SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 7, 1998
ALLIED WASTE INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization.)
0-19285 88-0228636
(Commission File Number) (IRS Employer Identification No.)
15880 North Greenway-Hayden Loop, Suite 100
Scottsdale, Arizona 85260
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (602) 423-2946
Not Applicable
(Former name or former address, if changed since last report)
Item 5. Other Events
In October 1998, Allied Waste Industries, Inc. ("Allied" or the "Company")
acquired American Disposal Services, Inc. ("ADSI") in a transaction accounted
for using the pooling-of-interests method for business combinations. The Company
files herewith restated supplemental financial statements and other financial
data to reflect the significant acquisitions completed in 1998 that were
accounted for using the pooling-of-interests method of business combinations.
The audited supplemental financial statements of the company as of December 31,
1997 and the unaudited supplemental financial statements as of September 30,
1998 and for the three and nine months ended September 30, 1997 and 1998 have
been restated for the ADSI acquisition and are filed herewith for informational
purposes.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Allied
(i) Report of Independent Public Accountants
(ii) Supplemental Condensed Consolidated Balance Sheets - December 31, 1997
and September 30, 1998
(iii) Supplemental Condensed Consolidated Statements of Operations for the
Three Months and Nine Months Ended September 30, 1997 and 1998
(iv) Supplemental Condensed Consolidated Statements of Cash Flows for the
Nine Months Ended September 30, 1997 and 1998
(v) Notes to Supplemental Condensed Consolidated Financial Statements
<PAGE>
<TABLE>
<CAPTION>
ALLIED WASTE INDUSTRIES, INC.
SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, September 30,
1997 1998
--------------- ----------------
(unaudited)
ASSETS
<S> <C> <C>
Current assets --
Cash and cash equivalents...................................... $ 32,298 $ 26,123
Accounts receivable, net of allowance of
$8,992 and $9,579, respectively.............................. 195,297 220,272
Prepaid and other current assets............................... 40,782 67,903
Inventories.................................................... 7,664 8,849
Deferred income taxes.......................................... 5,318 4,971
--------------- ----------------
Total current assets....................................... 281,359 328,118
Property and equipment, net....................................... 1,576,674 1,709,614
Goodwill, net..................................................... 1,056,601 1,277,669
Other assets...................................................... 105,545 104,142
--------------- ----------------
Total assets $ 3,020,179 $ 3,419,543
=============== ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities --
Current portion of long-term debt.............................. $ 61,565 $ 28,724
Accounts payable............................................... 91,752 77,196
Accrued liabilities............................................ 117,521 205,829
Unearned income................................................ 43,999 50,382
--------------- ----------------
Total current liabilities 314,837 362,131
Long-term debt, less current portion.............................. 1,454,270 1,551,589
Deferred income taxes............................................. 17,336 40,557
Accrued closure, post-closure and environmental costs............. 224,534 222,642
Other long-term obligations....................................... 58,665 61,051
Commitments and contingencies.....................................
Stockholders' equity ...................................... 950,537 1,181,573
--------------- ----------------
Total liabilities and stockholders' equity $ 3,020,179 $ 3,419,543
=============== ================
<FN>
The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these balance sheets.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIED WASTE INDUSTRIES, INC.
