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As filed with the Securities and Exchange Commission on September 15, 1997
Registration No. -
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRANT STATEMENT
UNDER
THE SECURITIES EXCHANGE ACT OF 1933
ALLIED WASTE INDUSTRIES, INC.
(Exact name of registrant as specified in charter)
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DELAWARE 4953 88-0228636
(State of other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification Number)
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15880 N. Greenway/Hayden Loop, Suite 100
Scottsdale, Arizona 85260
(602) 423-2946
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Henry L. Hirvela
Chief Financial Officer
Allied Waste Industries, Inc.
15880 North Greenway-Hayden Loop, Suite 100
Scottsdale, Arizona 85260
(602) 423-2946
With copies to:
Robert G. Reedy
Porter & Hedges, L.L.P.
700 Louisiana, 35th Floor
Houston, Texas 77002
(713) 226-0600
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be
offered in connection with the termination of a holding company and there is
compliance with General Instruction G, check the following box / /.
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering / /.
If this form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering / /.
CALCULATION OF REGISTRATION FEE
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==============================================================================================================
Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Title of Each Class of Amount to Price Per Offering Registration
Securities to be Registered be registered (1) Share (1) Price (1) Fee (1)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share............. 7,000,000 $16.44 $115,080,000 $34,873
==============================================================================================================
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(1) Pursuant to Rule 457(c), National Market tier of the registration fee is
calculated based on the average of the high and low prices for the Common
Stock, as reported on the National Market tier of the Nasdaq Stock Market
Inc. on September 9, 1997.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
PURSUANT TO THE PROVISIONS OF RULE 429 OF THE SECURITIES ACT OF 1933,
AS AMENDED, THE PROSPECTUS CONTAINED IN THIS REGISTRATION STATEMENT ALSO RELATES
TO 2,169,306 SHARES OF COMMON STOCK COVERED BY THE REGISTRANT'S REGISTRATION
STATEMENT ON FORM S-4 (REG. NO. 333-03585). THE REGISTRATION FEES WITH RESPECT
THERETO WERE PREVIOUSLY PAID.
<PAGE> 3
9,169,306 SHARES
ALLIED WASTE INDUSTRIES, INC.
COMMON STOCK
This Prospectus covers shares of common stock, par value $.01 per share
(the "Common Stock"), that may be issued from time to time in the future by
Allied Waste Industries, Inc. ("Allied" or the "Company") on the completion of
acquisitions of assets, businesses or securities, or on the payment of dividends
on or conversion of shares of preferred stock or the conversion of or payment of
interest on convertible notes issued in connection with such acquisitions of
other assets, businesses or securities.
It is expected that the terms of acquisitions involving the issuance of
the shares of Common Stock covered by this Prospectus will be determined by
direct negotiations with the owners or controlling persons of the assets,
businesses or securities to be acquired, and that the shares of Common Stock
issued will be valued at prices reasonably related to the market price of the
Common Stock either at the time an agreement is entered into concerning the
terms of the acquisition or at or about the time the shares are delivered. No
underwriting discounts or commissions will be paid, although finder's fees may
be paid in connection with certain acquisitions. Any person receiving such fees
may be deemed to be an "underwriter" within the meaning of the Securities Act of
1933, as amended (the "Securities Act") and any profit on the resale of shares
of Common Stock purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act.
The last reported sale price for the Common Stock on the National
Market tier of the Nasdaq Stock Market, Inc. ("Nasdaq") (Symbol: "AWIN") on
September 12, 1997 was $18.00 per share.
AN INVESTMENT IN THE COMMON STOCK OFFERED HEREBY INVOLVED CERTAIN
RISKS. SEE "RISK FACTORS" WHICH BEGINS ON PAGE 4 OF THIS PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is September 15, 1997.
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TABLE OF CONTENTS
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Section Page
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Available Information 2
Incorporation of Certain Documents By Reference 3
Summary 3
Risk Factors 4
Acquisition Terms 10
Legal Matters 10
Experts 10
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C., at the Commission's regional offices at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and
World Trade Center, 13th Floor, New York, New York 10007, and at the
Commission's site on the World Wide Web at http://www.sec.gov. The Common Stock
is listed on Nasdaq, and material filed by the Company can be inspected at the
offices of Nasdaq at 1735 K Street, N.W., Washington, D.C. 20006. Copies of such
material may also be obtained from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates.
The Company has filed with the Commission a Registration Statement on
Form S-4 (Reg. No. 333-03585) and a Registration Statement on Form S-4 (Reg. No.
