<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
-----------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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. Employer Identification
incorporation or organization) Number)
TWO PENNSYLVANIA PLAZA, NEW YORK, NEW YORK 10121
------------------------------------------ -----
(Address or principal executive office) (Zip Code)
(212)-868-6100
(Registrant's telephone number including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last
report)
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
---- ----
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of each of the issuer's classes of common
stock, as of September 30, 1999; 49,465,891 shares of Common Stock, $.50 par
value per share.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OGDEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
FOR THE NINE MONTHS FOR THE THREE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------- -------------------
1999 1998 1999 1998
-------- ------- --------- -------
(In Thousands of Dollars, Except per Share Data)
<S> <C> <C> <C> <C>
Service revenues $ 595,787 $ 585,658 $ 208,165 $ 190,615
Net sales 39,975 52,853 13,437 16,505
Construction revenues 101,091 18,460 33,221 10,512
Net gain on disposition of businesses 5,664 1,469 800
-------- -------- -------- --------
Total revenues 742,517 658,440 255,623 217,632
-------- -------- -------- --------
Operating costs and expenses 416,637 390,210 150,212 119,824
Costs of goods sold 43,791 62,044 14,652 17,063
Construction costs 97,332 16,863 32,123 9,549
Selling, administrative and
general expenses 63,165 71,675 20,103 21,299
Debt service charges 70,879 77,390 24,180 26,949
-------- -------- -------- --------
Total costs and expenses 691,804 618,182 241,270 194,684
-------- -------- -------- --------
Consolidated operating income 50,713 40,258 14,353 22,948
Equity in net income of
investees and joint ventures 9,372 10,478 3,428 1,731
Interest income 3,605 9,315 808 4,573
Interest expense (25,411) (24,723) (9,038) (7,970)
Other income (deductions)-net 5,137 432 (37) 147
------- ------- -------- --------
Income before income taxes, minority
interests, income (loss) from discontinued
operations and the cumulative effect of
change in accounting principle 43,416 35,760 9,514 21,429
Less: income taxes 11,558 10,780 525 5,934
minority interests 3,178 2,165 636 1,436
-------- ------- --------- -------
Income from continuing operations 28,680 22,815 8,353 14,059
Income (loss) from discontinued operations
(net of income taxes, YTD, 1999, $15,022,
1998,$31,708; QTR, 1999, $2,598, 1998,
$12,238) (883) 44,100 (16,069) 14,096
Cumulative effect of change in accounting
principle (net of income taxes of $1,313) (3,820)
-------- ------- --------- -------
Net Income (Loss) 23,977 66,915 (7,716) 28,155
-------- -------- ------ -------
Other Comprehensive Income, Net Of Tax:
Foreign currency translation adjustments (5,577) (1,292) 1,780 83
Unrealized holding gains(losses) arising
during period (320) (106) 229 (209)
Less: reclassification adjustment for
gains included in net income (666) (666)
-------- ------- --------- -------
Other comprehensive income (6,563) (1,398) 1,343 (126)
--------- -------- --------- --------
Comprehensive income $ 17,414 $ 65,517 $ (6,373) $ 28,029
========= ======== ========= ========
BASIC EARNINGS PER SHARE
Income from continuing operations $ .59 $ .45 $ .17 $ .28
Income (loss) from discontinued operations (.02) .88 (.33) .29
Cumulative effect of change
in accounting principle (.08)
-------- ------- --------- -------
Net Income (Loss) $ .49 $ 1.33 $ (.16) $ .57
======== ======== ======== ========
DILUTED EARNINGS PER SHARE
Income from continuing operations $ .58 $ .45 $ .17 $ .28
Income (loss) from discontinued operations (.02) .86 (.33) .28
Cumulative effect of change in
accounting principle (.08)
-------- ------- --------- -------
Net Income (Loss) $ .48 $ 1.31 $ (.16) $ .56
======== ======== ======== =========
</TABLE>
1
<PAGE>
OGDEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
----------- -----------
(In Thousands of Dollars)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 119,125 $ 181,169
Marketable securities available for sale 44,685
Restricted funds held in trust 108,676 110,553
Receivables (less allowances: 1999,
$13,711 and 1998, $18,130) 287,371 274,307
Inventories 18,548 20,162
Deferred income taxes 48,881 47,921
Other 65,304 48,102
Net assets of discontinued operations 530,880 468,508
----------- -----------
Total current assets 1,178,785 1,195,407
Property, plant and equipment-net 1,823,073 1,736,241
Restricted funds held in trust 168,428 180,922
Unbilled service and other receivables 177,935 159,409
Unamortized contract acquisition costs 111,941 69,260
Goodwill and other intangible assets 44,120 41,935
Investments in and advances to investees and
joint ventures 178,834 149,663
Other assets 83,859 113,115
----------- -----------
Total Assets $ 3,766,975 $ 3,645,952
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Current Liabilities:
Current portion of long-term debt $ 41,276 $ 21,888
Current portion of project debt 56,946 63,201
Dividends payable 15,403
Accounts payable 75,032 50,550
Federal and foreign income taxes payable 12,604 21,776
Accrued expenses, etc. 234,160 232,607
Deferred income 46,140 45,090
----------- -----------
Total current liabilities 466,158 450,515
Long-term debt 418,081 348,594
Project debt 1,432,061 1,367,528
Deferred income taxes 392,095 393,568
Deferred income 193,759 201,563
Other liabilities 139,876 160,728
Minority interests 30,939 25,706
Convertible subordinated debentures 148,650 148,650
----------- -----------
Total Liabilities 3,221,619 3,096,852
----------- -----------
Shareholders' Equity:
Serial cumulative convertible preferred stock, par
value $1.00 per share; authorized 4,000,000 shares;
shares outstanding: 39,632 in 1999 and 42,218 in
1998; net of treasury shares of 29,820 in 1999
and 1998 40 43
Common stock, par value $.50 per share;authorized,
80,000,000 shares; shares outstanding: 49,465,891
in 1999 and 48,945,989 in 1998, net of treasury
shares of 4,425,103 and 4,561,963 in 1999 and 1998,
respectively 24,733 24,473
Capital surplus 182,806 173,413
Earned surplus 361,153 367,984
Accumulated other comprehensive income (23,376) (16,813)
----------- -----------
Total Shareholders' Equity 545,356 549,100
----------- -----------
Total Liabilities and Shareholders' Equity $ 3,766,975 $ 3,645,952
=========== ===========
</TABLE>
2
<PAGE>
OGDEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
September 30, 1999 December 31, 1998
Shares Amounts Shares Amounts
------ ------- ------ -------
(In Thousands of Dollars, Except Per Share Amounts)
<S> <C> <C> <C> <C>
Serial Cumulative Convertible Preferred
Stock, Par Value $1.00 Per Share;
Authorized 4,000,000 Shares:
Balance at beginning of period 72,038 $ 73 74,166 $ 75
Shares converted into common stock (2,586) (3) (2,128) (2)
---------- ------ ---------- ------
Total 69,452 70 72,038 73
Treasury shares (29,820) (30) (29,820) (30)
---------- ------ ---------- ------
Balance at end of period (aggregate
involuntary liquidation value - 1999
$799) 39,632 40 42,218 43
---------- ------ ---------- ------
Common Stock, Par Value $.50 Per Share;
Authorized, 80,000,000 Shares:
Balance at beginning of period 53,507,952 26,754 53,430,246 26,715
Exercise of stock options 175,801 88 65,000 33
Shares issued for acquisition 191,800 96
Conversion of preferred shares 15,441 8 12,706 6
---------- ------ ---------- ------
Total 53,890,994 26,946 53,507,952 26,754
---------- ------ ---------- ------
Treasury shares at beginning of period 4,561,963 2,281 3,135,123 1,568
Purchase of treasury shares 102,000 51 2,121,100 1,060
Exercise of stock options (238,860) (119) (694,260) (347)
---------- ------ ---------- ------
Treasury shares at end of period 4,425,103 2,213 4,561,963 2,281
---------- ------ ---------- ------
Balance at end of period 49,465,891 24,733 48,945,989 24,473
---------- ------ ---------- ------
Capital Surplus:
Balance at beginning of period 173,413 212,383
Exercise of stock options 6,952 16,355
Shares issued for acquisition 4,904
Purchase of treasury shares (2,458) (55,321)
Conversion of preferred shares (5) (4)
------- -------
Balance at end of period 182,806 173,413
------- -------
Earned Surplus:
Balance at beginning of period 367,984 343,237
Net income 23,977 86,970
-------- --------