SUPPLEMENTAL CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except for per share amounts; unaudited)
Nine Months Ended Three Months Ended
September 30, September 30,
---------------------------- --------------------------
1997 1998 1997 1998
--------- ---------- ------------- -------
<S> <C> <C> <C> <C>
Revenues.......................................... $ 955,005 $ 1,119,788 $ 344,775 $ 396,884
Cost of operations................................ 551,752 626,596 193,031 220,862
Selling, general
and administrative expenses..................... 122,141 111,814 42,614 36,906
Depreciation and amortization..................... 113,889 133,880 41,416 47,653
Acquisition related and
non-recurring costs............................. 2,652 75,925 2,652 30,783
------------ ------------ ------------- -----------
Operating income................................ 164,571 171,573 65,062 60,680
Interest income................................... (1,471) (3,320) (305) (844)
Interest expense.................................. 83,998 64,593 30,238 20,030
------------ ------------ ----------- -----------
Income before income taxes........................ 82,044 110,300 35,129 41,494
Income tax expense.............................. 26,001 55,444 10,487 22,289
------------ ------------ ----------- -----------
Income before extraordinary items.................... 56,043 54,856 24,642 19,205
Extraordinary items,
net of income tax benefit....................... 53,205 3,093 793 --
------------ ------------ ----------- -----------
Net income...................................... 2,838 51,763 23,849 19,205
Dividends on
preferred stock...................................... (381) -- (44) --
------------ ------------ ----------- -----------
Net income to common
shareholders.................................... $ 2,457 $ 51,763 $ 23,805 $ 19,205
============ ============ =========== ===========
Basic earnings per share:
Income before extraordinary items............... $ 0.36 $ 0.31 $ 0.16 $ 0.11
Extraordinary items................................. (0.35) (0.02) (0.01) --
------------ ------------ ----------- -----------
Net income...................................... $ 0.01 $ 0.29 $ 0.15 $ 0.11
============ ============ =========== ===========
Weighted average common shares
outstanding..................................... 153,062 175,990 154,991 176,315
============ ============ =========== ===========
Diluted earnings per share:
Income before extraordinary items................. $ 0.35 $ 0.30 $ 0.15 $ 0.11
Extraordinary items.................................. (0.33) (0.02) (0.01) --
------------ ------------ ----------- -----------
Net income...................................... $ 0.02 $ 0.28 $ 0.14 $ 0.11
============ ============ =========== ===========
Weighted average common and
common equivalent shares
outstanding..................................... 160,424 180,747 159,607 181,025
============ ============ =========== ===========
<FN>
The accompanying Notes to Condensed Consolidated Financial
Statements are an integral part of these statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIED WASTE INDUSTRIES, INC.
SUPPLEMENTAL CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands; unaudited)
Nine Months Ended
September
-----------------------------
1997 1998
----------- ------------
<S> <C> <C>
Operating Activities --
Net income .................................................... $ 2,838 $ 51,763
Adjustments to reconcile net income to cash
provided by operating activities --
Extraordinary items ...................................... 21,549 5,103
Provisions for:
Depreciation and amortization ................................ 113,889 133,880
Closure and post-closure costs ........................... 8,366 10,599
Acquisition related and non-recurring costs .............. -- 41,675
Doubtful accounts ........................................ 2,893 3,539
Accretion of senior discount notes .......................... 15,984 21,585
Deferred income taxes ...................................... (30,886) 23,568
Gain on sale of fixed assets ................................. (927) (1,152)
Change in operating assets and liabilities,
excluding the effects of purchase acquisitions --
Accounts receivable, prepaid expenses, inventories and other (62,589) (57,289)
Accounts payable, accrued liabilities and unearned income .. 51,969 28,390
Closure and post-closure costs and other ................... (15,607) (17,042)
----------- -----------
Cash provided by operating activities ........................... 107,479 244,619
----------- -----------
Investing Activities --
Cash expenditures for acquisitions, net of cash acquired ...... (246,635) (120,252)
Capital expenditures, other than for acquisitions ............. (129,581) (161,175)
Capitalized interest .......................................... (25,100) (47,207)
Proceeds from sale of assets .................................. 535,144 8,670
Change in deferred acquisition costs and notes receivable ..... (7,817) (1,042)
----------- -----------
Cash provided by (used for) investing activities ................ 126,011 (321,006)
----------- -----------
Financing activities --
Net proceeds from sale of common stock,
stock options and warrants ............................... 329,677 72,753
Proceeds from long-term debt, net of issuance costs ........... 1,072,924 762,546
Repayments of long-term debt .................................. (1,612,978) (737,150)
Repurchase of warrant ......................................... (49,000) --
Change in other long-term obligations ......................... 976 (9,059)
Preferred stock dividends paid ................................ (525) --
Equity transactions of pooled companies ....................... 58,903 (18,878)
----------- -----------
Cash provided by (used for) financing activities ................ (200,023) 70,212
----------- -----------
Increase (decrease) in cash and cash equivalents ................ 33,467 (6,175)
Cash and cash equivalents, beginning of period .................. 70,015 32,298
----------- -----------
Cash and cash equivalents, end of period ........................ $ 103,482 $ 26,123
=========== ===========
<FN>
The accompanying Notes to Condensed Consolidated Financial Statements
are an integral part of these financial statements.
</FN>
</TABLE>
<PAGE>
ALLIED WASTE INDUSTRIES, INC.