333-_____), including any amendments thereto, under the Securities Act of 1933,
with respect to the shares of Common Stock offered hereby (the "Registration
Statements"). This Prospectus does not contain all the information set forth in
the Registration Statements and the exhibits and schedules thereto. For further
information with respect to the Company and the Common Stock, reference is made
to the Registration Statements and the exhibits and schedules filed as a part
thereof. Statements made in this Prospectus as to the contents of any contract
of any other document referred to are not necessarily complete, and, in each
instance, reference is made to the copy of such contract or document filed as an
exhibit to the Registration Statements. Each such statement is qualified in all
respects by reference to such exhibit. The Registration Statements, including
exhibits and schedules thereto, are on file at the offices of the Commission and
may be inspected without charge. Copies of such material may be obtained from
the Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth
Street, N.W, Washington, D.C. 20549, at prescribed rates.
A copy of Allied's Annual Report on Form 10-K, as amended, for the most
recently completed fiscal year is included with this Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE WITHOUT
CHARGE UPON REQUEST FORM ALLIED WASTE INDUSTRIES, INC., 15880 NORTH
GREENWAY/HAYDEN LOOP, SUITE 100, SCOTTSDALE, AZ 85260, ATTENTION: INVESTOR
RELATIONS, TELEPHONE (602) 423-2946. IN ORDER TO INSURE TIMELY DELIVERY OF THE
DOCUMENTS, ANY REQUEST SHOULD BE MADE FIVE BUSINESS DAYS PRIOR TO THE DATE
ON WHICH THE FINAL INVESTMENT DECISION MUST BE MADE.
2
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NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED ON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE, ANY
SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE, SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH AN OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act are incorporated herein by reference (i) the
Company's Annual Report on form 10-K for the year ended December 31, 1996, as
amended; (ii) the Company's Quarterly Reports on Form 10-Q, as amended, for the
quarters ended March 31, 1997 and June 30, 1997; (iii) the Company's Definitive
Proxy Materials in accordance with Schedule 14A dated June 11, 1997; (iv) the
Company's Current Reports on Form 8-K, as amended, dated January 9, 1997,
January 30, 1997, February 19, 1997, May 2, 1997 and August 27, 1997, and (v)
all documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequently to the date of this
Prospectus and prior to the termination of the offering of the Common Stock
offered hereby.
Any statement continued herein or in a document all or a portion of
which is incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein or in
the Prospectus Supplement modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
SUMMARY
Allied is the fifth largest non-hazardous solid waste management
company in the United States, as measured by revenues. Allied serves 1.4 million
customers through operations in 21 states located primarily in the midwest,
northeast, southeast and southwest United States. The principal executive
offices of Allied are located at 15880 North Greenway-Hayden Loop, Suite 100,
Scottsdale, Arizona, 85260 and its telephone number is (602) 423-2946.
This Prospectus covers shares of Common Stock, that may be issued from
time to time in the future by the Company on the completion of acquisitions of
assets, businesses or securities or on the payment of dividends on or conversion
of shares of preferred stock or convertible notes issued in connection with such
acquisitions.
3
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RISK FACTORS
In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the Common
Stock.
RISKS ASSOCIATED WITH ALLIED'S STRATEGY; POTENTIAL DIFFICULTY IN OBTAINING
SUITABLE LANDFILLS, COLLECTION OPERATIONS, TRANSFER STATIONS AND PERMITS
Allied's strategy depends on its ability to identify and acquire
appropriate landfills, collection operations and transfer stations. There can be
no assurance that Allied will be able to locate appropriate acquisition
candidates, that any identified candidates will be acquired or that acquired
operations will be integrated effectively or prove profitable. Completion of an
acquisition requires the expenditure of sizable amounts of capital and the
competition among companies pursuing an acquisition strategy may increase
capital requirements. Allied could be forced to alter its strategy in the future
if such candidates become unavailable or too costly. In addition, obtaining
permits to operate non-hazardous solid waste landfills has become increasingly
difficult and expensive, often taking a number of years to obtain, requiring
numerous hearings and compliance with zoning, environmental and other regulatory
measures, and often being subject to resistance from citizen or other groups.
There can be no assurance that Allied will be successful in obtaining the
permits it requires, and an inability to receive such permits could have an
adverse effect on Allied's future results of operations. In some areas, suitable
land may be unavailable for new landfill sites. There can be no assurance that
Allied will be successful in obtaining new landfill sites or expanding the
permitted capacity of its current landfills once its landfill capacity has been
consumed. In such event, Allied could be forced to dispose of collected waste at
landfills operated by its competitors, which could have an adverse effect on
Allied's landfill revenues and collection expenses.
LIMITED OPERATING HISTORY IN REGARD TO ACQUIRED BUSINESSES
Allied has a limited operating history with regard to a significant
portion of its operations. During 1996, Allied acquired 21 companies, excluding
the Laidlaw Acquired Businesses (as defined below), which collectively comprised
approximately $78.8 million or 31.9% of Allied's revenue in 1996. In December
1996, Allied acquired (the "Laidlaw Acquisition") substantially all of the non-
hazardous solid waste management businesses conducted by Laidlaw Inc.