Total 391,961 430,207
-------- --------
Preferred dividends-per share 1999,
$2.5128, 1998, $3.35 104 144
Common dividends-per share 1999, $.625
1998, $1.25 30,704 62,079
-------- --------
Total dividends 30,808 62,223
-------- --------
Balance at end of period 361,153 367,984
-------- --------
Cumulative Translation Adjustment-Net (21,609) (16,032)
-------- --------
Minimum Pension Liability Adjustment (716) (716)
-------- --------
Net Unrealized Loss on Securities
Available For Sale (1,051) (65)
-------- --------
CONSOLIDATED SHAREHOLDERS' EQUITY $545,356 $549,100
======== ========
</TABLE>
3
<PAGE>
OGDEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
SEPTEMBER 30
1999 1998
-------- ---------
(In Thousands of Dollars)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 23,977 $ 66,915
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities of
Continuing Operations:
Loss (income) from discontinued operations 883 (44,100)
Depreciation and amortization 65,553 58,925
Deferred income taxes 3,500 19,051
Cumulative effect of change in accounting principle 3,820
Other (18,954) (4,146)
Management of Operating Assets and Liabilities:
Decrease (Increase) in Assets:
Receivables (20,301) 10,436
Inventories 1,614 1,436
Other assets 77 (9,666)
Increase (Decrease) in Liabilities:
Accounts payable 22,316 (7,800)
Accrued expenses (11,156) 4,863
Deferred income 1,072 196,263
Other liabilities (30,779) 13,678
-------- ---------
Net cash provided by operating activities of
continuing operations 41,622 305,855
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of business 9,760
Proceeds from sale of property, plant and equipment 3,061 135
Proceeds from sale of marketable securities
available for sale 59,438
Proceeds from sale of investment 5,138
Entities purchased, net of cash acquired (69,494)
Investments in Energy facilities (27,906) (15,991)
Other capital expenditures (14,418) (9,003)
Decrease in other receivables 846 2,865
Distributions from investees and joint ventures 10,510 6,058
Increase in investment in and advances to
investees and joint ventures (33,278) (24,688)
--------- ---------
Net cash used in investing activities of
continuing operations (56,343) (40,624)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings for Energy facilities 135,110 267,303
Other new debt 87,769 30,254
Decrease in funds held in trust 14,364 5,397
Payment of debt (170,845) (312,272)
Dividends paid (46,210) (47,150)
Purchase of treasury shares (2,509) (48,916)
Proceeds from exercise of stock options 4,892 14,032
Other (3,868) (4,287)
--------- ---------
Net cash provided by (used in) financing
activities of continuing operations 18,703 (95,639)
--------- ---------
Net cash used in discontinued operations (66,026) (20,763)
--------- ---------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (62,044) 148,829
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 181,169 144,724
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 119,125 $ 293,553
========= =========
</TABLE>
4
<PAGE>
OGDEN CORPORATION AND SUBSIDIARIES
SEPTEMBER 30, 1999
ITEM 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions to Form 10-Q and, therefore, do not include
all information and footnotes necessary for a fair presentation of financial
position, results of operations, and cash flows in conformity with generally
accepted accounting principles. However, in the opinion of Management, all
adjustments consisting of normal recurring accruals necessary for a fair
presentation of the operating results have been included in the statements.
On January 1, 1999 the Company adopted the American Institute of Certified
Public Accountants (AICPA) Statement of Position (SOP) 98-5, "Reporting on the
Costs of Start-Up Activities." This SOP established accounting standards for
these costs and requires they generally be expensed as incurred. The effect of
the adoption of this SOP was a charge of $3,820,000 net of income taxes of
$1,313,000 recorded as a cumulative effect of change in accounting principle in
the accompanying financial statements.
On September 17, 1999 the Company announced that it intended to sell its
Aviation and Entertainment businesses and on September 29, 1999 the Board of
Directors of the Company formally adopted a plan for discontinuing the
operations of its Aviation and Entertainment units which were previously
reported as separate business segments.
As a result of the adoption of this plan, the presentation of the financial
results have been reclassified in the accompanying financial statements to show
these operations as discontinued and the prior periods have been restated.
Net sales and income (loss) from discontinued operations are as follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------- --------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
(In Thousands of Dollars)
<S> <C> <C> <C> <C>
Revenues $624,126 $640,003 $253,656 $223,481
----------- ----------- ----------- -----------
Income (Loss) Before Income Taxes
and Minority Interests $ 15,465 $ 76,052 $(12,358) $26,394
Income Taxes 15,022 31,708 2,598 12,238
Minority Interests 1,326 244 1,113 60
----------- ----------- ----------- -----------
Income (Loss) from
Discontinued Operations $ (883) $44,100 $ (16,069) $14,096
=========== =========== =========== ===========
</TABLE>
5
<PAGE>
Net assets of discontinued operations are as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
-------------- ---------------
(In Thousands of Dollars)
<S> <C> <C>
Current Assets $ 243,397 $226,953
Noncurrent Assets 712,176 520,576
Current Liabilities (251,571) (173,662)
Noncurrent Liabilities (173,122) (105,359)
------------- -------------
Net Assets of Discontinued Operations $ 530,880 $468,508
============= =============
</TABLE>
The accompanying financial statements for prior periods have been reclassified
as to certain amounts to conform with the 1999 presentation.
6
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OPERATIONS:
Revenues and income from continuing operations by segment for the nine months
and the three months ended September 30, 1999 and 1998 were as follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
Information Concerning SEPTEMBER 30, SEPTEMBER 30,
Business Segments -------------------------- ----------------------------
1999 1998 1999 1998
----------- ----------- ----------- ------------
(In Thousands of Dollars)
<S> <C> <C> <C> <C>
Revenues:
Energy $ 685,407 $ 585,228 $ 235,954 $ 195,775
Other 57,110 73,212 19,669 21,857
----------- ----------- ----------- ------------
Total Revenues $ 742,517 $ 658,440 $ 255,623 $ 217,632
----------- ----------- ----------- ------------
Income (Loss) from Continuing
Operations:
Energy $ 65,861 $ 69,323 $ 17,804 $ 30,726
Other (2,140) (1,830) 431 (1,114)
----------- ----------- ----------- ------------
Total 63,721 67,493 18,235 29,612
Equity in net income of investees
and joint ventures:
Energy 9,372 10,478 3,428 1,731
----------- ----------- ----------- ------------
Total 73,093 77,971 21,663 31,343
Corporate unallocated expenses - net (7,871) (26,803) (3,919) (6,517)
Interest - net (21,806) (15,408) (8,230) (3,397)
----------- ----------- ----------- ------------
Income from Continuing Operations
Before Income Taxes, Minority
Interests, Income (Loss) from
Discontinued Operations and Cumulative
Effect of Change in Accounting Principle $ 43,416 $ 35,760 $ 9,514 $ 21,429
=========== =========== =========== ============
</TABLE>
7
<PAGE>
OVERVIEW
As a result of the adoption of the plan to discontinue the operations of the
Entertainment and Aviation businesses, the Company's financial statement
presentation has changed. Segment information for two units previously reflected
under the segment headings "Energy" and "Other" are now reported as Continuing
Operations and will continue to be reported under those headings. Results
previously reported under the segment headings "Entertainment" and "Aviation"
are now reported as Discontinued Operations.
The Company has engaged financial advisors to assist in the sale of the
discontinued operations. Management expects this process to take approximately
nine months to complete. While based upon a number of assumptions and judgments,
and although no guarantees can be given, management believes, based upon
multiples of earnings, cash flows and revenues for comparable businesses, that
these dispositions will, in the aggregate after costs of disposition, be at book
value or greater.
