FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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 Identification
incorporation or organization) Number)
40 Lane Road, Fairfield, NJ 07007-2615
(Address of principal executive offices)
(Zip Code)
(201) 882-9000
(Registrant's telephone number, including
area code)
Not Applicable
(Former name, former address and former
fiscal year, if changed since last report)
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
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of each of the issuer's classes of common
stock, as of March 31, 1994: 38,012,544 shares of Common Stock, $.50 par
value per share.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OGDEN PROJECTS, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
FOR THE
THREE MONTHS ENDED
MARCH 31
1994 1993
(Thousands of dollars,
except per-share data)
Service revenues $109,059 $103,503
Construction revenues 50,936 38,003
Total revenues 159,995 141,506
Operating costs 67,131 64,328
Construction costs 46,417 35,384
Debt service charges 25,203 24,091
General and administrative expenses 4,392 4,154
Other deductions (income) - net (1,452) (651)
Total costs and expenses 141,691 127,306
Income before income taxes 18,304 14,200
Charge equivalent to income taxes 7,138 5,680
Net income $ 11,166 $ 8,520
EARNINGS PER SHARE OF COMMON STOCK $ .29 $ .22
OGDEN PROJECTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1994 1993
(Thousands of dollars)
ASSETS:
Cash $ 7,134 $ 3,558
Receivables (net of allowances of
$9,567,000 and $7,321,000, respectively) 242,012 224,561
Restricted funds 331,173 359,416
Property, plant, and equipment (net of
accumulated depreciation of
$166,283,000 and $156,475,000, respectively) 1,574,087 1,563,362
Contract acquisition costs 54,497 55,519
Unamortized bond issuance costs 35,919 36,984
Due from affiliated companies 166,814 136,664
Other assets 50,077 52,263
Total Assets $2,461,713 $2,432,327
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable $ 17,720 $ 24,647
Accrued expenses 162,268 156,806
Project Debt:
Revenue bonds issued by and prime
responsibility of municipalities 1,205,080 1,210,935
Revenue bonds issued by municipal
agencies with sufficient service
revenues guaranteed by third parties 338,231 340,431
Other borrowings 28,423 28,423
Deferred income 53,869 52,028
Deferred income taxes 164,360 155,130
Other liabilities 90,698 74,064
Total liabilities 2,060,649 2,042,464
STOCKHOLDERS' EQUITY:
Common Stock: authorized 40 million
shares of $.50 par value; shares
outstanding: 38,012,000 in 1994 and
38,010,000 in 1993 19,006 19,005
Paid-in surplus 150,479 150,445
Retained earnings 231,579 220,413
Stockholders' equity 401,064 389,863
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $2,461,713 $2,432,327
OGDEN PROJECTS, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE
THREE MONTHS ENDED
MARCH 31,
1994 1993
(Thousands of dollars)
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash generated from operations $ 29,214 $ 26,459
Management of Operating Assets
and Liabilities:
Receivables (17,451) (14,990)
Other assets (1,637) (4,698)
Accounts payable and accrued expenses (1,518) 18,364
Billings in excess of costs and estimated
profit on uncompleted contracts 19,536 7,808
Other liabilities 3,039 1,442
Net cash provided by operating activities 31,183 34,385
CASH FLOWS FROM FINANCING ACTIVITIES:
Decreases in restricted funds
held in trust 28,243 4,099
Receipts from (advances to)
affiliated companies (26,898) 28,835
Repayment of revenue bonds (8,055) (3,875)
Other financing activities (505) (391)
Net cash provided by
(used in) financing activities (7,215) 28,668
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in waste-to-energy facilities (19,074) (16,242)
Entities purchased, net of cash acquired (46,814)
Other property, plant, and equipment expenditures (1,318) (2,149)
Net cash used in investing activities (20,392) (65,205)
Net Increase (Decrease) in Cash 3,576 (2,152)
Cash at Beginning of Period 3,558 7,938
Cash at End of Period $ 7,134 $ 5,786
OGDEN PROJECTS, INC. AND SUBSIDIARIES
MARCH 31, 1994
ITEM 1 (continued) - BASIS OF PRESENTATION:
The accompanying unaudited consolidated condensed financial
statements have been prepared in accordance with the instructions
to Form 10-Q and, therefore, do not include all information and
footnotes necessary for a fair presentation of financial position,
results of operations, and cash flows in conformity with generally
accepted accounting principles. However, in the opinion of the
management of Ogden Projects, Inc. (the "Company"), all
adjustments (consisting of normal recurring accruals) necessary for
a fair presentation of the operating results have been included in
the statements.
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 the first quarter of 1994 and 1993 were 38,010,000 and
37,878,000, respectively.
Prior period amounts in the accompanying financial statements have
been reclassified to conform with the 1994 presentation.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS:
Results of Operations:
Income from services (service revenues less operating costs and
debt service charges) in the first quarter of 1994 of $16.7 million
increased $1.6 million from the comparable period in 1993. An
increase in income from services associated with the start-up
operations of the Union County, New Jersey, facility and from
insurance recoveries was partially offset by costs incurred for
planned outages at the facilities whose operations were acquired in
1993 from Asea Brown Boveri Inc. ("ABB"). Construction profit
(construction revenues less construction costs) of $4.5 million in
the first quarter of 1994 was $1.9 million higher than the first
quarter of 1993 due primarily to increased construction activity in
the 1994 period.
