to potential risks that typically are not involved in such
activities in the United States. Payment for services is often
made in whole or part in the domestic currencies of the foreign
country and the conversion of such currencies into U.S. dollars
may not be assured by a governmental or other creditworthy
foreign country agency. In addition, fluctuations in value of
such currencies against the U.S. dollar may cause the operation
to yield less return than expected. Also, the transfer of
earnings and profits in any form beyond the borders of the
foreign country may be subject to special taxes or limitations,
imposed by the laws of the foreign country.
Many customers are billed on cost-plus, fixed-price or time
and materials basis. Where services are performed on a cost-plus
basis, the customer reimburses the appropriate Ogden Services'
group for all acceptable reimbursable expenditures made in
connection with the job and also pays a fee, which may be a
percentage of the reimbursable expenditures, a specific dollar
amount, or a combination of the two. Fixed-price contracts, in
most cases, contain escalation clauses increasing the fixed price
in the event, and to the extent, that there are increases in
payroll and related costs.
Contracts in Aviation Services and Other Services may be
written on a month-to-month basis or provide for a longer or
indefinite term but are terminable by either party on notice
varying from 30 to 180 days.
ENTERTAINMENT SERVICES
The Entertainment Services group provides total facility
management services; presentation of concerts and family shows;
food, beverage and novelty concessions; and janitorial, security,
parking, and other maintenance services. These services are
provided to a wide variety of public and private facilities
including more than 100 stadiums, convention and exposition
centers, arenas, parks, amphitheaters, and fairgrounds located in
the United States, Mexico, Canada, Argentina, Brazil, Spain and
the United Kingdom. Entertainment also operates a racetrack and
five off-track betting parlors in Illinois.
The facility management and concession arrangements under
which this group operates are individually negotiated and vary
widely as to terms and duration. Concession contracts and leases
usually provide for payment by Entertainment of commissions or
rentals based on a stipulated percentage of gross sales or net
profits, sometimes with a minimum rental or payment. Most of the
facility management contracts are on a cost-plus-a-fee basis but
a number of such contracts provide for a sharing of profits and
losses between Entertainment and the facility owner.
Entertainment offers its customers a wide range of project-
development options, including the operational design review,
consultation during construction, and assistance with financing
arrangements, as well as operations of facilities, usually in
return for long-term services and concession contracts. In some
cases Ogden Corporation guarantees Entertainment's performance of
these contracts as well as the financing arrangements.
In 1995, Entertainment acquired a 50% interest in The
Metropolitan Entertainment Co., Inc. ("Metropolitan"), a leading
concert promoter in New York, New Jersey, Connecticut, and parts
of Massachusetts. Metropolitan and Entertainment, through their
joint venture called the Metropolitan Entertainment Group
("MEG"), will continue existing concert promotion activities,
operate amphitheaters in the eastern United States and
concentrate on national and global music tours, artist
management, Broadway and television productions, recording, and
music publishing. In December of 1995, Metropolitan entered into
a 25-year agreement to renovate and operate a 21,000 capacity
amphitheater in Darien Lake, New York (located between Buffalo
and Rochester).
In 1995, Ogden acquired 100% of Firehole Entertainment Corp.
("Firehole"), an innovative themed attraction/film and
merchandising developer. Through Firehole, Ogden now owns and
operates Grizzly Park, a nature-based entertainment center
located at the entrance to Yellowstone National Park. Within
Grizzly Park are, among other attractions, the Grizzly Discovery
Center, a natural habitat with grizzly bears and gray wolves, and
a variety of stores and restaurants. Through the acquisition of
Firehole, Entertainment plans the development of several new
nature-themed attractions at major tourist destinations in the
United States.
Food, Beverage and Novelty Services at Stadiums and Arenas
Food, beverage and novelty services are provided by
Entertainment in the United States and Canada at a number of
locations including those listed in the following table:
<TABLE>
<CAPTION>
Name Location
<S> <C>
Wrigley Field Chicago, Illinois
Anaheim Stadium Anaheim, California
Rich Stadium Buffalo, New York
USAir Arena Landover, Maryland
Milwaukee Exposition and Convention Center Milwaukee, Wisconsin
Los Angeles Convention Center Los Angeles, California
The Kingdome Seattle, Washington
Veterans Stadium Philadelphia, Pennsylvania
Market Square Arena Indianapolis, Indiana
McNichols Arena Denver, Colorado
Cobo Hall Detroit, Michigan
Tempe Diablo Stadium Tempe, Arizona
University of Oklahoma Stadium Norman, Oklahoma
The MGM Grand Gardens Arena Las Vegas, Nevada
Saint John Regional Exhibition Centre New Brunswick, Canada
Lansdowne Park Ottawa, Canada
</TABLE>
During 1995 Entertainment began providing services at General
Motors Place, a new sports and entertainment arena in Vancouver,
British Columbia which opened in late 1995 and which is the home
of the National Hockey League's Vancouver Canucks and the
National Basketball Association's Vancouver Grizzlies.
In 1995, Entertainment was also awarded an exclusive food and
beverage contract for the MCI Center under construction in
downtown Washington, D.C. This new 20,000-seat facility is
anticipated to open in the fall of 1997 and will serve as the
home of the Washington Bullets National Basketball Association
team and the Washington Capitals National Hockey League team. In
addition to operating three restaurants within the arena,
Entertainment will provide concession services to the general
seating area as well as in-seat services to 110 suites and more
than 2,000 club seats.
In 1995, Entertainment also acquired a 50% interest in the
Australian and New Zealand business of the International Facility
Corporation Pty Ltd. ("IFC"), a private facility management firm
based in Brisbane, Australia. IFC is the managing general
partner for all of the Entertainment/IFC joint venture accounts
in Australia and New Zealand. These accounts include the
Brisbane Entertainment Centre, the Newcastle Entertainment
Centre, the Cairns Convention Centre, and a significant interest
in Convex, operator of the Brisbane Convention and Exposition
Centre. IFC is also acting as a consultant for the design,
construction, and ongoing management of the Olympic 2000 Stadium
in Sydney, Australia.
In addition, in 1995 Entertainment purchased 100% of IFC's
Asian business and established Ogden-IFC (Asia Pacific) Pty Ltd.
("Ogden-IFC Asia Pacific"), a wholly-owned subsidiary, to manage
certain Asian projects. The first contract award to Ogden-IFC
Asia Pacific is a 10-year agreement to manage the Bangkok Arena
and Trade & Exposition Centre, both of which are now under
construction. The new 20,000-seat arena will be the site of the
1998 Asian Games. Ogden-IFC Asia Pacific has also formed joint
venture relationships in other Asian countries such as Malaysia,
Taiwan, and Singapore.
Food, Beverage and Novelty Services at Amphitheaters
Entertainment also provides food and beverage services at
amphitheaters throughout the United States, including the
Starlake Amphitheater (near Pittsburgh, Pennsylvania); the
Fiddler's Green Amphitheatre (Englewood, Colorado); the Sandstone
Amphitheatre (Kansas City, Missouri); the Cynthia Woods Mitchell
Pavilion (Woodlands, Texas); the Mega Star Amphitheater (Eufaula,
Oklahoma); the all-seasons Meadows Music Theater (Hartford,
Connecticut); the all-seasons Camden Amphitheater (Camden, New
Jersey); the Polaris Amphitheater (Columbus, Ohio); and the
Nissan Amphitheater (Manassas, Virginia).
In 1995, Entertainment was awarded a 20-year contract to
provide food and beverage services, parking and support for the
long-term financing at an amphitheatre under construction in
Virginia Beach, Virginia, to be operated by the Cellar Door
Companies, expected to open during 1996.
Facility Management and Concession Services
Entertainment, through long-term management agreements
operates and manages, and in some cases provides concession
services, various convention centers, arenas and public
facilities including the Pensacola Civic Center in Pensacola,
Florida; the Sullivan Arena and Egan Convention Center in
Anchorage, Alaska; the Rosemont Horizon, near Chicago, Illinois;
the Target Center in Minneapolis; the Northlands Coliseum in
Edmonton, Alberta; and The Great Western Forum in Los Angeles.
The Ottawa Palladium, a 19,000-seat multipurpose indoor arena
in Ottawa, Canada, which is owned by a third party, opened in
January of 1996, and Entertainment commenced operations under a
30-year contract to provide complete facility management and
concession services at this arena, which is the home of the
Ottawa Senators of the National Hockey League. Pursuant to the
30-year contract, Entertainment agreed to advance funds, if
necessary, to a customer to assist in financing senior secured
debt incurred in connection with construction of the facility.
Such requirements are not expected to exceed $75,000,000 at
maturity of the senior secured debt, which is expected to be on
or about March 1, 2001. In addition, at December 31, 1995 Ogden
has guaranteed indebtedness of $6.2 million of an affiliate and
principal tenant of Entertainment's customer. Ogden has agreed
that the Ottawa Palladium, under Entertainment's management, will
generate a minimum amount of revenues computed in accordance with
its 30-year contract. The owners of the Ottawa Palladium are
parties to a 30-year license agreement with the owner of the
Ottawa Senators, pursuant to which the Ottawa Senators began to
play their home games at the arena in January 1996.
Pursuant to a management agreement between the City of
Anaheim, California and a wholly owned subsidiary of Ogden,
Entertainment manages and operates the Arrowhead Pond, a facility
owned by and located within the City of Anaheim. The Arrowhead
Pond is a multi-purpose facility capable of accommodating
professional basketball and hockey, concerts and other
attractions, and has a maximum seating capacity of approximately
19,400. Ogden has agreed that the Arrowhead Pond, under
Entertainment's management, will generate a minimum amount of
revenues computed in accordance with the 30-year management
agreement with the City. Entertainment also has a 30-year lease
agreement with The Walt Disney Company at the Arrowhead Pond
where the Anaheim Mighty Ducks, a National Hockey League team
owned by The Walt Disney Company, plays its home games.
In 1995, the 19,000 seat Victoria Station Arena in Manchester,
England opened; Entertainment will manage and operate this
building pursuant to a 20-year lease. In 1995, Entertainment
secured a 20-year contract to provide total facility management
services at the 10,000-seat Newcastle Arena, a new sports and
entertainment arena located in Newcastle, England, which opened
in November 1995 and which will feature ice hockey, concerts and
other events.
Also in 1995, the Port Authority of New York and New Jersey
awarded Entertainment an eleven and one-half year lease to
renovate and operate the 107th Floor Observation Deck at the
World Trade Center in New York City. The Observation Deck will
undergo a $5 to $6 million renovation which will include wide-
screen, high-definition television theaters that will take
visitors on an aerial sightseeing tour of New York City and
environs; interactive, multi-lingual kiosks at various viewing
points; a nightly rooftop light show; and exhibits showcasing the
region's pre-eminence in international trade, finance and the
arts. The lease agreement provides that Entertainment will pay
the Port Authority an annual fee plus a percentage of gross
revenues above a certain level.
In Mexico, Entertainment provides food and beverage
concessions at the Sports Palace, a 22,000 seat arena, and the
Autodrome, a 45,000 seat open air facility, located in Mexico
City, as well as the new Autodrome Fundidora Amphitheater in
Monterey, Mexico that is able to accommodate 18,000 people.
Other Activities
During 1996, Entertainment acquired a long-term leasehold
interest in Silver Springs and Wild Waters, two nature-based
attractions located near Ocala, Florida, as well as other
associated assets. Silver Springs is located on a 250-acre park
which is open 365 days a year and features attractions consisting
of jungle cruise boat rides, jeep safari rides, animal shows, a
petting zoo, gift shops and eateries. Wild Waters is located on
a six acre park featuring a variety of slides, a wave pool,
miniature golf, food services and other attractions. Wild Waters
is open March through Labor Day.
In 1995, Entertainment formed a joint venture to operate La
Rural de Palermo, a 28-acre fair and exhibition center located in
Buenos Aires, Argentina. The joint venture will continue the
existing fair and exhibition business on the property while
developing a master plan for the development of the property to
include an entertainment attraction. Entertainment owns a 50%
interest in the joint venture and will serve as the managing
partner. As such, Entertainment will direct day-to-day
operations and be responsible for creating and implementing the
development plan for this property.
Entertainment also leases and operates a thoroughbred and
harness racetrack and six off-track betting parlors in Illinois
where it telecasts races from Fairmount Park and other racing
facilities. Restaurants and other food and beverage services are
provided by Entertainment at these facilities. A large portion of
the track's revenue is derived from its share of the pari-mutuel
handle, which can be adjusted by state legislation. Other income
is derived from admission charges, parking, programs and
concessions.
Entertainment also owns an equity interest in Parques
Tecnocultiroles, S.A. ("Partecsa"), a Spanish Corporation based
in Seville, Spain. Partecsa was awarded a 30-year contract to
convert, remodel, manage and operate a 200-acre site in Seville,
Spain where the 1992 Exposition Fair was held.
Entertainment also provides concessions at zoos located in
Seattle, Washington; Cleveland, Ohio; and Columbia, South
Carolina.
AVIATION SERVICES
Aviation Services provides specialized support services to
185 airlines at over 100 locations throughout the United States,
Canada, Europe, Latin America and the Pacific Rim. The
specialized support services provided by this group include
comprehensive ground handling, ramp, passenger, cargo and
warehouse, aviation fueling and in-flight catering services.
These services are performed through contracts with individual
airlines, through consolidated agreements with several airlines,
and contracts with various airport authorities.
Aviation Services continues to pursue opportunities associated
with the privatization of airport operations and related airport
projects. To capitalize on these opportunities, Ogden combines
its Aviation Services skills with the development, financing and
construction management expertise of its Projects business
segment.
Ground Handling and Specialized Support Services
Ground handling services include diversified ramp operations
such as baggage unloading and loading, aircraft cleaning,
aircraft maintenance, flight planning, de-icing, cargo handling,
warehouse operations and passenger-related services such as
ticketing, check-in, porter ("sky-cap") service, passenger lounge
operations, cargo/warehouse services and other miscellaneous
services.
Global expansion by the Aviation group has resulted in
providing comprehensive ground handling and related services at
many international locations throughout Europe, Canada, South
America and other countries. Set forth below is a list of major
foreign airports where Aviation currently conducts ground
handling operations:
<TABLE>
Airport Location
<S> <C>
Heathrow Airport England
Schiphol International Airport Netherlands
Auckland International Airport New Zealand
Jorge Chaves International Airport Lima, Peru
Guarulhos International Airport Sao Paulo, Brazil
Galeao International Airport Rio de Janeiro, Brazil
Pearson International Airport Toronto, Canada
Mirabel and Dorval Airports Montreal, Canada
Simon Bolivar International Airport Caracas, Venezuela
Mexico International Airport Mexico City, Mexico
</TABLE>
Aviation also performs ground handling operations at eight
different airports throughout Germany; the Czech Republic through
a 50% interest in a Prague-based airport handling company; VIP
lounge and ground handling operations at the Arturo Merino
Benitez Airport in Santiago, Chile and through a joint venture
with a Turkish company, aircraft cleaning, security and
commissary supplies to carriers at Ataturk Airport in Istanbul
and other locations in Turkey. Ogden Aviation continues to
perform services at St. Maarten's Princess Juliana International
Airport. In Aruba through a corporation jointly owned by
Aviation Services and Air Aruba, Aviation Services provides ramp
and passenger services at Reina Beatrix International Airport.
During 1995 Aviation Services (i) was awarded a 10-year
license to provide services at the new airport at Chek Lap Kok,
Hong Kong, expected to open in April 1998. Aviation will provide
a wide range of support services including ground services,
passenger services, cargo handling, loading and unloading of mail
and baggage, and aircraft marshalling, among others; (ii) was
awarded a contract as the exclusive provider of ground handling
services for all airlines at the La Union Airport in Puerto
Plata, Dominican Republic; (iii) began ground handling operations
at Belo Horizonte International Airport, Brazil as well as at
Huatulco, Zihautanejo, and Mazatlan International Airports in
Mexico; (iv) formed a joint venture with Aldeasa S.A. of Spain to
provide cargo handling and warehousing services at airports
located in Madrid and Barcelona, Spain.
Fueling Services
Aviation operates fueling facilities, including storage and
hydrant fueling systems for the fueling of aircraft. This
operation assists airlines in designing, arranging financing for,
and installing underground fueling systems. These fueling
operation services are principally performed in the North
American market. However, pursuant to a 10-year contract running
through 2004, Aviation Services is the sole fueling handling
agent at Tocumen International Airport in Panama City, Panama.
Also, pursuant to a 5-year contract which commenced in 1995,
Aviation fuels aircrafts at the Luis Munoz International Airport
in San Juan, Puerto Rico. During 1995 Aviation was also awarded
a contract for the maintenance and operation of a new Fuel Farm
located at the San Diego International Airport.
In-Flight Catering
Aviation operates 16 in-flight kitchens for over 85 airline
customers at a number of locations, including John F. Kennedy
International and LaGuardia Airports in New York; Newark
International Airport in New Jersey; Los Angeles and San
Francisco International Airports in California; Miami
International Airport in Florida; Washington Dulles International
Airport near Washington, D.C.; McCarren International in Las
Vegas, Nevada; and Honolulu International in Hawaii. The
Aviation in-flight kitchen at Honolulu International also
provides catering services to two cruise ships owned by NAVATEK,
a Hawaiian cruise line.
During 1995 Aviation was awarded several long-term catering
contracts in Spain at Gran Canaria Airport, Las Palmas; Palma De
Mallorca Airport, Palma De Mallorca; and Tenerife-Sur/Reina Sofia
Airport. At these locations Aviation will be providing catering
for more than twenty-five different airlines.
Airport Privatization and Related Projects
In 1994 a consortium, composed of Ogden Aviation Services,
Inc., Macau Aviation Services Corporation, EVA Airways, Air Macau
and several local companies and prominent businessmen, was
awarded a 19-year contract, with a 16-year exclusivity
arrangement, to provide ramp and cargo handling, passenger
services, and aircraft line maintenance service at the new Macau
International Airport, which opened and began operations in
November 1995. The consortium, of which Aviation Services is the
managing partner with a 29% participation, is providing all
necessary passenger and ramp equipment, has constructed a cargo
warehouse and is in process of building cargo and engineering
facilities, an aircraft hangar and a state-of-the-art training
center at the airport. The consortium's investment in
infrastructure improvements and equipment in the new Macau
airport is expected to exceed $40 million.
Aviation Services is also part of a consortium, of which
Aviation has a 19% interest, that has been awarded a 20-year
concession contract by the Civil Aviation Authority of Colombia
to finance, build and operate a second runway at the El Dorado
Airport, in Bogota, Colombia. Aviation's consortium partners,
including Spain's Dragados y Contrucciones SA and Colombia's
Conconcreto, will build the 3.8-kilometer runway at an estimated
cost of $97 million. Construction is expected to begin in 1996
and be completed by May 1998. The consortium will maintain the
new runway, and the pre-existing runway, for approximately 17
years in return for runway landing fees.
Applied Data Technology
During January 1995 Ogden acquired Applied Data Technology,
Inc. ("ADTI"), located in San Diego, California. ADTI is a
leading supplier of air combat maneuvering instrumentation
systems and after-action reporting and display systems. ADTI's
range systems are installed at Navy and Air Force aircraft
training ranges to facilitate air-to-air combat exercises and
monitor, record and graphically display the exact maneuvers of
the aircraft on the ranges and simulate the various weapons
systems aboard the aircraft. These range automated systems are
used by the U.S. Navy and Air Force to train pilots for combat
conditions and by the Department of Defense in training pilots to
avoid "friendly fire" incidents. ADTI's systems are currently
installed at four of the 14 domestic ranges, including the range
at the Top Gun school at Miramar, California. The range systems
business includes new ranges, expansion and upgrade of existing
ranges, product support and related programs.
In March 1995, ADTI was awarded a contract by the Naval Air
Warfare Center - Aircraft Division to provide technical support
services at the Patuxant River Naval Air Station in Patuxant
River, Maryland. Pursuant to the contract, ADTI teamed with
Raytheon Corporation, a leading defense contractor, to develop
the Joint Tactical Combat Training System (JTCTS). JTCTS is the
next generation training range, will be transportable for each
deployment and will replace all existing "Top Gun" training
ranges for the United States Navy and Air Force. The technology
will be used until the year 2010. Also during 1995, ADTI, as
part of a team with Lockhead Martin, was awarded a contract to
develop Advanced Distributed Simulation Technologies II, another
combat simulation system.
ADTI also developed a proprietary flight line test set
designed to test and trouble-shoot the Auxiliary Power Unit
("APU") on-board a Boeing air-to-air refueling aircraft. The APU
tester was developed to fill the military's demand for a
practical low cost flightline support unit that will isolate
faults within the APU on-board the Boeing aircraft.
OTHER SERVICES
Environmental Services
Ogden Environmental and Energy Services Co., Inc. ("OEES")
provides a comprehensive range of environmental, infrastructure
and energy consulting, engineering and design services to
industrial and commercial companies, electric utilities and
governmental agencies. These services include analysis and
characterization, remedial investigations, engineering and
design, data management, project management, and regulatory
assistance.
OEES provides services to a variety of clients in the public
and private sectors in the United States and abroad. Principal
clients include major Federal agencies, particularly the
Department of Defense and the Department of Energy, as well as
major corporations in the chemical, petroleum, transportation,
public utility and health care industries and Federal and state
regulatory authorities. United States Government contracts may
be terminated, in whole or in part, at the convenience of the
government or for cause. In the event of a convenience
termination, the government is obligated to pay the costs
incurred by Environmental under the contract plus a fee based
upon work completed.
Professional environmental engineering services, including
program management, environmental analysis, and restoration
continues to be provided by OEES to the United States Navy CLEAN
Program (Comprehensive Long Term Environmental Action Navy)
pursuant to a 10-year contract awarded during 1991. Thus far
OEES has provided these services at Navy bases in Hawaii, Guam,
Japan, Hong Kong, the Philippines, Australia and Korea.
OEES also continues to oversee the removal of storage tanks
and contaminated soil from Air Force bases across the United
States and in U.S. territories.
See Operational Restructuring below for further discussion
concerning Environmental Services.
Atlantic Design
Atlantic Design, Inc., with principal offices located in
Charlotte, North Carolina and engineering facilities located in
Fairfield, New Jersey and locations within New York state,
provides engineering design, drafting and technical services, as
well as turn-key, integrated services in electronics contract
manufacturing and assembly. Through its Lenzar operation in
Florida, Atlantic Design develops and markets medical products
and custom image capturing products. Atlantic Design provides
services to customers primarily in the computer, medical and
electronic industries, including IBM, General Electric, Seiko,
Compaq, Martin Marietta, AT&T, EMC2 Corporation, Netrix
Corporation and Pratt and Whitney.
In 1995, Atlantic Design formed a strategic business and
operations partnership with Genicom Corporation, based in
Chantilly, Virginia, an international supplier of multivendor
services, network systems management, and computer printer
technologies. Under this long-term agreement, the group acquired
the operating assets of Genicom's Reynosa, Mexico, and McAllen,
Texas, manufacturing and distribution facilities. Atlantic
Design will provide primary manufacturing support worldwide for
impact printer products as well as related integration
requirements, spares, and other proprietary supplies to service
Genicom's original equipment manufacturer's customer base.
Additionally, Atlantic Design purchased the operating assets
of Logitech Ireland Limited of Cork, Ireland, and its 50,000-
square-foot facility. Under terms of the agreement, the group
will continue to provide manufacturing, warehousing, and
engineering design services for the Logitech line of PC mice and
peripherals. The acquisition enables Atlantic Design to grow
into new markets, service the requirements of current United
States customers, and extend its contract services business into
Europe.
OPERATIONAL RESTRUCTURING
During 1995, Ogden began taking steps necessary to restructure
its operations and concentrate its resources on its
Entertainment, Aviation and Projects (Independent Power, Water
and Wastewater and Waste-to-Energy) core businesses. The
restructuring is expected to be completed during 1996 and entails
the disposition of the non-core businesses Of Ogden as set forth
and described below.
Technology Services
W.J. Schafer Associates, Inc. provides technology and
engineering services and consultation in space-based and free
electron laser technology and high energy systems research to the
Ballistic Missile Defense Organization as well as technical
research to the other agencies within the Department of Defense
and the U.S. Government. This unit is also currently working
under contract with the Defense Nuclear Agency to define and
analyze sensor architectures that assess bomb damage to
underground targets. WJSA is also involved in a program with the
Department of Energy to develop an advanced technique for
producing large-scale electric power. WJSA continues its efforts
under contract with the Coleman Research Corporation to provide
system engineering and technical assistance support for the
Theater High Altitude Area Defense Project.
Ogden Professional Services, Inc. provides automated business
systems and software engineering and computer/telephone-related
products and services to Government agencies and private
industry. Some of their largest clients are the U.S. General
Services Administration (GSA), the Department of Defense, and the
Office of Personnel Management. During 1995, this operation was
awarded several large contracts ranging from one to five years in
duration.
Ogden BioServices Corporation which provides biomedical
research, support and biological repository services for such
customers as the National Institute of Health, the Walter Reed
Army Institute of Research, the U.S. Food and Drug
Administration, the Center for Disease Control and Prevention,
the National Cancer Institute and other health agencies was sold
during December 1995 to McKesson Corp., a leading provider of
health care products and services.
The laboratory operations of Environmental Services are in the
process of being sold as part of Ogden's restructuring program.
Facility Management Services
Facility Services, Inc. and its subsidiaries' provides a
comprehensive range of facility management, maintenance and
manufacturing support services to industrial, commercial, and
office buildings electric utilities, governmental agencies and
education and institutional customers throughout the United
States and Canada.
The range of services provided include total facility
management; facility operations and maintenance; operations,
maintenance and repair of production equipment; security and
protection; housekeeping; landscaping and grounds care; energy
management; warehousing and distribution; project and
construction management; and skilled craft support services.
<PAGE>
PROJECTS
Operations in the Company's Projects business segment are
conducted by the Company's Ogden Projects, Inc. ("OPI")
subsidiary. In 1995 OPI substantially reorganized its operations
to permit better focus on its three principal business areas:
independent power, water and waste water and waste-to-energy.
Independent power operations and waste-to-energy are now
conducted by separate wholly-owned subsidiaries of OPI. Water
and wastewater operations are conducted by Ogden's joint venture
with Yorkshire Water Plc. Although the foregoing operations are
linked in that the Company seeks through them to make equity
investments in infrastructure assets and obtain long-term
operating or service contracts, differences in the nature of the
physical assets and the markets for such services led management
to believe that each operation should have dedicated marketing
and operational staff. The reorganization has accomplished this
objective. Services such as overall management, financial, human
resources, legal and construction management in which the
requirements of the operating companies overlap are provided by
staff at the OPI level.
INDEPENDENT POWER
Ogden's independent power business is conducted by a wholly-
owned subsidiary of OPI, Ogden Energy, Inc. ("OEI"). OEI
develops, operates and, in some cases, invests in and owns
independent (i.e., non-utility) electric energy generation
("Independent Power Production" or "IPP") projects which sell
their output to utilities, electricity distribution companies or
industrial consumers in the United States and abroad.
OEI presently has an ownership interest in, or is the operator
or designated to be the operator of, eight generation facilities
with a total nameplate capacity of 594 MW, located in the United
States, Costa Rica and Bolivia. Additionally, it has an
ownership interest and operates a geothermal resource in the
United States which provides the geothermal brine required by two
of its geothermal power plants. OEI continues to seek to expand
its ownership and operation of IPP projects and is presently
focusing on opportunities in the United States, Central and South
America, the Pacific Rim and India.
(a) Methods of doing business. OEI generally seeks to
participate in IPP projects in which it can make an equity
investment and become the operator. OEI also seeks to have a
role in the development of the projects. The types of projects
in which OEI seeks to participate sell the electrical power they
generate under long term contracts or market concessions to
utilities, government agencies providing power distribution or
creditworthy industrial users. For power projects utilizing a
combustible fuel or geothermal sources, OEI seeks projects which
have a secure supply of fuel or geothermal brine through long-
term supply arrangements or by obtaining control of the fuel
source. OEI generally looks to finance its projects using equity
or capital commitments provided by OEI or other investors,
combined with non-recourse debt for which the lender's sole
source of payment is project revenues and assets.
In 1995 the Company opened an office in Hong Kong to
facilitate OEI's ability to develop projects in Asia.
(b) OEI's projects. OEI, through Catalyst New Martinsville
Hydroelectric Corporation, manages and operates a hydroelectric
power generating facility under a long-term contract with the
City of New Martinsville, West Virginia. The plant has been in
operation since 1988 and is rated at approximately 40 megawatts
("MW"). The plant's electrical output is sold to the Monongahela
Power Company under a long-term power sales agreement.
OEI, as a 50% partner in the Heber Geothermal Company ("HGC")
(a partnership with Centennial Geothermal, Inc.), leases and
manages a 52MW geothermal power plant in Heber, California. The
power is sold to Southern California Edison under a long-term
power sales agreement. An OEI subsidiary is also the operations
and maintenance contractor at HGC.
In 1994, OEI acquired the Second Imperial Geothermal Company
("SIGC") and its principal asset, a leasehold interest in a 48MW
geothermal power plant located in Heber, California. SIGC is a
party to a 30-year power purchase contract with Southern
California Edison. An OEI subsidiary is also the operations and
maintenance contractor at SIGC.
OEI owns 50% of the lessee of the geothermal resource, which
is adjacent to and supplies fluid to both the HGC and SIGC power
plants. An OEI subsidiary operates and maintains the geothermal
resource, which currently produces approximately fifteen million
pounds per hour of fluid.
OEI's operations were expanded into the Latin American market
through the acquisition in 1994 of an approximate 6% equity
interest in Energia Global, Inc. ("EGI") which interest will
probably be reduced as a result of an offering of EGI stock in
1996 and a nominal ownership interest in each of the two run-of-
river hydroelectric power plants being developed by EGI in Costa
Rica (combined 31 MW). In addition, a subsidiary of OEI has
entered into a long term contract to operate and maintain the
first plant, Don Pedro, which is under construction and is
scheduled for commercial operation in late 1996. The second
hydroelectric power plant, Rio Volcan, is scheduled to begin
construction in 1996 with commercial operation by mid 1997. An
OEI subsidiary will also enter into a long-term operation and
maintenance contract regarding Rio Volcan. During the design and
construction phases of these two plants, OEI, through a
subsidiary, will serve as a consultant.
In June 1995, OPDB, Ltd. a subsidiary of OEI, along with its
partners Constellation Energy International Holdings, Inc., PMDC
Energia, Inc. and Energia Andina S.A., were the successful
bidders for an interest in a Bolivian generating company, Empresa
Valle Hermoso ("EVH"). EVH was formed by the Bolivian government
as part of the capitalization of the government-owned utility
ENDE. OEI owns a 20% interest in the consortium company, The
Bolivian Generating Group, Ltd. (BGG), which in turn owns a 50%
interest in EVH. The majority of the balance is held by Bolivian
pension funds. EVH currently owns and operates a 87 MW gas-fired
electric generating facility and is constructing two gas fired
electric generating facilities (54 MW each) in Bolivia. Both of
the units under construction are expected to be in commercial
operation in 1996. In addition, a subsidiary of OEI is a
participant in a joint venture which is under contract to supply
EVH with management services support.
OEI is providing start-up services and will be the operator of
a 240MW gas-fired cogeneration facility located in Maryland. The
plant is expected to begin full commercial operation in 1996.
As part of an incorporated consortium, OEI is developing a
480MW coal-fired independent electric generating facility in the
Republic of the Philippines. The other members of the consortium
are International Generating Company, a corporation formed by
subsidiaries of Bechtel Enterprises, Inc. and PG&E Enterprises,
Inc., and PMR Power, Inc., a company doing business exclusively
in the Philippines. In August 1994, the consortium entered into
a power purchase agreement with Manila Electric Company
("Meralco"), the largest electric distribution company in the
Philippines, which serves the area surrounding and including the
metropolitan Manila area and other areas. Under the terms of the
agreement, Meralco is obligated, for a period of 25 years, to
purchase stated minimum annual quantities of electricity produced
by the facility pursuant to price terms set forth in the
agreement. The consortium has entered into contracts for the
supply of coal at stated prices for a portion of the term of the
power purchase agreement.
The power purchase agreement has been approved by the
Philippines Energy Regulatory Board, and the project has applied
for and substantially completed the substantive requirements in
order to receive an environmental clearance certificate, the
primary environmental permit required for construction and
operation. A site for the facility, on the east coast of Luzon
Island in the Quezon province, has been selected, and site
acquisition is under way. An information memorandum describing
the project has been circulated among several multi-lateral
finance agencies and the Export-Import Bank of the United States,
and applications have been filed with these agencies seeking debt
financing for the project. Financing is expected to be completed
in 1996. Total cost of development and construction of the
project is expected to be approximately $800 million.
Commencement of construction is subject to a number of
conditions including completion of financing and site
acquisition, new agreement and an agreement with Meralco regarding
the project transmission line and issuance of required
governmental permits and approvals. There can be no assurance
that the conditions, some of which are in whole or in part beyond
the control of the Company, will be satisfied. If the project
proceeds, OEI intends to retain a portion of its equity interest
in the entity owning the facility and to sell the balance of its
equity. OEI will also operate and maintain the facility under a
25 year contract with the owner.
WATER AND WASTEWATER
In 1994, Ogden and OPI, through a subsidiary formed a joint
venture, Ogden Yorkshire Water Company ("OYWC"), with a wholly-
owned subsidiary of Yorkshire Water, plc, a major British water
and wastewater utility. The purpose of the joint venture is to
develop, design, construct, maintain, operate, and in some cases
own, water and wastewater treatment facilities and distribution
and collection networks in the United States, Canada, Latin
America and elsewhere. The Company has a 55% interest in the
joint venture, but such percentage interest may be greater with
respect to projects outside the United States.
In the United States, OYWC seeks to participate in projects in
which under contracts with municipalities, it privatizes water or
wastewater facilities, agrees to build new or substantially
augment existing facilities and agrees to operate and maintain
the facilities under long term contracts. Although OYWC in
certain situations would consider entering into operational
contracts for facilities in which it has no ownership or long
term leasehold interest, and presently has such contracts with
three small communities in New York State, OYWC generally does
not believe such contracts provide adequate returns. To the
extent such projects require debt financing, OYWC intends to
obtain such financing on a non-recourse basis in which the only
source of repayment are project revenues and project assets.
The development of the privatization market for water and
wastewater projects in the United States has been hampered by
certain legal constraints. Many of the water and waste water
facilities that could be considered for privatization were
financed with tax-exempt municipal bonds or grants from the
Federal government. Sale of all or a significant portion of the
assets could trigger a loss of the tax exempt status of the bonds
issued to finance these facilities or obligations to refund the
grant. The financial burdens these constraints place on municipalities
and the likelihood that their effect would be to raise the cost
of service to consumers has been a disincentive to privatization.
Nonetheless, there are opportunities for such projects in the
United States, especially in circumstances where substantial new
construction is required.
In countries other than the United States, OYWC is seeking
opportunities in which it will provide water services to
municipalities in which it can own an equity interest in water
facilities under a concession which grants it the right to
provide service to, and collect revenues from, consumers. OYWC
believes that the lack of creditworthiness of non-U.S.
municipalities, which may result from their limited ability to
raise revenues or from other causes, makes the collection of
tariffs from the consumer a more secure source of revenue.
