<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1994 Commission File No. 1-9253
[_] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
CHEMICAL WASTE MANAGEMENT, INC.
-------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-2989152
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3001 Butterfield Road, Oak Brook, Illinois 60521
- ------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 218-1500
--------------------
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
--- ---
As of November 1, 1994, the registrant had issued and outstanding an aggregate
of 209,143,793 shares of its common stock.
<PAGE>
CHEMICAL WASTE MANAGEMENT, INC. AND SUBSIDIARIES
INDEX
-----
PART I. Financial Information: PAGE
Consolidated balance sheets as of December 31, 1993
and September 30, 1994................................ 3
Consolidated statements of income for the three-month and
nine-month periods ended September 30, 1993 and 1994.. 5
Consolidated statements of stockholders' equity for
the nine-month periods ended September 30, 1993
and 1994.............................................. 6
Consolidated statements of cash flows for the
nine-month periods ended September 30, 1993 and 1994.. 7
Notes to consolidated financial statements................. 8
Management's discussion and analysis of financial
condition and results of operations................... 18
PART II. Other Information................................ 25
*****
2
<PAGE>
PART I. FINANCIAL INFORMATION
CHEMICAL WASTE MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
(000's omitted)
ASSETS
<TABLE>
<CAPTION>
December 31, September 30,
1993 1994
------------ -------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 2,592 $ 16,479
Short-term investments 1,906 2,061
Accounts receivable, less reserve of
$14,040 in 1993 and $15,532 in 1994 512,986 530,507
Employee receivables 1,134 1,038
Costs and estimated earnings in excess of
billings on uncompleted contracts 185,867 200,931
Refundable income taxes 54,002 1,836
Prepaid expenses 78,905 77,980
---------- ----------
Total Current Assets $ 837,392 $ 830,832
---------- ----------
PROPERTY AND EQUIPMENT, at cost:
Land, primarily disposal sites $ 402,954 $ 392,110
Buildings 234,837 239,808
Vehicles and equipment 898,262 906,188
Leasehold improvements 13,032 13,260
---------- ----------
$1,549,085 $1,551,366
Less-Accumulated depreciation
and amortization (382,157) (421,626)
---------- ----------
Total Property and Equipment, Net $1,166,928 $1,129,740
---------- ----------
OTHER ASSETS:
Intangible assets relating to acquired
businesses, net $ 708,473 $ 789,847
Investments 236,803 269,965
Sundry 133,069 132,442
Deferred income taxes 41,379 8,366
---------- ----------
Total Other Assets $1,119,724 $1,200,620
---------- ----------
Total Assets $3,124,044 $3,161,192
========== ==========
</TABLE>
The accompanying notes are an integral part of these balance sheets.
3
<PAGE>
CHEMICAL WASTE MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
(000's omitted except share amounts)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
December 31, September 30,
1993 1994
------------ -------------
<S> <C> <C>
CURRENT LIABILITIES:
Portion of long-term debt payable
within one year $ 186,086 $ 137,223
Accounts payable 173,155 137,558
Billings in excess of costs and estimated
earnings on uncompleted contracts 43,579 59,139
Accrued expenses 201,932 186,985
---------- ----------
Total Current Liabilities $ 604,752 $ 520,905
---------- ----------
DEFERRED ITEMS $ 238,743 $ 180,135
---------- ----------
LONG-TERM DEBT:
Due to WMX Technologies, Inc. $1,134,596 $1,203,917
Other long-term debt, less portion
payable within one year 58,318 75,657
---------- ----------
Total Long-Term Debt $1,192,914 $1,279,574
---------- ----------
MINORITY INTEREST IN SUBSIDIARIES $ 392,716 $ 427,295
---------- ----------
COMMITMENTS AND CONTINGENCIES $ $
---------- ----------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value; 500,000,000 shares
authorized; 212,422,463 issued in 1993 and 1994 $ 2,124 $ 2,124
Additional paid-in capital 430,014 429,977
Cumulative translation adjustment (37,353) (25,700)
Retained earnings 336,930 383,538
---------- ----------
$ 731,715 $ 789,939
Less-Treasury stock, at cost; 3,291,170
shares in 1993 and 3,278,670 in 1994 (36,796) (36,656)
---------- ----------
Total Stockholders' Equity $ 694,919 $ 753,283
---------- ----------
Total Liabilities and
Stockholders' Equity $3,124,044 $3,161,192
========== ==========
</TABLE>
The accompanying notes are an integral part of these balance sheets.
