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:
Ogden Projects Profit Sharing 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 Projects Profit Sharing Plan
Administrative Committee
By: /s/ Louis M. Walters
-------------------------
Louis M. Walters
Member of the Ogden Projects Profit Sharing
Plan Administrative Committee
Date : July 2, 2001
Ogden Projects Profit
Sharing Plan
Independent Auditors' Report
Financial Statements
Years Ended December 31, 2000 and 1999
Supplemental Schedule
Year Ended December 31, 2000
OGDEN PROJECTS PROFIT SHARING 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
Ogden Projects Profit Sharing Plan
We have audited the accompanying statements of net assets available for benefits
of the Ogden Projects Profit Sharing 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 as of 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 15, 2001
OGDEN PROJECTS PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2000 AND 1999
- --------------------------------------------------------------------------------
2000 1999
ASSETS:
Investments (see Note 3) $50,314,914 $49,918,705
RECEIVABLES:
Participant contributions 91,253 --
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $50,406,167 $49,918,705
=========== ===========
See notes to financial statements.
OGDEN PROJECTS PROFIT SHARING PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
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) $ (3,971,256) $ 1,545,438
Interest and dividends 3,536,478 3,298,358
------------ ------------
(434,778) 4,843,796
------------ ------------
Contributions:
Employer 2,069,272 8,106
Employee 1,854,161 1,915,439
------------ ------------
3,923,433 1,923,545
------------ ------------
Total additions 3,488,655 6,767,341
------------ ------------
DEDUCTIONS:
Deductions from net assets attributed to:
Distributions to participants (2,905,486) (1,976,842)
Administrative expenses (34,197) (22,960)
Net transfer (to) from other plans (61,510) 4,010
------------ ------------
Total deductions (3,001,193) (1,995,792)
------------ ------------
NET INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS 487,462 4,771,549
NET ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF
YEAR 49,918,705 45,147,156
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR $ 50,406,167 $ 49,918,705
============ ============
See notes to financial statements.
OGDEN PROJECTS PROFIT SHARING 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 Projects Profit Sharing
Plan (the "Plan"). Participants should refer to the Plan document for more
complete information.
a. General Information - The Plan is a defined contribution employee
savings plan providing for both employer and employee contributions.
The Plan includes a pre-tax savings feature which is intended to
qualify under Sections 401(k) and 401(a) of the Internal Revenue Code
(the "Code"). Prior to January 1, 1998, the plan included an after-tax
savings feature which was intended to qualify under Section 401(a) of
the Code. The after-tax feature of the Plan was discontinued effective
December 31, 1997 (see Note 2(j)). The Plan is intended to conform
with the requirements of the Tax Reform Act of 1986 (TRA) and the
Technical and Miscellaneous Revenue Act of 1988 (TAMRA). The Plan is
subject to the provisions of the Employee Retirement Income Security
Act of 1974.
b. Administration of the Plan - The Administrative Committee is appointed
by the Board of Directors (the "Board") of Covanta Energy Group, Inc.
("CEG") (formerly Ogden Energy Group, Inc.) and serves as a fiduciary
of the Plan. The Administrative Committee has general responsibility
for the administration and interpretation of the Plan.
The Covanta Energy Group Investment Committee is responsible for the
appointment of investment advisors and reviewing the performance of
the investment portfolio. Costs related to the administration of the
Plan are paid by the participants out of Plan assets.
c. Participation - Each employee who was, as of December 31, 1988, a
participant in the Plan continued to be a participant if they were
employed by CEG on such date. Each other employee who performs an hour
of service after December 31, 1988 becomes a participant on the first
day of the month coinciding with or next following the earlier of: (i)
the last day of a period of 6 months of continuous employment and (ii)
the close of: (a) a twelve-month period if they had at least 1,000
hours of service or (b) a Plan year during which they had at least
1,000 hours of service.
d. Participants Accounts - Shares in group trust funds were determined on
the basis of the initial asset contribution to the trust by each
participating plan, adjusted for subsequent contributions,
distributions and allocated income and realized and unrealized gains
and losses. Allocation of income, realized and unrealized gains and
losses, and administrative expenses were determined monthly on the
basis of each plan's proportionate share in the plan assets stated at
fair value.