REVENUES FROM CONTINUING OPERATIONS
Revenues from Continuing Operations were $255.6 million for the quarter ended
September 30, 1999, an increase of $38 million as compared with $217.6 million
for the comparable period in 1998. For the nine-month period ended September 30,
1999, Revenues from Continuing Operations were $742.5 million, an increase of
$84.1 million as compared with $658.4 million for the comparable period in 1998.
The $38 million increase in revenues for the quarter ended September 30, 1999 is
primarily related to increases in the Energy segment of approximately $40
million. These increases were partially offset by declines in revenues of
approximately $2 million in the Other Segment. The Energy segment increase is
attributable to increases at various waste-to-energy facilities amounting to
approximately $4 million and an increase in construction revenues from
waste-to-energy facility retrofits of $3 million. The Company anticipates that
retrofit activity will decline during 2000 as facilities attain compliance with
the Clean Air Act Amendments of 1990, which is mandated by the end of 2000.
Revenues also increased by approximately $19 million in the Independent Power
group primarily reflecting new projects that became operational in 1999 and the
consolidation of a plant as a result of the acquisition of an additional 50%
interest in the second quarter of 1999, and by $9 million in construction
revenues related to the construction of a potable water treatment plant.
Revenues at Ogden Environmental and Energy Services (OEES) increased by $5
million as a result of an increase in construction revenues of $11 million,
partially offset by a decrease of $6 million in service revenues from the
environmental consulting business due mainly to management focusing on the heavy
construction business as opposed to the consulting business. The decline in
revenues in the Other Segment of $2 million is mainly due to lower orders from a
major
8
<PAGE>
customer of Datacom (formerly Atlantic Design) partially offset by an increase
in revenues from government contracts.
The $84.1 million increase in revenues for the nine months ended September 30,
1999 compared to the same period in 1998 was principally attributable to the
Energy segment which increased by approximately $100 million partially offset by
a decrease in revenues of $16 million from the Other Segment. The Energy segment
showed an increase in construction revenues from waste-to-energy facility
retrofits of $25 million, partially offset by a net decrease in service revenues
at various waste-to-energy facilities of approximately $6 million. This $6
million decrease is primarily attributable to a reduction of $18.7 million at
the Lawrence, Massachusetts facility resulting from a gain recognized in the
second quarter of 1998 on the buyout of a power sales agreement and decreases
attributable to the closing of the Lawrence facility, also in the second
quarter of 1998. These decreases were offset by increases at various other
locations, primarily at the Union County, New Jersey facility which increased
by $11.1 million as a result of a new service agreement negotiated in the third
quarter of 1998. The Company anticipates that retrofit construction revenue will
decline during 2000 as facilities attain compliance with the Clean Air Act
Amendments of 1990, which is mandated by the end of 2000. The Independent
Power group's revenues increased $34 million related to new plants that
became operational in 1999, the consolidation of a plant as a result of the
acquisition of an additional 50% interest in the second quarter of 1999, and a
gain of approximately $5.7 million on the sale of an ownership interest in a
joint venture. In addition, revenues increased by $16 million related to the
construction of a potable water treatment plant. Revenues at OEES increased $31
million due to an increase in construction revenues of $42 million, offset by a
decrease in service revenues from the environmental consulting business of $11
million due mainly to management focusing on the heavy construction business as
opposed to the consulting business. These increases were offset by a decrease in
the revenues from the Other Segment of $16 million, chiefly attributable to
lower orders from a major customer of Datacom partially offset by an increase in
revenues from government contracts.
CONSOLIDATED OPERATING INCOME FROM CONTINUING OPERATIONS
Consolidated operating income from continuing operations for the three-month and
nine-month periods ended September 30, 1999 were $14.4 million and $50.7 million
respectively, as compared with $22.9 million and $40.3 million for the
comparable periods in 1998.
Consolidated operating income for the three months ended September 30, 1999
decreased by approximately $8.5 million from the comparable period of 1998. The
Energy segment's operating income for the three months ended September 30, 1999
decreased $12.9 million as compared to the three months ended September 30,
1998. The decrease in operating income is primarily due to an $8 million gain in
connection with a payment received for the termination and restructuring of a
waste-to-energy facility operating
9
<PAGE>
contract in the 1998 period; a charge of $3.3 million associated with the
write-off of certain air pollution control equipment being replaced with
equipment designed to conform to the Clean Air Act Amendments of 1990; an
increase in overhead and development expenses of $3.8 million in the Independent
Power group; and a higher loss at OEES of $1.6 million principally related to
the construction business; partially offset by an increase of $1.7 million in
income from retrofit construction, and increased operating income from new
plants that became operational in 1999 of $2.3 million. Operating income in the
Other Segment increased $1.5 million due to reduced overhead costs and new
government contracts.
Consolidated operating income for the nine months ended September 30, 1999
increased by $10.4 million as compared to the nine months ended September 30,
1998. The Energy segment's operating income for the nine months ended September
30, 1999 decreased $3.5 million as compared to the nine months ended September
30, 1998. The decrease in operating income is primarily due to a $16.7 million
decrease due to closure of the Lawrence facility in 1998, reduced activity at
various waste-to-energy facilities and amortization of the prepayment of a power
sales agreement. Operating income also decreased due to an $8 million gain in
connection with a payment received for the termination and restructuring of a
waste-to-energy facility operating contract in the 1998 period; a write-off of
$3.3 million related to certain air pollution control equipment being replaced
with equipment designed to conform to the Clean Air Act Amendments of 1990; and
an increase in overhead and development expenses of $3.8 million in the
Independent Power group. Also, OEES's operating loss increased $5.4 million due
to increased losses in the environmental consulting business of $2.8 million and
losses incurred in the construction business of $2.6 million. These decreases
were partially offset by a gain of $9.3 million in connection with a payment
received for the termination and restructuring of another waste-to-energy
facility operating contract in the 1999 period, an increase in retrofit
construction income of $3.7 million, adjustments of $9.0 million associated with
the acquisition of the remaining 50% interest in a joint venture, increased
income of $5.3 million primarily related to new projects that became operational
in 1999, a $5.7 million gain on the sale of a joint venture interest and
increased income related to construction of a potable water treatment plant of
$700,000.
Debt service charges were $2.8 million and $6.5 million lower for the
three-month and nine-month periods ended September 30, 1999, respectively,
compared with the same periods in 1998 due mainly to lower project debt
outstanding on various facilities caused by redemption, refinancing and maturity
of bonds. The Energy segment had interest rate swap agreements entered into as
hedges against interest rate exposure on adjustable rate project debt that
resulted in additional debt service expense of $1.6 million and $847,000 for the
nine months ended September 30, 1999 and 1998, respectively, and $426,000 and
$492,000 for the three-month periods ended September 30, 1999 and 1998,
respectively. Two of these interest rate swap agreements were terminated in the
third and fourth quarters of 1998 leaving only one remaining.
Corporate unallocated expenses-net were $2.6 million and $18.9 million lower
than the comparable three and nine-month periods in 1998. The reductions for the
three-month
10
<PAGE>
period were attributable principally to termination of the Executive Pension
Plan, gain on the sale of pension plan assets and the absence of a year-end
bonus provision, while the nine-month reduction reflects the absence of certain
restructuring costs, certain litigation and proxy-related charges provided for
in 1998, a gain of $5.1 million on the sale of an investment in June of 1999, as
well as the items discussed above which impacted the three-month period.
INTEREST INCOME AND EXPENSE
Interest income from continuing operations decreased $3.8 million for the three
months ended September 30, 1999 compared to the same period in 1998, due mainly
to lower average cash invested in 1999, receipt of payment of certain
receivables, and interest received in the 1998 period on state tax refunds.
Interest income from continuing operations decreased $5.7 million for the nine
months ended September 30, 1999 compared with the same period in 1998, due
primarily to lower average cash invested. Average cash invested was lower in
1999 than in 1998 primarily due to cash used for acquisitions, including
acquisitions relating to discontinued operations, purchases of property, plant
and equipment, common stock repurchases, and dividends.