4
<PAGE>
CHEMICAL WASTE MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(000's omitted except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended September 30 Nine Months Ended September 30
-------------------------------- -------------------------------
1993 1994 1993 1994
--------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
REVENUE $ 541,565 $583,876 $1,570,987 $1,690,711
--------- -------- ---------- ----------
COSTS AND EXPENSES:
Operating $ 435,196 $468,743 $1,250,212 $1,334,133
Special charge 550,000 -- 550,000 --
Selling and administrative 75,469 66,617 213,391 213,521
Interest expense 10,380 15,746 25,404 43,814
Interest income (3,033) (623) (3,696) (2,250)
Equity in earnings of affiliate (3,516) (3,962) (10,186) (11,293)
Minority interest 9,283 7,509 28,659 21,745
Sundry income, net (1,426) (709) (15,907) (1,819)
Gains on issuance of stock
by subsidiary -- -- (10,462) --
--------- -------- ---------- ----------
Income (Loss) Before Income Taxes $(530,788) $ 30,555 $ (456,428) $ 92,860
Provision (Benefit) for Income Taxes (170,904) 15,533 (140,414) 46,252
--------- -------- ---------- ----------
NET INCOME (LOSS)
FOR THE PERIOD $(359,884) $ 15,022 $ (316,014) $ 46,608
========= ======== ========== ==========
AVERAGE SHARES AND EQUIVALENT
SHARES OUTSTANDING DURING
THE PERIOD 209,641 209,189 211,170 209,180
========= ======== ========== ==========
EARNINGS (LOSS) PER COMMON AND
COMMON EQUIVALENT SHARE $(1.72) $0.07 $(1.50) $0.22
========= ======== ========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
CHEMICAL WASTE MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1993 AND 1994
(unaudited)
(000's omitted)
<TABLE>
<CAPTION>
ADDITIONAL CUMULATIVE
COMMON PAID-IN TRANSLATION RETAINED TREASURY
STOCK CAPITAL ADJUSTMENT EARNINGS STOCK
-------- ----------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1993 $2,123 $505,217 $(19,198) $ 658,439 $ --
Net loss for the period -- -- -- (316,014) --
Cash dividends -- -- -- (21,193) --
Stock issued upon exercise
of stock options 1 1,410 -- -- 170
Treasury stock received in
connection with exercise
of stock options -- -- -- -- (27)
Tax benefit of non-qualified
stock options exercised -- 453 -- -- --
Cumulative translation
adjustment of foreign
currency statements -- -- (14,241) -- --
Investment in Rust
International Inc. -- (77,066) -- -- --
Stock repurchases
(3,300,300 shares) -- -- -- -- (36,939)
------ --------- -------- --------- --------
Balance at September 30, 1993 $2,124 $430,014 $(33,439) $ 321,232 $(36,796)
====== ========= ======== ========= ========
Balance at January 1, 1994 $2,124 $430,014 $(37,353) $ 336,930 $(36,796)
Net income for the period -- -- -- 46,608 --
Stock issued upon exercise
of stock options -- (37) -- -- 140
Cumulative translation
adjustment of foreign
currency statements -- -- 11,653 -- --
------ --------- -------- --------- --------
Balance at September 30, 1994 $2,124 $429,977 $(25,700) $ 383,538 $(36,656)
====== ========= ======== ========= ========
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE>
CHEMICAL WASTE MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1993 AND 1994
(unaudited)
(000's omitted)
<TABLE>
<CAPTION>
1993 1994
---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES
- --------------------
Net income (loss) $(316,014) $ 46,608
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 84,644 94,653
Interest on LYONs 8,744 7,315
Undistributed earnings of equity investee (10,186) (11,293)
Gain from stock transactions of subsidiary (10,462) --
Special charge, net of tax 363,000 --
Gain on sale of property and equipment and investments (13,527) (70)
Changes in assets and liabilities net of effects
of acquired companies:
Accounts receivable (6,854) 3,471
Costs and estimated earnings in excess of
billings on uncompleted contracts, net (7,810) 1,408
Prepaid expenses and refundable income taxes (25) 52,225
Accounts payable (38,291) (42,799)
Accrued expenses (70,996) (54,862)
Deferred other items (12,689) (67,715)
Sundry (770) (3,992)
Minority interest in subsidiaries 27,869 32,938
Deferred income taxes 39,012 43,655
--------- ---------
Net Cash from Operating Activities $ 35,645 $ 101,542
--------- ---------
INVESTING ACTIVITIES
- --------------------
Short-term investments $ (2,036) $ (155)
Purchases of property and equipment (172,786) (78,739)
Transfer of property and equipment, net with WMX and affiliates 10,299 4,549
Purchases of companies, net of cash acquired (292,442) (54,029)
Proceeds from sale of property and equipment and investments 40,263 13,869
--------- ---------
Net Cash used for Investing Activities $(416,702) $(114,505)
--------- ---------
FINANCING ACTIVITIES
- --------------------
Increase in borrowings from WMX $ 498,721 $ 69,321
Proceeds from issuance of indebtedness -- 24,161
Payments on debt (48,685) (66,735)
Common stock repurchases (36,939) --
Preferred stock repurchase (5,000) --
Proceeds from exercise of stock options, net 2,007 103
Dividends paid (21,193) --
--------- ---------
Net Cash from Financing Activities $ 388,911 $ 26,850
--------- ---------
Net Increase in Cash $ 7,854 $ 13,887
Cash at beginning of period 3,552 2,592
--------- ---------
Cash at End of Period $ 11,406 $ 16,479
========= =========
Additional disclosure:
Liabilities assumed in acquisitions of businesses $ 255,755 $ 75,800
========= =========
Interest paid, net of amounts capitalized $ 16,660 $ 37,396
========= =========
Income taxes paid (refunds received), net $ 19,255 $ (55,214)
========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
7
<PAGE>
CHEMICAL WASTE MANAGEMENT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(000's omitted in all tables except per share amounts)
Summary of Accounting Policies-
The financial statements included herein have been prepared by Chemical Waste
Management, Inc. ("CWM" or the "Company") without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain information
and footnote disclosure normally included in financial statements prepared in
accordance with generally accepted accounting principles has been condensed or
omitted pursuant to such rules and regulations. The financial information
included herein reflects, in the opinion of the Company, all adjustments (which
include only normal recurring adjustments) necessary to present fairly the
financial position and results of operations for the periods presented. The
results for interim periods are not necessarily indicative of results for the
entire year.
Certain amounts in previously issued financial statements have been reclassified
to conform to 1994 classifications.
Income Taxes -
The following table sets forth the provision for income taxes for the three
months and nine months ended September 30, 1993 and 1994:
<TABLE>
<CAPTION>
Three Months Ended September 30 Nine Months Ended September 30
--------------------------------- --------------------------------
1993 1994 1993 1994
----------------- -------------- ---------------- --------------
<S> <C> <C> <C> <C>
Currently payable $ (17,850) $(5,173) $ (5,115) $(1,317)
Deferred (152,941) 20,775 (134,960) 47,774
Amortization of deferred investment credit (113) (69) (339) (205)
--------- ------- --------- -------
$(170,904) $15,533 $(140,414) $46,252
========= ======= ========= =======
</TABLE>
Consolidating Financial Statements -
The following consolidating statements of income show the Company's core
business and its Rust International Inc. ("Rust") subsidiary for the three
months and nine months ended September 30, 1993 and 1994.
