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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) April 6, 2000
Allied Waste Industries, Inc.
(Exact name of registrant as specified in charter)
Delaware
(State or other jurisdiction of incorporation)
0-19285 88-0228636
(Commission File Number) (IRS Employer Identification No.)
15880 N. Greenway-Hayden Loop, Suite 100
Scottsdale, Arizona 85260
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (480) 627-2700
Not Applicable
(Former name or former address, if changed since last report)
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<PAGE>
Item 5. Other Events
On April 6, 2000 Allied Waste Industries, Inc. ("Allied" or the "Company")
issued a press release providing an update on the progress of its integration of
the Browning-Ferris Industries, Inc. ("BFI") acquisition and the asset
divestiture program, as well as other financial information related to the year
2000 outlook for the Company. A copy of the press release is provided herein
along with additional unaudited supplemental data.
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Contact: Debi Ford
Allied Waste Industries, Inc.
(480) 627-2700
FOR IMMEDIATE RELEASE
ALLIED WASTE PROVIDES 2000 OUTLOOK
SCOTTSDALE, ARIZONA, APRIL 6, 2000 - Allied Waste Industries, Inc. (NYSE: AW)
today provided an update on the progress of its integration of the
Browning-Ferris Industries, Inc. (BFI) acquisition and its asset divestiture
program, as well as other information to assist investors and analysts as they
form their year 2000 outlook for the company. The highlights include:
|X| Expected 2000 EBITDA (adjusted) of between $2.0 billion and $2.1 billion;
|X| Expected 2000 adjusted free cash flow of between $300 million and $385
million;
|X| Debt expected to be reduced to under $9.8 billion by December 31, 2000;
|X| Net cash proceeds from asset sales since January 1, 2000 totaled
approximately $327 million;
|X| Revolver capacity at March 31, 2000 of approximately $438 million; Tranche
D Term Loan balance reduced to approximately $198 million at March 31,
2000.
"Eight months of operating the assets we acquired in the purchase of BFI has
confirmed the strategic rationale of that transaction and its benefits to
long-term shareholder value," said Tom Van Weelden, Chairman and CEO of Allied
Waste. "As we continue the integration of the BFI operations with those of
Allied Waste, we are excited by the performance and potential of the newly
combined asset base. Moreover, general industry conditions are very positive,
and we have every reason to believe that they will remain so for the foreseeable
future.
"At the same time," continued Mr. Van Weelden, "Allied continues to be subject
to the effects of not having completed certain asset divestitures according to
our original schedule, which has led to higher interest costs. Furthermore, the
delay in the contribution of `in-bound' assets involved in the pending swap
transactions has delayed the benefit to Allied of the earnings associated with
those businesses.
"We are, nonetheless, in a good position today to provide investors with an
outlook on the year 2000. Our current analysis indicates that adjusted EBITDA
for the year 2000 will be within expectations, but with growth weighted towards
the third and fourth quarters as the company realizes the benefits of pending
divestitures and swap transactions and further pricing initiatives," stated Mr.
Van Weelden.
"Deleveraging Allied Waste's balance sheet remains a top strategic priority for
the company. Our commitment to delivering on this goal is supported by our
confidence today that we will complete by year end our current divestiture and
swap program and generate net cash proceeds that will allow total debt to be
reduced to below $9.8 billion by December 31, 2000," concluded Mr. Van Weelden.
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Information for Full-year 2000 Outlook
For the full year ended December 31, 2000, Allied Waste expects to achieve the
goals listed below. These expectations are premised on current assumptions about
the timing of certain "in-bound" assets to be acquired in pending swap
transactions and the timing of certain pending asset sales. The outlook assumes
that there will be no significant market development activity during 2000 other
than market development completed in the first quarter ended March 31, 2000.
These assumptions highlight Allied Waste's focus on improving cash flow and
capital structure by selling and buying assets that allow it to fully integrate
its core markets.
|X| Revenues are expected to range from $5.75 billion to $5.85 billion.
|X| Adjusted EBITDA is expected between $2.0 billion and $2.1 billion. Adjusted
EBITDA is earnings before interest, taxes, depreciation and amortization,
adjusted to exclude non-recurring transition and integration costs.
|X| Adjusted free cash flow for the year 2000 is expected between $300 million
and $385 million.
|X| Total debt at December 31, 2000 is expected to be below $9.8 billion
compared to $10.2 billion at December 31, 1999.