("Laidlaw") in the United States and Canada. On a pro forma basis after giving
effect to the sale by Allied of all of the Canadian solid waste business
acquired in the Laidlaw Acquisition, the businesses acquired from Laidlaw, (the
"Laidlaw Acquired Businesses") generated revenues for the twelve months ended
November 30, 1996 of approximately $494.5 million. The revenues for the year
ended December 31, 1996 generated by the operations of Allied excluding such
Laidlaw Acquired Businesses were approximately $246.7 million.
Allied expects to continue to acquire appropriate landfills, collection
operations and transfer stations in the future. The financial position and
results of operations of Allied will depend to a large extent on Allied's
ability to integrate acquired operations effectively and to realize expected
financial benefits and operational efficiencies. There can be no assurance that
Allied's efforts to integrate acquired operations will be effective, or that
expected financial benefits and operational efficiencies will be realized.
Failure to effectively integrate acquired operations could have an adverse
effect on Allied's future results of operations. As Allied continues to pursue
its acquisitions strategy in the future, its financial position and results of
operations may fluctuate significantly from period to period.
4
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CAPITAL REQUIREMENTS AND LIMITED WORKING CAPITAL
Allied intends to fund its cash needs through cash flow from operations and
borrowings under the Amended and Restated Bank Agreement dated June 5, 1997
among Allied, Allied Waste North America, Inc., a wholly-owned subsidiary of
Allied ("AWNA"), Credit Suisse First Boston, Citibank, N.A., Goldman Sachs
Credit Partners, L.P. and the other bank lenders named therein (the "Amended
Bank Agreement") and its equipment lease facilities. Because of the capital
intensive nature of the solid waste industry, Allied may use amounts in excess
of the cash generated from operations to retire and service debt and fund
acquisitions, landfill development and capital expenditures. A substantial
portion of Allied's available cash will be required to be applied to service
indebtedness, which is expected to include approximately $203.6 million in
annual principal and interest payments. During 1997, Allied also expects to
spend approximately $172 million for capital, closure and post-closure and
remediation expenditures and has provided approximately $264.6 million in
financial assurance obligations related to its landfill operations. Amounts
expended on capital expenditures and financial assurance obligations will
increase as a result of any acquisitions or expansions of Allied's operations.
As a result of these capital requirements, Allied may periodically have low
levels of working capital or be required to finance working capital deficits.
Further regulatory action by federal, state and local governments could
accelerate expenditures for closure and post-closure monitoring and obligate
Allied to spend sums in addition to those presently reserved for such purposes.
These factors, together with the other factors discussed above, could
substantially increase Allied's operating costs and impair Allied's ability to
invest in its facilities.
Allied's ability to make scheduled payments of principal of, or to pay
interest on, or to refinance its indebtedness depends on its future performance,
which, to a certain extent, is subject to general economic, financial,
competitive, legislative, regulatory and other factors beyond its control. Based
upon the current level of operations and anticipated growth, management of
Allied believes that available cash flow, together with available borrowing
under the Amended Bank Agreement, and other sources of liquidity, will be
adequate to meet Allied's anticipated future requirements for working capital,
letters-of-credit, capital expenditures and scheduled payments of principal of,
and interest on debt incurred under the Amended Bank Agreement, and interest on
AWNA's 10 1/4% Senior Subordinated Notes due 2006 (the "AWNA Notes") and,
commencing December 1, 2002, on Allied's 11.30% Senior Discount Notes due 2007
(the "Allied Notes"). However, the principal payments at maturity on the AWNA
Notes and the Allied Notes may require refinancing. There can be no assurance
that Allied's business will generate sufficient cash flow from operations or
that future financings will be available in an amount sufficient to enable
Allied or AWNA to service its indebtedness or to make necessary capital
expenditures, or that any refinancing would be available on commercially
reasonable terms, or at all. Additionally, depending on the timing, amount and
structure of any future acquisitions and the availability of funds under the
Amended Bank Agreement, Allied may need to raise additional capital to fund the
acquisition and integration of additional solid waste businesses. There can be
no assurance that Allied will be able to secure such additional funding on
favorable terms, if at all.
RISK OF COMPETITION FROM OTHER COMPANIES AND MUNICIPALITIES; LANDFILL
ALTERNATIVES
The non-hazardous solid waste industry is led by five large national waste
management companies, one of which is Allied, and includes numerous regional and
local companies, all of which contribute to the high level of competition that
characterizes the industry. Some of these companies have considerably greater
financial and operational resources than Allied. In addition, cities and
counties that operate their own waste collection and disposal facilities often
enjoy the benefits of tax-exempt financing and may control the disposal of waste
collected within their jurisdictions.