8
<PAGE>
CHEMICAL WASTE MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
For the Three Months Ended September 30, 1993*
(unaudited)
(000's omitted except per share amount)
<TABLE>
<CAPTION>
Core
CWM Rust Eliminations Consolidated
---------- --------- ------------- -------------
<S> <C> <C> <C> <C>
Revenue $ 169,698 $390,338 $(18,471) $ 541,565
--------- -------- -------- ---------
Costs and Expenses:
Operating $ 139,877 $313,790 $(18,471) $ 435,196
Special charge 550,000 -- -- 550,000
Selling and administrative 33,612 41,857 -- 75,469
Interest expense 7,415 2,965 -- 10,380
Interest income (2,692) (341) -- (3,033)
Equity in earnings of affiliate -- (3,516) -- (3,516)
Minority interest 132 -- 9,151 9,283
Sundry expense (income), net 301 (1,727) -- (1,426)
--------- -------- -------- ---------
Income (Loss) Before Income Taxes $(558,947) $ 37,310 $ (9,151) $(530,788)
Provision (Benefit) for Income Taxes (187,318) 16,414 -- (170,904)
--------- -------- -------- ---------
Net Income (Loss) $(371,629) $ 20,896 $ (9,151) $(359,884)
========= ======== ======== =========
Average Shares and Equivalent Shares
Outstanding During the Period 209,641
=========
(Loss) Per Common and Common
Equivalent Share $(1.72)
=========
</TABLE>
*Certain amounts have been restated to conform to 1994 classifications.
9
<PAGE>
CHEMICAL WASTE MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
For the Three Months Ended September 30, 1994
(unaudited)
(000's omitted except per share amount)
<TABLE>
<CAPTION>
Core
CWM Rust Eliminations Consolidated
--------- --------- ------------- -------------
<S> <C> <C> <C> <C>
Revenue $149,989 $443,000 $(9,113) $583,876
-------- -------- ------- --------
Costs and Expenses:
Operating $106,926 $370,930 $(9,113) $468,743
Selling and administrative 23,121 43,496 -- 66,617
Interest expense 10,501 5,245 -- 15,746
Interest income (237) (386) -- (623)
Equity in earnings of affiliate -- (3,962) -- (3,962)
Minority interest 256 (38) 7,291 7,509
Sundry income, net (263) (446) -- (709)
-------- -------- ------- --------
Income Before Income Taxes $ 9,685 $ 28,161 $(7,291) $ 30,555
Provision for Income Taxes 3,989 11,544 -- 15,533
-------- -------- ------- --------
Net Income $ 5,696 $ 16,617 $(7,291) $ 15,022
======== ======== ======= ========
Average Shares and Equivalent Shares
Outstanding During the Period 209,189
========
Earnings Per Common and Common
Equivalent Share $0.07
========
</TABLE>
10
<PAGE>
CHEMICAL WASTE MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
For the Nine Months Ended September 30, 1993*
(unaudited)
(000's omitted except per share amount)
<TABLE>
<CAPTION>
Core
CWM Rust Eliminations Consolidated
---------- ----------- ------------- ------------
<S> <C> <C> <C> <C>
Revenue $ 495,558 $1,123,901 $(48,472) $1,570,987
--------- ---------- -------- ----------
Costs and Expenses:
Operating $ 383,579 $ 915,105 $(48,472) $1,250,212
Special charge 550,000 -- -- 550,000
Selling and administrative 97,753 115,638 -- 213,391
Interest expense 19,668 5,736 -- 25,404
Interest income (2,852) (844) -- (3,696)
Equity in earnings of affiliate -- (10,186) -- (10,186)
Minority interest 175 3,278 25,206 28,659
Sundry income, net (12,619) (3,288) -- (15,907)
Gains on issuance of
stock by subsidiary (10,462) -- -- (10,462)
--------- ---------- -------- ----------
Income (Loss) Before Income Taxes $(529,684) $ 98,462 $(25,206) $ (456,428)
Provision (Benefit) for Income Taxes (180,268) 39,854 -- (140,414)
--------- ---------- -------- ----------
Net Income (Loss) $(349,416) $ 58,608 $(25,206) $ (316,014)
========= ========== ======== ==========
Average Shares and Equivalent Shares
Outstanding During the Period 211,170
=========
(Loss) Per Common and Common
Equivalent Share $ (1.50)
==========
</TABLE>
*Certain amounts have been restated to conform to 1994 classifications.
11
<PAGE>
CHEMICAL WASTE MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
For the Nine Months Ended September 30, 1994
(unaudited)
(000's omitted except per share amount)
<TABLE>
<CAPTION>
Core
CWM Rust Eliminations Consolidated
--------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
Revenue $481,664 $1,240,818 $(31,771) $1,690,711
-------- ---------- -------- ----------
Costs and Expenses:
Operating $336,795 $1,029,109 $(31,771) $1,334,133
Selling and administrative 82,392 131,129 -- 213,521
Interest expense 28,137 15,677 -- 43,814
Interest income (820) (1,430) -- (2,250)
Equity in earnings of affiliate -- (11,293) -- (11,293)
Minority interest 1,064 -- 20,681 21,745
Sundry income, net (354) (1,465) -- (1,819)
-------- ---------- -------- ----------
Income Before Income Taxes $ 34,450 $ 79,091 $(20,681) $ 92,860
Provision for Income Taxes 14,296 31,956 -- 46,252
-------- ---------- -------- ----------
Net Income $ 20,154 $ 47,135 $(20,681) $ 46,608
======== ========== ======== ==========
Average Shares and Equivalent Shares
Outstanding During the Period 209,180
==========
Earnings Per Common and Common
Equivalent Share $ 0.22
==========
</TABLE>
12
<PAGE>
Business Combinations -
Excluding the formation of Rust in January 1993, all businesses acquired by the
Company have been accounted for as purchases and are included in the financial
statements from the date of acquisition.
During 1993, the Company acquired 17 businesses (including the minority interest
in The Brand Companies, Inc. ("Brand") as a result of the Rust-Brand merger) for
$301 million in cash and notes and approximately 3.1 million shares of common
stock of Rust. During 1994, the Company acquired six businesses for $54.0
million in cash and notes.
The following summarizes the effect of businesses acquired and accounted for as
purchases in 1993 and 1994 as if they had been acquired as of January 1, 1993.