Information for First Quarter 2000 Outlook
In updating its outlook for the full-year 2000, Allied Waste made a preliminary
forecast of results for the first quarter 2000, which indicated the following:
|X| Revenues are expected to be between $1.34 billion and $1.36 billion.
|X| Adjusted EBITDA is expected to be between $450.0 million and $460.0 million.
|X| Total debt was approximately $10.16 billion at March 31, 2000 after
considering first quarter market development activity for a total purchase
price of approximately $270 million and proceeds from asset sales (net of
asset swap activity) of approximately $327 million.
|X| Capacity on the company's revolving credit facility was approximately $438
million at March 31, 2000. The company's Tranche D Term Loan balance was
approximately $198 million at March 31, 2000 and is expected to be repaid
with asset-sale proceeds by the beginning of the third quarter of 2000.
Allied Waste plans to formally report first-quarter results in early May 2000.
The reported results for the first quarter ended March 31, 2000 will include
non-recurring costs the company is incurring related to its acquisition
transition and integration efforts.
Divestiture and Swap Program Update
During the past eight months since the completion of the BFI acquisition, Allied
Waste has realized approximately $1.3 billion in net cash proceeds from asset
sales, including asset sales since January 1, 2000 totaling approximately $327
million. The company continues to expect that it will fully complete before the
end of 2000 its currently outstanding net asset divestiture and swap
transactions. Allied Waste today filed with the Securities and Exchange
Commission a Form 8-K containing the information in this press release as well
as information about its divestiture and swap program.
Allied Waste Industries, Inc., a leading waste services company, provides
collection, recycling and disposal services to residential, commercial and
industrial customers in the United States.
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Safe Harbor for Forward-Looking Statements
Certain matters discussed in this press release are "forward-looking statements"
intended to qualify for the safe harbors from liability established by the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements can generally be identified as such by the context of the statements,
including words such as the Company "believes," "anticipates," "expects" or
words of similar import. Similarly, statements that describe the Company's
future plans, objectives or goals are forward-looking statements.
Such forward-looking statements are subject to certain risks and uncertainties
which could cause actual results to differ materially from those currently
anticipated. Examples of such risks and uncertainties include, without
limitation the ability of Allied to continue its vertical integration business
strategy in a successful manner; the ability of Allied to successfully pursue
and continue a disciplined market development program, the ability of Allied to
successfully integrate the acquired operations, to exit certain regional markets
and certain non-strategic businesses, whether and when the recent transactions
concluded or completed will be accretive to Allied's earnings, the amount of
consideration to be paid and timing of the closing of potential transactions
currently under definitive agreement, and whether Allied will be successful in
negotiating asset sales at a pace sufficient to achieve the Company's
twelve-month goal.
Other factors which could materially affect such forward-looking statements can
be found in the Company's periodic reports filed with the Securities and
Exchange Commission, including risk factors detailed in Management's Discussion
and Analysis in Allied's Form 10-K for the year ended December 31, 1999.
Shareholders, potential investors and other readers are urged to consider these
factors carefully in evaluating the forward-looking statements and are cautioned
not to place undue reliance on such forward-looking statements. The
forward-looking statements made herein are only made as of the date of this
press release and the Company undertakes no obligation to publicly update such
forward-looking statements to reflect subsequent events or circumstances.
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<TABLE>
<CAPTION>
Allied Waste Industries, Inc.
Divestiture Program
As of March 31, 2000
(in millions)
(unaudited)
Estimated Estimated Estimated
Gross Annual Annual
Acquirer Operations of: Proceeds (1) Revenue EBITDA
- ------------------------------------ --------------------------------- ---------------- ---------------- ----------------
Completed divestitures:
<S> <C> <C> <C>
SITA SITA $ 444 $ -- $ --
Stericycle BFI medical waste 411 198 44
Superior BFI 196 91 34
Republic BFI 60 31 11
Waste Connections BFI & Allied 42 17 8
Other BFI & Allied 98 106 17
---------------- ---------------- ----------------
Total completed divestitures 1,251 443 114
Pending divestitures:
Republic BFI 9 10 1
Republic Allied (2) 2 4 1
---------------- ---------------- ----------------
Subtotal - Republic 11 14 2
Gas Recovery Systems BFI gas 53 -- --
Other Allied 2 3 1
---------------- ---------------- ----------------
Total pending divestitures (assets held for sale) 66 17 3
Other potential divestitures BFI & Allied 477 170 48
---------------- ---------------- ----------------
Total divestitures 1,794 630 165
Less: estimated tax impact (62) -- --
---------------- ---------------- ----------------
Net divestitures $ 1,732 $ 630 $ 165
================ ================ ================
<FN>
Footnotes:
(1) Includes $42 million of standard holdback funds generally received 30 to 90
days subsequent to close.