NOTES TO SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Allied Waste Industries, Inc. ("Allied" or the "Company"), is incorporated
under the laws of the state of Delaware. Allied is a solid waste management
company providing non-hazardous waste collection, transfer, recycling and
disposal services in selected markets.
The condensed consolidated financial statements include the accounts of
Allied and its subsidiaries. All significant intercompany accounts and
transactions are eliminated in consolidation. The condensed consolidated balance
sheet as of December 31, 1997, which has been derived from audited consolidated
financial statements, and the unaudited interim condensed consolidated financial
statements included herein have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission (the "SEC"). As applicable
under such regulations, certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. The Company believes that
the presentations and disclosures herein are adequate to make the information
not misleading when read in conjunction with the Company's Annual Report on Form
10-K for the year ended December 31, 1997, as restated for significant
acquisitions accounted for as poolings-of-interests in its Current Report on
Form 8-K filed on October 29, 1998. The condensed consolidated financial
statements as of September 30, 1998 and for the three months and nine months
ended September 30, 1997 and 1998 reflect, in the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
fairly state the financial position and results of operations for such periods.
The condensed consolidated financial statements and accompanying notes have also
been restated to reflect acquisitions accounted for as poolings-of-interests
(See Note 2).
Operating results for interim periods are not necessarily indicative of the
results for full years. These condensed consolidated financial statements should
be read in conjunction with the consolidated financial statements of Allied for
the year ended December 31, 1997 and the related notes thereto included in the
Company's Annual Report on Form 10-K filed with the SEC on March 31, 1998, as
restated for significant acquisitions accounted for as poolings-of-interests in
its Current Report on Form 8-K filed on October 29, 1998.
There have been no significant additions to or changes in accounting
policies of the Company since December 31, 1997. For a description of these
policies, see Note 1 of Notes to Consolidated Financial Statements for the year
ended December 31, 1997 in the Company's Annual Report on Form 10-K as restated
for significant acquisitions accounted for as poolings-of-interests in its
Current Report on Form 8-K filed on October 29, 1998.
Certain reclassifications have been made in prior period financial
statements to conform to the current presentation.
Accounting pronouncement not yet required to be adopted
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities ("Statement 133"). Statement 133 establishes accounting
and reporting standards requiring that every derivative instrument (including
certain derivative instruments embedded in other contracts) be recorded in the
balance sheet as either an asset or liability measured at its fair value.
Statement 133 requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative's gains and losses to
offset related results on the hedged item in the income statement, and requires
that a company formally document, designate, and assess the effectiveness of
transactions that receive hedge accounting.
<PAGE>
ALLIED WASTE INDUSTRIES, INC.
NOTES TO SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Statement 133 is effective for fiscal years beginning after June 15, 1999.
A company may elect early implementation of Statement 133 as of the beginning of
any fiscal quarter after issuance (that is, fiscal quarters beginning June 16,
1998 and thereafter).
The Company has not yet quantified the impacts of adopting Statement 133 on
its financial statements and has not determined the timing or method of
adoption. However, Statement 133 could increase volatility in earnings and other
comprehensive income.
Acquisition related and non-recurring costs
Acquisition related and non-recurring costs of $75.9 million were incurred
in 1998 for transaction and integration costs directly related to acquisitions.
During the third quarter of 1998, the Company recorded a $30.8 million
acquisition related and non-recurring charge associated primarily with
acquisitions accounted for as poolings-of-interest. The third quarter charge is
comprised of $16.7 million of termination and severance costs and retention
bonuses, $8.7 million of asset impairments and abandonments, $2.6 million of
transaction related costs, $2.0 million of environmental and compliance related
costs and $0.8 million of other acquisition related costs.
Extraordinary items, net
In June 1998, the Company replaced its credit facility and recognized an
extraordinary charge of approximately $5.1 million ($3.1 million net of income
tax benefit) related to the write-off of previously deferred debt issuance
costs.
On May 15, 1997, the Company repurchased (the "Repurchase") from Laidlaw
Inc. ("Laidlaw") and Laidlaw Transportation, Inc., a $150 million 7% junior
subordinated debenture ($81.6 million book value), a $168.3 million zero coupon
debenture ($34.9 million book value) and a warrant to purchase 20.4 million
shares of common stock ($49.0 million book value), used as partial consideration
for the purchase of Laidlaw's solid waste business in 1996, for an aggregate
purchase price of $230 million in cash. An extraordinary charge to earnings
related to the Repurchase of approximately $65.7 million ($39.4 million net of
income tax benefit) was recorded in the second quarter of 1997. In addition, the
Company replaced its $1.275 billion senior credit facility with a $900 million
senior credit facility on June 5, 1997 and recognized an extraordinary charge of
approximately $21.6 million ($13.0 million net of income tax benefit) in the
second quarter of 1997.