<TABLE>
<CAPTION>
Nine Months Ended September 30
--------------------------------
1993 1994
--------------- ---------------
<S> <C> <C>
Revenue as reported $1,570,987 $1,690,711
Revenue of purchased businesses for
period prior to acquisition 211,487 3,644
---------- ----------
Pro forma revenue $1,782,474 $1,694,355
========== ==========
Net income as reported $ (316,014) $ 46,608
Net income of purchased businesses for
period prior to acquisition 3,083 121
Adjustment for interest and amortization
of cost in excess of market value of
net assets acquired (5,288) (70)
---------- ----------
Pro forma net income $ (318,219) $ 46,659
========== ==========
Earnings per share as reported $ (1.50) $ .22
Effect of purchased businesses for period
prior to acquisition (.01) --
---------- ----------
Pro forma earnings per share $ (1.51) $ .22
========== ==========
</TABLE>
Equity Investments -
Rust holds a 12% beneficial interest in Waste Management International plc ("WM
International"). WMX Technologies, Inc. ("WMX"), which is the majority owner
of CWM, owns 56% of WM International. Selected financial data for WM
International, stated in British Pounds Sterling and in accordance with U. S.
generally accepted accounting principles, is as follows (000's omitted):
13
<PAGE>
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
----------------------- -----------------------
1993 1994 1993 1994
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenue (Pounds)235,136 (Pounds)288,815 (Pounds)690,868 (Pounds)831,738
Operating income 36,829 40,859 99,134 118,956
Pre-tax income 32,892 37,668 93,373 109,417
Minority interest 2,544 5,467 6,505 15,380
Net income 19,624 21,401 56,431 61,988
</TABLE>
Debt-
On June 30, 1994, the Company repurchased for approximately $58 million Liquid
Yield Option Notes ("LYONs") due 2010 in an aggregate principal amount at
maturity of $150.8 million. The repurchase was funded by a $60 million increase
to $810 million in the Company's financing commitment from WMX. Holders of the
remaining LYONs ($334.9 million aggregate principal amount at maturity) may
require the Company to repurchase LYONs on each June 30 at a price equal to the
issue price plus accrued original issue discount to the repurchase date
(approximately $131.0 million as of September 30, 1994).
Derivatives-
From time to time, the Company uses foreign currency derivatives to mitigate
the impact of currency fluctuations on the earnings of its foreign subsidiaries
and on its equity income from WM International. Although the Company's purpose
for using such derivatives is to hedge currency risk, they do not qualify for
hedge accounting under generally accepted accounting principles and,
accordingly, must be marked to market at the end of each accounting period.
Gains and losses on currency derivatives to date have not been material.
As of September 30, 1994, the Company was a party to the following average rate
currency collars, structured as offsetting puts and calls with different strike
prices (all options settle at expiration of the option period):
<TABLE>
<CAPTION>
Notional
Currency Amount Duration
-------------- -------- -------------
<S> <C> <C>
Sterling 22,500 Feb - Dec '94
Deutschemark 5,300 Jan - Dec '94
</TABLE>
The notional amounts of the contracts are used to measure cash payments at
settlement and do not represent the amount of exposure to credit loss. In
addition, the counterparties are major financial institutions which are expected
to fully perform under the terms of the contract.
Restructuring -
14
<PAGE>
In the third quarter of 1993, the Company completed a study of its business,
announced a strategic reconfiguration of its operations to meet then current
demand levels and recorded a special revaluation and restructuring charge of
$550 million ($363 million after tax). The special charge consisted of $381
million to write down assets, primarily incinerators, and $169 million for the
probable cash expenditures related to its program to reduce costs, improve
efficiency and structure the Company to meet current market demand. Of the $169
million provided for probable cash expenditures, the Company has spent $92.6
million through September 30, 1994, including $22.9 million related to personnel
actions. The Company expects the balance, except for closure and post-closure
costs, to be expended by the end of 1994. Based upon results for the third
quarter and first nine months of 1994, the Company continues to believe that the
full impact of the restructuring will reduce overhead, including depreciation
and amortization, by approximately $60 million annually.
Changes in Accounting Principles -
The Financial Accounting Standards Board has issued Standard No. 112,
"Employers' Accounting for Postemployment Benefits" ("FAS 112") and No. 115,
"Accounting for Certain Investments in Debt and Equity Securities" ("FAS 115").
Effective January 1, 1994, the Company adopted FAS 112, which did not have a
material impact on the financial statements as the Company's current accounting
was substantially in compliance with the new standard. The Company does not
have and does not contemplate acquiring significant investments of the type
covered in FAS 115.
Environmental Matters -
The majority of the businesses in which the Company is engaged are intrinsically
connected with the protection of the environment. As such, a significant
portion of the Company's operating costs and capital expenditures could be
characterized as costs of environmental protection. While the Company is faced,
in the normal course of its business, with the need to expend funds for
environmental protection and remediation, it does not expect such expenditures
to have a material adverse effect on its financial condition or results of
operations because its business is based on compliance with environmental laws
and regulations and its services are priced accordingly. Such costs may
increase in the future as a result of legislation or regulation; however, the
Company believes that it has the resources and experience to manage
environmental risk.
As a part of its ongoing operations, the Company provides for estimated closure
and post-closure monitoring costs over the operating life of disposal sites as
air space is consumed. The Company has also established procedures to evaluate
potential remedial liabilities at closed sites which it owns or operated, or to
which it transported waste, including 20 sites listed on the Superfund National
Priority List ("NPL"). In the majority of situations, the Company's connection
with NPL sites relates to allegations that its subsidiaries (or their
predecessors) transported waste to the facilities in question, often prior to
the acquisition of such subsidiaries by the Company. Where the Company
concludes that it is probable that a liability has been incurred, provision is
made in the financial statements.
15
<PAGE>
Estimates of the extent of the Company's degree of responsibility for
remediation of a particular site and the method and ultimate costs of
remediation require a number of assumptions and are inherently difficult, and
the ultimate outcome may differ from current estimates. However, the Company
believes that its extensive experience in the environmental services business,
as well as its involvement as a remediation services provider with a larger
number of sites, provides a reasonable basis for estimating its aggregate
liability. As additional information becomes available, estimates are adjusted
as necessary. While the Company does not anticipate that any such adjustment
would be material to its financial statements, it is reasonably possible that
technological, regulatory or enforcement developments, the results of
environmental studies or other factors could alter this expectation and
necessitate the recording of additional liabilities which could be material.