5
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Alternatives to landfill disposal, such as recycling and composting, are
increasingly being used, and incineration continues to be utilized in some
markets in which Allied operates. There has also been an increasing trend at the
state and local levels to mandate waste reduction at the source and to prohibit
the disposal of certain types of wastes, such as yard wastes, at landfills. This
trend may result in a reduction in the volume of waste going to landfills in
certain areas, which may affect Allied's ability to operate its landfills at
their full capacity and/or affect the prices that can be charged for landfill
disposal services. In addition, most of the states in which Allied operates
landfills have adopted plans or requirements that set goals for specified
percentages of certain solid waste items to be recycled. These recycling goals
will be phased in over the next few years.
SUBSTANTIAL LEVERAGE; ABILITY TO SERVICE DEBT; DEPENDENCE ON DISTRIBUTIONS FROM
SUBSIDIARIES
Allied has substantial indebtedness with significant debt service
requirements and is highly leveraged. At June 30, 1997, Allied's consolidated
debt was approximately $1,439.7 million and stockholders' equity was
approximately $208.2 million. The degree to which Allied is leveraged has
important consequences, including the following: (i) the ability of Allied to
obtain additional financing in the future, whether for working capital, capital
expenditures, acquisitions or other purposes, may be impaired, (ii) a
substantial portion of Allied's cash flow from operations is required to be
dedicated to the payment of principal and interest on its debt, thereby reducing
funds available to Allied for other purposes, (iii) Allied's flexibility in
planning for or reacting to changes in market conditions may be limited, (iv)
Allied may be more vulnerable in the event of a downturn in its business and (v)
to the extent of Allied's outstanding debt under its Amended Bank Agreement at
variable rates that have not been hedged, Allied will be vulnerable to increases
in interest rates.
The ability of Allied to meet its debt service obligations will depend on
the future operating performance and financial results of Allied, which will be
subject in part to factors beyond the control of Allied. Although Allied
believes that its cash flow will be adequate to meet its interest payments,
there can be no assurance that Allied will continue to generate earnings in the
future sufficient to cover its fixed charges. If Allied is unable to generate
earnings in the future sufficient to cover its fixed charges and is unable to
borrow sufficient funds under either the Amended Bank Agreement or from other
sources, it may be required to refinance all or a portion of its existing debt
or to sell all or a portion of its assets. There can be no assurance that a
refinancing would be possible, nor can there be any assurance as to the timing
of any asset sales or the proceeds which Allied could realize therefrom. In
addition, the terms of certain of its debt restrict Allied's ability to sell
assets and Allied's use of the proceeds therefrom.
Allied holds all of its assets and conducts all of its operations through
its subsidiary AWNA and AWNA's subsidiaries. Allied thus derives all of its
operating income and cash flow from AWNA and must rely upon distributions from
AWNA to generate the funds necessary to meet its obligations. If for any reason,
including a shortfall in anticipated operating results or proceeds from asset
sales, AWNA were unable to meet its debt service obligations, it would be in
default under the terms of certain of its debt. In the event of such a default,
the holders of such debt could elect to declare all of such debt immediately due
and payable, including accrued and unpaid interest, and to terminate their
commitments (if any) with respect to funding obligations under such debt. In
addition, such holders could proceed against any collateral which, in the case
of certain debt, consists of the capital stock of AWNA and its subsidiaries and
substantially all of the assets of AWNA and its subsidiaries. Any default with
respect to any of AWNA's debt could result in a default under other debt or
result in the bankruptcy of AWNA.
6
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RESTRICTIONS IMPOSED BY THE AMENDED BANK AGREEMENT, THE ALLIED NOTES AND THE
AWNA NOTES
The Amended Bank Agreement and the indentures relating to the Allied Notes
and the AWNA Notes contain a number of significant covenants that, among other
things, will restrict the ability of Allied and its subsidiaries to dispose of
assets, incur additional indebtedness, incur liens on property or assets, repay
other indebtedness, pay dividends, enter into certain investments or
transactions, repurchase or redeem capital stock, engage in mergers or
consolidations, or engage in certain transactions with subsidiaries and
affiliates and otherwise restrict corporate activities. There can be no
assurance that such restrictions will not adversely affect Allied's ability to
finance its future operations or capital needs or engage in other business
activities that may be in the interest of Allied. In addition, the Amended Bank
Agreement also requires Allied to maintain compliance with certain financial
ratios. The ability of Allied to comply with such ratios may be affected by
events beyond Allied's control. A breach of any of these covenants or the
inability of Allied to comply with the required financial ratios could result in
a default under the Amended Bank Agreement or either or both of the indentures
relating to the Allied Notes and the AWNA Notes. In the event of any such
default under the Amended Bank Agreement, the lenders under the Amended Bank
Agreement could elect to declare all borrowings outstanding under the Amended
Bank Agreement, together with accrued interest and other fees, to be due and
payable, to require Allied to apply all of its available cash to repay such
borrowings or to prevent Allied from making debt service payments on any
indebtedness of Allied. If Allied were unable to repay any such borrowings when
due, the lenders could proceed against their collateral. In the event of a
default under the indenture relating to the Allied Notes or the AWNA Notes, the
holders of such notes could elect to declare such notes to be due and payable.