Under contractual arrangements, OYWC may be required to
warrant certain levels of performance and may be subject to
financial penalties or termination if it fails to meet these
warranties. The Company and Yorkshire may be required to
guarantee the performance of OYWC. OYWC seeks not to take
responsibility for conditions that are beyond its control.
OYWC's projects. OYWC operates and maintains wastewater
treatment facilities for three small municipalities in New York
State. Such facilities cumulatively process approximately 11.8
million gallons per day ("mgd"). In addition, OYWC operates and
maintains the municipal wastewater treatment facilities for
several other small government and privately owned concerns that
cumulatively process less than 1 mgd. All of the facilities are
operated pursuant to short-term contracts.
In December 1995 OYWC, through a joint venture in which it has
a majority interest, entered into a 25 year concession contract
with the Tourist, Historical and Cultural District of Santa Marta
Colombia to provide water and wastewater services.
Implementation of the contract is subject to substantial
conditions, some of which are beyond the control of OYWC and is
not assured.
WASTE-TO-ENERGY
The Waste-to-Energy operations have been consolidated in a
wholly-owned subsidiary of OPI, Ogden Waste to Energy, Inc.
("OWTE"). Waste-to-energy facilities combust municipal solid
waste to make saleable energy in the form of electricity or
steam. This group completed construction of its first waste-to-
energy projects in 1986. It currently operates 28 waste-to-
energy facilities at 27 locations. OWTE is the owner or lessee
of 17 of its facilities and has been awarded a contract for one
additional facility that is not yet under construction. OWTE has
the exclusive right to market in the United States the
proprietary, mass-burn technology of Martin Gmbh fur Umwelt-und
Energietechnik ("Martin"). All of the facilities OWTE has
constructed use this Martin technology. In addition OWTE
operates facilities using other technologies.
Generally, OWTE, through wholly-owned subsidiaries ("Operating
Subsidiaries"), provides waste-to-energy services pursuant to
long-term service contracts ("Service Agreements") with local
governmental units sponsoring the waste-to-energy project
("Client Communities"). Certain of its facilities do not have
sponsoring Client Communities and in the future OWTE may
undertake projects for which there is no such sponsoring Client
Community.
(a) Terms and Conditions of Service Agreements. Projects
generally have been awarded by Client Communities pursuant to
competitive procurement. However, OWTE has also built and is
operating projects that were not competitively bid.
Following execution of a Service Agreement between the
Operating Subsidiary and the Client Community, several conditions
must be met before construction commences. These usually
include, among other things, financing the facility, executing an
agreement providing for the sale of the energy produced by the
facility, purchasing or leasing the facility site, and obtaining
of required regulatory approvals, including the issuance of
environmental and other permits required for construction. In
many respects, satisfaction of these conditions is not wholly
within OWTE's control and, accordingly, implementation of an
awarded project is not assured, or may occur only after
substantial delays.
Each Service Agreement is different in order to reflect the
specific needs and concerns of the Client Community, applicable
regulatory requirements, and other factors. The following
description sets forth terms that are generally common to these
agreements: (i) the Operating Subsidiary designs the facility,
generally applies for the principal permits required for its
construction and operation, helps to arrange for financing, and
then constructs and equips the facility on a fixed price and
schedule basis. The actual construction and installation of
equipment is performed by contractors under the supervision of
the Operating Subsidiary. The Operating Subsidiary bears the
risk of costs exceeding the fixed price of the facility and may
be charged liquidated damages for construction delays, unless
caused by the Client Community or by unforeseen circumstances
beyond its control, such as changes of law ("Unforeseen
Circumstances"). After the facility successfully completes
acceptance testing, the Operating Subsidiary operates and
maintains the facility for an extended term, generally 20 years
or more; (ii) the Operating Subsidiary generally guarantees that
the facility will meet minimum processing capacity and efficiency
standards, energy production levels, and environmental standards.
The Operating Subsidiary's failure to meet these guarantees or to
otherwise observe the material terms of the Service Agreement
(unless caused by the Client Community or by Unforeseen
Circumstances) may result in liquidated damages to the Operating
Subsidiary or, if the breach is substantial, continuing, and
unremedied, the termination of the Service Agreement. In the case
of such Service Agreement termination, the Operating Subsidiary
may be obligated to discharge project indebtedness; (iii) the
Client Community is generally required to deliver minimum
quantities of municipal solid waste ("MSW") to the facility and,
regardless of whether that quantity of waste is delivered to the
facility, to pay a service fee. Generally, the Client Community
also provides or arranges for debt financing. Additionally, the
Client Community bears the costs of disposing of ash residue from
the facility and, in many cases, of transporting the residue to
the disposal site. Generally, expenses resulting from the
delivery of unacceptable and hazardous waste to the facility, and
from the presence of hazardous materials on the site, are also
borne by the Client Community. In addition, the Client Community
is also generally responsible to pay increased expenses and
capital costs resulting from Unforeseen Circumstances, subject to
limits which may be specified in the Service Agreement; (iv)
Ogden typically guarantees each Operating Subsidiary's
performance under its respective Service Agreement.
After construction is completed and the facility is accepted,
the Client Community pays the Operating Subsidiary a fixed
operating fee which escalates in accordance with specified
indices, reimburses the Operating Subsidiary for certain costs
specified in the Service Agreement including taxes, governmental
impositions (other than income taxes), ash disposal and utility
expenses, and shares with the Operating Subsidiary a portion of
the energy revenues (generally 10%) generated by the facility.
If the facility is owned by the Operating Subsidiary, the Client
Community also pays as part of the Service Fee an amount equal to
the debt service due to be paid on the bonds issued to finance
the facility. At most facilities, OWTE may earn additional fees
from accepting waste from the Client Community or others
utilizing the capacity of the facility which exceeds the amount
of waste committed by the Client Community.
OWTE operates transfer stations in connection with some of its
waste-to-energy facilities and, in connection with the Montgomery
County, Maryland project, uses a railway system to transport
Municipal Solid Waste (MSW) and ash residue to and from the
facility. OWTE leases and operates a landfill located at its
Haverhill, Massachusetts, facility, and leases, but does not
operate, a landfill in connection with its Bristol, Connecticut,
facility.
(b) Other Arrangements for Providing Waste-to-Energy
Services. OWTE owns two facilities that are not operated
pursuant to Service Agreements with Client Communities and may
undertake in the future additional such projects. In such
projects, OWTE must obtain sufficient waste under contracts with
haulers or communities to ensure sufficient project revenues. In
these cases, OWTE is subject to risks usually assumed by the
Client Community, such as those associated with Unforeseen
Circumstances and the supply and price of municipal waste to the
extent not contractually assumed by other parties. This group's
current contracts with waste suppliers for these two facilities
provide that the fee charged for waste disposal service is
subject to limited increases in the event that costs of operation
increase as a result of Unforeseen Circumstances. On the other
hand, in these cases, OWTE generally retains all of the energy
revenues from sales of power to utilities or industrial power
users and disposal fees for waste accepted at these facilities.
Accordingly, OWTE believes that such projects carry both greater
risks and greater potential rewards than projects in which there
is a Client Community.
For the projects that are not operated pursuant to a Service
Agreement, tipping fees, which are generally subject to
escalation in accordance with specified indices, and energy
revenues are paid to the OWTE group. Electricity generated by
these projects is sold to public utilities and in one instance,
steam and a portion of the electricity generated is sold to
industrial users. In certain of the contracts under which waste
is provided to these facilities, OWTE may be entitled to fee
adjustments to reflect certain Unforeseen Circumstances.
(c) Project Financing. Financing for projects is generally
accomplished through the issuance of a combination of tax-exempt
and taxable revenue bonds issued by a public authority. If the
facility is owned by the Operating Subsidiary, the authority
lends the bond proceeds to the Operating Subsidiary and the
Operating Subsidiary contributes additional equity to pay the
total cost of the project. For such facilities, project-related
debt is included as a liability in Ogden's consolidated financial
statements. Generally, such debt is secured by the revenues
pledged under the respective indenture and is collateralized by
the assets of the Operating Subsidiary and otherwise provides no
recourse to Ogden, subject to construction and operating
performance guarantees and commitments.
(d) OWTE Projects. Certain information with respect to
projects as of March 1, 1996 is summarized in the following
table:
<PAGE>
<TABLE>
WASTE-TO-ENERGY PROJECTS
<CAPTION>
Tons Boiler Commencement
In Operation Per Day Units of Operations
<S> <C> <C> <C>
Tulsa,OK(I)(1)............. 750 2 1986
Haverhill/Lawrence,
MA-RDF(8)................. 950 1 1984
Marion County, OR.......... 550 2(2) 1987
Hillsborough County, FL(3). 1,200 3(2) 1987
Tulsa, OK(II)(1)(4)........ 375 1 1987
Bristol, CT................ 650 2(2) 1988
Alexandria/Arlington, VA... 975 3 1988
Indianapolis, IN........... 2,362 3(2) 1988
Hennepin County, MN (1)(5). 1,000 2 1990
Stanislaus County, CA...... 800 2 1989
Babylon, NY................ 750 2(2) 1989
Haverhill, MA-Mass Burn.... 1,650 2 1989
Warren County, NJ (5)...... 400 2 1990
Kent County, MI(3)......... 625 2(2) 1990
Wallingford, CT(5)......... 420 3(2) 1990
Fairfax County, VA......... 3,000 4(2) 1990
Huntsville, AL(3).......... 690 2(2) 1990
Lake County, FL............ 528 2(2) 1990
Lancaster County, PA(3).... 1,200 3(2) 1991
Pasco County, FL(3)........ 1,050 3(2) 1991
Huntington, NY (6)......... 750 3(2) 1991
Hartford, CT (3)(7)(8)..... 2,000 3 1989
Detroit, MI (1)(8)......... 3,300 3 1989
Honolulu, HI (1)(8)........ 2,160 2 1990
Union County, NJ(3)........ 1,440 3 1994
Lee County, FL (3)......... 1,200 3(2) 1994
Onondaga, NY(6)............ 990 3 1995
Montgomery County, MD. (3). 1,800 3(2) 1995
Total................ 33,565
</TABLE>
<TABLE>
<CAPTION>
Estimated
Construction
Expected Revenues
Awarded--Not yet Tons Boiler Commencement (in thousands
Under Construction Per Day Units of Construction of dollars)
<S> <C> <C> <C> <C>
Mercer County, NJ (9)... 1,450 2 1996 $188,200
</TABLE>
(1) Facility is owned by an owner/trustee pursuant to a sale/leaseback
arrangement.
(2) Facility has been designed to allow for the addition of another unit.
(3) Facility is owned (or, with respect to facilities not under
construction, is to be owned) by the Client Community.
(4) Phase II of the Tulsa facility, which was financed as a separate
project, expanded the capacity of the facility from two to three
units.
(5) Operating Subsidiaries were purchased after completion, and use a
mass-burn technology that is not the Martin Technology.
(6) Owned by a limited partnership in which the limited partners are not
affiliated with Ogden.
(7) Under contracts with the Connecticut Resource Recovery Authority and
Northeast Utilities, OWTE operates only the boiler and turbine for
this facility.
(8) Operating contracts were acquired after completion. Facility uses a
refuse-derived fuel technology and does not employ the Martin
Technology.
(9) All permits for the Mercer County project have been received, and some
construction tasks have commenced. However, substantial construction
has been delayed as the Mercer County Improvement Authority considers
the impact of legal challenges to New Jersey's flow control system and
the continuing lack of curative legislation in Congress. The
Authority has confirmed its commitment to the project and is exploring
changes to its waste management system that would permit the project
to proceed without legal flow control. OWTE and the Authority are
working toward this end, and in this regard have discussed the
possibility of OWTE owning the project. Were this occur, the OWTE
would recognize no revenues in connection with the construction of
this facility.
(e) Technology. The principal feature of the Martin Technology is the
reverse-reciprocating stoker grate upon which the waste is burned. The
patent for the basic stoker grate technology used in the Martin Technology
expired in 1989. Ogden has no information that would cause it to believe
that any other company uses the basic stoker grate technology that was
protected by the expired patent. Moreover, Ogden believes that unexpired
patents on other portions of the Martin technology would limit the ability
of other companies to effectively use the basic stoker grate technology in
competition with Ogden. There are several unexpired patents related to the
Martin Technology including: (i) Grate Bar for Grate Linings, Especially in
Incinerators - expires, 1999; (ii) Method and Arrangement for Reducing NOx
Emissions from Furnaces - expires 2000; (iii) Method and Apparatus for
Regulating the Furnace Output of Incineration Plants - expires 2007; (iv)
Method for Regulating the Furnace Output in Incineration Plants - expires
2008; and (v) Feed Device with Filling Hopper and Adjoining Feed Chute for
Feeding Waste to Incineration Plants - expires 2008. More importantly,
Ogden believes that it is Martin's know-how in designing and manufacturing
stoker and grate components, Martin's worldwide reputation in the waste-to-
energy field, and Ogden's know-how in designing, constructing and operating
waste-to-energy facilities, rather than the use of patented technology,
that is important to Ogden's competitive position in the waste-to-energy
industry in the United States. Ogden does not believe that the expiration
of the patent covering the basic stoker grate technology or patents on
other portions of the Martin Technology will have a material adverse effect
on Ogden's financial condition or competitive position.
The Company believes that mass burn technology is now the predominant
technology used for the combustion of solid waste. Although the Company
believes the Martin technology as superior overall, there are several other
mass-burn technologies available in the market including those of Von Roll,
Widmer & Ernst, Takuma, Volund, Steinmueller, Deutsche Babcock, O'Connor,
and Detroit Stoker. In addition, other innovative non-mass burn
technologies have been developed from time-to-time. Such technologies may
claim reduced air emissions, but to date have been unproven on a large
scale operation and appear likely to be substantially more expensive.
Martin seeks to implement improvements and modifications to its technology
in order to maintain its competitive position with non-mass burn
technologies. However, should such technologies develop that offer
competitive advantages to mass burn, OWTE's ability to respond in the
United States would be limited by the Cooperation Agreement--see(f) below.
(f) The Cooperation Agreement. Under an agreement between Martin and
Ogden (the "Cooperation Agreement"), OPI has the exclusive rights to market
the proprietary technology (the "Martin Technology") of Martin in the
United States, Canada, Mexico, Bermuda, certain Caribbean countries, most
of Central and South America, and Israel. In addition, in Germany, Turkey,
Saudi Arabia, Kuwait, the Netherlands, Denmark, Norway, Sweden, Finland,
Poland, and Italy, OPI has the preferential right to cooperate with Martin
to utilize the Martin Technology to provide full service design, construct,
and operate projects. Martin is obligated to assist OPI in installing,
operating, and maintaining facilities incorporating the Martin Technology.
The fifteen year term of the Cooperation Agreement renews automatically
each year unless notice of termination is given, in which case the
Cooperation Agreement would terminate 15 years after such notice.
Additionally, the Cooperation Agreement may be terminated by either party
if the other fails to remedy its material default within 90 days of notice.
The Cooperation Agreement is also terminable by Martin if there is a change
of control (as defined in the Cooperation Agreement) of Ogden Martin
Systems, Inc. ("OMS"), a wholly-owned subsidiary of OPI or any direct or
indirect parent of OMS not approved by its respective board of directors.
Although termination would not affect the rights of OPI to design,
construct, operate, maintain, or repair waste-to-energy facilities for
which contracts have been entered into or proposals made prior to the date
of termination, the loss of OPI's right to use the Martin Technology could
have a material adverse effect on OPI's future business and prospects.
(g) Backlog. OWTE's backlog as of December 31, 1995, is set forth
under (d) above. As of December 31, 1994, the estimated unrecognized
construction revenues for projects under construction was $44,764,000 and
the estimated construction revenues for projects awarded but not yet under
construction was approximately $260,000,000. The amounts in 1995 and 1994
for projects under construction were estimated based on the difference
between the total contract value and the cumulative construction revenue
recognized as of that date. The completion of the facility in Montgomery
County, Maryland, accounted for the entire decrease in the amount for
projects under construction. As of December 31, 1995, there were no longer
any projects under construction. The decrease in the amount for projects
awarded but not yet under construction was due to the termination of the
project in Halifax, Nova Scotia.
PROJECTS' FOREIGN BUSINESS DEVELOPMENT
OWTE, OEI and OYWC develop projects in foreign countries. In 1995 OWTE
modified its strategy for the development of its waste-to-energy business
in selected international markets to focus on a limited number of
opportunities which can be developed in conjunction with local companies.
OWTE has entered into an agreement with CTCI Corporation in Taiwan to
jointly pursue waste-to-energy operation and maintenance contracts in
Taiwan. The agreement provides that OPI will perform as a technical
advisor to CTCI and will receive a share of pretax profits from certain
awarded contracts. In 1995, CTCI bid and was awarded the operation and
maintenance of a 900-metric tonnes per day facility in Hsintien, Taipei
County, for a period of six years commencing November 1995. In addition,
as indicated in the discussions about their businesses, OEI and OYWC are
actively pursuing opportunities in many foreign countries and OEI has
established an office in Hong Kong where opportunities for the services
provided by these groups are highly dependent upon the elimination of
historic legal and political barriers to the participation of foreign
capital and foreign companies in the financing, construction, ownership and
operation of infrastructure facilities. For example, in many countries,
the production, distribution and delivery of electricity has traditionally
been provided by governmental or quasi-governmental agencies. Although a
number of these countries have recently liberalized their laws and policies
with regard to the participation of private interests and foreign capital
in their electric sectors, not all have done so, and not all that have done
so may afford acceptable opportunities for OPI.
The development, construction, ownership and operation of facilities in
foreign countries also exposes the Company to several potential risks that
typically are not involved in such activities in the United States.
Many of the countries in which OWTE, OEI and OYWC are or intend to be
active in developing projects are lesser developed countries or developing
countries. The financial condition and creditworthiness of the potential
purchasers of power and services provided by OWTE, OEI and OYWC which may
be a governmental or private utility or industrial consumer--or of the
suppliers of fuel for alternate energy projects or of waste for waste-to-
energy projects in these countries--may not be as strong as those of
similar entities in developed countries. The obligations of the purchaser
under the power purchase agreement, the services recipient under the
related service agreement and the supplier under the fuel supply agreement
generally are not guaranteed by any host country governmental or other
creditworthy agency.
OWTE and OEI projects in particular are keenly dependent on the reliable
and predictable delivery of fuel, municipal solid waste in the case of
waste-to-energy, meeting the quantity and quality requirements of the
project facilities. OWTE and OEI will in all cases seek to negotiate long-
term contracts for the supply of fuel with creditworthy and reliable
suppliers under terms that will permit it to project the future cost of
fuel through the life of the contract. However, the reliability of fuel
deliveries may be compromised by one or more of several factors that may be
more acute or may occur more frequently in developing countries than in
developed countries, including a lack of sufficient infrastructure to
support deliveries under all circumstances, bureaucratic delays in the
import, transportation and storage of fuel in the host country, customs and
tariff disputes and local or regional unrest or political instability.
Payment for services that OWTE, OEI and OYWC provide will often be made
in whole or part in the domestic currencies of the host countries.
Conversion of such currencies into U.S. dollars generally as not assured by
a governmental or other creditworthy host country agency, and may be
subject to limitations in the currency markets, as well as restrictions of
the host country. In addition, fluctuations in value of such currencies
against the value of the U.S. dollar may cause OPI's participation in such
projects to yield less return than expected. Transfer of earnings and
profits in any form beyond the borders of the host country may be subject
to special taxes or limitations imposed by host country laws.
In addition, OWTE, OEI and OYWC will generally participate in projects,
the facilities for which will be fixed and practically immovable. The
provision of electric power, waste disposal and water and wastewater
services are treated as a matter of national or key economic importance by
the laws and politics of many host countries. There is therefore some risk
that the assets constituting the facilities of these projects could be
temporarily or permanently expropriated or nationalized by a host country,
or made subject to martial or exigent law or control.
OPI will seek to manage and mitigate these risks through all available
means that it deems appropriate. They will include: careful political and
financial analysis of the host countries and the key participants in each
project; guarantees of relevant agreements with creditworthy entities;
political risk and other forms of insurance; participation by international
finance institutions, such as affiliates of the World Bank, in financing of
projects in which it participates; and joint ventures with other companies
to pursue the development, financing and construction of these projects.
GAIN ON SALE OF LIMITED PARTNERSHIP INTERESTS
During 1994, an Operating Subsidiary of OWTE that is the owner of the
Onondaga County, New York, facility sold limited partnership interests and
tax benefits to third party investors. Under the Onondaga limited
partnership agreement, the Operating Subsidiary is the general partner and
retains responsibility for the operation and maintenance of the facility.
OTHER ACTIVITIES
OPI also intends to develop, operate and, in some cases, own projects
that process recyclable paper products into containerboard for reuse in the
commercial sector. As with OWTE's projects, such projects involve various
contractual arrangements with a variety of private and public entities,
including municipalities, lenders, joint venture partners (which may
provide some of the financing or technical support), purchasers of the
plant output, and contractors and subcontractors which build the
facilities. In addition, such projects require significant amounts of
energy in the form of steam, which may be provided by present or future
waste-to-energy projects operated by OWTE.
In 1993, OPI discontinued the fixed-site hazardous waste business
conducted through American Envirotech, Inc., an indirect subsidiary. In
light of substantial and adverse changes in the market for hazardous waste
incineration services and regulatory uncertainty stemming from EPA
pronouncements, OPI ceased all development activities. Although OPI
continues to hold permits and certain related assets pending resolution of
certain litigation, any other related assets have been disposed of or
otherwise abandoned. (See "Item 3. Legal Proceedings and Environmental
Matters" of this Form 10-K.)
<PAGE>
OTHER INFORMATION
MARKETS, COMPETITION AND GENERAL BUSINESS CONDITIONS
Ogden's Services and Projects business segments can be
adversely affected by general economic conditions, war,
inflation, adverse competitive conditions, governmental
restrictions and controls, natural disasters, energy shortages,
weather, the adverse financial condition of customers and
suppliers, various technological changes and other factors over
which Ogden has no control.
The economic climate can also adversely affect several of
Ogden's Services' operations, including, but not limited to,
fewer airline flights, reduced inflight meals and flight
cancellations in Services' Aviation group; and, reduced event
attendance in Services' Entertainment group. In addition,
disputes between owners of professional sports organizations and
the professional players of such organizations have affected and
may continue to affect the operations of the Entertainment group.
OWTE markets its services principally to governmental
entities, including city, county, and state governments as well
as public authorities or special purpose districts established by
one or more local government units for the purpose of managing
the collection and/or disposal of municipal solid waste ("MSW").
Since 1989 there has been a decline in the number of communities
requesting proposals for waste-to-energy facilities.
The Company believes that it is likely that there will be few
or no opportunities for new waste-to-energy facilities in the
United States in the next three to five years. Ogden believes
that this decline has resulted from a number of factors that
adversely affected communities' willingness to make long-term
capital commitments to waste disposal projects, including:
declining prices at which energy can be sold; declining
alternative disposal costs; uncertainties about the impact of
recycling on the waste stream; and continuing concerns arising
from the Clean Air Act Amendments of 1990.
Ogden believes that waste-to-energy facilities and recycling
are complementary methods of managing a community's waste
disposal needs. The fact that many of Ogden's Client Communities
have recycling rates in excess of national averages demonstrates
that a properly sized waste-to-energy facility does not hinder
achievement of aggressive recycling goals.
MSW is typically supplied to OWTE's facilities pursuant to
long-term contracts. In most of the markets that OWTE currently
serves, the cost of waste-to-energy services to its current
Client Communities is competitive with the cost of other disposal
alternatives, mainly landfilling.
Compliance with regulations adopted in 1996 by the United
States Environmental Protection Agency (the "EPA") to control air
pollutant emissions from landfills will to some extent increase
the cost of landfilling, although landfills may be less expensive
in some cases, in the short term, than waste-to-energy
facilities. Landfills generally do not commit their capacity for
extended periods. Much of the landfilling done in the United
States is done on a spot market or through short term contracts
(less than 5 years). Accordingly, landfill pricing tends to be
more volatile as a result of periodic changes in waste generation
and available capacity than Ogden's pricing, which is based on
long-term contracts. Ogden believes that landfills have not been
required to comply with permitting requirements under existing
law relating to the emission of air pollutants and that this
provides landfills with a competitive advantage.
Another factor affecting the competitiveness of waste-to-
energy fees are the additional charges imposed by Client
Communities and included in such fees to support recycling
programs, household hazardous waste collections, citizen
education, and similar initiatives. The cost competitiveness of
waste-to-energy facilities also depends on the prices at which
the facility can sell the energy it generates. Waste-to-energy
facilities also compete with other disposal technologies such as
mixed solid-waste composting. Mixed waste composting is not a
proven technology, and Ogden believes that it has not been
applied successfully to date in a large scale facility.
Another factor affecting the demand for new waste-to-energy
projects was a 1994 United States Supreme Court decision
invalidating state and local laws and regulations mandating that
waste generated within a given jurisdiction be taken to a
designated facility. See "Flow Control."
Notwithstanding the decline in opportunities for new waste-to-
energy facilities, OWTE believes there may be opportunities at
existing facilities for expansion.
Competition for projects is intense in all markets in which
Projects does business or intends to do business. There are
numerous companies in the United States and in several foreign
countries that pursue these projects. Many of these companies
have more experience, capital and other resources than does
Ogden.
OWTE, OEI and OYWC expend substantial amounts for the
development of new businesses some of which expenditures are
capitalized. Expenditures include the costs of contract and site
acquisition, feasibility and environmental studies, technical and
financial analysis, and in some cases the preparation of
extensive proposals in response to public or private requests for
proposals. Development of independent power projects involves
substantial risk to the developers which is not within their
control. Success depends upon obtaining in a timely manner
acceptable contractual arrangements and financing, appropriate
sites, acceptable licenses and environmental permits and other
government approvals. Even after the required contractual
arrangements are achieved, implementation of the contract often
is subject to substantial conditions that may be outside the
control of the developer. If development opportunities in which
the Company is involved are no longer viewed as viable, such
costs are written off as an expense. OWTE has made contractual
arrangements with some of its Client Communities for the partial
recovery of development costs if the project fails to be
implemented for reasons beyond OWTE's control.
EQUAL EMPLOYMENT OPPORTUNITY
In recent years, governmental agencies (including the Equal
Employment Opportunity Commission) and representatives of
minority groups and women have asserted claims against many
companies, including some Ogden subsidiaries, alleging that
certain persons have been discriminated against in employment,
promotions, training, or other matters. Frequently, private
actions are brought as class actions, thereby increasing the
practical exposure. In some instances, these actions are brought
by many plaintiffs against groups of defendants in the same
industry, thereby increasing the risk that any defendant may
incur liability as a result of activities which are the primary
responsibility of other defendants. Although Ogden and its
subsidiaries have attempted to provide equal opportunity for all
of its employees, the combination of the foregoing factors and
others increases the risk of financial exposure.
EMPLOYEE AND LABOR RELATIONS
As of January 31, 1996, Ogden and its subsidiaries employed
approximately 45,000 people.
Certain employees of Ogden are employed pursuant to collective
bargaining agreements with various unions. During 1995 Ogden
successfully renegotiated collective bargaining agreements in
certain of its business sectors with no strike-related loss of
service. However, in January, 1996 negotiations between New York
City commercial office building owners and Local 32B-32J Service
Employees International Union, AFL-CIO broke off following the
December 31, 1995 expiration of the previous industry wide
collective bargaining agreement. As a result thereof
approximately 30,000 Union employees went on strike on January 4,
1996. Ogden's Facility Management Services employs approximately
1,700 Union employees which were effected by the strike under
contracts with the building owners. The strike was settled in
February 1996 and there was no significant impact on Ogden's
consolidated operations as a result of this strike. Ogden
considers relations with its employees to be good and does not
anticipate any further significant labor disputes in 1996.
ENVIRONMENTAL REGULATORY LAWS
Ogden's business activities are pervasively regulated pursuant
to federal, state, and local environmental laws. Federal laws,
such as the Clean Air Act and Clean Water Act, and their state
counterparts, govern discharges of pollutants to air and water.
Other federal, state, and local laws, such as RCRA,
comprehensively govern the generation, transportation, storage,
treatment, and disposal of solid waste, including hazardous waste
(such laws and the regulations thereunder, "Environmental
Regulatory Laws").
The Environmental Regulatory Laws and other federal, state,
and local laws, such as the Comprehensive Environmental Response
Compensation and Liability Act ("CERCLA") (collectively,
"Environmental Remediation Laws"), make Ogden potentially liable
on a joint and several basis for any environmental contamination
which may be associated with its activities at sites, including
landfills, which OPI has owned, operated, or leased or at which
there has been disposal of residue or other waste handled or
processed by OPI. OPI leases and operates a landfill in
Haverhill, Massachusetts, and leases a landfill in Bristol,
Connecticut, in connection with its projects at those locations.
Some state and local laws also impose liabilities for injury to
persons or property caused by site contamination. Some Service
Agreements provide for indemnification of the Operating
Subsidiaries from some such liabilities.
The Environmental Regulatory Laws require that many permits be
obtained before the commencement of construction and operation of
waste-to-energy, independent power and water and wastewater
projects. There can be no assurance that all required permits
will be issued, and the process of obtaining such permits can
often cause lengthy delays, including delays caused by third
party appeals challenging permit issuance. Failure to meet
conditions of these permits or of the Environmental Regulatory
Laws and the corresponding regulations can subject an Operating
Subsidiary to regulatory enforcement actions by the appropriate
governmental unit, which could include monetary penalties, and
orders requiring certain remedial actions or limiting or
prohibiting operation. To date, OPI has not incurred material
penalties, been required to incur material capital costs or
additional expenses, nor been subjected to material restrictions
on its operations as a result of violations of environmental
laws, regulations, or permits. Certain of the Environmental
Regulatory Laws also authorize suits by private parties for
damages and injunctive relief. Repeated unexcused failure to
comply with environmental standards may also constitute a default
by OWTE or OYWC.
The Environmental Regulatory Laws and federal and state
governmental regulations and policies governing their enforcement
are subject to revision. New technology may be required or
stricter standards may be established for the control of
discharges of air or water pollutants or for solid waste or ash
handling and disposal. Thus, as new technology is developed and
proven, it may be required to be incorporated into new facilities
or major modifications to existing facilities. This new
technology may often be more expensive than that used previously.
The Clean Air Act Amendments of 1990 required EPA to
promulgate New Source Performance Standards ("NSPS") and Emission
Guidelines ("EG") applicable to new and existing municipal waste
combustion units for particulate matter (total and fine), opacity
(as appropriate), sulfur dioxide, hydrogen chloride, oxides of
nitrogen, carbon monoxide, dioxins and dibenzofurans. The laws
of other countries also may require permitting, regulate
emissions into the environment, and provide governmental entities
with authority to impose sanctions for violations, although these
requirements are generally not as rigorous as those of the United
States. Compliance with environmental standards comparable to
those of the United States may also be conditions to the
provision of credit from multi-lateral lenders such as the World
Bank.
The NSPS and EG, which were issued in final form in 1995, will
require capital improvements or operating changes to most of the
waste to energy facilities operated by OWTE to control nitrogen
oxides, organics, mercury and acid gases. The exact timing and
cost of such modifications cannot be stated definitively because
State regulations embodying these have generally not been finally
adopted. The costs to meet new rules for existing facilities
owned by Client Communities will be borne by the Client
Communities. For projects owned or leased by Ogden and operated
under a Service Agreement, the Client Community has the
obligation to fund such capital improvements, to which Ogden may
be required to make an equity contribution, generally 20%. In
addition, Ogden is required to fund the full cost of these
capital improvements at those facilities that are either not
operated pursuant to a Service Agreement or whose Service
Agreement does not require the costs to be borne by the Client
Community. At December 31, 1995, the Company estimates that its
commitments for these capital improvements to total approximately
$30,000,000 over the next four years. Ogden believes that most
costs incurred to meet EG and operating permit requirements at
facilities it operates may be recovered from Client Communities
and other users of its facilities through increased tipping fees
permitted under applicable contracts.
The Clean Air Act also requires each state to develop a state
implementation plan that outlines how areas out of compliance
with federally-established national ambient air quality standards
will achieve compliance. In addition, states must also develop
an operating permit program. Most states are now in the process
of implementing these requirements. The state implementation
plans and the operating permits to be issued under them may place
new requirements on waste-to-energy facilities. Under federal
law, the new operating permits may have a term of up to 12 years
after issuance or renewal, subject to review every five years.
Domestic drinking water facilities developed in the future by
OYWC will be subject to regulation of water quality by the EPA
under the Federal Safe Drinking Water Act and by similar state
laws. Domestic wastewater facilities are subject to regulation
under the Federal Clean Water Act and by similar state laws.
These laws provide for the establishment of uniform minimum
national water quality standards, as well as governmental
authority to specify the type of treatment processes to be used
for public drinking water. Under the federal Clean Water Act,
OYWC may be required to obtain and comply with National Pollutant
Discharge Elimination System permits for discharges from its
treatment stations. Generally, under its current contracts the
client community is responsible for fines and penalties resulting
from the delivery to OYWC's treatment facilities of water not
meeting standards set forth in the contract.
The Environmental Remediation Laws prohibit disposal of
hazardous waste other than in small, household-generated
quantities at OWTE's municipal solid waste facilities. The
Service Agreements recognize the potential for improper
deliveries of hazardous wastes and specify procedures for dealing
with hazardous waste that is delivered to a facility. Although
certain Service Agreements require the Operating Subsidiary to be
responsible for some costs related to hazardous waste deliveries,
to date, no Operating Subsidiary has incurred material hazardous
waste disposal costs.
ENERGY AND WATER REGULATION
OWTE and OEI's domestic businesses are subject to the
provisions of federal, state and local energy laws applicable to
their development, ownership and operation of their domestic
facilities, and to similar laws applicable to their foreign
operations. Federal laws and regulations govern transactions
with utilities, the types of fuel used and the power plant
ownership. State regulatory regimes govern rate approval and
other terms under which utilities purchase electricity from
independent producers, except to the extent such regulation is
pre-empted by federal law.
Pursuant to federal Public Utility Regulatory Policies Act
("PURPA"), the Federal Energy Regulatory Commission ("FERC") has
promulgated regulations that exempt qualifying facilities
(facilities meeting certain size, fuel and ownership
requirements) from compliance with certain provisions of the
Federal Power Act ("FPA"), the Public Utility Holding Company Act
of 1935 ("PUHCA"), and, except under certain limited
circumstances, state laws regulating the rates charged by, or the
financial and organizational activities of, electric utilities.
PURPA was promulgated in 1978 to encourage the development of
cogeneration facilities and small facilities making use of non-
fossil fuel power sources, including waste-to-energy facilities.
The exemptions afforded by PURPA to qualifying facilities from
the FPA and PUHCA and most aspects of state electric utility
regulation are of great importance to OPI and its competitors in
the waste-to-energy and independent power industries.
State public utility commissions must approve the rates, and
in some instances other contract terms, by which public utilities
purchase electric power from Ogden's projects. PURPA requires
that electric utilities purchase electric energy produced by
qualifying facilities at negotiated rates or at a price equal to
the incremental or "avoided" cost that would have been incurred
by the utility if it were to generate the power itself or
purchase it from another source. While public utilities are not
required by PURPA to enter into long-term contracts, PURPA
creates a regulatory environment in which such contracts can
typically be negotiated.
