FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the Fiscal Year Ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _______________ to ______________
Commission file number 1-10282
OGDEN PROJECTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3213657
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
40 Lane Road, Fairfield, NJ 07007-2615
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code 201-882-9000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock, par value New York Stock Exchange
$.50 per share
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No _____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendments to this Form 10-K. [X].
The aggregate market value of registrant's voting stock, held by non-
affiliates as of February 28, 1994 was $92,396,739.
The number of shares of the registrant's Common Stock outstanding as of
February 28, 1994 was 38,009,544 shares.
The following documents are hereby incorporated by reference into this
Form 10-K:
(1) Portions of the Registrant's Annual Report to Shareholders for
the year ended December 31, 1993 (Parts II and IV).
(2) Portions of the Registrant's 1994 Proxy Statement to be filed
with the Securities and Exchange Commission (Part III).
<PAGE>
<PAGE>
PART I
Item 1. BUSINESS
Ogden Projects, Inc. and its subsidiaries (the "Company") provide waste
disposal services throughout the United States. Its principal business,
conducted through wholly-owned subsidiaries, including Ogden Martin
Systems, Inc. ("OMS"), is providing waste-to-energy services. Waste-to-
energy facilities combust municipal solid waste to make saleable energy in
the form of electricity or steam. Approximately 84.2% of the Company's
common stock is held by Ogden Corporation ("Ogden").
The Company was organized as a wholly-owned subsidiary of Ogden in 1984.
Through OMS, it holds the exclusive rights to use the proprietary
technology (the "Martin Technology") of Martin GmbH fur Umwelt-und
Energietechnik of Germany ("Martin") in the United States, other Western
Hemisphere locations, and Israel. In addition, the Company has exclusive
rights to use the Martin Technology only on a full service design,
construct, and operate basis in Germany, the Netherlands, Denmark, Norway,
Sweden, Finland, Poland, and Italy. See "Waste-to-Energy Services -- (h)
The Cooperation Agreement". The Martin Technology is used in over 150
waste-to-energy facilities operating worldwide, principally in Europe, the
Far East, and the United States. Worldwide and in the United States, the
Martin Technology is the leading waste-to-energy technology in terms of
daily municipal solid waste processing capacity as determined from
information available to the Company from Martin and other sources.
The Company completed construction of its first waste-to-energy facility in
1986 and currently operates 25 waste-to-energy projects at 24 locations.
Three facilities are under construction. The Company is the owner or lessee
of 17 of these projects. Additional projects are in various stages of
development. See "Waste-to-Energy Services -- (e) The Company's Waste-to-
Energy Projects."
In 1993 the Company acquired the United States waste-to-energy business of
Asea Brown Boveri Inc. through the acquisition of the stock of one of its
indirect, wholly-owned subsidiaries. By virtue of the acquisition, the
Company became the operator of three facilities. These three facilities do
not employ the Martin Technology. The Company owns and operates four
additional facilities that do not utilize the Martin Technology.
The Company has been awarded three additional projects that are not yet
under construction. See "Waste-To-Energy Services -- The Company's Waste-
to-Energy Projects" herein. The Company has taken preliminary steps toward
expanding its waste-to-energy business internationally. It also is pursuing
opportunities to develop independent power projects that utilize fuels
other than waste. In addition, the Company is pursuing opportunities to
operate and maintain water and wastewater processing facilities. See
"Other Services" herein.
Waste-To-Energy Services
In most cases, the Company, through wholly-owned subsidiaries ("Operating
Subsidiaries"), provides waste-to-energy services pursuant to long-term
service contracts ("Service Agreements") with local governmental units
sponsoring the waste-to-energy project ("Client Communities"). The Company
has projects currently under development for which there is no sponsoring
Client Community and may in the future undertake other such projects.
(a) Terms and Conditions of Service Agreements. Projects generally are
awarded by Client Communities pursuant to competitive procurement. The
Company has also built and is operating projects that were not
competitively bid. Following award of the project, the Client Community and
the winning vendor must agree upon the final terms of the Service
Agreement.
Following execution of a Service Agreement between the Operating Subsidiary
and the Client Community, several conditions must be met before
construction commences. These usually include, among other things,
financing the facility, executing an agreement providing for the sale of
the energy produced by the facility, purchasing or leasing the facility
site, and obtaining of required regulatory approvals, including the
issuance of environmental and other permits required for construction. In
many respects, satisfaction of these conditions is not wholly within the
Company's control and, accordingly, implementation of an awarded project is
not assured, or may occur only after substantial delays. The Company incurs
substantial costs in preparing bids and, if it is the successful bidder,
implementing the project so it meets all conditions precedent to the
commencement of construction. In some instances the Company has made
contractual arrangements with communities that provide partial recovery of
development costs if the project fails to go into construction for reasons
beyond the Company's control.
Each Service Agreement is different in order to reflect the specific needs
and concerns of the Client Community, applicable regulatory requirements,
and other factors. The following description sets forth terms that are
generally common to these agreements.
Pursuant to the Service Agreement, the Operating Subsidiary designs the
facility, generally applies for the principal permits required for its
construction and operation, and helps to arrange for financing. The
Operating Subsidiary then constructs and equips the facility on a fixed
price and schedule basis. The actual construction and installation of
equipment is performed by contractors under the supervision of the
Operating Subsidiary. The Operating Subsidiary bears the risk of costs
exceeding the fixed price of the facility and may be charged liquidated
damages for construction delays, unless caused by the Client Community or
by unforeseen circumstances beyond the Company's control, such as changes
of law ("Unforeseen Circumstances"). After the facility successfully
completes acceptance testing, the Operating Subsidiary operates and
maintains the facility for an extended term, generally 20 years or more.
Under the Service Agreement, the Operating Subsidiary generally guarantees
that the facility will meet minimum processing capacity and efficiency
standards, energy production levels, and environmental standards. The
Operating Subsidiary's failure to meet these guarantees or to otherwise
observe the material terms of the Service Agreement (unless caused by the
Client Community or by Unforeseen Circumstances) may result in liquidated
damages to the Operating Subsidiary or, if the breach is substantial,
continuing, and unremedied, the termination of the Service Agreement. In
the case of such Service Agreement termination, the Operating Subsidiary
may be obligated to discharge project indebtedness.
The Service Agreement requires the Client Community to deliver minimum
quantities of municipal solid waste ("MSW") to the facility and, regardless
of whether that quantity of waste is delivered to the facility, to pay a
service fee. See "Waste-to-Energy Services -- (d) Revenues and Income."
Generally, the Client Community also provides or arranges for debt
financing. Additionally, the Client Community bears the costs of disposing
ash residue from the facility and, in many cases, of transporting the
residue to the disposal site. Generally, expenses resulting from the
delivery of unacceptable and hazardous waste to the facility, and from the
presence of hazardous materials on the site, are also borne by the Client
Community. In addition, the Client Community is also generally responsible
to pay increased expenses and capital costs resulting from Unforeseen
Circumstances, subject to limits which may be specified in the Service
Agreement.
Ogden typically guarantees each Operating Subsidiary's performance under
its respective Service Agreement.
(b) Other Arrangements for Providing Waste-to-Energy Services. The Company
owns two facilities that are not operated pursuant to Service Agreements
with Client Communities, and is currently developing, and may undertake in
the future, additional such projects. In such projects, the Company must
obtain sufficient waste under contracts with haulers or communities to
ensure sufficient project revenues. The Company is subject to risks usually
assumed by the Client Community, such as those associated with Unforeseen
Circumstances and the supply and price of municipal waste to the extent not
contractually assumed by other parties. The Company's current contracts
with waste suppliers for these two facilities provide that the fee charged
for waste disposal service is subject to increase to a limited extent in
the event that costs of operation increase as a result of Unforeseen
Circumstances. On the other hand, the Company generally retains all of the
energy revenues from sales of power to utilities or industrial power users
and disposal fees for waste accepted at these facilities. Accordingly, the
Company believes that such projects carry both greater risks and greater
potential rewards than projects in which there is a Client Community. As a
result of the declining number of municipal procurements in the United
States, which is anticipated to continue in the near future, such projects
are likely to become more common.
(c) Project Financing. Financing for projects is generally accomplished
through the issuance of a combination of tax-exempt and taxable revenue
bonds issued by a public authority. If the facility is owned by the
Operating Subsidiary, the authority lends the bond proceeds to the
Operating Subsidiary and the Operating Subsidiary contributes additional
equity to pay the total cost of the project. For such facilities, project-
related debt is included as a liability in the Company's consolidated
financial statements. Generally, such debt is secured by the revenues
pledged under the respective indenture and is collateralized by the assets
of the Operating Subsidiary and otherwise provides no recourse to the
Company.
The Operating Subsidiaries are able to realize value from facilities owned
by them either by selling the facilities and leasing them from the
purchaser for extended terms or by selling limited partnership interests in
the entity owning the facility. The Company has taken advantage of these
financing mechanisms by selling its interests in Tulsa I and Tulsa II to a
leveraged lessor and leasing the facility back under a long term lease. In
addition, in 1991, limited partnership interests in, and the related tax
benefits of, the partnership that owns the Huntington, New York, facility
were sold to third party investors. In 1992 the Company sold the subsidiary
that held the remaining limited partnership interests in, and certain
related tax benefits of, that partnership. Under the limited partnership
agreement, an Operating Subsidiary is the general partner and retains
responsibility for the operation and maintenance of the facility. The
Operating Subsidiary retained 85% of the residual value of the facility
after the initial term of the Service Agreement. In 1991, the Company
acquired a facility from Blount, Inc. which was sold through a sale-
leaseback arrangement. An Operating Subsidiary is the owner of the
facility under construction in Onondaga, New York, and a sale of equity
interests in such facility is under consideration.
(d) Revenues and Income. During the construction period, for facilities
owned by Client Communities, construction income is recognized on the
percentage-of-completion method based on the percentage of costs incurred
to total estimated costs. Construction revenues also include amounts
relating to sales of limited partnership interests and related tax benefits
in facilities not yet in commercial operation as well as other amounts
received with respect to activities conducted by the Company prior to the
commencement of commercial operation.
After construction is completed and the facility is accepted, the Client
Community pays the Operating Subsidiary a fixed operating fee which
escalates in accordance with specified indices, reimburses the Operating
Subsidiary for certain costs specified in the Service Agreement including
taxes, governmental impositions (other than income taxes), ash disposal and
utility expenses, and shares with the Operating Subsidiary a portion of the
energy revenues (generally 10%) generated by the facility. If the facility
is owned by the Operating Subsidiary, the Client Community also pays as
part of the Service Fee an amount equal to the debt service due to be paid
on the bonds issued to finance the facility. At most facilities, the
Company may earn additional fees from accepting waste from the Client
Community or others utilizing the capacity of the facility which exceeds
the amount of waste committed by the Client Community.
For the projects that are not operated pursuant to a Service Agreement,
tipping fees, which are generally subject to escalation in accordance with
specified indices, and energy revenues are paid to the Company. Electricity
generated by these projects is sold to public utilities and in one
instance, steam and a portion of the electricity generated is sold to
industrial users. Under certain of the contracts under which waste is
provided to these facilities, the Company may be entitled to fee
adjustments to reflect certain Unforeseen Circumstances.
Information about construction revenues, construction costs, service
revenues, and operating costs for all of the Company's operations for each
of the three years ended December 31, 1993, 1992, and 1991 are presented in
the Company's Statements of Consolidated Income incorporated by reference
to Part IV of this report.
(e) The Company's Waste-to-Energy Projects. Certain information with
respect to the Company's projects as of February 28, 1994 is summarized in
the following table:
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<TABLE>
THE COMPANY'S WASTE-TO-ENERGY PROJECTS
<CAPTION>
Tons Boiler Commencement
In Operation Per Day Units of Operations
<S> <C> <C> <C>
Tulsa,OK(I)(1)............. 750 2 1986
Haverhill/Lawrence,
MA-RDF(8)................. 950 1 1984
Marion County, OR.......... 550 2(2) 1987
Hillsborough County, FL(3). 1,200 3(2) 1987
Tulsa, OK(II)(1)(4)........ 375 1 1987
Bristol, CT................ 650 2(2) 1988
Alexandria/Arlington, VA... 975 3 1988
Indianapolis, IN........... 2,362 3(2) 1988
Hennepin County, MN (1)(5). 1,000 2 1990
Stanislaus County, CA...... 800 2 1989
Babylon, NY................ 750 2(2) 1989
Haverhill, MA-Mass Burn.... 1,650 2 1989
Warren County, NJ (5)...... 400 2 1990
Kent County, MI(3)......... 625 2(2) 1990
Wallingford, CT(5)......... 420 3(2) 1990
Fairfax County, VA......... 3,000 4(2) 1990
Huntsville, AL(3).......... 690 2(2) 1990
Lake County, FL............ 528 2(2) 1990
Lancaster County, PA(3).... 1,200 3(2) 1991
Pasco County, FL(3)........ 1,050 3(2) 1991
Huntington, NY (6)......... 750 3(2) 1991
Hartford, CT (3)(7)(8)..... 2,000 3 1989
Detroit, MI (1)(8)(9)...... 3,300 3 1989
Honolulu, HI (1)(8)........ 2,160 2 1990
Union County, NJ(3)(11)... 1,440 3 1994
Total................ 29,575
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Estimated
Unrecognized
Construction
Revenues as
of 12/31/93
Scheduled (In
Tons Boiler Commencement thousands
Under Construction Per Day Units of Operations of dollars)
<S> <C> <C> <C> <C>
Onondaga County, NY....... 990 3(2) 1995 N/A
Lee County, FL(3)......... 1,200 3(2) 1994 $ 46,269
Montgomery County, MD (3). 1,800 3(2) 1995 $177,988
Total..................... 3,990
</TABLE>
<TABLE>
<CAPTION>
Estimated
Construction
Expected Revenues (In
Awarded--Not Yet Commencement thousands of
Under Construction Construction dollars)
<S> <C> <C> <C> <C>
Mercer County, NJ (3)..... 1,450 2 1994 $154,866
Clark County, OH (10)..... 1,750 2 1995 N/A
Halifax, Nova Scotia (3).. 550 2 1994 $ 99,620*
Total................. 3,750
*Expressed in Canadian Dollars.
</TABLE>
____________________
(1) Facility is owned by an owner/trustee pursuant to a sale/leaseback
arrangement.
(2) Facility has been designed (or, with respect to awarded facilities and
facilities under construction, will be designed) to allow for the
addition of another unit.
(3) Facility is owned (or, with respect to facilities not under
construction, is to be owned) by the Client Community.
(4) Phase II of the Tulsa facility, which was financed as a separate
project, expanded the capacity of the facility from two to three
units.
(5) Operating Subsidiaries were purchased after completion, and use a
mass-burn technology that is not the Martin Technology.
(6) Owned by a limited partnership in which the limited partners are not
affiliated with the Company. See "Waste-to-Energy Services -- (c)
Project Financing."
(7) Under contracts with the Connecticut Resource Recovery Authority and
Northeast Utilities, the Company operates only the boiler and turbine
for this facility.
(8) Operating contracts were acquired after completion. Facility uses a
refuse-derived fuel technology and does not employ the Martin
Technology.
(9) In addition, the Company is presently constructing environmental
improvements to the Detroit Facility. The total price for this
project is approximately $117,800,000 (subject to escalation), and the
Company expects construction to be completed by April 1996.
(10) On May 19, 1993, the Company entered into a Development
Agreement, a Steam Purchase and Sale Agreement, and an Operation
and Maintenance Agreement with Ohio Edison Company. On June 8,
1993, the Company entered into a Host Community Agreement for the
Construction and Operation of a Waste-to-Energy Incinerator with
the Clark County Solid Waste Management District. This contract
is the subject of litigation brought by a local landfill in which
an intermediate appellate court recently enjoined performance by
the County. The County and the Company are determining whether
to appeal to the Ohio Supreme Court or whether to rebid the
Project. The Company is in the process of procuring additional
waste contracts for the facility.
(11) This facility is substantially complete and is processing waste.
The Company expects to recognize an additional $7.2 million in
construction revenues in 1994.
(f) Markets and Competition. The Company markets its services principally
to governmental entities, including city, county, and state governments as
well as public authorities or special purpose districts established by one
or more local government units for the purpose of managing the collection
and/or disposal of MSW. For certain projects, the Company may market its
services directly to private firms in the business of MSW collection and/or
disposal.
The quantity of MSW generated in 1993 in the United States was estimated to
be 201 million tons. This amount is projected to increase to approximately
222 million tons by the year 2000. During 1993, approximately 16% of the
total MSW generated was processed in waste-to-energy facilities and
approximately 1% was incinerated without energy recovery; and approximately
17% was recycled. The remainder was landfilled. The Company believes that
no single waste disposal technique can properly manage all MSW and that an
effective waste management program should include waste minimization,
recycling, and in many circumstances waste to energy to utilize as much
waste as possible for reuse and energy production.
Steps to minimize the quantity of MSW produced are being taken at the
manufacturing and consumer levels. Some jurisdictions, for example, have
banned the use of certain plastic containers. These efforts have not yet
had an appreciable impact on the quantities of MSW being generated.
Increased recycling is a goal of many state and local governments, and some
have legislated ambitious mandatory targets. The Company believes that
increased recycling is an important aspect of waste disposal planning in
the United States and that the amount of MSW recycled in the United States
will continue to grow. However, the Company believes that the inherent
limitations on the types of materials that can successfully be recycled
will continue to require municipalities to use other disposal methods such
as waste to energy or landfilling for much of the waste produced. Most of
the Company's facilities have been sized to accommodate the accomplishment
of communities recycling goals.
Waste-to-energy facilities compete with other disposal methods, such as
landfills. In most of the markets the Company serves, the cost of waste-
to-energy services is competitive with landfilling. Compliance with
regulations promulgated by the United States Environmental Protection
Agency (the "EPA") in 1991 will to some extent increase the cost of
landfilling, although landfills may be less expensive in some cases, in the
short term, than waste-to-energy facilities. Landfills generally do not
commit their capacity for extended periods. Much of the landfilling done
in the United States is done on a spot market or through short term
contracts (less than 5 years). Accordingly, landfill pricing tends to be
more volatile as a result of periodic changes in waste generation and
available capacity than the Company's pricing, which is based on long-term
contracts. Another factor affecting the competitiveness of waste-to-energy
fees are the additional charges imposed by Client Communities and included
in such fees to support recycling programs, household hazardous waste
collections, citizen education, and similar initiatives. The cost
competitiveness of waste-to-energy facilities also depends on the prices at
which the facility can sell the energy it generates. See "Regulation"
herein.
Waste-to-energy facilities also compete with other disposal technologies
such as mixed solid-waste composting. Mixed waste composting is not a
proven technology, and the Company believes that it has not been applied
successfully to date in a large scale facility.
Mass-burn waste-to-energy systems compete with various refuse-derived fuel
("RDF") systems in which MSW is preprocessed to remove various non-
combustibles and is shredded for sizing prior to burning. The Company
believes that the large-scale facilities being contracted for today are
primarily mass-burn systems. Although the Company operates four RDF
projects, these were all acquired after construction. The Company does not
intend to develop any new RDF facilities.
Since 1989 there has been a decline in the number of communities requesting
proposals for waste-to-energy facilities. The Company believes that this
decline has resulted from a number of factors that adversely affected
communities' willingness to make long-term capital commitments to waste
disposal projects, including: the economic downturn which adversely
affected local government finances and slowed waste generation;
uncertainties about the impact of recycling on the waste stream; and
concerns arising from the Clean Air Act Amendments of 1990 and the
regulatory actions currently being proposed pursuant to its terms. In
addition, there was aggressive opposition to proposed waste disposal
projects of all types by individuals and organizations during this period.
The Company believes that legislative developments, increased public
acceptance of the safety and cost effectiveness of waste-to-energy, and
economic recovery will resolve many of these uncertainties. The Company
also believes that waste-to-energy facilities and recycling are
complimentary methods of managing a community's waste disposal needs. The
fact that many of the Company's Client Communities have recycling rates in
excess of national averages demonstrates that a properly sized waste-to-
energy facility does not hinder achievement of aggressive recycling goals.
In response to the decline in the number of requests for proposals, the
Company has sought projects for which there are no sponsoring Client
Communities. See "Waste-to-Energy Services -- (b) Other Arrangements for
Providing Waste-to-Energy Services." In 1993, the Company negotiated a
waste disposal agreement with Clark County, Ohio, for the disposal of MSW
at such a project. The Company also completed negotiation of contracts
with Ohio Edison Company pursuant to which Ohio Edison leases a site to the
Company and purchases steam generated at the proposed waste-to-energy
facility. This project is conditional upon obtaining commitments of
additional MSW from other sources and satisfactory resolution of litigation
described herein under "Waste-to-Energy Services -- (e) the Company's
Waste-to-Energy Projects."
There is substantial competition within the waste-to-energy field. The
Company competes with a number of firms, some of which have greater
financial resources than the Company. Some competitors have licenses or
similar contractual arrangements for competing technologies in the waste-
to-energy field, and a limited number of competitors have their own
proprietary technology. The Company believes it is the largest operator of
large scale (greater than 400 tons per day) waste-to-energy facilities.
There are presently 77 such facilities in the United States. The Company
believes Wheelabrator Technologies, Inc., which operates 14 such facilities
is the second largest operator. Waste-to-energy facilities are also
operated by other private companies and municipalities. Approximately 16%
of the nation's waste is disposed of at waste-to-energy facilities. The
balance of waste not recycled is disposed of by landfilling. The
landfilling industry is dominated by several large companies of which Waste
Management, Inc. and Browning Ferris, Inc. are the largest.
Other technologies utilized in mass-burn type facilities in the United
States include those of Von Roll, W+E, Takuma, Volund, Steinmueller,
Deutsche Babcock, O'Connor, and Detroit Stoker.
The principal factors influencing selection of vendors for governmentally
sponsored waste-to-energy projects are technology, financial strength,
performance guarantees, experience, reputation for environmental
compliance, service, and price.
(g) Technology. The principal feature of the Martin Technology is the
reverse-reciprocating stoker grate upon which the waste is burned. The
patent for the basic stoker grate technology used in the Martin Technology
expired in 1989. The Company has no information that would cause it to
believe that any other company uses the basic stoker grate technology that
was protected by the expired patent. Moreover, the Company believes that
unexpired patents on other portions of the Martin Technology would limit
the ability of other companies to effectively use the basic stoker grate
technology in competition with the Company. There are several unexpired
patents related to the Martin Technology including: (i) Apparatus for
Discharging Cinders from an Incinerator - expires 9/20/94; (ii) Apparatus
for the Processing of Slag - expires 2/14/95; (iii) Grate Bar for Grate
Linings, especially in Incinerators - expires 2/9/99; (iv) Method and
Arrangement for Reducing NOx Emissions from Furnaces - expires 7/19/00; (v)
Method and Apparatus for Regulating the Furnace Output of Incineration
Plants - expires 9/4/07; (vi) Method for Regulating the Furnace Output in
Incineration Plants - expires 1/1/08; and (vii) Feed Device with Filling
Hopper and Adjoining Feed Chute for Feeding Waste to Incineration Plants -
expires 4/23/08. More importantly, the Company believes that it is
Martin's know-how in manufacturing grate components and in designing and
operating mass-burn facilities and Martin's worldwide reputation in the
waste-to-energy field and the Company's know-how in operating waste-to-
energy facilities, rather than the use of patented technology, that is
important to the Company's competitive position in the waste-to-energy
industry in the United States. The Company does not believe that the
expiration of the patent covering the basic stoker grate technology or
patents on other portions of the Martin Technology will have a material
adverse effect on the Company's financial condition or competitive
position.
(h) The Cooperation Agreement. Under an agreement between the Company and
Martin (the "Cooperation Agreement"), the Company has the exclusive right
to use the Martin Technology in waste-to-energy facilities in the United
States, Canada, Mexico, Bermuda, certain Caribbean countries, most of
Central and South America, and Israel. In addition, in Germany, Turkey,
Saudi Arabia, Kuwait, the Netherlands, Denmark, Norway, Sweden, Finland,
Poland, and Italy the Company has exclusive rights to use the Martin
Technology, but only on a full service design, construct, and operate
basis. The Company may not use any other technology to market, develop, or
build refuse incineration facilities without Martin's permission. The
Company may, however, acquire, own, commission, and/or operate facilities
that use technology other than the Martin technology that have been
constructed by entities other than the Company or its affiliates. Martin
is obligated to assist the Company in installing, operating, and
maintaining facilities incorporating the Martin Technology. The fifteen
year term of the Cooperation Agreement renews automatically each year
unless notice of termination is given, in which case the Cooperation
Agreement would terminate 15 years after such notice. Additionally, the
Cooperation Agreement may be terminated by either party if the other fails
to remedy its material default within 90 days of notice. The Cooperation
Agreement is also terminable by Martin if there is a change of control (as
defined in the Cooperation Agreement) of OMS or any direct or indirect
parent of OMS not approved by its respective board of directors. Although
termination would not affect the rights of the Company to design,
construct, operate, maintain, or repair waste-to-energy facilities for
which contracts have been entered into or proposals made prior to the date
of termination, the loss of the Company's right to use the Martin
Technology could have a material adverse effect on the Company's future
business and prospects.