Interest expense from continuing operations increased $1.1 million and $700,000
for the three-month and nine-month periods ended September 30, 1999,
respectively, compared to the same periods in 1998, due mainly to interest on
additional borrowings at the Energy segment and interest on borrowings under the
Company's revolving credit facility. Ogden has one interest rate swap agreement
covering a notional amount of $2 million which expires November 30, 2000 and was
entered into to convert Ogden's variable rate debt to a fixed rate. Another swap
agreement expired December 16, 1998 and was entered into to convert Ogden's
fixed rate $100 million 9.25% debentures to a variable rate. Additional interest
expense relating to these swap agreements was not significant in the nine-month
and three-month periods ended September 30, 1999 and 1998.
EQUITY IN NET INCOME OF INVESTEES AND JOINT VENTURES
Equity in net income of investees and joint ventures for the three-month and
nine-month periods ended September 30, 1999 increased $1.7 million and
decreased $1.1 million, respectively, compared to the comparable periods of
1998. The increase in the three-month period is due mainly to increased
earnings at Pacific Energy joint ventures, primarily Mammoth Geothermal.
The decrease in the nine-month period is due mainly to decreased earnings
at Pacific Energy joint ventures which included a gain on the buyout of an
energy sales agreement in the second quarter of 1998.
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<PAGE>
INCOME TAXES
The effective income tax rate for continuing operations was 5.5% for the quarter
ended September 30, 1999 as compared with 27.7% for the comparable period in
1998. This decrease is mainly attributable to a decrease in income before taxes
and an increase in the proportion of income from foreign sources taxed at rates
lower than the Federal statutory rate. The effective income tax rate for the
nine months ended September 30, 1999 was 26.6% compared with 30.1% for the same
period of 1998. This decrease is primarily due to an increase in deductible
permanent items and lower foreign taxes.
DISCONTINUED OPERATIONS
Income (Loss) from Discontinued Operations for the three-month and nine-month
periods ended September 30, 1999 were ($16.1) million and ($883,000),
respectively, compared with $14.1 million and $44.1 million for the comparable
periods of 1998.
Operating income (loss) from Discontinued Operations for the three-month and
nine-month periods ended September 30, 1999 were ($13.9) million and $14.6
million, respectively, compared with $23.6 million and $75.9 million for the
comparable periods of 1998.
Entertainment
Entertainment's operating (loss) for the three-month and nine-month
periods ended September 30, 1999 were ($18.2) million and ($7.7) million,
respectively, compared with operating income of $14.0 million and $28.8 million
for the comparable periods of 1998.
Operating income (loss) for the third quarter of 1999 was $32.2 million lower
than the comparable period of 1998 primarily attributable to the following
events: In the second quarter of 1999, the Company announced that it had
signed an agreement to acquire Volume Services America ("VSA"). Pursuant to
that agreement, the Company made a $10 million nonrefundable deposit to be
applied against the purchase price. On September 30, 1999 the Company
announced that it had decided not to complete the acquisition and, as a
result, forfeited that deposit and took a charge in an equal amount. In
addition, the Company has written off certain legal, accounting and other
costs directly associated with that transaction totaling approximately
$500,000. In addition, during the third quarter of 1999, the Company reached
an agreement to sell its interest in the Grizzly Nature Center and sold its
interest in a casino operation in Aruba resulting in losses of $4.2 million
and $2.5 million, respectively. Additionally, Entertainment took charges of
approximately $6.5 million to write off, as unrecoverable, contract
acquisition costs for concession services at facilities (the Great Western
Forum and the U.S. Air Arena) that
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<PAGE>
ceased to be utilized by professional sports teams. The Company continues to
perform concession services at the new venues (the Staples Center and the MCI
Arena) utilized by those teams, so on-going income is not expected to be
materially altered as a result of these events. The Company also concluded that
it would abandon its participation in a consortium that was developing a casino
in Johannesburg, South Africa, resulting in losses of $2.1 million. In addition,
Entertainment's results decreased by approximately $4.8 million at several
site-based and venue management locations due to lower attendance, as well as a
decrease of $1.9 million from Amphitheatre concessions due to a change in
contract terms. Also, in the comparable period in 1998, Entertainment's results
included $8.1 million in gains principally attributable to receipt of payments
for exclusivity rights at certain facilities. These reductions were partially
offset by income of $9.5 million at waterparks operations acquired in 1999.
Operating income for the nine months ended September 30, 1999 was $36.5
million lower than the comparable period of 1998 primarily attributable to
the items above affecting the third quarter as well as poor performance at
Casino Iguazu acquired in December 1998, Aruba Casino, Tinseltown, and
American Wilderness and start-up losses at several shopping malls in earlier
periods of 1999, which were partially offset by a gain on the renegotiation
of the management contract at Arrowhead Pond of $6.0 million and the gain on
the sale of certain Amphitheatre contracts of $7.2 million.
Aviation
Aviation's operating income for the three-month and nine-month periods ended
September 30, 1999 were $4.2 million and $22.3 million, respectively, compared
with $9.6 million and $47.1 million for the comparable periods of 1998.
The decrease in operating income of $5.4 million for the three months ended
September 30, 1999 as compared to the same period of 1998 primarily reflects the
additional gain on the sale of the Spanish inflight kitchens of $2.0 million,
offset by income of $7.5 million relating to the sale of the domestic inflight
catering operations in 1998.
The decrease of $24.8 million in operating income for the nine months ended
September 30, 1999 was chiefly associated with the gain on the sale of the
domestic inflight catering operation in 1998 of $36.4 million and the items
discussed above totaling $5.4 million, partially offset by provisions for
restructuring European operations, certain legal claims and other charges in
1998 of $10.2 million, increased income in fueling and overseas ground service
operations of $6.9 million and an insurance recovery of $1.5 million.
The effective income tax rate for discontinued operations for the three months
ended September 30, 1999 was (21.0%) as compared with 46.3% for the comparable
period of 1998. This decrease is primarily attributable to net pretax losses and
higher foreign income taxes caused by foreign losses that do not generate any
foreign or domestic income tax benefits. The effective income tax rate for
discontinued operations for the
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<PAGE>
nine months ended September 30, 1999 was 97.1% compared to 41.7% for the
comparable period of 1998 due mainly to lower pretax income and proportionately
higher foreign income taxes caused by foreign losses that do not generate any
foreign or domestic income tax benefits.
LIQUIDITY: At the end of the third quarter, the Company had approximately
$119 million in cash and cash equivalents. In addition, the Company maintains
a $200 million revolving credit facility. At September 30, 1999 the Company
had drawn $50 million under the facility leaving an unused line of $150
million. In connection with the sales process, the Company is seeking waivers
that will permit it to utilize the entirety of the unused portion of the
facility. Net cash provided from operating activities was $264 million lower
than the comparable period of 1998 primarily reflecting a decrease in
deferred income of $195.2 million chiefly associated with the prepayment of a
power sale agreement for the Haverhill, Massachusetts waste-to-energy
facility in 1998, an increase of $30.1 million in accounts receivable, and a
decrease of $44.5 million in other liabilities chiefly associated with
decreases in pensions, severance and insurance liabilities. Net cash used in
investing activities increased $15.7 million primarily reflecting the
purchase of Energy operations in the Philippines and Thailand and the
remaining 50% interest in a domestic joint venture amounting to $69.5
million, an increase of $17.3 million in investments in energy facilities and
capital expenditures, and a net increase of $4.2 million in investments in
joint ventures, partially offset by an increase of $59.4 million in proceeds
from the sale of investments and $17.8 million from sales of property, plant
and equipment and an ownership interest in a joint venture. Net cash provided
from financing activities was $114.3 million higher primarily reflecting an
increase of $66.7 million in debt mainly representing the revolving credit
facility, a decrease of $46.4 million for the purchase of treasury shares and
a decrease of $9.0 million in funds held in trust, partially offset by lower
proceeds from the exercise of stock options of $9.1 million.
Net cash used by discontinued operations increased $45.3 million compared to the
nine months ended September 30, 1998 primarily due to Ogden funding additional
acquisitions and purchases of property, plant and equipment for both the
Aviation and Entertainment businesses.
Because of the seasonal nature of the Entertainment and Aviation businesses, and
certain capital improvements being made in the Energy business, the Company
anticipates that it will need to utilize a portion of its cash and cash
equivalents during the fourth quarter to fund existing operations. The Company
believes that it has sufficient funds to do so. To complete the planned sales of
its Aviation and Entertainment businesses, the Company will need to obtain from
the banks under the revolving credit facility, as well as certain other banks
that have issued letters of credit, waivers of certain covenants restricting
dispositions of assets and the computation of certain covenants as a result of
its decision to treat the Entertainment and Aviation businesses as discontinued.