(2) Operations were sold subsequent to March 31, 2000
for approximately $2 million.
</FN>
</TABLE>
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<TABLE>
<CAPTION>
Allied Waste Industries, Inc.
Swap Program
As of March 31, 2000
(in millions)
(unaudited)
Estimated Estimated Estimated
Gross Annual Annual
Acquirer Operations of: Proceeds (1) Revenue EBITDA(2)
- ------------------------------------ --------------------------------- --------------- ---------------- ----------------
Divestitures ("Outbound"):
Completed divestitures:
<S> <C> <C> <C>
Superior BFI $ 10 $ 6 $ 1
Republic BFI 58 49 9
Waste Management BFI Canada 75 64 17
--------------- ---------------- ----------------
Total completed divestitures 143 119 27
Pending divestitures:
Waste Management BFI 15 6 3
Republic BFI 110 86 17
Republic Allied 24 23 3
--------------- ---------------- ----------------
Subtotal - Republic 134 109 20
Superior BFI 37 25 5
Superior Allied 42 14 5
--------------- ---------------- ----------------
Subtotal - Superior 79 39 10
Other BFI 124 96 25
--------------- ---------------- ----------------
Total pending divestitures (assets held for sale) 352 250 58
Other Potential divestitures BFI & Allied 11 11 4
--------------- ---------------- ----------------
Total divestitures $ 506 $ 380 $ 89
================ =============== ================
Purchases ("Inbound"):
Completed purchases:
Allied Republic $ 57 $ 25 $ 7
Allied Waste Management 50 37 10
--------------- ---------------- ----------------
Total completed purchases 107 62 17
Pending purchases:
Allied Republic 137 121 23
Allied Superior 105 35 13
Allied Waste Management 188 111 37
Allied Waste Connections 8 5 2
--------------- ---------------- ----------------
Total pending purchases 438 272 75
Total purchases $ 545 $ 334 $ 92
================ =============== ===============
Net impact to Allied before taxes $ (39) $ (46) $ 3
Less: Estimated Tax Impact (55) -- --
--------------- ---------------- ----------------
Net Impact to Allied after taxes $ (94) $ (46) $ 3
================ =============== ===============
<FN>
Footnotes:
(1) Includes $14 million of standard holdback funds generally received 30 to 90 days subsequent to close.
(2) Excludes expected annualized synergies of approximately $20 million.
</FN>
</TABLE>
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<TABLE>
<CAPTION>
Allied Waste Industries, Inc.
Projected Free Cash Flow
For the Year Ended December 31, 2000
(in millions)
(unaudited)
Projected Range
December 31, 2000
-------------------------------
<S> <C> <C>
Adjusted EBITDA(1) $ 2,000 --- $ 2,100
Cash interest(2) (905) --- (890)
Cash taxes (105) --- (130)
Closure, post-closure and environmental expenditures (90) --- (90)
Increase in working capital(3) (30) --- (25)
Capital expenditures (570) --- (580)
-------------- -------------
Free cash flow 300 --- 385
Transition and other non-recurring expenditures (340) --- (265)
Market development expenditures (270) --- (270)
Net divestiture proceeds 680 --- 680
Cash available at December 31, 1999 113 --- 113
-------------- -------------
Cash flow available for debt repayment 483 --- 643
Debt at December 31,1999 10,243 --- 10,243
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Estimated Debt at December 31, 2000 $ 9,760 --- $ 9,600
============== =============
<FN>
Footnotes:
(1) Adjusted to exclude non-recurring transition and integration costs.
(2) Includes capitalized interest.
(3) Excludes the effects of acquisition accruals; cash expenditures
associated with these accruals are included in transition and other
non-recurring cash flows.
</FN>
</TABLE>
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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/PETER S. HATHAWAY
---------------------------------------------
Peter S. Hathaway
Vice President & Chief Accounting Officer
Date: April 6, 2000
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