If the indebtedness under the Amended Bank Agreement, the Allied Notes or the
AWNA Notes were to be accelerated, the assets of Allied and/or AWNA might be
insufficient to pay amounts due on other debt securities then outstanding.
RELIANCE ON MANAGEMENT
Allied relies and will continue to rely significantly on the services of its
senior management team. Allied could be adversely affected if any member of the
senior management team were unwilling or unable to continue in Allied's employ.
There can be no assurance that Allied will be successful in hiring or retaining
qualified personnel to meet this demand.
COST OF COMPLIANCE WITH ENVIRONMENTAL REGULATIONS; RISK OF FUTURE LITIGATION
The scope and stringency of laws and regulations designed to protect the
environment have increased dramatically. Compliance with the evolving and
expanding regulatory requirements, including the adoption in October 1991 of
Subtitle D regulations ("Subtitle D") pursuant to the U.S. Resource Conservation
and Recovery Act of 1976, as amended ("RCRA"), has been and will continue to be
costly. Rigorous regulatory standards require waste management companies to
enhance or replace equipment and to modify landfill operations or, in some
cases, to close landfills. There can be no assurance that Allied will be able to
implement price increases sufficient to offset the cost of complying with these
standards. In addition, environmental regulatory changes could accelerate
expenditures for closure and post-closure monitoring at solid waste facilities
and obligate Allied to spend sums in addition to those presently accrued for
such purposes. These factors could increase substantially Allied's operating
costs as well as the possibility of the impairment of Allied's investment in its
facilities.
In addition to the costs of complying with environmental regulations, Allied
will continue to be involved in legal proceedings in the ordinary course of
business. Government agencies may seek to impose fines on Allied for alleged
failure to comply with laws and regulations or to revoke or to deny the renewal
of, Allied's permits and licenses. In addition, governmental agencies, as well
as surrounding landowners, may assert claims against Allied alleging
environmental damage or violations of permits and licenses pursuant to which
Allied operates. Citizens' groups have become increasingly active in challenging
the grant or renewal of permits and licenses, and responding to such challenges
has further increased the costs associated with permitting new facilities or
expanding current facilities. A significant judgment against Allied, the loss of
a significant permit or license or the imposition of a significant fine could
have a material adverse affect on Allied's financial condition.
7
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Certain of Allied's waste disposal operations traverse state boundaries.
Such operations could be adversely affected if the federal government or a state
in which a landfill is located limits or prohibits, imposes discriminatory fees
on, or otherwise seeks to discourage disposal, within state boundaries, of waste
collected outside of the state.
As a condition to the Laidlaw Acquisition, Allied engaged Emcon
Environmental Services, Inc. ("Emcon"), an independent environmental consultant,
to conduct environmental assessments of the Acquired Subsidiaries and to prepare
a report reflecting its findings (the "Emcon Environmental Report").
In the Emcon Environmental Report, Emcon identified several contaminated
landfills and other locations owned by the Laidlaw Acquired Businesses, that
could pose significant sources of liability to the Laidlaw Acquired Businesses.
The costs of performing the investigation, design, remediation and allocation of
responsibility to the subsidiaries of Allied vary significantly between sites.
Based on information available to Allied, Allied recorded a provision of $51.5
million for environmental matters, including closure and post-closure costs, in
the 1996 consolidated statement of operations and expects these amounts to be
disbursed over the next 30 years. The actual liability at these sites cannot
currently be determined due to a number of uncertainties including the extent of
the contamination, the appropriate remedy, the financial viability of other
potentially responsible parties and the ultimate apportionment of responsibility
among such potentially responsible parties.
The representations made by the Laidlaw sellers in the Stock Purchase
Agreement, dated September 17, 1996, among Allied, Laidlaw and the other sellers
named therein (the "Laidlaw Sellers") relating to the Laidlaw Acquisition (the
"Laidlaw Acquisition Agreement") with respect to the environmental matters (i)
terminated on the closing of the Laidlaw Acquisition as to all matters disclosed
in writing to Allied at least five business days prior to the closing or
disclosed with specificity in the Emcon Environmental Report and (ii) will
terminate on the third anniversary of the closing of the Laidlaw Acquisition as
to all matters other than those described in clause (i) and which are known to
Laidlaw or the Laidlaw Sellers on the closing date. The Laidlaw Acquisition
Agreement further provided that Laidlaw and the Laidlaw Sellers' indemnification
obligations with respect to environmental matters would be limited to the amount
by which the aggregate of all such damages exceeded a $1.0 million basket,
without giving effect to any materiality qualifications. At the closing of the
Laidlaw Acquisition, Allied and the Laidlaw Sellers entered into a Special
Environmental Indemnity, which provided that the indemnity in respect of
properties located at Etobicoke, Ontario, Delafield, Wisconsin and Gary Lagoons,
Indiana would not be subject to the three-year limitation or any basket. Allied
and Laidlaw have further agreed that the indemnity for damages arising out of
the Etobicoke, Ontario and Delafield, Wisconsin sites will be limited to a
three-year period from the closing of the Laidlaw Acquisition and to an amount
in excess of $25.0 million with the $25.0 million basket to be reduced by any
damages to which the basket in the Laidlaw Acquisition Agreement applies.