As a result of severance and other charges and expenses to be incurred
associated with the planned disposition of the Aviation and Entertainment
businesses, the Company has
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<PAGE>
also requested that such banks grant waivers permitting the Company to exceed
restrictions on the Company's indebtedness as a percentage of its capitalization
over the next nine months. The Company believes that this is necessary to insure
that it maximizes the value of the assets being sold in an orderly auction
process.
Finally, under certain agreements entered into by the Company, if the Company's
outstanding debt securities are no longer rated investment grade, it may be
required to post additional collateral or letters of credit. The failure to post
such letters could result in a forfeiture of certain contracts or could result
in a default under the agreements requiring the posting of such letters. It is
the expressed intention of the Company to maintain an investment grade rating.
To that end, the Company will seek to utilize sales proceeds to pay down
existing corporate debt where economically feasible.
The Company has also commenced discussions with its banks and believes that it
will be successful in obtaining any necessary waivers from the covenants
described above. To insure liquidity through the sales process, the Company has
commenced discussions with alternative debt providers and is exploring
additional equity sources.
CAPITAL INVESTMENT AND COMMITMENTS
For the nine months ended September 30, 1999, capital investments amounted to
$42.3 million, of which $27.9 million, inclusive of restricted funds held in
trust, was for Energy facilities and $14.4 million was for normal replacement
and growth in Energy ($11.4 million) and Other ($3 million) operations.
At September 30, 1999, capital commitments for continuing operations amounted to
$12.1 million for normal replacement and growth in Energy ($12 million) and
Other ($100,000) operations. Commitments for Discontinued Operations amounted to
$78.1 million for normal replacement and growth in Entertainment ($75.1 million)
and Aviation ($3 million) operations.
Other capital commitments for Energy as of September 30, 1999 amounted to
approximately $66.5 million. This amount includes a commitment to pay, in 2008,
$10.6 million for a service contract extension at a waste-to-energy facility. In
addition, this amount includes $5 million for additional equity commitments
related to Energy's interest in a coal-fired power project in the Philippines,
$23.6 million for additional equity commitments for a hydroelectric plant in the
Philippines, $2.7 million for additional equity commitments for a natural
gas-fired plant in Bangladesh, $1.7 million for additional equity commitments
for a gas co-generation facility in Murcia, Spain and $22.9 million for standby
letters of credit in support of debt service reserve requirements. Funding for
the remaining mandatory equity contributions is being provided through bank
credit facilities, which must be repaid in June 2000 through December 2001. The
Corporation also has $5.1 million contingent equity contributions in
Entertainment ($2.5 million in connection with its investment at Isla Magica)
and Aviation ($2.6 million in connection with its investment in Argentina). The
Corporation has no further obligations with respect to its previous agreement to
acquire VSA. In addition, compliance with the standards and guidelines under the
Clean Air Act Amendments of 1990 may require
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further Energy capital expenditures of approximately $35 million through
December 2000 subject to the final time schedules determined by the individual
states in which the Corporation's waste-to-energy facilities are located.
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. In
connection with certain contractual arrangements, Ogden has agreed to provide a
vendor with a specified amount of business over a two-year period. If this
amount is not provided the Corporation may be liable for prorated damages of up
to approximately $3 million. 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 Ogden entered into a 30-year facility management
contract, pursuant to which it agreed to advance funds to a customer, and if
necessary, to assist the customer's refinancing of senior secured debt incurred
in connection with the construction of the facility. Ogden is obligated to
purchase such senior secured debt in the amount of $97.1 million on December 23,
2002, if the debt is not refinanced prior to that time. Ogden is also required
to repurchase the outstanding amount of certain subordinated secured debt of
such customer on December 23, 2002. At September 30, 1999, the amount
outstanding was $51.6 million. In addition, on September 30, 1999, the
Corporation has guaranteed $3.4 million of senior secured term debt of an
affiliate and principal tenant of this customer and has guaranteed up to $3.4
million of the tenant's secured revolving debt. In addition, Ogden is obligated
to purchase $20.4 million of the tenant's secured subordinated indebtedness on
January 29, 2004, if such indebtedness has not been repaid or refinanced prior
to that time. In October 1999, Ogden also agreed to advance a secured loan to
that tenant of up to approximately $8.4 million if certain contingencies occur.
Ogden has guaranteed approximately $4 million of borrowings of a joint venture
in which Ogden has an equity interest. Management does not expect that these
arrangements will have a material adverse effect on Ogden's Consolidated
Financial Statements.
Year 2000 Issues:
BACKGROUND - The term `Year 2000 issue' generally refers to the problems that
may occur from the improper processing of date sensitive calculations, date
comparisons, and leap year determination by computers and other machinery
containing computer chips (i.e., "embedded systems"). In an effort to save
expensive memory and processing time, historically most of the world's computer
hardware and software used only two digits to identify the year in a date. If
not corrected or replaced, many systems will fail to distinguish between the
years `2000' and `1900' and will incorrectly process related date information.
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STATE OF READINESS - Ogden has established a Year 2000 Project that is actively
addressing its Year 2000 issues. The project is comprised of four phases:
awareness, assessment, action, and anticipation. The awareness phase included
the education of the Corporation's Board of Directors, management, and staff
regarding the Year 2000 issue and the Corporation's strategy to address the
problem. The awareness phase of the project is completed. The objective of the
project's assessment phase is to inventory and assess the Year 2000 compliance
of Ogden's internal information technology and embedded systems, as well as to
ascertain the compliance of the products and services provided to the
Corporation by third parties. Ogden's internal assessment is complete. The
assessment of third parties on which the Corporation relies for key products and
services is now considered an iterative process that will continue through the
end of 1999. Ogden's action phase includes the prioritization, remediation, and
testing of Year 2000 solutions. The Corporation is performing the remediation of
all its mission critical systems, through a series of projects with completion
dates between January 1997 and November 1999. This phase is on target to be
completed on schedule. The fourth phase of the Ogden's Year 2000 Project, the
anticipation phase, includes the development and implementation of contingency
plans for mission critical business functions. The anticipation phase of the
project has begun and is expected to continue throughout 1999.
Ogden has made considerable progress towards Year 2000 compliance, as a result
of its initiative to improve access to business information through the
implementation of common, integrated computing systems across the operations of
the Corporation. Early in the process, Ogden adopted the strategy of
implementing industry standard compliant packages, rather than remediate the
code of its legacy systems. This initiative commenced in 1996, with the
replacement of Ogden's domestic administrative systems with the PeopleSoft
systems and the upgrade of associated infrastructure. The implementations of
these Year 2000 compliant systems are completed. Additional efforts to replace
or upgrade the international administrative systems and a variety of key
operating systems are on schedule for completion. Ogden has not deferred any
specific information technology project as a result of the implementation of the
Year 2000 Project.
COSTS - The total cost associated with resolving the Corporation's Year 2000
issues is not expected to be material to the Company's financial condition.
Based on the assessments and remediation plans, the estimated costs of the
Company's Year 2000 Project are $8.9 million, of which $5.5 million has been
spent to date. Because of Ogden's strategy to implement or upgrade a number of
systems (e.g., PeopleSoft) as part of its initiative to improve access to key
business information, those costs of implementation are not included in these
estimates.
RISKS - The Securities and Exchange Commission requires that public companies
forecast the most reasonably likely worst case Year 2000 scenario. Based on the
assessment efforts to date, the Company does not believe that the Year 2000
issue will have a material adverse effect on its financial condition or results
of operations. The Company operates a large number of geographically dispersed
sites and has a large supplier base and believes that these factors will
mitigate any adverse impact. The Company's beliefs
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and expectations, however, are based on certain assumptions and expectations
that ultimately may prove to be inaccurate.
The Company has identified that a significant disruption in the supply chain
represents the most reasonably likely worst case Year 2000 scenario.