e. Vesting - Vesting of employer contributions to the Plan is determined
based on the period of vesting service by participants commencing on
their date of hire to their date of termination of service in
accordance with the following schedule:
Percent
Years of Vesting Service in the Plan Vested
Less than one year of vesting service 0%
One but less than two years of vesting service 20
Two but less than three years of vesting service 40
Three but less than four years of vesting service 60
Four but less than five years of vesting service 80
Five or more years of vesting service 100
Participant contributions are immediately 100% vested.
f. Contributions - Contributions paid by CEG are determined by
Compensation Committee of the Board. The Board's determination may be
expressed in terms of a stated percentage of CEG's annual net profit,
as a fixed dollar amount or as a percentage of total compensation paid
to each participant. The contribution may not exceed the amount
deductible by CEG for Federal income tax purposes and may be made only
out of its current or accumulated earnings and profits. During 2001,
the compensation committee of the Board approved a discretionary
contribution for 2000 that is expected to be paid to the Plan in the
second half of 2001. The 1999 discretionary contribution was made
during 2000. The allocation of the contributions to individual
participants is based on the relationship of compensation paid to each
participant to the compensation paid to all participants. Participants
may contribute one to ten percent of their annual compensation on a
pre-tax basis. Participants direct the investment of their
contributions into various investment options offered by the Plan.
Participants direct the investment of their contributions into various
investments options offered by the Plan. For 2000 and 1999,
participant pre-tax contributions could not exceed $10,500 and
$10,000, respectively, in accordance with Internal Revenue Service
("IRS") Regulations.
Effective January 1, 1998, participants in the Plan may not elect to,
nor continue to, make after-tax contributions to the Plan. Any
after-tax contributions made by a participant on or before December
31, 1997 and credited to his/her after-tax contribution account shall
remain in such after-tax contribution account and will continue to be
adjusted in accordance with the provisions of the Plan document
g. 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.
h. Payments from the Plan's Trust - The value of a participant's interest
in the Plan is payable upon retirement, disability, death, or
termination of employment, as follows:
i) 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. Participants may elect to
receive the distribution valued as of any month after the date of
termination of service but not later than the April 1st of the
year following the year the participant attains age 70-1/2.
ii) Upon the termination of service of any participant may be paid in
a lump sum amount equal to the value, as of the valuation date
coincident with or following the date of termination of service,
of the vested interest, if any, in the account. Such payment is
made to the participant as soon as practicable after termination
of service. Participants may elect to receive the distribution
valued as of any month after the date of termination of service
but not later than April 1st of the year following the year the
participant attains age 70-1/2.
Any benefit payable under the Plan pursuant to (i) above is paid
as one lump sum payment from the trust, with a supplemental
payment to be made as promptly as possible in respect to any
contribution allocated to the participant's account for the Plan
year.
i. Loans - In accordance with Plan policy, participants can borrow
against the vested portion of their account balance. Borrowings are
limited to the lesser of $50,000 or 50% of the participant's vested
balance (not to exceed certain limitations). While such loans do not
represent a reduction of the participant's account balance,
participants are prohibited from receiving allocations (earnings)
based on the loan amounts, although when the loans are repaid, the
interest expense incurred by the participant is added to the
participant's account balance. The interest rate on such loans is the
prime lending rate plus 1%.
j. Forfeitures - Forfeitures arising under the Plan during the year are
allocated by the Administrative Committee to Participants' accounts in
the same manner as contributions (see Note 1(f)).
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 accounting
principles generally accepted in the United States of America. The
following is a description of the more significant of these policies:
a. Investment Funds - During 2000 and 1999, the Plan included the
following funds in which participants could elect to invest their Plan
assets. Funds denoted by an asterisk (*) are new investment options
offered during 2000. Plan assets are held by T. Rowe Price Trust
Company (the "Trustee").
o T. Rowe Price Equity Income Fund - This fund invests in stocks
that pay above-average dividends.
o T. Rowe Price U.S. Treasury Money Fund ("U.S. Treasury Money
Fund") - This fund invests primarily in short-term U.S. Treasury
securities.
o Fidelity Magellan Fund - This fund invests in common stock of
domestic, foreign, and multinational companies of all sizes. The
fund may also invest in bonds.