(i) International Business Development. In 1993, the Company continued
the development of its waste-to-energy business in selected international
markets.
The Company opened an office in Munich, Germany, in 1993 and, as indicated
above, extended its right to use the Martin system to develop full service
projects in much of Europe. The Company has not had operations outside the
United States previously, although Ogden Corporation does conduct its
aviation services at several European airports and entertainment services
at several venues. Furthermore, in Europe, waste-to-energy facilities have
been built as turn-key construction projects and then operated by local
governmental units or by utilities under cost-plus contracts. The Company
emphasizes developing projects which it will build and then operate for a
fixed fee. Thus, developing this market will require the Company to both
become better known in Europe and to successfully market its service
concept. The Company believes that its concept of service coupled with the
Company's extensive operational experience offers local government units
more economical service. Some European countries are seeking to
substantially reduce their dependency on landfilling. For example, Germany
has enacted legislation which would prevent the landfilling of untreated
raw municipal waste by the end of the decade. The Company therefore
believes this is an appropriate time to seek to expand its business in
these markets.
(j) Backlog. The Company's backlog as of December 31, 1993 is set forth
under (e) above. As of the same date of the prior year, the estimated
unrecognized construction revenues for projects under construction was
$192,935,000, and the estimated construction revenues for projects awarded
but not yet under construction was $513,488,000 (includes $99,620,000
expressed in Canadian Dollars). The changes reflect construction progress
on four projects. Generally, the construction period for a waste-to-energy
Facility is approximately 28 to 34 months. The backlog does not reflect
the cancellation of projects owned by the Company or the cancellation of
the Quonset Point and Johnston Rhode Island projects. See (f) "Markets and
Competition" herein.
Other Services.
The Company operates transfer stations in connection with some of its
waste-to-energy facilities and, in connection with the Montgomery County,
Maryland, project, the Company will use a railway system to transport MSW
and ash residue to and from the facility. The Company leases and operates
a landfill located at its Haverhill, Massachusetts, facility, and leases,
but does not operate, a landfill in connection with its Bristol,
Connecticut, facility.
In 1991, the Company announced that it would discontinue the on-site
remediation business utilizing a mobile technology then conducted by OWTS.
OWTS, which was formed by Ogden in 1986 to conduct on-site remediations of
hazardous wastes using a proprietary incineration process, operated at
sites located in Alaska and California. Certain of these operations
continued into 1993, and certain contractual obligations resulting from the
disposal of assets are expected to conclude in 1994.
In 1993, the Company announced that it would discontinue the fixed-site
hazardous waste business conducted through American Envirotech, Inc., an
indirect subsidiary. In light of substantial and adverse changes in the
market for hazardous waste incineration services and regulatory uncertainty
stemming from EPA pronouncements. The Company has ceased all development
activities and in 1994 intends to dispose of the assets related to this
business, primarily a permit to build and operate a hazardous waste
incineration facility which is the subject of a pending approval.
The Company, through its wholly-owned subsidiary, Ogden Power Systems,
Inc., intends to develop, operate and, in some cases, own power projects
("alternative energy projects") which cogenerate electricity and steam or
generate electricity alone for sale to utilities both in the United States
and abroad. These power systems may use, among other fuels, wood, tires,
coal, other wastes, or natural gas. The Company believes that its
experience in operating waste-to-energy facilities is applicable to other
forms of power generation. Although, presently the Company does not
operate any alternative energy projects, it is seeking opportunities in
this business, through discussions with potential partners and by making
proposals on projects that the Company believes have a substantial
likelihood of profitable development. The Company currently operates 10
fossil fuel boilers and co-fires coal with MSW at another of its
facilities. The Company does not believe that the development activities
for this business are likely to require a material amount of the assets of
the Company.
Competition for alternative energy projects is intense. Many domestic
utilities and other purchasers of power are required to or elect to select
vendors of power by competitive bidding in which price is the dominant
determination in making an award, thereby reducing returns on such
projects. Consequently, the Company seeks opportunities in which contract
terms are set by negotiation and where the Company is able to stress its
ability to run facilities in a highly reliable manner or where other
considerations such as the Company's willingness to guarantee project
availability are attractive to the power purchaser.
There are numerous companies currently operating alternative power projects
in the United States and internationally today. Many of these companies
are able to commit substantially greater funds to this business and have
greater experience in running alternative power projects using fuels other
than MSW. The Company seeks to compete by entering into joint ventures
with other companies which will as a group have necessary assets available
and experience. Proprietary technologies are not significant in this
business.
The Company, through Ogden Water Systems, Inc., intends to develop, operate
and, in some cases, own projects that purify water, treat wastewater, and
treat and manage biosolids and compost organic wastes. As with the
Company's waste-to-energy business, water and wastewater projects involve
various contractual arrangements with a variety of private and public
entities including municipalities, lenders, joint venture partners (which
provide financing or technical support), and contractors and subcontractors
which build the facilities.
The Company also intends to develop, operate and, in some cases, own
projects that process recyclable paper products into linerboard for reuse
in the commercial sector. As with the Company's waste-to-energy business,
such projects involve various contractual arrangements with a variety of
private and public entities, including municipalities, lenders, joint
venture partners (which provide financing or technical support) and
contractors and subcontractors which build the facilities. In addition,
such projects require significant amounts of energy in the form of steam,
which may be provided by present or future waste-to-energy projects
operated by the Company.
Regulation
Environmental regulations. The Company's business activities are
pervasively regulated pursuant to federal, state, and local environmental
laws. Federal laws, such as the Clean Air Act and Clean Water Act, and
their state counterparts, govern discharges of pollutants to air and water.
Other federal, state, and local laws, such as RCRA, comprehensively govern
the generation, transportation, storage, treatment, and disposal of solid
waste, including hazardous waste (such laws and the regulations thereunder,
"Environmental Regulatory Laws"). The Environmental Regulatory Laws and
other federal, state, and local laws, such as the Comprehensive
Environmental Response Compensation and Liability Act ("CERCLA"), make the
Company potentially liable for any environmental contamination which may be
associated with its activities or properties (collectively, "Environmental
Remediation Laws").
Many states have mandated local and regional solid waste planning, and
require that new solid waste facilities may be constructed only in
conformity with these plans. State laws may authorize the planning agency
to require that waste generated within its jurisdiction be brought to a
designated facility, which may help that facility become economically
viable but preclude the development of other facilities in that
jurisdiction. Such ordinances are sometimes referred to as legal flow
control. Legal flow control has been challenged in a number of law suites
on the basis that it is a state regulation of interstate commerce
prohibited by the United States Constitution. The decisions on these cases
have not been consistent. However several recent decisions have
invalidated ordinances creating legal flow control. In 1993, the United
States Supreme Court granted an appeal from a decision of a New York State
Court upholding a New York municipality's ordinance requiring that all
waste generated within its jurisdiction be disposed of at a transfer
station operating under contract with the municipality. The case was
argued in December 1993 and a decision is expected during the Court's
Spring 1994 term.
The Company believes that legal flow control is an important tool used by
municipalities in fulfilling their obligations to provide safe and
environmentally sound waste disposal services to their constituencies.
Although a decision invalidating legal flow control would reduce the number
of options local government would have in meeting this obligation, the
Company does not believe it would materially impact the Company's existing
facilities or its ability to develop new ones. This view is based on a
number of considerations. Most of the contracts pursuant to which the
Company provides disposal services require the Client Community to deliver
stated minimum quantities of waste on a put-or-pay basis. The Company does
not believe these obligations would be negated by an adverse Supreme Court
decision. Furthermore, only a few of the Client Communities served by the
Company rely solely on legal flow control to provide waste to the Company's
facilities, a factor influenced in part by past difficulties in enforcing
legal flow control ordinances. Although some municipalities may
experience temporary difficulties in meeting delivery commitments as they
address required changes in their waste disposal plans, such difficulties
should not be long-lived as indicated by the experience of municipalities
served by the Company which adopted alternative measures. The Company
believes that there are other methods for providing incentives to use
integrated waste systems incorporating waste to energy that do not entail
legal flow control, which incentives should not be affected by the Court's
decision. These include mandating that charges for utilization of the
system be maintained at competitive levels and that revenue shortfalls be
funded from tax revenues or special assessments on residents. This type of
incentive will be utilized at the facility being constructed and which will
be operated by the Company in Montgomery County, Maryland.
Furthermore, in most of the municipalities where the Company provides
services, information available to the Company indicates that the cost to
the Client Community of waste to energy is competitive with alternative
disposal facilities, and therefore the Company's facilities should be able
to compete for waste economically. As indicated, however, certain
additional waste disposal services are financed by the Client Community's
increasing the cost for disposal at waste-to-energy facilities, and these
services may have to be paid for by other mechanisms. A number of bills
are presently pending in Congress to authorize legal flow control. Whether
Congress will enact legislation on this subject is uncertain.
In addition, state laws have been enacted in some jurisdictions that may
also restrict the intrastate and interstate movement of solid waste.
Restrictions on importation of waste from other states have generally been
voided by Federal courts as invalid restrictions on interstate commerce.
Bills proposed in past sessions of Congress would authorize such
designations and restrictions. Bills of this nature have been introduced
in the current session of Congress, but it remains uncertain whether
Congress will act to authorize such laws.
The Environmental Regulatory Laws require that many permits be obtained
before the commencement of construction and operation of any waste-to-
energy facility, including: air quality construction and operating permits,
stormwater discharge permits, solid waste facility permits in most cases,
and,in many cases, wastewater discharge permits. There can be no assurance
that all required permits will be issued, and the process of obtaining such
permits can often cause lengthy delays, including delays caused by third
party appeals challenging permit issuance.
The Environmental Regulatory Laws and regulations and permits issued
pursuant to them also establish operational standards, including specific
limitations upon emissions of certain air and water pollutants. Failure to
meet these standards subject an Operating Subsidiary to regulatory
enforcement actions by the appropriate governmental unit, which could
include fines, and orders limiting or prohibiting operation. To date, the
Company has not incurred material fines, been required to incur material
capital costs or additional expenses, or been subjected to material
restrictions on its operations as a result of violations of environmental
laws, regulations, or permits. Certain of the Environmental Regulatory Laws
also authorize suits by private parties for damages and injunctive relief.
Repeated unexcused failure to comply with environmental standards may also
constitute a default by the Operating Subsidiary under its Service
Agreement.
The Environmental Regulatory Laws and governmental policies governing their
enforcement are subject to revision. New technology may be required or
stricter standards may be established for the control of discharges of air
or water pollutants or for solid waste or ash handling and disposal. Most
federal Environmental Regulatory Laws encourage development of new
technology to achieve increasingly stringent standards; they also often
require use of the best available technology at the time a permit is
issued. The federal Prevention of Significant Deterioration of air quality
program requires that new or substantially modified waste-to-energy
facilities of the size constructed by the Company that are located in areas
of the country that are in compliance with national ambient air quality
standards ("NAAQS") employ the Best Available Control Technology ("BACT").
The selection of control technology and the emission limits that must be
achieved are made on a case-by-case basis considering economic impacts,
energy and other environmental impacts and costs, and may include
requirements that certain components of the mixed waste stream be separated
for treatment by other means than combustion in the Operating Subsidiary's
facility. For facilities developed in areas where NAAQS are not met,
federal law requires that control technology capable of achieving the
Lowest Achievable Emission Rate ("LAER") must be employed. LAER means the
most stringent emission limit achievable in practice by emission sources
similar to the facility in question, which does not involve any
consideration of the economic impacts or costs to achieve such a
limitation. Existing facilities in areas where LAER is now required for
new facilities may be required to retro-fit Reasonably Available Control
Technology ("RACT") established by EPA applicable to selected pollutants to
enhance progress toward these areas achieving the NAAQS. RACT is that
technology which EPA or state agencies determine to be available, proven,
reliable, and affordable to reduce targeted emissions from specific types
of existing sources of air emissions within geographic areas in which NAAQS
for the target emissions is not being met. Thus, as new technology is
developed and proven, it must be incorporated into new facilities or major
modifications to existing facilities. This new technology may often be more
expensive than that used previously.
EPA has promulgated regulations establishing New Source Performance
Standards ("NSPS") and Emission Guidelines ("EG") applicable to new and
existing municipal waste combustion units with a capacity of greater than
250 tons per day. The EG and NSPS establish limitations upon the flue gas
pollutant concentrations entering the ambient air for particulate matter
(opacity), organics (dioxins and furans), carbon monoxide and acid gases
(sulfur dioxide and hydrogen chloride). The NSPS also establish emissions
limitations for nitrogen oxides. The NSPS apply to facilities beginning
construction after December 20, 1989 and the EG will become effective three
years after each individual state adopts them, but no later than five years
after promulgation. Additional air pollution control equipment is likely to
be required at four of the Company's existing waste-to-energy facilities to
achieve the EG limitations.
The Clean Air Act required EPA to re-evaluate the NSPS and EG for
particulate matter (total and fine), opacity (as appropriate), sulfur
dioxide, hydrogen chloride, oxides of nitrogen, carbon monoxide, dioxins
and dibenzofurans, and to establish new NSPS and EG for lead, cadmium, and
mercury no later than November 15, 1991 for all waste combustion
facilities. Such re-evaluation and regulations were not completed by that
date. These standards must reflect maximum achievable control technology
("MACT") for both new and existing waste-to-energy units. "MACT" means the
maximum degree of reduction in emissions, considering the cost, energy
requirements, and non air quality related health and environmental impacts.
For new facilities, these limits may not be less stringent than the best
performing similar facility. For existing facilities, these limits may not
be less stringent than the performance of the top 12% non-LAER facilities.
The Company cannot predict what standards will be proposed or finally
promulgated, although EPA is reviewing data from existing facilities. The
revised standards for new facilities will become effective six months after
the date of promulgation of the revised standards. Standards for lead,
cadmium, and mercury are expected to be proposed in 1994 under a consent
order entered in 1993 in connection with litigation commenced by several
parties against the EPA.
The Clean Air Act also requires each state to implement a state
implementation plan in conformity with federal law that outlines how areas
out of compliance with NAAQS will be returned to compliance. One aspect of
the state implementation plan must be an operating permit program. Most
states are now in the process of developing or augmenting their
implementation plans to meet these requirements. The state implementation
plans and the operating permits issued under them may place new
requirements on waste-to-energy facilities. Under federal law, the new
operating permits may have a term of up to 12 years after issuance or
renewal, subject to review every 5 years.
Changes in Clean Air Act standards can affect the manner in which the
Company operates existing projects and could require significant additional
expenditures to achieve compliance. The Clean Air Act Requirements, which
the Company believes will be issued in final form between 1994 and 1996,
will require capital improvements to the facilities operated by the
Company. The exact timing and cost of such improvements cannot be stated
definitively because State regulations embodying the Clean Air Act
Requirements have generally not been finally adopted. The cost of capital
improvements to meet the Clean Air Act Requirements for facilities owned by
Client Communities will be borne by the Client Communities. For projects
owned or leased by the Company and operated under a Service Agreement, the
Client Community has the obligation to fund such capital improvements, to
which the Company must make an equity contribution, generally 20%. Such
equity contributions are likely to range, in total for all such facilities,
from $9 million to $15 million. With respect to a project owned by the
Company and not operated pursuant to a Service Agreement, such capital
improvements will cost between $8 million and $15 million. The Company
believes that costs incurred to meet Clean Air Act Requirements at
facilities it operates may be recovered from Client Communities and other
users of its facilities through increased tipping fees permitted under
applicable contracts.
The Environmental Remediation Laws, including CERCLA, may subject the
Company, like other entities that manage waste, to joint and several
liability for the costs of remediating contamination at sites, including
landfills, which the Company has owned, operated, or leased or at which
there has been disposal of residue or other waste handled or processed by
the Company. The Company leases and operates a landfill in Haverhill,
Massachusetts, and leases a landfill in Bristol, Connecticut, in connection
with its projects at those locations. Some state and local laws also
impose liabilities for injury to persons or property caused by site
contamination. Some Service Agreements provide for indemnification of the
Operating Subsidiaries from some such liabilities.
Environmental Regulatory Laws, such as RCRA and state and local solid waste
laws, impose significantly more stringent requirements upon disposal of
hazardous waste than upon disposal of MSW and other non-hazardous wastes.
These laws prohibit disposal of hazardous waste other than in small,
household-generated quantities at the Company's municipal solid waste
facilities and generally make disposal of hazardous waste more expensive
than management of non-hazardous waste. The Service Agreements recognize
the potential for improper deliveries of hazardous wastes and specify
procedures for dealing with hazardous waste that is delivered to a
facility. Although certain Service Agreements require the Operating
Subsidiary to be responsible for some costs related to hazardous waste
deliveries, to date, no Operating Subsidiary has incurred material
hazardous waste disposal costs.
No ash residue from a fully operational facility operated by the Company
has been characterized as hazardous under the present or past prescribed
EPA test procedures and such ash residue is currently disposed of in
permitted landfills as non-hazardous waste. Some state laws or regulations
provide that if prescribed test procedures demonstrate that ash residue has
hazardous characteristics, it must be treated as hazardous waste. In
certain states, ash residue from certain waste-to-energy facilities of
other vendors or communities has, on occasion, been found to have hazardous
characteristics under these test procedures. There is a conflict between
the two federal courts of appeal which have decided whether municipal solid
waste ash residue having hazardous characteristics is subject to RCRA's
provisions for management as a hazardous waste. The Second Circuit Court
of Appeals has held that it is not. The Seventh Circuit Court of Appeals
reached the opposite result. In September 1992, the Administrator of the
EPA officially stated that EPA policy was that waste-to-energy ash residue
was exempt from treatment as a hazardous waste as a matter of law and could
be safely disposed of in MSW landfills that met the EPA's criteria. In
reaching its decision, the Seventh Circuit refused to give deference to the
EPA's policy. An appeal from the Seventh Circuit's determination was filed
in early 1993 in the United States Supreme Court and a decision is expected
during the Court's Spring 1994 term. The Company does not expect that a
decision that requires ash residue having hazardous characteristics to be
managed as a hazardous waste would have significant impacts on the
Company's business. Eight of the Company's facilities are located in
states or dispose of their ash residue in states which require testing to
determine whether such residue must be managed as a hazardous waste under
state law. Furthermore, ash processing technology is available which could
be used to further ensure that ash does not exhibit characteristics of
hazardous waste.
From time to time, state and federal moratoria on waste to energy have been
proposed in legislation, regulation, and by executive action. Generally,
such proposals have not been adopted, and where they have, as in the State
of New Jersey, following the moratorium, waste to energy has continued to
be included in the options available to local municipalities. In 1992, as
previously reported, the State of Rhode Island eliminated waste to energy
from its unique legislation in which the state's solid waste management
plan was enacted as law. As a consequence of this legislation, the Company
brought an action against the state challenging the validity of the change
in the plan which has been settled by the State's agreement to pay the
Company approximately $5.5 million in 1994, a portion of which must be
shared with Blount, Inc., the former developer of the Quonset, Rhode Island
project.
OWTS' business activities were regulated under federal, state, and local
environmental laws governing air and water emissions and the generation,
transportation, storage, treatment, and disposal of solid wastes, and
hazardous and toxic materials. In particular, RCRA, its implementing
regulations, and parallel state laws create a cradle-to-grave system for
regulating hazardous waste; and CERCLA and similar state laws create
programs for remediation of contaminated sites and for the imposition of
liability upon those who owned or operated such sites or who generated or
transported hazardous substances disposed of at such sites. The Company
believes that OWTS's units and projects were operated in compliance in all
material respects with regulatory requirements that apply to its business.
The Company's waste-to-energy business is subject to the provisions of the
federal Public Utility Regulatory Policies Act ("PURPA"). Pursuant to
PURPA, the Federal Energy Regulatory Commission ("FERC") has promulgated
regulations that exempt qualifying facilities (facilities meeting certain
size, fuel and ownership requirements) from compliance with certain
provisions of the Federal Power Act, the Public Utility Holding Company Act
of 1935, and, except under certain limited circumstances, state laws
regulating the rates charged by electric utilities. PURPA was promulgated
to encourage the development of cogeneration facilities and small
facilities making use of non-fossil fuel power sources, including waste-to-
energy facilities. The exemptions afforded by PURPA to qualifying
facilities from the Federal Power Act and the Public Utility Holding
Company Act of 1935 are of great importance to the Company and its
competitors in the waste-to-energy industry.
State public utility commissions must approve the rates, and in some
instances other contract terms, by which public utilities purchase electric
power from the Company's projects. PURPA requires that electric utilities
purchase electric energy produced by qualifying facilities at negotiated
rates or at a price equal to the incremental or "avoided" cost that would
have been incurred by the utility if it were to generate the power itself
or purchase it from another source. While public utilities are not
required by PURPA to enter into long-term contracts, PURPA creates a
regulatory environment in which such contracts can typically be negotiated.
In October, 1992, Congress enacted, and the President signed into law,
comprehensive energy legislation, several provisions of which are intended
to foster the development of competitive, efficient bulk power generation
markets throughout the country. Although the impact of the legislation
will not be fully known until any judicial challenges are resolved and
Federal and State regulatory agencies develop policies and promulgate
implementing regulations, the Company believes that, over the long term,
the legislation will create business opportunities both in the waste-to-
energy field as well as in other power generation fields.
Other Information
(a) Raw Materials. The construction of each of the Company's waste-to-
energy facilities is generally carried out by a general contractor selected
by the Company. The general contractor is usually responsible for the
procurement of bulk commodities used in the construction of the facility,
such as steel and concrete. These commodities are generally readily
available from many suppliers. The Company generally directs the
procurement of all major equipment utilized in the facility, which
equipment is also generally readily available from many suppliers. The
stoker grates utilized in facilities constructed by the Company are
required to be obtained from Martin pursuant to the Cooperation Agreement.
In connection with the currently operating waste-to-energy facilities, the
Company has entered into long-term waste disposal agreements which obligate
the relevant Client Communities (or in the case of the Haverhill projects,
the private haulers) to deliver specified amounts of waste on an annual
basis. The Company believes that sufficient amounts of waste are being
produced in the United States to support current and future waste-to-energy
projects. Other commodities used in the operation of the Company's
facilities are readily available from many suppliers. See "Regulation"
herein.
(b) Employees. As of February 1, 1994, the Company had 355 full-time
employees. Substantially all of the personnel operating the Company's
waste-to-energy facilities are employees of subsidiaries of an affiliate of
the Company, Ogden Services Corporation ("Ogden Services"). Some of the
employees at certain facilities are employed by subsidiaries of Ogden
Services pursuant to collective bargaining agreements. Each facility's
staff is typically supervised by a Facility Manager who is an employee of a
subsidiary of Ogden Services, and a Manager of Facility Administration, who
is an employee of the Company. There were approximately 1310 employees of
a subsidiary of Ogden Services working at the Company's waste-to-energy
facilities as of February 1, 1994. The Company considers relations with
its employees to be good.
(c) Dependence on Ogden. Ogden has provided, at no cost to the Company,
guarantees of performance of the obligations of the Operating Subsidiaries
for their waste-to-energy projects and has provided other forms of credit
support. Such credit support is typically required in connection with the
Company's proposals to Client Communities, and without such credit support
for future projects, there is no assurance that the Company could continue
to compete effectively in the waste-to-energy industry. Credit support has
also been provided in connection with acquisitions made by the Company.
Ogden also provided certain guarantees with respect to OWTS operations.
Ogden has also supported the Company by providing other guarantees related
to project financing and project energy agreements, by providing support
services in areas such as investor relations, tax, legal, internal audit,
cash management, employee benefits administration, and insurance, and by
funding working and other capital requirements, including the equity
requirements of Company-owned projects, to the extent not provided by the
Company. The Company pays a fee for these services. Under the cash
management arrangements the Company is charged interest by Ogden if it is a
net borrower from, or is paid interest by Ogden if it is a net depositor
with, Ogden. Ogden has further supported the Company by providing certain
personnel, either directly or through a subsidiary. Substantially all of
the personnel utilized by the Company in operating its waste-to-energy
facilities are provided on a cost-plus basis by Ogden Services under the
technical and budgetary supervision of the Company.
The Board of Directors of Ogden has adopted a Statement of Intent providing
that it intends to continue to provide support services to the Company.
However, the Statement of Intent does not represent a contractual
obligation of Ogden and there can be no assurance that Ogden will continue
to provide such support.
Item 2. PROPERTIES
The Company's principal executive offices are located in Fairfield,
New Jersey, in an office building located on a 5.4-acre site owned by the
Company.