On September 30, 1997, the Company sold 18.6 million shares of common stock
with net proceeds of approximately $327.4 million. The Company used $203 million
of the net proceeds to retire a portion of the term loan facility of the credit
agreement, $71 million to repay the entire amount outstanding on the revolving
credit facility and used the remaining proceeds for acquisitions and general
corporate purposes. As a result of the early repayment of debt outstanding under
the term loan facility, the Company recognized an extraordinary charge of
approximately $1.3 million ($0.8 million net of income tax benefit) related to
the write-off of previously deferred debt issuance costs in the third quarter of
1997.
<PAGE>
ALLIED WASTE INDUSTRIES, INC.
NOTES TO SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Statements of cash flows
The supplemental cash flow disclosures and non-cash transactions for the
nine months ended September 30, 1997 and 1998 are as follows (in thousands):
Nine Months Ended
September 30,
------------------
1997 1998
------- ------
(unaudited)
Supplemental Disclosures:
Interest paid.............................. $84,064 $ 72,157
Income taxes paid.......................... 11,356 30,757
Non-cash Transactions:
Common stock issued in acquisitions
accounted for as purchases............ $52,043 $122,234
Capital leases............................. 14,973 1,187
Debt and liabilities incurred or assumed
in acquisitions....................... 65,413 22,036
Debt converted to common stock............. 1,290 --
Non-cash purchase and sale of operating
assets................................ 61,300 --
2. BUSINESS COMBINATIONS AND DIVESTITURES
Acquisitions accounted for as purchases are reflected in the results of
operations since the date of purchase in Allied's condensed consolidated
financial statements. The results of operations for acquisitions accounted for
as poolings-of-interests are included in Allied's condensed consolidated
financial statements for all periods presented. Often, the final determination
of the cost, and the allocation thereof, of certain of the Company's
acquisitions is subject to resolution of certain contingencies. Once such
contingencies are resolved, the purchase price is adjusted.
The following table summarizes acquisitions for the nine months ended
September 30, 1997 and 1998:
<TABLE>
<CAPTION>
Nine Months
Ended September 30,
-------------------------------
1997 1998
------------ -----------
(unaudited)
Number of businesses acquired and accounted for as:
<S> <C> <C>
Poolings-of-interests......................................... 5 16
Purchases..................................................... 18 26
Total consideration (in millions)............................... $ 303.6 $ 1,899.4
Shares of common stock issued................................... 5,985,143(1) 72,731,205(2)
- ----------
<FN>
(1) Includes 279,560 shares of contingently issuable common stock.
(2) Includes 547,191 shares of contingently issuable common stock.
</FN>
</TABLE>
<PAGE>
ALLIED WASTE INDUSTRIES, INC.
NOTES TO SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
In the first nine months of 1998, the Company acquired 16 companies in
transactions accounted for as poolings-of-interests. Prior period financial
statements have been restated to include historical operating results for 14 of
the companies acquired in the first nine months of 1998 that were accounted for
as a pooling-of-interests. As the effect of two of these business combinations
was not significant, prior period financial statements were not restated to
include historical operating results of these two acquired companies. The
following table presents revenues and net income restated for the cumulative
effect of acquisitions accounted for as poolings-of-interests during 1998 (in
thousands; unaudited).
<TABLE>
<CAPTION>
Before After
Pooling Effect of Pooling
Effects Poolings Effects
------------ ------------ ----------
<S> <C> <C> <C>
Three months ended September 30, 1998
Revenues................................................... $ 326,640 $ 70,244 $ 396,884
Net income................................................. 10,541 8,664 19,205
Nine months ended September 30, 1998
Revenues................................................... 794,338 325,450 1,119,788
Net income................................................. 11,161 40,602 51,763
Three months ended September 30, 1997
Revenues................................................... 224,295 120,480 344,775
Net income................................................. 13,634 10,215 23,849
Nine months ended September 30, 1997
Revenues................................................... 633,303 321,702 955,005
Net income (loss).......................................... (19,329) 22,167 2,838
Year ended December 31, 1997
Revenues................................................... 875,028 426,363 1,301,391
Net income................................................. 412 26,995 27,407
Year ended December 31, 1996
Revenues................................................... 291,685 327,863 619,548
Net loss................................................... (80,582) 14,273 (66,309)
Year ended December 31, 1995
Revenues................................................... 262,243 318,541 580,784
Net income................................................. 13,130 15,178 28,308
</TABLE>
<PAGE>
ALLIED WASTE INDUSTRIES, INC.