In 1995, the FERC issued two orders in which it modified its
previous interpretation of PURPA and held that state laws and
regulatory orders directing utilities to purchase electricity
from qualifying facilities at rates in excess of the utility's
projected avoided costs were pre-empted by PURPA and that
contracts providing for such above-avoided cost rates were void.
Such laws and regulations have been used in the past by states to
encourage the development of environmentally beneficial
facilities such as waste-to-energy facilities. The FERC stated
in both orders that it intends to apply its reinterpretation of
PURPA only on a prospective basis and that it will not entertain
requests by utilities to invalidate power sales agreements
entered into pursuant to such state laws and regulatory orders
unless the purchasing utility raised the issue of the legality of
the rate at the time of contract execution. Ogden does not
believe any of the power sales agreements related to its OWTE and
OEI facilities is subject to challenge based on the prospective
nature of the orders.
Under PUHCA, any entity owning or controlling ten percent or
more of the voting securities of a "public utility company" or
company which is a "holding company" of a public utility company
is subject to registration with the Securities and Exchange
Commission (the "SEC") and regulation by the SEC unless exempt
from registration. Under PURPA, projects that satisfy the
definition of a "qualifying facility" are exempt from regulation
under PUHCA. Under the Energy Policy Act of 1992, projects that
satisfy the definition of an "exempt wholesale generator" ("EWG")
are not public utility companies under PUHCA. Finally, projects
that satisfy the definition of "foreign utility companies" are
exempt from regulation under PUHCA. Ogden believes that all of
its projects involved in the generation, transmission and/or
distribution of electricity, both domestically and
internationally, will qualify for an exemption from PUHCA and
Ogden will not be required to register with the SEC.
In October, 1992, Congress enacted, and the President signed
into law, comprehensive energy legislation, several provisions of
which are intended to foster the development of competitive,
efficient bulk power generation markets throughout the country.
Although the impact of the legislation cannot be fully known
because Federal and State regulatory agencies are still engaged
in the process of developing policies and promulgating
implementing regulations, OPI believes that, over the long term,
the legislation will create business opportunities both in the
waste-to-energy field as well as in other power generation
fields.
At present, certain members of Congress have indicated their
intention of introducing legislation designed to increase
competition in the electric utility industry. Modification or
repeal of the PURPA and PUHCA are among the legislative changes
that have been discussed. Ogden cannot predict when or if energy
legislation will be enacted or what impact, if any, such
legislation will have on its businesses.
OEI presently has, and intends to continue to acquire,
ownership and operating interests in projects outside the United
States. Most countries have expansive systems for the regulation
of the power business. These generally include provisions
relating to ownership, licensing, rate setting and financing of
generating and transmission facilities.
OYWC's business may be subject to the provisions of state,
local and, in the case of foreign operations, national utility
laws applicable to the development, ownership and operation of
water supply and waste-water facilities. Whether such laws apply
depends upon the local regulatory scheme as well as the manner in
which OYWC provides its services. Where such regulations apply,
they may relate to rates charged, services provided, accounting
procedures, acquisitions and other matters. In the United
States, rate regulations have typically been structured to
provide a pre-determined return on the regulated entities
investments. In other jurisdictions, the trend is towards
periodic price reviews comparing rates to anticipated capital and
operating revenues. The regulated entity benefits from
efficiencies achieved during the period for which the rate is
set.
FLOW CONTROL
Many states provide for local and regional solid waste
planning and require that new solid waste facilities may be
constructed only in conformity with these plans. Certain of
these laws, sometimes referred to as legal flow control,
authorize state agencies to require delivery of waste generated
within their jurisdiction to designated facilities. In 1994, the
United States Supreme court held that such laws were
constitutionally invalid. Federal legislation proposed to
authorize flow control has not been adopted to date.
Although the rates OWTE charges its Client Community are
generally competitive with other disposal options, additional
administrative, recycling and similar charges added to OWTE's
rates may raise the costs of disposal at its facilities. Some
Client Communities have experienced erosion of waste deliveries.
Under most Service Agreements, the Client Community bears the
economic impact of waste delivery shortfalls. Client Communities
are now evaluating options to attract additional waste to
facilities. Certain of these options have been tested in the
federal courts and sustained.
Although it is likely that the Supreme Court's decision has
adversely effected the market for new waste-to-energy facilities,
other factors are believed by Ogden to be more significant for
the inactive market. See Other Information: MARKETS,
COMPETITION, AND GENERAL BUSINESS CONDITIONS.
ASH RESIDUE
In 1994, the United States Supreme Court held that municipal
solid waste ash residue demonstrated by testing to possess
hazardous characteristics is subject to RCRA's provisions for
management as a hazardous waste relating to transportation,
disposal and treatment downstream of the point of generation.
The Supreme Court's ruling has not had a significant impact on
OWTE's business. Following that decision and related EPA
actions, OWTE made adjustments to its operations and, as required
by EPA guidelines issued after the Court's decision, sampled and
tested the ash residue leaving its facilities. No ash residue
from a fully operational facility operated by Ogden has been
characterized as hazardous under the present or past EPA
prescribed test procedures and such ash residue is currently
disposed of in permitted landfills as non-hazardous waste. In
certain states, ash residue from certain waste-to-energy
facilities of other vendors or communities has, on occasion, been
found to have hazardous characteristics under these test
procedures.
In 1994, as previously reported, trade association of which
Ogden is a member, Ogden and other industry members filed an
action against the EPA in federal court challenging certain
actions taken by the EPA following the Court's ruling which could
have required some waste-to-energy facilities to obtain permits
under RCRA in connection with their handling of ash. Subsequent
agency actions confirmed that such permitting would not be
required and the suit has been withdrawn.
<PAGE>
Item 2. PROPERTIES
(a) Services
The principal physical properties of Services are the fueling
installations at various airports in the United States and Canada
and the corporate premises located at Two Pennsylvania Plaza, New
York, New York 10121 under lease, which expires on April 30,
2008 and which contains an option by Ogden to renew for an
additional five years.
Atlantic Design Company's corporate offices are located in
Charlotte, North Carolina. Atlantic Design owns a 51,000 square
foot operating facility on 3.5 acres of land in Vestal, New York.
Atlantic Design also leases operating facilities at various
locations in Florida, New Jersey and New York. The leases range
from a term of one year to as long as ten years.
Ogden Services Corporation, through wholly-owned subsidiaries,
owns and leases buildings in various areas in the United States
and several foreign countries which house office, laboratory and
warehousing operations. The leases range from a month-to-month
term to as long as five years. Ogden Services Corporation also
owns a 12,000 square-foot warehouse and office facility located
in Long Island City, New York.
The Aviation Services in-flight food service operation
facilities, aggregating approximately 600,000 square feet, are
leased, except at Newark, New Jersey; Miami, Florida; and Las
Vegas, Nevada, which are owned.
Entertainment operates Fairmount Park racetrack pursuant to a
long-term lease which expires in 2017. Fairmount Park conducts
thoroughbred and harness racing on a 150-acre site located in
Collinsville, Illinois, eight miles from downtown St. Louis.
Entertainment also owns a 148-acre site located at East St.
Louis, Illinois.
Entertainment also owns and operates Grizzly Park, a nature-
based entertainment facility located on approximately 25-acres
near Yellowstone National Park in West Yellowstone, Montana.
Pursuant to a lease agreement with the State of Florida, which
expires in 2008, Entertainment also has a leasehold interest in
Silver Springs, a 250-acre nature-based park, and Wild Waters, a
6-acre park featuring a variety of water slides and events, both
parks are located near Ocala, Florida.
Ogden Technology leases most of its facilities, consisting
almost entirely of office space. This includes a 15-year lease
which began in 1995 for its headquarters facility in Fairfax,
Virginia, for approximately 139,000 square feet as well as office
space in other locations throughout the United States under lease
terms of five years or less. Ogden Professional Services
occupies approximately 77,000 square feet and Ogden
Communications, Inc. occupies approximately 15,000 square feet of
the Fairfax headquarters facility.
Environmental also leases an aggregate of approximately
347,000 square feet of office and laboratory space in 40 separate
locations in 17 states in the United States. These leases are
generally short term in nature, with terms which range from five
to ten years or less and include (i) the headquarters office
described above, (ii) office and laboratory space in Nashville
and Oak Ridge, Tennessee; San Diego, California; Pensacola,
Florida; and Phoenix, Arizona, and (iii) laboratory office space
owned in Fort Collins, Colorado. In addition to its Fairfax,
Virginia headquarters, Environmental maintains regional
headquarters in San Diego, California and Nashville, Tennessee.
Many of the other Services segment facilities operate from
leased premises located principally within the United States.
(b) Projects
OPI's principal executive offices are located in Fairfield,
New Jersey, in an office building located on a 5.4-acre site
owned by OPI. It also leases approximately 47,000 square feet of
office space in Fairfax, Virginia.
<PAGE>
The following table summarizes certain information relating to
the locations of the properties owned or leased by OPI or its
subsidiaries as of January 31, 1996(1).
<TABLE>
<CAPTION>
Approximate
Site Size
Location in Acres Site Use Nature of Interest
<S> <C> <C> <C>
Fairfield, New Jersey 5.4 Office space Own
Marion County, Oregon 15.2 Waste-to-energy facility Own (2)
Alexandria/Arlington,
Virginia 3.3 Waste-to-energy facility Acquiring the Alexandria
Authority's and the Arlington
Authority's interest under Site
lease (expires Oct. 1, 2025)
pursuant to Conditional Sale
Agreement
Bristol, Connecticut 18.2 Waste-to-energy facility Own (2)
Bristol, Connecticut 35.0 Landfill Site lease (expires Jul. 1, 2014)
Indianapolis, Indiana 23.5 Waste-to-energy facility Site lease (expires Dec., 2008
subject to four 5-year renewal
options) (2)
Stanislaus County,
California 16.5 Waste-to-energy facility Site lease (expires Aug. 20, 2021
subject to 15-year renewal option)
(2)
Babylon, New York 9.5 Waste-to-energy facility Site lease (expires Dec. 19, 2010,
with renewal options)
Haverhill, Massachusetts 12.7 Waste-to-energy facility Site lease (expires Mar. 16, 1997,
subject to sixteen 5-year renewal
options) (2)
Haverhill, Massachusetts 16.8 RDF processing facility Site lease (expires Mar. 16, 1997,
subject to sixteen 5-year renewal
options) (2)
Haverhill, Massachusetts 20.2 Landfill Site lease (expires Mar. 16, 1997,
subject to sixteen 5-year renewal
options) (2)
Lawrence, Massachusetts 11.8 RDF power plant Own (2)
Lake County, Florida 15.0 Waste-to-energy facility Own (2)
Wallingford, Connecticut 10.3 Waste-to-energy facility Site lease (expires Dec. 1, 2026)
(2)
Fairfax County, Virginia 22.9 Waste-to-energy facility Acquiring Fairfax Authority's
interest under Site Lease (expires
Mar. 10, 2016) pursuant to
Conditional Sale Agreement
Imperial County,
California 83.0 Undeveloped land Own
Montgomery County,
Maryland 35.0 Waste-to-energy facility Site lease (expires Nov. 16, 2030)
(2)
Huntington, New York 13.0 Waste-to-energy facility Site lease (expires Oct. 28, 2012,
subject to successive renewal terms
through Jan. 28, 2029)(2)
Warren County, New Jersey 19.8 Waste-to-energy facility Site lease (expires Nov. 16, 2005
subject to two ten-year
renewals)(2)
Hennepin County, Minnesota 14.6 Waste-to-energy facility Leases of site and facility
(expires Oct. 1, 2017 subject to
renewal options to December 20,
2024)(2)(3)
Stockton, California 4.5 Contaminated soil Site lease (expired remediation
remediation facility February 1,
1994) (discontinued)
Tulsa, Oklahoma 22.0 Waste-to-energy facility Leases of site and facility
(expires April 30, 2012 subject to
renewal options to August 2,
2026)(2)(3)
Harris County, Texas 14.0 Undeveloped land Own
Onondaga County, New York 12.0 Facility site Site lease expires
contemporaneously with service
agreement, subject to renewal
options to May 9, 2020(2)
New Martinsville,
West Virginia N/A Hydroelectric Power (See description under
Generating Facility "Projects Independent Power")
Heber, California N/A Geothermal Power Plant (See description under "Projects
Independent Power")
Heber, California N/A Geothermal Power Plant (See description under "Projects
Independent Power")
</TABLE>
_______________________
<PAGE>
(1) Two Facilities not listed in the table were initially owned
by political subdivisions and were sold to a leveraged
lessor. The leverage lessor entered into lease agreements
with the respective Operating subsidiaries as accommodation
leases. All of the lease obligations, including the
obligation to pay rent, are passed through to the client
communities.
(2) The Operating Subsidiary's ownership or leasehold interest
is subject to material liens in connection with the
financing of the related project.
(3) Sublease of site expires contemporaneously with facility
lease.<PAGE>
Item 3. LEGAL PROCEEDINGS AND ENVIRONMENTAL MATTERS
(a) Legal Proceedings
Ogden Corporation and its subsidiaries (the "Company") are
parties to various legal proceedings involving matters arising in
the ordinary course of business. The Company does not believe
that there are any pending legal proceedings for damages against
the Company, including the legal proceeding described below, the
outcome of which would have a material adverse effect on the
Company on a consolidated basis.
As previously disclosed, Ogden was the defendant in actions
brought in state court in Fort Worth and Houston, Texas by
several individuals who claimed that Ogden had breached its
obligations to them to develop a hazardous waste facility. In
March 1995, the Fort Worth court entered partial summary judgment
for the plaintiffs (the "Fort Worth Plaintiffs") in that action
on the issue of whether Ogden had breached its contractual
obligations. Subsequently, the Houston case was abated and the
plaintiffs in that case (the "Intervening Plaintiffs") intervened
in the Fort Worth action. In October 1995 the Company settled
with the Fort Worth Plaintiffs, pursuant to which the summary
judgment was vacated. In February 1996, the Intervening
Plaintiffs and Ogden reached an oral agreement to settle their
action as well. A definitive settlement agreement is being
prepared.
(b) Environmental Matters
The Company conducts regular inquiries of its subsidiaries
regarding litigation and environmental violations which include
determining the nature, amount and likelihood of liability for
any such claims, potential claims or threatened litigation.
In the ordinary course of its business, the Company may
become involved in Federal, state, and local proceedings relating
to the laws regulating the discharge of materials into the
environment and the protection of the environment. These include
proceedings for the issuance, amendment, or renewal of the
licenses and permits pursuant to which a Company subsidiary
operates. Such proceedings also include actions brought by
individuals or local governmental authorities seeking to overrule
governmental decisions on matters relating to the subsidiaries'
operations in which the subsidiary may be, but is not
necessarily, a party. Most proceedings brought against the
Company by governmental authorities or private parties under
these laws relate to alleged technical violations of regulations,
licenses, or permits pursuant to which a subsidiary operates.
The Company believes that such proceedings will not have a
material adverse effect on the Company on a consolidated basis.
The Company's operations are subject to various Federal,
state and local environmental laws and regulations, including the
Clean Air Act, the Clean Water Act, the Comprehensive
Environmental Response Compensation and Liability Act (CERCLA)
and Resource Conservation and Recovery Act (RCRA). Although the
Company operations are occasionally subject to proceedings and
orders pertaining to emissions into the environment and other
environmental violations, the Company believes that it is in
substantial compliance with existing environmental laws and
regulations.
In connection with certain previously divested operations,
the Company may be identified, along with other entities, as
being among potentially responsible parties responsible for
contribution for costs associated with the correction and
remediation of environmental conditions at various hazardous
waste disposal sites subject to CERCLA. In certain instances the
Company may be exposed to joint and several liability for
remedial action or damages. The Company's ultimate liability in
connection with such environmental claims will depend on many
factors, including its volumetric share of waste, the total cost
of remediation, the financial viability of other companies that
also sent waste to a given site and its contractual arrangement
with the purchaser of such operations.
The potential costs related to such matters and the possible
impact on future operations are uncertain due in part to the
complexity of government laws and regulations and their
interpretations, the varying costs and effectiveness of cleanup
technologies, the uncertain level of insurance or other types of
recovery, and the questionable level of the Company's
responsibility. Although the ultimate outcome and expense of
environmental remediation is uncertain, the Company believes that
required remediation and continuing compliance with environmental
laws will not have a material adverse effect on the Company on a
consolidated basis.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the security holders
of Ogden during the fourth quarter of 1995.
<PAGE>
EXECUTIVE OFFICERS OF OGDEN
Set forth below are the names, ages, position and office
held and year appointed, of all "executive officers" (as defined
by Rule 3b-7 of the Securities Exchange Act of 1934) of Ogden as
of March 31, 1996:
<TABLE>
<CAPTION>
CONTINUALLY AN
POSITIONS & AGE AS OF OGDEN OFFICER
NAME OFFICE HELD 3/31/96 SINCE
_________________________________________________________________
<S> <C> <C> <C>
Ralph E. Ablon Chairman of the Board 79 1962
R. Richard Ablon President & 46 1987
Chief Executive
Officer
Constantine G.Caras Executive Vice 57 1990
President & Chief
Administrative Officer
Scott G. Mackin President & Chief 39 1992
Operating Officer,
Ogden Projects, Inc.,
a wholly-owned
subsidiary of Ogden
Philip G. Husby Senior Vice 49 1991
President, Chief Financial
Officer and Treasurer
Lynde H. Coit Senior Vice 41 1991
President & General
Counsel
David L. Hahn Senior Vice President 44 1995
Rodrigo Arboleda Senior Vice President 55 1995
Robert M. DiGia Vice President, 71 1965
Controller & Chief
Accounting Officer
Quintin G. Marshall Vice President- 34 1995
Investor Relations
Kathleen Ritch Vice President & 53 1981
Secretary
</TABLE>
<PAGE>
There is no family relationship by blood, marriage or
adoption (not more remote than first cousins) between any of the
above individuals and any Ogden director, except that R. Richard
Ablon, an Ogden director and President and Chief Executive
Officer, is the son of Ralph E. Ablon, an Ogden director and
Chairman of the Board.
The term of office of all officers shall be until the next
election of directors and until their respective successors are
chosen and qualified.
There are no arrangements or understandings between any of
the above officers and any other person pursuant to which any of
the above was selected as an officer.
The following briefly describes the business experience, the
principal occupation and employment of the foregoing Executive
Officers during the past five years:
Ralph E. Ablon has been Chairman of the Board of Ogden since
1962 and served as its Chief Executive Officer prior to May
1990.
R. Richard Ablon has been President and Chief Executive
Officer of Ogden since May 1990 and has served as Chairman
of the Board and Chief Executive Officer of Ogden Projects,
Inc., since November 1990.
Constantine G. Caras has been Executive Vice President and
Chief Administrative Officer since July 1990.
Scott G. Mackin has been considered an Executive Officer of
Ogden since 1992. He has been President and Chief Operating
Officer of Ogden Projects, Inc. since January 1991.
Philip G. Husby has been Senior Vice President and Chief
Financial Officer of Ogden since January 1, 1991 and
Treasurer since January 19, 1995.
Lynde H. Coit has been a Senior Vice President and General
Counsel of Ogden since January 17, 1991.
David L. Hahn was elected Senior Vice President of Ogden in
January 1995. He has served as Vice President-Marketing of
Ogden Services Corporation for more than the past five
years.
Rodrigo Arboleda was elected Senior Vice President of Ogden
in January 1995. Since 1992, he has served as Senior Vice
President-Business Development for Latin America of Ogden
Services Corporation. From 1989 to 1992 he owned and served
as the President and Chief Executive Officer of
Interamerican Consulting Group, Inc., a consulting firm
located in Miami, Florida specializing in management,
financing, and restructuring of troubled companies.
Robert M. DiGia has been Vice President, Controller and
Chief Accounting Officer for more than the past five years.
Quintin G. Marshall has served as Vice President - Investor
Relations since October 1995. From May 1993 to October 1995
he served as Managing Director of CDA Investment
Technologies, a division of Thomson Financial. From July
1992 to May 1993 he served as Senior Vice President at Gavin
Andersen & Company, an investor relations consulting firm.
From September 1986 to March 1992 he served first as
Managing Director and then Co-Chief Operation Officer of
Georgeson & Company, a proxy solicitation and consulting
company.
Kathleen Ritch has been Vice President and Secretary of
Ogden for more than the past five years.
Part II
Item 5. MARKET FOR OGDEN'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Pursuant to General Instruction G (2), the information called
for by this item is hereby incorporated by reference from Page 55
of Ogden's 1995 Annual Report to Shareholders.
As of March 1, 1996, the approximate number of record holders
of Ogden common stock was 9,100.
Item 6. SELECTED FINANCIAL DATA
Pursuant to General Instruction G (2), the information called
for by this item is hereby incorporated by reference from Page 32
of Ogden's 1995 Annual Report to Shareholders.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Pursuant to General Instruction G (2), the information called
for by this item is hereby incorporated by reference from Pages 28
through 31 of Ogden's 1995 Annual Report to Shareholders.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Pursuant to General Instruction G (2), the information called
for by this item is hereby incorporated by reference from Pages 32
through 52 and Page 55 of Ogden's 1995 Annual Report to
Shareholders.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not Applicable.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF OGDEN
Pursuant to General Instruction G (3), the information
regarding directors called for by this item is hereby incorporated
by reference from Ogden's 1996 Proxy Statement to be filed with the
Securities and Exchange Commission.
Item 11. EXECUTIVE COMPENSATION
Pursuant to General Instruction G (3), the information called
for by this item is hereby incorporated by reference from Ogden's
1996 Proxy Statement to be filed with the Securities and Exchange
Commission. The information regarding officers called for by this
item is included at the end of Part I of this document under the
heading "Executive Officers of Ogden."
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Pursuant to General Instruction G (3), the information called
for by this item is hereby incorporated by reference from Ogden's
1996 Proxy Statement to be filed with the Securities and Exchange
Commission.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to General Instruction G (3), the information called
for by this item is hereby incorporated by reference from Ogden's
1996 Proxy statement to be filed with the Securities and Exchange
Commission.
Part IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a) Listed below are the documents filed as a part of this
report:
1). All financial statements contained on pages 33 through 52
and the Independent Auditors' Report on page 53 of
Ogden's 1995 Annual Report to Shareholders are
incorporated herein by reference.
2). Financial statement schedules as follows:
(i) Schedule II - Valuation and Qualifying Accounts for
the years ended December 31, 1995, 1994 and 1993.
3). Those exhibits required to be filed by Item 601 of
Regulation S-K:
<PAGE>
EXHIBITS
2.0 Plans of Acquisition, Reorganization, Arrangement,
Liquidation or Succession.
2.1 Agreement and Plan of Merger, dated as of October
31, 1989, among Ogden, ERCI Acquisition Corporation
and ERC International, Inc.*
2.2 Agreement and Plan of Merger among Ogden
Corporation, ERC International, Inc., ERC
Acquisition Corporation and ERC Environmental and
Energy Services Co., Inc., dated as of January 17,
1991.*
2.3 Amended and Restated Agreement and Plan of Merger
among Ogden Corporation, OPI Acquisition Corp. and
Ogden Projects, Inc., dated as of September 27,
1994.*
3.0 Articles of Incorporation and By-laws.
3.1 Ogden's Restated Certificate of Incorporation as
amended.*
3.2 Ogden's By-Laws, as amended.*
4.0 Instruments Defining Rights of Security Holders.
4.1 Fiscal Agency Agreement between Ogden and Bankers
Trust Company, dated as of June 1, 1987, and
Offering Memorandum dated June 12, 1987, relating
to U.S. $85 million Ogden 6% Convertible
Subordinated Debentures, Due 2002.*
4.2 Fiscal Agency Agreement between Ogden and Bankers
Trust Company, dated as of October 15, 1987, and
Offering Memorandum, dated October 15, 1987,
relating to U.S. $75 million Ogden 5-3/4%
Convertible Subordinated Debentures, Due 2002.*
4.3 Indenture dated as of March 1, 1992 from Ogden
Corporation to The Bank of New York, Trustee,
relating to Ogden's $100 million debt offering.*
10.0 Material Contracts
10.1 Credit Agreement by and among Ogden, The Bank of
New York, as Agent and the signatory bank Lenders
thereto dated as of September 20, 1993.*
(i) Amendment to Credit Agreement, dated as of
November 16, 1995. Transmittal herewith as Exhibit
10.1(i).
10.2 Stock Purchase Agreement, dated May 31, 1988,
between Ogden and Ogden Projects, Inc.*
10.3 Tax Sharing Agreement, dated January 1, 1989,
between Ogden, Ogden Projects, Inc. and
subsidiaries, Ogden Allied Services, Inc. an
subsidiaries, and Ogden Financial Services, Inc.
and subsidiaries.*
10.4 Stock Purchase Option Agreement, dated June 14,
1989, between Ogden and Ogden Projects, Inc. as
amended on November 16, 1989.*
10.5 Preferred Stock Purchase Agreement, dated July 7,
1989, between Ogden Financial Services, Inc. and
Image Data Corporation.*
10.6 Rights Agreement between Ogden Corporation and
Manufacturers Hanover Trust Company, dated as of
September 20, 1990 and amended August 15, 1995 to
provide The Bank of New York as successor agent.*
10.7 Executive Compensation Plans
(a) Ogden Corporation 1986 Stock Option Plan.*
(b) Ogden Corporation 1990 Stock Option Plan.*
(i) Ogden Corporation 1990 Stock Option Plan
as Amended and Restated as of January 19,
1994.*
(c) Ogden Services Corporation Executive Pension
Plan.*
(d) Ogden Services Corporation Select Savings
Plan.*
(i) Ogden Services Corporation Select Savings
Plan Amendment and Restatement as of
January 1, 1995.*
(e) Ogden Services Corporation Select Savings Plan
Trust.*
(i) Ogden Services Corporation Select Savings
Plan Trust Amendment and Restatement
dated as of January 1, 1995.*
(f) Ogden Services Corporation Executive Pension
Plan Trust.*
(g) Changes effected to the Ogden Profit Sharing
Plan effective January 1, 1990.*
(h) Ogden Corporation Profit Sharing Plan.*
(i) Ogden Profit Sharing Plan as amended and
restated January 1, 1991 and as in effect
through January 1, 1993.*
(ii) Ogden Profit Sharing Plan as amended and
restated effective as of January 1,
1995.*
(i) Ogden Corporation Core Executive Benefit
Program.*
(j) Ogden Projects Pension Plan.*
(k) Ogden Projects Profit Sharing Plan.*
(l) Ogden Projects Supplemental Pension and Profit
Sharing Plans.*
(m) Ogden Projects Employee's Stock Option Plan.*
(i) Amendment, dated as of December 29, 1994
to the Ogden Projects Employees' Stock
Option Plan. Transmitted herewith as
Exhibit 10.7 (u)(i).*
(n) Ogden Projects Core Executive Benefit
Program.*
(o) Form of amendments to the Ogden Projects, Inc.
Pension Plan and Profit Sharing Plans
effective as of January 1, 1994.*
(i) Form of Amended Ogden Projects, Inc.
Profit Sharing Plan, effective as of
January 1, 1994. Transmitted herewith as
Exhibit 10.7 (w)(i).*
(ii) Form of Amended Ogden Projects, Inc.
Pension Plan, effective as of January 1,
1994. Transmitted herewith as Exhibit
10.7 (w)(ii).*
(p) Ogden Corporation CEO Formula Bonus Plan.*
10.8 Employment Agreements
(a) Employment Letter Agreement between Ogden and
Lynde H. Coit dated January 30, 1990.*
(b) Employment Agreement between Ogden and R.
Richard Ablon dated as of May 24, 1990.*
(i) Letter Amendment Employment Agreement
between Ogden and R. Richard Ablon dated
as of October 11, 1990.*
(c) Employment Agreement between Ogden and C. G.
Caras dated as of July 2, 1990.*
(i) Letter Amendment to Employment Agreement
between Ogden Corporation and C.G. Caras,
dated as of October 11, 1990.*
(d) Employment Agreement between Ogden and Philip
G. Husby as of July 2, 1990.*
(e) Termination Letter Agreement between Maria P.
Monet and Ogden dated as of October 22, 1990.*
(f) Letter Agreement between Ogden Corporation and
Ogden's Chairman of the Board, dated as of
January 16, 1992.*
(g) Employment Agreement between Ogden and Ogden's
Chief Accounting Officer dated as of December
18, 1991.*
(h) Employment Agreement between Scott G. Mackin
and Ogden Projects, Inc. dated as of January
1, 1994.*
(i) Employment Agreement between David L. Hahn and
Ogden Corporation, dated December 1, 1995.
Transmitted herewith as Exhibit 10.8(i).
10.9 First Amended and Restated Ogden Corporation
Guaranty Agreement made as of January 30, 1992
by Ogden Corporation for the benefit of
Mission Funding Zeta and Pitney Bowes Credit
Corporation.*
10.10 Ogden Corporation Guaranty Agreement as of
January 30, 1992 by Ogden Corporation for the
benefit of Allstate Insurance Company and
Ogden Martin Systems of Huntington Resource
Recovery Nine Corporation.*
11 Ogden Corporation and Subsidiaries Detail of
Computation of Earnings Applicable to Common
Stock for the years ended December 31, 1995,
1994 and 1993. Transmitted herewith as
Exhibit 11.
13 Those portions of the Annual Report to
Stockholders for the year ended December 31,
1995, which are incorporated herein by
reference. Transmitted herewith as Exhibit
13.
21 Subsidiaries of Ogden. Transmitted herewith
as Exhibit 21.
23 Consent of Deloitte & Touche LLP. Transmitted
herewith as Exhibit 23.
27 Financial Data Schedule (EDGAR Filing Only).
* Incorporated by reference as set forth in the
Exhibit Index of this Annual Report on Form 10-K.
(b) No Reports on Form 8-K were filed by Ogden during
the fourth quarter of 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 and 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
OGDEN CORPORATION
Date: March 27, 1996 By /S/ R. Richard Ablon
R. Richard Ablon
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities indicated.
SIGNATURE TITLE
/S/ Ralph E. Ablon Chairman of the Board & Director
RALPH E. ABLON
/S/ R. Richard Ablon President & Chief Executive Officer
R. RICHARD ABLON and Director
/S/ Philip G. Husby Senior Vice President, Treasurer and
PHILIP G. HUSBYChief Financial Officer
/S/ Robert M. DiGia Vice President, Controller and Chief
ROBERT M. DIGIA Accounting Officer
/S/ David M. Abshire Director
DAVID M. ABSHIRE
/S/ Norman G. Einspruch Director
NORMAN G. EINSPRUCH
/S/ Constantine G. Caras Director
CONSTANTINE G. CARAS
/S/ Attallah Kappas Director
ATTALLAH KAPPAS
Director
TERRY ALLEN KRAMER
Director
MARIA P. MONET
/S/ Judith D. Moyers Director
JUDITH D. MOYERS
/S/ Homer A. Neal Director
HOMER A. NEAL
/S/ Stanford S. Penner Director
STANFORD S. PENNER
/S/ Jesus Sainz Director
JESUS SAINZ
/S/ Frederick Seitz Director
FREDERICK SEITZ
/S/ Robert E. Smith Director
ROBERT E. SMITH
/S/ Helmut F.O. Volcker Director
HELMUT F.O. VOLCKER
/S/ Abraham Zaleznik Director
ABRAHAM ZALEZNIK
<PAGE>
INDEPENDENT AUDITORS' REPORT
Ogden Corporation:
We have audited the consolidated financial statements of Ogden
Corporation and subsidiaries as of December 31, 1995 and 1994 and
for each of the three years in the period ended December 31, 1995,
and have issued our report thereon dated February 5, 1996, which
report includes an explanatory paragraph relating to the adoption
of Statements of Financial Accounting Standards Nos. 106, 112, 115,
and 121; such consolidated financial statements and report are
included in your 1995 Annual Report to Shareholders and are
incorporated herein by reference. Our audits also included the
consolidated financial statement schedule of Ogden Corporation and
subsidiaries, listed in Item 14. This consolidated financial
statement schedule is the responsibility of the Corporation's
management. Our responsibility is to express an opinion based on
our audits. In our opinion, such consolidated financial statement
schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
/s/Deloitte & Touche, LLP
New York, New York
February 5, 1996
<PAGE>
<TABLE>
SCHEDULE II
OGDEN CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1994
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
ADDITIONS
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND CHARGED TO END OF
DESCRIPTION OF PERIOD EXPENSES OTHER ACCOUNTS DEDUCTIONS PERIOD
<S> <C> <C> <C> <C> <C>
Allowances deducted in the balance sheet
from the assets to which they apply:
Doubtful receivables - current $25,547,000 $ 5,869,000 $10,241,000 (A) $ 9,047,000 (D) $32,783,000
31,000 (B)
142,000 (C)
Deferred charges on projects 750,000 5,650,000 1,350,000 (B) 750,000 (E) 7,000,000
TOTAL $26,297,000 $11,519,000 $11,764,000 $ 9,797,000 $39,783,000
Allowances not deducted:
Provision for consolidation of facilities $ 4,720,000 $ 1,320,000 (G) $ 3,400,000
Estimated cost of disposal of discontinued
operations 1,008,000 $ 1,485,000 (F) 1,548,000 (G) 945,000
Reserves relating to tax indemnification
and other contingencies in connection
with the sale of limited partnership
interests in and related tax benefits of
a waste-to-energy facilty $ 6,000,000 6,000,000
Other 1,477,000 3,500,000 (1,350,000) (B) 23,000 (G) 3,604,000
TOTAL $ 7,205,000 $ 9,500,000 $ 135,000 $ 2,891,000 $13,949,000
Notes:
(A) Reserve for contract billing adjustments.
(B) Transfer from other accounts.
(C) Recoveries of amounts previously written off.
(D) Write-offs of receivables considered uncollectible.
(E) Write-offs of unsuccessful development costs.
(F) Net proceeds from operations and sale of assets relating to
discontinued operations credited to provision.
(G) Payments charged to allowances.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE II
OGDEN CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1993
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
ADDITIONS
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND CHARGED TO END OF
DESCRIPTION OF PERIOD EXPENSES OTHER ACCOUNTS DEDUCTIONS PERIOD
<S> <C> <C> <C> <C> <C>
Allowances deducted in the balance sheet
from the assets to which they apply:
Doubtful receivables - current $19,730,000 $7,682,000 $4,073,000 (A) $ 6,034,000 (D) $25,547,000
119,000 (B) 94,000 (E)
71,000 (C)
Deferred charges on projects 750,000 750,000
TOTAL $20,480,000 $7,682,000 $4,263,000 $ 6,128,000 $26,297,000
Allowances not deducted:
Provision for consolidation of facilities $ 6,040,000 $ 1,320,000 (G) $ 4,720,000
Estimated cost of disposal of discontinued
operations 7,620,000 $1,706,000 $4,061,000 (F) 12,379,000 (H) 1,008,000
Other 285,000 1,350,000 158,000 (G) 1,477,000
TOTAL $13,945,000 $3,056,000 $4,061,000 $13,857,000 $ 7,205,000
Notes:
(A) Reserve for contract billing adjustments.
(B) Transfer from other accounts.