The impact of such future events cannot be estimated at the current time.
Subsequent Event -
On July 28, 1994, WMX made a proposal to acquire all of the approximately 44.9
million outstanding shares of the Company which it does not already own in a
transaction whereby WMX would have exchanged .27 shares of its stock for each
publicly held CWM share. WMX already owns 78.6% of the Company's outstanding
shares.
On October 14, 1994, following negotiations with a special committee of the
Company's independent directors, WMX agreed to a revised proposal, in which the
public shareholders of the Company will receive a WMX convertible subordinated
note, described more fully below. The terms of the revised proposal were
approved unanimously by the special committee of the Company's independent
directors and approved by the Boards of Directors of both companies. The
transaction, which will be taxable under the revised terms, remains subject to
the approval of the holders of a majority of the Company's outstanding shares
(other than those held by WMX) voting at a special meeting of the Company's
stockholders expected to be held in January 1995.
The new terms provide for the Company's stockholders to receive a convertible
subordinated note due 2005, with a principal amount at maturity of $1,000, for
every 81.1 of Company shares held. The notes will be subordinated to all
existing and future indebtedness of WMX. Each note will bear cash interest from
the date the Merger is consummated at the rate of two percent per annum of the
$1,000 principal amount at maturity, payable semi-annually. The difference
between the principal amount at maturity of $1,000 and the $717.80 stated issue
price of each note represents the stated discount which, together with the cash
interest payable on the notes, will accrue at a rate of 5.75 percent per annum
(determined on a semi-annual bond equivalent basis) for purposes of determining
the prices at which WMX may purchase or redeem notes, as described below.
At the option of the holder, each note will be purchased for cash by WMX on
March 15, 1998, and March 15, 2000, at prices of $790.24 and $843.35,
respectively, which represent the stated issue price plus accrued stated
discount to those dates. Accrued unpaid interest to those dates will also be
paid. The notes will be redeemable by WMX after March 15, 2000 (but not
16
<PAGE>
before) for cash, at the stated issue price plus accrued stated discount and
accrued but unpaid interest through the date of redemption.
In addition, each note will be convertible at any time prior to maturity,
unless previously purchased or redeemed by WMX, into a number of shares of WMX
common stock to be determined by dividing the stated issue price per note by the
average New York Stock Exchange closing prices of WMX common stock during the
ten trading days immediately preceding the special meeting of the Company's
stockholders to be held to consider the merger. The conversion rate will be not
less than 21.90 shares nor more than 26.76 shares per note. Upon any such
conversion, WMX will have the option of paying cash equal to the market value of
the WMX shares which would otherwise be issuable.
17
<PAGE>
PART II MANAGEMENT'S DISCUSSION AND ANALYSIS
CHEMICAL WASTE MANAGEMENT, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
The Company's consolidated revenue for the nine months ended September 30,
1994, was $1.691 billion compared to $1.571 billion for the nine months ended
September 30, 1993. Net income amounted to $46.6 million for the nine months
ended September 30, 1994, compared to a net loss of $316.0 million for the first
nine months of 1993. The first nine months of 1993 included a $550 million
($363 million after-tax) special asset revaluation and restructuring charge, an
approximate $8 million net of tax gain from the sale of stock held for
investment and a $10.5 million non-taxable gain related to the merger of The
Brand Companies, Inc. ("Brand") into a wholly-owned subsidiary of Rust
International Inc. ("Rust"). Earnings per share were $.22 in the first nine
months of 1994 compared to a loss per share of $(1.50) for the same nine-month
period a year earlier. The 1993 nine-month period included approximately $.09
attributable to the gain from the stock sale and the Rust-Brand merger and
$(1.74) related to the special charge.
Consolidated revenue for the three months ended September 30, 1994, was $583.9
million compared to $541.6 million reported in the third quarter of 1993. Net
income for the third quarter of 1994 totalled $15.0 million whereas there was a
net loss of $359.9 million in the third quarter of 1993. The year earlier
quarter included the special charge noted above.
REVENUE
The Company provides hazardous waste transportation, treatment, resource
recovery and disposal services as part of its core business. Through Rust, its
56% owned subsidiary, the Company also provides engineering, construction and
environmental and infrastructure consulting services, and environmental
remediation and other on-site industrial services. Rust also operated an
asbestos abatement business through the first four months of 1993. Revenue for
the three-month and nine-month periods ended September 30, 1993 and 1994 is as
follows (000's omitted):
<TABLE>
<CAPTION>
Three Months Nine Months
------------------------- -----------------------
1993 1994 1993 1994
------------ ----------- ---------- -----------
<S> <C> <C> <C> <C>
Core business $169,698 $149,989 $ 495,558 $ 481,664
Engineering, construction
and consulting services 205,601 260,827 573,260 707,612
Remediation and industrial
services 184,737 182,173 518,876 533,206
Asbestos abatement -- -- 31,765 --
Intercompany revenue (18,471) (9,113) (48,472) (31,771)
-------- -------- ---------- ---------
$541,565 $583,876 $1,570,987 $1,690,711
======== ======== ========== ==========
</TABLE>
18
<PAGE>
Core business revenue in the three months ended September 30, 1994, decreased
$19.7 million or 11.6% compared to the same three months of 1993, reflecting the
continuing impact of changes which have affected the hazardous waste industry,
including the decline in off-site waste volumes from environmental cleanup
projects, the lack of regulatory "drivers", the shift of special wastes to
subtitle D facilities, waste minimization and recycling, and overcapacity in the
incineration markets. Third quarter 1994 core business revenue was also
impacted as a result of substantially reduced low-level radioactive waste
volumes received at the Company's disposal facility in Barnwell, SC which was
restricted by the state of South Carolina to customers within an eight-state
region in the southeastern United States (the "Southeast Compact") after
June 30, 1994. Price increases for low-level radioactive waste disposal
effective July 1, 1994, more than offset price declines during the third quarter
of 1994 in the remainder of the Company's core business.