Potential sources of risk include (a) the inability of principal suppliers to
be Year 2000 ready, which could result in delays in deliveries from such
suppliers and (b) disruption of the Company's ability to provide products and
services as a result of a general failure of systems and necessary
infrastructure such as electricity supply. The Company is preparing
contingency plans around an assumed period of disruption to the supply chain,
to reduce the impact of significant failure.
CONTINGENCY PLANS - Ogden's Year 2000 project strategy includes the
development of contingency plans for any mission critical business functions
determined to be at risk. While Ogden is not presently aware of any
significant exposure, there can be no assurances that all Year 2000
remediation processes will be completed and properly tested before the Year
2000, or that contingency plans will sufficiently mitigate the risk of a Year
2000 compliance problem. Ogden is finalizing the development of its
contingency plans and will be conducting a worldwide readiness review at the
end of November. The contingency planning process is an ongoing one which
will continue through 1999 as Ogden obtains relevant Year 2000 compliance
information resulting from its internal remediation and testing efforts, as
well as from third parties.
ANY STATEMENTS IN THIS COMMUNICATION, INCLUDING BUT NOT LIMITED TO THE "YEAR
2000 ISSUE" DISCUSSION, WHICH MAY BE CONSIDERED TO BE "FORWARD-LOOKING
STATEMENTS," AS THAT TERM IS DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995, ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES. THE FACTORS THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE SUGGESTED BY ANY SUCH
STATEMENTS INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED OR IDENTIFIED FROM
TIME TO TIME IN THE CORPORATION'S PUBLIC FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION AND MORE GENERALLY, GENERAL ECONOMIC CONDITIONS, INCLUDING
CHANGES IN INTEREST RATES AND THE PERFORMANCE OF THE FINANCIAL MARKETS; CHANGES
IN DOMESTIC AND FOREIGN LAWS, REGULATIONS, AND TAXES; CHANGES IN COMPETITION AND
PRICING ENVIRONMENTS; AND REGIONAL OR GENERAL CHANGES IN ASSET VALUATIONS.
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<PAGE>
PART II - OTHER INFORMATION
Item 1. 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, other than ordinary routine
litigation incidental to its business, the outcome of which would have a
material adverse effect on the Company on a consolidated basis.
(a) 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's consolidated financial statements.
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
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<PAGE>
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's consolidated financial statements.
(b) Shareholder Litigation
On September 22, October 1, and October 12, 1999 complaints
(the "Complaints") denominated as class actions (the "Actions") were filed in
the United States District Court for the Southern District of New York against
the Company, the Company's former Chairman and Chief Executive, R. Richard
Ablon, and Robert M. DiGia (incorrectly identified in the Complaints as the
Chief Financial Officer and Senior Vice President of the Company). The
Complaints, which are largely identical to one another, are brought by alleged
shareholders of the Company and purport to assert claims under the federal
securities laws. In general, the Complaints allege that the Company and the
individual defendants disseminated false and misleading information during the
period of March 11, 1999 through September 17, 1999 (the "Class Period") with
respect to the Company's intended reorganization plans and its financial
condition. The Complaints seek the certification of a class of all purchasers of
Ogden Corporation common stock during the Class Period. While the Actions are at
a very early stage, the Company believes it has meritorious defenses to the
allegations made in the Complaints and intends to defend the Actions vigorously.
(c) Other Litigation
On November 5, 1999, the Company received a summons and
complaint filed in the Supreme Court of the State of New York, brought by R.
Richard Ablon, the Company's former Chairman, President and Chief Executive
Officer. In general, this complaint alleges that the Company has breached the
employment agreement between the Company and Mr. Ablon (the terms of which are
described in the company's most recent proxy statement), and seeks damages in
the amount of $12.5 million, plus continuation of pension and certain other
benefits valued in such complaint at approximately $10 million. The Company
intends to defend the Action vigorously.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
2 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.*
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<PAGE>
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 Corporation sub. and Ogden
Projects, Inc., dated as of September
27, 1994.*
3 ARTICLES OF INCORPORATION AND BY-LAWS.
3.1 Ogden's Restated Certificate of Incorporation
as amended.*
3.2 Ogden's By-Laws, as amended through April 8,
1998.*
4 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 MATERIAL CONTRACTS
10.1 (a) U.S. $95 million Term Loan and
Letter of Credit and Reimbursement
Agreement among Ogden, the Deutsche
Bank AG, New York Branch and the
signatory Banks thereto, dated March
26, 1997.*
(b) Ogden $200 million Credit Agreement by
and among Ogden, The Bank of New York,
as Agent and the signatory Lenders
thereto dated as of June 30, 1997.*
10.2 Rights Agreement between Ogden Corporation
and Manufacturers Hanover Trust Company,
dated as of September 20, 1990.*
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<PAGE>
10.3 Executive Compensation Plans and Agreements.
(a) Ogden Corporation 1990 Stock Option
Plan.*
(i) Ogden Corporation 1990 Stock
Option Plan as Amended and
Restated as of January 19,
1994.*
(ii)Amendment adopted and effective
as of September 18, 1997.*
(b) Ogden Corporation 1999 Stock Option
Plan, as amended.*
(c) Ogden Energy Select Savings Plan.
(d) Ogden Services Corporation Select
Savings Plan Trust Amendment and
Restatement as of January 1, 1995.*
(e) Ogden Profit Sharing Plan as amended
and restated effective as of January
1, 1995.*
(f) Ogden Corporation Core Executive
Benefit Program.*
(g) Ogden Projects Pension Plan.*
(h) Ogden Projects Profit Sharing Plan.*
(i) Ogden Projects Supplemental Pension
and Profit Sharing Plans.*
(j) Ogden Projects Core Executive Benefit
Program.*
(k) 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
Profit Sharing Plan effective as
of January 1, 1994.*
(ii)Form of amended Ogden Projects
Pension Plan, effective as of
January 1, 1994.*
(l) Ogden Corporation Amended and
Restated CEO Formula Bonus Plan.*
(m) Ogden Key Management Incentive Plan.*
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<PAGE>
10.4 Employment Agreements
(a) Employment Letter Agreement between
Ogden Corporation and Lynde H.
Coit, Senior Vice President and
General Counsel, dated March 1,
1999.*
(b) Employment Agreement between R.
Richard Ablon, President, Chairman
and C.E.O., and Ogden dated as of
January 1, 1998.*
(c) Separation Agreement between Ogden
and Philip G. Husby, Senior Vice
President and C.F.O., dated as of
September 17, 1998.*
(d) Employment Agreement between Scott
G. Mackin, Executive Vice President
and Ogden Corporation dated as of
October 1, 1998.*
(e) Employment Agreement between Ogden
Corporation and David L. Hahn,
Senior Vice President - Aviation,
dated December 1, 1995.*
(i) Letter Amendment to Employment
Agreement between Ogden
Corporation and David L. Hahn,
Senior Vice President -
Aviation
effective as of October 1,
1998.*
(f) Employment Agreement between Ogden
Corporation and Rodrigo Arboleda,
Senior Vice President dated January
1, 1997.*
(i) Letter Amendment to Employment
Agreement between Ogden
Corporation and Rodrigo
Arboleda, Senior Vice
President, effective as of
October 1, 1998.*
(g) Employment Agreement between Ogden
Projects, Inc. and Bruce W. Stone,
dated June 1, 1990.*
(h) Employment Agreement between Ogden
Corporation and Quintin G.
Marshall, Senior Vice President
- Corporate Development, dated
October 30, 1996.*
(i) Letter Amendment to Employment
Agreement between Ogden
Corporation and Quintin G.
Marshall, Senior Vice
President - Corporate
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<PAGE>
Development, effective as of
October 1, 1998.*
(i) Employment Agreements between
Ogden and Jesus Sainz, Executive
Vice President, effective as of
January 1, 1998.*
(i) Letter Amendment to Employment
Agreement between Ogden
Corporation and Jesus Sainz,
Executive Vice President,
effective as of October 1,
1998.*
(j) Employment Agreement between Alane
Baranello, Vice President - Human
Resources, and Ogden Services
Corporation dated October 28,
1996.*
(i) Letter Amendment to Employment
Agreement between Ogden
Corporation and Alane
Baranello, Vice President -
Human Resources, dated as of
October 13, 1998.*
(k) Employment Agreement between Peter
Allen, Senior Vice President, and
Ogden Corporation dated July 1,
1998.*
(l) Employment Agreement between Ogden
Corporation and Raymond E.