Service revenues in the first quarter of 1994 were $5.6 million
higher than the comparable period in 1993. This increase was due
primarily to the revenues generated from the start-up operations of
the Union County facility during the first quarter of 1994,
increased revenues from the Detroit, Michigan, and Honolulu,
Hawaii, facilities whose operations were acquired in 1993 from ABB,
and the revenue from the operation of the transfer station at the
Montgomery County, Maryland, facility which is currently under
construction. Additional service revenues in 1994 are expected
from the Union County facility commencing commercial operation in
the second quarter of 1994, enhanced performance at certain
facilities currently in operation, and marketing efforts to secure
higher-priced waste streams.
Construction revenues in the first quarter of 1994 were $12.9
million higher than in the first quarter of 1993. This increase
was primarily due to construction activity in the first quarter of
1994 at the Montgomery County, Maryland, facility which broke
ground in April 1993, partially offset by reduced construction
activity at the Union County facility as the project entered start-
up operations. Construction of the Union County facility will be
completed in the second quarter of 1994, while construction of the
Montgomery County and Lee County, Florida, facilities and the
retrofit project at the Detroit, Michigan, facility is expected to
continue throughout the remainder of the year. Additional
construction revenue in 1994 and in future years may be generated
from new projects breaking ground and sales of limited partnership
interests and related tax benefits. Although construction starts
cannot be predicted with certainty, the Company continues to work
toward ground breakings on two municipally-owned facilities. In
addition, with the decline in the number of requests for proposals
for new facilities, the Company's primary source of new business in
the past, the Company is pursuing opportunities for the development
and construction of waste-to-energy facilities for which there are
no sponsoring municipalities, as well as opportunities in other
industries. 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 $2.8 million in the first quarter of 1994
as compared to the first quarter of 1993. This increase was
principally a result of costs incurred at the Honolulu, Hawaii,
facility for its scheduled outage and costs incurred for the
operation of the transfer station at the Montgomery County
facility, partially offset by amounts recovered from insurance
companies for certain property damage resulting in 1993. Operating
costs included $8.8 million and $8.7 million in the first quarter
of 1994 and 1993, respectively, for depreciation of waste-to-energy
facilities.
Debt service charges increased $1.1 million in the first quarter of
1994 as compared to the first quarter of 1993. This increase was
due to higher interest rates resulting from the conversion of one
series of adjustable rate project debt to fixed rates in the fourth
quarter of 1993 and higher interest expense resulting from two
interest rate swap agreements entered into in the second quarter of
1993 as hedges against interest rate exposure on two other series
of adjustable rate project debt. The interest rate swap agreements
resulted in an additional $0.6 million of interest expense in the
first quarter of 1994.
Other income in the first quarter of 1994 includes $1.2 million of interest
income from amounts advanced to affiliated companies as compared to
$0.3 million for such interest income during the comparable period in 1993.
The effective rate of the charge equivalent to income taxes for the
first quarter of 1994 was 39% compared to 40% in the comparable
period in 1993. This decrease in the effective rate is due to
additional investment tax credits generated in the 1994 period from
the construction of the Onondaga, New York, facility, partially
offset by the higher corporate tax rate in the 1994 period
resulting from the passage of the Omnibus Budget Reconciliation Act
of 1993 in the third quarter of 1993.
Financial Condition and Capital Resources:
Receivables at March 31, 1994 increased $17.5 million from December
31, 1993 due primarily to $8.9 million related to construction
activity, $4.3 million which reflects amounts recorded for services
performed currently which will be billed by contract at later
dates, and $4.3 million from timing of collections.
Restricted funds held in trust decreased by $28.2 million during
the first quarter of 1994 principally as a result of funds
disbursed to cover expenditures for the Onondaga County facility.
Other liabilities at March 31, 1994 increased $16.6 million from
December 31, 1993 due primarily to billings in excess of costs on
uncompleted construction contracts and additional retainage on
construction in progress.
At March 31, 1994, capital commitments, exclusive of funds provided
by revenue bonds issued by municipalities and municipal agencies,
amounted to $20.1 million, of which $10.6 million was for direct
equity investments in waste-to-energy facilities and $9.5 million
was for normal replacement, modernization, and growth.
PART II - OTHER INFORMATION
Item 1. 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. At March 31, 1994, the Company
continued to be involved in one such previously reported 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 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Number Exhibits
2.0 (a) Stock Purchase and Sale Agreement by and between Ogden
Projects, Inc. and Blount, Inc., dated December 17, 1990
without exhibits.*
(b) Agreement and Amendment, dated as of May 23, 1991, to the
Stock Purchase and Sale Agreement between Ogden Projects, Inc.
and Blount, Inc., dated December 17, 1990.*
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.*
Number Exhibits
(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 28, 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.*
(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 Amendment, dated October 13,
1989, between Ogden Martin Systems of Haverhill, Inc. and
Union Bank of Switzerland, New York Branch.*
Number Exhibits
(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 Registrant's Common Stock.*
4.4 Demand Note, dated May 31, 1989, by Registrant to Ogden
Corporation.*
4.5 Demand Note, dated December 19, 1984, by Registrant 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
(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 (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.*
Number Exhibits
(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.*
Number Exhibits
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.*
Number Exhibits
(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.*
11.0 Detail of Computation of Earnings Applicable to Common Stock.
_______________
* Incorporated by reference as set forth in the Exhibit Index of
this Form 10-Q.
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 Registrant filed the following reports on Form 8-K during
the three months ended March 31, 1994:
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
OGDEN PROJECTS, INC.
(Registrant)
Date May 12, 1994 BY /s/ Scott G. Mackin
Scott G. Mackin
President
Chief Operating Officer
Date May 12, 1994 BY /s/ William E. Whitman
William E. Whitman
Executive Vice President
Chief Financial Officer