Core business revenues declined $13.9 million or 2.8% in the first nine
months of 1994 compared to the same nine month period in 1993. The more modest
decline during the nine-month period compared to the third quarter of 1994
results from the strong second quarter 1994 disposal volume at the Company's
facility in Barnwell from customers outside the Southeast Compact whose access
to the facility ended on June 30, 1994. South Carolina earlier adopted
legislation which allows the Barnwell site to continue operating until
December 31, 1995, to serve customers located within this region. The North
Carolina Low Level Radioactive Waste Management Authority has voted to select a
site in that state for development by the Company as a replacement regional
disposal facility for the Southeast Compact, but the Company is unable to
predict when, if ever, its efforts to develop a replacement site will be
successful.
Event business (generally large, non-recurring projects) was 9.0% of core
business revenue in the 1994 third quarter, compared to 10.2% in the same
quarter a year earlier. In the first nine months of 1994, event business was
8.6% of core business revenue compared to 10.9% for the first nine months of
1993. The decline in event business revenue is primarily due to the decline in
off-site waste volumes from environmental cleanups.
The following table analyzes core business revenue changes for the three and
nine-month periods ended September 30, 1994, compared to 1993:
<TABLE>
<CAPTION>
Three Nine
Months Months
------ ------
<S> <C> <C>
Price 4.2% (0.6)%
Purchased Business 2.1 2.7
Volume (17.9) (4.9)
----- -----
(11.6)% (2.8)%
===== =====
</TABLE>
For engineering, construction and consulting services, the increase in
revenue for the first nine months of 1994 compared to 1993 was primarily the
result of acquisitions completed in the latter part of 1993 and the beginning
of 1994. In addition, there were net increases in existing businesses in 1994
of $29.1 million in the third quarter,
19
<PAGE>
primarily the result of work on two pulp and paper product facilities, and $11.8
million for the nine months, compared to the same periods in 1993. Backlog in
this business line at September 30, 1994, was $1,091 million.
The increase in remediation and industrial services revenue for the first
nine months of 1994 compared to 1993 was the result of acquisitions completed in
the second half of 1993. This was offset by declines in existing businesses of
$59.0 million due to severe weather in the first quarter of 1994 and scaffolding
and industrial customers' delay of scheduled maintenance at their plants. In
addition, the expected award of several large federal remediation contracts has
been delayed. Net declines in existing businesses in the third quarter of 1994
from the third quarter of 1993 were $16.0 million and were due to continued
customer delays. Backlog in this business line at September 30, 1994, was $556
million.
The backlog in the two business lines above includes approximately $449
million in respect of several Department of Defense contracts awarded to Rust,
including two Total Environmental Restoration Contracts. There can be no
assurance that specific projects identified and performed by Rust pursuant to
such contracts will result in aggregate revenues of $449 million over the
remaining terms of such contracts.
Rust's revenue from affiliates was 13.8% of its revenue for the first nine
months of 1994 and 15.4% for the first nine months of 1993.
OPERATING EXPENSES
Operating expenses as a percentage of consolidated revenue declined for both
the third quarter and the first nine months of 1994 compared to the same periods
in 1993. Cost savings achieved in the core business from the restructuring
begun in the third quarter of 1993 were partially offset by the effects of
severe weather in the first quarter and project delays which resulted in less
efficient personnel utilization. Both the core business and Rust have
experienced shifts toward lower margin revenues in 1994.
SELLING AND ADMINISTRATIVE EXPENSES
Selling and administrative expenses as a percentage of revenue for the core
business were 15.4% and 17.1% of revenue in the third quarter and for the first
nine months of 1994, respectively, compared to 19.8% and 19.7%, respectively,
for the comparable periods in 1993. Cost savings in the core business resulted
from the restructuring begun in the fourth quarter of 1993. These savings were
partially offset by a total of $7.3 million, including $2.0 million in the third
quarter, of development expenses reimbursed to Rust in 1994 pursuant to an
agreement entered into in connection with the formation of Rust in January 1993.
The Company agreed to reimburse Rust for certain business development expenses
in an amount not to exceed $10 million in each of 1993 and 1994. Rust has the
right to defer the Company's obligation to reimburse such expenses from year to
year until December 31, 1997. Such reimbursement for 1993 was deferred. The
Company is not in a position to estimate the timing or the amount of such
development expenses which may be charged to the Company in any future quarters.
20
<PAGE>
Rust selling and administrative expenses as a percentage of revenue in 1994
compared to 1993 were 9.8% compared to 10.7% for the third quarter and 10.6%
compared to 10.3% for the nine months. The percentage decline between quarters
is attributable to revenue growth of 13.5% between the quarters (as discussed
above), and the somewhat fixed nature of such expenses. The increase over the
nine-month period is attributable to the revenue volume declines and the
increased acquisition activity in 1993 and 1994. The level of selling and
administrative expenses associated with acquired companies was higher than that
of existing operations. Acquisitions tend to initially increase costs as a
percent of revenue, but the situation generally reverses as the companies are
integrated into existing operations.
INTEREST
Consolidated interest expense increased to 2.6% of consolidated revenue for
the nine months ended September 30, 1994, compared to 1.6% for the nine months
ended September 30, 1993. Higher interest rates and debt levels in the latter
part of 1993 and in 1994 are the cause.
EQUITY IN EARNINGS OF AFFILIATES
Waste Management International plc ("WM International"), in which Rust holds
a 12% equity interest, is a leading international provider of waste management
and related services and includes essentially all of the waste management
operations of WMX Technologies, Inc. ("WMX") outside of North America. It
currently has operations in Europe, the Pacific Rim and South America. WMX and
Wheelabrator Technologies Inc. own 56% and 12%, respectively, of WM
International. Selected financial information for WM International for the
three and nine-month periods ended September 30, 1993 and 1994, stated in
British Pounds Sterling and in accordance with United States generally accepted
accounting principles, is set forth in the Notes to Consolidated Financial
Statements.
MINORITY INTEREST
The decline in minority interest is principally due to Rust's acquisition of
the minority interest in Brand during the second quarter of 1993. However, as
of January 1, 1994, as part of its core business, the Company acquired a
majority interest in a Mexican hazardous waste management services company
resulting in an increase in minority interest.