Dombrowski, Jr., Senior Vice
President and C.F.O., dated as of
September 21, 1998.*
10.5 Stock Purchase Agreement among Volume
Services America Holdings, Inc.; BCP Volume
L.P.; BCP Offshore Volume L.P.; Recreational
Services L.L.C.; VSI Management Direct L.P.;
General Electric Capital Corporation; and
Ogden Entertainment, Inc., dated June 24,
1999.*
11 Detail of Computation of Earnings Per
Share Applicable to Common Stock.
27 Financial Data Schedule (EDGAR Filing Only).
- - Incorporated by reference as set forth in the Exhibit Index of this
Form 10-Q.
(b) Reports on Form 8-K
A Form 8-K Current Report was filed on September 17,
1999 and is incorporated herein by reference.
II - 6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereto duly authorized.
OGDEN CORPORATION
(Registrant)
Date: November 19, 1999 By /s/ Raymond E. Dombrowski, Jr.
----------------------------------
Raymond E. Dombrowski, Jr.
Senior Vice President
and Chief Financial
Officer
Date: November 19, 1999 By: /s/ William J. Metzger
---------------------------------
William J. Metzger
Vice President and
Chief Accounting Officer
II - 7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
<S> <C> <C>
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 By-Laws as amended. Filed as Exhibit 3.2 to Ogden's Form 10-Q for the
quarterly period ended March 31, 1998 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.
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.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO.
DESCRIPTION OF DOCUMENT FILING NFORMATION
<S> <C> <C>
10 MATERIAL CONTRACTS
10.1(a) U.S. $95 million Term Loan and Letter of Credit Filed as Exhibit 10.6 to Ogden's Form 10-Q
and Reimbursement Agreement among Ogden, the for the quarterly period ended March 31,
Deutsche Bank AG, New York Branch and the 1997 and incorporated herein by reference.
signatory Banks thereto, dated March 26, 1997.
10.1(b) $200 million Credit Agreement among Ogden, The Filed as Exhibit 10.1(i) to Ogden's Form
Bank of New York as Agent and the signatory 10-Q for the quarterly period ended June 30,
Lenders thereto, dated as of June 30, 1997. 1997 and incorporated herein by reference.
10.2 Rights Agreement between Ogden Corporation and Filed as Exhibit (10)(h) to Ogden's Form
Manufacturers Hanover Trust Company, dated as 10-K for the fiscal year ended December 31,
of September 20, 1990 and amended August 15, 1990 and incorporated herein by reference.
1995 to provide The Bank of New York as successor
agent.
10.3 EXECUTIVE COMPENSATION PLAN AND AGREEMENTS.
(a) (i) Ogden Corporation 1990 Filed as Exhibit 10.6(b)(i) to Ogden's Form
Stock Option Plan as 10-Q for the quarterly period ended
Amended and Restated September 30, 1994 and incorporated herein
as of January 19, 1994. by reference.
(ii) Amendment to the Filed as Exhibit 10.7(a)(ii) to
Ogden Corporation 1990 Ogden's Form 10-K for fiscal period
Stock Option Plan as ended December 31, 1997 and
Amended and Restated incorporated herein by reference.
effective as of September
18, 1997.
(b) Ogden Corporation 1999 Stock Filed as Exhibit 10.3(a)(a) to Ogden's Form
Option Plan, as amended. 10-Q for the quarter period ended June 30,
1999 and incorporated herein by reference.
(c) (i) Ogden Energy Select Savings Transmitted herewith as Exhibit 10.3(c) (ii).
Plan.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C>
(d) Ogden Services Corporation Filed as Exhibit 10.7 (e) (i) to
Select Savings Plan Trust Ogden's Form 10-K for the fiscal
Amendment and Restatement as year ended December 31, 1994 and
of January 1, 1995. incorporated herein by reference.
(e) Ogden Profit Sharing Plan as Filed as Exhibit 10.7(p)(ii) to
amended and restated effective Ogden's Form 10-K for fiscal year
as of January 1, 1995. ended December 31, 1994 and
incorporated herein by reference.
(f) Ogden Corporation Core Executive Filed as Exhibit 10.8(q) to Ogden's Form
Benefit Program. 10-K for fiscal year ended December 31, 1992
and incorporated herein by reference.
(g) 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.
(h) Ogden Projects Profit Filed as Exhibit 10.8(s) to Ogden's Form 10-K for fiscal
Sharing Plan. year ended December 31, 1992
and incorporated herein by reference.
(i) Ogden Projects Supplemental Pension Filed as Exhibit 10.8(t) to Ogden's Form 10-K for fiscal
and Profit Sharing Plans. year ended December 31, 1992 and incorporated herein by
reference.
(j) Ogden Projects Core Executive Filed as Exhibit 10.8(v) to Ogden's Form 10-K for fiscal
Benefit Program. year ended December 31, 1992 and incorporated herein by
reference.
(k) Form of amendments to the Ogden Filed as Exhibit 10.8(w) to Ogden's Form
Projects, Inc. Pension Plan 10-K for fiscal year ended December 31, 1993
and Profit Sharing Plans and incorporated herein by reference.
effective as of January 1, 1994.
(i) Form of amended Ogden Filed as Exhibit 10.7(w)(i) to Ogden's Form
Projects Profit Sharing Plan 10-K for fiscal year ended December 31, 1994
effective as of January 1, and incorporated herein by reference.
1994.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C> <C>
(ii) Form of amended Ogden Filed as Exhibit 10.7(w)(ii) to Ogden's Form
Projects Pension Plan, 10-K for fiscal year ended December 31, 1994
effective as of January 1, and incorporated herein by reference.
1994.
(l) Ogden Corporation Amended and Restated Filed as Exhibit 10.3(n) to Ogden's Form
CEO Formula Bonus Plan. 10-K for the fiscal year ended December 31,
1998 and incorporated herein by reference.
(m) Ogden Key Management Incentive Filed as Exhibit 10.7(p) to Ogden's Form 10-K for
Plan. the fiscal year ended December 31, 1997 and
incorporated herein by reference.
10.4 EMPLOYMENT AGREEMENTS
(a) Employment Letter Agreement between Filed as Exhibit 10.4(a) to Ogden's Form
Ogden Corporation and Lynde H. Coit, 10-K for the fiscal year ended December 31,
Senior Vice President and General 1998 and incorporated herein by reference.
Counsel dated March 1, 1999.
(b) Employment Agreement between R. Filed as Exhibit 10.3(h) to Ogden,s Form
Richard Ablon and Ogden dated as of 10-Q for the quarterly period ended June 30,
January 1, 1998. 1998 and incorporated herein by reference.
(c) Separation Agreement between Ogden Filed as Exhibit 10.8(c) to Ogden's Form
Corporation and Philip G. Husby, 10-Q for the quarterly period ended
Senior Vice President and C.F.O., September 30, 1998 and incorporated herein
dated as of September 17, 1998. by reference.
(d) Employment Agreement between Scott G.
Mackin, Executive Vice President, and Filed as Exhibit 10.8(e) to Ogden's Form
Ogden Corporation dated as of October 10-Q for the quarter ended September 30,
1, 1998. 1998 and incorporated herein by reference.
(e) Employment Agreement between Ogden
Corporation and David L. Hahn, Senior Filed as Exhibit 10.8(i) to Ogden's Form
Vice President - Aviation, dated 10-K for fiscal year ended December 31, 1995
and incorporated herein by reference.
</TABLE>
4
<PAGE>
<TABLE>
<S> <C> <C>
December 1, 1995.
(i) Letter Amendment to
Employment Agreement between Filed as Exhibit 10.8(f)(i) to Ogden's Form
Ogden Corporation and David 10-Q for the quarterly period ended
L. Hahn, effective as of September 30, 1998 and incorporated herein
October 1, 1998. by reference.
(f) Employment Agreement between Ogden Filed as Exhibit 10.8(j) to Ogden's Form
Corporation and Rodrigo Arboleda, 10-K for fiscal year ended December 31, 1996
Senior Vice President dated January 1, and incorporated herein by reference.
1997.