HAZARDOUS SUBSTANCES LIABILITY
The Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), has been interpreted to impose joint and several
liability on current and former owners or operators of facilities at which there
has been a release or a threatened release of a "hazardous substance" and on
persons who generate, transport or arrange for the disposal of such substances
at the facility. Hundreds of substances are defined as "hazardous" under CERCLA
and their presence, even in minute amounts, can result in substantial liability.
The statute provides for the remediation of contaminated facilities and imposes
costs on the responsible parties. The expense of conducting such a cleanup can
be significant. Notwithstanding its efforts to comply with applicable
regulations and to avoid transporting and receiving hazardous substances, such
substances may be present in waste collected by Allied or disposed of in its
landfills, or in waste collected, transported or disposed of in the past by
acquired companies. Cleanup liability may also arise under various state laws
similar to CERCLA and other corrective action procedures. As used in this
Prospectus, "non-hazardous waste" means substances, including asbestos, that are
not defined as hazardous waste under federal regulations.
8
<PAGE> 11
POTENTIAL UNDISCLOSED LIABILITIES ASSOCIATED WITH ACQUISITIONS
In connection with any transaction made by Allied there may be liabilities
that Allied fails or is unable to discover, including liabilities arising from
non-compliance with environmental laws by prior owners, and for which Allied, as
a successor owner, may be responsible.
POTENTIAL UNINSURED OR UNDERINSURED ENVIRONMENTAL LIABILITIES
As is typically the case in the solid waste industry, Allied is able to
obtain only very limited environmental impairment insurance regarding its
landfills. An uninsured or underinsured claim of sufficient magnitude would
require Allied to fund such claim from cash flow generated by operations or
borrowings under the Amended Bank Agreement or other sources of liquidity. There
can be no assurance that Allied would be able to fund any such claim from
operations, the Amended Bank Agreement or elsewhere.
LAIDLAW TAX INDEMNIFICATION
Laidlaw has disclosed to Allied the existence of a tax controversy (the "Tax
Controversy") in the amount of more than $385 million with the United States
Internal Revenue Service (the "IRS") involving the consolidated U.S. federal
income tax liability for the fiscal years 1986 through 1991 of the members of an
affiliated group of corporations (the "Laidlaw Transportation U.S. Consolidated
Tax Group") within the meaning of Section 1504(c) of the Internal Revenue Code
("IRC"), of which Laidlaw Transportation is the common parent corporation (which
includes Laidlaw Transportation, Inc. ("Laidlaw Transportation"), those Laidlaw
Acquired Businesses which are incorporated in the U.S. (the "LSW U.S.
Subsidiaries"), and other U.S. subsidiaries of Laidlaw Transportation which were
not acquired in the Laidlaw Acquisition). The Laidlaw Transportation U.S.
Consolidated Tax Group has also received notice that fiscal years 1992, 1993 and
1994 will be examined regarding this issue. Under Treasury Regulations
promulgated under Section 1502 of the IRC, each member of the Laidlaw
Transportation U.S. Consolidated Tax Group including each LSW U.S. Subsidiary,
is or could be severally liable for United States federal income tax liabilities
of the entire Laidlaw Transportation U.S. Consolidated Tax Group, including all
amounts at issue in the Tax Controversy which are ultimately determined to be
owed.
Allied has obtained an indemnity from Laidlaw and Laidlaw Transportation
which covers the amounts at issue in the Tax Controversy for which any LSW U.S.
Subsidiary may ultimately be found liable. The obligation of Laidlaw and Laidlaw
Transportation to indemnify Allied in respect of amounts at issue in the Tax
Controversy is a general, unsecured obligation of Laidlaw and Laidlaw
Transportation. The ability of Laidlaw and Laidlaw Transportation to pay and
fulfill such indemnification obligation will depend on the financial condition
of Laidlaw and Laidlaw Transportation at the time of any required performance of
such obligation, as to which Allied has no assurance.
IMPACT OF ADVERSE WEATHER CONDITIONS
The collection and landfill operations of Allied could be adversely affected
by protracted periods of inclement weather which delay the development of
landfill capacity, the transfer of waste or reduce the volume of waste
generated. There can be no assurance that protracted periods of inclement
weather will not have a material adverse effect on Allied's future results of
operations.