NOTES TO SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Unaudited pro forma income statement data
The following unaudited pro forma consolidated data for the year ended
December 31, 1997 and the nine months ended September 30, 1998 presents the
results of operations of Allied as if the companies purchased and sold in 1997
and through September 30, 1998, had all occurred as of January 1, 1997 (in
thousands, except per share data). In addition, the pro forma data reflect the
issuance of 18.6 million shares of common stock in the Equity Offering completed
September 30, 1997, as if it had occurred on January 1, 1997. This data does not
purport to be indicative of the results of operations of Allied that might have
occurred during the periods indicated nor that might occur in the future.
<TABLE>
<CAPTION>
December 31, 1997
----------------------------------
Reported(1) ProForma
------------ ---------
(unaudited)
<S> <C> <C>
Revenues ............................................ $ 1,301,391 $ 1,379,342
Operating income..................................... 223,812 230,606
Net income before extraordinary items................ 80,612 78,032
Net income before extraordinary items
to common shareholders............................. 80,231 77,651
Net income before extraordinary items
per common share................................... 0.48 0.43
Weighted average common and common
equivalent shares-diluted.......................... 166,198 182,202
</TABLE>
<TABLE>
<CAPTION>
September 30, 1998
----------------------------------
Reported(1) ProForma
----------- ---------
(unaudited)
<S> <C> <C>
Revenues ............................................ $ 1,119,788 $ 1,127,332
Operating income..................................... 171,573 168,262
Net income before extraordinary items................ 54,856 62,825
Net income before extraordinary items
per common share................................... 0.30 0.35
Weighted average common and common
equivalent shares-diluted.......................... 180,747 181,088
<FN>
(1) Amounts have been restated to reflect acquisitions made during 1998 using the pooling-of-interests method of
accounting for business combinations.
</FN>
</TABLE>
<PAGE>
ALLIED WASTE INDUSTRIES, INC.
NOTES TO SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
3. NET INCOME PER COMMON SHARE
Net income per common share is calculated by dividing net income less
dividend requirements on preferred stock by the weighted average number of
common shares and common share equivalents outstanding during each period, as
restated to reflect acquisitions accounted for as poolings-of-interests. The
computation of basic earnings per share and diluted earnings per share is as
follows (in thousands, except per share data; unaudited):
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
--------------------------- --------------------------
1997 1998 1997 1998
----------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Basic earnings per share computation:
Net income
before extraordinary items........... $ 56,043 $ 54,856 $ 24,642 $ 19,205
Less: Preferred stock dividends........ (381) -- (44) --
----------- ------------- ----------- -----------
Income before extraordinary items
available to common shareholders..... $ 55,662 $ 54,856 $ 24,598 $ 19,205
=========== ============= =========== ===========
Weighted average common shares
outstanding.......................... 153,062 175,990 154,991 176,315
=========== ============= =========== ===========
Basic earnings per share
before extraordinary items.............. $ 0.36 $ 0.31 $ 0.16 $ 0.11
=========== ============= =========== ===========
Diluted earnings per share computation:
Net income
before extraordinary items........... $ 56,043 $ 54,856 $ 24,642 $ 19,205
Less: Preferred stock dividends........ (381) -- (44) --
Interest savings upon conversion
of convertible securities............ -- -- 56 --
----------- ------------- ----------- -----------
Income before extraordinary items
available to common shareholders..... $ 55,662 $ 54,856 $ 24,654 $ 19,205
=========== ============= =========== ===========
Weighted average common
shares outstanding ..................... 153,062 175,990 154,991 176,315
Effect of stock options and warrants,
assumed exercisable..................... 6,564 3,972 3,277 3,909
Assumed conversions:
7% cumulative convertible
preferred............................... -- -- 339 --
Convertible notes....................... -- -- 188 --
Effect of shares assumed issued
pursuant to hold-back arrangements...... 798 785 812 801
----------- ------------- ----------- -----------
Weighted average common
and common equivalent
shares outstanding...................... 160,424 180,747 159,607 181,025
=========== ============= =========== ===========
Diluted earnings per share before
extraordinary items..................... $ 0.35 $ 0.30 $ 0.15 $ 0.11
=========== ============= =========== ===========
</TABLE>
<PAGE>
ALLIED WASTE INDUSTRIES, INC.