The following table summarizes certain information relating to
the locations of the properties owned or leased by the Company or its
subsidiaries as of January 31, 1994(1).
<TABLE>
<CAPTION>
Approximate
Site Size Nature of
Location in Acres Site Use Interest
<S> <C> <C> <C>
Fairfield, New Jersey 5.4 Office space Own
Marion County, Oregon 15.2 Waste-to-energy
facility Own (2)
Alexandria/Arlington, 3.3 Waste-to-energy Acquiring the
Virginia facility Alexandria
Authority's and
the Arlington
Authority's
interest under
Site lease
(expires Oct.
1, 2025)
pursuant to
Conditional
Sale Agreement
Bristol, Connecticut 18.2 Waste-to-energy Own (2)
facility
Bristol, Connecticut 35.0 Landfill Site lease
(expires July
1, 2014)
Indianapolis, Indiana 23.5 Waste-to-energy Site lease
facility (expires Dec.,
2008 subject to
four 5-year
renewal
options) (2)
Stanislaus County, 16.5 Waste-to-energy Site lease
California facility (expires Aug.
20, 2021
subject to 15-
year renewal
option) (2)
Babylon, New York 9.5 Waste-to-energy Site lease
facility (expires Dec.
19, 2010, with
renewal
options)
<PAGE>
<PAGE>
Haverhill, 12.7 Waste-to-energy Site lease
Massachusetts facility (expires Mar.
16, 1997,
subject to
sixteen 5-year
renewal
options) (2)
Haverhill, 16.8 RDF processing Site lease
Massachusetts facility (expires Mar.
16, 1997,
subject to
sixteen 5-year
renewal
options) (2)
Haverhill, 20.2 Landfill Site lease
Massachusetts (expires Mar.
16, 1997,
subject to
sixteen 5-year
renewal
options) (2)
Lawrence, Massachusetts 11.8 RDF power plant Own (2)
Lake County, Florida 15.0 Waste-to-energy Own (2)
facility
Wallingford, Connecticut 10.3 Waste-to-energy Site lease
facility (expires Dec.
1, 2026) (2)
Fairfax County, Virginia 22.9 Waste-to-energy Acquiring
facility Fairfax
Authority's
interest under
Site Lease
(expires Mar.
10, 2016)
pursuant to
Conditional
Sale Agreement
Imperial County, 83.0 Undeveloped land Own
California
Huntington, New York 13.0 Waste-to-energy Site lease
facility (expires Oct.
28, 2012,
subject to
successive
renewal terms
through Jan.
28, 2029)(2)
<PAGE>
<PAGE>
Warren County, 19.8 Waste-to-energy Site lease
New Jersey facility (expires Nov.
16, 2005
subject to two
ten-year
renewals)(2)
Hennepin County, 14.6 Waste-to-energy Leases of site
Minnesota facility and facility
(expires Oct.
1, 2017 subject
to renewal
options to
December 20,
2024)(2)(3)
Stockton, California 4.5 Contaminated soil Site lease
(expired
remediation
facility
February 1,
1994)
(discontinued)
Tulsa, Oklahoma 22.0 Waste-to-energy Leases of site
facility and facility
(expires April
30, 2012
subject to
renewal options
to August 2,
2026)(2)(3)
Harris County, Texas 14.0 Undeveloped land Own
Onondaga, New York Facility site Site lease
expires
contempora-
neously with
service
agreement,
subject to
renewal options
to May 9,
2020(2)
_______________________
(1) Two Facilities, located in Detroit, Michigan and Honolulu, Hawaii and
not listed in the table, were initially owned by political
subdivisions and were sold to leveraged lessors. The lessors entered
into lease agreements with the respective Operating subsidiaries, all
of which lease obligations, including the obligation to pay rent, are
passed through to the client communities.
(2) The Operating Subsidiary's ownership or leasehold interest is subject
to material liens in connection with the financing of the related
project.
(3) Sublease of site expires contemporaneously with facility lease. The
Company believes that its properties and equipment are generally well
maintained, in good operating condition, and adequate for its present
needs. The Company regularly upgrades and modernizes facilities and
equipment and expands its facilities as necessary.
</TABLE>
Item 3. LEGAL PROCEEDINGS
In the ordinary course of its business, the Company becomes involved in
federal, state, and local proceedings relating to the laws regulating the
discharge of materials into the environment and the protection of the
environment. These include proceedings for the issuance, amendment, or
renewal of the licenses and permits pursuant to which the Company operates.
Such proceedings also include actions brought by individuals or local
governmental authorities seeking to overrule governmental decisions on
matters relating to the Company's operations in which the Company may be,
but is not necessarily, a party. Most proceedings brought against the
Company by governmental authorities under these laws relate to alleged
technical violations of regulations, licenses, or permits pursuant to which
the Company operates. To date the Company, has resolved the proceedings to
which it is a party through settlements that generally involve the payment
of civil fines or penalties and, in some instances, changing operational
procedures. None of these resolutions require the Company to make any
material capital expenditures. At September 30, 1993, the Company was
involved in one such proceeding in which the Company believes sanctions
involved may exceed $100,000. The Company believes that such proceeding
will not have a material adverse effect on it or its business.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers (as defined by Rule 3b-7 of the Securities Exchange
Act of 1934) of the Company are named in the table below. Officers are
appointed by the Board of Directors and serve at the discretion of the
Board.
<TABLE>
<CAPTION>
Name Position Age
<S> <C> <C>
R. Richard Ablon Chairman of the Board and Chief 44
Executive Officer
Scott G. Mackin President and Chief Operating Officer 37
Bruce W. Stone Executive Vice President and Managing
Director 46
William C. Mack Executive Vice President 47
John M. Klett Executive Vice President--Operations 47
Gloria A. Mills Executive Vice President--Business
Development 54
William E. Whitman Executive Vice President, Chief
Financial Officer and Treasurer 38
Brian A. Delle Donne Senior Vice President 37
Jeffrey R. Horowitz Senior Vice President, General Counsel
and Secretary 44
Kenneth G. Torosian Vice President and Controller 32
</TABLE>
Information about the executive officers of the Company is set forth below:
Mr. Ablon has been Chairman of the Board and Chief Executive Officer of the
Company since November 1990. Since May 1990, he has been President and
Chief Executive Officer of Ogden. From January 1987 to May 1990, he was
President- and Chief Operating Officer, Operating Services, Ogden.
Mr. Mackin has been President and Chief Operating Officer of the Company
since January 1991. From November 1990 to January 1991, he was Co-
President, Co-Chief Operating Officer, General Counsel and Secretary of the
Company. From 1988 to November 1990, he was First Executive Vice President
and Managing Director, General Counsel of the Company and since December
1989 Secretary of the Company. From 1987 to 1988, he was Vice President
and General Counsel of the Company, and from 1987 to May 1989, he was
Secretary of the Company.
Mr. Stone has been Executive Vice President and Managing Director of the
Company since January 1991. From November 1990 to January 1991, he was Co-
President and Co-Chief Operating Officer of the Company. From 1988 through
November 1990, he was First Executive Vice President and Managing Director-
- -Project Implementation of the Company.
Mr. Mack has been Executive Vice President of the Company since January
1991. He was Secretary of the Company from January 1991 until November
1991. From 1988 to January 1991, he was First Executive Vice President and
Managing Director--Operations of the Company.
Mr. Klett has been Executive Vice President--Operations of the Company
since January 1991. From January 1990 to January 1991, he was Executive
Vice President--Plant Operations of OMS. From March 1989 to January 1990,
he was Senior Vice President--Plant Operations of OMS.
Ms. Mills has been Executive Vice President--Business Development of the
Company since January 1991. From 1988 to January 1991, she was First
Executive Vice President and Managing Director--Marketing of the Company.
Mr. Whitman has been Executive Vice President of the Company since
February, 1994 and Chief Financial Officer and Treasurer of the Company
since September 1990. He was also Senior Vice President of the Company
from December 1990 through February 1994 and Vice President of the Company
from September 1990 through December 1990. From January 1990 to September
1990, he was Assistant Vice President, Facility Administration of OMS.
From November 1987 to January 1990, he was first a Senior Cost Analyst,
then Director, Facility Administration, of the Company.
Mr. Delle Donne has been Senior Vice President of the Company since May
1990, and has been President and Chief Operating Officer of OWTS since
November 1989. From October 1987 through October 1989, he was Director,
Marketing at Westinghouse Environmental Services.
Mr. Horowitz has been a Senior Vice President and General Counsel of the
Company since July, 1991 and Secretary since November 1991. From 1982 until
1991 he was a partner in the law firm of Schnader, Harrison, Segal and
Lewis.
Mr. Torosian has been Vice President of the Company since February 1992 and
Controller of the Company since November 1987.
<PAGE>
<PAGE>
PART II
Item 5. MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS.
The information required by this item is incorporated herein by
reference to the material captioned "Price Range of Common Stock and
Dividend Data" on page 44 of the Company's 1993 Annual Report to
Stockholders.
As of February 28, 1994, there were 5,103 holders of record of
the Company's Common Stock.
Item 6. SELECTED FINANCIAL DATA.
The information required by this item is incorporated herein by
reference to the material captioned "Selected Financial Data" on page 24 of
the Company's 1993 Annual Report to Stockholders.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION.
The information required by this item is incorporated herein by
reference to the material captioned "Management's Discussion and Analysis
of Consolidated Operations" on pages 22 and 23 of the Company's 1993 Annual
Report to Stockholders.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by this item is incorporated herein by
reference to pages 25 through 42 and 44 of the Company's 1993 Annual Report
to Stockholders. For other financial statements and schedules required
under this item, reference is made to Item 14 of this Report.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable.
<PAGE>
<PAGE>
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.
(a) Directors. The information with respect to directors
required by this item is incorporated herein by reference to the Company's
1994 Proxy Statement to be filed with the Securities and Exchange
Commission.
(b) Executive Officers. The information with respect to
officers required by this item is included at the end of PART I of this
document under the heading Executive Officers of the Company.
Item 11. EXECUTIVE COMPENSATION.
The information required by this item is incorporated herein by
reference to the Company's 1994 Proxy Statement to be filed with the
Securities and Exchange Commission.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by this item is incorporated herein by
reference to the Company's 1994 Proxy Statement to be filed with the
Securities and Exchange Commission.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this item is incorporated herein by
reference from the Company's 1994 Proxy Statement to be filed with the
Securities and Exchange Commission.
<PAGE>
<PAGE>
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) Listed below are the documents filed as a part of this report:
1. Consolidated Financial Statements and the Independent
Auditors' Report incorporated herein by reference to pages 25 through 42 of
the Company's 1993 Annual Report to Stockholders:
Independent Auditors' Report.
Consolidated Balance Sheets, December 31, 1993 and
1992.
Statements of Consolidated Income for the Years Ended
December 31, 1993, 1992, and 1991.
Statements of Consolidated Cash Flows for the Years
Ended December 31, 1993, 1992, and 1991.
Statements of Common Stockholders' Equity for the Years
Ended December 31, 1993, 1992, and 1991.
Notes to Consolidated Financial Statements.
2. Financial Statement Schedules:
Independent Auditors' Report
Schedule II - Amounts Receivable from Related Parties
and Underwriters, Promoters, and Employees other than
Related Parties.
Schedule V - Property, Plant, and Equipment.
Schedule VI - Accumulated Depreciation, Depletion, and
Amortization of Property, Plant, and Equipment.
Schedule VIII - Valuation and Qualifying Accounts.
Schedule X - Supplementary Income Statement
Information.
Schedules, other than those listed above, have been
omitted because of the absence of conditions under
which they are required or because the required
information is included in the financial statements or
the notes thereto.
3. Exhibits:
3.1 Third Restated Certificate of Incorporation.*
(i) Certificate of Retirement of Stock and
Reduction of Capital, dated March 1, 1990.*.
(ii) Certificate of Retirement of Stock and
Reduction of Capital, dated April 26, 1990.*
(iii) Certificate of Ownership and Merger,
dated December 1, 1989.*
3.2 Third Restated By-Laws of Ogden Projects, Inc. as amended.*
4.1 (a) Trust Indenture, dated as of December 1, 1986, and
amended and restated as of July 1, 1987, between
Shawmut Bank, N.A., as trustee, and Massachusetts
Industrial Finance Agency.*
(i) Amendment No. 2, dated as of April 1, 1992,
to Amended and Restated Trust Indenture, as
amended, between Shawmut Bank, N.A., as
trustee, and Massachusetts Industrial Finance
Agency.*
(ii) Supplemental and Amending Trust Indenture,
dated as of May 1, 1992, between Shawmut
Bank, N.A., as trustee, and Massachusetts
Industrial Finance Agency.*
(b) OHA Loan Agreement, dated as of December 1, 1986,
and as amended as of August 1, 1988, between Ogden
Haverhill Associates and Massachusetts Industrial
Finance Agency.*
(i) Amendment No. 2, dated as of May 1, 1992, to
the OHA Loan Agreement, as amended, between
Ogden Haverhill Associates and Massachusetts
Industrial Finance Agency.*
(c) OHA (Ogden Haverhill Project) Massachusetts
Industrial Finance Agency Series A Note, dated
December 23, 1986, and as amended as of August 1,
1988 (Amendment incorporated by reference to
Exhibit No. 4.1(e)), by Ogden Haverhill Associates
to Shawmut Bank, N.A., as trustee.*
(d) OHA (Ogden Haverhill Project) Massachusetts
Industrial Finance Agency Series B Note, dated
December 23, 1986, and as amended as of August 1,
1988 (Amendment incorporated by reference to
Exhibit No. 4.1(e)), by Ogden Haverhill Associates
to Shawmut Bank, N.A., as trustee.*
(e) OHA (Ogden Haverhill Project) Massachusetts
Industrial Finance Agency Series C Note, dated
December 23, 1986, and as amended as of August 1,
1988, by Ogden Haverhill Associates to Shawmut
Bank, N.A., as trustee.*
(i) Amendment No. 2, dated as of May 29, 1992, to
OHA (Ogden Haverhill Project) Massachusetts
Industrial Finance Agency Series C Note, as
amended , by Ogden Haverhill Associates to
Shawmut Bank, N.A., as trustee.*
<PAGE>
<PAGE>
(f) SBR Loan Agreement, dated as of December 1, 1986,
and as amended through August 1, 1988, between SBR
Associates and Massachusetts Industrial Finance
Agency.*
(i) Amendment No. 2, dated as of May 1, 1992, to
SBR Loan Agreement, as amended, between SBR
Associates and Massachusetts Industrial
Finance Agency.*
(g) SBR (Ogden Haverhill Project) Massachusetts
Industrial Finance Agency Series D Note, dated
December 23, 1986, and as amended as of August 1,
1988, by SBR Associates to Shawmut Bank, N.A., as
trustee.*
(i) Amendment No. 2, dated as of May 28, 1992, to
SBR (Ogden Haverhill Project) Massachusetts
Industrial Finance Agency, Series D Note, as
amended, by SBR Associates to Shawmut Bank,
N.A., as trustee.*
(h) Letter of Credit and Reimbursement Agreement,
dated as of December 1, 1986, between Ogden Martin
Systems of Haverhill, Inc. and Union Bank of
Switzerland, New York Branch.*
(i) Reimbursement Agreement Amendment, dated
August 1, 1988, between Ogden Martin Systems
of Haverhill, Inc. and Union Bank of
Switzerland, New York Branch.*
(ii) Second Reimbursement Agreement Amendment,
dated August 1, 1989, between Ogden Martin
Systems of Haverhill, Inc. and Union Bank of
Switzerland, New York Branch.*
(iii) Third Reimbursement Agreement, dated
October 13, 1989, between Ogden Martin
Systems of Haverhill, Inc. and Union
Bank of Switzerland, New York Branch.*
(iv) Fourth Reimbursement Agreement Amendment,
dated as of September 23, 1991, between Ogden
Martin Systems of Haverhill, Inc. and Union
Bank of Switzerland, New York Branch.*
(v) Fifth Reimbursement Agreement Amendment,
dated as of May 1, 1992, between Ogden Martin
Systems of Haverhill, Inc. and Union Bank of
Switzerland, New York Branch.*
(i) Reimbursement Agreement, dated as of May 31, 1989,
between Ogden Haverhill Properties, Inc. and Swiss
Bank Corporation, New York Branch.*
(i) First Amendment to the Reimbursement
Agreement dated as of May 28, 1992 between
Ogden Haverhill Properties, Inc. and Swiss
Bank Corporation, New York Branch.*
4.2 (a) Second Amended and Restated Trust Indenture, dated
as of February 1, 1989, between the Fairfax County
Economic Development Authority and Crestar Bank,
as trustee.*
(b) Conditional Sale and Security Agreement, dated as
of February 1, 1988, between the Fairfax County
Solid Waste Authority and Ogden Martin Systems of
Fairfax, Inc.*
4.3 Specimen Stock Certificate for Company's Common
Stock.*
4.4 Demand Note, dated May 31, 1989, by Company to
Ogden Corporation.*
4.5 Demand Note, dated December 19, 1984, by Company
to Bouldin Development Corporation.*
10.1 Tax Sharing Agreement, dated as of January 1,
1989, among Ogden Corporation, Company and
Subsidiaries, Ogden Allied Services, Inc. and
Subsidiaries, and Ogden Financial Services, Inc.
and Subsidiaries.*
10.2 (a) Amended and Restated Cooperation Agreement, dated
April 30, 1983 and amended and restated as of
April 1, 1985, and as further amended through
May 25, 1989 between Ogden Martin Systems, Inc.
and Martin GmbH fur Umwelt- und Energietechnik of
West Germany (confidential status has been granted
for certain provisions thereof pursuant to
Commission Order No. 810132).*
(i) Amendment to Section 5.3.1 of the Amended and
Restated Cooperation Agreement, effective as
of January 1, 1989, between Ogden Martin
Systems, Inc. and Martin GmbH fur Umwelt- und
Energietechnik of West Germany (confidential
status has been granted for certain
provisions thereof pursuant to Rule 24b-2.)*
(ii) Amendment No. 6 to Amended and Restated
Cooperation Agreement, effective as of
January 1, 1991, between Ogden Martin
Systems, Inc. and Martin GmbH fur Umwelt-und
Energietechnik of West Germany.*
(b) Rights of First Refusal, dated June 2, 1989, among
Walter Josef Martin, Anneliese Martin, Johannes
Josef Edmund Martin and Ogden Martin Systems,
Inc.*
10.3 Ogden Projects, Inc. Directors' Stock Option Plan.*
10.4 Letter Agreement, dated October 5, 1990, between David L.
Sokol and Ogden Corporation.*
10.5 Ogden Projects, Inc. Employees' Stock Option Plan.*
10.6 Ogden Corporation Pension Plan, as amended and
restated, effective as of January 1, 1988.*
10.7 Ogden Corporation Supplementary Deferred Benefit Plan,
adopted December 13, 1976, and amended as of January 5,
1988.*
10.8 Ogden Corporation Stock Option Plan, effective as of March
11, 1986.*
10.9 Ogden Corporation 1990 Stock Option Plan, effective as of
October 11, 1990.*
10.10 Ogden Projects, Inc. Pension Plan effective as of
January 1, 1989.*
(i) Amendment to Ogden Projects, Inc. Pension
Plan effective as of January 1, 1994.
10.11 Form of Supplementary Deferred Benefit Plan of Ogden
Projects, Inc. effective as of January 1, 1989.*
10.12 Ogden Projects, Inc. Profit Sharing Plan effective as
of January 1, 1989.*
(i) Ogden Projects Profit Sharing Plan amendment
by Unanimous Written Consent of the
Administrative Committee, dated March 7,
1990.*
(ii) Amendment to Ogden Projects, Inc. Profit
Sharing Plan effective as of January 1, 1994.
10.13 Ogden Allied Services Saving and Security Plan, as
amended and restated, effective as of August 1, 1986.*
10.14 Ogden Services Corporation Profit Sharing Plan, as
amended and restated, effective as of January 1, 1989,
as further amended July 18, 1990.*
10.15 (a) Ogden Services Corporation Executive Pension
Plan, effective as of January 1, 1989.*
(b) Ogden Services Corporation Executive Pension Plan
Trust Agreement, dated as of October 1, 1990,
between Ogden Services Corporation and The Bank of
New York.*
10.16 (a) Ogden Services Corporation Select Savings
Plan, dated as of October 1, 1990.*
(b) Ogden Services Corporation Select Savings Plan
Trust Agreement, dated as of October 1, 1990,
between Ogden Services Corporation and The Bank of
New York.*
10.17 Form of Supplemental Defined Benefit Plan of Ogden
Allied Services effective as of January 1, 1989.*
10.18 Ogden Environmental Services Pension Plan effective as
of January 1, 1989.*
10.19 Ogden Environmental Services Profit Sharing Plan
effective as of January 1, 1989.*
(i) Ogden Environmental Services Profit Sharing
Plan amendment by Unanimous Written Consent
of the Administrative Committee, dated March
7, 1990.*
10.20 Form of Supplementary Deferred Benefit Plan of Ogden
Environmental Services, Inc., effective as of January
1, 1989.*
10.21 Stock Purchase Agreement, dated as of May 31, 1989,
between Company and Ogden Corporation.*
10.22 Stock Purchase Option Agreement, dated June 14, 1989,
between Ogden Corporation and Company.*
(i) Amendment to Stock Purchase Option Agreement,
dated November 16, 1989, between Ogden
Corporation and Company.*
10.23 Employment Agreement, dated as of June 1, 1990, between
Company and William C. Mack.*
10.24 Employment Agreement, dated as of June 1, 1990, between
Company and Scott G. Mackin.*
(i) Employment Agreement dated January 1, 1994
between Company and Scott G. Mackin.
10.25 Employment Agreement, dated as of June 1, 1990, between
Company and Gloria A. Mills.*
10.26 Employment Agreement, dated as of June 1, 1990, between
Company and Bruce W. Stone.*
10.27 Employment Agreement, dated as of June 1, 1990, between
Company and John M. Klett.*
10.28 Employment Agreement, dated as of May 24, 1990, between
Ogden Corporation and R. Richard Ablon, as amended
October 11, 1990.*
10.29 Agreement and Plan of Merger dated September 20, 1990
by and among Ogden Environmental Services of Houston,
Inc., Ogden Acquisition Company and American
Envirotech, Inc.*
(i) Amendment dated June 12, 1991 by and among
Ogden Environmental Services of Houston,
Inc., Ogden Acquisition Company, and American
Envirotech, Inc.*
10.30 Ogden Projects, Inc. Core Executive Benefit Program.*
13.0 Annual Report to Stockholders for the year ended
December 31, 1993.
21.0 Subsidiaries of the Company.
24.0 Consent of Deloitte & Touche.
_______________
* Incorporated by reference as set forth in the Exhibit Index of this
Annual Report on Form 10-K.
Note:
Long term debt instruments of the Company and its consolidated subsidiaries
under which the total amount of securities authorized do not exceed 10% of
the total assets of the Company and its subsidiaries on a consolidated
basis will be furnished to the Commission upon request.
(b) The Company filed the following reports on Form 8-K during the
quarter ended December 31, 1993:
None.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
OGDEN PROJECTS, INC.
By:/s/ R. Richard Ablon
Chairman and Chief Executive Officer
Date: March 29, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Company in the capacities indicated on March 29, 1994.
Signature Title
/s/ R. Richard Ablon Chairman of the Board and
R. Richard Ablon Chief Executive Officer
/s/ Scott G. Mackin President, Chief Operating
Scott G. Mackin Officer and Director
/s/ Bruce W. Stone Executive Vice President,
Bruce W. Stone Managing Director and Director
/s/ William E. Whitman Executive Vice President,
William E. Whitman Chief Financial Officer and Treasurer
(Chief Financial Officer)
/s/ Kenneth G. Torosian Vice President and Controller
Kenneth G. Torosian (Chief Accounting Officer)
/s/ William M. Batten Director
William M. Batten
/s/ Constantine G. Caras Director
Constantine G. Caras
/s/ Lynde H. Coit Director
Lynde H. Coit
/s/ Philip G. Husby Director
Philip G. Husby
/s/ Robert E. Smith Director
Robert E. Smith
/s/ Jeffrey F. Friedman Director
Jeffrey F. Friedman
<PAGE>
<PAGE>
DELOITTE &
TOUCHE
One World Trade Center Facsimile:(212)524-0890
New York, New York 10048-0601 International & Domestic
Telephone:(212)669-5000 Telex: 4995706
1633 Broadway Facsimile:(212)489-6944
New York, New York 10019-6754 International & Domestic
Telephone:(212)489-1600 Telex: 4995706
INDEPENDENT AUDITORS' REPORT
Ogden Projects, Inc.