(C) Recoveries of amounts previously written off.
(D) Write-offs of receivables considered uncollectible.
(E) Transfer to other accounts.
(F) Net proceeds from on-site remediation utilizing mobile technology
$3,853,000 and reclassification of liabilities pertaining to fixed-
site hazardous waste business $208,000.
(G) Payments charged to allowances.
(H) Gain from on-site remediation business utilizing mobile technology.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE II
OGDEN CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1995
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
ADDITIONS
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND CHARGED TO END OF
DESCRIPTION OF PERIOD EXPENSES OTHER ACCOUNTS DEDUCTIONS PERIOD
<S> <C> <C> <C> <C> <C>
Allowances deducted in the balance sheet
from the assets to which they apply:
Doubtful receivables - current $32,783,000 $ 7,204,000 $ 64,000 (A) $ 3,012,000 (B) $37,039,000
Deferred charges on projects 7,000,000 3,670,000 7,000,000 (C) 3,670,000
TOTAL $39,783,000 $10,874,000 $ 64,000 $10,012,000 $40,709,000
Allowances not deducted:
Provision for consolidation of facilities $ 3,400,000 $ 2,850,000 (D)
550,000 (E)
Estimated cost of disposal of discontinued
operations 945,000 $ 4,510,000 5,269,000 (E) $ 186,000
Estimated cost of disposal of assets 14,993,000 14,993,000
Provision for restructuring 8,200,000 2,090,000 (E) 6,110,000
Reserves relating to tax indemnification and
other contingencies in connection with the
sale of limited partnership interests in and
related tax benefits a of waste-to-energy
facility 6,000,000 3,000,000 (D) 3,000,000
Other 3,604,000 7,267,000 1,500,000 (D) 9,371,000
TOTAL $13,949,000 $34,970,000 $15,259,000 $33,660,000
Notes:
(A) Recoveries of amounts previously written off.
(B) Write-offs of receivables considered uncollectible.
(C) Write-offs of unsuccessful development costs.
(D) Reversal to operating costs of provisions no longer required.
(E) Payments charged to allowances.
<PAGE>
</TABLE>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
2 Plans of Acquisition,
Reorganization Arrangement,
Liquidation or Succession.
2.1 Agreement and Plan of Merger, Filed as Exhibit 2 to Ogden's
dated as of October 31, 1989, Form S-4 Registration Statement
among Ogden, ERCI Acquisition File No. 33-32155, and
Corporation and ERC International incorporated herein by
Inc. reference.
2.2 Agreement and Plan of Merger Filed as Exhibit (10)(x) to
among Ogden Corporation, ERC Ogden's Form 10-K for the
International Inc., ERC fiscal year ended December 31,
Acquisition Corporation and 1990 and incorporated herein
ERC Environmental and Energy by reference.
Services Co., Inc. dated as of
January 17, 1991.
2.3 Amended and Restated Agreement Filed as Exhibit 2 to Ogden's
and Plan of Merger among Ogden Form S-4 Registration Statement
Corporation, OPI Acquisition File No. 33-56181 and
Corporation sub. and Ogden incorporated herein by
Projects, Inc. dated as of reference.
September 27, 1994.
3 Articles of Incorporation and
By-Laws.
3.1 Ogden's Restated Certificate Filed as Exhibit (3)(a)
of Incorporation as amended. to Ogden's Form 10-K for the
fiscal year ended December 31,
1988 and incorporated herein
by reference.
3.2 Ogden's By-Laws, as amended. Filed as Exhibit 3.2 to Ogden's
Form 10-Q for the quarterly
period ended June 30, 1995 and
incorporated herein by
reference.
4 Instruments Defining Rights of
Security Holders.
4.1 Fiscal Agency Agreement between Filed as Exhibits (C)(3) and
Ogden and Bankers Trust Company, (C)(4) to Ogden's Form 8-K
dated as of June 1, 1987 and filed with the Securities and
Offering Memorandum dated June Exchange Commission on July 7,
12, 1987, relating to U.S. 1987 and incorporated herein
$85 million Ogden 6% Convertible by reference.
Subordinated Debentures, Due 2002.
<PAGE>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
4.2 Fiscal Agency Agreement between Filed as Exhibit (4) to Ogden's
Ogden and Bankers Trust Company, Form S-3 Registration Statement
dated as of October 15, 1987, filed with the Securities and
and Offering Memorandum, dated Exchange Commission on December
October 15, 1987, relating to 4, 1987, Registration No.
U.S. $75 million Ogden 5-3/4% 33-18875, and incorporated
Convertible Subordinated herein by reference.
Debentures, Due 2002.
4.3 Indenture dated as of March 1, Filed as Exhibit (4)(C) to
1992 from Ogden Corporation to Ogden's Form 10-K for fiscal
The Bank of New York, Trustee, year ended December 31, 1991,
relating to Ogden's $100 million and incorporated herein by
debt offering. reference.
10 Material Contracts
10.1 Credit Agreement by and among Filed as Exhibit No. 10.2 to
Ogden, The Bank of New York, as Ogden's Form 10-K for fiscal
Agent and the signatory Lenders year ended December 31, 1993,
thereto dated as of September 20, and incorporated herein by
1993. reference.
(i) Amendment to Credit Transmitted herewith as
Agreement, dated as of Exhibit 10.1(i).
November 16, 1995.
10.2 Stock Purchase Agreement dated Filed as Exhibit (10)(d) to
May 31, 1988, between Ogden and Ogden's Form 10-K for the
Ogden Projects, Inc. fiscal year ended December 31,
1989 and incorporated herein
by reference.
10.3 Tax Sharing Agreement, dated Filed as Exhibit (10)(e) to
January 1, 1989 between Ogden, Ogden's Form 10-K for the
Ogden Projects, Inc. and fiscal year ended December 31,
subsidiaries, Ogden Allied 1989 and incorporated herein
Services, Inc. and subsidiaries by reference.
and Ogden Financial Services,
Inc. and subsidiaries.
10.4 Stock Purchase Option Agreement, Filed as Exhibit (10)(f) to
dated June 14, 1989, between Ogden's Form 10-K for the
Ogden and Ogden Projects, Inc. fiscal year ended December 31,
as amended on November 16, 1989. 1989 and incorporated herein
by reference.
10.5 Preferred Stock Purchase Filed as Exhibit (10)(g) to
Agreement, dated July 7, 1989, Ogden's Form 10-K for the
between Ogden Financial Services, fiscal year ended December 31,
Inc. and Image Data Corporation. 1989 and incorporated herein
by reference.
<PAGE>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
10.6 Rights Agreement between Ogden Filed as Exhibit (10)(h) to
Corporation and Manufacturers Ogden's Form 10-K for the
Hanover Trust Company, dated as fiscal year ended December 31,
of September 20, 1990 and amended 1990 and incorporated herein
August 15, 1995 to provide The by reference.
Bank of New York as successor
agent.
10.7 Executive Compensation Plans.
(a) Ogden Corporation 1986 Filed as Exhibit (10)(k) to
Stock Option Plan. Ogden's Form 10-K for the
fiscal year ended December 31,
1985 and incorporated herein
by reference.
(b) Ogden Corporation 1990 Filed as Exhibit (10)(j) to
Stock Option Plan. Ogden's Form 10-K for the
fiscal year ended December 31,
1990 and incorporated herein
by reference.
(i) Ogden Corporation 1990 Filed as Exhibit 10.6(b)(i) to
Stock Option Plan as Ogden's Form 10-Q for the
Amended and Restated as of quarterly period ended
January 19, 1994. September 30, 1994 and
incorporated herein by
reference.
(c) Ogden Services Corporation Filed as Exhibit (10)(k) to
Executive Pension Plan. Ogden's Form 10-K for the
fiscal year ended December 31,
1990 and incorporated herein
by reference.
(d) Ogden Services Corporation Filed as Exhibit (10)(l) to
Select Savings Plan. Ogden's Form 10-K for the
fiscal year ended December 31,
1990 and incorporated herein
by reference.
(i) Ogden Services Corporation Filed as Exhibit 10.7(d)(i)
Select Savings Plan to Ogden's Form 10-K for the
Amendment and Restatement fiscal year ended December 31,
as of January 1, 1995. 1994 and incorporated herein
by reference.
(e) Ogden Services Corporation Filed as Exhibit (10)(m) to
Select Savings Plan Trust. Ogden's Form 10-K for the
fiscal year ended December 31,
1990 and incorporated herein
by reference.
(i) Ogden Services Corporation Filed as Exhibit 10.7(e)(i) to
Select Savings Plan Trust Ogden's Form 10-K for the
Amendment and Restatement fiscal year ended December 31,
as of January 1, 1995. 1994 and incorporated herein
by reference.<PAGE>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
(f) Ogden Services Corporation Filed as Exhibit (10)(n) to
Executive Pension Plan Trust. Ogden's Form 10-K for the
fiscal year ended December 31,
1990 and incorporated herein
by reference.
(g) Changes effected to the Ogden Filed as Exhibit (10)(o) to
Profit Sharing Plan effective Ogden's Form 10-K for the
January 1, 1990. fiscal year ended December 31,
1990 and incorporated herein
by reference.
(h) Ogden Corporation Profit Sharing Filed as Exhibit 10.8(p) to
Plan. Ogden's Form 10-K for fiscal
year ended December 31, 1992
and incorporated herein by
reference.
(i) Ogden Profit Sharing Plan Filed as Exhibit 10.8(p)(i) to
as amended and restated Ogden's Form 10-K for fiscal
January 1, 1991 and as in year ended December 31, 1993
effect through January 1, and incorporated herein by
1993. reference.
(ii) Ogden Profit Sharing Plan Filed as Exhibit 10.7(p)(ii)
as amended and restated to Ogden's Form 10-K for fiscal
effective as of January 1, year ended December 31, 1994
1995. and incorporated herein by
reference.
(i) Ogden Corporation Core Executive Filed as Exhibit 10.8(q) to
Benefit Program. Ogden's Form 10-K for fiscal
year ended December 31, 1992
and incorporated herein by
reference.
(j) Ogden Projects Pension Plan. Filed as Exhibit 10.8(r) to
Ogden's Form 10-K for fiscal
year ended December 31, 1992
and incorporated herein by
reference.
(k) Ogden Projects Profit Sharing Filed as Exhibit 10.8(s) to
Plan. Ogden's Form 10-K for fiscal
year ended December 31, 1992
and incorporated herein by
reference.
(l) Ogden Projects Supplemental Filed as Exhibit 10.8(t) to
Pension and Profit Sharing Plans. Ogden's Form 10-K for fiscal
year ended December 31, 1992
and incorporated herein by
reference.
<PAGE>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
(m) Ogden Projects Employees' Stock Filed as Exhibit 10.8(u) to
Option Plan. Ogden's Form 10-K for fiscal
year ended December 31, 1992
and incorporated herein by
reference.
(i) Amendment dated as of Filed as Exhibit 10.7(u)(i) to
December 29, 1994, to the Ogden's Form 10-K for fiscal
Ogden Projects Employees' year ended December 31, 1994
Stock Option Plan. and incorporated herein by
reference.
(n) Ogden Projects Core Executive Filed as Exhibit 10.8(v) to
Benefit Program. Ogden's Form 10-K for fiscal
year ended December 31, 1992
and incorporated herein by
reference.
(o) Form of amendments to the Ogden Filed as Exhibit 10.8(w) to
Projects, Inc. Pension Plan and Ogden's Form 10-K for fiscal
Profit Sharing Plans effective as year ended December 31, 1993
of January 1, 1994. and incorporated herein by
reference.
(i) Form of amended Ogden Filed as Exhibit 10.7(w)(i) to
Projects Profit Sharing Ogden's Form 10-K for fiscal
Plan effective as of year ended December 31, 1994
January 1, 1994 and and incorporated herein by
incorporated herein by reference.
reference.
(ii) Form of amended Ogden Filed as Exhibit 10.7(w)(ii)
Projects Pension Plan, to Ogden's Form 10-K for fiscal
effective as of January 1, year ended December 31, 1994
1994 and incorporated and incorporated herein by
herein by reference. reference.
(p) Ogden Corporation CEO Formula Filed as Exhibit 10.6(w) to
Bonus Plan. Ogden's Form 10-Q for the
quarterly period ended
September 30, 1994 and
incorporated herein by
reference.
10.8 Employment Agreements
(a) Employment Letter Agreement Filed as Exhibit (10)(p) to
between Ogden and an executive Ogden's Form 10-K for the
officer dated January 30, 1990. fiscal year ended December 31,
1990 and incorporated herein
by reference.
<PAGE>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
(b) Employment Agreement between Filed as Exhibit (10)(r) to
R. Richard Ablon and Ogden Ogden's Form 10-K for the
dated as of May 24, 1990. fiscal year ended December 31,
1990 and incorporated herein
by reference.
(i) Letter Amendment to Filed as Exhibit (10)(r)(i)
Employment Agreement to Ogden's Form 10-K for the
between Ogden Corporation fiscal year ended December 31,
and R. Richard Ablon, dated 1990 and incorporated herein
as of October 11, 1991. by reference.
(c) Employment Agreement between Filed as Exhibit (10)(s) to
Ogden and C. G. Caras dated Ogden's Form 10-K for the
as of July 2, 1990. fiscal year ended December 31,
1990 and incorporated herein
by reference.
(i) Letter Amendment to Filed as Exhibit (10)(s)(i)
Employment Agreement to Ogden's Form 10-K for the
between Ogden Corporation fiscal year ended December 31,
and C. G. Caras, dated as 1990 and incorporated herein
of October 11, 1990. by reference.
(d) Employment Agreement between Filed as Exhibit (10)(t) to
Ogden and Philip G. Husby, Ogden's Form 10-K for the
dated as of July 2, 1990. fiscal year ended December 31,
1990 and incorporated herein
by reference.
(e) Termination Letter Agreement Filed as Exhibit (10)(v) to
between Maria P. Monet and Ogden Ogden's Form 10-K for the
dated as of October 22, 1990. fiscal year ended December 31,
1990 and incorporated herein
by reference.
(f) Letter Agreement between Ogden Filed as Exhibit 10.2 (p) to
Corporation and Ogden's Chairman Ogden's Form 10-K for fiscal
of the Board, dated as of year ended December 31, 1991
January 16, 1992. and incorporated herein by
reference.
(g) Employment Agreement between Filed as Exhibit 10.2 (q) to
Ogden Corporation and Ogden's Ogden's Form 10-K for fiscal
Chief Accounting Officer dated year ended December 31, 1991
as of December 18, 1991. and incorporated herein by
reference.
(h) Employment Agreement between Filed as Exhibit 10.8(o) to
Scott G. Mackin and Ogden Ogden's Form 10-K for fiscal
Projects, Inc. dated as of year ended December 31, 1993
January 1, 1994. and incorporated herein by
reference.
(i) Employment Agreement between Transmitted herewith as
Ogden Corporation and Exhibit 10.8(i).
David L. Hahn, dated December
1, 1995.
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
10.9 First Amended and Restated Filed as Exhibit 10.3 (b) (i)
Ogden Corporation Guaranty to Ogden's Form 10-K for
Agreement made as of January 30, fiscal year ended December 31,
1992 by Ogden Corporation for 1991 and incorporated herein
the benefit of Mission Funding by reference.
Zeta and Pitney Bowes Credit
Corporation.
10.10 Ogden Corporation Guaranty Filed as Exhibit 10.3 (b) (iii)
Agreement made as of January to Ogden's Form 10-K for
30, 1992 by Ogden Corporation fiscal year ended December 31,
for the benefit of Allstate 1991 and incorporated herein
Insurance Company and Ogden by reference.
Martin Systems of Huntington
Resource Recovery Nine Corp.
11 Ogden Corporation and Transmitted herewith as
Subsidiaries Detail of Exhibit 11.
Computation of Earnings
Applicable to Common Stock
for the years ended December
31, 1995, 1994 and 1993.
13 Those portions of the Annual Transmitted herewith as
Report to Stockholders for the Exhibit 13.
year ended December 31, 1995,
which are incorporated herein
by reference.
21 Subsidiaries of Ogden. Transmitted herewith as
Exhibit 21.
23 Consent of Deloitte & Touche. Transmitted herewith as
Exhibit 23.
27 Financial Data Schedule. Transmitted herewith as
Exhibit 27.
EXHIBIT 10.1(i)
AMENDMENT NO. 2
TO
CREDIT AGREEMENT
AMENDMENT NO. 2 (this "Amendment"), dated as of November
16, 1995, to the Credit Agreement, dated as of September 20,
1993, by and among Ogden Corporation (the "Company"), the
signatory Lenders thereto and The Bank of New York, as Agent
(the "Agent"), as amended by Consent and Amendment No. 1,
dated as of September 12, 1994 (the "Agreement").
RECITALS
I. Capitalized terms used herein which are defined in
the Agreement shall have the meanings therein defined.
II. The Company has requested that the Agreement be
amended to extend the Termination Date by one year.
III. In addition, the Company has requested that the
Aggregate Commitments be increased to $200,000,000, that the
Commitment of Swiss Bank Corporation be increased by
$5,000,000, that Bank of America Illinois ("B of A") be added
as a Lender under the Agreement with a Commitment of
$20,000,000 and that the Agreement be amended in certain other
respects as set forth herein.
IV. On the date hereof and on the Amendment Effective
Date (as defined in paragraph 5) no Competitive Bid Loans are
or will be outstanding, no Letter of Credit has been or will
have been issued and the only Loans outstanding under the
Agreement are and will be R/C Loans (the "Existing Loans").
The Existing Loans will be outstanding as Eurodollar Loans
having a one-month Interest Period expiring on December 6,
1995.
V. In order to avoid the need for assigning portions of
the Existing Loans to conform to the revised Commitments and
Commitment Percentages arising from this Amendment, on the
Amendment Effective Date, the Company will deliver to the
Agent a Borrowing Request requesting R/C Loans from the
Lenders, including B of A, in an aggregate amount at least
equal to the aggregate amount due on the Existing Loans on the
requested Borrowing Date, which Loans will be made based on
the revised Commitments and Commitment Percentages set forth
in Attachment A hereto, and the proceeds of such Loans will
be used, in whole or in part, to retire the Existing Loans.
In consideration of the Recitals, the terms and
conditions hereinafter set forth, and for other good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
1. Paragraph 1.1 of the Agreement is amended to restate
the following definition in its entirety:
"Termination Date": October 29, 1998, or any date
subsequent thereto resulting from an extension of the
Termination Date pursuant to paragraph 2.18.
2. Paragraph 1.1 of the Agreement is further amended to
change the amount contained in clause (viii) of the definition
of "Permitted Subsidiary Indebtedness" from "$25,000,000" to
"$50,000,000".
3. Exhibit A to the Agreement is restated in its
entirety to read as set forth in Attachment A hereto.
4. Schedule 1.1 to the Agreement is restated in its
entirety to read as set forth in Attachment B hereto.
5. This Amendment shall not become effective until the
date (the "Amendment Effective Date ") on which each of the
following conditions precedent has been fulfilled, provided
that if such conditions are fulfilled prior to December 6,
1995, the Amendment Effective Date shall be December 6, 1995:
a. The Agent shall have received this Amendment
executed by a duly authorized officer or officers of the
Company, the Agent and the Lenders.
b. The Agent shall have received notes, dated the
Amendment Effective Date, as follows: (i) on behalf of Swiss
Bank, a new Note (the "Replacement Note") in the principal
amount of its increased Commitment in replacement of its
existing Note (which existing Note shall be marked
"SUPERCEDED" and returned to the Company) and (ii) on behalf
of B of A, a new Note in the principal amount of its
Commitment (the "B of A Note", and with the Replacement Note,
the "New Notes") each in the form of Exhibit E to the
Agreement, with appropriate insertions therein, executed by a
duly authorized officer or officers of the Company.
c. The Agent shall have timely received an R/C
Borrowing Request from the Company requesting R/C Loans in an
aggregate amount at least equal to the aggregate amount due on
the Existing Loans on the requested Borrowing Date, upon the
making of which the Company hereby directs the Agent to remit
all or such part of the proceeds thereof as shall be necessary
to repay the full amount due on the Existing Loans on such
Borrowing Date to the Lenders thereof for application in
payment of such Loans and to credit the remainder of such
proceeds, if any, as provided in the Agreement or as otherwise
directed by the Company.
d. The Agent shall have received a certificate, dated
the date hereof, of the Secretary or an Assistant Secretary of
the Company (i) attaching a true and complete copy of the
resolutions of its Board of Directors and of all documents
evidencing other necessary corporate action (in form and
substance satisfactory to the Agent and to Special Counsel)
taken by it to authorize the execution and delivery of this
Amendment No. 2, the New Notes and the transactions
contemplated hereby, (ii) attaching a true and complete copy
of its Certificate of Incorporation and By-Laws, (iii) setting
forth the incumbency of its officer or officers who may sign
this Amendment and the New Notes, including therein a
signature specimen of such officer or officers and (iv)
attaching a certificate of good standing of the Secretary of
State of the State of Delaware, together with such other
documents as the Agent or Special Counsel shall reasonably
require.
e. The Agent shall have received an opinion of general
counsel of the Company, dated the date hereof, substantially
in the form of Attachment C hereto.
f. All conditions precedent set forth in paragraph 6 of
the Agreement shall have been satisfied.
6. By its execution hereof, B of A agrees that,
simultaneously upon the occurrence of the Amendment Effective
Date, it shall become a Lender for all purposes under the
Agreement and shall be deemed to have appointed the Agent to
act on its behalf under, and on the terms set forth in,
paragraph 10 of the Agreement.
7. The Company hereby (a) reaffirms and admits the
validity and enforceability of all the Loan Documents and its
obligations thereunder, (b) agrees and admits that it has no
valid defenses to or offsets against any of its obligations to
the Agent or any Lender under the Loan Documents, (c) agrees
to pay the reasonable fees and disbursements of counsel to the
Agent incurred in connection with the preparation, negotiation
and closing of this Amendment, and (d) represents and
warrants that, after giving effect to this Amendment, no
Default or Event of Default has occurred and is continuing.
8. This Amendment may be executed in any number of
counterparts, each of which shall be an original and all of
which shall constitute one agreement. It shall not be neces-
sary in making proof of this Amendment to produce or account
for more than one counterpart signed by the party against
which enforcement is sought.
9. In all other respects, the Agreement and the other
Loan Documents shall remain in full force and effect.
10. THIS AMENDMENT IS BEING DELIVERED IN AND IS INTENDED
TO BE PERFORMED IN THE STATE OF NEW YORK AND SHALL BE
CONSTRUED AND ENFORCEABLE AND BE GOVERNED BY, THE INTERNAL
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first above
written.
OGDEN CORPORATION
By: /s/Philip G. Husby
Title: Senior V.P. & CFO
THE BANK OF NEW YORK,
Individually and as Agent
By: /s/William A. Klein
Title: V.P.
BANK OF AMERICA ILLINOIS
By: illegible signature
Title: Authorized Officer
DEUTSCHE BANK AG
New York and/or Cayman Islands
Branches
By: /s/Robert M. Wood
Title: Vice President
By: /s/James Fox
Title: Assistant Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/James S. Finch
Title: Vice President
NATIONSBANK, N.A.
By: /s/Michael R. Heredia
Title: Vice President
NATIONAL WESTMINSTER BANK, PLC
New York Branch
By: /s/Maria Amaral-LeBlanc
Title: Vice President
NATIONAL WESTMINSTER BANK, PLC
Nassau Branch
By: /s/Maria Amaral-LeBlanc
Title: Vice President
SWISS BANK CORPORATION
New York Branch
By: /s/Robert O. Gurman
Title: Director, Merchant Banking
By: /s/David C. Hemingway
Title: Director, Merchant Banking
UNION BANK OF SWITZERLAND,
New York Branch
By: /s/James P. Kelleher
Title: Assistant Vice President
By: /s/Peter B. Yearley
Title: Vice President
CHEMICAL BANK
By: /s/Robert K. Gaynor
Title: Vice President
THE MITSUBISHI BANK, LIMITED,
New York Branch
By: /s/Paula Mueller
Title: Vice President
<PAGE>
ATTACHMENT A
EXHIBIT A
<TABLE>
COMMITMENTS
<CAPTION>
COMMITMENT
BANK COMMITMENT PERCENTAGE
<S> <C> <C>
The Bank of New York $ 30,000,000 15.00%
Bank of America Illinois 20,000,000 10.00
Deutsche Bank AG 20,000,000 10.00
New York and/or Cayman
Islands Branches
Morgan Guaranty Trust
Company of New York 20,000,000 10.00
NationsBank, N.A. 20,000,000 10.00
National Westminster 20,000,000 10.00
Bank, PLC
Swiss Bank Corporation 20,000,000 10.00
Union Bank of Switzerland 20,000,000 10.00
New York Branch
Chemical Bank 15,000,000 7.50
The Mitsubishi Bank, 15,000,000 7.50
Limited, New York Branch
___
Totals $200,000,000 100%
</TABLE>
<PAGE>
ATTACHMENT B
SCHEDULE 1.1
LIST OF LENDING OFFICES
DOMESTIC LENDING OFFICES EURODOLLAR LENDING OFFICES
(1) The Bank of New York The Bank of New York
New York Corporate Division New York Corporate Division
8th Floor 8th Floor
One Wall Street One Wall Street
New York, New York 10286 New York, New York 10286
Attention: William G.C. Dakin, Attention: William G.C. Dakin,
Assistant Vice President Assistant Vice President
Telephone: (212) 635-1473 Telephone: (212) 635-1473
Telecopy: (212) 635-1483 Telecopy: (212) 635-1483
(2) Bank of America Bank of America
200 West Jackson Blvd. 200 West Jackson Blvd.
Chicago, Illinois 60697 Chicago, Illinois 60697
Attention: David Noda Attention: David Noda
Telephone: (212) 503-7948 Telephone: (212) 503-7948
Telecopy: (212) 503-7771 Telecopy: (212) 503-7771
(3) Deutsche Bank AG Deutsche Bank AG
New York Branch Cayman Islands Branch
24th Floor 24th Floor
31 West 52nd Street 31 West 52nd Street
New York, New York 10019 New York, New York 10019
Attention: Robert Wood Attention: Robert Wood
Telephone: (212) 469-7839 Telephone: (212) 469-7839
Telecopy: (212) 469-8212 Telecopy: (212) 469-8212
(4) Morgan Guaranty Trust Morgan Guaranty Trust
Company of New York Company of New York
60 Wall Street Nassau, Bahamas Office
New York, New York 10260-0060 c/o J. P. Morgan Services Inc.-
Attention: James Finch 3/OP52
Vice President 500 Stanton Christiana Road
Telephone: (212) 648-6985 Newark, Delaware 19713
Telecopy: (212) 648-5016 Telephone: (212) 648-6957
Telecopy: (212) 648-5014
(5) NationsBank, NA NationsBank, NA
6610 Rockledge Dr. 6610 Rockledge Dr.
Corporate Bank Corporate Bank
6th Floor 6th Floor
Bethesda, MD 20817 Bethesda, MD 20817
Attention: Michael Heredia Attention: Michael Heredia
Telephone: (301) 571-0724 Telephone: (301) 571-0724
Telecopy: (301)-571-0719 Telecopy: (301)-571-0719
(6) National Westminster Bank PLC National Westminster Bank PLC
New York Marketing Office New York Marketing Office
175 Water Street - 19th Floor 175 Water Street - 19th Floor
New York, New York 10038 New York, New York 10038
Attention: David Apps, Attention: David Apps,
Vice President Vice President
Telephone: (212) 602-4221 Telephone: (212) 602-4221
Telecopy: (212) 602-4500 Telecopy: (212) 602-4500
(7) Swiss Bank Corporation Swiss Bank Corporation
New York Branch Cayman Islands Branch
222 Broadway c/o Swiss Bank Corporation
222-04-E New York Branch
New York, New York 10038 222 Broadway
Attention: Robert O. Gurman, 222-04-E
Director New York, New York 10038
Telephone: (212) 574-3127 Attention: Robert O. Gurman,
Telecopy: (212) 574-4131 Director
Telephone: (212) 574-3127
Telecopy: (212) 574-4131
(8) Union Bank of Switzerland Union Bank of Switzerland
New York Branch New York Branch
299 Park Avenue 299 Park Avenue
New York, New York 10171 New York, New York 10171
Attention: Peter B. Yearley Attention: Peter B. Yearley
Vice President Vice President
Telephone: (212) 821-3339 Telephone: (212) 821-3339
Telecopy: (212) 821-3878 Telecopy: (212) 821-3878
(9) Chemical Bank Chemical Bank
270 Park Avenue 270 Park Avenue
New York, New York 10017 New York, New York 10017
Attention: Chris Perkins, Attention: Chris Perkins,
Vice President Vice President
Telephone: (212) 270-4769 Telephone: (212) 270-4769
Telecopy: (212) 270-0330 Telecopy: (212) 270-0330
(10) The Mitsubishi Bank, Limited- The Mitsubishi Bank, Limited-
New York Branch New York Branch
225 Liberty Street 225 Liberty Street
Two World Financial Center Two World Financial Center
New York, New York 10281 New York, New York 10281
Attention: Paula Mueller Attention: Paula Mueller
Telephone: (212) 667-2890 Telephone: (212) 667-2890
Telecopy: (212) 667-3562 Telecopy: (212) 667-3562
<PAGE>
ATTACHMENT C
FORM OF OPINION OF COUNSEL
_______ __, 1995
TO THE PARTIES LISTED ON
SCHEDULE A ATTACHED HERETO
I have acted as counsel to Ogden Corporation, a Delaware
corporation (the "Company") in connection with Amendment No. 2,
dated as of November 16, 1995 (the "Amendment"), to the Credit
Agreement, dated as of September 20, 1993, by and among the
Company, the signatory Banks thereto, and The Bank of New York,
as Agent, as amended by Amendment No. 1 thereto, dated as of
September 12, 1994 (the "Agreement"). Capitalized terms used
herein that are defined in the Amendment or the Agreement shall
have the meanings therein defined.
In furnishing this opinion, I have examined and relied
upon originals or copies, certified or otherwise identified to
my satisfaction as being true copies, of such instruments,
documents and certificates of officers of the Company or of
government officials, and have conducted such investigations of
fact and law, as I have deemed necessary or appropriate as the
basis for the opinions hereinafter expressed, including,
without limitation, (i) the Restated Certificate of Incorpora-
tion and By-Laws of the Company, (ii) the Amendment and the
Agreement and (iii) the New Notes. With respect to questions of
fact material to any opinions expressed herein, I have relied
solely upon inquiries made of the appropriate officers of the
Company and its Subsidiaries.
I express no opinion as to any question of law other than
with respect to the laws of the State of New York, the corpo-
rate laws of the State of Delaware, and the laws of the United
States of America. Wherever in this opinion the phrase "to the
best of my knowledge" is used, it shall be construed as being
limited, without independent investigation, to my actual
knowledge and the actual knowledge of those attorneys in my
office who have directly participated in this matter.
Based upon and subject to the foregoing, I am of the
opinion that:
11. The Company and each Material Subsidiary is duly or-
ganized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or formation, has all
requisite corporate power and authority to own its Property and
to carry on its business as now conducted, and is in good
standing and authorized to do business in each jurisdiction in
which there is a reasonable likelihood of a Material Adverse
Effect as a consequence of the failure to be so authorized.
12. The Company has full corporate power and authority to
enter into, execute, deliver and carry out the terms of the
Amendment and the New Notes, and to make the borrowings and to
incur the other obligations contemplated thereby, to execute,
deliver and carry out the terms of the New Notes and to incur
the obligations provided for therein, all of which have been
duly authorized by all proper and necessary corporate action
and are not in violation of its Restated Certificate of
Incorporation and By-Laws.
13. No consent, authorization or approval of, filing
with, notice to, or exemption by, stockholders, any Governmen-
tal Body or any other Person (except for those which have been
obtained, made or given) is required to authorize, or is re-
quired in connection with the execution, delivery and perfor-
mance of the Amendment and the New Notes or is required as a
condition to the validity or enforceability of the Amendment
and the New Notes. No provision of any applicable statute, law
(including, without limitation, any applicable usury or similar
law), rule or regulation of any Governmental Body will prevent
the execution, delivery or performance of, or affect the
validity of, the Amendment and the New Notes.
14. The Amendment constitutes, and the New Notes, when
issued and delivered pursuant thereto for value received, will
constitute, the valid and legally binding obligations of the
Company enforceable in accordance with their respective terms,
except (i) as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally or by
general principles of equity, including, without limitation,
principles of materiality, reasonableness and good faith
(regardless of whether considered in a proceeding in equity or
an action at law), and (ii) that the enforceability of any
provision of the Agreement providing for indemnification might
be limited by considerations of public policy.
15. There are no actions, suits, arbitration proceedings
or claims pending or, to the best of my knowledge, threatened
against the Company or any Subsidiary, or maintained by the
Company or any Subsidiary, at law or in equity, before any
Governmental Body as to which there is a reasonable likelihood
of a Material Adverse Effect. There are no proceedings pending
or, to the best of my knowledge, threatened against the Company
or any Subsidiary which call into question the validity or en-
forceability of any of the Loan Documents.
16. To the best of my knowledge, neither the Company nor
any Subsidiary is in default under any mortgage, indenture,
contract or agreement to which it is a party or by which it or
any of its Property is bound, as to which, taken as a whole,
there is a reasonable likelihood of a Material Adverse Effect.
To the best of my knowledge, the execution, delivery or carry-
ing out of the terms of the Loan Documents will not constitute
a default under, conflict with, require any consent under
(other than consents which have been obtained), or result in
the creation or imposition of, or obligation to create, any
Lien upon the Property of the Company or any Subsidiary pur-
suant to the terms of any such mortgage, indenture, contract,
agreement, judgment, decree or order as to which, if not con-
sented to, waived or obtained, there is a reasonable likelihood
of a Material Adverse Effect.
17. To the best of my knowledge, neither the Company nor
any Subsidiary is in default with respect to any judgment, or-
der, writ, injunction, decree or decision of any Governmental
Body as to which there is a reasonable likelihood of a Material
Adverse Effect and the Company and each Subsidiary is complying
in all material respects with all applicable statutes and
regulations, including ERISA, of all Governmental Bodies, a
violation of which is reasonably likely to have a Material
Adverse Effect.
18. Neither the Company nor any Subsidiary (a) is subject
to regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act (other than the minimum statutory
requirements that do not violate clause (b) below) or the
Investment Company Act of 1940, or (b) is subject to any
statute or regulation which prohibits or restricts the in-
currence of Indebtedness under the Loan Documents, including,
without limitation, statutes or regulations relative to common
or contract carriers or to the sale of electricity, gas,
steam, water, telephone, telegraph or other public utility
services.
19. To the best of my knowledge, neither the Company nor
any Subsidiary has received written notice or otherwise learned
of any claim, demand, action, event, condition, report or
investigation indicating or concerning any potential or actual
liability as to which individually or in the aggregate there is
a reasonable likelihood of a Material Adverse Effect arising in
connection with any non-compliance with or violation of the
requirements of any Environmental Laws.
Very truly yours,
Lynde H. Coit
Senior Vice President &
General Counsel
<PAGE>
SCHEDULE A
The Bank of New York
Bank of America Illinois
Deutsche Bank AG
Morgan Guaranty Trust Company of New York
NationsBank of Virginia, N.A.