o T. Rowe Price International Stock Fund - This fund invests in
established non-U.S. companies.
o T. Rowe Price Balanced Fund - This fund invests approximately 60%
in stocks and 40% in bonds.
o T. Rowe Price Spectrum Income Fund - This fund invests in five
U.S. bond funds, two international bond funds, a money market
fund, and an income-oriented stock fund.
o T. Rowe Price Blue Chip Growth Fund - This fund invests in large
and medium-sized blue chip growth companies.
o T. Rowe Price Equity Index 500 Fund - This fund invests in the
500 stocks that make up the S&P 500 Index.
o T. Rowe Price Small-Cap Value Fund - This fund invests in small
companies that appear to be undervalued.
o T. Rowe Price New Horizons Fund - This aggressive fund seeks high
long-term growth. It invests in small-company stocks and takes a
growth approach to investing. This fund is subject to the abrupt
and unpredictable market movements associated with small-company
stocks.
o Ogden Stock Fund - This fund invests in Covanta Energy
Corporation (formerly Ogden Corporation) common stock, traded on
the New York Stock Exchange.
o *T. Rowe Price Mid-Cap Growth Fund - This fund invests at least
65% of its assets in a diversified portfolio of common stocks of
mid-cap companies whose earnings T. Rowe Price expects to grow at
a faster rate than the average company.
o *T. Rowe Price Science & Technology Fund - This fund invests at
least 65% of its assets in the common stocks of companies
expected to benefit from the development, advancement, and use of
science and technology.
o T. Rowe Price Stable Value Fund ("Stable Value Fund") - This fund
invests in investment contracts issued by high-quality insurance
companies and banks.
The Stable Value Fund primarily 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 5.88% to 7.83%
and 5.88% to 8.41%, respectively. The average yields of the Stable
Value Fund for the years ended December 31, 2000 and 1999 were 6.58%
and 6.35%, respectively. All investment contracts in the Stable Value
Fund are fully benefit-responsive and are recorded at their fair
values. Generally, fair value approximates contract value
(contributions made plus interest accrued at the contract rate, less
withdrawals and fees). If, however, an event has occurred that may
impair the ability of the contract issuer to perform in accordance
with the contract terms, fair value may be less than the contract
value.
b. Investment Valuation - Investments in securities listed on national
securities exchanges are valued at closing composite prices published
for the last business day of the year. Investments in guaranteed
investment contracts included in the Stable Value Fund are stated at
fair value, which approximates contract value. Investments in the U.S.
Treasury Money Fund are stated at cost plus investment income which
approximates fair value. Other investments are stated at fair value as
determined by the Trustee.
c. Investment Transactions and Investment Income - Investment
transactions are accounted for on the date purchases or sales are
executed. Realized and unrealized gains and losses are determined
based on the fair 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. Distributions to Participants - Benefits are recorded when paid.
e. General - The financial statements are prepared in conformity with
accounting principles generally accepted in the United States of
America. These principles require management to make certain estimates
and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, and the reported
amounts of changes in net assets available for benefits during the
reporting period. Actual results could differ from those estimates.
f. Adoption of New Accounting Pronouncement - On September 15, 1999, the
Accounting Standards Executive Committee issued Statement of Position
99-3, Accounting for Defined Contribution Benefit Plan Investments and
Other Disclosure Matters ("SOP 99-3"), which eliminates the previous
requirement for a defined contribution plan to present investments by
general type for participant-directed investments in the statement of
net asset available for benefits, total number of units and the net
assets value per unit during the period. SOP 99-3 is effective for
plan years beginning after December 15, 1999. The Plan adopted SOP
93-3 for the year ended December 31, 2000.