We have audited the consolidated financial statements of Ogden Projects,
Inc. and subsidiaries as of December 31, 1993 and 1992 and for each of the
three years in the period ended December 31, 1993, and have issued our
report thereon dated February 2, 1994, which report includes an explanatory
paragraph relating to the adoption of Statement of Financial Accounting
Standards No. 109; such consolidated financial statements and report are
included in your 1993 Annual Report to Shareholders and are incorporated
herein by reference. Our audits also included the consolidated financial
statement schedules of Ogden Projects, Inc. and subsidiaries, listed in
Item 14. These consolidated financial statement schedules are the
responsibility of the Company's management. Our responsibility is to
express an opinion based on our audits. In our opinion, such consolidated
financial statement schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly in all
material respects the information set forth therein.
/S/ Deloitte & Touche
February 2, 1994
<PAGE>
<PAGE>
SCHEDULE II
<TABLE>
OGDEN PROJECTS, INC. AND SUBSIDIARIES
AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS,
PROMOTERS, AND EMPLOYEES OTHER THAN RELATED PARTIES
FOR THE YEAR ENDED DECEMBER 31, 1991
<CAPTION>
Column A Column B Column C Column D Column E
BALANCE AT DEDUCTIONS BALANCE AT END OF PERIOD
BEGINNING AMOUNTS AMOUNTS
NAME OF DEBTOR OF PERIOD ADDITIONS COLLECTED WRITTEN OFF CURRENT NON-CURRENT
<S> <C> <C> <C> <C> <C> <C>
Brian Delle Donne (A) $175,000 $175,000
Notes:
(A) Mortgage Loan, Collateralized Promissory Note, bearing interest at 8.5% per
annum.
</TABLE>
<PAGE>
<PAGE>
SCHEDULE V
<TABLE>
OGDEN PROJECTS, INC. AND SUBSIDIARIES
PROPERTY, PLANT, AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(In thousands of dollars)
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
BALANCE AT OTHER BALANCE AT
BEGINNING ADDITIONS CHANGES END OF
CLASSIFICATION OF PERIOD AT COST RETIREMENTS ADD/(DEDUCT) PERIOD
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1993
Land $ 5,049 $ 5,049
Waste-to-energy facilities 1,538,762 $ 611 1,539,373
Buildings and improvements 39,498 4,420 $ 4,228 (A) 48,146
Machinery and equipment 19,228 4,066 $278 23,016
Landfills 8,306 158 8,464
Construction in progress 24,993 73,292 (2,496)(B) 95,789
TOTAL $1,635,836 $82,547 $278 $ 1,732 $1,719,837
YEAR ENDED DECEMBER 31, 1992
Land $ 5,049 $ 5,049
Waste-to-energy facilities 1,491,791 $ 9,804 $101 $ 37,268 (C) 1,538,762
Buildings and improvements 27,075 8,556 3,867 (B) 39,498
Machinery and equipment 16,168 3,430 370 19,228
Landfills 8,166 140 8,306
Construction in progress 10,054 16,441 (1,502)(D) 24,993
TOTAL $1,558,303 $38,371 $471 $ 39,633 $1,635,836
YEAR ENDED DECEMBER 31, 1991
Land $ 5,158 $ (109)(E) $ 5,049
Waste-to-energy facilities 1,042,702 $ 659 448,430 (F) 1,491,791
Buildings and improvements 26,516 559 27,075
Machinery and equipment 12,626 3,612 $ 70 16,168
Landfills 8,371 107 (312)(E) 8,166
Construction in progress 178,621 68,944 (237,511)(G) 10,054
TOTAL $1,273,994 $73,881 $ 70 $210,498 $1,558,303
NOTES:
(A) Represents $2,496 from the reclassification of construction in progress upon completion and $1,732
from the acquisition of the capital stock of RRS Holdings, Inc.
(B) Reclassification of construction in progress upon completion.
(C) Represents $39,633 from adjustment to acquired property, plant, and equipment to pretax amounts
upon adoption of Statement of Financial Accounting Standards No. 109 and $(2,365) from adjustment
of accruals.
(D) Represents $(3,867) from the reclassification of construction in progress upon completion and
$2,365 from adjustment of accruals.
(E) Adjustment of accruals.
(F) Represents $238,723 from the reclassification of construction in progress upon completion,
$202,974 from the acquisition of the capital stock of Blount Energy Resource Corp., $8,300 from
contract cost adjustment, and $(1,567) from adjustment of accruals.
(G) Represents $(238,723) from the reclassification of construction in progress upon completion and
$1,212 from adjustment of accruals.
Prior-year amounts have been reclassified to conform with the 1993 presentation.<PAGE>
</TABLE>
SCHEDULE VI
<PAGE>
<TABLE>
OGDEN PROJECTS, INC. AND SUBSIDIARIES
ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY, PLANT, AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(In thousands of dollars)
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
ADDITIONS
BALANCE AT CHARGED TO OTHER BALANCE AT
BEGINNING COST AND CHANGES END OF
DESCRIPTION OF PERIOD EXPENSES RETIREMENTS ADD/(DEDUCT) PERIOD
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1993
Waste-to-energy facilities $ 98,475 $35,134 $133,609
Buildings and improvements 2,073 384 $359 (A) 2,816
Machinery and equipment 11,761 2,277 $264 604 (A) 14,378
Landfills 5,309 363 5,672
TOTAL $117,618 $38,158 $264 $963 $156,475
YEAR ENDED DECEMBER 31, 1992
Waste-to-energy facilities $ 62,352 $34,551 $ 10 $1,582 (B) $ 98,475
Buildings and improvements 1,647 68 358 (A) 2,073
Machinery and equipment 9,357 2,094 322 632 (A) 11,761
Landfills 5,277 32 5,309
TOTAL $ 78,633 $36,745 $332 $2,572 $117,618
YEAR ENDED DECEMBER 31, 1991
Waste-to-energy facilities $ 35,441 $26,911 $ 62,352
Buildings and improvements 1,243 46 $ 358 (A) 1,647
Machinery and equipment 6,425 1,656 $ 58 1,334 (A) 9,357
Landfills 5,138 609 (470) (C) 5,277
TOTAL $ 48,247 $29,222 $ 58 $1,222 $ 78,633
NOTES:
(A) Amount capitalized.
(B) Adjustment to acquired property, plant, and equipment to pretax amounts upon adoption of Statement
of Financial Accounting Standards No. 109.
(C) Adjustment of accruals.
</TABLE>
<PAGE>
<PAGE>
SCHEDULE VIII
<TABLE>
OGDEN PROJECTS, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(In thousands of dollars)
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
ADDITIONS
BALANCE AT CHARGED TO CHARGED TO BALANCE AT
BEGINNING COST AND OTHER END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS PERIOD
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1993
Allowances deducted from assets to
which they apply:
Deferred charges on projects $ 750 $ 750
Doubtful receivables 4,776 $ 180 $4,073 (A) $ 1,708 (C) 7,321
Allowances not deducted:
Estimated cost of disposal
of discontinued operations 7,620 1,706 4,061 (B) 12,379 (D) 1,008
Other 1,350 1,350
TOTAL RESERVES $13,146 $ 3,236 $8,134 $14,087 $10,429
YEAR ENDED DECEMBER 31, 1992
Allowances deducted from assets to
which they apply:
Deferred charges on projects $ 6,500 $ 5,750 (E) $ 750
Doubtful receivables 531 $ 265 $4,121 (A) 141 (C) 4,776
<PAGE>
Allowances not deducted:
Estimated cost of disposal
of discontinued operations 7,090 530 (F) 7,620
TOTAL RESERVES $14,121 $ 265 $4,651 $ 5,891 $13,146
YEAR ENDED DECEMBER 31, 1991
Allowances deducted from assets to
which they apply:
Deferred charges on projects $ 6,500 $ 6,500
Doubtful receivables $ 163 406 $ 38 (C) 531
Allowances not deducted:
Estimated cost of disposal
of discontinued operations 7,090 7,090
TOTAL RESERVES $ 163 $13,996 $ 38 $14,121
NOTES:
(A) Reserve for contract billing adjustments.
(B) Net proceeds from on-site remediation utilizing mobile technology $3,853 and reclassification
of liabilities pertaining to fixed-site hazardous waste business $208.
(C) Write-offs of receivables considered uncollectible.
(D) Gain from on-site remediation business utilizing mobile technology.
(E) Write-offs of unsuccessful development efforts.
(F) Net proceeds from on-site remediation utilizing mobile technology.<PAGE>
SCHEDULE X
</TABLE>
<PAGE>
<TABLE>
OGDEN PROJECTS, INC. AND SUBSIDIARIES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
<CAPTION>
COLUMN A COLUMN B
CHARGED TO COSTS AND EXPENSES
ITEM 1993 1992 1991
<S> <C> <C> <C>
Maintenance and repairs $55,161,000 $40,873,000 $36,019,000
Royalties 7,452,000 5,901,000 4,750,000
</TABLE>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
3.1 Third Restated Certificate of Incorporated by reference to
Incorporation. Exhibit No. 3.1 forming part of
Amendment No. 1 to the
Company's Registration State-
ment on Form S-1 (File No.
33-29312) filed with the
Securities and Exchange
Commission under the Securities
Act of 1933, as amended.
(i) Certificate of Retirement Incorporated by reference to
of Stock and Reduction of Exhibit No. 3.1(a) forming part
Capital, dated March 1, of the Company's Registration
1990. Statement on Form S-1 (File No.
33-33679) filed with Securities
and Exchange Commission under
the Securities Act of 1933, as
amended.
(ii) Certificate of Retirement Incorporated by reference to
of Stock and Reduction of Exhibit No. 4.0(a)(ii) forming
Capital, dated April 26, part of the Company's Report on
1990. Form 10-Q (File No. 1-10282)
filed with the Securities and
Exchange Commission under the
Securities Exchange Act of
1934, as amended, for the
quarterly period ended March
31, 1990.
(iii) Certificate of Ownership Incorporated by reference to
and Merger, dated Exhibit 3.1(iii) forming part of
December 1, 1989. the Company's Report on Form
10-K (File No. 1-10282) filed
with the Securities and
Exchange Commission under the
Securities Exchange Act of
1934, as amended, for the
fiscal year ended December 31,
1990.
3.2 Third Restated By-Laws of Ogden Incorporated by reference to
Projects, Inc. as amended through Exhibit 3.2 forming part of the
March 12, 1991. Company's Report on Form 10-K
(File No. 1-10282) filed with
the Securities and Exchange
Commission under the Securities
Exchange Act of 1934, as
amended, for the fiscal year
ended December 31, 1990.
<PAGE>
4 Instruments Defining Rights of
Security Holders.
4.1 (a) Trust Indenture, dated as Incorporated by reference to
of December 1, 1986, and Exhibit No. 4.1(a) forming part
amended and restated as of of the Company's Registration
July 1, 1987, between Statement on Form S-1 (File No.
Shawmut Bank, N.A., as 33-29312) filed with the
trustee, and Massachusetts Securities and Exchange Commis-
Industrial Finance Agency. sion under the Securities Act of
1933, as amended.
(i) Amendment No. 2, dated Incorporated by reference to
as of April 1, 1992, to Exhibit No. 4.1(a)(i) forming
Amended and Restated part of the Company's Report on
Trust Indenture, as Form 10-Q (File No. 1-10282)
amended, between Shawmut filed with the Securities and
Bank, N.A., as trustee, Exchange Commission under the
and Massachusetts Securities Exchange Act of 1934,
Industrial Finance as amended, for the quarterly
Agency. period ended June 30, 1992.
(ii) Supplemental and Incorporated by reference to
Amending Trust Inden- Exhibit No. 4.1(a)(ii) forming
ture, dated as of May part of the Company's Report on
1, 1992, between Form 10-Q (File No. 1-10282)
Shawmut Bank, N.A., as filed with the Securities and
trustee, and Massachu- Exchange Commission under the
setts Industrial Securities Exchange Act of 1934,
Finance Agency. as amended, for the quarterly
period ended June 30, 1992.
(b) OHA Loan Agreement, dated Incorporated by reference to
as of December 1, 1986, and Exhibit No. 4.1(b) forming part
as amended as of August 1, of the Company's Registration
1988, between Ogden Haverhill Statement on Form S-1 (File No.
Associates and Massachusetts 33-29312) filed with the
Industrial Finance Agency. Securities and Exchange
Commission under the Securities
Act of 1933, as amended.
(i) Amendment No. 2, dated Incorporated by reference to
as of May 1, 1992, to Exhibit No. 4.1(b)(i) forming
the OHA Loan Agreement, part of the Company's Report on
as amended, between Form 10-Q (File No. 1-10282)
Ogden Haverhill filed with the Securities and
Associates and Exchange Commission under the
Massachusetts Industrial Securities Exchange Act of 1934,
Finance Agency. as amended, for the quarterly
period ended June 30, 1992.
<PAGE>
(c) OHA (Ogden Haverhill Incorporated by reference to
Project) Massachusetts Exhibit No. 4.1(c) forming part
Industrial Finance Agency of the Company's Registration
Series A Note, dated Statement on Form S-1 (File No.
December 23, 1986, and as 33-29312) filed with the
amended as of August 1, Securities and Exchange Commis-
1988 (Amendment incorpor- sion under the Securities Act of
ated by reference to 1933, as amended.
Exhibit No. 4.1(e)), by
Ogden Haverhill Associates
to Shawmut Bank, N.A., as
trustee.
(d) OHA (Ogden Haverhill Incorporated by reference to
Project) Massachusetts Exhibit No. 4.1(d) forming part
Industrial Finance Agency of the Company's Registration
Series B Note, dated December Statement on Form S-1 (File No.
23, 1986, and as amended as 33-29312) filed with the
of August 1, 1988 (Amendment Securities and Exchange Commis-
incorporated by reference to sion under the Securities Act of
Exhibit No. 4.1(e)), by 1933, as amended.
Ogden Haverhill Associates to
Shawmut Bank, N.A., as
trustee.
(e) OHA (Ogden Haverhill Incorporated by reference to
Project) Massachusetts Exhibit No. 4.1(e) forming part
Industrial Finance Agency of the Company's Registration
Series C Note, dated Statement on Form S-1 (File No.
December 23, 1986, and as 33-29312) filed with the
amended as of August 1, 1988, Securities and Exchange Commis-
by Ogden Haverhill Associates sion under the Securities Act of
to Shawmut Bank, N.A., as 1933, as amended.
trustee.
(i) Amendment No. 2, dated Incorporated by reference to
as of May 28, 1992, to Exhibit No. 4.1(e)(i) forming
OHA (Ogden Haverhill part of the Company's Report on
Project) Massachusetts Form 10-Q (File No. 1-10282)
Industrial Finance filed with the Securities and
Agency Series C Note, Exchange Commission under the
as amended, by Ogden Securities Exchange Act of 1934,
Haverhill Associates as amended, for the quarterly
to Shawmut Bank, N.A., period ended June 30, 1992.
as trustee.
(f) SBR Loan Agreement, dated as Incorporated by reference to
of December 1, 1986, and as Exhibit No. 4.1(f) forming part
amended through August 1, of the Company's Registration
1988, between SBR Associates Statement on Form S-1 (File No.
and Massachusetts Industrial 33-29312) filed with the
Finance Agency. Securities and Exchange
Commission under the Securities
Act of 1933, as amended.
<PAGE>
(i) Amendment No. 2, dated Incorporated by reference to
as of May 1, 1992, to Exhibit No. 4.1(f)(i) forming
SBR Loan Agreement, as part of the Company's Report on
amended, between SBR 10-Q (File No. 1-10282) filed
Associates and with the Securities and Exchange
Massachusetts Commission under the Securities
Industrial Finance Exchange Act of 1934, as
Agency. amended, for the quarterly
period ended June 30, 1992.
(g) SBR (Ogden Haverhill Project) Incorporated by reference to
Massachusetts Industrial Exhibit No. 4.1(g) forming part
Finance Agency Series D of the Company's Registration
Note, dated December 23, Statement on Form S-1 (File No.
1986, and as amended as of 33-29312) filed with the
August 1, 1988, by SBR Securities and Exchange
Associates to Shawmut Commission under the Securities
Bank, N.A., as trustee. Act of 1933, as amended.
(i) Amendment No. 2, dated Incorporated by reference to
as of May 28, 1992, to Exhibit No. 4.1(g)(i) forming
SBR (Ogden Haverhill part of the Company's Report on
Project) Massachusetts Form 10-Q (File No. 1-10282)
Industrial Finance filed with the Securities and
Agency, Series D Note, Exchange Commission under the
as amended by SBR Securities Exchange Act of 1934,
Associates to Shawmut as amended, for the quarterly
Bank, N.A., as trustee. period ended June 30, 1992.
(h) Letter of Credit and Reim- Incorporated by reference to
bursement Agreement dated as Exhibit No. 4.1(h) forming part
of December 1, 1986, between of the Company's Registration
Ogden Martin Systems of Statement on Form S-1 (File No.
Haverhill, Inc. and Union 33-29312) filed with the
Bank of Switzerland, New Securities and Exchange
York Branch. Commission under the Securities
Act of 1933, as amended.
(i) Reimbursement Agreement Incorporated by reference to
Amendment, dated August Exhibit No. 4.1(h)(i) forming
1, 1988, between Ogden part of Amendment No. 1 to the
Martin Systems of Company's Registration Statement
Haverhill, Inc. and on Form S-1 (File No. 33-29312)
Union Bank of filed with the Securities and
Switzerland, New York Exchange Commission under the
Branch. Securities Act of 1933, as
amended.
(ii) Second Reimbursement Incorporated by reference to
Agreement Amendment, Exhibit No. 4.1(h)(ii) forming
dated August 1, 1989, part of Amendment No. 3 to the
between Ogden Martin Company's Registration Statement
Systems of Haverhill, on Form S-1 (File No. 33-29312)
Inc. and Union Bank of filed with the Securities and
Switzerland, New York Exchange Commission under the
Branch. Securities Act of 1933, as
amended.
<PAGE>
(iii) Third Reimbursement Incorporated by reference to
Agreement Amendment, Exhibit No. 4.1(h)(iii) forming
dated October 13, 1989, part of Amendment No. 1 to the
between Ogden Martin Company's Registration Statement
Systems of Haverhill, on Form S-1 (File No. 33-31575)
Inc. and Union Bank of filed with the Securities and
Switzerland, New York Exchange Commission under the
Branch. Securities Act of 1933, as
amended.
(iv) Fourth Reimbursement Incorporated by reference to
Agreement Amendment, Exhibit No. 4.1(h)(iv) forming
dated September 23, part of the Company's Report on
1991, between Ogden Form 10-Q (File No. 1-10282)
Martin Systems of filed with the Securities and
Haverhill, Inc. and Exchange Commission under the
Union Bank of Securities Exchange Act of 1934,
Switzerland, New York as amended, for the quarterly
Branch. period ended June 30, 1992.
(v) Fifth Reimbursement Incorporated by reference to
Agreement Amendment, Exhibit No. 4.1(h)(v) forming
dated May 1, 1992, part of the Company's Report on
between Ogden Martin Form 10-Q (File No. 1-10282)
Systems of Haverhill, filed with the Securities and
Inc. and Union Bank of Exchange Commission under the
Switzerland, New York Securities Exchange Act of 1934,
Branch. as amended, for the quarterly
period ended June 30, 1992.
(i) Reimbursement Agreement, Incorporated by reference to
dated as of May 31, 1989, Exhibit No. 4.1(i) forming part
between Ogden Haverhill of the Company's Report on Form
Properties, Inc. and Swiss 10-Q (File No. 1-10282) filed
Bank Corporation, New York with the Securities and Exchange
Branch. Commission under the Securities
Exchange Act of 1934, as
amended, for the quarterly
period ended June 30, 1990.
(i) First Amendment to the Incorporated by reference to
Reimbursement Agreement Exhibit No. 4.1(i)(i) forming
dated as of May 28, 1992 part of the Company's Report on
between Ogden Haverhill Form 10-Q (File No. 1-10282)
Properties, Inc. and filed with the Securities and
Swiss Bank Corporation, Exchange Commission under the
New York Branch. Securities Exchange Act of
1934, as amended, for the
quarterly period ended June 30,
1992.
4.2 (a) Second Amended and Restated Incorporated by reference to
Trust Indenture, dated as of Exhibit No. 4.8(a) forming part
February 1, 1989, between of the Company's Registration
the Fairfax County Economic Statement on Form S-1 (File No.
Development Authority and 33-29312) filed with the
Crestar Bank, as Trustee. Securities and Exchange
Commission under the Securities
Act of 1933, as amended.
(b) Conditional Sale and Incorporated by reference to
Security Agreement, dated as Exhibit No. 4.8(b) forming part
of February 1, 1988, between of the Company's Registration
the Fairfax County Solid Statement on Form S-1 (File No.
Waste Authority and Ogden 33-29312) filed with the
Martin Systems of Fairfax, Securities and Exchange
Inc. Commission under the Securities
Act of 1933, as amended.
4.3 Specimen Stock Certificate for Incorporated by reference to
Company's Common Stock. Exhibit No. 4.12 forming part
of Amendment No. 1 to the
Company's Registration
Statement on Form S-1 (File no.
33-29312) filed with the
Securities and Exchange
Commission under the Securities
Act of 1933, as amended.
4.4 Demand Note, dated May 31, 1989 Incorporated by reference to
by Company to Ogden Corporation. Exhibit No. 4.13 forming part
of Amendment No. 1 to the
Company's Registration
Statement on Form S-1 (File No.
33-29312) filed with the
Securities and Exchange
Commission under the Securities
Act of 1933, as amended.
4.5 Demand Note, dated December 19, Incorporated by reference to
1984, by Company to Bouldin Exhibit No. 4.14 forming part of
Development Corporation. Amendment No. 1 to the
Company's Registration
Statement on Form S-1 (File No.
33-29312) filed with the
Securities and Exchange
Commission under the Securities
Act of 1933, as amended.
10.1 Tax Sharing Agreement, dated as Incorporated by reference to
of January 1, 1989, among Ogden Exhibit No. 10.21 forming part
Corporation, Ogden Projects, Inc., of the Company's Registration
and Subsidiaries, Ogden Allied Statement on Form S-1 (File No.
Services, Inc. and Subsidiaries, 33-29312) filed with the
and Ogden Financial Services, Inc. Securities and Exchange
and Subsidiaries. Commission under the Securities
Act of 1933, as amended.
<PAGE>
10.2 (a) Amended and Restated Incorporated by reference to
Cooperation Agreement, dated Exhibit No. 10.22(a) forming
April 30, 1983 and amended part of Amendment No. 2 to the
and restated as of April 1, Company's Registration Statement
1985, and as further on Form S-1 (File No. 33-29312)
amended through May 25, 1989 filed with the Securities and
between Ogden Martin Systems, Exchange Commission under the
Inc. and Martin GmbH fur Securities Act of 1933, as
Umwelt-und Energietechnik of amended.
West Germany (confidential
status has been granted for
certain provisions thereof
pursuant to Commission Order
No. 810132).
(i) Amendment to Section Incorporated by reference to
5.3.1 of the Amended Exhibit No. 19.1 forming part of
and Restated Coopera- The Company's Report Form 10-Q
tion Agreement, effec- (File no. 1-10282) filed with
tive as of January 1, the Securities and Exchange
1989, between Ogden Commission under the Securities
Martin Systems, Inc. Exchange Act of 1934, as
and Martin GmbH fur amended, for the quarterly
Umwelt- und Energie- period ended June 30, 1990.
technik of West
Germany (confidential
status has been granted
for certain provisions
thereof pursuant to
Rule 24b-2).
(ii) Amendment No. 6 to Incorporated by reference to
Amended and Restated Exhibit No. 19.1 forming part of
Cooperation Agreement, The Company's Report Form 10-Q
effective as of (File no. 1-10282) filed with
January 1, 1991, the Securities and Exchange
between Ogden Martin Commission under the Securities
Systems, Inc. and Exchange Act of 1934, as
Martin GmbH fur amended, for the quarterly
Umwelt- und Energie- period ended June 30, 1991.
technik of West
Germany.
(b) Rights of First Refusal, Incorporated by reference to
dated June 2, 1989, among Exhibit No. 10.22(b) forming
Walter Josef Martin, part of Amendment No. 2 to the
Anneliese Martin, Johannes Company's Registration Statement
Josef Edmund Martin, and on Form S-1 (File No. 33-29312)
Ogden Martin Systems, Inc. filed with the Securities and
Exchange Commission under the
Securities Act of 1933, as
amended.
<PAGE>
10.3 Ogden Projects, Inc. Directors' Incorporated by reference to
Stock Option Plan. Exhibit No. 10.24 forming part
of the Company's Registration
Statement on Form S-1 (File No.
33-29312) filed with the
Securities and Exchange
Commission under the Securities
Act of 1933, as amended.
