SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K/A
/X/ Annual report pursuant to Section 15(d) of the Securities and Exchange
Act of 1934 For the fiscal year ended December 31, 2000.
/ / Transition report pursuant to Section 15(d) of the Securities
Exchange Act of 1934 for the transition period from to
Commission file number: 1-3122
A. Full title of the plan and the address of the plan, if different from
that if the issuer named below:
The Ogden 401(k) Plan
B. Name of the issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Covanta Energy Corporation
40 Lane Road
Fairfield, NJ 07007
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the Resources Recovery 401(k)
Plan) have duly caused this annual report to be signed by the undersigned
thereunto duly authorized.
Ogden 401(k) Plan
Administrative Committee
By: /s/ Louis M. Walters
-------------------------
Louis M. Walters
Member of the Ogden 401(k) Plan
Administrative Committee
Date : July 2, 2001
The Ogden 401(k) Plan
Independent Auditors' Report
Financial Statements
Years Ended December 31, 2000 and 1999
Supplemental Schedule
Year Ended December 31, 2000
THE OGDEN 401(k) PLAN
TABLE OF CONTENTS
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INDEPENDENT AUDITORS' REPORT
FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 2000 AND 1999:
Statements of Net Assets Available for Benefits
Statements of Changes in Net Assets Available for Benefits
Notes to Financial Statements
SUPPLEMENTAL SCHEDULE FOR THE
YEAR ENDED DECEMBER 31, 2000:
Schedule of Assets Held for Investment Purposes at End of Year
INDEPENDENT AUDITORS' REPORT
The Ogden 401(k) Plan
We have audited the accompanying statements of net assets available for benefits
of The Ogden 401(k) Plan (the "Plan") as of December 31, 2000 and 1999, and the
related statements of changes in net assets available for benefits for the years
then ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 net assets available for benefits of the Plan at December 31, 2000
and 1999, and the changes in net assets available for benefits for the years
then ended in conformity with accounting principles generally accepted in the
United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule listed in the
Table of Contents is presented for the purpose of additional analysis and is not
a required part of the basic financial statements, but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This schedule is the responsibility of the Plan's management. Such
schedule has been subjected to the auditing procedures applied in our audit of
the basic 2000 financial statements and, in our opinion, is fairly stated in all
material respects when considered in relation to the basic financial statements
taken as a whole.
/s/ DELOITTE & TOUCHE LLP
Parsippany, New Jersey
June 22, 2001
THE OGDEN 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2000 AND 1999
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2000 1999
ASSETS:
Investments (See Note 3) $ 87,823,337 $107,387,258
Receivables:
Employer contributions 121,612 266,289
Participant contributions 65,051 135,871
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Total receivables 186,663 402,160
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $ 88,010,000 $107,789,418
============ ============
See accompanying notes to financial statements.
THE OGDEN 401(k) PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2000 AND 1999
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2000 1999
ADDITIONS:
Additions to net assets attributed to:
Investment income:
Net (depreciation) appreciation in fair value of
investments (See Note 3) $ (6,446,648) $ 13,152,664
Interest and dividends 2,440,821 2,504,354
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(4,005,827) 15,657,018
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Contributions:
Participant 2,965,836 3,594,069
Employer 1,598,463 1,840,161
Rollovers 79,156 89,096
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4,643,455 5,523,326
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Total additions 637,628 21,180,344
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DEDUCTIONS:
Deductions from net assets attributed to:
Benefits paid to participants (17,035,087) (24,200,159)
Administrative expenses (49,856) (78,035)
Net transfer to other plans (3,332,103) (39,585,969)
------------- -------------
Total deductions (20,417,046) (63,864,163)
------------- -------------
NET DECREASE IN NET ASSETS
AVAILABLE FOR BENEFITS (19,779,418) (42,683,819)
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR 107,789,418 150,473,237
------------- -------------
NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR $ 88,010,000 $ 107,789,418
============= =============
See accompanying notes to financial statements.
THE OGDEN 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000 AND 1999
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1. DESCRIPTION OF THE PLAN
The following is a brief description of The Ogden 401(k) Plan ("the Plan").
Participants should refer to the Plan document for more complete
information.
a. General Information - Effective June 3, 1996, Ogden Services
Corporation (the "Company") changed the Plan name from the Ogden
Profit Sharing Plan to The Ogden 401(k) Plan. The Plan is an employee
savings plan providing for both employer and employee contributions.
The Plan was established as the Ogden Food Service Corporation Savings
and Security Plan by Ogden Food Service Corporation on January 1,
1982. The Plan was amended and restated effective January 1, 1991 to
conform with the Tax Reform Act of 1986. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974.