INCOME TAXES
The consolidated provision (benefit) for income taxes rose to 49.8% of income
before taxes in the first nine months of 1994 from 30.8% in the first nine
months of 1993 for several reasons. Increased amortization of intangibles,
which for the most part is not tax deductible, resulted in a higher effective
tax rate. The increase in amortization of intangibles was due primarily to
acquisitions completed by Rust during the latter part of 1993 and in the first
nine months of 1994, and the purchase of the minority interest in Brand. The
recognition of a $10,462,000 non-taxable gain related to the Rust-Brand merger
during the second quarter of 1993 had the effect of reducing the effective tax
provision for the first nine months of 1993.
21
<PAGE>
RESTRUCTURING
In the third quarter of 1993, the Company completed a study of its business,
announced a strategic reconfiguration of its operations to meet then current
demand levels and recorded a special revaluation and restructuring charge of
$550 million ($363 million after tax). The special charge consisted of $381
million to write down assets, primarily incinerators, and $169 million for the
probable cash expenditures related to its program to reduce costs, improve
efficiency and structure the Company to meet current market demand. Of the $169
million provided for probable cash expenditures, the Company has spent $92.6
million through September 30, 1994, including $22.9 million related to personnel
actions. The Company expects the balance, except for closure and post-closure
costs, to be expended by the end of 1994. Based upon results for the third
quarter and first nine months of 1994, the Company continues to believe that the
full impact of the restructuring will reduce overhead, including depreciation
and amortization, by approximately $60 million annually.
FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES
The Company is in a service industry and has neither significant inventory
nor seasonal variations in receivables. Cash flow from operating activities is
used primarily for capital expenditures and acquisitions of businesses.
In 1993 and throughout 1994, the Company financed its business primarily with
cash flow from operating activities and by borrowing from WMX.
At September 30, 1994, the Company had working capital of $309.9 million
compared to working capital at December 31, 1993, of $232.6 million. The
Company believes that it has adequate liquidity and expects sufficient cash flow
from future operations to meet its capital needs.
ACQUISITIONS AND CAPITAL EXPENDITURES
Capital expenditures, excluding acquired businesses, were $78.7 million for
the nine months ended September 30, 1994, and $172.8 million for the comparable
period in 1993.
During the first nine months of 1994, the Company acquired six businesses for
$54.0 million in cash and notes. During the first nine months of 1993, the
Company acquired the minority interest of Brand as a result of the Rust-Brand
merger, plus fifteen businesses, for 3.1 million shares of Rust common stock and
$292.4 million in cash and notes. See Notes to Consolidated Financial
Statements for a schedule showing the pro forma effect of businesses acquired in
1993 and 1994, as if they had been acquired as of January 1, 1993.
22
<PAGE>
DERIVATIVES
From time to time, the Company uses foreign currency derivatives to mitigate
the impact of currency fluctuations on the earnings of its foreign subsidiaries
and on its equity income from WM International. Although the Company's purpose
for using such derivatives is to hedge currency risk, they do not qualify for
hedge accounting under generally accepted accounting principles and,
accordingly, must be marked to market at the end of each accounting period.
Gains and losses on currency derivatives to date have not been material. See
Notes to Consolidated Financial Statements for further discussion of the use of
and accounting for such instruments and the portfolio as of September 30, 1994.
CAPITAL STRUCTURE
The Company and Rust each has an agreement with WMX under which WMX provides
a financing commitment up to $810 million for the Company and up to $350 million
for Rust. Borrowings under these agreements are classified as long-term debt
since any indebtedness of the Company or Rust may be converted, at the option of
the borrower, to a term loan with either a fixed or floating interest rate. The
interest rates and terms of such loans will generally be WMX's costs of funds
for loans of similar maturity. Interest on other indebtedness is charged at a
rate equal to WMX's effective 30-day commercial paper rate plus a number of
basis points sufficient to reimburse WMX for its cost of obtaining funds. On
December 31, 1993, Rust converted $50 million of its borrowings from WMX to a
5.75% term loan due December 31, 1998. In addition to the above financing
commitments, in August 1993, WMX increased the amount of the credit facility for
Rust by an additional $100 million which has been converted to a five-year term
loan providing for a lump-sum repayment on December 31, 1998, with interest at
the rate of 6% per annum.
On June 30, 1994, the Company repurchased for approximately $58 million
certain of its Liquid Yield Option Notes ("LYONs") due 2010 in an aggregate
principal amount at maturity of $150.8 million. The repurchase was funded by a
$60 million increase to $810 million in the Company's financing commitment from
WMX. Holders of the remaining LYONs ($334.9 million aggregate principal amount
at maturity) may require the Company to repurchase LYONs on each June 30 at a
price equal to the issue price plus accrued original issue discount to the
repurchase date (approximately $131.0 million as of September 30, 1994).
The Board of Directors of the Company has authorized the repurchase of up to
10 million shares of its common stock over a 48-month period ending in November
1994. The Company has not repurchased any shares during 1994.
In August 1993, the Board of Directors suspended indefinitely the payment of
quarterly cash dividends on the Company's common stock.
Debt was 54.5% of total capital at September 30, 1994, compared to 55.9% at
December 31, 1993. This ratio includes minority interest in subsidiaries as
part of total capital. The Company expects to reduce this ratio during the
remainder of 1994 through reduced capital expenditures and cash flow from
operations.
23
<PAGE>
SUBSEQUENT EVENT
On July 28, 1994, WMX made a proposal to acquire all of the approximately
44.9 million outstanding shares of the Company which it does not already own in
a transaction whereby WMX would have exchanged .27 shares of its stock for each
publicly held CWM share. WMX already owns 78.6% of the Company's outstanding
shares.
On October 14, 1994, following negotiations with a special committee of the
Company's independent directors, WMX agreed to a revised proposal, in which the
public shareholders of the Company will receive a WMX convertible subordinated
note, described more fully below. The terms of the revised proposal were
approved unanimously by the special committee of the Company's independent
directors and approved by the Boards of Directors of both companies. The
transaction, which will be taxable under the revised terms, remains subject to
the approval of the holders of a majority of the Company's outstanding shares
(other than those held by WMX) voting at a special meeting of the Company's
stockholders expected to be held in January 1995.