(i) Letter Amendment to Filed as Exhibit 10.8(g)(i) to Ogden's Form
Employment Agreement between 10-Q for the quarterly period ended
Ogden Corporation and Rodrigo September 30, 1998 and incorporated herein
Arboleda, Senior Vice by reference.
President, effective as of
October 1, 1998.
(g) Employment Agreement between Ogden Filed as Exhibit 10.8(k) to Ogden's Form
Projects, Inc. and Bruce W. Stone, 10-K for fiscal year ended December 31, 1996
dated June 1, 1990. and incorporated herein by reference.
(h) Employment Agreement between Ogden Filed as Exhibit 10.8(l) to Ogden's Form
Corporation and Quintin G. Marshall, 10-K for fiscal year ended December 31, 1996
Senior Vice President dated October and incorporated herein by reference.
30, 1996.
(i) Letter Amendment to Filed as Exhibit 10.8(i)(i) to Ogden's Form
Employment Agreement 10-Q for the quarter ended September 30,
between Ogden Corporation and 1998 and incorporated herein by reference.
Quintin G. Marshall, Senior
Vice President - Corporate
Development effective as of
October 1, 1998.
(i) Employment Agreements between Ogden Filed as Exhibit 10.8(m) to Ogden's Form
and Jesus Sainz, Executive Vice 10-K for the fiscal year ended December 31,
President, 1997 and incorporated
</TABLE>
5
<PAGE>
<TABLE>
<S> <C> <C>
effective as of January 1, 1998. herein by reference.
(i) Letter Amendment to Filed as Exhibit 10.8(j)(i) to Ogden's Form
Employment Agreement between 10-Q for the quarter ended September 30,
Ogden Corporation and Jesus 1998 and incorporated herein by reference.
Sainz, Executive Vice
President, effective as of
October 1, 1998.
(j) Employment Agreement between Alane Filed as Exhibit 10.3(m) to Ogden's Form
Baranello, Vice President - Human 10-Q for the quarterly period ended June 30,
Resources and Ogden Services 1998 and incorporated herein by reference.
Corporation dated October 28, 1996.
(i) Letter Amendment to Filed as Exhibit 10.8(k)(i) to Ogden's From
Employment Agreement between 10-Q for the quarter ended September 30,
Ogden Corporation and Alane 1998 and incorporated herein by reference.
Baranello, Vice President -
Human Resources, dated as of
October 13, 1998.
(k) Employment Agreement between Peter Filed as Exhibit 10.3(M)(1) to Ogden's Form
Allen, Senior Vice President, and 10-Q for the quarterly period ended June 30,
Ogden Corporation dated July 1, 1998. 1998 and incorporated herein by reference.
(l) Employment Agreement between Ogden Filed as Exhibit 10.4(m) to Ogden's Form
Corporation and Raymond E. Dombrowski, 10-Q for the quarter ended September 30,
Jr., Senior Vice President and C.F.O., 1998 and incorporated herein by reference.
dated as of September 21, 1998.
10.5 Stock Purchase Agreement among Volume Services Filed as Exhibit 10.5 to Ogden's Form 10-Q
America Holdings, Inc.; BCP Volume L.P.; BCP for the quarter ended June 30, 1999 and
Offshore Volume L.P.; Recreational Services incorporated herein by reference.
L.L.C.; VSI Management Direct L.P.; General
Electric Capital Corporation; and Ogden
Entertainment, Inc., dated as of June 24, 1999.
</TABLE>
6
<PAGE>
<TABLE>
<S> <C> <C>
11 Ogden Corporation and Subsidiaries Detail of Transmitted herewith as Exhibit 11.
Computation of Earnings Per Share Applicable to
Common Stock.
27 Financial Data Schedule. Transmitted herewith as Exhibit 27.
</TABLE>
<PAGE>
EXHIBIT 11
OGDEN CORPORATION AND SUBSIDIARIES
DETAIL OF COMPUTATION OF EARNINGS PER SHARE APPLICABLE TO COMMON STOCK
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
------------------------------------------------------------
1999 1998
Income Shares Per-Share Income Shares Per-Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- --------- ----------- ------------- --------
(In Thousands, Except per Share Amounts)
<S> <C> <C> <C> <C>
Income from continuing operations $ 28,680 $ 22,815
Less: preferred stock dividends 104 109
-------- --------
Basic Earnings Per Share 28,576 49,157 $ 0.59 22,706 50,071 $ 0.45
------ ------
Effect of Dilutive Securities:
Stock options 405 887
Convertible preferred stock 104 249 109 258
6% convertible debentures (A) (A)
5 3/4% convertible debentures (A) (A)
-------- ------ -------- ------
Diluted Earnings per Share $ 28,680 49,811 $ 0.58 $ 22,815 51,216 $ 0.45
-------- ------ ------ -------- ------ ------
Discontinued operations
Basic $ (883) 49,157 $(0.02) $ 44,100 50,071 $ 0.88
-------- ------ ------ -------- ------ ------
Diluted $ (883) 49,811 $(0.02) $ 44,100 51,216 $ 0.86
-------- ------ ------ -------- ------ ------
Cumulative effect of change in accounting
principle
Basic $ (3,820) 49,157 $(0.08)
-------- ------ ------
Diluted $ (3,820) 49,811 $(0.08)
-------- ------ ------
</TABLE>
(A) Anti-dilutive
Note:
Basic earnings per common share was computed by dividing net income,
reduced by preferred stock dividend requirements, by the weighted
average of the number of shares of common stock outstanding during each
period.
Diluted earnings per common share was computed on the assumption that
all convertible debentures, convertible preferred stock, and stock
options converted or exercised during each period, or outstanding at
the end of each period were converted at the beginning of each period
or the date of issuance or grant, if dilutive. The computation provides
for the elimination of related convertible debenture interest and
preferred dividends.
<PAGE>
EXHIBIT 11
OGDEN CORPORATION AND SUBSIDIARIES
DETAIL OF COMPUTATION OF EARNINGS PER SHARE APPLICABLE TO COMMON STOCK
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
------------------------------------------------------------
1999 1998
Income Shares Per-Share Income Shares Per-Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- --------- ----------- ------------- --------
(In Thousands, Except per Share Amounts)
<S> <C> <C> <C> <C>
Income from continuing operations $ 8,353 $14,059
Less: preferred stock dividends 34 36
-------- -------
Basic Earnings Per Share 8,319 49,382 $ 0.17 14,023 49,653 $ 0.28
------ ------
Effect of Dilutive Securities:
Stock options 218 575
Convertible preferred stock 34 246 36 255
6% convertible debenture (A) (A)
5 3/4% convertible debentures (A) (A)
-------- ------ ------- ------
Diluted Earnings per Share $ 8,353 49,846 $ 0.17 $14,059 50,483 $ 0.28
-------- ------ ------ ------- ------ ------
Discontinued operations
Basic $(16,069) 49,382 $(0.33) $14,096 49,653 $ 0.29
-------- ------ ------- ------- ------ ------
Diluted $(16,069) 49,382 $(0.33) $14,096 50,483 $ 0.28
-------- ------ ------- ------- ------ ------
</TABLE>
(A) Anti-dilutive
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 119,125
<SECURITIES> 0
<RECEIVABLES> 301,082
<ALLOWANCES> 13,711
<INVENTORY> 18,548
<CURRENT-ASSETS> 1,178,785
<PP&E> 2,378,116
<DEPRECIATION> 555,043
<TOTAL-ASSETS> 3,766,975
<CURRENT-LIABILITIES> 466,158
<BONDS> 1,998,792
0
40
<COMMON> 24,733
<OTHER-SE> 520,583
<TOTAL-LIABILITY-AND-EQUITY> 3,766,975
<SALES> 39,975
<TOTAL-REVENUES> 742,517
<CGS> 43,791
<TOTAL-COSTS> 628,639
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 25,411
<INCOME-PRETAX> 43,416
<INCOME-TAX> 11,558
<INCOME-CONTINUING> 28,680
<DISCONTINUED> (883)
<EXTRAORDINARY> 0
<CHANGES> (3,820)
<NET-INCOME> 23,977
<EPS-BASIC> $0.49
<EPS-DILUTED> $0.48
</TABLE>
