SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
/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:
Covanta Energy Americas, Inc. The Power Savings 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 Covanta Energy Americas, Inc.
The Power Savings Plan) have duly caused this annual report to be signed by the
undersigned thereunto duly authorized.
Covanta Energy Americas, Inc. The Power
Savings Plan Administrative Committee
By /s/ Louis M. Walters
--------------------------------------------
Louis M. Walters
Member of the Covanta Energy Americas, Inc.
The Power Savings Plan Administrative Committee
Date: July 16, 2001
Covanta Energy Americas, Inc. The Power Savings Plan
(formerly Ogden Power Corporation The Power Savings Plan)
Independent Auditors' Report
Financial Statements
Years Ended December 31, 2000 and 1999
Supplemental Schedule
Year Ended December 31, 2000
Covanta Energy Americas, Inc. THE POWER SAVINGS PLAN
(formerly Ogden Power Corporation The Power Savings 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
Covanta Energy Americas, Inc.
The Power Savings Plan
We have audited the accompanying statements of net assets available for benefits
of Covanta Energy Americas, Inc. The Power Savings Plan (formerly Ogden Power
Corporation The Power Savings 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.
Except as explained in the following paragraph, 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 out audits provide a reasonable basis for our opinion.
As permitted by Section 2520.103-8 of the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, investment assets held by Fidelity Management Trust
Company, the trustee of the Plan, and transactions in those assets were
excluded from the scope of our audit of the Plan's 1999 financial statements,
except for comparing the information provided by the trustee, which is
summarized in Note 9, with the related information included in the financial
statements.
Because of the significance of the information that we did not audit, we are
unable to express, and do not express an opinion on the Plan's financial
statements as of or for the year ended December 31, 1999. The form and content
of the information included in the 1999 financial statements, other than that
derived from the information certified by the trustees, have been audited by us
and, in our opinion, are presented in compliance with the Department of Labor's
Rules and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974.
In our opinion, the financial statements, referred to above, of the Plan as of
December 31, 2000, and for the year then ended present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
2000, and the changes in net assets available for benefits for the year then
ended in conformity with accounting principles generally accepted in the United
States of America.
Our audit of the Plan's financial statements as of and for the year ended
December 31, 2000, was conducted for the purpose of forming an opinion on the
basic financial statements 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 supplemental schedule is the responsibility of the Plan's management.
Such schedule has been subjected to the auditing procedures applied in the audit
of the basic financial statements for the year ended December 31, 2000, 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
July 9, 2001
COVANTA ENERGY AMERICAS, INC. THE POWER SAVINGS PLAN
(formerly Ogden Power Corporation The Power Savings Plan)
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2000 AND 1999
- --------------------------------------------------------------------------------
2000 1999
ASSETS:
Investments (see Note 3) $ 10,227,273 $ 9,622,822
------------- -----------
Receivables:
Participant contributions 35,129 30,442
Employer contributions 7,959 299,570
------------- -----------
Total receivables 43,088 330,012
------------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $ 10,270,361 $ 9,952,834
============= ===========
See notes to financial statements.
COVANTA ENERGY AMERICAS, INC. THE POWER SAVINGS PLAN
(formerly Ogden Power Corporation The Power Savings Plan)
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2000 AND 1999
- --------------------------------------------------------------------------------
2000 1999
ADDITIONS:
Additions to net assets attributed to:
Investment income:
Interest and dividends $ 615,534 $ 665,491
Net (depreciation) appreciation
in fair value of investments
(see Note 3) (637,405) 1,142,329
------------ ------------
(21,871) 1,807,820
------------ ------------
Contributions:
Participant 764,422 737,205
Employer 228,729 472,663
Rollover 80,668 31,614
------------ ------------
1,073,819 1,241,482
------------ ------------
Total additions 1,051,948 3,049,302
------------ ------------
DEDUCTIONS:
Deductions from net assets attributed to:
Benefits paid to participants (727,661) (921,118)
Administrative expenses (6,760) (6,564)
------------ ------------
Total deductions (734,421) (927,682)
------------ ------------
NET INCREASE IN NET ASSETS
AVAILABLE FOR BENEFITS 317,527 2,121,620
------------ ------------
NET ASSETS AVAILABLE FOR
BENEFITS, BEGINNING OF YEAR 9,952,834 7,831,214
------------ ------------
NET ASSETS AVAILABLE FOR
BENEFITS, END OF YEAR $10,270,361 $ 9,952,834
============ ============
See notes to financial statements.