10.4 Letter Agreement, dated October Incorporated by reference to
5, 1990, between David L. Sokol Exhibit No. 19.5 forming part of
and Ogden Corporation. the Company's Report on Form
10-Q (File No. 1-10282) filed
with the Securities and
Exchange Commission under the
Securities Exchange Act of
1934, as amended, for the
quarterly period ended
September 30, 1990.
10.5 Ogden Projects, Inc. Employees' Incorporated by reference to
Stock Option Plan. Exhibit No. 10.26 forming part
of the Company's Registration
Statement on Form S-1 (File No.
33-29312) filed with the
Securities and Exchange
Commission under the Securities
Act of 1933, as amended.
10.6 Ogden Corporation Pension Plan, Incorporated by reference to
as amended and restated, Exhibit No. 10.27 forming part
effective as of January 1, 1988. of the Company's Registration
Statement on Form S-1 (File No.
33-29312) filed with the
Securities and Exchange
Commission under the Securities
Act of 1933, as amended.
10.7 Ogden Corporation Supplementary Incorporated by reference to
Deferred Benefit Plan, adopted Exhibit No. 10.28 forming part
December 13, 1976, and amended of the Company's Registration
as of January 5, 1988. Statement on Form S-1 (File No.
33-29312) filed with the
Securities and Exchange
Commission under the Securities
Act of 1933, as amended.
10.8 Ogden Corporation Stock Option Incorporated by reference to
Plan, effective as of March 11, Exhibit No. 10.29 forming part
1986. of the Company's Registration
Statement on Form S-1 (File No.
33-29312) filed with the
Securities and Exchange
Commission under the Securities
Act of 1933, as amended.
<PAGE>
10.9 Ogden Corporation 1990 Stock Incorporated by reference to
Option Plan, effective as of Exhibit No. 10.29 forming part
October 11, 1990. of the Company's Report on Form
10-K (File No. 1-10282) filed
with the Securities and
Exchange Commission under the
Securities Exchange Act of
1934, as amended, for the
fiscal year ended December 31,
1990.
10.10 Ogden Projects, Inc. Pension Incorporated by reference to
Plan effective as of January 1, Exhibit No. 10.30 forming part
1989. of the Company's Registration
Statement on Form S-1 (File No.
33-29312) filed with the
Securities and Exchange
Commission under the Securities
Act of 1933, as amended.
(i) Amendment to Ogden Projects, Transmitted herewith as
Inc. Pension Plan, effective Exhibit 10.10(i)
as of January 1, 1994.
10.11 Form of Supplementary Deferred Incorporated by reference to
Benefit Plan of Ogden Projects, Exhibit No. 10.31 forming part
Inc. effective as of January 1, of Amendment No. 1 to the
1989. Company's Registration
Statement on Form S-1 (File No.
33-29312) filed with the
Securities and Exchange
Commission under the Securities
Act of 1933, as amended.
10.12 Ogden Projects, Inc. Profit Incorporated by reference to
Sharing Plan effective as of Exhibit No. 10.32 forming part
January 1, 1989. of the Company's Registration
Statement on Form S-1 (File No.
33-29312) filed with the
Securities and Exchange
Commission under the Securities
Act of 1933, as amended.
(i) Amendment to Ogden Projects, Incorporated by reference to
Profit Sharing Plan amendment Exhibit No. 19.2 forming part of
by Unanimous Written the Company's Report on Form
Consent of the Administra- 10-Q (File No. 1-10282) filed
tive Committee, dated with the Securities and Exchange
March 7, 1990. Commission under the Securities
Exchange Act of 1934, as
amended, for the quarterly
period ended March 31, 1990.
(ii) Amendment to Ogden Transmitted herewith as
Projects, Inc. Profit Exhibit No. 10.10(i)
Sharing Plan, effective
as of January 1, 1994.
<PAGE>
10.13 Ogden Allied Services Savings Incorporated by reference to
and Security Plan, as amended Exhibit No. 10.33 forming part
and restated, effective as of of the Company's Registration
August 1, 1986. Statement on Form S-1 (File No.
33-29312) filed with the
Securities and Exchange
Commission under the Securities
Act of 1933, as amended, for
the fiscal year ended December
31, 1990.
10.14 Ogden Services Corporation Profit Incorporated by reference to
Sharing Plan, as amended and Exhibit No. 10.34 forming part
restated, effective as of January of the Company's Report on Form
1, 1989, as further amended July 10-K (File No. 1-10282) filed
18, 1990. with the Securities and
Exchange Commission under the
Securities Exchange Act of
1934, as amended, for the
fiscal year ended December 31,
1990.
10.15 (a) Ogden Services Corporation Incorporated by reference to
Executive Pension Plan, Exhibit No. 10.35(a) forming
effective as of January 1, part of the Company's Report on
1989. Form 10-K (File No. 1-10282)
filed with the Securities and
Exchange Commission under the
Securities Exchange Act of
1934, as amended, for the
fiscal year ended December 31,
1990.
(b) Ogden Services Corporation Incorporated by reference to
Executive Pension Plan Trust Exhibit No. 10.35(b) forming
Agreement, dated as of part of the Company's Report
October 1, 1990, between on Form 10-K (File No. 1-10282)
Ogden Services Corporation filed with the Securities and
and The Bank of New York. Exchange Commission under the
Securities Exchange Act of
1934, as amended, for the
fiscal year ended December 31,
1990.
10.16 (a) Ogden Services Corporation Incorporated by reference to
Select Savings Plan, Exhibit No. 10.36(a) forming
effective as of October 1, part of the Company's Report on
1990. Form 10-K (File No. 1-10282)
filed with the Securities
Exchange Act of 1934, as
amended, for the fiscal year
ended December 31, 1990.
<PAGE>
(b) Ogden Services Corporation Incorporated by reference to
Select Savings Plan Trust Exhibit No. 10.36(b) forming
Agreement, dated as of part of the Company's Report on
October 1, 1990, between Form 10-K (File No. 1-10282)
Ogden Services Corporation filed with the Securities and
and The Bank of New York. Exchange Commission under the
Securities Exchange Act of
1934, as amended, for the
fiscal year ended December 31,
1990.
10.17 Form of Supplemental Defined Incorporated by reference to
Benefit Plan of Ogden Allied Exhibit No. 10.34 forming part
Services effective as of of Amendment No. 1 to the
January 1, 1989. Company's Registration
Statement on Form S-1 (File No.
33-29312) filed with the
Securities and Exchange
Commission under the Securities
Act of 1933, as amended.
10.18 Ogden Environmental Services Incorporated by reference to
Pension Plan effective as of Exhibit No. 10.35 forming part
January 1, 1989. of the Company's Registration
Statement on Form S-1 (File No.
33-29312) filed with the
Securities and Exchange
Commission under the Securities
Act of 1933, as amended.
10.19 Ogden Environmental Services Incorporated by reference to
Profit Sharing Plan effective as Exhibit No. 10.36 forming part
of January 1, 1989. of the Company's Registration
Statement on Form S-1 (File No.
33-29312) filed with the
Securities and Exchange
Commission under the Securities
Act of 1933, as amended.
(i) Ogden Environmental Services Incorporated by reference to
Profit Sharing Plan amend- Exhibit No. 19.3 forming part of
ment by Unanimous Written the Company's Report on Form
Consent of the Administra- 10-Q (File No. 1-10282) filed
tive Committee, dated March with the Securities and Exchange
7, 1990. Commission under the Securities
Exchange Act of 1934, as
amended, for the quarterly
period ended March 31, 1990.
10.20 Form of Supplementary Deferred Incorporated by reference to
Benefit Plan of Ogden Exhibit No. 10.37 forming part
Environmental Services, Inc., of Amendment No. 1 to the
effective as of January 1, 1989. Company's Registration
Statement on Form S-1 (File No.
33-29312) filed with the
Securities and Exchange
Commission under the Securities
Act of 1933, as amended.
<PAGE>
10.21 Stock Purchase Agreement, dated Incorporated by reference to
as of May 31, 1989, between Exhibit No. 10.38 forming part
Company and Ogden Corporation. of the Company's Registration
Statement on Form S-1 (File No.
33-29312) filed with the
Securities and Exchange
Commission under the Securities
Act of 1933, as amended.
10.22 Stock Purchase Option Agreement, Incorporated by reference to
dated June 14, 1989, between Exhibit No. 10.39 forming part
Ogden Corporation and Company of the Company's Registration
Statement on Form S-1 (File No.
33-29312) filed with the
Securities and Exchange
Commission under the Securities
Act of 1933, as amended.
(i) Amendment to Stock Incorporated by reference to
Purchase Option Agreement, Exhibit No. 10.39(i) forming
dated November 16, 1989, part of Amendment No. 1 to the
between Ogden Corporation Company's Registration Statement
and Company. on Form S-1 (File No. 33-31575)
filed with the Securities and
Exchange Commission under the
Securities Act of 1933, as
amended.
10.23 Employment Agreement, dated as Incorporated by reference to
of June 1, 1990, between Company Exhibit No. 10.47 forming part
and William C. Mack. of the Company's Report on Form
10-K (File No. 1-10282) filed
with the Securities and
Exchange Commission under the
Securities Exchange Act of
1934, as amended, for the
fiscal year ended December 31,
1990.
10.24 Employment Agreement, dated as Incorporated by reference to
of June 1, 1990, between Company Exhibit No. 10.48 forming part
and Scott G. Mackin. of the Company's Report on Form
10-K (File No. 1-10282) filed
with the Securities and
Exchange Commission under the
Securities Exchange Act of
1934, as amended, for the
fiscal year ended December 31,
1990.
(i) Employment Agreement dated Transmitted herewith as
as of January 1, 1994 Exhibit No. 10.24(i).
between Company and
Scott G. Mackin.
<PAGE>
10.25 Employment Agreement, dated as Incorporated by reference to
of June 1, 1990, between Company Exhibit No. 10.49 forming part
and Gloria A. Mills. of the Company's Report on Form
10-K (File No. 1-10282) filed
with the Securities and
Exchange Commission under the
Securities Exchange Act of
1934, as amended, for the
fiscal year ended December 31,
1990.
10.26 Employment Agreement, dated as Incorporated by reference to
of June 1, 1990, between Company Exhibit No. 10.50 forming part
and Bruce W. Stone. of the Company's Report on Form
10-K (File No. 1-10282) filed
with the Securities and
Exchange Commission under the
Securities Exchange Act of
1934, as amended, for the
fiscal year ended December 31,
1990.
10.27 Employment Agreement, dated as Incorporated by reference to
of June 1, 1990, between Company Exhibit No. 10.51 forming part
and John M. Klett. of the Company's Report on Form
10-K (File No. 1-10282) filed
with the Securities and
Exchange Commission under the
Securities Exchange Act of
1934, as amended, for the
fiscal year ended December 31,
1990.
10.28 Employment Agreement, dated as Incorporated by reference to
of May 24, 1990, as amended Exhibit No. 10.52 forming part
October 11, 1990, between Ogden of the Company's Report on Form
Corporation and R. Richard Ablon. 10-K (File No. 1-10282) filed
with the Securities and
Exchange Commission under the
Securities Exchange Act of
1934, as amended, for the
fiscal year ended December 31,
1990.
10.29 Agreement and Plan of Merger Incorporated by reference to
dated September 20, 1990 by and Exhibit No. 10.53 forming part
among Ogden Environmental of the Company's Report on Form
Services of Houston, Inc., Ogden 10-K (File No. 1-10282) filed
Acquisition Company and American with the Securities and Exchange
Envirotech, Inc. Commission under the Securities
Exchange Act of 1934, as
amended, for the fiscal year
ended December 31, 1990.
<PAGE>
(i) Amendment dated June 12, Incorporated by reference to
1991 by and among Ogden Exhibit No. 10.29 forming part
Environmental Services of of the Company's Report on Form
Houston, Inc., Ogden 10-K (File No. 1-10282) filed
Acquisition Company and with the Securities and Exchange
American Envirotech, Inc. Commission under the Securities
Exchange Act of 1934, as
amended, for the fiscal year
ended December 31, 1991.
10.30 Ogden Projects, Inc. Core Incorporated by reference to
Executive Benefit Program. Exhibit No. 10.30 forming part
of the Company's Report on Form
10-K (File No. 1-10282) filed
with the Securities and
Exchange Commission under the
Securities Exchange Act of
1934, as amended, for the
fiscal year ended December 31,
1992.
13.0 Those portions of the Annual Transmitted herewith as Exhibit
Report to Stockholders for the No. 13.
year ended December 31, 1993
which are incorporated herein
by reference.
21.0 Subsidiaries of the Company. Transmitted herewith as Exhibit
No. 21.
24.0 Consent of Deloitte & Touche. Transmitted herewith as Exhibit
No. 24.
EXHIBIT NO. 10.10(i) and
EXHIBIT NO. 10.12(ii)
FORM OF AMENDMENTS TO THE OGDEN PROJECTS, INC.
PENSION PLAN AND PROFIT SHARING PLANS
EFFECTIVE JANUARY 1, 1994
WHEREAS, the Corporation is the sponsor of the Ogden Projects
Pension Plan (the "Pension Plan") and the Ogden Projects Profit
Sharing Plan (the "Profit Sharing Plan") and their related trusts,
said Pension Plan and Profit Sharing Plan and underlying trusts
being qualified and tax-exempt under Section 401(a) and 501(a) (of
the Internal Revenue Code (the "IRC"); and
WHEREAS, the Corporation has determined that the Pension Plan
and Profit Sharing Plan should be amended and modified in certain
respects, so that the Corporation will be able to meet the IRC
rules and regulations concerning the employer-wide non-
discriminatory classification test (the "Test") necessary to
maintain the qualified and tax-exempt status of the Corporation's
Pension Plan and Profit Sharing Plan, effective as of January 1,
1994; and
WHEREAS, the Corporation has determined that it is in the best
interest of the Corporation and its employees that effective as of
January 1, 1994, and in order to satisfy the Test, all benefits
under the Pension Plan be frozen and that the Profit Sharing Plan
be amended to enable the Corporation to remove from coverage as
many highly paid employees as is necessary to satisfy the Test; NOW
THEREFORE
BE IT RESOLVED, that the Board of Directors hereby authorizes,
upon advice of counsel, that the Pension Plan be amended, effective
as of January 1, 1994, as follows: (i) all additional benefit
accruals under the Pension Plan shall cease effective as of the
close of business on December 31, 1993; (ii) all accrued benefits
under the Pension Plan shall be frozen as of the close of business
on December 31, 1993, and (iii) subject to the foregoing
amendments, the Pension Plan shall continue in existence as a
qualified and tax-exempt plan under Section 401(a) and 501(a) of
the IRC in accordance with its terms and applicable law, regulation
and governmental guidelines; and it is further
RESOLVED, that the Board of Directors hereby authorizes, upon
advice of counsel, that the Profit Sharing Plan shall be amended,
effective as of January 1, 1994, to provide that a certain number
of highly paid employees of the Corporation shall no longer be
eligible to participate in the Profit Sharing Plan as shall be
determined by the Administrative Committee from time to time as may
be necessary for the Profit Sharing Plan to meet the Test and
maintain its qualified and tax-exempt status, and to provide that
the account balances of any highly paid employees who are
determined to be ineligible to participate in the Profit Sharing
Plan shall be ineligible to receive future contributions; and it is
further
<PAGE>
RESOLVED, that effective as of January 1, 1993, the Profit
Sharing Plan is further amended to comply with the Unemployment
Compensation Act of 1993 by applying a 20% Federal income tax
withholding to the taxable portion of any distribution unless the
participant requests a direct rollover of the distribution to an
eligible retirement plan; and it is further
RESOLVED, that the fiduciaries of the Pension Plan and Profit
Sharing Plan and the officers of this Corporation and each of them
be and hereby is authorized, upon advice of counsel, to execute,
deliver and file any and all documents and instruments which, upon
advice of counsel, are desirable, necessary or appropriate to
effect the purpose and intent of the foregoing Resolutions.
EXHIBIT 10.24(i)
CONFIDENTIAL AND LEGALLY PRIVILEGED
SCOTT G. MACKIN
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the 1st day of January,
1994, by and between OGDEN PROJECTS, INC., a Delaware corporation maintaining
its principal office at 40 Lane Road, Fairfield, New Jersey (the "Company")
and Scott G. Mackin, now residing at 19 Hall Road, Chatham, New Jersey 07928
(the "Employee").
WITNESSETH:
WHEREAS, the Employee is currently serving as President and Chief
Operating Officer of the Company, a position he has held since January 1991;
and
WHEREAS, the employment agreement under which the Employee is currently
employed is a three (3) year agreement entered into on June 1, 1990 and which
on December 31, 1993 began to run on a year to year basis (the "Old
Agreement") and which incorrectly reflects the Employee's title as Executive
Vice President, General Counsel, Secretary and Managing Director; and
WHEREAS, the Company and Employee desires to terminate the Old Agreement
and enter into a new employment agreement with terms and conditions similar
to the Old Agreement; and
WHEREAS, the Company desires to ensure that the Employee will continue
to be available to provide services in the capacity of President and Chief
Operating Officer in the future, which services are significant to the
Company's long-range prospects and the long-range prospects of the Company's
subsidiaries (the Company and its subsidiaries are hereinafter referred to as
the "OPI Group"); and
WHEREAS, to induce the Employee to continue to provide such services,
the Company is offering to provide the Employee with the compensation,
benefits and security provided for in this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree as follows:
1. EMPLOYMENT/CAPACITY/TERM.
The Company agrees to and does hereby continue to employ the Employee,
and the Employee agrees to and does hereby continue in the employ of the
Company upon the terms and conditions set forth in this Agreement. Such
employment shall be in an executive capacity as President and Chief Operating
Officer. Such employment shall commence on January 1, 1994 and shall
continue through December 31, 1996, and from year to year thereafter subject
to the right of the Employee or the Company to terminate such employment as
of December 31, 1994, or any subsequent December 31, by written notice given
to the other party at least sixty (60) days prior to such termination date
stating an intention to so terminate such employment. Termination by the
Company, in accordance with the provisions of the preceding sentence, shall
obligate the Company to make a severance payment as provided in Paragraph 9.
hereof. Otherwise, termination by either party, in accordance with the
provisions of the above referenced sentence, shall not require a statement of
the reason or cause for such termination and shall not be deemed a breach or
violation of this Agreement by the party giving such notice. As used in this
Agreement, the phrase "term of this Agreement" shall be deemed to include the
period subsequent to the date hereof and prior to termination of this
Agreement; however, such phrase shall not be construed as limiting the
enforceability by either party of any rights which survive termination of
this Agreement.
2. TIME AND EFFORT/ABSENCES.
During the term of this Agreement, the Employee shall devote his entire
time and attention during normal business hours to the business of the
Company and the OPI Group, subject to the supervision of the Board of
Directors of the Company, and he shall not engage in any other business
activity whether or not such business activity is pursued for gain, profit,
or other pecuniary advantage, but this restriction shall not be construed to
restrict the Employee (i) from performing services as a member of the Board
of Directors, Board of Trustee or the like of any non-profit entity for which
the Employee receives no compensation, provided that, such services do not
unreasonably interfere with the ability of the Employee to perform the
services and discharge the responsibilities required of him under this
Agreement, and (ii) from investing his assets in such form or manner as will
not require any services on the part of the Employee in the operation of the
business of the entity in which such investments are made. The Employee
shall be excused from rendering his services during reasonable vacation
periods and during other reasonable temporary absences as authorized from
time to time by the Board of Directors of the Company. At the date hereof,
the principal office of the Company is located in Fairfield, New Jersey,
considered to be a New York suburb and part of the metropolitan New York
area. It is understood that the Employee will not be required to relocate
from the metropolitan New York area to discharge his responsibilities under
this Agreement.
3. CORPORATE OFFICES.
If elected, the Employee will serve, without additional compensation, as
an officer and director (or in either capacity) of the Company and the OPI
Group.
4. SALARY/BONUS/OTHER BENEFITS.
In consideration of the services and duties to be rendered and performed
by the Employee during the term of this Agreement, the Company agrees to pay
and provide for the Employee the compensation and benefits described below:
(a) Consistent with the Company's policy concerning its
executives, the Executive's annual salary shall be reviewed by the Board of
Directors or an appropriate committee of the Board of Directors of the
Company on a calendar year basis, with any increases therein being within the
sole discretion of the Board of Directors or an appropriate committee of the
Board of Directors and shall become effective on March 1st of the following
year. During January and February of 1994, the Employee will be paid on the
basis of his 1993 salary. Commencing March 1, 1994, the minimum annual
salary payable to the Executive under this Agreement shall be in the amount
of Four Hundred Thousand and 00/100 Dollars ($400,000), payable in equal
monthly or bi-weekly installments.
(b) An annual incentive bonus in such amount as may from time to
time be fixed by the Board of Directors or an appropriate committee of the
Board of Directors of the Company, provided that in determining the annual
incentive bonus the Board of Directors or appropriate Committee shall utilize
standards which are reasonably applied to the Employee and other executives
<PAGE>of the Company who furnish services of comparable significance, on a
non-discriminatory basis.
(c) Other Benefits. It is intended that the Company shall
continue to provide the Employee with benefits at least as favorable as
benefits provided on behalf of other executives of the Company and the OPI
Group who furnish services of comparable significance, as they may exist from
time to time. Such benefits presently include Group Life Insurance, Group
Health Insurance, Automobile Allowance, and Pension and Profit Sharing Plans.
Except as otherwise provided herein, any such participation shall be in
accordance with the provisions of such plans and nothing contained in this
Agreement is intended to or shall be deemed to affect adversely any of the
Employee's rights as a participant under any such plan. Nothing herein shall
prevent the Company from modifying or discontinuing any benefit plan on a
consistent and non-discriminatory basis applicable to all such executives.
5. EXPENSE.
The Employee shall be reimbursed for out-of-pocket expenses incurred
from time to time on behalf of the Company and the OPI Group or in the
performance of his duties under this Agreement, upon the presentation of such
supporting documents and forms as the Company shall reasonably request.
6. DISABILITY/DISABILITY BENEFIT.
In the event that the Employee is incapable because of physical or
mental illness of rendering services of the character contemplated hereby,
for a period of six (6) consecutive months, the Board of Directors of the
Company may determine that the Employee has become disabled. In the event of
such a determination of disability, the Company shall have the continuing
right and option while such disability continues to terminate this Agreement
by notice in writing to the Employee, effective thirty (30) days after such
notice of termination is so given, unless, within such thirty (30) day notice
period, the Employee resumes rendering full-time services of the character
contemplated hereby. The incapacity due to physical or mental illness to
render the services of the character contemplated hereby, shall not
constitute a breach of this Agreement by the Employee. If this Agreement is
terminated by the Company as a result of a determination of disability, as
aforesaid, the Company shall be obligated to continue the salary and benefits
of the Employee as provided in Paragraph 4 for a period equal to the greater
of (a) twelve (12) months, or (b) such longer period as may be determined by
the Board of Directors of the Company, in each case reduced by any disability
insurance benefits provided for the benefit of the Employee at the expense of
the Company.
7. DEATH/DEATH BENEFIT.
In the event of the death of the Employee during the term of this
Agreement, this Agreement shall terminate and the Employee's salary shall
continue to be paid to his designated beneficiary or, if none, to his
personal representative, through the last day of the month in which such
death occurs. In addition, the Employee, his personal representative(s)
and/or his beneficiaries will be entitled to such death benefits as are
provided to Employee under Paragraph 4 hereof.
8. COMPANY STOCK OPTION PLAN.
The Board of Directors of the Company has awarded the Employee
non-qualified stock options to purchase Thirty-five Thousand (35,000) shares
of the Company Common Stock under the Company's Employees' Stock Option Plan
(the "Employees' Plan"). If the employment of the Employee terminates under
circumstances entitling him to a Severance Payment (as defined in Paragraph
9.), he shall thereupon be entitled to exercise any and all options granted
to him under the Employees' Plan to the extent permitted pursuant to the
terms and conditions of the Employees' Plan.