NOTES TO SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
In 1997, the Company adopted SFAS No. 128 "Earnings per Share," which
required restatement of the prior period earnings per share amounts. The effect
of this accounting change on previously reported earnings per share data for the
three months and nine months ended September 30, 1997 was as follows:
<TABLE>
<CAPTION>
September 30, 1997
-------------------------------------
Nine Months Ended Three Months Ended
----------------- ------------------
<S> <C> <C>
Primary earnings per share before
extraordinary items....................... $ 0.35 $ 0.16
Effect of SFAS No. 128...................... 0.01 --
---------------- -----------------
Basic earnings per share before
extraordinary items....................... $ 0.36 $ 0.16
================ =================
Fully diluted earnings per share before
extraordinary items....................... $ 0.34 $ 0.15
Effect of SFAS No. 128...................... 0.01 --
---------------- -----------------
Diluted earnings per share before
extraordinary items $ 0.35 $ 0.15
================ =================
</TABLE>
4. SUMMARIZED FINANCIAL INFORMATION OF ALLIED WASTE NORTH AMERICA, INC.
As discussed in Note 5 of the Company's Annual Report on Form 10-K,
$525 million of the 10.25% senior subordinated notes due 2006 issued by Allied
Waste North America, Inc. ("Allied NA"; a wholly owned, consolidated subsidiary
of the Company) are guaranteed by Allied and substantially all subsidiaries of
the Company. The separate complete financial statements of Allied NA have not
been included herein as management has determined that such disclosure is not
material. However, summarized financial information for Allied NA and
subsidiaries as of December 31, 1997 and September 30, 1998 is as follows (in
thousands):
<TABLE>
<CAPTION>
Summarized Consolidated Balance Sheet Information
December 31, 1997 September 30, 1998
------------------- -------------------
(unaudited)
<S> <C> <C>
Current assets....................................... $ 281,359 $ 328,118
Property and equipment, net.......................... 1,576,674 1,709,614
Goodwill, net........................................ 1,056,601 1,277,669
Other non-current assets............................. 105,545 104,142
Current liabilities.................................. 305,392 352,786
Long-term debt, net of current portion............... 1,199,580 1,296,899
Due to parent........................................ 1,050,411 1,380,671
Due to Allied Canada Finance, Ltd.................... 152,825 --
Other long-term obligations.......................... 305,809 331,778
Retained earnings.................................... 6,162 57,409
</TABLE>
<TABLE>
<CAPTION>
Summarized Statement of Operations Information
Nine Months
Ended September 30,
1997 1998
---------- -----------
(unaudited)
<S> <C> <C>
Revenue ....................................... $ 1,301,391 $ 1,119,788
Operating costs and expenses.................... 1,077,579 948,215
Operating income................................ 223,812 171,573
Income before extraordinary items............... 89,628 68,138
Extraordinary items, net of income tax benefit.. 13,831 3,093
Net income...................................... 75,797 65,046
</TABLE>
<PAGE>
ALLIED WASTE INDUSTRIES, INC.
NOTES TO SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
5. SUBSEQUENT EVENTS
In October 1998, the Company acquired American Disposal Services, Inc.
("ADSI") in a transaction accounted for using the pooling-of-interests method
for business combinations. ADSI is a vertically integrated solid waste
management company providing collection, transfer, recycling and disposal
services to approximately 485,000 customers in 12 states, primarily in the
midwest and northeast United States. Under the terms of the agreement, ADSI
shareholders received 1.65 shares of Allied common stock for each share of ADSI
common stock or approximately 40.7 million shares.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant, Allied Waste Industries, Inc., has caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
ALLIED WASTE INDUSTRIES, INC.
By: /s/ HENRY L. HIRVELA
-----------------------------------------
Henry L. Hirvela
Vice President and Chief Financial Officer
(Principal Financial Officer)
By: /s/ JAMES S. ENG
---------------------------------------
James S. Eng
Corporate Controller
(Principal Accounting Officer)
Date: December 7, 1998