COVANTA ENERGY AMERICAS, INC. THE POWER SAVINGS PLAN
(formerly Ogden Power Corporation The Power Savings Plan)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000 AND 1999
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following description of the Covanta Energy Americas, Inc. The Power
Savings Plan, (formerly Ogden Power Corporation The Power Savings Plan)
(the "Plan"), provides only general information. Participants should refer
to the Plan Document, a copy of which is available from the Plan
administrator, for more complete information of the Plan's provisions.
General - The Plan is a defined contribution plan covering substantially
all employees of Covanta Energy Americas, Inc. (formerly Ogden Power
Corporation) and its subsidiaries (collectively, "the Company"). The Plan
is subject to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA).
Effective February 1, 2000, all of the assets and outstanding loans of the
Plan were transferred from Fidelity Management Trust Company (the "Prior
Trustee") to T. Rowe Price Trust Company (the "Trustee"). The Company,
determined that it would be in the best interest of the Company and the
Plan, for the assets and outstanding loans to be held by a separate
trustee from the Prior Trustee.
Eligibility - All employees of the Company who have attained age twenty
and have completed three months of credited service are eligible to
participate in the Plan. Qualified employees may enroll in the Plan only
at the beginning of each quarter.
Participant Contributions - A participant may contribute up to 15% of his
or her eligible compensation to the Plan on a pretax basis. For 2000 and
1999, participant pre-tax contribution could not exceed $10,500 and
$10,000, respectively, in accordance with Internal Revenue Service ("IRS")
Regulations.
Employer Contributions - The Company matches 50% of a participant's pretax
contributions with a maximum match equal to 3% of eligible compensation.
Matching contributions are made each pay period, and there are no
eligibility requirements. The Company may also make an annual
discretionary profit-sharing contribution. The matching and profit sharing
contributions follow the participants directed contributions into the
various investment options offered by the Plan. Profit sharing
contributions of $0 and $236,626 were made for the plan years 2000 and
1999, respectively. These amounts were paid to the plan in the following
year.
Participant Rollover - Participants may make rollover contributions from
other qualified employee benefit plans specified by the Internal Revenue
Code (the "Code").
Vesting - Participants are immediately vested in their voluntary
contributions and matching Company contributions and earnings thereon.
Employer discretionary contributions vest at 20% per year beginning with
one year of service as defined in the Plan, with 100% vesting after five
years of service.
Payment of Benefits - Upon termination of service resulting from
retirement, permanent disability, death, or termination of employment, a
participant may elect to receive either a lump-sum amount equal to the
vested value of his or her account, or annual installments over a period
not exceeding five years.
Forfeitures - Forfeiture amounts were used to reduce administrative
expenses of the Plan. At December 31, 2000 and 1999, forfeitures of
nonvested accounts totaled $9,857 and $26,277, respectively.
Hardship Withdrawals - In certain hardship situations, as defined by the
Plan, a participant can withdraw all or part of his or her vested pretax
contributions account while still actively employed. Employer matching and
discretionary contributions are not eligible for hardship withdrawals.
In-Service Withdrawals - A participant who has attained the age of 59 1/2
is permitted to withdraw upon request all or any portion of the account.
Participant Loans - Participant loans are recorded at the face amount of
the loans made to plan participants (see Note 5).
Participant Accounts - Each participant's account is credited with the
participant's contributions, the Company's matching contributions, and
allocations of investment income and any Company discretionary
contributions. Allocations of earnings are based on participant account
balances. Allocations of discretionary contributions are based on eligible
compensation.
All contributions are allocated based on percentage elections made by each
participant among the various mutual funds.
During 2000, the Plan included the following funds in which participants
could elect to invest their Plan assets:
o T. Rowe Price Equity Income Fund - This fund invests in stocks that
pay above-average dividends.
o T. Rowe Price Stable Value Fund ("Stable Value Fund") - This fund
invests in investment contracts issued by high-quality insurance
companies and banks.
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
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.