9. SEVERANCE PAYMENT.
If the Company gives notice to terminate in accordance with Paragraph 1
or if the employment of the Employee is terminated at any time (i) by the
Employee for Good Reason (as defined in Paragraph 10), or (ii) by the Company
for any reason other than for Cause (as hereinafter defined), the Company
will be obligated to pay to the Employee in cash a severance payment equal to
the product of (i) and (ii); where (i) shall equal the sum of (A) the
Employee's annual salary at the time of such termination, and (B) the
Employee's annual incentive bonus during the twelve (12) month period ending
with the close of the month in which such termination of employment occurs
(the "Date of Termination"), but not less than the incentive bonus paid to
the Employee in January 1994 for services rendered during 1993, which was
Three Hundred Thousand and 00/100 Dollars ($300,000), divided by twelve (12);
and where (ii) shall be thirty-six (36). Termination of the Employee's
employment on account of his disability, death or retirement (as defined in
this Agreement) will not be considered a termination of the Employee's
employment by the Company and will not require the Company to pay and provide
any Severance Payment. No Severance Payment will be required if the
employment of the Employee is terminated by the Company for Cause (as
hereinafter defined) or by the Employee (other than for Good Reason as
defined in Paragraph 10) or if the Employee gives notice to terminate in
accordance with Paragraph 1. The Severance Payment provided herein is
provided in order to reinforce and encourage the continued loyalty,
attention, and dedication of the Employee to the Company's business and
affairs without the concerns which normally arise from the possibility of a
loss of employment security. As used herein, the terms "Retirement" and
"Cause" shall have the following meanings, respectively:
(a) Retirement. Termination of the Employee's employment on
account of "Retirement" shall mean termination on or after the Employee's
normal retirement date in accordance with the terms of the Company's pension
plan (or any successor or substitute plan or plans of the Company or of any
subsidiary of the Company under which the Employee may be a participant); and
(b) Cause. Termination by the Company of the Employee's
employment for "Cause" shall mean termination as a result of (i) the willful
and continued failure by the Employee to devote the time, attention and
effort necessary to perform substantially the services contemplated by this
Agreement in a manner consistent with the Employee's past performance (other
than any such failure resulting from the Employee's incapacity due to
physical or mental illness) after a written demand for substantial
performance is delivered to the Employee by a member or representative of the
Board of Directors of the Company which specifically identifies the manner in
which it is alleged that the Employee has not substantially performed such
services, or (ii) the willful engaging by the Employee in gross misconduct
which is materially and demonstrably injurious to the Company; provided that,
no act, or failure to act, on the Employee's part shall be considered
"willful" unless done, or omitted to be done, in bad faith and without
reasonable belief that such action or omission was in, or not apposed to, the
best interests of the Company. It is also expressly understood that the
Employee's attention to or engagement in matters not directly related to the
business of the Company shall not provide a basis for termination for Cause
if such attention or engagement is authorized by the terms of this Agreement
or has otherwise been approved by the Board of Directors of the Company.
Anything in this Agreement to the contrary notwithstanding, the Employee's
employment may not be terminated for Cause unless and until there shall have
been delivered to the Employee a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of
the Board (after reasonable notice to the Employee and an opportunity for the
Employee, together with his counsel, to be heard before the Board), finding
that in the good faith opinion of the Board the Employee was guilty of the
conduct set forth in clause (i) or (ii) of this subparagraph (b) and
specifying the particulars thereof in detail. Except as otherwise provided
in Paragraphs 1 and 6, no purported termination by the Company of the
Employee's employment which is not justified as a termination of the
Employee's employment for Cause shall be effective.
10. TERMINATION BY THE EMPLOYEE FOR GOOD REASON.
The termination by the Employee of his employment for "Good Reason"
shall be deemed a justifiable termination of his employment and shall excuse
the Employee from the obligation to render services as provided in Paragraph
2 hereof. Upon such termination, the Employee shall be entitled to the
Severance Payment in accordance with the provisions of Paragraph 9 hereof.
As used herein, the phrase "Good Reason" shall mean:
(a) a change in the Employee's status, title or position(s) as an
officer of the Company in the executive capacity set forth in Paragraph 1
hereof, which in his reasonable judgment, does not represent a promotion from
or enhancement of his status, title and position, or the assignment by the
Board of Directors of the Company to the Employee of any duties or
responsibilities which, in his reasonable judgment, are inconsistent with
such status, title or position, or any removal of the Employee from or any
failure to reappoint or reelect him to such position, except in connection
with a justifiable termination by the Company of the Employee's employment
for Cause or on account of disability, the Retirement or death of the
Employee or the termination by the employee of his employment other than for
Good Reason;
(b) a reduction in the Employee's annual salary or a failure by
the Company to pay to the Employee any installment of the annual salary
required by Paragraph 4 hereof, which failure continues for a period of
twenty (20) days after written notice thereof is given by the Employee to the
Company;
(c) the Company's requiring the Employee to be based anywhere
other than the Fairfield, New Jersey area, except for required travel on the
business of the Company or the OPI Group to an extent substantially
consistent with the business travel obligations which the Employee has
previously undertaken on behalf of the Company or the OPI Group;
(d) the failure by the Company to obtain the assumption of this
Agreement in form and substance to the reasonable satisfaction of the
Employee by any Successor (other than by merger or consolidation for which no
separate assumption is necessary) as referred to in Paragraph 17; or
(e) any refusal by the Company to allow the Employee to attend to
matters or engage in activities not directly related to the business of the
Company which is permitted by this Agreement or which, prior thereto, was
permitted by the Board of Directors of the Company.
<PAGE>
11. NOTICE OF TERMINATION.
Any purported notice of termination of the Employee's employment (other
than a Notice given by either party pursuant to Paragraph 1 hereof) shall be
communicated in writing and delivered to the other party as provided in
Paragraph 18 (hereinafter a "Notice of Termination"). For purposes of this
Agreement a "Notice of Termination" shall mean a notice which specifies the
termination provision relied upon by the party giving such notice and shall
set forth in detail such facts and circumstances claimed by said party to
provide a justified basis for termination of the Employee's employment under
the provision(s) so indicated.
12. TRADE SECRETS, ETC.
The Employee acknowledges that prior to his initial employment by the
Company he had no knowledge of the formulae, processes or methods of
manufacture or other trade secrets of the Company. Upon the termination of
his employment, the Employee agrees forthwith to deliver up to the Company
notebooks and other data relating to research or experiments as conducted by
him or relating to the products, formulae, processes or methods of
manufacture of the Company.
13. CUSTOMER LIST.
The Employee recognizes and acknowledges that the written list of the
customers of the Company, its subsidiaries and affiliates, as it may exist
from time to time, is a valuable, special and unique asset. The Employee
agrees that he will not during the term of his employment or within five (5)
years thereafter, use for his own personal benefit or disclose the written
list of the customers of the Company, its subsidiaries and affiliates or any
part thereof, to any person, firm, corporation, association or other entity
for any reason or purpose whatsoever.
14. LIMITED COVENANT NOT TO COMPETE.
If the employment of the Employee hereof is terminated (i) by the
Employee pursuant to Paragraph 1 hereof or (ii) by the Company for Cause (as
defined in Paragraph 9.(b) above), then in either case (y) the Employee will
not, for a period of two (2) years from such termination of employment,
within the territorial confines of the United States of America, directly or
indirectly, own, manage, operate, control, be employed by, participate in, or
be connected in any manner with the ownership, management, operation or
control of any business in competition with the business conducted by the
Company at the time of such termination, and (z) the Employee will, for a
period of two (2) years from such termination refrain from carrying on a
business similar to that presently carried on by the Company within the
states in which the business of the Company has been carried on, so long as
the Company carries on like business therein.
15. INJUNCTIVE RELIEF.
In the event of a breach by the Employee of the provisions of Paragraphs
12, 13 or 14 during or after the term of this Agreement, the Company shall be
entitled to an injunction restraining the Employee from violation of such
paragraph. Nothing herein shall be construed as prohibiting the Company from
pursuing any other remedy it may have in the event of breach of this
Agreement by the Employee.
<PAGE>
16. CERTAIN PROPRIETARY RIGHTS.
Employee agrees to and hereby does assign to the Company all his right,
title and interest in and to all inventions, whether or not patentable, which
are made or conceived solely or jointly by him:
(a) At any time during the term of his employment by the Company
in an executive, managerial, planning, technical research or engineering
capacity (including development, manufacturing, systems, applied science and
sales), or
(b) During the course of or in connection with his duties during
the term of this Agreement, or
(c) With the use of time or materials of the Company. The
Employee agrees to communicate to the Company or its representatives all
facts known to him concerning such inventions, to sign all rightful papers,
make a rightful oaths and generally to do every thing possible to aid the
Company in obtaining and enforcing proper patent protection for all such
inventions in all countries and in vesting title to such inventions and
patents in the Company. For the purpose of this Agreement, the subject
matter of any application for patent naming Employee as a sole or joint
inventor filed during the course of employment or within one year subsequent
to the termination thereof shall be deemed to be an invention made or
conceived by him during the course of his employment by the Company and
assignable to the Company hereunder, unless the Employee establishes by a
preponderance of the evidence that such invention was made or conceived by
him subsequent to termination of his employment hereunder. At the Company's
request (during or after the term of this Agreement) and expense, the
Employee will promptly execute a specific assignment of title to the Company,
and perform any other acts reasonably necessary to implement the foregoing
assignment.
17. BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of:
(a) The Company, and any successors or assigns of the Company,
whether by way of a merger or consolidation, or liquidation of the Company,
or by way of the Company selling all or substantially all of the assets of
the Company, or a division thereof, to a successor entity; however, in the
event of the assignment by the Company of this Agreement, the Company shall
nevertheless remain liable and obligated to the Employee in accordance with
the terms hereof; and
(b) The Employee, his estate, his executors, administrators, heirs
and beneficiaries.
18. NOTICE.
Any notice or other
<PAGE>
Ogden Projects, Inc. and Subsidiaries
MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED OPERATIONS
The following discussion and analysis should be read in conjunction with the
Company's Consolidated Financial Statements and notes thereto.
RESULTS OF OPERATIONS
Year Ended December 31, 1993, Compared with 1992
Income from services (service revenues less operating costs and debt service
charges) in 1993 of $76,403,000 was $8,527,000 higher than in 1992 due primarily
to enhanced performance at certain existing facilities and the income generated
at the three waste-to-energy facilities operated as part of the acquisition of
RRS Holdings, Inc. ("RRS") in 1993. Construction profit (construction revenues
less construction costs) of $16,495,000 in 1993 was $6,339,000 higher than in
1992 due primarily to increased construction activity during 1993.
Service revenues for the year ended December 31, 1993 were $60,940,000 higher
than in 1992. This increase was due primarily to the addition of the three RRS
facilities in 1993.
Construction revenues in 1993 were $154,083,000 higher than in 1992. This
increase was primarily due to a full year of construction activity in 1993 at
the Lee County, Florida, facility which broke ground in October 1992, new
construction activity at the Montgomery County, Maryland, facility which broke
ground in April 1993, and construction activity relating to the retrofit project
at the Detroit, Michigan, facility which was part of the acquisition of RRS.
These increases were partially offset by reduced construction activity for the
year at the Union County, New Jersey, facility as the project nears completion.
Additionally, $7,681,000 of construction revenues was recognized in 1992 on the
sale of limited partnership interests in and related tax benefits of the
Huntington, New York, waste-to-energy facility. Construction of the Union County
facility is expected to be completed in the early part of 1994, while
construction of the other three facilities is expected to continue throughout
the entire year. The company recognizes profit on the percentage-of-completion
method commencing at the level of completion at which the total profit is
reasonably determinable.
Operating costs increased $53,483,000 in 1993 compared to 1992. This increase
was due primarily to the three RRS facilities being included in the results of
operations during 1993,including the costs to overhaul the acquired facilities.
Operating costs included $35,134,000 and $34,551,000 in 1993 and 1992,
respectively, for depreciation of waste-to-energy facilities.
General and administrative expenses in 1993 increased $7,492,000 compared to
1992 due primarily to increased marketing efforts associated with the
development of new business.
In December 1993, the Company adopted a plan to discontinue its fixed-site
hazardous waste business. The net charge for all discontinued operations
activity in 1993, which was not material, has been included in other deductions.
See Note 3 for a further discussion on discontinued operations.
The effective rate of the charge equivalent to income taxes for 1993 was 45.5%
as compared to 40.0% in 1992. This increase was due primarily to the Omnibus
Budget Reconciliation Act of 1993, enacted in August 1993, which increased the
corporate Federal income tax rate from 34% to 35% retroactively to January 1,
1993. In accordance with the provisions of Statement of Financial Accounting
Standards (SFAS) No. 109, "Accounting for Income Taxes", the net deferred income
tax liabilities were adjusted for the effect of the change in rate, resulting in
a one-time charge of $4,402,000 in 1993.
Year Ended December 31, 1992, Compared with 1991
Income from services in 1992 of $67,876,000 was $14,343,000 higher than in 1991
due primarily to six additional waste-to-energy facilities in operation
throughout the entire year, partially offset by increased maintenance and repair
costs incurred in 1992 at certain facilities. Construction profit of $10,156,000
in 1992 was $11,492,000 lower than in 1991 due primarily to a decrease of
$10,098,000 in the construction revenues recognized in 1992 from the sale of
limited partnership interests and related tax benefits of the Huntington
facility.
Service revenues for the year ended December 31, 1992 were $50,308,000 higher
than in 1991. This increase was due primarily to six facilities that were in
operation for only a portion of 1991 generating revenue for the entire year in
1992.
Construction revenues in 1992 were $51,488,000 higher than in 1991. This
increase was primarily attributable to increased construction activity at the
Union County waste-to-energy facility and the commencement of construction at
the Lee County waste-to-energy facility, partially offset by lower construction
revenues recognized on the aforementioned sale of limited partnership interests
and related tax benefits.
Operating costs increased $25,189,000 in 1992 as compared to 1991. This
increase was due primarily to the six facilities that were in operation for only
a portion of 1991 incurring costs for the full year in 1992 as well as from
additional maintenance and repair costs incurred in 1992 at certain other
operating facilities. Operating costs included $34,551,000 and $26,911,000 in
1992 and 1991, respectively, for depreciation of waste-to-energy facilities.
Debt service charges in 1992 were $10,776,000 higher than in 1991. This
increase was due primarily to four additional privately-owned waste-to-energy
facilities, which were in commercial operation for only a portion of
1991, incurring debt service charges for the full year in 1992. Such increase
was partially offset by a reduction in interest rates in 1992 on various
adjustable rate revenue bonds.
Effective January 1, 1992, the Company adopted the provisions of SFAS No. 109.
The adoption of this standard required the Company to recognize the benefit of
certain deferred tax assets that were not recognizable under previous standards.
This benefit of $43,852,000 was recognized as a cumulative effect of a change in
accounting principle in 1992. The effective rate of the charge equivalent to
income taxes increased to 40.0% in 1992 from 26.3% in 1991 principally as a
result of the adoption of SFAS No. 109.
<PAGE>
<PAGE>
The Company adopted Statement of Financial Accounting Standards (SFAS) No.
106, "Employers' Accounting for Postretirement Benefits Other Than Pensions",
effective January 1, 1993. This Statement requires the accrual of the obligation
for future costs of health benefits after retirement during the period employees
render the service necessary to earn the benefits. In 1992, the Company
discontinued its policy of providing postretirement health care and life
insurance benefits for its employees, except those employees that were retired
or eligible for retirement at December 31, 1992. The estimated accumulated
postretirement benefit obligation as of January 1, 1993 and the effect on
current results of operations from the implementation of SFAS No. 106 were not
material.
Statement of Financial Accounting Standards (SFAS) No. 112,
"Employers' Accounting for Postemployment Benefits", was issued in November 1992
and is effective for fiscal years beginning after December 15, 1993. This
Statement establishes accounting standards for the estimated cost of benefits
provided by an employer to former or inactive employees after employment but
before retirement and requires the accrual of the future cost of postemployment
benefits. The implementation of SFAS No. 112 will not have a material effect on
the Company's consolidated financial position or results of operations.
FINANCIAL CONDITION
December 31, 1993, Compared with December 31, 1992
Receivables at December 31, 1993 increased by $49,990,000 due primarily to
$15,000,000 related to the RRS facilities, $14,460,000 related to construction
activity, and $22,962,000 which reflects amounts recorded for services performed
currently which will be billed by contract at later dates.
Restricted funds held in trust decreased by $60,347,000 during 1993
principally as a result of funds disbursed to cover expenditures for the
privately-owned Onondaga County, New York, waste-to-energy facility.
Property, plant, and equipment at December 31, 1993 increased by $45,144,000.
This increase was due primarily to construction costs incurred on the Onondaga
County facility, partially offset by normal depreciation for the year.
Contract acquisition costs at December 31, 1993 increased by $39,318,000 due
primarily to the amounts associated with the acquisition of RRS.
Other liabilities increased by $20,794,000 in 1993 due primarily to billings
in excess of costs on uncompleted construction contracts and additional
retainage on construction in progress.
LIQUIDITY AND CAPITAL RESOURCES
The Company's most significant cash requirements are for construction
expenditures for its privately-owned waste-to-energy facilities. The project
debt associated with the financing of such facilities is generally arranged by
municipalities through the issuance of tax-exempt or taxable revenue bonds. In
addition to the proceeds of these revenue bonds, generally between 10% and 25%
of the cost of construction is invested by operating subsidiaries in each of the
facilities they own. Additional significant cash requirements include
expenditures for project proposal and development efforts, acquisitions, the
equity portion of rent for the lease under the Tulsa sale and leaseback
arrangements, and normal replacement, modernization, and growth.
The Company's cash needs in excess of funds provided by project debt have been
met by cash generated from operations, the sale of limited partnership interests
and related tax benefits, and amounts held by Ogden on behalf of the Company.
Funds from Ogden may also include payments to the Company under a tax sharing
agreement. The Company expects that its cash requirements will continue to be
met from the proceeds of project debt, from operations and, if necessary, from
amounts held by Ogden.
Ogden has stated that it intends to continue to fund the Company's cash
requirements as necessary. Such funding is expected to be provided in the form
of advances repayable on demand which bear interest at a mutually agreed rate.
The Company advances its excess cash to Ogden to be invested by Ogden at a
mutually agreed rate. Advances to Ogden totaled $136,664,000 at December 31,
1993.
At December 31, 1993, commitments for direct-equity investments in
waste-to-energy facilities, exclusive of funds provided by project debt issued
by municipalities and municipal agencies, and for normal replacement,
modernization, and growth amounted to $24,909,000, which is expected to be
expended over the next 18 months.
<PAGE>
<TABLE>
Ogden Projects, Inc. and Subsidiaries
SELECTED FINANCIAL DATA
<CAPTION>
December 31, 1993 1992(a) 1991 1990 1989
(In thousands of dollars, except per-share amounts)
<S> <C> <C> <C> <C> <C>
TOTAL REVENUES............................. $ 681,060 $ 466,037 $ 364,241 $ 362,600 $ 321,713
INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES AND CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE........... 80,214 71,719 69,652 48,319 31,912
INCOME (LOSS) FROM:
Continuing operations...................... 43,726 43,007 52,560 39,159 26,303
Discontinued operations.................... (20,101) (3,100) (877)
Cumulative effect of change in
accounting principle..................... 43,852
Net income................................. 43,726 86,859 32,459 36,059 25,426
EARNINGS (LOSS) PER COMMON SHARE:
Continuing operations...................... 1.15 1.14 1.40 1.07 .77
Discontinued operations.................... (.54) (.08) (.03)
Cumulative effect of change in
accounting principle.................... 1.16
Total...................................... 1.15 2.30 .86 .99 .74
TOTAL ASSETS............................... 2,432,327 2,287,284 2,006,080 1,884,891 1,874,267
LONG-TERM OBLIGATIONS:
Project Debt............................... 1,551,366 1,582,813 1,444,680 1,363,205 1,377,730
Other borrowings........................... 28,423 28,423 28,423
Total............................ 1,579,789 1,611,236 1,473,103 1,363,205 1,377,730
REDEEMABLE PREFERRED STOCK PLUS ACCRUED
DIVIDENDS................................ 14,913
COMMON STOCKHOLDERS' EQUITY................ 389,863 344,052 253,763 218,939 145,252
COMMON STOCKHOLDERS' EQUITY PER SHARE...... 10.26 9.08 6.74 5.84 4.05
- ------------
(a) See Note 10 to the Consolidated Financial Statements for the effect of a
change in accounting principle effective January 1, 1992.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
Ogden Projects, Inc. and Subsidiaries
STATEMENTS OF CONSOLIDATED INCOME
<CAPTION>
For the years ended December 31, 1993 1992 1991
<S> <C> <C> <C>
REVENUES:
Service revenues............. $432,609,000 $371,669,000 $321,361,000
Construction revenues........ 248,451,000 94,368,000 42,880,000
Total revenues........... 681,060,000 466,037,000 364,241,000
COSTS AND EXPENSES:
Operating costs.............. 257,542,000 204,059,000 178,870,000
Construction costs........... 231,956,000 84,212,000 21,232,000
Debt service charges......... 98,664,000 99,734,000 88,958,000
General and administrative
expenses................... 16,066,000 8,574,000 6,813,000
Other deductions (income) -
net........................ (3,382,000) (2,261,000) (1,284,000)
Total costs and expenses. 600,846,000 394,318,000 294,589,000
INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME
TAXES AND CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING
PRINCIPLE.................. 80,214,000 71,719,000 69,652,000
Charge equivalent to income
taxes...................... (36,488,000) (28,712,000) (17,092,000)
INCOME FROM CONTINUING
OPERATIONS................. 43,726,000 43,007,000 52,560,000
LOSS FROM DISCONTINUED
OPERATIONS................. (20,101,000)
CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE.... 43,852,000
NET INCOME................... $ 43,726,000 $ 86,859,000 $ 32,459,000
EARNINGS PER SHARE OF COMMON
STOCK:
Income from continuing
operations................. $ 1.15 $ 1.14 $ 1.40
Loss from discontinued
operations................. (.54)
Cumulative effect of change
in accounting principle.... 1.16
Total........................ $ 1.15 $ 2.30 $ .86
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
Ogden Projects, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<CAPTION>
ASSETS December 31, 1993 1992
<S> <C> <C>
Cash..................................... $ 3,558,000 $ 7,938,000
Receivables (net of allowances of
$7,321,000 in 1993 and $4,776,000 in
1992).................................. 224,561,000 174,571,000
Restricted funds......................... 359,416,000 419,763,000
Property, plant, and equipment........... 1,563,362,000 1,518,218,000
Contract acquisition costs............... 55,519,000 16,201,000
Unamortized bond issuance costs.......... 36,984,000 39,945,000
Due from affiliated companies............ 136,664,000 64,696,000
Other assets............................. 52,263,000 45,952,000
TOTAL ASSETS............................. $ 2,432,327,000 $ 2,287,284,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable......................... $ 24,647,000 $ 11,681,000
Accrued expenses......................... 156,806,000 110,490,000
Project Debt:
Revenue bonds issued by and prime
responsibility of municipalities.. 1,210,935,000 1,234,910,000
Revenue bonds issued by municipal
agencies with sufficient service
revenues guaranteed by third
parties........................... 340,431,000 347,903,000
Other borrowings......................... 28,423,000 28,423,000
Deferred income.......................... 52,028,000 52,613,000
Deferred income taxes.................... 155,130,000 102,353,000
Minority interest........................ 12,130,000 13,719,000
Other liabilities........................ 61,934,000 41,140,000
Total liabilities.................... 2,042,464,000 1,943,232,000
Common Stockholders' Equity:
Common stock: authorized, 40,000,000
shares of $.50 par value; shares
outstanding: 38,010,000 in 1993 and
37,872,000 in 1992..................... 19,005,000 18,936,000
Additional Capital:
Paid-in surplus.......................... 150,445,000 148,429,000
Retained earnings........................ 220,413,000 176,687,000
Total additional capital............. 370,858,000 325,116,000
Common stockholders' equity.......... 389,863,000 344,052,000
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY................................. $ 2,432,327,000 $ 2,287,284,000
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<PAGE>
<TABLE>
Ogden Projects, Inc. and Subsidiaries
STATEMENTS OF COMMON STOCKHOLDERS' EQUITY
<CAPTION>
For the years ended December 31, 1993 1992 1991
<S> <C> <C> <C>
COMMON STOCK (AUTHORIZED,
40,000,000 SHARES OF
$.50 PAR VALUE):
Issuance of shares upon
exercise of stock options.. $ 69,000 $ 110,000 $ 76,000
Balance at beginning of year. 18,936,000 18,826,000 18,750,000
Balance at end of year... 19,005,000 18,936,000 18,826,000
ADDITIONAL CAPITAL:
Paid-in Surplus:
Issuance of shares upon
exercise of stock options.. 2,016,000 3,320,000 2,289,000
Balance at beginning of year. 148,429,000 145,109,000 142,820,000
Balance at end of year... 150,445,000 148,429,000 145,109,000
Retained Earnings:
Net income for year.......... 43,726,000 86,859,000 32,459,000
Balance at beginning of year. 176,687,000 89,828,000 57,369,000
Balance at end of year... 220,413,000 176,687,000 89,828,000
Total additional capital..... 370,858,000 325,116,000 234,937,000
COMMON STOCKHOLDERS' EQUITY.. $ 389,863,000 $ 344,052,000 $ 253,763,000
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
Ogden Projects, Inc. and Subsidiaries
STATEMENTS OF CONSOLIDATED CASH FLOWS
<CAPTION>
For the years ended December 31, 1993 1992 1991
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income...................... $ 43,726,000 $ 86,859,000 $ 32,459,000
Adjustments to reconcile net
income to net cash provided by
operating activities:
Cumulative effect of change in
accounting principle.......... (43,852,000)
Depreciation and amortization... 47,168,000 42,156,000 34,031,000
Deferred income taxes........... 53,231,000 37,224,000 23,844,000
Estimated loss on disposal of
discontinued operations....... 17,373,000
Other........................... (5,526,000) (5,529,000) 6,877,000
Management of Operating Assets
and Liabilities:
Receivables..................... (40,674,000) (48,614,000) (7,850,000)
Other assets.................... (26,050,000) (22,486,000) (25,959,000)
Accounts payable and accrued
expenses...................... 51,337,000 17,081,000 (15,265,000)
Deferred income................. (1,152,000) (926,000) 364,000
Billings in excess of costs and
estimated profit on uncompleted
contracts..................... 21,128,000 7,649,000 2,533,000
Other liabilities............... 7,477,000 (3,692,000) (4,735,000)
Net operating activities of
discontinued operations....... (636,000) (2,959,000) 3,004,000
Net cash provided by
operating activities...... 150,029,000 62,911,000 66,676,000
CASH FLOWS FROM FINANCING
ACTIVITIES:
Issuance of revenue bonds....... 225,686,000 1,800,000
Repayments and advances to
affiliated companies.......... (52,005,000) (27,186,000) (31,631,000)
Decreases in (additions to)
restricted funds held in trust 60,347,000 (139,705,000) 161,271,000
Repayment of revenue bonds...... (31,447,000) (95,462,000) (122,855,000)
Proceeds from exercise of stock
options....................... 1,631,000 2,623,000 2,365,000
Distributions to minority
partners...................... (2,040,000) (1,932,000) (588,000)
Other financing activities...... (1,446,000) (48,000)
Net cash provided by
(used in) financing
activities................ (24,960,000) (35,976,000) 10,314,000
CASH FLOWS FROM INVESTING
ACTIVITIES:
Investments in waste-to-energy
facilities.................... (77,777,000) (29,856,000) (68,144,000)
Entities purchased, net of cash
acquired...................... (47,696,000) (13,240,000)
Other property, plant, and
equipment expenditures........ (4,035,000) (3,433,000) (4,069,000)
Proceeds from sale of property
and equipment................. 59,000 91,000
Proceeds from sale of limited
partnership interests......... 8,238,000 10,521,000
Net investing activities of
discontinued operations....... 827,000
Net cash used in investing
activities................ (129,449,000) (24,960,000) (74,105,000)
NET INCREASE (DECREASE) IN CASH. (4,380,000) 1,975,000 2,885,000
CASH AT BEGINNING OF YEAR....... 7,938,000 5,963,000 3,078,000
CASH AT END OF YEAR............. $ 3,558,000 $ 7,938,000 $ 5,963,000
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
Ogden Projects, Inc. and Subsidianes
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND OPERATIONS
ORGANIZATION: Ogden Projects, Inc. ("OPI") and its subsidiaries (the
"Company") design, build, and operate, with affiliated companies,
waste-to-energy facilities utilizing the mass-burn combustion technology of
Martin GmbH fur Umwelt-und Energietechnik of Germany ("Martin"). Ogden
Martin Systems, Inc. ("OMS"), a subsidiary of the Company, holds the
exclusive rights to develop and market facilities utilizing the Martin
technology in North America, most of Central and South America, and certain
other countries, for which royalty and other fees are paid. The Company also
operates, and in certain instances owns, waste-to-energy facilities
utilizing technologies other than the Martin technology.