9
<PAGE> 12
ACQUISITION TERMS
This Prospectus covers shares of Common Stock, that may be issued from
time to time in the future by the Company on the completion of acquisitions of
assets, businesses or securities or on the payment of dividends on or conversion
of shares of preferred stock or convertible notes issued in connection with such
acquisitions.
It is expected that the terms of acquisitions involving the issuance of
the shares of Common Stock covered by this Prospectus will be determined by
direct negotiations with the owners or controlling persons of the assets,
businesses or securities to be acquired, and that the shares of Common Stock
issued will be valued at prices reasonably related to the market price of the
Common Stock either at the time an agreement is entered into concerning the
terms of the acquisition or at or about the time the shares are delivered. No
underwriting discounts or commissions will be paid, although finder's fees may
be paid in connection with certain acquisitions. Any person receiving such fees
may be deemed to be an "underwriter" within the meaning of the Securities Act of
1933, as amended (the "Securities Act"), and any profit on the resale of shares
of Common Stock purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act.
LEGAL MATTERS
Certain legal matters in connection with the shares of Common Stock
offered hereby will be passed on for the Company by Porter & Hedges, L.L.P.,
Houston, Texas.
EXPERTS
The audited consolidated financial statements of Allied incorporated by
reference in this prospectus and elsewhere in the registration statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are incorporated by
reference in reliance upon the authority of said firm as experts in giving said
report.
The audited consolidated financial statements of Laidlaw Solid Waste
Management Group incorporated by reference in this Prospectus and elsewhere in
the Registration Statement have ben audited by Coopers & Lybrand, independent
public accountants, as indicated in their report with respect thereto, and are
incorporated herein by reference in reliance upon the authority of said firm as
experts in giving said report.
10
<PAGE> 13
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law permits a
corporation to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action. In an action brought to obtain a judgment in the corporation's favor,
whether by the corporation itself or derivatively by a stockholder, the
corporation may only indemnify for expenses, including attorney's fees, actually
and reasonably incurred in connection with the defense or settlement of such
action, and the corporation may not indemnify for amounts paid in satisfaction
of a judgment or in settlement of the claim. In any such action, no
indemnification may be paid in respect of any claim, issue or matter as to which
such person shall have been adjudged liable to the corporation except as
otherwise approved by the Delaware Court of Chancery or the court in which the
claim was brought. In any other type of proceeding, the indemnification may
extend to judgments, fines and amounts paid in settlement, actually and
reasonably incurred in connection with such other proceeding, as well as to
expenses.
The statute does not permit indemnification unless the person seeking
indemnification has acted in good faith and in a manner be reasonably believed
to be in, or not opposed to, the best interests of the corporation and, in the
case of criminal actions or proceedings, the person had no reasonable cause to
believe his conduct was unlawful. The statute contains additional limitations
applicable to criminal actions and to actions brought by or in the name of the
corporation. The determination as to whether a person seeking indemnification
has met the required standard of conduct is to be made (1) by a majority vote of
a quorum of disinterested members of the board of directors, (2) by independent
legal counsel in a written opinion, if such a quorum does not exist or if the
disinterested directors so direct, or (3) by the stockholders.
The Company's Certificate of Incorporation and Bylaws require the
Company to indemnify its directors to the fullest extent permitted under
Delaware law. Pursuant to employment agreements entered into by the Company with
its executive officers and certain other key employees, the Company must
indemnify such officers and employees in the same manner and to the same extent
that the Company is required to indemnify its directors under the Company's
Bylaws. The Company's Certificate limits the personal liability of a director to
the corporation or its stockholders to damages for breach of the director's
fiduciary duty.
The Company has purchased insurance on behalf of its directors and
officers against certain liabilities that may be asserted against, or incurred
by, such persons in their capacities as directors or officers of the registrant,
or that may arise out of their status as directors or officers of the
registrant, including liabilities under the federal and state securities laws.
The Company has entered into indemnification agreements to indemnify its
directors to the extent permitted under Delaware law.
II-1
<PAGE> 14
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following is a list of all the exhibits and financial statement schedules
filed as part of the Registration Statement.
(a) EXHIBITS
EXHIBIT NO EXHIBIT
---------- -------
5.1 -- Opinion of Porter & Hedges, L.L.P.
23.1 -- Consent of Arthur Andersen LLP
23.2 -- Consent of Coopers & Lybrand
23.3 -- Consent of Porter & Hedges, L.L.P. (included in its
opinion filed as Exhibit 5.1 hereto).
24 -- Power of Attorney (included on the signature
page to the originally filed Registration
Statement).
(b) FINANCIAL STATEMENT SCHEDULES
Schedules are omitted since the information required to be submitted has been
included in the Consolidated Financial Statements of Allied Waste Industries,
Inc. or the notes thereto, or the required information is not applicable.