During 1999, the Plan included the following funds in which participants
could elect to invest their Plan assets.
o Fidelity Puritan Fund - Funds are invested in shares of a registered
investment company that, according to the fund prospectus, invests
mainly in high-yielding securities, including common stocks, preferred
stocks, and bonds.
o Fidelity Magellan Fund - Funds are invested in shares of a registered
investment company that, according to the fund prospectus, invests
mainly in common stocks and securities convertible to common stock
with long-term growth potential.
o Fidelity Equity Income Fund - Funds are invested in shares of a
registered investment company that, according to the fund prospectus,
invests mainly in income-producing common stocks.
o Fidelity Growth Company Fund - Funds are invested in shares of a
registered investment company that, according to the fund prospectus,
invests mainly in highly diversified common stocks and securities
convertible into common stocks.
o Fidelity OTC Portfolio - Funds are invested in shares of a registered
investment company that, according to the fund prospectus, invests
mainly in common stocks, preferred stocks, and debt obligations issued
by companies traded on the over-the-counter market.
o Fidelity Blue Chip Growth Fund - Funds are invested in shares of a
registered investment company that, according to the fund prospectus,
invests mainly in common stocks diversified among industries of large,
well-known, and established companies.
o Fidelity Asset Manager - Funds are invested in shares of a registered
investment company that, according to the fund prospectus, invests
mainly in equity securities, intermediate to long-term bonds, and
short-term financial instruments.
o Fidelity Retirement Money Market Portfolio - Funds are invested in
shares of a registered investment company that, according to the fund
prospectus, invests mainly in short-term high-quality corporate
obligations, U.S. government obligations, and certificates of deposit.
o Fidelity Managed Income Portfolio - Funds are invested in shares of a
registered investment company that, according to the fund prospectus,
invests mainly in intermediate term investment contracts with
financial institutions and investment companies.
o Fidelity Short-Term Intermediate Government Portfolio - Funds are
invested in shares of a registered investment company that, according
to the fund prospectus, invests mainly in U.S. government securities
and repurchase agreements secured by U.S. government securities.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The accompanying financial statements of the Plan
have been prepared on the accrual basis of accounting.
Investment Valuation - The Plan's investments are stated at fair value.
Shares of mutual funds are valued at quoted market prices, which represent
the net asset value of shares held by the Plan at year-end. Participant
notes receivable are valued at cost, which approximates fair value.
Purchase and sales of securities are recorded on a trade date basis.
Dividends are recorded on the ex-dividend date.
Investment Transactions - Investment transactions are accounted for on a
trade-date basis.
Investment Income - Dividend income is recorded on the ex-dividend date.
Interest income is recorded on the accrual basis.
Administrative Charges - Substantially all costs of administering the Plan
were paid by the Company in 2000 and 1999. Certain mutual funds include
direct investment management expenses that are paid by the Plan.
Payment of Benefits - Benefits are recorded when paid.
Use of Estimates - The preparation of financial statements in conformity
with accounting principles generally accepted in the Unitded States of
America 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 additions and deductions
during the reporting period. Actual results could differ from those
estimates.
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. SFAS No. 133, as amended and interpreted, established
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 beginning 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 that represent 5% or more of the Plan's net assets:
2000
Investments at fair value determined by quoted market price:
Fidelity Magellan Fund $2,184,012
T. Rowe Price Balanced Fund 701,400
T. Rowe Price Blue Chip Growth Fund 3,008,190
T. Rowe Price New Horizons Fund 625,729
U.S. Treasury Money Fund 561,891
T. Rowe Price Equity Income Fund 1,026,748
T. Rowe Price Spectrum Income Fund 609,336
Investments at fair value estimated by the Trustee - Loan Fund 884,241
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 for the various
investment contracts ranged from 5.88% to 7.83%. The average yields of the
Stable Value Fund for the year ended December 31, 2000 was 6.58%. 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
rates 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.
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 $637,405 as follows:
2000
Fidelity Magellan Fund $ (426,318)
T. Rowe Price International Stock Fund (5,187)
T. Rowe Price Equity Income Fund 47,389
Ogden Stock Fund 66,420
T. Rowe Price Balanced Fund (5,066)
T. Rowe Price New Horizons Fund (104,769)
T. Rowe Price Spectrum Income Fund 13,402
T. Rowe Price Blue Chip Growth Fund (152,847)
T. Rowe Price Equity Index 500 Fund (13,929)
T. Rowe Price Small-Cap Value Fund 74
T. Rowe Price Science & Technology Fund (56,318)
T. Rowe Price Mid-Cap Growth Fund (256)
-----------
$ (637,405)
===========
Loans to participants which comprise the Loan Fund, are reported at cost,
which approximates fair value.
4. CONTRIBUTIONS RECEIVABLE
The Plan recorded participant and employer contributions receivable at
December 31, 2000 and 1999, for contributions related to the 2000 and 1999
plan years, respectively, not yet received by the Plan at year-end. Such
contributions were paid to the Trustee and allocated to participant
accounts subsequent to the respective year-ends.