National Westminster Bank PLC
Swiss Bank Corporation
Union Bank of Switzerland
Chemical Bank
The Mitsubishi Bank, Limited
EXHIBIT 10.8(i)
CONFIDENTIAL AND
LEGALLY PRIVILEGED
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the 1st day of
December 1995, by and between OGDEN CORPORATION, a Delaware
corporation maintaining its principal office at Two Pennsylvania
Plaza, New York, New York (the "Company") and David L. Hahn, an
individual now residing at 19 Janes Lane, Lloyd Harbor, New York
11743 (the "Employee").
WITNESSETH THAT:
WHEREAS, the Employee is currently serving in an executive
capacity as a Senior Vice President of the Company and the Company
desires to ensure that the Employee will continue to be available
to provide services in a similar capacity in the future, which
services are significant to the Company's long-range prospects and
the long-range prospects of the Company's subsidiaries; and
WHEREAS, to induce the Employee to provide such services, the
Company is offering to provide the Employee with the compensation,
benefits and security provided for in this Agreement.
NOW, THEREFORE, in consideration of the covenants and
agreements herein contained, the parties hereto agree as follows:
1. Employment/Capacity/Term.
(a) The Company agrees to and does hereby employ the
Employee, and the Employee agrees to and hereby does enter into the
employ of the Company upon the terms and conditions set forth in
this Agreement. Such employment shall be in an executive capacity
as Senior Vice President, Business Development - Asia of the
Company.
(b) Such employment shall commence on December 1, 1995
and shall continue through November 30, 1998, and from year to year
thereafter subject to the right of the Employee or the Company to
terminate such employment as of November 30, 1996, or any
subsequent November 30, by written notice given to the other party
at least sixty (60) days prior to such termination date stating an
intention to so terminate such employment. Termination by either
party, in accordance with the provisions of the preceding sentence
shall not require a statement of the reason or cause for such
termination and shall not be deemed a breach or violation of this
Agreement by the party giving such notice. As used in this
Agreement, the phrase "term of this Agreement" shall be deemed to
include the period subsequent to the date hereof and prior to
termination of this Agreement.
2. Time and Effort/Absences.
During the "term of this Agreement", the Employee shall
devote his entire time and attention during normal business hours
to the business of the Company and its subsidiaries (the "Ogden
Group") subject to the supervision of the Board of Directors of the
Company and the President and Chief Executive Officer of the
Company, and he shall not engage in any other business activity
whether or not such business activity is pursued for gain, profit,
or other pecuniary advantage, but this restriction shall not be
construed to restrict the Employee (i) from performing services as
a member of the Board of Directors, Board of Trustees or the like
of any non-profit entity for which the Employee receives no
compensation, provided that, such services do not unreasonably
interfere with the ability of the Employee to perform the services
and discharge the responsibilities required of him under this
Agreement, and (ii) from investing his assets in such form or
manner as will not require any services on the part of the Employee
in the operation of the business of the entity in which such
investments are made. The Employee shall be excused from rendering
his services during reasonable vacation periods and during other
reasonable temporary absences as authorized from time to time by
the Board of Directors or the President and Chief Executive Officer
of the Company.
3. Corporate Offices.
If elected, the Employee will serve, without additional
compensation, as an officer and director (or in either capacity) of
the Company and the Ogden Group.
4. Salary/Bonus/Other Benefits.
In consideration of the services and duties to be
rendered and performed by the Employee during the term of this
Agreement, the Company agrees to pay and provide for the Employee
the compensation and benefits described below:
(a) An annual salary, payable in equal monthly or bi-
weekly installments, in the amount of One Hundred Seventy Thousand
Dollars ($170,000) or in such greater amount as may from time to
time be fixed by the Board of Directors of the Company.
(b) An annual incentive bonus in such amount as may from
time to time be fixed by the Board of Directors of the Company.
(c) Other Benefits. It is intended that the Company
shall continue to provide the Employee with benefits at least as
favorable as benefits provided on behalf of other executives of the
Company who furnish services of comparable significance, as they
may exist from time to time. Such benefits presently include
Ogden's Core Group Life Insurance, Supplemental Executive Group
Life Insurance, Medical and Health Insurance, Automobile, Ogden
Stock Option Plan, Executive Pension Plan, Ogden Select Plan and
Profit Sharing Plan. Except as otherwise provided herein, any such
participation shall be in accordance with the provisions of such
plans and nothing contained in this Agreement in intended to or
shall be deemed to affect adversely any of the Employee's rights as
a participant under any such plans. Nothing herein shall prevent
the Company from modifying or discontinuing any benefit plan on a
consistent and non-discriminatory basis applicable to all such
executives.
5. Expenses.
The Employee shall be reimbursed for out-of-pocket
expenses incurred from time to time on behalf of the Company and
the Ogden Group or in the performance of his duties under this
Agreement, upon the presentation of such supporting documents and
forms as the Company shall reasonably request.
6. Disability/Disability Benefit.
In the event that the Employee is incapable because of
physical or mental illness of rendering services of the character
contemplated hereby, for a period of six (6) consecutive months,
the Board of Directors of the Company may determine that the
Employee has become disabled. In the event of such a determination
of disability, the Company shall have the continuing right and
option while such disability continues to terminate this Agreement
by notice in writing to the Employee, effective thirty (30) days
after such notice of termination is so given, unless, within such
thirty (30) day period, the Employee resumes rendering full-time
services of the character contemplated hereby. The incapacity due
to physical or mental illness to render the services of the
character contemplated hereby, shall not constitute a breach of
this Agreement by the Employee. If this Agreement is terminated by
the Company as a result of a determination of disability, as
aforesaid, the Company shall be obligated to continue the salary of
the Employee as provided in Paragraph 4. for a period equal to the
greater of (a) twelve (12) months, or (b) such longer period as may
be determined by the Board of Directors of the Company, in each
case reduced by any disability insurance benefits provided for the
benefit of the Employee at the expense of the Company.
7. Death/Death Benefit.
In the event of the death of the Employee during the term
of this Agreement, this Agreement shall terminate and the
Employee's salary shall continue to be paid to his designated
beneficiary or, if none, to his personal representative, through
the last day of the month in which such death occurs.
8. Severance Pay.
If the Company gives notice to terminate in accordance
with Paragraph 1.(b), or if the employment of the Employee is
terminated at any time (i) by the Employee for Good Reason (as
defined in Paragraph 9., or (ii) by the Company for any reason
other than for Cause (as hereinafter defined), the Company will be
obligated to pay to the Employee a cash payment in an amount equal
to the product of (i) and (ii); where (i) shall equal the sum of
(A) the Employee's annual salary and (B) the Employee's annual
incentive bonus during the twelve (12) month period ending with the
close of the month in which such termination of employment occurs
(the "Date of Termination"), but not less than the incentive bonus
awarded to the Employee in December 1994, which was Seventy Five
Thousand Dollars ($75,000), divided by twelve (12); and where (ii)
shall be the lesser of, (x) thirty-six (36), or (y) the number of
months until the Employee's normal retirement date (the "Severance
Pay"). Termination of the Employee's employment on account of his
disability, death or retirement (as hereinafter defined) will not
be considered a termination of the Employee's employment by the
Company and will not require the Company to pay and provide any
Severance Pay. No Severance Pay will be required if the employment
of the Employee is terminated by the Company for Cause (as
hereinafter defined) or by the Employee (other than for Good Reason
as defined in Paragraph 9.) or if the Employee gives notice to
terminate in accordance with Paragraph 1.(b). The Severance Pay
provided herein is provided in order to reinforce and encourage the
continued loyalty, attention, and dedication of the Employee to the
Company's business and affairs without the concerns which normally
arise from the possibility of a loss of employment security. As
used herein, the terms "Retirement" and "Cause" shall have the
following meanings, respectively:
(a) Retirement.
Termination of the Employee's employment on account
of "Retirement" shall mean termination on or after the Employee's
normal retirement date in accordance with the terms of the Ogden
Profit Sharing Plan; and
(b) Cause.
Termination by the Company of the Employee's
employment for "Cause" shall mean termination as a result of (i)
the willful and continued failure by the Employee to perform
substantially the services contemplated by this Agreement (other
than any such failure resulting from the Employee's incapacity due
to physical or mental illness) after a written demand for
substantial performance is delivered to the Employee by a member or
representative of the Board of Directors of the Company or the
President and Chief Executive Officer of the Company which
specifically identifies the manner in which it is alleged that the
Employee has not substantially performed such services, or (ii) the
willful engaging by the Employee in gross misconduct which is
materially and demonstrably injurious to the Company; provided
that, no act, or failure to act, on the Employee's part shall be
considered "willful" unless done, or omitted to be done, in bad
faith and without reasonable belief that such action or omission
was in, or not opposed to, the best interests of the Company.
9. Termination by the Employee for Good Reason.
The termination by the Employee of this Agreement and his
employment for "Good Reason" shall be deemed a justifiable
termination of his employment and shall excuse the Employee from
the obligation to render services as provided in Paragraph 2.
hereof. Upon such termination, the Employee shall be entitled to
Severance Pay in accordance with the provisions of Paragraph 8.
hereof. As used herein, the phrase "Good Reason" shall mean:
(a) a change in the Employee's status, title or position
as an officer of the Company in the executive capacity set forth in
this Agreement which, in his reasonable judgment, does not
represent a promotion from or enhancement of his status, title and
position, or, any removal of the Employee from or any failure to
reappoint or reelect him to such position, except in connection
with a justifiable termination by the Company of the Employee's
employment for Cause or on account of disability, the retirement or
death of the Employee or the termination by the Employee of his
employment other than for Good Reason;
(b) a reduction in the Employee's annual salary or a
failure by the Company to pay to the Employee any installment of
the annual salary required by Paragraph 4. which failure continues
for a period of twenty (20) days after written notice thereof is
given by the Employee to the Company;
(c) the failure by the Company within ten (10) days of
notice from the Employee to obtain the assumption of this Agreement
in form and substance to the reasonable satisfaction of the
Employee by any successor (other than by merger of consolidation
for which no separate assumption is necessary) as referred to in
Paragraph 16; or
(d) any refusal by the Company to allow the Employee to
attend to matters or engage in activities not directly related to
the business of the Company which is permitted by this Agreement.
10. Notice of Termination.
Any purported notice of termination of the Employee's
employment (other than a Notice given by either party pursuant to
Paragraph 1. hereof) shall be communicated in writing and delivered
to the other party as provided in Paragraph 17. (hereinafter a
"Notice of Termination").
11. Trade Secrets, Etc.
The Employee acknowledges that prior to his employment by
the Company he had no knowledge of the formulae, processes or
methods of manufacture or other trade secrets of the Company. Upon
the termination of his employment, the Employee agrees forthwith to
deliver up to the Company notebooks and other data relating to
research or experiments as conducted by him or relating to the
products, formulae, processes or methods of manufacture of the
Company.
12. Customer List.
The Employee recognizes and acknowledges that the written
list of the customers of the Company, its subsidiaries and
affiliates, as it may exist from time to time, is a valuable,
special and unique asset. The Employee agrees that he will not
during the term of his employment or within five (5) years
thereafter, use for his own personal benefit or disclose the
written list of the customers of the Company, its subsidiaries and
affiliates or any part thereof, to any person, firm, corporation,
association or other entity for any reason or purpose whatsoever.
13. Limited Covenant Not to Compete.
If the employment of the Employee hereof is terminated
(i) by the Employee pursuant to Paragraph 1.(b) hereof, or (ii) by
the Company for Cause (as defined in Paragraph 8. above), then in
either case (y) the Employee will not, for a period of two (2)
years form such termination of employment within the territorial
confines of the United States of America, directly or indirectly,
own, manage, operate, control, be employed by, participate in, or
be connected in any manner with the ownership, management,
operation or control of any business in competition with the
business conducted by the Company at the time of such termination,
and (z) the Employee will, for a period of two (2) years from such
termination refrain from carrying on a business similar to that
presently carried on by the Company within the states in which the
business of the Company has been carried on, so long as the Company
carries on like business therein.
14. Injunctive Relief.
In the event of a breach or threatened breach by the
Employee of the provisions of Paragraph 11., 12., or 13. during or
after the term of this Agreement, the Company shall be entitled to
an injunction restraining the Employee from violation of such
paragraph. Nothing herein shall be construed as prohibiting the
Company from pursuing any other remedy it may have in the event of
breach of this Agreement by the Employee.
15. Certain Proprietary Rights.
Employee agrees to and hereby does assign to the Company
all his right, title and interest in and to all inventions, whether
or not patentable, which are made or conceived solely or jointly by
him:
(a) At any time during the term of his employment by the
Company in an executive, managerial, planning, technical research
or engineering capacity (including development, manufacturing,
systems, applied science and sales), or
(b) During the course of or in connection with his
duties during the term of this Agreement, or
(c) With the use of time or materials of the Company.
The Employee agrees to communicate to the Company or its
representatives all facts known to him concerning such inventions,
to sign all rightful papers, make all rightful oaths and generally
to do everything possible to aid the Company in obtaining and
enforcing proper patent protection for all such inventions in all
countries and in vesting title to such inventions and patents in
the Company. For the purpose of this Agreement, the subject matter
of any application for patent naming Employee as a sole or joint
inventor filed during the course of employment or within one year
subsequent to the termination thereof shall be deemed to be an
invention made or conceived by him during the course of his
employment by the Company and assignable to the Company hereunder,
unless the Employee establishes by a preponderance of the evidence
that such invention was made or conceived by him subsequent to
termination of his employment hereunder. At the Company's request
(during or after the term of this Agreement) and expense, the
Employee will promptly execute a specific assignment of title to
the Company, and perform any other acts reasonably necessary to
implement the foregoing assignment.
16. Binding Effect.
This Agreement shall be binding upon and inure to the
benefit of:
(a) Any successors or assigns of the Company, whether by
way of a merger or consolidation, or liquidation of the Company, or
by way of the Company selling all or substantially all of the
assets of the Company to a successor entity; however, in the event
of the assignment by the Company of this Agreement, the Company
shall nevertheless remain liable and obligated to the Employee in
accordance with the terms hereof; and
(b) The Employee's estate, his executors, adminis-
trators, heirs and beneficiaries.
17. Notices.
Any notice or other communication required under this
Agreement shall be in writing, shall be deemed to have been given
and received when delivered in person, or, if mailed, shall be
deemed to have been given when deposited in the United States mail,
first class, registered or certified, return receipt requested,
with proper postage prepaid, and shall be deemed to have been
received on the third business day thereafter, and shall be
addressed as follows:
If to the Company, addressed to:
Ogden Corporation
Two Pennsylvania Plaza
New York, New York 10121
Attention: General Counsel
If to the Employee, addressed to:
David L. Hahn
19 Janes Lane
Lloyd Harbor, New York 11743
or such other address as to which any party hereto may have
notified the other in writing.
18. Governing Law.
This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York.
19. Entire Agreement.
This Agreement contains the entire arrangement or
understanding between the Employee and the Company relating to the
employment of the Employee by the Company. No provision of the
Agreement may be modified or amended except by any instrument in
writing by or for both parties hereto. All references to
paragraphs refer to paragraphs of this Agreement.
20. Waiver.
Failure of either party hereto to insist upon strict
compliance by the other party with any term, covenant or condition
hereof shall not be deemed a waiver of such term, covenant or
condition, nor shall any waiver or relinquishment or failure to
insist upon strict compliance of any right or power hereunder at
any one or more times be deemed a waiver or relinquishment of such
right or power at any other time or times.
21. Assignment by Employee.
The rights and benefits of the Employee under this
Agreement are personal to him and no such right or benefit shall be
subject to voluntary or involuntary alienation, assignment or
transfer; provided, however, that nothing in this Paragraph 21
shall preclude the Employee from designating a beneficiary or
beneficiaries to receive any benefit payable on his death.
22. Severability.
If for any reason any provision of this Agreement shall
be held invalid, such invalidity shall not affect any other
provision of this Agreement not held so invalid, and all other
provisions shall to the full extent consistent with law continue in
full force and effect. If any such provision shall be held invalid
in part, such invalidity shall in no way affect the remaining
portion of such provision not held so invalid, and the remaining
portion of such provision, together with all other provisions of
this Agreement, shall to the full extent consistent with law
continue in full force and effect.
23. Headings.
The headings of paragraphs are included solely for
convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
OGDEN CORPORATION
/s/David L. Hahn By: /s/R. Richard Ablon
David L. Hahn - Employee President and Chief Executive
Officer
EXHIBIT 11
<TABLE>
OGDEN CORPORATION AND SUBSIDIARIES
DETAIL OF COMPUTATION OF EARNINGS
APPLICABLE TO COMMON STOCK
FOR THE THREE YEARS ENDED DECEMBER 31, 1995
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
NUMBER OF SHARES USED FOR COMPUTATION
OF EARNINGS PER SHARE:
Average number of common shares 49,385,000 43,610,000 43,378,000
NUMBER OF SHARES USED FOR COMPUTATION
OF EARNINGS PER SHARE ASSUMING FULL
DILUTION:
Average number of common shares 49,385,000 43,610,000 43,378,000
Issuable for options-treasury
stock method
Shares issuable for conversion of
preferred stock 306,000 329,000 356,000
Shares issuable for conversion of
debentures 42,000
Number of shares used for computation 49,691,000 43,939,000 43,776,000
COMPUTATION OF EARNINGS APPLICABLE
TO COMMON SHARES:
Income from continuing operations
before cumulative effect of changes
in accounting principles $ 7,444,000 $67,826,000 $62,130,000
Add (deduct):
Adjustments arising from minority
interest in consolidated subsidiaries 10,000 32,000
Dividends on Ogden preferred stock (171,000) (184,000) (199,000)
Consolidated income applicable to
Ogden common stock $ 7,273,000 $67,652,000 $61,963,000
Cumulative effect of changes in
accounting principles ($1,520,000)($ 5,340,000)
COMPUTATION OF EARNINGS APPLICABLE
TO COMMON SHARE ASSUMING FULL
DILUTION:
Income from continuing operations
before cumulative effect of
changes in accounting principles $ 7,444,000 $67,826,000 $62,130,000
Add:
Adjustments arising from minority
interest in consolidated subsidiaries 10,000 32,000
Debenture interest (net of applicable
income taxes) 16,000
Consolidated income applicable to
Ogden common stock $ 7,444,000 $67,836,000 $62,178,000
Cumulative effect of changes in
accounting principles ($1,520,000) ($5,340,000)
Note: Current options result in less than three percent dilution with the
expectation of continuing at less than three percent dilution.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
Ogden Corporation and Subsidiaries
<CAPTION>
December 31, 1995 1994 1993 1992 1991
(In thousands of dollars, except per-share amounts)
<S> <C> <C> <C> <C> <C>
Total Revenues $2,184,993 $2,104,547 $2,035,860 $1,766,443 $1,566,579
Income (Loss) From:
Continuing operations 7,444 67,826 62,130 60,767 57,604
Discontinued operations (13,880)
Cumulative effect of
changes in accounting
principles (1,520) (5,340) (5,186)
Net income 7,444 66,306 56,790 55,581 43,724
Earnings (Loss) Per
Common Share:
Continuing operations 0.15 1.55 1.43 1.41 1.33
Discontinued operations (0.32)
Cumulative effect of
changes in
accounting principles (0.03) (0.12) (0.12)
Total 0.15 1.52 1.31 1.29 1.01
Total Assets 3,652,671 3,644,886 3,340,729 3,187,826 2,846,254
Shareholders' Equity 546,978 596,818 486,267 481,084 478,122
Shareholders' Equity
Per Common Share 11.04 12.21 11.15 11.11 11.09
</TABLE>
Net income in 1995 reflects a net after-tax charge of $48.9 million, or $.99
per share. (See Notes 21 and 22 to the Consolidated Financial Statements.)
Net income in 1993 was reduced by $.08 per share, reflecting the retroactive
effect of the increased Federal income tax rate that was enacted in August
1993 on the prior years' deferred income tax balances.
Total Revenues (expressed in millions of dollars)
Year - Revenues
1991 - 1,567
1992 - 1,766
1993 - 2,036
1994 - 2,105
1995 - 2,185
[presented as a bar chart]
Income from Continuing Operations Before Income Taxes and Minority Interest
(expressed in millions of dollars)
Year - income as described above
1991 - 104
1992 - 113
1993 - 126
1994 - 139
1995 - 41<F1>
[presented as bar chart]
Total Assets (expressed in millions of dollars)
Year - Assets
1991 - 2,846
1992 - 3,188
1993 - 3,341
1994 - 3,645
1995 - 3,653
[presented as bar chart]
<F1>
Reflects an unusual net pretax charge of $69.3 million. (See Notes 21 and
22 to the Consolidated Financial Statements.)
<PAGE>
Ogden Corporation and Subsidiaries
Management's Discussion and Analysis of Consolidated Operations
The following discussion and analysis should be read in conjunction
with the Corporation's Financial Statements and notes thereto.
Operations: Revenues for 1995 were $80,400,000 higher than the
comparable period of 1994, primarily due to increased revenues of
$67,300,000 in Aviation Services reflecting the acquisition in 1995 of an
air range and pilot training systems company, four airline catering kitchens
in the Canary and Balearic islands, and in late 1994, an airline cargo
operation at Heathrow Airport in the United Kingdom; $56,100,000 in
Entertainment Services, chiefly associated with new contracts at Wrigley
Field, the Target Center, General Motors Place, amphitheaters, as well as
the start-up of operations in the United Kingdom; $39,100,000 in Technology
Services due to increased customer activity and new contracts in the
Atlantic Design operations, as well as the start-up of operations in Ireland;
$35,400,000 in waste-to-energy services, primarily due to revenues generated
at the Lee County (Florida), Onondaga County (New York), and Montgomery
County (Maryland) facilities, which commenced commercial operations in
December 1994 and March and August 1995, respectively; $31,100,000 in
Independent Power Services income, primarily reflecting the acquisition
of the SIGC facility in December 1994; and $17,500,000 in Facility Services,
reflecting several new contracts and increased customer activity. These
increases were partially offset by a decrease of $143,200,000 in
construction revenues due primarily to the completion of the Union County
(New Jersey) and Lee County facilities in May and December 1994,
respectively; from reduced construction activity at the Montgomery County
facility; and from a reduction of $26,100,000 in revenues from the gain
on the sale of limited partnership interests and related tax benefits in
1994, which did not recur in 1995.
Consolidated operating income for 1995 was $92,400,000 lower than
1994, primarily reflecting the effects of the early adoption of Statement
of Financial Accounting Standards (SFAS) No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of"; restructuring initiatives; and other unusual losses and costs
totaling $82,800,000, which were reduced by a gain of $13,500,000 from
the sale of a noncore business, for a net charge of $69,300,000. The
charges principally related to the early adoption of SFAS No. 121,
amounting to $45,300,000, included anticipated losses on the sale of
noncore businesses of $32,800,000; costs of restructuring initiatives of
$8,200,000; and an impairment loss of $12,200,000 for the write-down of
certain deferred charges relating to a previously awarded contract not
expected to be completed, unusual waste-to-energy repair costs, and an
adjustment of inventory balances resulting from a physical inventory.
Also included in the second quarter of 1995 was a charge of $17,100,000
relating to the write-off of accounts receivable of $10,300,000, disposal
of inventory of $3,900,000, and $2,900,000 of costs related to
curtailment of operations all at Ogden Communications, Inc. Of the net
charge of $69,300,000, $56,900,000 was applicable to the Services segment
and $12,400,000 pertained to Projects. (Also see Notes 21 and 22 to the
Consolidated Financial Statements for further information.)
Before the charges discussed above, consolidated operating income
for 1995 would have been $23,100,000 lower than 1994, primarily
reflecting lower income of $26,100,000 due to the gain on the sale of
limited partnership interests in and related tax benefits of the Onondaga
County facility in 1994, which did not recur in 1995; $10,500,000 in
Entertainment Services, primarily reflecting development costs in Europe,
lower income from the Ottawa Palladium, and costs associated with the
acquisition of Firehole Entertainment Corp.; $6,800,000 at Ogden
Environmental, primarily due to reduced activity in the environmental
laboratory area; and $3,200,000 in Water/Wastewater Treatment Services,
its first year of operations, primarily reflecting continuing development
costs. These decreases were partially offset by increased income of
$9,000,000 in construction activities, primarily reflecting increased
activity on the Detroit (Michigan) facility and an early completion bonus
on the Montgomery County facility; $5,600,000 in Independent Power,
primarily due to the acquisition of SIGC in 1994; and $2,600,000 in
waste-to-energy service income (service revenues less operating costs and
debt service charges), primarily reflecting increased income from the
full commercial operations of the Lee County, Onondaga County, and
Montgomery County facilities, as well as enhanced performance at the
Honolulu (Hawaii) facility, offset in part by lower income at the Union
County and Hartford (Connecticut) facilities resulting from lower margins
in 1995 than 1994 due to a contract renegotiation.
Debt service charges for 1995 increased $11,500,000 over 1994 and
included $7,000,000 in waste-to-energy services, chiefly associated with
the Onondaga County facility being in full commercial operation during
1995, and $4,500,000 for project debt assumed as part of the SIGC
acquisition. Three interest rate swap agreements entered into as hedges
against interest rate exposure on three series of adjustable-rate project
debt resulted in lower debt service of $230,000 in 1995 and additional
debt service of $1,400,000 in 1994. The effect of these swap agreements
on the weighted-average interest rate was not significant. Selling,
administrative, and general expenses increased $4,800,000, primarily
reflecting increased marketing and development expenses.
The effective income tax rate for 1995 was 84.5%, compared with
44.4% for 1994. This increase of 40.1% was primarily due to the effect
of adopting SFAS No. 121, which included the write-down of goodwill for
which the Corporation will not receive tax benefits, as well as higher
foreign tax rates and certain nondeductible foreign losses. Note 23 to
the Consolidated Financial Statements contains a more detailed
reconciliation of the variances from the Federal statutory income tax
rate.
Interest income for 1995 was $2,400,000 higher than 1994,
primarily reflecting interest earned on loans made in the second half of
1994. Interest expense was $6,800,000 higher, chiefly associated with
higher interest rates on variable-rate debt, higher borrowings, and a net
increase of $1,412,000 in interest costs on two interest rate swap
agreements covering notional amounts of $100,000,000 each. One swap
agreement expired in March 1994. The other swap agreement expires on
December 16, 1998. These swap agreements were entered into in order to
convert Ogden's fixed-rate $100,000,000, 9.25% debentures into
variable-rate debt. During 1995, Ogden paid $603,000 on the remaining
swap, while in 1994, Ogden received $809,000 on the two swaps. The effect of
these swap agreements on the weighted-average interest rate was not
significant.
Revenues for 1994 were $68,700,000 higher than the comparable
period of 1993, primarily due to increased revenues of $26,100,000,
reflecting the sale of limited partnership interests in and related tax
benefits of the Onondaga County facility in 1994; $26,900,000 in
waste-to-energy service revenues due primarily to increased revenues at
the Detroit, Hartford, and Honolulu facilities acquired in January 1993,
revenues from the start-up and full operation of the Union County
facility, and the operation of the transfer station at Montgomery
County; $24,100,000 in Aviation Services, reflecting the start-up of
operations in Brazil and increased activity in Venezuela, Chile, and
European operations; $30,200,000 in Technology Services, primarily in
the Atlantic Design operations and the Systems Engineering group,
reflecting several new contracts and increased customer activity;
$18,500,000 in Environmental Services due primarily to increased activity in
the consulting group (these increases were partially offset by lower revenues
of $35,300,000 in construction revenues, primarily due to reduced
construction activity at the Union County facility completed in May 1994
and the Lee County facility completed in December 1994, which reductions
were partially offset by increased activity at the Montgomery County
facility); and $24,800,000 in the Facility Management Services group due
primarily to the loss of several building cleaning contracts and certain
utility maintenance contracts as well as reduced customer activity.
Consolidated operating income for 1994 was $15,400,000 higher
than 1993, primarily due to increased income of $26,100,000, reflecting
the gain on the sale of limited partnership interests in and related tax
benefits of the Onondaga County facility in 1994; $3,500,000 in
Technology Services, primarily due to several new contracts and increased
customer activity in the Atlantic Design operations; $2,600,000 in
construction income (construction revenues less construction costs),
primarily due to increased activity at the Montgomery County facility;
$1,600,000 in waste-to-energy service income (service revenues less
operating costs and debt service charges), primarily associated with the
start-up and full commercial operations of the Union County facility,
partially offset by additional maintenance work at the Detroit facility;
and a provision of $8,000,000 for the potential write-offs of deferred
proposal costs on property for which construction had not commenced and
for litigation and contractor settlements. These increases were
partially offset by lower income of $5,000,000 in Facility Management
Services, reflecting the loss of several building cleaning and utility
maintenance contracts; $2,500,000 in Aviation Services, primarily
reflecting lower margins in the in-flight catering area and a loss on the
devaluation of the Mexican peso, partially offset by increased earnings in
overseas ground services operations; and $800,000 in Entertainment
Services, primarily reflecting the effect of the baseball strike and hockey
lockout and start-up costs of overseas operations, partially offset by the
opening of Arrowhead Pond of Anaheim and several new customer contracts.
Debt service charges increased $1,700,000. This increase was due to higher
interest rates resulting from the conversion of one series of
adjustable-rate project debt to fixed rates in 1993 and higher interest
rates resulting from two fixed interest rate swap agreements entered into
as hedges against two series of adjustable-rate project debt. The swap
agreements resulted in additional interest expense of $1,400,000 and
$1,500,000 in 1994 and 1993, respectively. The effect of these swap
agreements on the weighted-average interest rate was not significant.
Interest income for 1994 was $3,500,000 higher than in 1993,
primarily reflecting interest earned on loans made in the third quarter
of 1994 and higher interest rates on earnings from investments. Interest
expense for 1994 was $3,400,000 higher than in 1993, primarily reflecting
higher borrowings and a reduction of $2,600,000 in income received on two
variable-rate interest rate swap agreements covering notional amounts of
$100,000,000 each. One swap agreement expired in March 1994. The other
swap agreement expires on December 16, 1998. These swap agreements were
entered into as a hedge against Ogden's $100,000,000, 9.25% debentures.
Income received on these swap agreements reduced interest expense by
$800,000 and $3,400,000 in 1994 and 1993, respectively. The effect of
these swap agreements on the weighted-average interest rate was not
significant.
The effective income tax rate for 1994 was 44.4%, compared with
45.0% for 1993. This decrease was primarily due to a charge of
$4,100,000 in 1993, reflecting the adjustment of prior years' deferred
income tax balances to the new 35% rate enacted in 1994 in accordance
with SFAS No. 109, offset by investment tax credits of $3,600,000 in 1994
due to the recapture of investment tax credits relating to the sale of
limited partnership interests in and related tax benefits of the Onondaga
County facility. Note 23 to the Consolidated Financial Statements
contains a more detailed reconciliation of the variances from the Federal
statutory income tax rate.
Capital Investments and Commitments: During 1995, capital
investments amounted to $92,800,000, of which $26,800,000, inclusive of
restricted funds transferred from funds held in trust, was for Projects'
waste-to-energy operations and $66,000,000 was for normal replacement and
growth in Services' and Projects' operations.
At December 31, 1995, capital commitments amounted to $53,400,000
for normal replacement, modernization, and growth in Services'
($42,100,000) and Projects' ($11,300,000) operations. In addition,
compliance with recently promulgated standards and guidelines under the
Clean Air Act Amendments of 1990 may require additional capital
expenditures of $30,000,000 during the next four years.
Ogden and certain of its subsidiaries have issued or are party to
performance bonds and guarantees and related contractual obligations
undertaken mainly pursuant to agreements to construct and operate certain
waste-to-energy, entertainment, and other facilities. In the normal
course of business, they are involved in legal proceedings in which
damages and other remedies are sought. Management does not expect that
these contractual obligations, legal proceedings, or any other contingent
obligations incurred in the normal course of business will have a
material adverse effect on Ogden's Consolidated Financial Statements.
During 1994, a subsidiary of the Corporation entered into a
30-year facility management contract pursuant to which it agreed to
advance funds to a customer, if necessary, to assist refinancing senior
secured debt incurred in connection with construction of the facility. Such
refinancing requirements are not expected to exceed $75,000,000 at
maturity of the senior secured debt, which is expected to be on or about
March 1, 2001. In addition, at December 31, 1995, the Corporation has
guaranteed indebtedness of $6,200,000 of an affiliate and principal
tenant of this customer. The Corporation expects this guaranty will
increase to approximately $16,100,000 in 1996. Ogden continues as
guarantor of surety bonds and letters of credit totaling approximately
$19,200,000 on behalf of International Terminal Operating Co. Inc. and has
guaranteed borrowings of certain customers amounting to approximately
$29,200,000. Management does not expect that these arrangements will have a
material adverse effect on Ogden's Consolidated Financial Statements.
Liquidity/Cash Flow: Net cash provided from operating activities
was $94,300,000 lower, primarily reflecting lower net income of
$58,900,000; reductions of $20,400,000 in billings in excess of costs and
estimated profit on uncompleted contracts resulting from the timing of
billings and construction activity on the Montgomery County facility; a
decrease of $17,300,000 from the timing of retention payments relating to
the construction on the waste-to-energy facilities; payment in 1995 of
$8,300,000 relating to a construction contract adjustment on the Babylon
(New York) facility; and decreases of $13,200,000 in Federal and State
taxes payable, offset, in part, by increases in the effect of noncash
operating expenses.
Net cash used in investing activities was $106,100,000 lower than
1994, primarily reflecting lower investments in waste-to-energy
facilities of $49,900,000 due to the completion of construction of the
Onondaga County facility in early 1995; a reduction of $56,400,000 in the
repurchase of marketable securities held for sale; lower costs of
acquisitions of $16,900,000; and a decrease of $18,300,000 in other
receivables reflecting lower noncurrent loans made to customers. These
decreases were partially offset by increases of $23,000,000 in other capital
expenditures, principally in the Entertainment Services business, reflecting
increased activity, and $28,300,000 in other investments, reflecting increased
equity investments in Argentina and other investee affiliates.
Net cash used in financing activities increased $40,500,000,
primarily reflecting a decrease of $42,800,000 in amounts of restricted
funds utilized due to the completion of the Onondaga County facility;
increased dividends of $5,000,000 related to shares issued in connection
with the acquisition of the minority interest in Ogden Projects, Inc., in
late 1994; and increases of $8,300,000 in payments of other debt. These
increases in cash used in financing activities were partially offset by
increases of $9,400,000 in other borrowings. Increased borrowings for
waste-to-energy facilities of $96,800,000 represent amounts borrowed, net
of issuance and related costs, in connection with the refinancing of
approximately $92,500,000 of project debt, which is reflected under the
heading "Payment of Debt."
Exclusive of changes in waste-to-energy facility construction
activities, the Corporation's various types of contracts are not expected
to have a material effect on liquidity. Debt service associated with
project debt, which is an explicit component of a client community's
obligation under its service agreement, is paid as it is billed and
collected. Cash required for investing and financing activities is
expected to be satisfied from operating activities; available funds, including
short-term investments; proceeds from the sale of noncore businesses; and
the Corporation's unused credit facilities to the extent needed. At
December 31, 1995, the Corporation had $96,800,000 in cash, cash
equivalents, and marketable securities and unused revolving credit lines
of $167,600,000.