The Company's parent is Ogden Corporation ("Ogden"), which owns 84.2% of
the capital stock of OPI.
OPERATIONS: Through certain of its subsidiaries, the Company is responsible,
through long-term contracts, for the operation and maintenance of both
privately-owned waste-to-energy facilities (in which equity of approximately
10% to 25% of the facility price is invested by the Company) and such
facilities owned solely by municipalities or unrelated third parties. The
Company, through these subsidiaries, is also responsible for the
construction of all facilities except those acquired after completion.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION: The Consolidated Financial Statements include
the accounts of OPI and all of its subsidiaries. All intercompany accounts
and transactions have been eliminated in the Consolidated Financial
Statements.
SERVICE REVENUES: Service revenues represent the fees earned under
long-term contracts to operate and maintain the waste-to-energy facilities
and, with respect to privately-owned facilities, to service the facilities'
debt. Additional fees are earned from the processing of excess waste and
from energy generation. The Company typically receives all of the revenue
for electricity and steam sales or, in certain cases, alternative fees
during the facility's start-up period prior to the date the facility is
accepted for full commercial operation by the municipality. Upon acceptance
for commercial operation, revenues from energy sales are generally allocated
90% to the municipality and 10% to the Company. Long-term unbilled
receivables for services performed currently, which are due by contract at a
later date, are discounted in recognizing the present value of such
services.
CONSTRUCTION REVENUES: Construction revenues from waste-to-energy facilities
which are not owned by the Company are recognized as work progresses on the
percentage-of-completion method based on the percentage of costs incurred to
date to total estimated costs. Profit recognition on individual contracts
commences when construction has progressed to the point at which the total
profit is reasonably determinable. Estimated losses are provided in full as
soon as identified. In addition, construction revenues include amounts
relating to sales of limited partnership interests and related tax benefits
as well as other activities prior to the commencement of commercial
operations.
RESTRICTED FUNDS: Restricted funds represent proceeds from the financing of
privately-owned facilities. Funds are held in trust and released as
expenditures are made or upon satisfaction of conditions provided under the
respective trust agreements.
PROPERTY, PLANT, AND EQUIPMENT: For those facilities that the Company owns,
the construction costs are capitalized in property, plant, and equipment.
Property, plant, and equipment is stated at cost. Depreciation is provided
on the straight-line method over the estimated useful lives of the assets,
which range generally from 50 years for waste-to-energy facilities to five
years for certain machinery and equipment, for financial reporting purposes.
Accelerated depreciation is generally used for Federal income tax purposes.
Landfill costs are amortized based on the rate at which the total estimated
capacity of such landfill cell is used.
CONTRACT ACQUISITION COSTS: Costs associated with the acquisition of certain
contracts are amortized over the term of the respective contract.
BOND ISSUANCE COSTS: Costs incurred in connection with issuance of revenue
bonds are amortized over the terms of the respective debt issues.
<PAGE>
<PAGE>
DEFERRED CHARGES ON PROJECTS: Costs incurred in connection with certain
project development efforts are deferred until the award of the related
project is determined. Costs on awarded projects are deferred until the
commencement of construction, at which time they are either capitalized in
property, plant, and equipment for privately-owned facilities or charged to
construction costs for municipally-owned facilities. Costs associated with
general marketing efforts and with projects which are no longer under
consideration are charged to operating costs.
INCOME TAXES: The Company adopted the provisions of Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes",
effective January 1, 1992.
The Company and its subsidiaries are included in the consolidated Federal
income tax return of Ogden. A tax sharing agreement among Ogden and its
principal subsidiaries provides for payments to those affiliated groups that
generate tax deductions and credits that are used to reduce taxable income
otherwise payable by the Ogden consolidated group.
EARNINGS PER SHARE OF COMMON STOCK: Earnings per common share are computed
by dividing net income by the weighted average of the number of shares of
common stock outstanding.
The weighted average number of shares outstanding during each period were
as follows:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Weighted average shares outstanding... 37,948,000 37,828,000 37,570,000
</TABLE>
RECLASSIFICATIONS: Prior-year amounts in the accompanying financial
statements have been reclassified to conform with the 1993 presentation.
3. DISCONTINUED OPERATIONS
In December 1993, the Company adopted a plan to discontinue its fixed-site
hazardous waste business (the "hazardous waste business"). As part of the
disposal of this business, the Company ceased all development activities and
in 1994 intends to dispose of the assets related to this business, primarily
a permit to build and operate a hazardous waste incineration facility.
Provision has been made in 1993 for the write down of assets resulting in a
pretax loss of $12,629,000.
In December 1991, the Company adopted a plan to discontinue its on-site
remediation business utilizing mobile technology (the "remediation
business"). During 1993, the Company recognized a pretax gain from the
remediation business totaling $12,379,000. This gain resulted primarily from
the receipt of amounts previously withheld pending satisfactory completion
of obligations under existing contracts and from proceeds received from the
sale of assets in excess of previously estimated net realizable values.
For the year ended December 31, 1993, the net loss of $250,000 from
discontinued operations is included in "Other deductions (income)-net" in
the Statement of Consolidated Income. At December 31, 1993, the remaining
net liabilities of approximately $1,000,000 related to discontinued
operations are included in "Other liabilities" in the accompanying
Consolidated Balance Sheet.
For the year ended December 31, 1991, the results of operations of the
discontinued remediation business, and the estimated loss on disposal,
presented as Discontinued Operations in the accompanying Statement of
Consolidated Income (expressed in thousands of dollars), were as follows:
<TABLE>
<S> <C>
Service revenues and other income................................. $ 4,540
Operating costs................................................... 8,014
Loss from operations before taxes................................. (3,474)
Benefit equivalent to income taxes................................ 746
Loss from operations.............................................. (2,728)
Loss on disposal (net of income tax benefit of $4,747)............ (17,373)
Loss from discontinued operations................................. $(20,101)
--------
</TABLE>
<PAGE>
<PAGE>
4. ACQUISITION
On January 8, 1993, the Company completed the purchase of all of the
outstanding capital stock of RRS Holdings, Inc. ("RRS"), the United States
waste-to-energy subsidiary of Asea Brown Boveri Inc. The purchase price of
$47,696,000 was paid from amounts held by Ogden on behalf of the Company.
The assets acquired consisted primarily of long-term contracts to operate
three municipally-owned waste-to-energy facilities in Detroit, Michigan;
Honolulu, Hawaii; and Hartford, Connecticut.
The acquisition was accounted for using the purchase method of accounting.
Accordingly, the assets and liabilities of RRS have been recorded at their
estimated fair values at the date of acquisition and are included in the
Consolidated Balance Sheet of the Company at December 31, 1993. The results
of operations of RRS have been included in the Statements of Consolidated
Income of the Company since the date of acquisition.
The unaudited pro forma total revenues of the Company and RRS for the year
ended December 31, 1992 were $551,708,000, calculated as if the acquisition
had occurred on January 1, 1992. The effect on income from continuing
operations, net income, and earnings per share is not material. The pro
forma information is for comparative purposes only and does not purport to
be indicative of the results of operations that would have occurred had the
acquisition been consummated at the beginning of 1992 or of results which
may occur in the future.
5. RECEIVABLES
Receivables (expressed in thousands of dollars) were comprised of the
following:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Billed services....................................... $ 68,082 $ 51,333
Unbilled services..................................... 108,108 85,146
Construction contract billings........................ 22,025 13,361
Costs in excess of billings on uncompleted
construction contracts.............................. 435 7,678
Retainage on uncompleted construction contracts....... 17,447 4,408
Other................................................. 15,785 17,421
Allowance for doubtful accounts....................... (7,321) (4,776)
Total................................................. $224,561 $174,571
</TABLE>
Unbilled service revenues due from municipalities at December 31, 1993 are
scheduled, by contract, to be billed as follows: $27,026,000 in 1994,
$32,075,000 in 1995, and $49,007,000 thereafter.
6. RESTRICTED FUNDS HELD IN TRUST
Funds held by trustees from proceeds received from financing of facilities
are segregated principally for the construction of the waste-to-energy
facilities, debt service reserves for payment of principal and interest on
revenue bonds, and capitalized interest for payment of interest generally
during the construction period. Such funds are invested principally in
United States Treasury bills and notes and United States government agencies
securities.
Fund balances (expressed in thousands of dollars) were as follows:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Construction funds.................................... $ 71,725 $129,913
Debt service funds.................................... 197,649 195,841
Capitalized interest funds............................ 19,289 28,788
Other funds........................................... 70,753 65,221
Total................................................. $359,416 $419,763
</TABLE>
Based on anticipated construction schedules, the remaining construction funds
at December 31, 1993 are expected to be disbursed as follows: $41,701,000 in
1994 and $30,024,000 in 1995.
<PAGE>
<PAGE>
7. PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment (expressed in thousands of dollars) consisted
of the following:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Land............................................. $ 5,049 $ 5,049
Waste-to-energy facilities....................... 1,539,373 1,538,762
Buildings and improvements....................... 48,146 39,498
Machinery and equipment.......................... 23,016 19,228
Landfills........................................ 8,464 8,306
Construction in progress......................... 95,789 24,993
Total............................................ 1,719,837 1,635,836
Less accumulated depreciation and amortization... 156,475 117,618
Net.............................................. $1,563,362 $1,518,218
</TABLE>
Depreciation and amortization (expressed in thousands of dollars) charged
to expense were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Waste-to-energy facilities,
including improvements..................... $35,134 $34,551 $26,911
Machinery and equipment...................... 2,661 2,162 1,702
Landfills.................................... 363 32 609
Total........................................ $38,158 $36,745 $29,222
</TABLE>
8. OTHER ASSETS
Other assets (expressed in thousands of dollars) were comprised of the
following:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Deferred charges on projects - net...................... $12,704 $16,014
Spare parts............................................. 25,825 16,458
Prepaid insurance....................................... 8,391 4,363
Other................................................... 5,343 9,117
Total................................................... $52,263 $45,952
</TABLE>
9. ACCRUED EXPENSES
Accrued expenses (expressed in thousands of dollars) consisted of the
following:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Interest.............................................. $ 36,430 $ 34,252
Construction costs.................................... 27,314 11,828
Lease payments........................................ 12,234 10,906
Insurance............................................. 16,201 8,869
Municipalities' share of service revenues............. 18,747 12,764
Other................................................. 45,880 31,871
Total................................................. $156,806 $110,490
</TABLE>
<PAGE>
<PAGE>
10. INCOME TAXES
Effective January 1, 1992, the Company adopted the provisions of Statement
of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income
Taxes". SFAS No. 109 requires the asset and liability method of accounting
for income taxes. Under the asset and liability method, deferred taxes are
recognized based on the expected future tax consequences of events that have
been included in the financial statements or tax returns by applying
currently enacted statutory tax rates applicable to future years to
differences between the financial statement and tax bases of assets and
liabilities. This standard required the Company to recognize the benefit of
certain deferred tax assets that were not recognizable under the previous
standard, Accounting Principles Board Opinion (APB) No. 11. This benefit of
$43,852,000, or $1.16 per share, as of January 1, 1992 was recognized in the
first quarter of 1992 as a cumulative effect of a change in accounting
principle.
In August 1993, the Omnibus Budget Reconciliation Act of 1993 was enacted
which, among other things, increased the corporate Federal income tax rate
from 34% to 35%, effective retroactively to January 1, 1993. In accordance
with the provisions of SFAS No. 109, the effect of the change in rate,
primarily a $4,402,000 adjustment of deferred tax liabilities and assets, is
included in the charge equivalent to income taxes for the current year.
The components of the charge equivalent to income taxes (expressed in
thousands of dollars) were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
CURRENT:
State........................................ $ 2,724 $ 1,381 $ 1,677
DEFERRED:
Federal...................................... 29,461 22,176 8,804
State........................................ 4,303 5,155 4,739
Total deferred............................... 33,764 27,331 13,543
Total charge equivalent to income taxes...... 36,488 28,712 15,220
Reduction in charge equivalent to income
taxes for benefits utilized by Ogden
affiliates................................. (3,621)
Charge equivalent to income taxes............ $36,488 $28,712 $11,599
</TABLE>
The charge equivalent to income taxes (expressed in thousands of dollars)
on a separate group return basis varied from the Federal statutory income tax
rate due to the following:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Taxes at statutory rate...................... $28,075 $24,385 $14,980
State income taxes, net of Federal tax
beneft..................................... 4,568 4,313 4,235
Investment tax credits....................... (1,807) (4,717)
Adjustment of deferred tax balances.......... 4,402
Benefits utilized by Ogden affiliates........ (3,621)
Other - net.................................. 1,250 14 722
Charge equivalent to income taxes............ $36,488 $28,712 $11,599
Statutory rate............................... 35.0% 34.0% 34.0%
Effective rate............................... 45.5% 40.0% 26.3%
</TABLE>
The charge (benefit) equivalent to income taxes (expressed in thousands of
dollars) was included in the financial statements as follows:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Continuing operations........................ $36,488 $28,712 $17,092
Discontinued operations...................... (5,493)
Charge equivalent to income taxes............ $36,488 $28,712 $11,599
</TABLE>
<PAGE>
<PAGE>
Deferred income taxes were determined under the provisions of SFAS No. 109
for 1993 and 1992 and under the provisions of APB No. 11 for 1991. Deferred
income tax (credits) charges for 1991 (expressed in thousands of dollars),
arising from differences between tax and financial reporting, were as
follows:
<TABLE>
<S> <C>
Interest income.................................................... $(1,672)
Deferred income.................................................... 7,770
Investment tax credits............................................. 2,430
Depreciation....................................................... 62,786
Investment tax credit carryforwards................................ (7,148)
Net operating loss carryforwards................................... (49,778)
Accrued expenses................................................... (1,150)
Waste-to-energy facility grant..................................... (1,438)
Disposal of discontinued operations................................ (7,521)
Sale of limited partnership interests.............................. 8,532
Other - net........................................................ 732
Total.............................................................. $13,543
-------
</TABLE>
The components of the net deferred income tax liability (expressed in
thousands of dollars) at December 31, 1993 and 1992 were as follows:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Deferred tax assets:
Deferred income................................... $ 21,690 $ 17,660
Accrued expenses.................................. 28,780 25,741
Investment tax credits............................ 80,097 77,317
Net operating loss carryforwards.................. 157,347 145,170
Total deferred tax assets......................... 287,914 265,888
Deferred tax liabilities:
Unbilled accounts receivable...................... 29,490 22,040
Property, plant, and equipment.................... 406,828 340,363
Other............................................. 6,726 5,838
Total deferred tax liabilities.................... 443,044 368,241
Net deferred tax liability............................ $155,130 $102,353
</TABLE>
Under the tax sharing agreement with Ogden, investment and other tax
credits recognizable in connection with such tax sharing arrangement are
reflected as a reduction of the charge equivalent to income taxes in the
accompanying Statement of Consolidated Income for the year ended December 31,
1991. For the years ended December 31, 1993 and 1992, these payments from
Ogden are reflected as a reduction of the deferred tax assets. At December
31, 1993, the Company had investment and other tax credit carryforwards with
Ogden for Federal income tax purposes of approximately $80,100,000 and net
operating loss carryforwards of approximately $364,600,000. The carryforwards
will expire in 2004 through 2008. Deferred Federal income taxes have been
reduced by the tax effect of these amounts.
<PAGE>
Under the tax sharing agreement, the Company received $19,963,000,
$13,008,000, and $9,718,000 for 1993,1992, and 1991, respectively, primarily for
utilization of its tax deductions (principally accelerated depreciation)
against taxable income otherwise payable by the Ogden consolidated tax group.
The utilization of these deductions by other Ogden affiliates resulted in a
reduction in the charge equivalent to income taxes (expressed in thousands of
dollars) in 1991 as follows:
<TABLE>
<S> <C>
Tax deductions of the Company utilized by the Ogden
consolidated group................................................ $9,718
Deferred taxes provided............................................. 6,097
Reduction in charge equivalent to income taxes...................... $3,621
------
------
</TABLE>
11. PROJECT DEBT
Project debt (expressed in thousands of dollars) is summarized as follows:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Revenue Bonds Issued by and Prime Responsibility
of Municipalities:
3.5-10% serial revenue bonds
maturing 1994 through 2005........................ $ 257,180 $ 269,055
5.4-10% term revenue bonds due 1995 through 2019.... 934,685 865,285
Adjustable rate revenue bonds due 1994 through 2013. 19,070 100,570
Total............................................... 1,210,935 1,234,910
Revenue Bonds Issued by Municipal Agencies with
Sufficient Service Revenues
Guaranteed by Third Parties:
4.15-8.9% serial revenue bonds maturing 1994
through 2007...................................... 91,290 94,280
7.25-7.4% term revenue bonds due 1999 through 2011.. 105,610 105,610
Adjustable rate revenue bonds due 1994 through 2011. 143,531 148,013
Total............................................... 340,431 347,903
Total project debt.................................. $1,551,366 $1,582,813
</TABLE>
The project debt associated with the financing of waste-to-energy facilities
is generally arranged by municipalities through the issuance of tax-exempt and
taxable revenue bonds. The category "Revenue Bonds Issued by and Prime
Responsibility of Municipalities" includes bonds issued with respect to which
debt service is an explicit component of the client community's obligation under
the related service agreement. In the event that a municipality is unable to
satisfy its payment obligations, the bondholders' recourse with respect to the
Company is limited to the waste-to-energy facility and restricted funds pledged
to secure such obligation. The category "Revenue Bonds Issued by Municipal
Agencies with Sufficient Service Revenues Guaranteed by Third Parties" includes
bonds issued to finance three facilities for which contractual obligations of
third parties to deliver waste ensure sufficient revenues to pay debt service,
although such debt service is not an explicit component of a third party's
service fee obligation.
Payment obligations for the project debt, which are limited recourse to the
Operating Subsidiary and nonrecourse to the Company and Ogden, subject to
construction and operating performance guarantees and commitments, are secured
by the revenues pledged under the respective indentures and are collateralized
principally by assets of the respective Operating Subsidiary. At December 31,
1993, such project debt is collateralized by property, plant, and equipment with
a net carrying value of $1,534,958,000, credit enhancements of approximately
$200,000,000 for which Ogden has certain reimbursement obligations, and
substantially all of the restricted funds held in trust (see Note 6).
The interest rates on adjustable rate revenue bonds are adjusted periodically
to reflect current market rates, generally with an upside cap of 15%. The
average adjustable rates during the years ended December 31, 1993 and 1992 were
2.65% and 3.40%, respectively.
<PAGE>
<PAGE>
In May 1993, the Company entered into two interest rate swap agreements as
hedges against interest rate exposure on certain adjustable rate revenue bonds
in the category "Revenue Bonds Issued by Municipal Agencies with Sufficient
Service Revenues Guaranteed by Third Parties". Both swap agreements expire in
May 1999. Under one swap agreement, the Company pays a fixed rate of 3.95%
per annum on a semi-annual basis and receives a floating rate based on an index
of tax-exempt variable rate obligations. Under the second swap agreement, the
Company pays a fixed rate of 5.25% per annum on a semi-annual basis and receives
a floating rate based on a defined commercial paper rate. At December 31, 1993,
the floating rates on the two swaps were 2.34% and 3.36%, respectively. The
notional amounts of the swaps at December 31, 1993 were $91,070,000 and
$48,305,000, respectively, and are reduced in accordance with the scheduled
repayments of the applicable revenue bonds. The counterparties to both swaps are
major financial institutions. The Company believes the credit risk associated
with nonperformance is not significant.
The maturities and sinking fund installments (expressed in thousands of
dollars) on the project debt are as follows:
<TABLE>
<S> <C>
1994............................................................ $ 32,632
1995............................................................ 37,867
1996............................................................ 48,597
1997............................................................ 52,617
1998............................................................ 58,132
Later years..................................................... 1,321,521
Total........................................................... $1,551,366
</TABLE>
Interest incurred, related capitalization of such interest costs, and
amortization of bond issuance costs (expressed in thousands of dollars) were as
follows:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Interest incurred on taxable
and tax-exempt borrowings............... $107,846 $99,828 $101,906
Interest earned on temporary investment of
borrowings during construction, etc..... 9,985 6,095 8,919
Net interest incurred..................... 97,861 93,733 92,987
Interest capitalized during construction
in property, plant, and equipment....... 5,538 753 9,166
Interest expense - net.................... 92,323 92,980 83,821
Amortization of bond issuance costs....... 6,341 6,754 5,137
Debt service charges...................... $ 98,664 $99,734 $ 88,958
</TABLE>
12. DEFERRED INCOME
Deferred income (expressed in thousands of dollars) was comprised of the
following:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Sale and leaseback arrangement.......................... $27,930 $29,954
Advance billings to municipalities...................... 14,297 9,862
Other................................................... 9,801 12,797
Total................................................... $52,028 $52,613
</TABLE>
The gain from a sale and leaseback arrangement (see Note 15) has been deferred
and is being recognized in income as a credit against future rental expenses.
<PAGE>
<PAGE>
13. OTHER BORROWINGS AND OTHER LIABILITIES
In 1991, the Company assumed an obligation for $28,423,000 representing the
equity component of a sale and leaseback arrangement relating to the Hennepin
County, Minnesota, waste-to-energy facility. This arrangement is accounted for
as a financing. The obligation, which has an effective interest rate of 5% and
does not require a principal payment in the next five years, extends through
2017.