Subsequently, the Company amended and restated the Plan again to
comply with the requirements of:
o The Omnibus Reconciliation Act of 1993
o The Unemployment Compensation Amendment of 1992
o Applicable revenue rulings and notices thereunder
o Miscellaneous administrative policies and procedures
Other amendments have been made since the Plan's inception to reflect
changes in the Plan name and participating Covanta Energy Corporation
("Covanta") (formerly Ogden Corporation) subsidiaries and affiliates
adopting the Plan. Participating companies in the Plan include:
o Ogden Services Corporation (the Sponsor of the Plan);
o Ogden Management Services, Inc.;
o All subsidiaries and affiliates of the participating companies
which adopt the Plan.
Effective January 1, 1999, the Plan was amended as a result of several
administrative and plan design changes. The sponsor of the Plan, the
Company, determined that it would be in the best interest of Ogden
Resource Recovery Support Services, Inc. and ADT Global Services, Inc.
(collectively, "Prior Participating Companies"), and their employees,
to establish separate defined contribution plans. Effective January 1,
1999, the Plan assets of the Prior Participating Companies were
transferred from the Plan to the Resource Recovery 401(k) Plan and ADT
Global Services 401(k) Plan, respectively.
b. Administration of the Plan - Administrative and Investment Committees
are appointed by the Board of Directors (the "Board") of the Company
and serve as fiduciaries of the Plan. The Administrative Committee has
responsibility for administering the Plan, and the Investment
Committee has responsibility for reviewing the performance of the
Plan's investments. Costs related to the administration of the Plan
may be paid out of Plan assets if the Company does not pay such
expenses directly.
c. Participation - Full-time and part-time employees of participating
companies who are not covered under a collective bargaining agreement
with a recognized union and have attained age 21 are eligible to
participate in the Plan on the first day of the calendar month
following the date he or she has completed twelve months of employment
and 1,000 hours of service.
d. Contributions - Participants may elect to contribute to the Plan from
one to fifteen percent of their annual compensation on a pre-tax
basis. The maximum annual compensation that can be applied to the
401(k) deferral for 2000 and 1999 is $170,000 and $160,000,
respectively. For 2000 and 1999, participant pre-tax contributions
could not exceed $10,500 and $10,000, respectively. The Company
matches 100 percent up to the first 3 percent of a participant's
annual compensation which is invested based on participant investment
elections. On January 1, 1999, the Company implemented an additional
company match of 50 percent up to the next 2 percent of a
participant's annual compensation in Covanta stock for participants
who are eligible and who elect to contribute. Plan participants can
reallocate the Covanta common stock contributions to different
investment elections at age 55 or older.
A participant's elective contributions and Company contributions are
invested, at the direction of the participant, in accordance with one
of the following options:
o 100 percent in one of the Investment Funds; or
o in more than one Investment Fund allocated in multiples of 1
percent.
If a participant does not make such an election, he or she is deemed
to have elected investment in the Government Securities Fund.
e. Loans to Participants - Loans are made to participants at a minimum of
$500 and up to the lesser of 50 percent of the vested balance or
$50,000, less the highest of any outstanding loan balance in the
previous 12 months, even if repaid. Loans can not exceed the
limitations of the Tax Reform Act of 1986. The terms of the loans are
a minimum of 6 months and a maximum of 5 years or 60 months (10 year
maximum on loans for a primary residence). Participants are prohibited
from borrowing funds accumulated in the Stock Fund. The maximum number
of loans outstanding at one time for an employee is two. The interest
rate charged is The Wall Street Journal's prime rate plus 1 percent.
f. Vesting - Employees eligible to participate in the Plan become 100
percent vested in Company contributions made on or after January 1,
1999. Matching contributions contributed on behalf of the participants
for payroll dates December 31, 1998 and earlier will be fully vested
after 5 years of service.
Participant contributions are immediately 100 percent vested.
g. Retirement Dates - A participant's normal retirement date is the
participant's sixty-fifth birthday. A participant may elect early
retirement at age 55 with 10 years of credited service.
h. Form of Benefits - Benefits are paid in one lump sum.
i. Reclassification - Certain 1999 amounts have been reclassified in the
accompanying financial statements to conform with the 2000
presentation.
j. Distribution from the Plan because of Hardship - Withdrawals are
permitted if a participant establishes, to the satisfaction of the
Administrative Committee, a financial need for funds for which there
is no other money available such as: (i) to purchase a primary
residence, (ii) to pay uninsured medical expenses for the participant
or immediate family, (iii) to prevent mortgage foreclosure on, or
eviction from their primary residence, or (iv) to pay post-secondary
educational expenses for the participant, spouse, children or
dependents.
k. Payments from the Plan's Trust - Upon termination of service of a
participant on or after retirement date or by reason of death or
disability, an amount equal to the value of the participant's account
as of the valuation date next following the date of termination of
service, whether or not such participant has a vested interest in such
account, is paid from the trust at age 59-1/2 or older.
l. Forfeitures - Forfeitures arising under the Plan during the year are
allocated to Participants' accounts in the same manner as
contributions (see Note 1(d)).