<PAGE>
<TABLE>
Ogden Corporation and Subsidiaries
Selected Financial Data
<CAPTION>
December 31, 1995 1994 1993 1992 1991
(In thousands of dollars, except per-share amounts)
<S> <C> <C> <C> <C> <C>
Total Revenues $2,184,993 $2,104,547 $2,035,860 $1,766,443 $1,566,579
Income (Loss) From:
Continuing operations 7,444 67,826 62,130 60,767 57,604
Discontinued operations (13,880)
Cumulative effect of
changes in
accounting principles (1,520) (5,340) (5,186)
Net income 7,444 66,306 56,790 55,581 43,724
Earnings (Loss) Per
Common Share:
Continuing operations 0.15 1.55 1.43 1.41 1.33
Discontinued operations (0.32)
Cumulative effect of
changes in
accounting principles (0.03) (0.12) (0.12)
Total 0.15 1.52 1.31 1.29 1.01
Earnings (Loss) Per
Common Share
Assuming Full Dilution:
Continuing operations 0.15 1.54 1.42 1.40 1.32
Discontinued operations (0.32)
Cumulative effect of
changes in
accounting principles (0.03) (0.12) (0.12)
Total 0.15 1.51 1.30 1.28 1.00
Total Assets 3,652,671 3,644,886 3,340,729 3,187,826 2,846,254
Long-Term Obligations 2,044,186 2,047,031 1,946,547 2,003,091 1,781,576
Shareholders' Equity 546,978 596,818 486,267 481,084 478,122
Shareholders' Equity
Per Common Share 11.04 12.21 11.15 11.11 11.09
Cash Dividends Declared
Per Common Share 1.25 1.25 1.25 1.25 1.25
</TABLE>
Net income in 1995 reflects a net after-tax charge of $48.9 million, or $.99
per share. (See Notes 21 and 22 to the Consolidated Financial Statements.)
Net income in 1993 was reduced by $.08 per share, reflecting the retroactive
effect of the increased Federal income tax rate that was enacted in August
1993 on the prior years' deferred income tax balances.
<PAGE>
<TABLE>
Ogden Corporation and Subsidiaries
Statements of Consolidated Income
<CAPTION>
For the years ended December 31, 1995 1994 1993
<S> <C> <C> <C>
Service revenues $1,563,748,000 $1,408,710,000 $1,364,080,000
Net sales 551,345,000 456,586,000 423,329,000
Construction revenues 69,900,000 213,125,000 248,451,000
Gain on sale of limited
partnership interests 26,126,000
Total revenues 2,184,993,000 2,104,547,000 2,035,860,000
Operating costs and expenses 1,318,847,000 1,127,348,000 1,077,102,000
Costs of goods sold 518,457,000 405,190,000 376,553,000
Construction costs 41,756,000 194,022,000 231,956,000
Selling, administrative, and
general expenses 144,714,000 135,852,000 125,219,000
Debt service charges 111,850,000 100,358,000 98,664,000
Total costs and expenses 2,135,624,000 1,962,770,000 1,909,494,000
Consolidated operating income 49,369,000 141,777,000 126,366,000
Equity in net income of
investees and joint ventures 6,866,000 7,683,000 6,895,000
Interest income 15,126,000 12,709,000 9,181,000
Interest expense (30,491,000) (23,655,000) (20,289,000)
Other income (deductions) net (344,000) 850,000 3,348,000
Income before income taxes
and minority interests 40,526,000 139,364,000 125,501,000
Less: income taxes 34,237,000 61,883,000 56,526,000
minority interests (1,155,000) 9,655,000 6,845,000
Income before cumulative effect
of changes in
accounting principles 7,444,000 67,826,000 62,130,000
Cumulative effect of changes in
accounting principles
(net of income taxes of
$1,100,000 and $3,710,000
for 1994 and 1993, respectively) (1,520,000) (5,340,000)
Net income $7,444,000 $66,306,000 $56,790,000
Earnings (Loss) Per Common Share:
Income before cumulative effect
of changes in
accounting principles $0.15 1.55 $1.43
Cumulative effect of changes in
accounting principles (0.03) (0.12)
Total $0.15 $1.52 $1.31
Earnings (Loss) Per Common Share
Assuming Full Dilution:
Income before cumulative effect
of changes in
accounting principles $0.15 $1.54 $1.42
Cumulative effect of changes in
accounting principles (0.03) (0.12)
Total $0.15 $1.51 $1.30
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
Ogden Corporation and Subsidiaries
Consolidated Balance Sheets
<CAPTION>
December 31, 1995 1994
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $96,782,000 $117,359,000
Marketable securities available for sale 13,939,000 86,676,000
Restricted funds held in trust 95,238,000 110,295,000
Receivables (less allowances:
1995, $37,039,000 and 1994, $32,783,000) 597,644,000 574,184,000
Deferred income taxes 31,979,000 26,451,000
Other 90,784,000 80,932,000
Total current assets 926,366,000 995,897,000
Property, plant, and equipment net 1,879,179,000 1,884,774,000
Restricted funds held in trust 218,551,000 213,999,000
Unbilled service and other receivables 191,753,000 171,441,000
Unamortized contract acquisition costs 148,342,000 133,172,000
Goodwill and other intangible assets 87,596,000 100,416,000
Other assets 200,884,000 145,187,000
Total Assets $3,652,671,000 $3,644,886,000
Liabilities and Shareholders' Equity
Liabilities:
Current Liabilities:
Current portion of long-term debt $4,680,000 $3,483,000
Current portion of project debt 55,774,000 45,279,000
Dividends payable 15,294,000 13,637,000
Accounts payable 114,648,000 93,362,000
Federal and foreign income taxes payable 10,141,000
Accrued expenses, etc. 291,421,000 320,154,000
Deferred income 28,702,000 26,843,000
Total current liabilities 510,519,000 512,899,000
Long-term debt 344,333,000 304,393,000
Project debt 1,551,203,000 1,593,988,000
Deferred income taxes 310,400,000 281,065,000
Other liabilities 230,558,000 196,305,000
Minority interests 10,030,000 10,768,000
Convertible subordinated debentures 148,650,000 148,650,000
Total Liabilities 3,105,693,000 3,048,068,000
Shareholders' Equity:
Serial cumulative convertible preferred
stock, par value $1.00 per share;
authorized, 4,000,000 shares; shares
outstanding: 49,469 in 1995 and 53,503
in 1994, net of treasury shares of
29,820 in 1995 and 1994, respectively 50,000 54,000
Common stock, par value $.50 per share;
authorized, 80,000,000 shares;
shares outstanding: 49,467,781 in 1995
and 48,777,092 in 1994, net of treasury
shares of 3,735,123 and 3,864,123 in
1995 and 1994, respectively 24,734,000 24,388,000
Capital surplus 197,921,000 194,496,000
Earned surplus 328,047,000 381,864,000
Cumulative translation adjustment net (2,657,000) (1,399,000)
Pension liability adjustment (760,000) (441,000)
Net unrealized loss on securities
available for sale (357,000) (2,144,000)
Total Shareholders' Equity 546,978,000 596,818,000
Total Liabilities and Shareholders' Equity 3,652,671,000 $3,644,886,000
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
Ogden Corporation and Subsidiaries
Statements of Shareholders' Equity
<CAPTION>
For the years ended December 31,.
1995 1994 1993
Shares Amounts Shares Amounts Shares Amounts
<S> <C> <C> <C> <C> <C> <C>
Serial Cumulative Convertible
Preferred Stock, Par Value
$1.00 Per Share;
Authorized, 4,000,000 Shares:
Balance at beginning of year 83,323 $ 84,000 87,017 $ 87,000 91,714 $ 92,000
Shares converted into common stock (4,034) (4,000) (3,694) (3,000) (4,697) (5,000)
Total 79,289 80,000 83,323 84,000 87,017 87,000
Treasury shares (29,820) (30,000) (29,820) (30,000) (29,820) (30,000)
Balance at end of year (aggregate
involuntary liquidation vlaue
1995, $996,800) 49,469 50,000 53,503 54,000 57,197 57,000
Common Stock, Par Value $.50 Per
Share; Authorized, 80,000,000
Shares:
Balance at beginning of year 52,641,215 26,320,000 47,472,245 23,736,000 47,287,048 23,643,000
Acquisition of Ogden Projects,
Inc., minority interests 5,139,939 2,570,000
Exercise of stock options,
less common stock utilized 10,735 6,000 6,977 3,000 65,389 33,000
Shares used for pooling of
interests 526,869 264,000
Conversion of preferred shares 24,085 12,000 22,054 11,000 28,046 14,000
Conversion of debentures 91,762 46,000
Total 53,202,904 26,602,000 52,641,215 26,320,000 47,472,245 23,736,000
Treasury shares at beginning
of year 3,864,123 1,932,000 3,973,123 1,986,000 4,096,123 2,048,000
Exercise of stock options (129,000) (64,000) (109,000) (54,000) (123,000) (62,000)
Treasury shares at end of year 3,735,123 1,868,000 3,864,123 1,932,000 3,973,123 1,986,000
Balance at end of year 49,467,781 24,734,000 48,777,092 24,388,000 43,499,122 21,750,000
Capital Surplus:
Balance at beginning of year 194,496,000 100,223,000 94,659,000
Acquisition of Ogden Projects,
Inc., minority interests 91,876,000
Exercise of stock options,
less common stock utilized 2,620,000 2,164,000 3,640,000
Arising from pooling of
interests 813,000
Capital transactions of
subsidiary companies net 241,000 696,000
Conversion of preferred shares (8,000) (8,000) (10,000)
Conversion of debentures 1,238,000
Balance at end of year 197,921,000 194,496,000 100,223,000
Earned Surplus:
Balance at beginning of year 381,864,000 370,231,000 367,908,000
Net income 7,444,000 66,306,000 56,790,000
Total 389,308,000 436,537,000 424,698,000
Preferred dividends per share
1995, 1994, and 1993, $3.35 171,000 184,000 199,000
Common dividends per share
1995, 1994, and 1993, $1.25 61,090,000 54,489,000 54,268,000
Total dividends 61,261,000 54,673,000 54,467,000
Balance at end of year 328,047,000 381,864,000 370,231,000
Cumulative Translation
Adjustment Net (2,657,000) (1,399,000) (4,639,000)
Pension Liability Adjustment (760,000) (441,000) (928,000)
Net Unrealized Loss on Securities
Available For Sale (357,000) (2,144,000)
Net Unrealized Loss on Noncurrent
Marketable Equity Securities (427,000)
Total Shareholders' Equity $546,978,000 $596,818,000 $486,267,000
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
Ogden Corporation and Subsidiaries
Statements of Consolidated Cash Flows
<CAPTION>
For the years ended December 31, 1995 1994 1993
<S> <C> <C> <C>
Cash Flows From Operating
Activities:
Net income $ 7,444,000 $ 66,306,000 $ 56,790,000
Adjustments to Reconcile Net
Income to Net Cash Provided
by Operating Activities:
Depreciation and amortization 109,604,000 90,545,000 85,643,000
Deferred income taxes 18,153,000 37,704,000 47,598,000
Cumulative effect of changes
in accounting principles 1,520,000 5,340,000
Long-lived asset write-downs 45,260,000
Other 11,986,000 38,390,000 19,596,000
Management of Operating
Assets and Liabilities:
Decrease (Increase) in Assets:
Accounts receivable (43,852,000) (63,527,000) (56,180,000)
Other assets (68,235,000) (61,595,000) (36,772,000)
Increase (Decrease) in
Liabilities:
Accounts payable 8,472,000 3,153,000 8,087,000
Accrued expenses 1,920,000 17,629,000 38,481,000
Deferred income 3,861,000 1,222,000 (1,152,000)
Other liabilities (22,369,000) 35,218,000 24,315,000
Net cash provided by
operating activities 72,244,000 166,565,000 191,746,000
Cash Flows From Investing
Activities:
Entities purchased,
net of cash acquired (15,474,000) (32,404,000) (54,224,000)
Proceeds from sale of
marketable securities
available for sale 71,364,000 63,545,000 88,775,000
Purchase of marketable
securities available for sale (56,418,000) (83,084,000)
Proceeds from sale of business 18,000,000 12,516,000
Proceeds from sale of property,
plant, and equipment 5,402,000 2,824,000 8,185,000
Investments in waste-to-energy
facilities (26,827,000) (76,686,000) (77,777,000)
Other capital expenditures (65,999,000) (42,961,000) (38,423,000)
Decrease (increase) in other
receivables (2,809,000) (21,127,000) (7,920,000)
Other (27,983,000) 268,000 7,111,000
Net cash used in investing
activities (44,326,000) (150,443,000) (157,357,000)
Cash Flows From Financing
Activities:
Borrowings for waste-to-energy
facilities 96,822,000
Decrease (increase) in funds
held in trust 9,514,000 52,337,000 60,347,000
Other new debt 40,948,000 31,589,000 680,000
Payment of debt (139,205,000) (38,455,000) (49,973,000)
Dividends paid (59,604,000) (54,630,000) (54,347,000)
Proceeds from exercise of
stock options 2,691,000 3,524,000 5,366,000
Other 630,000 (2,043,000) (3,488,000)
Net cash used by financing
activities (48,204,000) (7,678,000) (41,415,000)
Effect of foreign currency
exchange rate changes on cash
and cash equivalents (291,000) (182,000) (334,000)
Net Increase (Decrease) in
Cash and Cash Equivalents (20,577,000) 8,262,000 (7,360,000)
Cash and Cash Equivalents
at Beginning of Year 117,359,000 109,097,000 116,457,000
Cash and Cash Equivalents
at End of Year $ 96,782,000 $117,359,000 $109,097,000
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
Ogden Corporation and Subsidiaries
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies
Principles of Consolidation, Combinations, etc.: The
Consolidated Financial Statements include the accounts of Ogden
Corporation and its subsidiaries (Ogden). Companies in which Ogden has
equity investments of 50% or less are accounted for using the "Equity
Method," if appropriate. All intercompany transactions and balances
have been eliminated.
In December 1995, Ogden issued 526,869 shares of common
stock in exchange for all of the outstanding shares of Firehole
Entertainment Corp. (Firehole). This transaction was accounted for as
a pooling of interests. The accompanying financial statements for
prior periods have not been restated to include the accounts of
Firehole, since the amounts did not have a significant effect on
prior period reported results or balances.
In addition, in other transactions accounted for as
purchases in 1995, Ogden acquired the shares of Applied Data
Technology, Inc., an air range and pilot training systems company, and
four airline catering kitchens in the Canary and Balearic islands for
a total cost of $15,474,000. The operations of these companies have
been included in the accompanying financial statements from dates of
acquisition. If Ogden had acquired these companies at January 1,
1994, total revenues, net income, and earnings per share would have
been $2,185,000,000, $7,346,000, and $.15 for 1995 and $2,157,000,000,
$65,255,000, and $1.49 for 1994. Ogden also acquired a 50% interest
in Metropolitan Entertainment, Inc.; a 50% interest in IFC, an
Australian entertainment company; as well as a 50% interest in SFTA, a
Turkish airport handling company.
On December 29, 1994, in a transaction accounted for as a
purchase, Ogden acquired the minority interest in Ogden Projects, Inc.
(OPI), for .84 of an Ogden common share for each OPI share. Ogden
issued 5,139,939 shares of common stock valued at $18.375 per share
for a total purchase price of $94,446,000. The cost of other 1994
acquisitions was $32,404,000.
Use of Estimates: The preparation of consolidated financial
statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents: Cash and cash equivalents include
all cash balances and highly liquid investments having original
maturities of three months or less.
Marketable Securities: Ogden adopted Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," at January 1, 1994. In
accordance with SFAS No. 115, prior years' financial statements have
not been restated to reflect the change in accounting method. Under
this Statement, the Corporation's marketable securities have been
classified as available for sale and are recorded at current market
value with an offsetting adjustment to Shareholders' Equity. The
adoption of this Statement did not have a significant effect on the
Corporation's consolidated financial position. At December 31, 1993,
marketable securities were carried at the lower of cost or market.
Net unrealized losses on noncurrent marketable equity securities were
charged to Shareholders' Equity (see Note 2).
Contracts and Revenue Recognition: Service revenues primarily
include only the fees for cost-plus contracts and the gross billings
for fixed-fee and other types of contracts. Both the service revenues
and operating expenses exclude reimbursed expenditures of
$450,696,000, $439,195,000, and $432,891,000 for the years ended
December 31, 1995, 1994, and 1993, respectively. Subsidiaries engaged
in governmental contracting recognize revenues from
cost-plus-fixed-fee contracts on the basis of direct costs incurred
plus indirect expenses and the allocable portion of the fixed fee.
Revenues under time and material contracts are recorded at the
contracted rates as the labor hours and other direct costs are
incurred. Revenues under fixed-price contracts are recognized on
the basis of the estimated percentage of completion of services
rendered. Service revenues also include the fees earned under
contracts to operate and maintain the waste-to-energy facilities and
to service the facilities' debt, with additional fees earned based
on excess tonnage processed and energy generation. Long-term
unbilled service receivables related to waste-to-energy operations
are discounted in recognizing the present value for services
performed currently. Such unbilled receivables amounted to
$108,953,000 and $92,522,000 at December 31, 1995 and 1994,
respectively. Subsidiaries engaged in long-term construction
contracting record income on the percentage-of-completion method of
accounting and recognize income as the work progresses. Anticipated
losses on contracts are recognized as soon as they become known.
Revenues include the gain on sales of limited partnership interests in
and related tax benefits of waste-to-energy facilities.
Inventories: Inventories, consisting primarily of finished
goods, are recorded principally at the lower of first-in, first-out
cost or market.
Property, Plant, and Equipment: Property, plant, and equipment
is stated at cost. For financial reporting purposes, depreciation is
provided by the straight-line method over the estimated useful lives
of the assets, which range generally from five years for machinery
and equipment to 50 years for waste-to-energy facilities. Accelerated
depreciation is generally used for Federal income tax purposes
Leasehold improvements are amortized by the straight-line method
over the terms of the leases or the estimated useful lives of the
improvements as appropriate. Landfills are amortized based on the
quantities deposited into each landfill compared to the total
estimated capacity of such landfill. Property, plant, and equipment
is periodically reviewed to determine recoverability by comparing the
carrying value to expected future cash flows.
Contract Acquisition Costs: Costs associated with the
acquisition of specific contracts are amortized over their respective
terms.
Bond Issuance Costs: Costs incurred in connection with the
issuance of revenue bonds are amortized over the terms of the
respective debt issues.
Deferred Charges on Projects: Costs incurred in connection
with certain project development efforts are deferred until the award
of the related project is determined. Costs on awarded projects are
deferred until the commencement of construction, at which time they
are either capitalized in property, plant, and equipment for privately
owned facilities or charged to construction costs for municipally
owned facilities. Costs associated with projects that are no longer
under consideration are charged to operating costs.
Restricted Funds: Restricted funds represent proceeds from the
financing of waste-to-energy facilities and the operations of a
waste-to-energy facility and a power plant. Funds are held in trust
and released as expenditures are made or upon satisfaction of
conditions provided under the respective trust agreements.
Interest Rate Swap Agreements: Amounts received or paid
relating to swap agreements during the year are credited or charged to
interest expense.
Goodwill: Goodwill acquired subsequent to 1970 is being
amortized by the straight-line method over periods ranging from 15 to
40 years. Goodwill acquired prior to 1970 is not being amortized.
Goodwill is periodically reviewed to determine recoverability by
comparing its carrying value to expected future cash flows of the
businesses to which it relates.
Retirement Plans: The Corporation and certain subsidiaries
have several retirement plans covering all salaried and hourly
employees. Certain subsidiaries also contribute to multiemployer
plans for unionized hourly employees that cover, among other benefits,
pensions and postemployment health care. Ogden adopted SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other than
Pensions," as of January 1, 1993. The effect of adopting SFAS No. 106
is shown in the accompanying financial statements for 1993 as a
cumulative effect of a change in accounting principle and is reflected
as a charge to income of $5,340,000 (see Note 19).
Ogden adopted SFAS No. 112, "Employers' Accounting for
Postemployment Benefits," as of January 1, 1994. The effect of
adopting SFAS No. 112 is shown as a cumulative effect of a change in
accounting principle and is reflected as a charge to income of
$1,520,000 in 1994.
Income Taxes: Ogden files a consolidated Federal income tax
return, which includes all eligible United States subsidiary
companies. Foreign subsidiaries are taxed according to regulations
existing in the countries in which they do business. Provision has
not been made for United States income taxes on distributions, which
may be received from foreign subsidiaries, that would be substantially
offset by foreign tax credits. Investment credits are accounted for
by the "flow-through" method, and provisions for income taxes have
been reduced by the amount of investment credits earned.
Long-Lived Assets: Ogden adopted SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and Long-Lived Assets to be
Disposed of," in the fourth quarter of 1995. The effect of adopting
SFAS No. 121 resulted in an after-tax charge of $34,700,000 in 1995
(see Note 21).
Reclassification: The accompanying financial statements have
been reclassified to conform with the 1995 presentation.
2. Investments in Marketable Securities Available for Sale
Ogden adopted SFAS No. 115, "Accounting for Certain Investments
in Debt and Equity Securities," at January 1, 1994, and has classified
its marketable securities as available for sale and recorded them at
current market value with an offsetting adjustment to Shareholders'
Equity. In accordance with SFAS No. 115, prior years' financial
statements have not been restated to reflect this change in
accounting. At December 31, 1993, marketable securities were carried
at the lower of cost or market. Net unrealized losses on noncurrent
marketable equity securities were charged to Shareholders' Equity. At
December 31, 1993, noncurrent marketable securities having a cost of
$5,549,000 and a market value of $4,846,000 resulted in an unrealized
loss of $703,000, which was offset by deferred income taxes of
$276,000. The net valuation allowance of $427,000 was charged to
Shareholders' Equity.
At December 31, 1995 and 1994, marketable equity and debt
securities available for current operations are classified in the
balance sheet as current assets while securities held for noncurrent
uses, such as nonqualified pension liabilities and a deferred
compensation plan, are classified as long-term assets.
<TABLE>
Marketable securities at December 31, 1995 and 1994
(expressed in thousands of dollars), include the following:
<CAPTION>
1995 1994
Market Market
Value Cost Value Cost
<S> <C> <C> <C> <C>
Classified as Current Assets:
United States government securities $ 1,652 $ 1,736 $ 1,567 $ 1,736
Tax-exempt municipal bonds 6,214 6,374 52,158 53,295
Mortgage-backed securities 5,560 5,727 31,146 31,669
Other securities 513 360 1,805 1,954
Total current 13,939 14,197 86,676 88,654
Classified as Noncurrent Assets:
United States government securities 236 236
Mutual and bond funds 16,538 17,037 12,174 14,122
Total noncurrent 16,538 17,037 12,410 14,358
Total $30,477 $31,234 $99,086 $103,012
</TABLE>
<PAGE>
The United States government securities mature April 15,
1998; $3,000,000, $2,200,000, and $1,000,000 of the tax-exempt
municipal bonds mature on July 1, 1998, January 1, 2006, and October
1, 2013, respectively; $400,000, $2,300,000, $1,500,000, and $900,000
of the mortgage-backed securities mature July 1, 2019, June 25, 2020,
August 25, 2021, and March 29, 2030, respectively.
Unrealized holding losses at December 31, 1995 and 1994,
amounted to $757,000 and $3,926,000, respectively. Deferred tax
benefits on these losses amounted to $400,000 and $1,782,000,
respectively, resulting in net charges of $357,000 and $2,144,000,
respectively, to Shareholders' Equity.
Proceeds and realized gains and losses from the sales of
securities classified as available for sale for the years ended
December 31, 1995 and 1994, were $71,364,000, $235,000, and $1,749,000
and $63,545,000, $256,700, and $476,700, respectively. For the
purpose of determining realized gains and losses, the cost of
securities sold is based on specific identification.
3. Unbilled Service and Other Receivables
<TABLE>
Unbilled service and other receivables (expressed in thousands
of dollars) consisted of the following:
<CAPTION>
1995 1994
<S> <C> <C>
Unbilled service receivables $108,953 $92,522
Notes receivable 82,800 78,919
Total $191,753 $171,441
</TABLE>
Unbilled service receivables are for services performed
currently for municipalities that are due by contract at a later
date and are discounted in recognizing the present value of such
services. Long-term notes receivable primarily represent loans
made to the owners of entertainment and sports facilities. Current
unbilled service receivables amounted to $34,482,000 and $32,240,000
at December 31, 1995 and 1994, respectively.
4. Restricted Funds Held in Trust
Funds held by trustees from proceeds received from the
financing of waste-to-energy facilities and the operations of a
waste-to-energy facility and a power plant are segregated principally
for the construction of the facilities; debt service reserves for
payment of principal and interest on project debt; lease reserves for
lease payments under operating leases; capitalized interest for
payment of interest during the construction period; and deposits of
revenues received. Such funds are invested principally in United
States Treasury bills and notes and United States government agencies
securities.
<TABLE>
Fund balances (expressed in thousands of dollars) were as follows:
<CAPTION>
1995 1994
Current Noncurrent Current Noncurrent
<S> <C> <C> <C> <C>
Construction funds $ 2,931 $20,734
Debt service funds 64,706 $144,915 36,803 $158,746
Revenue funds 12,173 21,013
Lease reserve funds 14,190 15,260
Capitalized interest funds 8,847
Other funds 15,428 59,446 22,898 39,993
Total $95,238 $218,551 $110,295 $213,999
</TABLE>
5. Property, Plant, and Equipment
<TABLE>
Property, plant, and equipment (expressed in thousands of dollars)
consisted of the following:
<CAPTION>
1995 1994
<S> <C> <C>
Land $ 6,667 $ 6,698
Waste-to-energy facilities 1,722,375 1,577,147
Geothermal power plant 105,738 105,738
Buildings and improvements 175,214 155,904
Machinery and equipment 352,238 313,404
Landfills 10,927 9,841
Construction in progress 26,864 161,303
Total 2,400,023 2,330,035
Less accumulated depreciation and amortization 520,844 445,261
Property, plant, and equipment net $1,879,179 $1,884,774
</TABLE>
6. Other Assets
<TABLE>
Other assets (expressed in thousands of dollars) consisted of
the following:
<CAPTION>
1995 1994
<S> <C> <C>
Investment in and advances to
investees and joint ventures $ 67,095 $ 40,040
Unamortized bond issuance costs 38,473 29,290
Spare parts 19,544 13,915
Noncurrent securities available for sale 16,538 12,410
Deferred charges on projects 10,975 5,708
Insurance deposits 5,388 5,388
Other 42,871 38,436
Total $200,884 $145,187
</TABLE>
7. Accrued Expenses, etc.
<TABLE>
Accrued expenses, etc. (expressed in thousands of dollars),
consisted of the following:
<CAPTION>
1995 1994
<S> <C> <C>
Debt service charges and interest $ 33,886 $ 38,278
Payroll 25,743 31,493
Insurance 37,278 25,782
Construction costs 12,740 25,442
Operating expenses 37,847 21,802
Billings in excess of costs 19,167
Municipalities' share of energy revenues 18,154 17,756
Retainage payable 6,641 17,550
Lease payments 12,538 16,193
Payroll and other taxes 16,171 10,533
Pension and profit sharing 9,050 6,499
Commissions 8,477 7,226
Other 72,896 82,433
Total $291,421 $320,154
</TABLE>
8. Deferred Income
<TABLE>
Deferred income (expressed in thousands of dollars) was
comprised of the following:
<CAPTION>
1995 1994
Current Noncurrent Current Noncurrent
<S> <C> <C> <C> <C>
Sale and leaseback arrangements $ 1,523 $23,360 $ 1,523 $24,883
Advance billings to municipalities 11,644 13,028
Other 15,535 12,292
Total $28,702 $23,360 $26,843 $24,883
</TABLE>
Deferred income arose primarily from the gain from sale and
leaseback transactions consummated in 1986 and 1987. Such gain
was deferred and is being amortized as a reduction of rental
expense. Advance billings to various customers prior to performance
of service are billed one or two months in advance and are
recognized as income in the period the service is provided. Other
includes interest earnings on restricted funds, which accrue to the
benefit of municipalities. Such amounts are deferred and recognized
as income in the period in which the municipality receives a credit
against service fees for such interest.
9. Long-Term Debt
<TABLE>
Long-term debt (expressed in thousands of dollars) consisted of
the following:
<CAPTION>
1995 1994
<S> <C> <C>
Adjustable-rate revenue bonds due 2014 2024 $124,755 $124,755
9.25% debentures due 2022 100,000 100,000
Variable-rate revolving credit lines due 1998 48,000 26,820
Other long-term debt 71,578 52,818
Total $344,333 $304,393
</TABLE>
The adjustable-rate revenue bonds are adjusted
periodically to reflect current market rates for similar issues,
generally with an upside cap of 15%. The average rate for this debt
was 3.90% and 2.79% in 1995 and 1994, respectively. These bonds
were issued under agreements that contain various restrictions, the
most significant being the requirements to comply with certain
financial ratios and to maintain Shareholders' Equity of
$400,000,000. At December 31, 1995, Ogden was in compliance with
all requirements and had $146,978,000 in excess of the required
amount of Shareholders' Equity.
At December 31, 1995, Ogden had two long-term interest
rate swap agreements covering notional amounts of $100,000,000 and
$7,500,000, respectively, which expire December 16, 1998, and
November 30, 2000, respectively. These swaps were entered into to
convert Ogden's fixed-rate $100,000,000, 9.25% debentures due in
2022 to variable-rate debt and Ogden's $7,500,000 variable-rate debt
to a fixed rate. On the $100,000,000 swap, Ogden receives a fixed
rate of 5.52% per annum paid on a semi-annual basis and pays a
floating rate of three months LIBOR set in arrears on a quarterly
basis. On the $7,500,000 swap, Ogden pays a fixed rate of 5.83%
paid on a quarterly basis and receives a floating rate of three
months LIBOR on a quarterly basis. At December 31, 1995, the
three-month LIBOR rate was 5.63%. The counterparties to these
interest rate swaps are major financial institutions. Management
believes its credit risk associated with nonperformance by the
counterparties is not significant. Amounts (received) or paid on
the swap agreements amounted to $603,000, $(809,000), and
$(3,352,000) for 1995, 1994, and 1993, respectively, and were
(credited) or charged to interest expense. The effect on Ogden's
weighted-average borrowing rate for 1995, 1994, and 1993, was an
increase (decrease) of .14%, (.20)%, and (.82)%, respectively.
Other long-term debt includes an obligation for
approximately $28,400,000, representing the equity component of a
sale and leaseback arrangement relating to a waste-to-energy
facility. This arrangement is accounted for as a financing, has an
effective interest rate of 5%, and extends through 2017.
Additionally, other long-term debt includes $22,450,000 resulting
from the sale of limited partnership interests in and related tax
benefits of the Onondaga County, New York, waste-to-energy facility,
which has been accounted for as a financing for accounting purposes.
This obligation has an effective interest rate of 10% and extends
through 2015. The remaining other debt of $20,728,000 consists
primarily of debt associated with entertainment facilities in the
United Kingdom and Argentina as well as debt acquired in the
Firehole acquisition. These loans bear various interest rates and
maturity dates.
<TABLE>
The maturities on long-term debt (expressed in thousands of
dollars) at December 31, 1995, were as follows:
<S> <C>
1996.................................. $4,680
1997.................................. 10,967
1998.................................. 43,189
1999.................................. 5,292
2000.................................. 2,031
Later years........................... 282,854
Total................................. 349,013
Less current portion.................. 4,680
Total long-term debt.................. $344,333
</TABLE>
10. Project Debt
<TABLE>
Project debt (expressed in thousands of dollars) consisted
of the following:
<CAPTION>
1995 1994
<S> <C> <C>
Revenue Bonds Issued by and
Prime Responsibility of Municipalities:
4.25 8.1% serial revenue bonds due through 2005 $ 198,933 $ 222,036
5.4 8.5% term revenue bonds due through 2019 845,476 939,740
Adjustable-rate revenue bonds due through 2013 86,965 10,875
Total 1,131,374 1,172,651
Revenue Bonds Issued by Municipal Agencies
with Sufficient Service Revenues Guaranteed
by Third Parties:
4.95 8.9% serial revenue bonds due through 2007 71,006 78,591
7.25 7.4% term revenue bonds due 1999 through 2011 105,901 106,109
Adjustable-rate revenue bonds due through 2011 127,820 133,467
Total 304,727 318,167
Other project debt 115,102 103,170
Total long-term project debt $1,551,203 $1,593,988
</TABLE>
Project debt associated with the financing of waste-to-energy
facilities is generally arranged by municipalities through the
issuance of tax-exempt and taxable revenue bonds. The category,
"Revenue Bonds Issued by and Prime Responsibility of Municipalities,"
includes bonds issued with respect to which debt service is an
explicit component of the client community's obligation under the
related service agreement. In the event that a municipality is
unable to satisfy its payment obligations, the bondholders' recourse
with respect to the Corporation is limited to the waste-to-energy
facilities and restricted funds pledged to secure such obligations.
The category, "Revenue Bonds Issued by Municipal Agencies with
Sufficient Service Revenues Guaranteed by Third Parties," includes
bonds issued to finance three facilities for which contractual
obligations of third parties to deliver waste ensure sufficient
revenues to pay debt service, although such debt service is not an
explicit component of the third parties' service fee obligations.
Payment obligations for the project debt associated
with waste-to-energy facilities are nonrecourse to the Corporation
subject to construction and operating performance guarantees and
commitments. These obligations are secured by the revenues pledged
under various indentures and are collateralized principally by a
mortgage lien and a security interest in each of the respective
waste-to-energy facilities and related assets. At December 31,
1995, such revenue bonds were collateralized by property, plant, and
equipment with a net carrying value of $1,546,392,000, credit
enhancements of approximately $180,000,000 for which Ogden has
certain reimbursement obligations, and substantially all restricted
funds (see Note 4).
The interest rates on adjustable-rate revenue bonds are
adjusted periodically to reflect current market rates for similar
issues, generally with an upside cap of 15%. The average rate for
such revenue bonds was 5.28% and 3.33% in 1995 and 1994, respectively.
Other project debt includes an obligation of a
special-purpose limited partnership acquired by two special-purpose
subsidiaries of Ogden in December 1994 and represents the lease of a
geothermal power plant, which has been accounted for as a financing.
This obligation, which amounted to $95,156,000 at December 31,
1995, has an effective interest rate of 5.3% and extends through
2008 with options to renew for additional periods and has a fair
market value purchase option at the conclusion of the initial term.
Payment obligations under this lease arrangement are limited to
assets of the limited partnership and revenues derived from a power
purchase agreement with a third party, which are expected to provide
sufficient revenues to make rental payments. Such payment
obligations are secured by all the assets, revenues, and other
benefits derived from the geothermal power plant, which had a net
carrying value of approximately $111,389,000 at December 31, 1995.
In September 1995, the Corporation borrowed $20,984,000 from a
financial institution as part of the refinancing of project debt in
the category "Revenue Bonds Issued by and Prime Responsibility of
Municipalities." The debt service associated with this loan is
included as an explicit component of the client community's
obligation under the related service agreement. A portion of the
funds was retained in the Corporation's restricted funds and is
loaned to the community each month to cover the community's monthly
service fees. The Corporation's repayment for the other part of
the loan is limited to the extent repayment is received from the
client community. This overall obligation totaled $19,946,000 at
December 31, 1995, has an effective interest rate of 7.05%, and
extends through 2005.