The new terms provide for the Company's stockholders to receive a convertible
subordinated note due 2005, with a principal amount at maturity of $1,000, for
every 81.1 of Company shares held. The notes will be subordinated to all
existing and future indebtedness of WMX. Each note will bear cash interest from
the date the Merger is consummated at the rate of two percent per annum of the
$1,000 principal amount at maturity, payable semi-annually. The difference
between the principal amount at maturity of $1,000 and the $717.80 stated issue
price of each note represents the stated discount which, together with the cash
interest payable on the notes, will accrue at a rate of 5.75 percent per annum
(determined on a semi-annual bond equivalent basis) for purposes of determining
the prices at which WMX may purchase or redeem notes, as described below.
At the option of the holder, each note will be purchased for cash by WMX on
March 15, 1998, and March 15, 2000, at prices of $790.24 and $843.35,
respectively, which represent the stated issue price plus accrued stated
discount to those dates. Accrued unpaid interest to those dates will also be
paid. The notes will be redeemable by WMX after March 15, 2000 (but not before)
for cash, at the stated issue price plus accrued stated discount and accrued
but unpaid interest through the date of redemption.
In addition, each note will be convertible at any time prior to maturity,
unless previously purchased or redeemed by WMX, into a number of shares of WMX
common stock to be determined by dividing the stated issue price per note by the
average New York Stock Exchange closing prices of WMX common stock during the
ten trading days immediately preceding the special meeting of the Company's
stockholders to be held to consider the merger. The conversion rate will be not
less than 21.90 shares nor more than 26.76 shares per note. Upon any such
conversion, WMX will have the option of paying cash equal to the market value of
the WMX shares which would otherwise be issuable.
24
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
-----------------
Some of the businesses in which the Company is engaged are intrinsically
connected with the protection of the environment and the potential for the
unintended or unpermitted discharge of materials into the environment. In the
ordinary course of conducting its business activities, the Company becomes
involved in judicial and administrative proceedings involving governmental
authorities at the federal, state and local level including, in certain
instances, proceedings instituted by citizens or local governmental authorities
seeking to overturn governmental action where governmental officials or agencies
are named as defendants together with the Company or one or more of its
subsidiaries, or both. In the majority of the situations where proceedings are
commenced by governmental authorities, the matters involved relate to alleged
technical violations of licenses or permits pursuant to which the Company
operates or is seeking to operate or laws or regulations to which its operations
are subject or are the result of different interpretations of the applicable
requirements. From time to time the Company pays fines or penalties in
environmental proceedings relating primarily to waste treatment, storage or
disposal facilities. As of September 30, 1994, the Company was involved in four
such proceedings relating to operations of the Company or one of its
subsidiaries where it is believed that sanctions involved in each instance may
exceed $100,000. The Company believes that these matters will not have a
material adverse effect on its results of operations or financial condition.
However, the outcome of any particular proceeding cannot be predicted with
certainty, and the possibility remains that technological, regulatory or
enforcement developments, the results of environmental studies, or other factors
could materially alter this expectation at any time.
During the quarter, several putative class action lawsuits, which had been
filed between July 29 and August 5, 1994 in the Chancery Court of the State of
Delaware in and for New Castle County and which seek injunctive relief and
unspecified money damages against the Company, WMX Technologies, Inc. ("WMX")
and the individual directors of the Company in connection with a July 28, 1994
proposal by WMX, the Company's majority stockholder, to acquire all of the
shares of the Company's common stock which WMX does not own, were consolidated
for all purposes into a single action captioned In re Chemical Waste Management,
Inc. Shareholders Litigation. Discovery is ongoing in the consolidated action.
The Company believes that its actions and those of its Board of Directors
(including a Special Committee thereof consisting of independent directors) in
connection with the proposed transaction which is the subject of the litigation
have been in accordance with Delaware law. Accordingly, the Company intends to
contest this lawsuit vigorously.
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibits.
The exhibits to this report are listed in the Exhibit Index elsewhere
herein.
(b) Reports on Form 8-K.
The Company filed a report on Form 8-K dated July 28, 1994 reporting
under Item 5 that WMX Technologies, Inc. had made a proposal to acquire
through a merger all of the Company's outstanding shares which it does
not own.
25
<PAGE>
SIGNATURES
----------
Pursuant to the requirements 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.
/s/ Jerome D. Girsch
--------------------------------------
Jerome D. Girsch,
Executive Vice President,
Treasurer and Controller
Dated: November 11, 1994
26
<PAGE>
CHEMICAL WASTE MANAGEMENT, INC.
EXHIBIT INDEX
Number and Description of Exhibit*
- ---------------------------------
2 None
4 None
10 None
11 None
15 None
18 None
19 None
22 None
23 None
24 None
27 Financial Data Schedule
99 None
- -------------
* Exhibits not listed are inapplicable.
27
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
SEPTEMBER 30, 1994 CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATEMENT OF
INCOME FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1994 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND THE FOOTNOTES
THERETO.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 16,479
<SECURITIES> 2,061
<RECEIVABLES> 530,507
<ALLOWANCES> 15,532
<INVENTORY> 200,931
<CURRENT-ASSETS> 830,832
<PP&E> 1,551,366
<DEPRECIATION> 421,626
<TOTAL-ASSETS> 3,161,192
<CURRENT-LIABILITIES> 520,905
<BONDS> 1,279,574
<COMMON> 2,124
0
0
<OTHER-SE> 751,159
<TOTAL-LIABILITY-AND-EQUITY> 3,161,192
<SALES> 0
<TOTAL-REVENUES> 1,690,711
<CGS> 0
<TOTAL-COSTS> 1,334,133
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2,183
<INTEREST-EXPENSE> 43,814
<INCOME-PRETAX> 92,860
<INCOME-TAX> 46,252
<INCOME-CONTINUING> 46,608
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 46,608
<EPS-PRIMARY> .22
<EPS-DILUTED> .22
</TABLE>