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies followed in the preparation of the
financial statements of the Plan are in conformity with generally accepted
accounting principles. The following is a description of the more
significant of these policies:
a. Investment Funds - Effective June 3, 1996, the Plan retained the
American Express Trust Company to serve as the Trustee (the "Trustee")
of the Plan's assets. Prior to this date, the Plan's assets were held
in a master trust by the Bank of New York Trust Company (the
"Predecessor Trustee") as trustee for the benefit of various Covanta
subsidiary plans. During 2000 and 1999, the Plan included the
following funds in which participants could elect to invest their Plan
assets:
o Ogden Stock Fund ("Stock Fund") - This pooled fund invests in
common stock of Covanta, but does maintain a small cash balance
invested in a money market fund for liquidity purposes.
o Fiduciary Capital Management Fixed Income Fund ("Fixed Income
Fund") - Investment contracts with insurance companies and banks
purchased by the Plan and American Express Trust Income Fund II
(a collective money market investment fund, managed by the
Trustee) which provide for a guaranteed return on principal
invested over a specified time period.
o American Express Equity Index Fund II ("AMEX Equity Fund") -
Investments in a collective trust consisting of a diversified
portfolio of equity securities.
o AXP Mutual Fund Balanced Portfolio ("AXP Mutual Fund") -
Investments in a mutual fund consisting primarily of common
stock, preferred stock and debt securities.
o Templeton Foreign Fund ("Templeton Fund") - Investments in a
mutual fund consisting primarily of established, non-U.S.
companies.
o AXP Growth Fund ("AXP Growth Fund") - Investments in a mutual
fund seeking to provide long-term growth of capital primarily in
growth, improving, and technology companies.
o AXP New Dimensions Fund ("AXP Dimensions Fund") - Investments in
a mutual fund which invests primarily in common stocks of U.S.
and foreign companies in which economic and technical changes may
take place.
o AET U.S. Government Securities Fund II ("Government Securities
Fund") - Investments in a collective money market fund, managed
to provide maximum current income consistent with conserving
capital and maintaining high liquidity.
b. Investment Valuation - Investments in securities listed on national
securities exchanges are valued at the closing composite prices
published for the last business day of the year. Other investments in
securities are stated at fair value as determined by the Trustee.
Investments in guaranteed investment contracts included in the Fixed
Income Fund are stated at cost plus accrued income, which approximates
fair value.
c. Investment Transactions and Investment Income - Investment
transactions are accounted for on the date purchases or sales are
executed. Unrealized gains and losses are determined based on the fair
market value of assets at the beginning of the Plan year. Dividend
income is accounted for on the ex-dividend date. Interest income is
recorded on the accrual basis as earned.
d. Use of Estimates - The preparation of the financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those
estimates.
e. Accounting for Derivative Instruments - The Financial Accounting
Standards Board issued Statement of Financial Accounting Standards
("SFAS") No. 133, Accounting for Derivative Instruments and Hedging
Activities, in June 1998. SFAS No. 133, as amended and interpreted,
establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in
other contracts, and hedging activities. It requires entities,
including employee benefit plans, to recognize all derivatives as
either assets or liabilities in the statement of financial position
and to measure those instruments at fair value. This statement is
effective for fiscal years after June 15, 2000. Management has
determined that the implementation of SFAS No. 133 will have no effect
on the Plan's financial statements.
3. INVESTMENTS
The following is a summary of the Plan's investments held by the Trustee at
December 31, 2000 and 1999 that represent 5 percent or more of the Plan's
net assets:
2000 1999
Investments at fair value as determined by quoted market price:
AXP Growth Fund 18,715,324 24,159,996
AMEX Equity Fund 18,261,231 23,542,401
AXP Mutual Fund 5,324,939 6,907,765
Government Securities Fund 8,680,355 9,114,640
Investments at contract value as determined by
the Trustee - Fixed Income Fund 22,793,995 27,947,227
During 2000, the Plan's investments (including gains and losses on
investments bought and sold as well as held during the year) depreciated in
value by $6,446,648 as follows:
2000
AMEX Equity Fund $ (1,847,132)
AXP Dimensions Fund (819,848)
AXP Mutual Fund (821,416)
Other AXP/AETC Funds (5,021,806)
Stock Fund 952,366
Other Pooled Funds 1,505,406
Other Assets (394,218)
------------
$ (6,446,648)
============
Loans to participants at December 31, 2000 and 1999, which comprise the
Loan Fund, are reported at cost which approximates fair value.