At December 31, 1995, Ogden had three interest rate
swap agreements as hedges against interest rate exposure on certain
adjustable-rate revenue bonds. The first two interest rate swap
agreements expire in May 1999 and the third swap expires in 2019
and had notional amounts at December 31, 1995, of $91,070,000,
$38,835,000, and $80,220,000, respectively, which are reduced in
accordance with the scheduled repayments of the revenue bonds.
Under the first swap agreement, Ogden pays a fixed rate of 3.95%
per annum on a semi-annual basis and receives a floating rate based
on an index of tax-exempt, variable-rate obligations. Under the
second swap agreement, Ogden pays a fixed rate of 5.25% per annum
on a semi-annual basis and receives a floating rate based on a defined
commercial paper rate. Under the third swap agreement, Ogden pays a
fixed rate of 6.07% per annum on a semi-annual basis through 1998
and thereafter a fixed rate of 5.18% and receives a floating rate
based on a defined LIBOR-based rate. At December 31, 1995, the
floating rates on the three swaps were 4.22%, 5.87%, and 5.99%,
respectively. These swap agreements were entered into to convert
from floating rates to fixed interest rates $91,070,000 of
tax-exempt, adjustable-rate revenue bonds and $119,055,000 of
taxable, adjustable-rate revenue bonds. The counterparties to these
interest rate swaps are major financial institutions. Management
believes the credit risk associated with nonperformance by the
counterparties is not significant.
Amounts (received) or paid on these swap agreements
amounted to $(230,000), $1,400,000, and $1,500,000 for 1995, 1994,
and 1993, respectively, and were charged or (credited) to debt
service charges. The effect on Ogden's weighted-average borrowing
rate was an increase (decrease) of (.01)%, .09%, and .10% for 1995,
1994, and 1993, respectively.
<TABLE>
The maturities on long-term project debt (expressed in
thousands of dollars) at December 31, 1995, were as follows:
<S> <C>
1996............................... $ 55,774
1997............................... 61,873
1998............................... 68,672
1999............................... 76,092
2000............................... 77,003
Later years........................ 1,267,563
Total.............................. 1,606,977
Less current portion............... 55,774
Total long-term project debt....... $1,551,203
</TABLE>
11. Credit Arrangements
At December 31, 1995, Ogden had unused revolving credit
lines amounting to $167,557,000, of which $160,000,000
is available under its principal revolving credit line at various
borrowing rates including prime, the Eurodollar rate plus .30%, or
certificate-of-deposit rates plus .425%. Ogden is not required to
maintain compensating balances; however, Ogden pays a facility fee
of 3/16 of 1% on its principal revolving credit line of
$200,000,000, which expires October 29, 1998.
12. Convertible Subordinated Debentures
<TABLE>
Convertible subordinated debentures (expressed in thousands
of dollars) consisted of the following:
<CAPTION>
1995 1994
<S> <C> <C>
6% debentures due June 1, 2002............. $ 85,000 $ 85,000
53/4% debentures due October 20, 2002...... 63,650 63,650
Total...................................... $148,650 $148,650
</TABLE>
The 6% convertible subordinated debentures are convertible
into Ogden common stock at the rate of one share for each $39.077
principal amount of debentures. The debentures are redeemable at
Ogden's option at 102.4% of principal amount during the year
commencing June 1, 1995, and at decreasing prices thereafter.
The 5 3/4% convertible subordinated debentures are
convertible into Ogden common stock at the rate of one share for
each $41.772 principal amount of debentures. The debentures are
redeemable at Ogden's option at 100% of face value. During 1994,
the Corporation purchased $3,100,000 face value of these debentures
at prevailing market rates. The net gain on the acquisition of
these securities amounted to $620,000 and is included in Other
Income.
13. Preferred Stock
The outstanding Series A $1.875 Cumulative Convertible
Preferred Stock is convertible at any time at the rate of 5.97626
common shares for each preferred share. Ogden may redeem the
outstanding shares of preferred stock at $50 per share, plus all
accrued dividends. These preferred shares are entitled to receive
cumulative annual dividends at the rate of $1.875 per share, plus an
amount equal to 150% of the amount, if any, by which the dividend
paid or any cash distribution made on the common stock in the
preceding calendar quarter exceeded $.667 per share.
14. Common Stock and Stock Options
In 1986, Ogden adopted a nonqualified stock option plan
(the "1986 Plan"). Under the 1986 Plan, options and/or stock
appreciation rights may be granted to key management employees to
purchase Ogden common stock at prices not less than the fair market
value at the time of grant, which become exercisable during a five-
year period from the date of grant, except for the grant to the
Chairman of the Board, which vested in its entirety six months after
the date of the grant. As adopted, and as adjusted for stock splits,
the 1986 Plan calls for up to an aggregate of 2,700,000 shares of
Ogden common stock to be available for issuance upon the exercise of
options and stock appreciation rights, which may be granted over a
10-year period ending March 10, 1996. At December 31, 1995, all of
the authorized shares of this plan had been granted.
In October 1990, Ogden adopted the Ogden 1990 Stock
Option Plan (the "1990 Plan"). Under the 1990 Plan, nonqualified
options, incentive stock options, and/or stock appreciation rights
and stock bonuses may be granted to key management employees and
outside directors to purchase Ogden common stock at an exercise
price to be determined by the Ogden Compensation Committee.
Pursuant to the 1990 Plan, which was amended in 1994 to increase the
number of shares available by 3,200,000 shares, an aggregate of
6,200,000 shares of Ogden common stock is available for issuance
upon the exercise of such options, rights, and bonuses, which may be
granted over a 10-year period ending October 11, 2000; 2,158,200
shares were available for grant at December 31, 1995.
Under the foregoing plans, Ogden issued 4,466,300
limited stock appreciation rights in conjunction with the stock
options granted. These limited rights are exercisable only during
the period commencing on the first day following the occurrence of
any of the following events and terminate 90 days after such date:
the acquisition by any person of 20% or more of the voting power of
Ogden's outstanding securities; the approval by Ogden shareholders
of an agreement to merge or to sell substantially all of its assets;
or the occurrence of certain changes in the membership of the Ogden
Board of Directors. The exercise of these limited rights entitles
participants to receive an amount in cash with respect to each share
subject thereto, equal to the excess of the market value of a share
of Ogden common stock on the exercise date or the date these limited
rights become exercisable, over the related option price.
In connection with the acquisition of ERC
International, Inc. (ERCI), Ogden assumed pre-existing ERCI stock
option plans and converted all options then outstanding into options
to acquire shares of Ogden common stock. No further options were
granted under the ERCI plans. These options expired in 1993.
In connection with the acquisition of the minority
interest of OPI, Ogden assumed the pre-existing OPI stock option
plan then outstanding and converted these options into options to
acquire shares of Ogden common stock. No further options will be
granted under this plan.
In October 1995, the Financial Accounting Standards
Board issued SFAS No. 123, "Accounting for Stock-Based
Compensation," which is required to be adopted in the Corporation's
1996 financial statements. The Corporation expects to adopt only
the disclosure provisions of this Statement.
<TABLE>
Information regarding the Corporation's stock option
plans is summarized as follows:
<CAPTION>
Option Available
Price For
Per Share Outstanding Exercisable Grant
<S> <C> <C> <C> <C>
1986 Plan:
December 31, 1992, balance $14.98-28.54 1,080,000 668,000 115,500
Became exercisable 144,000
Exercised 14.98 (49,313) (49,313)
December 31, 1993, balance 14.98-28.54 1,030,687 762,687 115,500
Granted 22.50 115,500 (115,500)
Became exercisable 134,000
Exercised 14.98 (18,644) (18,644)
December 31, 1994, balance 14.98-28.54 1,127,543 878,043 ---
Became exercisable 18.31-28.54 157,100
Exercised 14.98 (16,618) (16,618) ---
December 31, 1995, balance 14.98-28.54 1,110,925 1,018,525
1990 Plan:
December 31, 1992, balance 18.31-21.19 2,655,000 1,037,400 345,000
Granted 23.56 158,000 (158,000)
Became exercisable 522,900
Exercised 18.31-20.31 (123,000) (123,000)
Cancelled 18.31-20.31 (50,000) (4,000) 50,000
December 31, 1993, balance 18.31-23.56 2,640,000 1,433,300 237,000
Increase in authorized
option shares 3,200,000
Granted 21.50-22.50 1,169,500 (1,169,500)
Became exercisable 507,500
Exercised 18.31-20.31 (109,000) (109,000)
Cancelled 18.31-23.56 (115,000) (32,000) 115,000
December 31, 1994, balance 18.31-23.56 3,585,500 1,799,800 2,382,500
Granted 20.06-22.69 409,000 (409,000)
Became exercisable 699,900
Exercised 18.31-20.31 (129,000) (129,000)
Cancelled 18.31-23.56 (184,700) (34,000) 184,700
December 31, 1995, balance 18.31-23.56 3,680,800 2,336,700 2,158,200
Conversion of ERCI Plan:
December 31, 1992, balance 21.05-24.74 70,117 70,117
Exercised 21.05 (23,102) (23,102)
Cancelled 21.05-24.74 (47,015) (47,015)
December 31, 1993, 1994,
and 1995, balance --- --- --- ---
Conversion of OPI Plan:
December 29, 1994 14.17-29.46 266,561 266,561 ---
December 31, 1994
and 1995, balance 14.17-29.46 266,561 266,561 ---
Total December 31, 1995 14.17-29.46 5,058,286 3,621,786 2,158,200
</TABLE>
At December 31, 1995, there were 11,211,067 shares of common
stock reserved for the exercise of stock options and the conversion
of preferred shares and debentures.
15. Preferred Stock Purchase Rights
In 1990, the Board of Directors declared a dividend of one
preferred stock purchase right (Right) on each outstanding share of
common stock. Among other provisions, each Right may be exercised
to purchase a one one-hundredth share of a new series of cumulative
participating preferred stock at an exercise price of $80, subject
to adjustment. The Rights may only be exercised after a party has
acquired 15% or more of the Corporation's common stock or commenced
a tender offer to acquire 15% or more of the Corporation's common
stock. The Rights do not have voting rights, expire October 2,
2000, and may be redeemed by the Corporation at a price of $.01 per
Right at any time prior to the acquisition of 15% of the
Corporation's common stock.
In the event a party acquires 15% or more of the
Corporation's outstanding common stock in accordance with certain
defined terms, each Right will then entitle its holders (other than
such party) to purchase, at the Right's then-current exercise price,
a number of the Corporation's common shares having a market value of
twice the Right's exercise price. At December 31, 1995, 49,468,000
preferred stock purchase rights were outstanding.
16. Sale of Limited Partnership Interests
In 1994, revenues include $26,100,000 from the sale of
limited partnership interests in and related tax benefits of the
Onondaga County waste-to-energy facility, which was partially offset
by the recapture of investment tax credits and minority interests.
17. Foreign Exchange
Foreign exchange translation adjustments for 1995, 1994,
and 1993, amounting to $(1,258,000), $3,240,000, and $(2,095,000),
respectively, have been credited (charged) directly to Shareholders'
Equity. Foreign exchange transaction adjustments, amounting to
$1,590,000 and $(1,844,000), have been credited (charged) directly
to income for 1995 and 1994, respectively.
18. Debt Service Charges
<TABLE>
Debt service charges for Ogden's project debt (expressed in
thousands of dollars) consisted of the following:
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Interest incurred on taxable and
tax-exempt borrowings $112,029 $109,586 $107,846
Interest earned on temporary investment
of borrowings during construction, etc. 4,908 6,782 9,985
Net interest incurred 107,121 102,804 97,861
Interest capitalized during construction
in property, plant, and equipment 1,512 8,893 5,538
Interest expense net 105,609 93,911 92,323
Amortization of bond issuance costs 6,241 6,447 6,341
Debt service charges $111,850 $100,358 $ 98,664
</TABLE>
19. Retirement Plans
Ogden has retirement plans that cover substantially all of
its employees. A substantial portion of hourly employees of Ogden
Services Corporation participates in defined contribution plans.
Other employees participate in defined benefit or defined
contribution plans.
The defined benefit plans provide benefits based on
years of service and either employee compensation or a flat benefit
amount. Ogden's funding policy for those plans is to contribute
annually an amount no less than the minimum funding required by
ERISA. Contributions are intended to provide not only benefits
attributed to service to date but also for those expected to be
earned in the future.
<TABLE>
The following table sets forth the defined benefit
plans' funded status and related amounts recognized in Ogden's
Consolidated Balance Sheets (expressed in thousands of dollars):
<CAPTION>
1995 1994
Assets Accumulated Assets Accumulated
Exceed Benefits Exceed Benefits
Accumulated Exceed Accumulated Exceed
Benefits Assets Benefits Assets
<S> <C> <C> <C> <C>
Accumulated Benefit
Obligation:
Vested $ 7,015 $ 9,724 $ 5,408 $ 7,800
Nonvested 389 501 311 413
Total $ 7,404 $10,225 $ 5,719 $ 8,213
Projected benefit
obligation for services
rendered to date $10,773 $14,319 $ 8,278 $11,733
Plan assets at fair value 10,325 5,581 7,832 5,138
Underfunded projected
benefits $ 448 $ 8,738 $ 446 $ 6,595
Source of Underfunded
Status:
Unrecognized net (loss)
from past experience
different from that
assumed and effects of
changes in assumptions $ (480) $(1,241) $(1,251) $ (625)
Unrecognized net
transition asset
(obligation) at
January 1, 1986, being
recognized over 13 years 494 (400) 566 (390)
Pension liability costs (961) (4,146) (412) (1,997)
Unrecognized prior service
costs 499 (2,951) 651 (3,583)
Underfunded projected
benefits $ 448 $ 8,738 $ 446 $ 6,595
</TABLE>
At December 31, 1995 and 1994, the accumulated benefit
obligation of certain pension plans exceeded plan assets. The
Corporation's liability for those plans was increased by $2,033,000
and $1,677,000 at December 31, 1995 and 1994, respectively. Such
amounts were offset by intangible assets and reductions in
Shareholders' Equity, net of income taxes of $760,000 and $441,000
at December 31, 1995 and 1994, respectively.
<TABLE>
Pension costs for Ogden's defined plans included the
following components (expressed in thousands of dollars):
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Service cost on benefits earned
during the period $2,078 $1,979 $1,610
Interest cost on projected
benefit obligation. 1,716 1,629 1,457
Net amortization and deferral 2,584 (436) 40
Actual return on plan assets (3,260) 32 (979)
Net periodic pension cost $3,118 $3,204 $2,128
</TABLE>
The weighted-average discount rate and rate of increase in
future compensation levels used in determining the
actuarial present value of the projected benefit obligations were 7
1/2% and 4 1/2% for 1995, 8 1/4% and 5% for 1994, and 7 1/2% and 4
1/2% for 1993, respectively. The expected long-term rate of return
on plan assets was 8% for each year.
Contributions and costs for defined contribution plans
are determined by benefit formulas based on percentage of
compensation as well as discretionary contributions and totaled
$10,358,000, $12,052,000, and $13,061,000 in 1995, 1994, and 1993,
respectively. Plan assets at December 31, 1995, 1994, and 1993,
primarily consisted of common stocks, United States government
securities, and guaranteed insurance contracts.
With respect to union employees, the Corporation is
required under contracts with various unions to pay, generally based
on hours worked, retirement, health, and welfare benefits. These
multiemployer defined benefit and defined contribution plans are not
controlled or administered by the Corporation. The amount charged
to expense for such plans during 1995, 1994, and 1993 was
$27,900,000, $30,100,000, and $32,000,000, respectively.
20. Postretirement Health Care and Life Insurance Benefits
In 1992, the Corporation discontinued its policy of
providing postretirement health care and life insurance benefits for
all salaried employees, except those employees who were retired or
eligible for retirement at December 31, 1992, or who were covered
under certain company-sponsored union plans. The Corporation
adopted SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions," as of January 1, 1993. SFAS No. 106
requires the accrual method of accounting for postretirement health
care and life insurance benefits, based on actuarial determined
costs to be recognized over the period from the date of hire to the
full eligibility date of employees who are expected to qualify for
such benefits.
As of January 1, 1993, the Corporation recognized the
full amount of its estimated accumulated postretirement benefit
obligation, representing the present value of the estimated future
benefits payable to current retirees, and a pro rata portion of
estimated benefits payable to eligible active employees after
retirement. The effect of recognizing SFAS No. 106 at January 1,
1993, is shown in the accompanying financial statements as a
cumulative effect of a change in accounting principle and is
reflected as a charge to income of $5,340,000 (net of income taxes
of $3,710,000), or $.12 per share.
For the years ended December 31, 1995 and 1994, the
components of the periodic expense for these benefits were as follows:
<TABLE>
Recognition of Components of Net Periodic Postretirement
Benefit Costs for the Years Ended December 31:
<CAPTION>
1995 1994
<S> <C> <C>
Service costs $131,966 $162,107
Interest 755,944 775,142
Amortization of unrecognized net (gain) loss (22,113) 67,820
Total $865,797 $1,005,069
</TABLE>
<TABLE>
As of December 31, 1995 and 1994, the actuarial recorded
liabilities for these postretirement benefits, none of which have
been funded, were as follows:
<CAPTION>
Accumulated Postretirement Benefit Obligation:
<S> <C> <C>
Retirees $ 4,352,614 $3,884,885
Eligible active participants 4,832,637 4,581,234
Other active 1,740,792 1,480,725
Total accumulated postretirement obligation 10,926,043 9,946,844
Unrecognized net loss 611,978 117,947
Accrued postretirement benefit liability $10,314,065 $9,828,897
</TABLE>
The accumulated postretirement benefit obligation was
determined using discount rates of 7 1/2% and 8 1/4%; an
estimated increase in compensation levels of 4 1/2% and 5% for 1995
and 1994, respectively; and a health care cost rate of approximately
14 1/2%, decreasing in subsequent years until it reaches 6% in the
year 2008 and thereafter. The effect of a one percentage point
increase in the assumed health care cost trend rates for each future
year on the aggregate of the service and interest cost components of
net periodic postretirement health care benefit cost and the
accumulated postretirement benefit obligation for health care
benefits would be $77,711 and $716,704, respectively.
21. Impairment of Long-Lived Assets
Ogden adopted the provisions of SFAS No. 121, "Accounting
for the Impairment of Long-Lived Assets and Long-Lived Assets to be
Disposed of," in the fourth quarter of 1995. SFAS No. 121 requires
that long-lived assets and certain identifiable intangibles held and
used by an entity, including any goodwill related to these assets,
be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying value of such assets may
not be recoverable. In performing this review for recoverability,
the Corporation estimated future cash flows expected from the use
of such assets and their eventual disposition. If the sum of
expected future cash flows (undiscounted) was less than the carrying
value of the assets, an impairment loss was recognized. The Statement
also requires that long-lived assets and certain identifiable
intangibles to be disposed of be reported at the lower of carrying
value or fair value less the costs to sell.
The effect of recognizing SFAS No. 121 resulted in a
pretax charge of $45,300,000 and an after-tax charge of $34,700,000,
or $.70 per share. This charge included estimated losses on the
disposal of noncore businesses, as announced in the fourth quarter
of 1995, of $32,800,000 and the write-down of other long-lived
assets of $12,500,000. The loss of $32,800,000 on the assets to be
disposed of was based on the Corporation's estimate of realizable or
liquidation values of the operations and bids received from
prospective purchasers. The impairment loss of $12,500,000 on other
long-lived assets represents the difference between the carrying
amount of the assets and their estimated fair values, which was
determined based on operating projections and future discounted cash
flows. The remaining carrying value of these assets is not
significant. These amounts were charged to cost of goods sold
($4,500,000) and operating expenses ($40,800,000) in the
accompanying financial statements.
22. Other Charges
During 1995, the Corporation recognized unusual charges of
$37,500,000, which were reduced by a $13,500,000 gain on the sale of
a noncore business in the fourth quarter for a net charge of
$24,000,000. The charge of $37,500,000 includes, in the second
quarter, $17,100,000 at Ogden Communications, Inc. (OCI), for the
write-off of receivables of $10,300,000 and related costs recorded
in connection with a telecommunications project at OCI, as well as a
loss on the disposal of inventory of $3,900,000 and costs related to
the curtailment of operations of $2,900,000; and in the fourth
quarter, $8,200,000 for costs, principally severance pay relating to
restructuring activities, and $12,200,000 representing the
write-down of deferred charges relating to a previously awarded
waste-to-energy project that is not expected to be completed;
unusual waste-to-energy repair costs; and an adjustment of inventory
balances resulting from a physical inventory. The $17,100,000
charge at OCI resulted from a review of the activities of this unit
during which the Corporation concluded that contracts and other
documentation did not provide a basis for recovering any of the
accounts receivable related to the telecommunications project and
that the sale of inventory would not recover its full carrying
value. In addition, the Corporation decided to discontinue the
business of OCI and estimated the costs relating thereto.
These amounts were charged to sales allowances
($10,300,000); operating costs ($3,800,000); cost of goods sold
($6,000,000); and selling, administrative, and general expenses
($3,900,000) in the accompanying financial statements. The gain on
the sale of the noncore business of $13,500,000 was included as a
reduction of operating expenses.
In December 1991, the Corporation discontinued the
on-site remediation business, utilizing mobile technology, of OPI.
During 1993, the Corporation recognized a pretax gain of $12,379,000
resulting primarily from the receipt of amounts previously withheld
pending satisfactory completion of obligations under existing
contracts and from proceeds from the sale of assets in excess of
previously estimated net realizable values.
In December 1993, the Corporation discontinued its
fixed-site hazardous waste business. Provision was made in 1993 for
the write-down of assets, primarily development costs, resulting in
a pretax loss of $12,629,000.
In addition, 1995 operating expenses include
$3,500,000 for the settlement of litigation relating to the
discontinuance of the fixed-site hazardous waste business. For
the year ended December 31, 1993, the $250,000 net loss from both
discontinued operations is reported as Operating Costs and
Expenses in the Statements of Consolidated Income.
23. Income Taxes
<TABLE>
The components of the provision for income taxes
(expressed in thousands of dollars) were as follows:
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Current:
Federal......................... $6,444 $10,141 $ 453
State........................... 5,038 11,616 6,999
Foreign......................... 4,602 2,422 1,476
Total current................... 16,084 24,179 8,928
Deferred:
Federal......................... 17,120 36,520 43,295
State........................... 1,033 1,184 4,303
Total deferred.................. 18,153 37,704 47,598
Total provision for income taxes.. $34,237 $61,883 $56,526
</TABLE>
The current provision for Federal income tax results
principally from the alternative minimum tax. In August 1993,
the Omnibus Budget Reconciliation Act was enacted, which increased
the corporate Federal income tax rate from 34% to 35% retroactive
to January 1, 1993. As a consequence, deferred Federal income
tax balances were adjusted to this new rate as required by SFAS
No. 109, which resulted in a one-time charge for Federal income
taxes of $4,066,000 in 1993.
<TABLE>
The provision for income taxes (expressed in thousands
of dollars) varied from the Federal statutory income tax rate due to
the following:
<CAPTION>
1995 1994 1993
Percent Percent Percent
of Income of Income of Income
Amount Before Amount Before Amount Before
of Tax Taxes of Tax Taxes of Tax Taxes
<S> <C> <C> <C> <C> <C> <C>
Taxes at statutory rate $14,184 35.0% $48,777 35.0% $43,925 35.0%
Adjustment of deferred
income tax benefits 4,066 3.2
State income taxes, net of
Federal tax benefit 3,946 9.7 8,320 6.0 7,346 5.8
Recapture (benefit) of
investment tax credits 1,807 1.3 (1,807) (1.4)
Foreign taxes and non-
deductible foreign losses 6,694 16.5 1,425 1.0 1,982 1.6
Amortization of goodwill 1,206 3.0 1,030 .7 838 .7
Write-down of goodwill 5,263 13.0
Pooling-related taxes and
costs 1,807 4.5
Other net 1,137 2.8 524 .4 176 .1
Provision for income taxes $34,237 84.5% $61,883 44.4% $56,526 45.0%
</TABLE>
<TABLE>
The components of the net deferred income tax liability
(expressed in thousands of dollars) as of December
31, 1995 and 1994, were as follows:
<CAPTION>
1995 1994
<S> <C> <C>
Deferred Tax Assets:
Deferred income..................... $ 14,387 $ 16,291
Accrued expenses.................... 47,125 51,055
Other liabilities................... 13,500 16,779
Investment tax credits.............. 28,930 31,064
Alternative minimum tax credits..... 27,521 19,387
Net operating loss carryforwards.... 120,298 137,488
Total deferred tax assets........... 251,761 272,064
Deferred Tax Liabilities:
Unbilled accounts receivable........ 48,734 47,119
Property, plant, and equipment...... 448,334 445,699
Other............................... 33,114 33,860
Total deferred tax liabilities...... 530,182 526,678
Net deferred tax liability.......... $278,421 $254,614
</TABLE>
<TABLE>
Deferred tax assets and liabilities are presented as follows
in the accompanying balance sheets:
<CAPTION>
1995 1994
<S> <C> <C>
Net deferred tax liability noncurrent... $310,400 $281,065
Less net deferred tax asset current..... 31,979 26,451
Net deferred tax liability.............. $278,421 $254,614
</TABLE>
At December 31, 1995, for Federal income tax purposes, the
Corporation had investment and energy tax credit carryforwards
of approximately $28,930,000 and net operating loss carryforwards
of approximately $299,170,000, which will expire in 2004 through
2008. Deferred Federal income taxes have been reduced by the tax
effect of these amounts.
24. Leases
Total rental expense amounted to $93,396,000, $77,190,000,
and $73,138,000 (net of sublease income of $193,000, $328,000, and
$2,606,000) for 1995, 1994, and 1993, respectively. Included in
rental expense are amounts based on contingent factors (principally
sales) in excess of minimum rentals, amounting to $21,676,000,
$15,181,000, and $19,836,000 for 1995, 1994, and 1993, respectively.
Principal leases are for leaseholds, sale and leaseback
arrangements on waste-to-energy facilities, trucks and automobiles,
airplane, and machinery and equipment. Some of these operating
leases have renewal options.
<TABLE>
The following is a schedule (expressed in thousands of
dollars), by year, of future minimum rental payments required under
operating leases that have initial or remaining noncancelable lease
terms in excess of one year as of December 31, 1995:
<S> <C>
1996............................... $ 65,007
1997............................... 62,854
1998............................... 61,528
1999............................... 54,042
2000............................... 44,564
Later years........................ 350,596
Total.............................. $638,591
</TABLE>
These future minimum rental payment obligations include
$108,183,000 of future nonrecourse rental payments that
relate to a waste-to-energy facility, which are supported by
third-party commitments to provide sufficient service revenues to
meet such obligations. Also included are $85,792,000 of nonrecourse
rental payments relating to a hydroelectric power generating
facility operated by a special-purpose subsidiary, which are
supported by contractual power purchase obligations of a third party
and which are expected to provide sufficient revenues to make the
rent payments. These nonrecourse rental payments (in thousands of
dollars) are due as follows:
<TABLE>
<S> <C>
1996............................... $ 18,698
1997............................... 19,197
1998............................... 19,492
1999............................... 20,797
2000............................... 21,402
Later years........................ 94,389
Total.............................. $193,975
</TABLE>
25. Earnings Per Share
Earnings per common share were computed by dividing net
income, reduced by preferred stock dividend requirements, by the
weighted average of the number of shares of common stock and common
stock equivalents, where dilutive, outstanding during each year.
Earnings per common share, assuming full dilution,
were computed on the assumption that all convertible debentures,
convertible preferred stock, and stock options converted or
exercised during each year or outstanding at the end of each year
were converted at the beginning of each year or at the date of
issuance or grant, if dilutive. This computation provided for the
elimination of related convertible debenture interest and preferred
dividends.
<TABLE>
The weighted-average number of shares used in computing
earnings per common share was as follows:
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Primary................... 49,385,000 43,610,000 43,378,000
Assuming full dilution.... 49,691,000 43,939,000 43,776,000
</TABLE>
26. Commitments and Contingent Liabilities
Ogden and certain of its subsidiaries have issued or are
party to performance bonds and guarantees and related contractual
obligations undertaken mainly pursuant to agreements to construct
and operate certain waste-to-energy, entertainment, and other
facilities. In the normal course of business, they are involved in
legal proceedings in which damages and other remedies are sought.
Management does not expect that these contractual obligations, legal
proceedings, or any other contingent obligations incurred in the
normal course of business will have a material adverse effect on
Ogden's Consolidated Financial Statements.
During 1994, a subsidiary of the Corporation entered
into a 30-year facility management contract pursuant to which it
agreed to advance funds to a customer, if necessary, to assist
refinancing senior secured debt incurred in connection with
construction of the facility. Such refinancing requirements are not
expected to exceed $75,000,000 at maturity of the senior secured
debt, which is expected to be on or about March 1, 2001. In
addition, at December 31, 1995, the Corporation has guaranteed
indebtedness of $6,200,000 of an affiliate and principal tenant of
this customer. Ogden continues as guarantor of surety bonds and
letters of credit totaling approximately $19,200,000 on behalf of
International Terminal Operating Co. Inc. (ITO) and has guaranteed
borrowings of certain customers amounting to approximately
$29,200,000. Management does not expect that these arrangements
will have a material adverse effect on Ogden's Consolidated
Financial Statements.
As of December 31, 1995, capital commitments amounted
to $53,400,000 for normal replacement, modernization, and growth in
Services' ($42,100,000) and Projects' ($11,300,000) operations. In
addition, compliance with recently promulgated standards and
guidelines under the Clean Air Act Amendments of 1990 may require
additional capital expenditures of $30,000,000 during the next four
years.
27. Information Concerning Business Segments
Ogden classifies its business segments as Services and
Projects. The Services segment includes principally ground
services, fueling, cargo, food catering, and related services to the
aviation industry; food and beverage, janitorial, maintenance, and
other services related to the management and operations of arenas,
stadiums, amphitheaters, and parks; management, maintenance,
security, janitorial, and related services to commercial office
buildings and industrial and other facilities; and professional
technical and environmental consulting services to a wide range of
customers. The Projects segment includes all of Ogden's
waste-to-energy activities, its independent power business, the
operation of two geothermal power stations and related well field
activities and a hydroelectric power station, its water and wastewater
project business, and its construction activities all of which
activities are commonly managed by Projects.
The operations of these two segments are performed
principally in the United States.
<TABLE>
Revenues and income from continuing operations
(expressed in thousands of dollars) for the years ended December 31,
1995, 1994, and 1993, were as follows:
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Revenues:
Services................... $1,560,987 $1,379,450 $1,330,104
Projects................... 624,006 725,097 705,756
Total revenues............. $2,184,993 $2,104,547 $2,035,860
Income from Operations:
Services................... $ (17,832) $ 50,674 $ 60,193
Projects................... 79,382 104,137 80,272
Total income from operations.... 61,550 154,811 140,465
Equity in Net Income of Investees
and Joint Ventures:
Services........................ 2,443 2,045 3,418
Projects........................ 4,423 5,638 3,477
Total........................... 68,416 162,494 147,360
Corporate unallocated income and
expenses net (12,525) (12,184) (10,751)
Corporate interest net....... (15,365) (10,946) (11,108)
Consolidated Income from
Continuing Operations
Before Income Taxes and
Minority Interest $ 40,526 $ 139,364 $ 125,501
</TABLE>
In 1995, income from operations of Services and
Projects reflects pretax charges of $56,900,000 and $12,400,000,
respectively, reflecting the adoption of SFAS No. 121 and other
unusual charges (see Notes 21 and 22).
Services' revenues include $250,300,000, $248,500,000,
and $245,100,000 from the United States government contracts for the
years ended December 31, 1995, 1994, and 1993, respectively.
Total revenues by segment reflect sales to unaffiliated
customers. In computing income from operations, none of the
following have been added or deducted: unallocated corporate
expenses, nonoperating interest expense, interest income, and income
taxes.
<TABLE>
A summary (expressed in thousands of dollars) of
identifiable assets, depreciation and amortization, and capital
additions of continuing operations for the years ended December 31,
1995, 1994, and 1993, is as follows:
<CAPTION>
Identifiable Depreciation and Capital
Assets Amortization Additions
<S> <C> <C> <C>
1995
Services.......... $ 903,218 $ 45,344 $ 57,424
Projects.......... 2,558,411 63,397 35,391
Corporate......... 191,042 863 11
Consolidated...... $3,652,671 $109,604 $ 92,826
1994
Services.......... $ 800,011 $ 39,658 $ 37,207
Projects.......... 2,556,655 49,061 82,418
Corporate......... 288,220 1,826 22
Consolidated...... $3,644,886 $ 90,545 $119,647
1993
Services.......... $ 719,964 $ 35,973 $ 33,877
Projects.......... 2,361,499 47,186 81,852
Corporate......... 259,266 2,484 471
Consolidated...... $3,340,729 $ 85,643 $116,200
</TABLE>
28. Supplemental Disclosure of Cash Flow Information
<TABLE>
<CAPTION>
(Expressed in thousands of dollars) 1995 1994 1993
<S> <C> <C> <C>
Cash Paid for Interest and Income Taxes:
Interest (net of amounts capitalized) $140,878 $119,188 $114,381
Income taxes 9,885 8,298 3,197
Noncash Investing and Financing
Activities:
Conversion of preferred shares for
common shares 4 3 5
Conversion of debentures for common
shares 1,287
Contract acquisition costs, etc. 22,539
Future contract obligations (22,539)
Purchase of Minority Interest:
Common stock issued 94,446
Adjustment to net assets for excess
of purchase price over book value
of net assets acquired 21,589
Detail of Entities Acquired:
Fair value of assets acquired 32,293 158,212 76,875
Liabilities assumed (16,819) (125,808) (22,651)
Net cash paid for acquisitions 15,474 32,404 54,224
</TABLE>
29. Fair Value of Financial Instruments
The following disclosure of the estimated fair value of
financial instruments is made in accordance with the requirements of
SFAS No. 107, "Disclosures About Fair Value of Financial
Instruments." The estimated fair-value amounts have been determined
using available market information and appropriate valuation
methodologies. However, considerable judgment is necessarily
required in interpreting market data to develop estimates of fair
value. Accordingly, the estimates presented herein are not
necessarily indicative of the amounts that Ogden would realize in
a current market exchange.