5. PARTICIPANTS NOTES RECEIVABLE
Participants may borrow from their accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50% of their vested account
balance. Loan transactions are treated as a transfer (from) to the
investment fund (to) from the Participant Loan Fund. The loans are for up
to 5-year terms (10 years for the purchase of a principal residence) and
are secured by the balance in the participant's account. The loans bear
interest at one percent over the prime rate (9.5% to 10.5% and 9.5% to
8.5% at December 31, 2000 and 1999, respectively) and are repaid ratably
through payroll withholdings.
6. EXCESS CONTRIBUTIONS REFUNDABLE
The Plan is required to refund contributions to certain highly compensated
participants in accordance with provisions of the Code. No excess
contributions refundable were required or recorded at December 31, 2000
and 1999.
7. TAX STATUS
The sponsor adopted a nonstandardized prototype plan which received an IRS
opinion letter dated August 24, 1993, and the IRS has determined and
informed the Company by letter dated January 20, 1998 that the Plan, as
adopted, and related trust are designed in accordance with applicable
sections of the Code. The Plan has been amended since receiving the
determination letter. However, 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.
8. PLAN TERMINATION
Although it has not expressed any intention to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
termination of the Plan, participants will become fully vested in their
accounts.
9. INFORMATION CERTIFIED BY THE TRUSTEE (UNAUDITED)
The following is a summary of the unaudited information regarding the
Plan, included in the Plan's 1999 financial statements, prepared by the
Prior Trustee of the Plan, and furnished to the Plan administrator. The
Plan administrator has obtained certifications from the Prior Trustee that
such information is complete and accurate.
1999
Investments, at a fair value $9,622,822
Interest and dividends 665,491
Net appreciation in fair value of investments 1,142,329
The following is a summary of the plan's investments held by the Prior
Trustee at December 31, 1999 that represented 5% or more of the Plan's net
assets.
1999
Fidelity Magellan Fund $2,191,565
Fidelity Equity Income Fund 948,878
Fidelity Growth Company Fund 1,235,535
Fidelity Blue Chip Growth Fund 1,825,974
Fidelity Retirement Money Market Portfolio 714,180
Fidelity Managed Income Portfolio 637,730
Fidelity Participant Loan Fund 574,564
During 1999, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
in value by $1,142,329, as follows:
1999
Fidelity Puritan Fund $ (23,487)
Fidelity Magellan Fund 244,231
Fidelity Equity Income Fund (31,666)
Fidelity Growth Company Fund 454,024
Fidelity OTC Portfolio 173,348
Fidelity Blue Chip Growth Fund 318,878
Fidelity Asset Manager 13,782
Fidelity Short-Term Intermediate Government Portfolio (6,781)
----------
$1,142,329
==========
******
COVANTA ENERGY AMERICAS, INC. THE POWER SAVINGS PLAN
(formerly Ogden Power Corporation The Power Savings Plan)
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
DECEMBER 31, 2000
- --------------------------------------------------------------------------------
Description Number of
of Shares/ Market
Identity of Issue Investment Units Value
MUTUAL FUNDS:
T. Rowe Price Equity Income Fund Mutual Fund 41,619 $ 1,026,748
Stable Value Fund GIC 16,515 16,515
U.S. Treasury Money Fund Mutual Fund 561,891 561,891
Fidelity Magellan Fund Mutual Fund 18,307 2,184,012
T. Rowe Price International Stock Fund Mutual Fund 1,663 24,151
T. Rowe Price Balanced Fund Mutual Fund 36,588 701,400
T. Rowe Price Spectrum Income Fund Mutual Fund 56,577 609,336
T. Rowe Price Blue Chip Growth Fund Mutual Fund 88,868 3,008,190
T. Rowe Price Equity Index 500 Fund Mutual Fund 2,386 84,712
T. Rowe Price Small-Cap Value Fund Mutual Fund 770 14,734
T. Rowe Price Hew Horizons Fund Mutual Fund 26,192 625,729
T. Rowe Price Science & Technology Fund Mutual Fund 2,246 79,876
T. Rowe Price Mid-Cap Growth Fund Mutual Fund 106 4,233
COMMON STOCKS:
*Ogden Stock Fund Common Stock 26,114 401,505
PARTICIPANT LOANS:
Participant Loans Loans N/A 884,241
-----------
TOTAL ASSETS HELD FOR
INVESTMENTS $10,227,273
===========
* 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
July 9, 2001 appearing in this Annual Report on Form 11-K of Covanta Energy
Americas, Inc. The Power Savings Plan (formerly Ogden Power Corporation The
Power Savings Plan) for the year ended December 31, 2000.
/s/ DELOITTE & TOUCHE LLP
Parsippany, New Jersey
July 13, 2001