Other liabilities (expressed in thousands of dollars) were comprised of the
following:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Retainage on construction in progress................... $11,136 $ 3,109
Lease reserve payments.................................. 10,605 10,605
Billings in excess of costs and estimated profit on
uncompleted contracts................................. 17,939 4,235
Other................................................... 22,254 23,191
Total................................................... $61,934 $41,140
</TABLE>
14. COMMON STOCK AND STOCK OPTIONS
In 1989, the Board of Directors approved a non-qualified Employees' Stock
Option Plan. Under such plan, options are granted to officers and key management
employees to purchase common stock of the Company. Options granted prior to
August 2, 1989 to certain employees of the Company became exercisable over a
three-year period ending on December 31, 1991. Options granted prior to August
2, 1989 to all other persons, including persons employed by affiliates of the
Company, became exercisable on August 9, 1989. The exercise price of such
options for 797,000 shares is $11.90 per share. The exercise price for any
options granted under the Employees' Stock Option Plan after August 2, 1989 is
to be the fair market value as of the date of the grant. During 1990, options
for 10,000 shares were granted at an exercise price of $24.75 per share. Such
options became exercisable over a three-year period ending on December 31, 1992.
As adopted, the plan calls for a maximum of 825,000 shares of the Company's
common stock to be available for issuance upon exercise of options.
Also in 1989, the Board of Directors approved a non-qualified Directors' Stock
Option Plan. Under such plan, options to purchase 25,000 shares of common stock
of the Company were granted to each person who as of August 9, 1989, was a
director or member of the Advisory Board of the Board of Directors and who was
not otherwise an employee of the Company, Ogden, or any of their respective
affiliates. The exercise price of such options for 275,000 shares is $11.90 per
share. The options became exercisable on August 9, 1989. As adopted, the plan
calls for a maximum of 275,000 shares of the Company's common stock to be
available for issuance upon exercise of options.
Information regarding the activity of the Company's stock option plans is
summarized as follows:
<TABLE>
<CAPTION>
AVAILABLE
OUTSTANDING EXERCISABLE FOR GRANT
<S> <C> <C> <C>
Balance at December 31,1990......... 943,334 872,334 30,666
Became exercisable.................. 66,333
Cancelled........................... (1,334) 1,334
Exercised........................... (152,998) (152,998)
Balance at December 31,1991......... 789,002 785,669 32,000
Became exercisable.................. 3,333
Exercised........................... (220,500) (220,500)
Balance at December 31,1992......... 568,502 568,502 32,000
Exercised........................... (137,000) (137,000)
Balance at December 31, 1993........ 431,502 431,502 32,000
</TABLE>
All options exercised or cancelled to date had an exercise price of $11.90 per
share. At December 31, 1993, there were 463,502 shares of the Company's common
stock reserved for issuance under such plans.
<PAGE>
<PAGE>
15. LEASES
Total rental expenses amounted to $13,632,000, $13,306,000, and $13,420,000
for the years ended December 31, 1993, 1992, and 1991, respectively.
In 1986 and 1987, the Company sold, under a sale and leaseback arrangement,
its ownership interests in the Tulsa, Oklahoma, waste-to-energy facility for an
aggregate sale price of $140,500,000, of which $92,375,000 represented the
assumption of revenue bonds. These leases, which extend through 2012, are
accounted for as operating leases.
Future minimum rental payments (expressed in thousands of dollars) required
under operating leases that have initial or remaining noncancelable lease terms
in excess of one year, principally for the Tulsa facility leases, leases on
waste-to-energy facility sites, and amounts to be paid under a leasehold for a
landfill through 1997 at the rate of $2.71 per ton of waste, are as follows:
<TABLE>
<S> <C>
1994.............................................................. $ 12,845
1995.............................................................. 12,447
1996.............................................................. 14,561
1997.............................................................. 13,915
1998.............................................................. 13,748
Later years....................................................... 181,667
Total............................................................. $249,183
</TABLE>
Operating leases at December 31, 1993 include $144,916,000 of future
nonrecourse rental payments that are supported by third-party commitments to
provide sufficient service revenues to meet such obligations.
16. RELATED PARTY TRANSACTIONS
ADMINISTRATIVE SERVICE CHARGE: Ogden affiliates provide the Company with
administrative services that include cash management, financing, employee
benefits, insurance, and similar services. For such services, the Company
incurred charges of $2,500,000, $2,364,000, and $2,364,000 for the years ended
December 31, 1993, 1992, and 1991, respectively.
In the opinion of management, such service charges have been made on a basis
which is considered to be reasonable; however, these charges are not necessarily
indicative of the total costs that the Company would have incurred had it
operated on a stand-alone basis.
CASH MANAGEMENT: The Company participates in Ogden's centralized cash
management system whereby all of the Company's cash requirements are satisfied
by Ogden affiliates; any excess cash is held by Ogden on behalf of the Company.
Commencing April 1, 1991, the Company was charged or credited interest on
advances from or to affiliated companies. During 1991, the Company was charged
net interest in the amount of $81,000. During 1993 and 1992, the Company was
credited for interest in the amount of $2,436,000 and $1,872,000, respectively.
WASTE-TO-ENERGY FACILITY PERSONNEL: Except for the manager of facility
administration, who is a Company employee, the work force at each facility is
generally supplied, by agreement, by Ogden Services Corporation, an Ogden
affiliate. The fee for such services, which is equal to payroll costs plus 10%
of the respective facilities' total payroll, amounted to $79,982,000,
$53,160,000, and $47,915,000 for the years ended December 31, 1993, 1992, and
1991, respectively.
<PAGE>
<PAGE>
17. RETIREMENT PLANS
The pension plan provides benefits to substantially all of the salaried
employees, normally upon retirement at age 65, based on years of service and
average compensation for the most highly compensated five consecutive years out
of the employee's last ten years of service. The Company's funding policy for
this plan is to contribute annually an actuarially recommended amount no less
than the minimum funding required by ERISA. Contributions are intended to
provide not only for benefits attributed to service to date but also for those
expected to be earned in the future.
Benefits under the plan have been temporarily frozen as of December 31, 1993
due to the Plan not being able to satisfy certain tests under ERISA regulations
effective January 1, 1994. Clarification of the new requirements is being
sought and a final determination of the status of the plan is expected in 1994.
The following table sets forth the pension plan's funded status at December
31, 1993 and 1992 (expressed in thousands of dollars):
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Accumulated benefit obligations (including vested
benefits of $3,248 and $1,698 in 1993 and
1992, respectively).................................... $ 4,163 $2,515
Projected benefit obligations............................ $ 6,614 $4,420
Plan assets, primarily common stocks and U S. government
securities, at fair value.............................. 5,222 4,275
Underfunded projected benefits........................... $(1,392) $ (145)
Source of Underfunded Status:
Unrecognized net gains (losses) from past experience
different from that assumed and effects
of changes in assumptions.............................. $(1,265) $ 55
Unrecognized net transition asset being recognized over
16 years............................................... 428 483
Accrued pension costs.................................... (555) (683)
Underfunded projected benefits........................... $(1,392) $ (145)
</TABLE>
<TABLE>
The 1993, 1992, and 1991 cost for the Company's pension plan included the
following components (expressed in thousands of dollars):
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Service cost on benefits earned during the year....... $699 $674 $656
Interest cost on projected benefit obligations........ 371 294 226
Net amortization and deferral......................... (224) 126 119
Actual return on plan assets.......................... (188) (461) (357)
Net pension cost...................................... $658 $633 $644
</TABLE>
The expected long-term rate of return on plan assets was 8.0% at December 31,
1993, 1992 and 1991. The weighted average discount rate and the rate of increase
in future compensation levels used in determining the actuarial present value of
the projected benefit were as follows:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Discount rate................................................ 7.5 % 8.5 %
Compensation increase........................................ 4.5 % 5.0 %
</TABLE>
Contributions and costs for defined contribution plans are determined by a
benefit formula based on a percentage of compensation as well as discretionary
contributions. The cost for 1993, 1992, and 1991 was $1,950,000, $1,663,000, and
$1,439,000, respectively.
<PAGE>
<PAGE>
18. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Payments of debt service charges and income taxes (expressed in thousands of
dollars) were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
------- ------- --------
<S> <C> <C> <C>
Interest paid (net of amounts capitalized).. $93,831 $96,416 $ 82,648
Charge equivalent to income taxes - net paid
(refunded)................................ (99) 913 1,855
</TABLE>
Noncash investing and financing activities (expressed in thousands of dollars)
were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Adjustment to acquired property, plant, and
equipment to pretax amounts upon
adoption of SFAS No 109................... $38,051
Acquisition of net assets in connection with
a merger.................................. 4,375
Adjustment to property, plant, and equipment
resulting from purchase price and
contract cost adjustments................. $ 8,300
Detail of entities acquired:
Fair value of assets acquired............... $62,438 $254,778
Cash paid for capital stock................. 47,696 13,250
Liabilities assumed......................... $14,742 $241,528
</TABLE>
19. COMMITMENTS AND CONTINGENT LIABILITIES
The Company and certain of its subsidiaries are contingently liable as a
result of transactions arising in the ordinary course of business and are
involved in legal proceedings in which damages and other remedies are sought. In
the opinion of Company management, after review with counsel, the eventual
disposition of these matters will not have a material adverse effect on the
Company's Consolidated Financial Statements.
The Company intends to indemnify Ogden for any payments Ogden or its
affiliates may be required to make under credit enhancements and guarantees
arising from the performance by the Company and its Operating Subsidiaries of
obligations under construction and service agreements in connection with
waste-to-energy facilities constructed and/or operated by Operating
Subsidiaries. In the opinion of Company management, there will be no requirement
for Ogden to make any payments under guarantees arising out of a default with
respect to the construction or operation of such facilities.
At December 31, 1993, capital commitments, exclusive of funds provided by
revenue bonds issued by municipalities and municipal agencies, amounted to
$24,909,000, of which $12,302,000 was for direct equity investments in
waste-to-energy facilities and $12,607,000 was for normal replacement,
modernization, and growth.
20. SALE OF LIMITED PARTNERSHIP INTERESTS
During October 1991 and January 1992, the Company sold limited partnership
interests in and related tax benefits of its Huntington, New York,
waste-to-energy facility. Construction revenues in the accompanying Statements
of Consolidated Income include $7,681,000 and $17,779,000 for the years ended
December 31, 1992 and 1991, respectively, from these transactions.
The accounts of the partnership have been consolidated as part of the
Company's Consolidated Financial Statements, with intercompany accounts and
transactions having been eliminated. At December 31, 1993 and 1992, the balance
of the capital accounts of minority partners totaling $12,130,000 and
$13,719,000, respectively, is reflected as "Minority Interest" in the
accompanying Consolidated Balance Sheets.
<PAGE>
<PAGE>
21. FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values of financial instruments have been determined by the
Company using available market information and appropriate valuation
methodologies. However, considerable judgement is required in interpreting
market data to develop the estimates of fair value. Accordingly, the estimates
presented herein are not necessarily indicative of the amounts that the Company
could realize in a current market exchange.
The carrying amount and estimated fair values of financial instruments
(expressed in thousands of dollars) at December 31, 1993 and 1992 are
summarized as follows:
<TABLE>
<CAPTION>
1993 1992
CARRYING ESTIMATED CARRYING ESTIMATED
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
<S> <C> <C> <C> <C>
ASSETS:
Cash................... $ 3,558 $ 3,558 $ 7,938 $ 7,938
Receivables............ 224,561 233,841 174,571 180,790
Restricted funds....... 359,416 366,006 419,763 424,940
LIABILITIES:
Project debt........... 1,551,366 1,691,939 1,582,813 1,668,372
Other borrowings....... 28,423 19,810 28,423 14,835
Other liabilities...... 8,300 7,175 8,300 6,395
OFF BALANCE SHEET
FINANCIAL INSTRUMENTS:
Unrealized loss on
interest rate swap
agreements........... 430
</TABLE>
The following methods and assumptions were used to estimate the fair value of
financial instruments presented above:
Cash - the carrying amount is a reasonable approximation of fair
value.
Receivables - the fair value of long-term unbilled receivables is
estimated by using a discount rate that approximates the current rate for
comparable notes. The carrying amount of all other receivables is a
reasonable approximation of fair value.
Restricted funds - the fair value of funds held in trust is estimated
based on quoted market prices of the investments held by the trustee.
Project debt - the fair value of the revenue bonds is estimated based
on quoted market prices for the same or similar issues.
Other borrowings - the fair value of the obligation assumed as part
of a sale and leaseback transaction accounted for as a financing is
estimated by discounting the future stream of payments using the
incremental borrowing rate of Ogden, the Company's primary source of
recourse financing.
Other liabilities - the fair value of liabilities that come due
beyond one year of the balance sheet date are estimated by discounting the
future stream of payments using the incremental borrowing rate of Ogden.
Interest rate swap agreements - the fair value of the interest rate
swap agreements is the estimated amount the Company would have to pay to
the financial institutions to terminate the agreements.
<PAGE>
INDEPENDENT AUDITORS' REPORT
Deloitte & Touche 1633 Broadway
New York, NY 10019
The Board of Directors and Stockholders of Ogden Projects, Inc.:
We have audited the accompanying consolidated balance sheets of Ogden Projects,
Inc. and subsidiaries as of December 31, 1993 and 1992 and the related
statements of common stockholders' equity, consolidated income and cash flows
for each of the three years in the period ended December 31, 1993. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the companies at December 31, 1993 and 1992
and the results of their operations and cash flows for each of the three years
in the period ended December 31, 1993 in conformity with generally accepted
accounting principles.
As discussed in Note 2 to the financial statements, in 1992 the Company changed
its method of accounting for income taxes to conform with Statement of Financial
Accounting Standards No. 109.
[Signature]
February 2, 1994
42 1993 ANNUAL REPORT
<PAGE>
Ogden Projects, Inc. and Subsidiaries
REPORT OF MANAGEMENT
Ogden Projects, Inc.'s management is responsible for the information and
representations contained in this annual report. Management believes that the
financial statements have been prepared in conformity with generally
accepted accounting principles appropriate in the circumstances to reflect in
all material respects the substance of events and transactions that should be
included and that the other information in the annual report is consistent with
those statements. In preparing the financial statements, management makes
informed judgments and estimates of the expected effects of events and
transactions currently being accounted for.
In meeting its responsibility for the reliability of the financial statements,
management depends on the Company's internal control structure. This structure
is designed to provide reasonable assurance that assets are safeguarded and
transactions are executed in accordance with management's authorization and
recorded properly to permit the preparation of financial statements in
accordance with generally accepted accounting principles. In designing control
procedures, management recognizes that errors or irregularities may
nevertheless occur. Also, estimates and judgments are required to assess and
balance the relative cost and expected benefits of such controls. Management
believes that the Company's internal control structure provides reasonable
assurance that errors or irregularities that could be material to the financial
statements are prevented or would be detected within a timely period by
employees in the normal course of performing their assigned functions.
The Board of Directors pursues its oversight role for these financial
statements through the Audit Committee, which is composed solely of
non-affiliated directors. The Audit Committee, in this oversight role,
meets periodically with management and internal auditors to monitor their
respective responsibilities. The Audit Committee also meets periodically
with the independent auditors and the internal auditors, both of whom
have free access to the Audit Committee without management present.
The independent auditors express an opinion on our financial statements. Their
opinion is based on procedures they consider to be sufficient to enable them to
reach a conclusion as to the fairness of the presentation of the financial
statements.
[Signature] [Signature]
Scott G. Mackin William E. Whitman
President and Executive Vice President and
Chief Operating Officer Chief Financial Officer
<PAGE>
<TABLE>
Ogden Projects, Inc. and Subsidiaries
QUARTERLY RESULTS OF OPERATIONS
<CAPTION>
1993 QUARTER ENDED MARCH 31 JUNE 30 SEPT. 30 DEC. 31
(In thousands of dollars,
except per-share amounts)
<S> <C> <C> <C> <C>
Total revenues............... $ 141,506 $ 171,836 $ 182,846 $ 184,872
Income before income taxes... $ 14,200 $ 19,118 $ 21,373 $ 25,523
Net income................... $ 8,520 $ 11,471 $ 7,875 $ 15,860
Earnings per common share.... $ .22 $ .30 $ .21 $ .42
</TABLE>
<TABLE>
<CAPTION>
1992 QUARTER ENDED MARCH 31 JUNE 30 SEPT. 30 DEC. 31
(In thousands of dollars,
except per-share amounts)
<S> <C> <C> <C> <C>
Total revenues............... $ 111,033 $ 107,577 $ 109,892 $ 137,535
Income from continuing
operations before income
taxes and cumulative effect
of change in accounting
principle.................. $ 16,861 $ 16,842 $ 16,039 $ 21,977
INCOME FROM:
Continuing operations........ $ 10,111 $ 10,099 $ 9,619 $ 13,178
Cumulative effect of change
in accounting principle.... 43,852
Net income................... $ 53,963 $ 10,099 $ 9,619 $ 13,178
EARNINGS PER COMMON SHARE:
Continuing operations........ $ .27 $ .27 $ .25 $ .35
Cumulative effect of change
in accounting principle.... 1.16
Total........................ $ 1.43 $ .27 $ .25 $ .35
</TABLE>
Ogden Projects, Inc. and Subsidiaries
PRICE RANGE OF STOCK AND DIVIDEND DATA
<TABLE>
<CAPTION>
1993 1992
HIGH LOW HIGH LOW
<S> <C> <C> <C> <C>
Common:
First Quarter............................... 20 5/8 17 1/4 24 1/4 20 1/4
Second Quarter.............................. 22 3/4 16 3/8 22 17
Third Quarter............................... 23 7/8 15 3/8 20 5/8 14 5/8
Fourth Quarter.............................. 18 15 1/8 20 3/4 15
</TABLE>
No dividends have been paid on Ogden Projects, Inc. common stock. The common
stock is listed on the New York Stock Exchange.
<TABLE>
December 31, 1993
OGDEN PROJECTS, INC. AND SUBSIDIARIES
<CAPTION>
PERCENT PLACE OF
COMPANY OWNERSHIP INCORPORATION
<S> <C> <S>
Ogden Projects, Inc. 84.5 Delaware
Ogden Energy Resource Corp. 100 Delaware
Ogden Land Management, Inc. 100 Delaware
Ogden Land Management of Warren, Inc. 100 New Jersey
Ogden Projects of Campo, Inc. 100 California
Ogden Projects of Haverhill, Inc. 100 Massachusetts
Ogden Projects of Lawrence, Inc. 100 Massachusetts
Ogden Power Systems, Inc. 100 Delaware
Ogden Power Systems 7, Inc. 100 Delaware
Ogden Projects Holdings, Inc. 100 Delaware
Ogden Projects (U.K.) Limited 100 U.K.
Ogden Projects (Birmingham) Limited 100 U.K.
Ogden Wallingford Associates, Inc. 100 Connecticut
OPW Associates, Inc. 100 Connecticut
OPWH, Inc. 100 Delaware
Ogden Martin Systems, Inc. 100 Delaware
Grey Acre Development Corporation 100 Massachusetts
Ogden Engineering Services, Inc. 100 New Jersey
Ogden Marion Land Corp. 100 Oregon
Ogden Martin Systems, Ltd. 100 Ontario
Ogden Martin Systems of
Nova Scotia, Ltd. 100 Nova Scotia
Ogden Martin Systems of Alexandria/
Arlington, Inc. 100 Virginia
OMS Equity of Alexandria/Arlington,
Inc. 100 Virginia
Ogden Martin Systems of Babylon, Inc. 100 New York
Ogden Martin Systems of Bristol, Inc. 100 Connecticut
Ogden Martin Systems of Clark, Inc. 100 Ohio
OMSC One, Inc. 100 Delaware
OMSC Two, Inc. 100 Delaware
OMSC Three, Inc. 100 Delaware
OMSC Four, Inc. 100 Delaware
Ogden Martin Systems of Dakota, Inc. 100 Minnesota
Ogden Martin Systems of
Eastern/Central Connecticut, Inc. 100 Connecticut
<PAGE>
Ogden Martin Systems of Fairfax, Inc. 100 Virginia
Ogden Martin Systems of Ford Heights,
Inc. 100 Illinois
Ogden Martin Systems of Haverhill,
Inc. 100 Massachusetts
Haverhill Power, Inc. 100 Massachusetts
LMI, Inc. 100 Massachusetts
Ogden Omega Lease, Inc. 100 Delaware
Ogden Haverhill Properties, Inc. 100 Massachusetts
Ogden Martin Systems of Hillsborough,
Inc. 100 Florida
Ogden Martin Systems of Hudson, Inc. 100 New Jersey
Ogden Martin Systems of Huntington,
Inc. 100 New York
Ogden Martin Systems of Huntington
Resource Recovery One Corp. 100 Delaware
Ogden Martin Systems of Huntington
Resource Recovery Two Corp. 100 Delaware
Ogden Martin Systems of Huntington
Resource Recovery Three Corp. 100 Delaware
Ogden Martin Systems of Huntington
Resource Recovery Four Corp. 100 Delaware
Ogden Martin Systems of Huntington
Resource Recovery Five Corp. 100 Delaware
Ogden Martin Systems of Huntington
Resource Recovery Six Corp. 100 Delaware
Ogden Martin Systems of Huntington
Resource Recovery Seven Corp. 100 Delaware
Ogden Martin Systems of Huntsville,
Inc. 100 Alabama
Ogden Martin Systems of Indianapolis,
Inc. 100 Indiana
Ogden Martin Systems of Kent, Inc. 100 Michigan
Ogden Martin Systems of Knox, Inc. 100 Tennessee
NRG/Recovery Group, Inc. 100 Florida
(formerly Ogden Martin Systems of
Lake, Inc.)
Ogden Martin Systems of Lancaster,
Inc. 100 Pennsylvania
Ogden Martin Systems of Lawrence, Inc. 100 Massachusetts
Ogden Martin Systems of Lee, Inc. 100 Florida
Ogden Martin Systems of Long Island,
Inc. 100 Delaware
Ogden Martin Systems of L.A., Inc. 100 Delaware
Ogden Martin Systems of Marion, Inc. 100 Oregon
Ogden Martin Systems of Mercer, Inc. 100 New Jersey
Ogden Martin Systems of Montgomery,
Inc. 100 Maryland
Ogden Martin Systems of Morris, Inc. 100 New Jersey
Ogden Martin Systems of North
Carolina, Inc. 100 North Carolina
<PAGE>
Ogden Martin Systems of Oakland, Inc. 100 Michigan
Ogden Martin Systems of Onondaga, Inc. 100 New York
Ogden Martin Systems of Onondaga Two
Corp. 100 Delaware
Ogden Martin Systems of Onondaga Three
Corp. 100 Delaware
Ogden Martin Systems of Onondaga Four
Corp. 100 Delaware
Ogden Martin Systems of Onondaga Five
Corp. 100 Delaware
Ogden Martin Systems of Pasco, Inc. 100 Florida
Ogden Martin Systems of Rhode Island,
Inc. 100 Rhode Island
Ogden Martin Systems of
San Bernardino, Inc. 100 California
Ogden Martin Systems of San Diego,
Inc. 100 California
Ogden Martin Systems of Stanislaus,
Inc. 100 California
OMS Equity of Stanislaus, Inc. 100 California
Ogden Martin Systems of Tulsa, Inc. 100 Oklahoma
Ogden Martin Systems of Union, Inc. 100 New Jersey
Ogden Recycling Systems, Inc. 100 Delaware
Ogden Recycling Systems of Chicago,
Inc. 100 Illinois
Ogden Recycling Systems of Fairfax,
Inc. 100 Virginia
Ogden Recycling Systems of
Indianapolis, Inc. 100 Indiana
Ogden Residuals Management, Inc. 100 Delaware
Ogden Waste Treatment Services, Inc. 100 Delaware
Ogden Environmental Services Limited 100 Canada
Ogden Environmental Services of
Houston, Inc. 100 Texas
American Envirotech, Inc. 100 Texas
Stockton Soil Treatment Facility, Inc. 100 California
Projets Ogden Quebec Inc. 100 Quebec
RRS Holdings Inc. 100 Delaware
Michigan Waste Energy, Inc. 100 Delaware
Oahu Waste Energy Recovery, Inc. 100 California
Ogden Projects of Hawaii, Inc. 100 Hawaii
Resource Recovery Systems of
Connecticut, Inc. 100 Connecticut
</TABLE>
EXHIBIT NO. 24
INDEPENDENT AUDITORS' CONSENT
Ogden Projects, Inc.:
We consent to the incorporation by reference in Registration
Statement No. 33-31935 of Ogden Projects, Inc. on Form S-8 of our
reports dated February 2, 1994 (which express an unqualified
opinion and include an explanatory paragraph relating to the
adoption of Statement of Financial Accounting Standards No. 109)
appearing or incorporated by reference in this Annual Report on
Form 10-K of Ogden Projects, Inc. for the year ended December 31,
1993.
/s/Deloitte & Touche
March 28, 1994