<TABLE>
The estimated fair value (expressed in thousands of
dollars) of financial instruments at December 31, 1995 and 1994, is
summarized as follows:
<CAPTION>
1995 1994
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
<S> <C> <C> <C> <C>
Assets:
Cash and cash equivalents $ 96,782 $ 96,782 $ 117,359 $ 117,359
Marketable securities
available for sale 30,477 30,477 99,086 99,086
Receivables 789,397 791,712 743,480 748,807
Restricted funds 313,789 315,987 318,699 317,631
Other assets 4,957 4,957 12,900 12,900
Liabilities:
Long-term debt 299,247 322,016 307,876 298,648
Convertible subordinated
debentures 148,650 137,608 148,650 119,770
Project debt 1,606,977 1,694,722 1,639,267 1,661,813
Other liabilities 76,944 79,449 34,906 28,794
Off Balance-Sheet Financial
Instruments:
Unrealized losses on interest
rate swap agreements 6,839 9,355
Unrealized gains on interest
rate swap agreements 1,103 8,716
</TABLE>
The following methods and assumptions were used to
estimate the fair value of each class of financial instruments for
which it is practicable to estimate that value:
For cash and cash equivalents, the carrying value of
these amounts is a reasonable estimate of their fair value. The
fair value of long-term unbilled receivables is estimated by using a
discount rate that approximates the current rate for comparable
notes. Marketable securities' fair values are based on quoted
market prices or dealer quotes. The fair value of restricted funds
held in trust is based on quoted market prices of the investments
held by the trustee. The fair value of noncurrent receivables is
estimated by discounting the future cash flows using the current
rates at which similar loans would be made to such borrowers based
on the remaining maturities, consideration of credit risks, and
other business issues pertaining to such receivables. Other assets,
consisting primarily of insurance and escrow deposits and other
miscellaneous financial instruments used in the ordinary course of
business, are valued based on quoted market prices or other
appropriate valuation techniques.
Fair values for short-term debt and long-term debt were
determined based on interest rates that are currently available to
the Corporation for issuance of debt with similar terms and
remaining maturities for debt issues that are not traded or quoted
on an exchange. With respect to convertible subordinated
debentures, fair values are based on quoted market prices. The
fair value of project debt is estimated based on quoted market prices
for the same or similar issues. Other borrowings and liabilities
are valued by discounting the future stream of payments using the
incremental borrowing rate of the Corporation. The fair value of the
Corporation's interest rate swap agreements is the estimated amount
that the Corporation would receive or pay to terminate the swap
agreements at the reporting date based on third-party quotations.
The fair value of Ogden financial guarantees provided on behalf of
ITO and customers (see Note 26) would be zero because Ogden receives
no fees associated with such commitments.
The fair-value estimates presented herein are based on
pertinent information available to management as of December 31,
1995 and 1994. Although management is not aware of any factors that
would significantly affect the estimated fair-value amounts, such
amounts have not been comprehensively revalued for purposes of these
financial statements since that date, and current estimates of fair
value may differ significantly from the amounts presented herein.
<PAGE>
Independent Auditors' Report
Deloitte & Touche llp
Two World Financial Center
New York, NY 10281
The Board of Directors and Shareholders of Ogden Corporation:
We have audited the accompanying consolidated balance sheets of Ogden
Corporation and subsidiaries as of December 31, 1995 and 1994 and the related
statements of shareholders' equity, consolidated income and cash flows for
each of the three years in the period ended December 31, 1995. These
financial statements are the responsibility of the Corporation's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the financial position of the companies at December 31,
1995 and 1994 and the results of their operations and cash flows for each
of the three years in the period ended December 31, 1995 in conformity with
generally accepted accounting principles.
As discussed in Note 1 to the financial statements, in 1995 the
Corporation adopted Statement of Financial Accounting Standards No. 121
relating to long-lived assets and long-lived assets to be disposed of. In
1994 the Corporation changed its methods of accounting for postemployment
benefits to conform with Statement of Financial Accounting Standards No. 112
and for certain investments in debt and equity securities to conform with
Statement of Financial Accounting Standards No. 115. In 1993, the
Corporation changed its method of accounting for postretirement benefits
other than pensions to conform with Statement of Financial Accounting
Standards No. 106.
February 5, 1996
<PAGE>
Ogden Corporation and Subsidiaries
Report of Management
Ogden's management is responsible for the information and
representations contained in this annual report. Management believes that
the financial statements have been prepared in conformity with generally
accepted accounting principles appropriate in the circumstances to reflect in
all material respects the substance of events and transactions that should be
included and that the other information in the annual report is consistent
with those statements. In preparing the financial statements, management
makes informed judgments and estimates of the expected effects of events
and transactions currently being accounted for.
In meeting its responsibility for the reliability of the financial
statements, management depends on the Corporation's internal control
structure. This structure is designed to provide reasonable assurance that
assets are safeguarded and transactions are executed in accordance with
management's authorization and recorded properly to permit the preparation of
financial statements in accordance with generally accepted accounting
principles. In designing control procedures, management recognizes that
errors or irregularities may nevertheless occur. Also, estimates and
judgments are required to assess and balance the relative cost and expected
benefits of such controls. Management believes that the Corporation's
internal control structure provides reasonable assurance that errors or
irregularities that could be material to the financial statements are
prevented and would be detected within a timely period by employees in the
normal course of performing their assigned functions.
The Board of Directors pursues its oversight role for these financial
statements through the Audit Committee, which is composed solely of
nonaffiliated directors. The Audit Committee, in this oversight role, meets
periodically with management to monitor their responsibilities. The Audit
Committee also meets periodically with the independent auditors and the
internal auditors, both of whom have free access to the Audit Committee
without management present.
The independent auditors elected by the shareholders express an opinion
on our financial statements. Their opinion is based on procedures they
consider to be sufficient to enable them to reach a conclusion as to the
fairness of the presentation of the financial statements.
R. Richard Ablon Philip G. Husby
President and Senior Vice President,
Chief Executive Officer Chief Financial Officer, and
Treasurer
<PAGE>
<TABLE>
Ogden Corporation and Subsidiaries
Quarterly Results of Operations
<CAPTION>
1995 Quarter Ended March 31 June 30 Sept. 30 Dec. 31
(In thousands of dollars,
except per-share amounts)
<S> <C> <C> <C> <C>
Total revenues........ $502,408 $537,645 $588,402 $556,538
Gross profit.......... $85,650 $82,406 $106,547 $31,330
Net income............ $12,092 $10,080 $23,828 $(38,556)
Earnings (loss) per
common share......... $0.24 $0.21 $0.48 $(0.78)
Earnings (loss) per
common share
assuming full dilution $0.24 $0.21 $0.48 $(0.78)
</TABLE>
<TABLE>
<CAPTION>
1994 Quarter Ended March 31 June 30 Sept. 30 Dec. 31
(In thousands of dollars,
except per-share amounts)
<S> <C> <C> <C> <C>
Total revenues.......... $478,424 $526,424 $544,296 $555,403
Gross profit............ $86,381 $95,975 $95,852 $99,779
Income before cumulative
effect of a change
in accounting principle $15,328 $17,640 $18,742 $16,116
Cumulative effect of a change
in accounting principle (1,520)
Net income............... $13,808 $17,640 $18,742 $16,116
Earnings (Loss) Per Common
Share:
Income before cumulative
effect of a change
in accounting principle $0.35 $0.40 $0.43 $0.37
Cumulative effect of a change
in accounting principle (0.03)
Total.................... $0.32 $0.40 $0.43 $0.37
Earnings (Loss) Per Common
Share Assuming Full Dilution:
Income before cumulative
effect of a change
in accounting principle $0.34 $0.40 $0.43 $0.37
Cumulative effect of a change
in accounting principle (0.03)
Total..................... $0.31 $0.40 $0.43 $0.37
The cumulative effect of a change in accounting principle reflects the
adoption of SFAS No. 112, "Employers' Accounting for Postemployment
Benefits," effective January 1, 1994.
</TABLE>
<TABLE>
Ogden Corporation and Subsidiaries
Price Range of Stock and Dividend Data
<CAPTION>
1995 1994
High Low High Low
<S> <C> <C> <C> <C>
Common:
First Quarter.......... 21 1/2 18 1/2 24 3/8 21 3/4
Second Quarter......... 22 3/8 19 7/8 23 3/8 19 7/8
Third Quarter.......... 23 7/8 22 23 1/8 20 1/2
Fourth Quarter......... 24 19 7/8 21 5/8 17 3/4
Preferred:
First Quarter.......... 120 113 1/2 137 137
Second Quarter......... Not Traded 128 1/2 128 1/2
Third Quarter.......... 134 3/8 134 3/8 131 1/2 131 1/2
Fourth Quarter......... 139 133 5/8 122 122
</TABLE>
Quarterly common stock dividends of $.3125 per share were paid to
shareholders of record for the four quarters of 1995 and 1994,
the dividends for the last quarters of 1995 and 1994 being paid in January of
the subsequent years. Quarterly dividends of $.8376 were paid for the four
quarters of 1995 and 1994 on the $1.875 preferred stock.
Ogden common and $1.875 preferred stocks are listed on the New York Stock
Exchange.
EXHIBIT 21
December 31, 1995
OGDEN CORPORATION - U.S. SUBSIDIARIES
(See Attachment A for foreign subsidiaries)
PERCENT DOMESTIC
COMPANY OWNERSHIP STATE
Ogden Corporation Delaware
Ogden Management Services, Inc. 100 Delaware
OFS Equity of Babylon, Inc. 100 New York
OFS Equity of Huntington, Inc. 100 New York
Ogden Services Corporation 100 Delaware
Firehole Entertainment Corp. 100 Delaware
Ogden Asia Pacific Services, Inc. 100 Delaware
(See attachment A for subsidiaries)
Ogden Central and South America, Inc. 100 Delaware
(See attachment A for subsidiaries)
Ogden International Europe Inc. 100 Delaware
(See Attachment A for subsidiaries)
Ogden Environmental and Energy Services
Co., Inc. 100 Delaware
Analytical Technologies, Inc. 100 Delaware
Analytical Technologies of
California, Inc. 100 California
Analytical Technologies of Alaska, Inc. 100 Alaska
G A Technical Services, Inc. 100 Tennessee
Multiple Dynamics Corporation 100 Michigan
Ogden Environmental and Energy Services
Co., Inc. of Ohio 100 Ohio
Ogden Environmental & Engineering
Services Co., Inc. 100 N. Carolina
Ogden Environmental Services Alaska
Co., Inc. 100 Delaware
Ogden Remediation Services Co., Inc. 100 Florida
Ogden Entertainment Services, Inc. 100 Delaware
Doggie Diner, Inc. 100 Delaware
Offshore Food Service, Inc. 100 Louisiana
Gulf Coast Catering Company, Inc. 100 Louisiana
Ogden Allied Security Services, Inc. 100 Delaware
Ogden American Food Services, Inc. 100 Ohio
Ogden Aviation Food Services, Inc. 100 Delaware
Ogden Aviation Food Services (ALC), Inc 100 New York
Ogden-Burtco Services, Inc. 100 Washington
Alpine Food Products, Inc. 100 Washington
Ogden Facility Management
of Alaska, Inc. 100 Alaska
Ogden Entertainment Services of
Indiana, Inc. 100 Delaware
<PAGE>
Ogden Corporation Page 2
Ogden Services Corporation
Ogden Entertainment Services, Inc. (con't.)
Ogden Facility Management Corporation 100 New York
Ogden Facility Management Corporation
of Anaheim 100 California
Ogden Facility Management Corporation
of California 100 California
Ogden Facility Management Corporation
of Huntington 100 W. Virginia
Ogden Facility Management Corporation
of Iowa 100 Iowa
Ogden Facility Management Corporation
of Pensacola 100 Florida
Ogden Facility Management Corporation
of West Virginia 100 W. Virginia
Ogden Food Service Corporation 100 Delaware
Ogden Confection Corporation 100 Delaware
Ogden Food Service Corporation of
Connecticut 100 Connecticut
Ogden Food Service Corporation of
Indiana 100 Indiana
Ogden Food Service Corporation of
Kansas 100 Kansas
Ogden Food Service Corporation of
Miami, Inc. 100 Florida
Ogden Food Service Corporation of
Milwaukee 100 Wisconsin
Ogden Food Service Corporation of
Texas 100 Texas
Ogden Food Service Corporation of
Wisconsin 100 Wisconsin
Ogden Leisure, Inc. 100 Delaware
Ogden Fairmount, Inc. 100 Delaware
Ogden Leisure Services of New York, Inc. 100 New York
Ogden Technology Services Corporation 100 Delaware
Applied Data Technology, Inc. 100 California
InterCAD Corporation 100 Maryland
Ogden/ERC Aviation Technology Services,
Inc. 100 Delaware
Ogden Professional Services Corporation 100 Virginia
Ogden Range Services, Inc. 100 Delaware
Logistics Operations, Inc. 100 Virginia
Ogden Support Services, Inc. 100 Delaware
W. J. Schafer Associates, Inc. 100 Mass.
Laser Corporation of America 49.92 Mass.
Laser Royalties, Inc. 100 Delaware
Ogden Allied Maintenance Corporation 100 New York
Atlantic Design Company, Inc. 100 New York
Atlantic Design Technicals, Inc. 100 New Jersey
Lenzar Electro-Optics, Inc. 100 Delaware
Ogden Allied Payroll Services, Inc. 100 New York
Ogden CISCO, Inc. 100 Delaware
Ogden CISCO Maintenance, Inc. 100 Delaware
Ogden Communications, Inc. 100 Delaware<PAGE>
Ogden Corporation Page 3
Ogden Services Corporation
Ogden Allied Maintenance Corporation (con't.)
Ogden Aviation Services, Inc. Inc. 100 Delaware
Ogden Aviation Distributing Corp. 100 New York
Ogden Aviation Fleet Corp. 100 Delaware
Ogden Aviation Fueling Company, Inc. 100 Delaware
Ogden Aviation Fueling Company of
Atlanta, Inc. 100 Georgia
Ogden Aviation Fueling Company of
Houston, Inc. 100 Texas
Ogden Aviation Fueling Company of
St. Louis, Inc. 100 Delaware
Ogden Aviation Fueling Company of
Texas, Inc. 100 Texas
Ogden Aviation Fueling Company of
Virginia, Inc. 100 Delaware
Ogden Aviation Service Company of
Colorado, Inc. 100 Colorado
Ogden Aviation Service Company of
Hawaii, Inc. 100 Hawaii
Ogden Aviation Service Company of
Kansas City, Inc. 100 Missouri
Ogden Aviation Service Company of
New Jersey, Inc. 100 New Jersey
Ogden Aviation Service Company of
New York, Inc. 100 New York
Ogden Ground Services, Inc. 100 Delaware
ARA Sunset Airport Systems, Inc. 100 California
Kenworthy Air Freight Services, Inc 100 Indiana
Ogden Aviation Service Company of
Pennsylvania, Inc. 100 Penn.
Ogden Aviation Service Company of
Texas, Inc. 100 Delaware
Ogden Aviation Service Company of
Washington, Inc. 100 Delaware
Ogden Aviation Service International
Corporation 100 New York
Ogden Aviation, Inc. 100 Delaware
Ogden Aviation Security Services of
Indiana, Inc. 100 Indiana
Ogden Aviation Terminal Services, Inc. 100 Mass.
Ogden Consolidated Aviation Services of
Houston, Inc. 100 Texas
Ogden New York Services, Inc. 100 New York
Ogden Pipeline Services Corporation 100 Delaware
<PAGE>
Ogden Corporation Page 4
Ogden Services Corporation
Ogden Allied Maintenance Corporation (con't.)
Ogden Facility Holdings, Inc. 100 Delaware
Ogden Facility Services, Inc. 100 Delaware
Hawaiian Building Maintenance Company,
Limited 100 Hawaii
Ogden Allied Building & Airport
Services Inc. 100 Delaware
Ogden Allied Building Service
Corporation 100 Delaware
Ogden Allied Commercial Cleaning
Systems Corporation 100 California
Ogden Allied Eastern States
Maintenance Corporation 100 Delaware
Ogden Allied Maintenance Company of
Hawaii, Inc. 100 Hawaii
Ogden Allied Maintenance Corporation
of New England 100 Mass.
Ogden Allied Maintenance Corporation
of Pennsylvania 100 Delaware
Ogden Allied Maintenance Corporation
of Texas 100 Texas
Ogden Allied Service Agency
Corporation 100 Delaware
Ogden Allied Window Cleaning Company,
Inc. 100 New York
Ogden Industrial Services, Inc. 100 Delaware
Ogden Plant Maintenance Company, Inc. 100 New Jersey
Ogden Plant Maintenance Company of
Missouri 100 Missouri
Ogden Plant Maintenance Company of
North Carolina 100 N. Carolina
Ogden Resource Recovery Support Services,
Inc. 100 Delaware
Ogden Plant Services of New Jersey, Inc. 100 New Jersey
Ogden Water Treatment Support
Services, Inc. 100 Delaware
Ogden Allied Abatement & Decontamination
Service, Inc. 100 New York
Ogden Projects, Inc. 100 Delaware
(See Attachment B for subsidiaries)
<PAGE>
Ogden Corporation (con't.) Page 5
Ogden Financial Services, Inc. 100 Delaware
B D C Liquidating Corp. 100 Delaware
Bouldin Development Corp. 100 California
Ogden Bulk Systems Company, Inc. 90 New York
BiE Leasing Company 100 Delaware
Greenway Insurance Company of Vermont 100 Vermont
International Terminal Operating Co., Inc. 50 Delaware
OFS Equity of Delaware, Inc. 100 Delaware
OFS Equity of Alexandria/Arlington, Inc. 100 Virginia
OFS Equity of Indianapolis, Inc. 100 Indiana
OFS Equity of Stanislaus, Inc. 100 California
Ogden Allied Financial Services Corporation 100 Delaware
Ogden Allied Maintenance Securities, Inc. 100 Delaware
Denver Fuel Facilities Corporation 100 Colorado
Kansas City International Fueling
Facilities Corporation 100 Missouri
LaGuardia Fuel Facilities Corporation 100 New York
Lambert Field Fueling Facilities
Corporation 100 Delaware
Love Field Fueling Facilities
Corporation 100 Texas
Newark Automotive Fuel Facilities
Corporation 100 New Jersey
Ogden Allied Facilities, Inc. 100 New York
Philadelphia Fuel Facilities
Corporation 100 Penn.
Rototest Laboratories, Inc. 91 California
<PAGE>
12/31/95
ATTACHMENT A
OGDEN CORPORATION - FOREIGN SUBSIDIARIES
PERCENT DOMESTIC
OWNERSHIP COUNTRY
Ogden Corporation
Ogden Projects, Inc. 100 DE/U.S.A.
Ogden Martin Systems, Inc. 100 DE/U.S.A.
Ogden Martin Systems, Ltd. 100 Ontario
Ogden Martin Systems of Nova Scotia, Ltd. 100 Nova Scotia
Ogden Power Development, Inc. 100 Delaware
Ogden Power Development of Bolivia, Inc. 100 Delaware
Ogden Power Development of Bolivia, Ltd. 100 Cayman
Islands
Ogden Projects Asia Pacific Limited 50 Hong Kong
(50% held by Ogden Power Systems, Inc.)
Ogden Projects GmbH 100 Germany
Ogden Projects Holdings, Inc. 100 DE/U.S.A.
Ogden Projects (U.K.) Limited 100 U.K.
Ogden Projects (Birmingham) Limited 100 U.K.
Ogden Projects of Hamilton, Ltd. 100 Ontario
Ogden Projects of London, Ltd. 100 Ontario
Ogden Waste Treatment Services, Inc. 100 DE/U.S.A.
Ogden Environmental Services Limited 100 Canada
Ogden Water Holdings, Inc. 100 DE/U.S.A.
Ogden Water Systems, Inc. 100 DE/U.S.A.
Ogden Yorkshire Water of Canada, Ltd. 55 Ontario
OPI Quezon, Inc. 100 Delaware
Ogden Quezon Power, Inc. 75 Cayman
Islands
Projets Ogden Quebec Inc. 100 Quebec
Ogden Services Corporation 100 DE/U.S.A.
Ogden Aviation Services Limited 100 U.K.
Ogden Aviation Engineering Limited 100 U.K.
Ogden Entertainment Services (UK) Ltd. 100 U.K.
Ogden Basketball (Newcastle) Limited 60 U.K.
Ogden Ice Hockey Limited 100 U.K.
Ogden Entertainment Services (Ireland) Limited 19 U.K.
Ogden SkyCare Cargo Limited 100 U.K.
SkyCare Limited 100 U.K.
Air Cargo Enterprises Limited 50 U.K.
<PAGE>
Page A-2
Ogden Corporation
Ogden Services Corporation (con't.)
Ogden Asia Pacific Services, Inc. 100 DE/USA
IEA of Japan Company Ltd. 50 Japan
HO/Ogden Investimentos e Transportes, Limitada 51 Macau
Ogden Aviation (Hong Kong) Limited 100 Hong Kong
Ogden Aviation Services (NZ) Limited 100 New Zealand
Ogden International Facilities
Corporation (Asia Pacific) Pty Ltd. 100 Australia
Ogden International Facilities
Corporation (Australia) Pty Ltd. 50 Australia
International Facilities Corporation
(Cairns) Pty Ltd. 100 Australia
International Facilities
Corporation (NZ) Pty Ltd. 100 New Zealand
International Facility Corporation
(Newcastle) Ltd. 100 U.K.
International Facility Corporation
(Hong Kong) Pty Ltd. * Hong Kong
* Boscastle Ltd and Coverack Ltd
are shareholders due to residency
requirements.
Ogden Central and South America, Inc. 100 DE/USA
Ogden/Air Aruba Ground Services N.V. 49 Aruba
Ogden Argentina, S.A. 100 Argentina
Ogden Aviation Services (Chile) Ltda. 99 Chile
(1% held by Ogden Asia Pacific Services Inc.)
Aviation Services Leader S.A. 80 Chile
Ogden Aviation Services Dominicana, S.A. 99 Dominican
Rep.
Ogden Aviation Services (Panama) Corp. 85 Panama
Ogden Ground Services of Panama Corp. 75 Panama
Ogden Aviation Services (Venezuela), S.A. 100 Venezuela
Ogden Ground Services Caracas, C.A. 100 Venezuela
Ogden do Brazil Participacoes S/C Ltda. 100 Brazil
Ogden Hellen's International Ltda. 60 Brazil
Ogden - Servicos de Atendimento
Aeroterrestre Ltda. ("SERVAIR") 100 Brazil
Ogden Alimentos Comercio e Servicoes Ltda. 100 Brazil
Ogden Ground Services, Inc. 100 Virgin
(St. Thomas) Islands
Ogden Saint Maarten Ground 100 Netherlands
Services, N.V. Antilles
Ogden, S. de R.L. de C.V. 66.67 Mexico
Ogden Servair Servicios Aeroportuarios, S.A. 50 Mexico
Ogden Servicios Aeroportuarios, SA de CV 94.9 Mexico
Ogden SEITSA Leasing, S.A. de C.V. 94.9 Mexico
Ogden Sint Maarten Ground Services N.V. 100 Netherlands
Antilles
Ogden & Talma Aviation Services of Peru S.A. 54 Peru
<PAGE>
Page A-3
Ogden Corporation
Ogden Services Corporation (con't.)
Ogden International Europe Inc. 100 DE/U.S.A.
Ogden Atlantic Design (Europe) Limited 100 Ireland
Ogden Holdings B.V. 100 Netherlands
Compania General de Sondeos CGS, S.A. 100 Spain
Czech-Ogden Airhandling s.r.o. 50 Czech. Rep.
KCL Ogden Aviation Services (Private) Limited 50 Pakistan
Ogden Aviation (Schiphol) B.V. 100 Netherlands
Ogden Cargo B.V. 100 Netherlands
Ogden Aviation Spain S.A. 100 Spain
Ogden Aviation Services, S.A. 100 Spain
Ogden Entertainment Services Portugal, S.A. 100 Portugal
Ogden Entertainment Services Spain, S.A. 100 Spain
Ogden Power Agua y Energia Torre Pacheco, S.A. 83.3 Spain
Sezai Turkes Feyzi Akkaya Ogden Hizmet
Ve Isletmecilik A.S. 50 Turkey
("STFA Ogden Maintenance and Service Co.")
Ogden Holdings (Deutschland) GmbH 100 Germany
Ogden Allied Services GmbH 100 Germany
Ogden Aviation Services GmbH & Co. KG 100 Germany
Ogden Services GmbH Gesellschaft fur Kultur-,
Medien- und Veranstaltungsmanagement 100 Germany
Ogden Tegel Verwaltungs GmbH 100 Germany
(formerly DAN AIR Services GmbH)
Tegel Aircraft Handling GmbH 100 Germany
Verwaltung Ogden Aviation Services GmbH 100 Germany
Ogden Environmental and Energy Services Co., Inc. 100 DE/U.S.A.
Ogden umwelt und energie systeme GmbH 100 Germany
IEAL energie consult GmbH 100 Germany
IEAL energie + umwelt consult, Berlin 100 Germany
Olmec Insurance, Ltd. 100 Bermuda
Ogden Entertainment Services, Inc. 100 DE/U.S.A.
Ogden Entertainment Services (Canada) Inc. 100 Canada
Fortier Associates International, Inc. 100 Canada
The Ogden Northmount Evergreen Group Limited 100 Canada
Ogden Palladium Services (Canada) Inc. 100 Canada
Ogden Entertainment Services de Mexico, SA de CV 100 Mexico
Servicios de Alimentos Bebidas Especializados,
SA de CV 100 Mexico
Ogden Allied Maintenance Corporation 100 NY/U.S.A.
Atlantic Design Company, Inc. 100 NY/U.S.A.
Datacom de Mexico, S.A. de C.V. 100 Mexico
Ogden Facility Services, Inc. 100 DE/U.S.A.
Ogden Allied Eastern States Maintenance
Corporation 100 DE/U.S.A.
Ogden Servicios de Seguridad, S.A. 100 Costa Rica
Ogden Agencia de Seguridad, S.A. 100 Panama
Allied Aviation Service Company of
Newfoundland, Ltd. 100 Canada
<PAGE>
Page A-4
Ogden Corporation
Ogden Services Corporation
Ogden Allied Maintenance Corporation (con't.)
Ogden Services of Canada Inc. 100 Canada
Cafas Inc. 100 Canada
Airconsol Aviation Services Ltd. 100 Canada
Ogden Ground Services (Canada) Ltd. 100 Canada
Aircraft Services Ltd. 100 Canada
Consolidated Aviation Fueling of Toronto Limited 100 Ontario
Consolidated Aviation Services of Alberta Limited 100 Canada
Ogden Allied Security Services Inc. 100 Canada
Ogden Allied Services Inc. 100 Canada<PAGE>
ATTACHMENT B 12/31/95
OGDEN PROJECTS, INC. - U.S. SUBSIDIARIES
(See Attachment A for foreign subsidiaries)
PERCENT DOMESTIC
COMPANY OWNERSHIP STATE
Ogden Projects, Inc. 100 Delaware
Ogden Energy, Inc. 100 Delaware
Ogden Power Corporation 100 Delaware
Geothermal, Inc. 100 Virginia
Imperial Power Services, Inc. 100 California
New Martinsville Hydro-Operations Corporation 100 W. Virginia
Ogden Brandywine Operations, Inc. 100 Delaware
Ogden Geothermal Operations, Inc. 100 Delaware
Ogden Hydro Operations, Inc. 100 Tennessee
Ogden Oil & Gas, Inc. 100 Delaware
Ogden Power Equity Corporation 100 Delaware
Catalyst New Martinsville Hydroelectric
Corporation 100 Delaware
ERC Energy, Inc. 100 Delaware
Ogden Heber Field Energy, Inc. 100 Delaware
Ogden Hydro Energy, Inc. 100 Delaware
Ogden Power International Holdings, Inc. 100 Delaware
Ogden SIGC Energy, Inc. 100 Delaware
AMOR 14 Corporation 100 Delaware
Ogden SIGC Energy II, Inc. 100 California
Ogden SIGC Geothermal Operations, Inc. 100 California
Ogden Power Development, Inc. 100 Delaware
Ogden Power Development of Bolivia, Inc. 100 Delaware
Ogden Power Development of Bolivia, Ltd. 100 Cayman
Islands
Ogden Energy Resource Corp. 100 Delaware
Ogden Land Management, Inc. 100 Delaware
Ogden Land Management of Warren, Inc. 100 New Jersey
Ogden Projects, of Campo, Inc. 100 California
Ogden Martin Systems, Inc. 100 Delaware
Grey Acre Development Corporation 100 Mass.
Ogden Engineering Services, Inc. 100 New Jersey
Ogden Marion Land Corp. 100 Oregon
Ogden Martin Systems of Alexandria/Arlington, Inc. 100 Virginia
OMS Equity of Alexandria/Arlington, Inc. 100 Virginia
Ogden Martin Systems of Babylon, Inc. 100 New York
Ogden Martin Systems of Bristol, Inc. 100 Connecticut
Ogden Martin Systems of Clark, Inc. 100 Ohio
OMSC One, Inc. 100 Delaware
OMSC Two, Inc. 100 Delaware
OMSC Three, Inc. 100 Delaware
OMSC Four, Inc. 100 Delaware
Ogden Martin Systems of Dakota, Inc. 100 Minnesota
Ogden Martin Systems of Eastern/Central
Connecticut, Inc. 100 Connecticut
Ogden Martin Systems of Fairfax, Inc. 100 Virginia
Ogden Martin Systems of Ford Heights, Inc. 100 Illinois
Ogden Martin Systems of Haverhill, Inc. 100 Mass.
Haverhill Power, Inc. 100 Mass.
LMI, Inc. 100 Mass.
Ogden Omega Lease, Inc. 100 Delaware<PAGE>
Page B-2
Ogden Projects, Inc.
Ogden Martin Systems, Inc. (con't.)
Ogden Haverhill Properties, Inc. 100 Mass.
Ogden Martn Systems of Hillsborough, Inc. 100 Florida
Ogden Martin Systems of Hudson, Inc. 100 New Jersey
Ogden Martin Systems of Huntington, Inc. 100 New York
Ogden Martin Systems of Huntington
Resource Recovery One Corp. 100 Delaware
Ogden Martin Systems of Huntington
Resource Recovery Two Corp. 100 Delaware
Ogden Martin Systems of Huntington
Resource Recovery Three Corp. 100 Delaware
Ogden Martin Systems of Huntington
Resource Recovery Four Corp. 100 Delaware
Ogden Martin Systems of Huntington
Resource Recovery Five Corp. 100 Delaware
Ogden Martin Systems of Huntington
Resource Recovery Six Corp. 100 Delaware
Ogden Martin Systems of Huntington
Resource Recovery Seven Corp. 100 Delaware
Ogden Martin Systems of Huntsville, Inc. 100 Alabama
Ogden Martin Systems of Indianapolis, Inc. 100 Indiana
Ogden Martin Systems of Kent, Inc. 100 Michigan
Ogden Martin Systems of Knox, Inc. 100 Tennessee
NRG/Recovery Group, Inc. 100 Florida
Ogden Martin Systems of Lancaster, Inc. 100 Penn.
Ogden Martin Systems of Lawrence, Inc. 100 Mass.
Ogden Martin Systems of Lee, Inc. 100 Florida
Ogden Martin Systems of Long Island, Inc. 100 Delaware
Ogden Martin Systems of L.A., Inc. 100 Delaware
Ogden Martin Systems of Marion, Inc. 100 Oregon
Ogden Martin Systems of Mercer, Inc. 100 New Jersey
Ogden Martn Systems of Montgomery, Inc. 100 Maryland
Ogden Martin Systems of Morris, Inc. 100 New Jersey
Ogden Martin Systems of North Carolina, Inc. 100 N. Carolina
Ogden Martin Systems of Oakland, Inc. 100 Michigan
Ogden Martin Systems of Onondaga, Inc. 100 New York
Ogden Martin Systems of Onondaga Two Corp. 100 Delaware
Ogden Martin Systems of Onondaga Three Corp. 100 Delaware
Ogden Martin Systems of Onondaga Four Corp. 100 Delaware
Ogden Martin Systems of Onondaga Five Corp. 100 Delaware
OMS Onondaga Operations, Inc. 100 Delaware
Ogden Martin Systems of Pasco, Inc. 100 Florida
Ogden Martin Systems of Rhode Island, Inc. 100 R.I.
Ogden Martin Systems of San Bernardino, Inc. 100 California
Ogden Martin Systems of San Diego, Inc. 100 California
Ogden Martin Systems of Stanislaus, Inc. 100 California
OMS Equity of Stanislaus, Inc. 100 California
Ogden Martin Systems of Tulsa, Inc. 100 Oklahoma
Ogden Martin Systems of Union, Inc. 100 New Jersey
Ogden Power Systems 7, Inc. 100 Delaware
Ogden Projects Americas, Inc. 100 Delaware
Ogden Projects Holdings, Inc. 100 Delaware
Ogden Projects of Haverhill, Inc. 100 Mass.
Ogden Projects of Lawrence, Inc. 100 Mass.
<PAGE>
Page B-3
Ogden Projects, Inc. (con't.)
Ogden Recycling Systems, Inc. 100 Delaware
Ogden Recycling Systems of Chicago, Inc. 100 Illinois
Ogden Recycling Systems of Fairfax, Inc. 100 Virginia
Ogden Recycling Systems of Indianapolis, Inc. 100 Indiana
Ogden Wallingford Associates, Inc. 100 Connecticut
Ogden Waste Treatment Services, Inc. 100 Delaware
Ogden Environmental Services of Houston, Inc. 100 Texas
American Envirotech,Inc. 100 Texas
Stockton Soil Treatment Facility, Inc. 100 California
Ogden Water Holdings, Inc. 100 Delaware
Ogden Water Systems, Inc. 100 Delaware
Ogden Water Systems of Jerusalem, Inc. 100 Delaware
Ogden Water Systems of Lee County, Inc. 100 Florida
OPI Quezon, Inc. 100 Delaware
OPW Associates, Inc. 100 Connecticut
OPWH, Inc. 100 Delaware
RRS Holdings Inc. 100 Delaware
Michigan Waste Energy Recovery, Inc. 100 Delaware
Oahu Waste Energy Recovery, Inc. 100 California
Ogden Projects of Hawaii, Inc. 100 Hawaii
Resource Recovery Systems of Connecticut, Inc. 100 Connecticut
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
Ogden Corporation:
We consent to the incorporation by reference in Registration
Statement Nos. 33-36658, 33-38489, 33-36667, 33-17558, 33-54143 of
Ogden Corporation on Forms S-8 of our reports dated February 5,
1996 (which express an unqualified opinion and include an
explanatory paragraph relating to the adoption of Statements of
Financial Accounting Standards Nos. 106, 112, 115, and 121)
appearing or incorporated by reference in this Annual Report on
Form 10-K of Ogden Corporation for the year ended December 31,
1995.
/s/Deloitte & Touche, LLP
New York, New York
March 27, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND STATEMENT OF CONSOLIDATED INCOME OF THE
COMPANY AS OF AND FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 96,782
<SECURITIES> 13,939
<RECEIVABLES> 634,683
<ALLOWANCES> 37,039
<INVENTORY> 36,583
<CURRENT-ASSETS> 926,366
<PP&E> 2,400,023
<DEPRECIATION> 520,844
<TOTAL-ASSETS> 3,652,671
<CURRENT-LIABILITIES> 510,519
<BONDS> 2,044,186
0
50
<COMMON> 24,734
<OTHER-SE> 522,194
<TOTAL-LIABILITY-AND-EQUITY> 3,652,671
<SALES> 551,345
<TOTAL-REVENUES> 2,184,993
<CGS> 518,457
<TOTAL-COSTS> 1,465,249
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 7,204
<INTEREST-EXPENSE> 30,491
<INCOME-PRETAX> 40,526
<INCOME-TAX> 34,237
<INCOME-CONTINUING> 7,444
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,444
<EPS-PRIMARY> $0.15
<EPS-DILUTED> $0.15
</TABLE>