The Fixed Income Fund invests in investment contracts providing a
guaranteed return on principal invested over a specified time period. The
crediting interest rates at December 31, 2000 and 1999 for the various
investment contracts ranged from 7.32% to 6.54% and 7.74% to 4.82%,
respectively. The average yields of the Fixed Income Fund for the years
ended December 31, 2000 and 1999 were 7.21% and 6.91%, respectively. All
investment contracts in the Fixed Income Fund are fully benefit-responsive
and are recorded at contract value which equals principal plus accrued
interest. If the investment contracts were reported at fair value, the
investment contracts in the Fixed Income Fund would have approximated
$3,355,677 and $7,346,721 at December 31, 2000 and 1999, respectively.
4. NON-PARTICIPANT DIRECTED INVESTMENTS
Information about the net assets at December 31, 2000 and 1999, and
significant components of the changes in net assets relating to the
nonparticipant-directed investments for the year ended December 31, 2000
is as follows:
2000 1999
Net assets:
Stock fund $ 2,060,024 $ 1,613,075
=========== ===========
Change in net assets:
Contributions $ 362,444
Interest and dividends --
Net realized and unrealized appreciation
(depreciation) of assets 482,465
Distributions to participants (218,679)
Expenses (1,037)
Transfers (178,244)
-----------
$ 446,949
===========
5. Plan Termination
The Company expects to continue the Plan indefinitely, but reserves the
right to modify, suspend or terminate the Plan at any time, which includes
the right to vary the amount of, or to terminate, the Company's
contributions to the Plan. In no event shall assets of the Plan be used for
any purpose other than to benefit participants or beneficiaries. In the
event of the Plan's termination or discontinuance of contributions
thereunder, the interest of each participant to benefits accrued to such
date, to the extent then funded, is fully vested and nonforfeitable.
In September 1999, Covanta, the parent of the Company, adopted a plan to
dispose of its Aviation and Entertainment businesses.
6. Tax Status
The Internal Revenue Service has determined and informed the Company by
letter dated June 14, 1995 that the Plan and related trust are designed in
accordance with the applicable sections of the Internal Revenue Code (the
"Code"). The Plan satifies Code section 401(a)(4) on the basis that it is a
design-based safe harbor. The Plan Administrator believes that the plan is
currently being operated in compliance with the applicable requirements of
the Code. Therefore, no provision for income taxes has been included in the
Plan's financial statements.
7. SALES OF PARTICIPATING COMPANIES
Beginning in June of 1998, the Company began selling certain subsidiaries.
Some of the participants in the Plan were employees of such businesses and
became employees of the purchasers. In 2000 and 1999, the participant
accounts of affected employees were transferred to other plans sponsored by
the purchasers.
******
THE OGDEN 401(k) PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
DECEMBER 31, 2000
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Description Number
of of Market
Identity of Issue Investment Shares/Units Cost * Value
General Investments:
Fixed Income Fund GIC 1,734,967 $ 22,793,995
Stock Fund Common Stock 534,894 $ 4,057,795 4,260,431
Government Securities Fund Money Market 8,637,769 8,680,355
AMEX Equity Fund Equity Securities 504,245 18,261,231
Promissory notes Loans 1,567,397
------------
Total General Investments 55,563,409
------------
Regulated Investment Companies:
AXP Growth Fund Mutual Fund 476,581 18,715,324
AXP Mutual Fund Mutual Fund 483,646 5,324,939
AXP Dimensions Fund Mutual Fund 149,118 4,333,362
Templeton Fund Mutual Fund 375,851 3,886,303
------------
Total Regulated Investment Companies 32,259,928
------------
GRAND TOTAL $ 87,823,337
============
*Nonparticipant-directed
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
33-36658, 33-36657, 33-54143, 333-19641, 333-82801 and 333-40140 of Covanta
Energy Corporation (formerly Ogden Corporation) on Form S-8 of our report dated
June 22, 2001, appearing in this Annual Report on Form 11-K of The Ogden 401(k)
Plan for the year ended December 31, 2000.
/s/ DELOITTE & TOUCHE LLP
Parsippany, New Jersey
June 27, 2001