g. 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:
Fidelity Magellan Fund $10,022,563 $12,573,033
T. Rowe Price International Stock Fund 3,422,571 4,039,440
T. Rowe Price Equity Income Fund 11,416,000 12,584,934
Ogden Stock Fund 2,899,258 2,214,231
Stable Value Fund 6,807,901 7,948,309
T. Rowe Price Blue Chip Growth Fund 4,287,543 3,046,888
T. Rowe Price Equity Index 500 Fund 2,937,281 2,979,342
During 2000 and 1999, the Plan's investments (including gains and losses on
investments bought and sold as well as held during the year) depreciated
and appreciated in value by $3,971,256 and $1,545,438, respectively, as
follows:
2000 1999
Fidelity Magellan Fund $(1,466,848) $ 1,322,570
T. Rowe Price International Stock Fund (996,995) 886,601
T. Rowe Price Equity Income Fund (129,850) (631,469)
Ogden Stock Fund 795,702 (946,035)
T. Rowe Price Balanced Fund (27,176) 56,147
T. Rowe Price New Horizons Fund (369,796) 18,811
T. Rowe Price Spectrum Income Fund 1,611 (10,504)
T. Rowe Price Blue Chip Growth Fund (372,876) 461,486
T. Rowe Price Equity Index 500 Fund (338,695) 400,119
T. Rowe Price Small-Cap Value Fund 18,589 (12,288)
T. Rowe Price Science & Technology Fund (1,059,126) -
T. Rowe Price Mid-Cap Growth Fund (25,796) -
------------- -----------
$(3,971,256) $ 1,545,438
============= ===========
Loans to participants which comprise the Loan Fund, are reported at cost,
which approximates fair value.
4. PLAN TERMINATION
The Board or the Administrative Committee may amend the Plan at any time.
No such amendment, however, may have the effect of diverting to CEG any
part of the Plan or of diverting any part of the Plan for any purpose other
than for the exclusive benefit of the participants. Likewise, an amendment
may not reduce the interest of any participant in the Plan accrued prior to
such amendment. The Board or the Administrative Committee may, however,
make such amendments to the extent required to conform the Plan to ERISA or
to maintain the continued qualified status of the Plan under the Code.
CEG expects to continue the Plan indefinitely, but reserves the right to
suspend contributions or to modify or terminate the Plan at any time. Upon
termination of the Plan or discontinuance of contributions thereunder, the
interest of each participant is fully vested and nonforfeitable.
5. TAX STATUS
The Plan and trust is intended to be qualified under Section 401(a) and tax
exempt under Section 501(a) of the Code, respectively. The Plan received a
favorable determination letter from the IRS dated June 16, 1995. However,
the Plan has been amended since receiving the determination letter. The
Plan Administrator believes that the Plan is currently designed and 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.
******
OGDEN PROJECTS PROFIT SHARING PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
DECEMBER 31, 2000
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Description of Number of Market
Identity of Issue Investment Shares / Units Value
MUTUAL FUNDS:
T. Rowe Price Equity
Income Fund Mutual Fund 462,748 $11,416,000
Stable Value Fund GIC 6,807,902 6,807,901
U.S. Treasury Money Fund Mutual Fund 1,812,771 1,812,771
Fidelity Magellan Fund Mutual Fund 84,011 10,022,563
T. Rowe Price
International Stock Fund Mutual Fund 235,714 3,422,571
T. Rowe Price
Balanced Fund Mutual Fund 49,791 954,498
T. Rowe Price
Spectrum Income Fund Mutual Fund 17,713 190,770
T. Rowe Price
Blue Chip Growth Fund Mutual Fund 126,663 4,287,543
T. Rowe Price
Equity Index 500 Fund Mutual Fund 82,740 2,937,281
T. Rowe Price
Small-Cap Value Fund Mutual Fund 34,217 654,921
T. Rowe Price
New Horizons Fund Mutual Fund 80,547 1,924,264
T. Rowe Price
Science & Technology Fund Mutual Fund 46,357 1,648,918
T. Rowe Price
Mid-Cap Growth Fund Mutual Fund 8,149 324,258
COMMON STOCKS:
*Ogden Stock Fund Common Stock 188,570 2,899,258
PARTICIPANT LOANS:
Participant Loans Loans N/A 1,011,397
-----------
TOTAL ASSETS HELD FOR
INVESTMENTS $50,314,914
===========
*Party-in-interest
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 15, 2001, appearing in this Annual Report on Form 11-K of the Ogden
Projects Profit Sharing Plan for the year ended December 31, 2000.
/s/ DELOITTE & TOUCHE LLP
Parsippany, New Jersey
June 27, 2001