ITEM 22. UNDERTAKINGS
The undersigned registrant hereby undertakes: (1) to file, during any period
in which offers or sales are being made, a post-effective amendment to this
registration statement: (i) to include any prospectus required by section
10(a)(3) of the Securities Act of 1933; (ii) to reflect in the Prospectus any
facts or events arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement; (2) that, for
the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; (3)
to remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE> 15
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes to respond to request for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such
request and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the date
of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-3
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Scottsdale, State of
Arizona, on September 15, 1997
ALLIED WASTE INDUSTRIES, INC.
By: /s/HENRY L. HIRVELA
------------------------------
Henry L. Hirvela
Vice President - Chief Financial Officer
POWER OF ATTORNEY
Each of the undersigned hereby appoints Roger A. Ramsey, Henry L.
Hirvela, Peter S. Hathaway, and each of them, with full power to act alone, as
attorney and agents for the undersigned, with full power of substitution, for
and in the name place and stead of the undersigned, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933 any and all
amendments and exhibits to this Registration Statement and any and all
applications, instruments and other documents to be filed with the Securities
and Exchange Commission pertaining to the registration of the securities covered
hereby, with full power and authority to do and perform any and all acts and
things whatsoever requisite or desirable.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons and in the
capacities indicated on September 15, 1997
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ ROGER A. RAMSEY Chairman of the Board of Directors
- ----------------------------------
Roger A. Ramsey
/s/ THOMAS H. VAN WEELDEN Director, President and Chief Executive Officer
- ---------------------------------- (Principal Executive Officer)
Thomas H. Van Weelden
/s/ HENRY L. HIRVELA Vice President - Chief Financial Officer
- ---------------------------------- (Principal Financial Officer)
Henry L. Hirvela
/s/ PETER S. HATHAWAY Vice President - Chief Accounting Officer
- ---------------------------------- (Principal Accounting Officer)
Peter S. Hathaway
/s/ NOLAN LEHMANN Director
- ----------------------------------
Nolan Lehmann
/s/ ALAN B. SHEPARD Director
- ----------------------------------
Alan B. Shepard
/s/ BRIAN A. O'LEARY Director
- ----------------------------------
Brian A. O'Leary
/s/ DAVID B. KAPLAN Director
- ----------------------------------
David B. Kaplan
</TABLE>
II-4
<PAGE> 17
/s/ MICHAEL GROSS Director
- ----------------------------------
Michael Gross
/s/ ANTONY P. RESSLER Director
- ----------------------------------
Antony P. Ressler
/s/ HOWARD A. LIPSON Director
- ----------------------------------
Howard A. Lipson
/s/ DENNIS HENDRIX Director
- ----------------------------------
Dennis Hendrix
/s/ WARREN B. RUDMAN Director
- ----------------------------------
Warren B. Rudman
/s/ VINCENT TESE Director
- ----------------------------------
Vincent Tese
II-5
<PAGE> 1
Exhibit 5.1
September 12, 1997
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Allied Waste Industries, Inc. - Shelf Registration Statement covering
7,000,000 Shares of Common Stock (the "Registration Statement")
Ladies and Gentlemen:
We have acted as counsel to Allied Waste Industries, Inc., a Delaware
corporation (the "Company"), in connection with the registration on Form S-4
under the Securities Act of 1933, as amended, of 7,000,000 shares of the
Company's common stock, par value $.01 per share (the "Common Stock"). In such
capacity we have examined the Certificate of Incorporation, Bylaws and corporate
proceedings of the Company, and based upon such examination and having regard
for applicable legal principles, it is our opinion that the 7,000,000 shares
being offered and sold by the Company pursuant to the Registration Statement
will, when issued and sold as contemplated in the Registration Statement, be
validly issued, fully paid and non-assessable, outstanding shares of Common
Stock.
We consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference to our firm under the heading "Legal Matters" in
the Prospectus included as part of the Registration Statement.
Very truly yours,
Porter & Hedges, L.L.P.
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated March 26, 1997
included in Allied Waste Industries, Inc.'s Form 10-K for the year ended
December 31, 1996 and to all references to our firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Phoenix, Arizona,
September 12, 1997.
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
LAIDLAW SOLID WASTE MANAGEMENT GROUP
We consent to the incorporation by reference in the Registration Statement of
Allied Waste Industries, Inc. on Form S-4 dated of September 15, 1997, our
report dated September 30, 1996, to the Directors of Laidlaw Inc. on the balance
sheets of the Laidlaw Solid Waste Management Group as at August 31, 1995 and
1996 and the statements of operations and cash flows for years ended August 31,
1994, 1995 and 1996, which report is incorporated in the Form 8K/A-4 dated of
February 19, 1997.
This letter is provided to securities regulatory authorities pursuant to the
requirements of their securities legislation and is not for any other purpose.
September 15, 1997 Coopers & Lybrand
Hamilton, Canada Chartered Accountants
