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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For The Fiscal Year Ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ____________________ to____________________
Commission File Number 1-3122
OGDEN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-5549268
(State or other jurisdiction of (I.R.S. Emlpoyer
incorporation or organization) Identification No.)
Two Pennsylvania Plaza, New York, N.Y. 10121
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code - (212) 868-6100
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock, par value New York Stock Exchange
$.50 per share
$1.875 Cumulative Convertible New York Stock Exchange
Preferred Stock (Series A)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES X NO______
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendments to this Form 10-K. [X]
The aggregate market value of registrant's voting stock, held by non-
affiliates based on the New York Stock Exchange closing price as reported
in the consolidated transaction reporting system as of the close of
business on March 1, 1996 was as follows:
Common Stock, par value $.50 per share $1,029,726,015
$1.875 Cumulative Convertible
Preferred Stock (Series A) $ 6,328,704
The number of shares of the registrant's Common Stock outstanding as of
March 1, 1996 was 49,579,675 shares.
The following documents are hereby incorporated by reference into this Form
10-K:
(1) Portions of the Registrant's Annual Report to Shareholders for the
year ended December 31, 1995 (Parts II and IV).
(2) Portions of the Registrant's 1996 Proxy Statement to be filed with the
Securities and Exchange Commission (Part III).
PART I
Item 1. BUSINESS
Ogden Corporation, a Delaware corporation (hereinafter together with
its consolidated subsidiaries referred to as "Ogden" or the "Company"), has
its executive offices located at Two Pennsylvania Plaza, New York, New York
10121, pursuant to a lease that expires on April 30, 2008 and which
contains an option by Ogden to renew for an additional five years.
Ogden is a diversified company primarily engaged in providing a wide
range of services through its operating groups within each of its two
business segments.
Set forth in the following table is the amount of revenue
attributable to each of the groups within Ogden's Services and Projects
business segments for each of the last three fiscal years (In Thousands):
YEARS ENDED DECEMBER 31,
1993 1994 1995
SERVICES REVENUES:
ENTERTAINMENT SERVICES $242,347 $245,187 $ 301,315
AVIATION SERVICES 389,201 413,337 480,620
ENVIRONMENTAL SERVICES 122,262 140,745 145,748
TECHNOLOGY SERVICES 181,870 212,098 251,243
FACILITY MANAGEMENT
SERVICES 382,056 357,272 374,804
OTHER SERVICES 12,368 10,811 7,257
TOTAL SERVICES $1,330,104 $1,379,450 $1,560,987
PROJECTS REVENUES:
INDEPENDENT POWER $ 24,696 $ 26,368 $ 57,443
WATER AND WASTEWATER 0 0 1,742
WASTE-TO-ENERGY 432,609 459,478 494,921
GAIN ON SALE OF LIMITED
PARTNERSHIP INTERESTS 0 26,126 0
CONSTRUCTION ACTIVITIES 248,451 213,125 69,900
TOTAL PROJECTS $ 705,756 $ 725,097 $624,006
TOTAL REVENUES $2,035,860 $2,104,547 $2,184,993
The above table has been reclassified to conform with the 1995
presentation.
The amounts of revenue, operating profit or loss and identifiable assets
attributable to each of Ogden's two business segments for each of the last
three fiscal years are set forth on pages 50 and 51 of Ogden's 1995 Annual
Report to Shareholders, certain specified portions of which are
incorporated herein by reference.
SERVICES
The operations of Ogden's Services business segment are
performed by Ogden Services Corporation and its subsidiaries
("Ogden Services") principally through its Entertainment
Services, Aviation Services and Other Services operating groups.
Ogden Services, through joint ventures, partnerships and
wholly-owned subsidiaries within each of the foregoing operating
groups, provides a wide range of services to private and public
facilities throughout the United States and many foreign
countries. Its principal customers include airlines,
transportation terminals, sports arenas, stadiums, banks, owners
and tenants of office buildings, state, local and Federal
governments, universities and other institutions and large
industrial organizations. In foreign countries the development,
construction, ownership and the providing of services may expose
Ogden to potential risks that typically are not involved in such
activities in the United States. Payment for services is often
made in whole or part in the domestic currencies of the foreign
country and the conversion of such currencies into U.S. dollars
may not be assured by a governmental or other creditworthy
foreign country agency. In addition, fluctuations in value of
such currencies against the U.S. dollar may cause the operation
to yield less return than expected. Also, the transfer of
earnings and profits in any form beyond the borders of the
foreign country may be subject to special taxes or limitations,
imposed by the laws of the foreign country.
Many customers are billed on cost-plus, fixed-price or time
and materials basis. Where services are performed on a cost-plus
basis, the customer reimburses the appropriate Ogden Services'
group for all acceptable reimbursable expenditures made in
connection with the job and also pays a fee, which may be a
percentage of the reimbursable expenditures, a specific dollar
amount, or a combination of the two. Fixed-price contracts, in
most cases, contain escalation clauses increasing the fixed price
in the event, and to the extent, that there are increases in
payroll and related costs.
Contracts in Aviation Services and Other Services may be
written on a month-to-month basis or provide for a longer or
indefinite term but are terminable by either party on notice
varying from 30 to 180 days.
ENTERTAINMENT SERVICES
The Entertainment Services group provides total facility
management services; presentation of concerts and family shows;
food, beverage and novelty concessions; and janitorial, security,
parking, and other maintenance services. These services are
provided to a wide variety of public and private facilities
including more than 100 stadiums, convention and exposition
centers, arenas, parks, amphitheaters, and fairgrounds located in
the United States, Mexico, Canada, Argentina, Brazil, Spain and
the United Kingdom. Entertainment also operates a racetrack and
five off-track betting parlors in Illinois.
The facility management and concession arrangements under
which this group operates are individually negotiated and vary
widely as to terms and duration. Concession contracts and leases
usually provide for payment by Entertainment of commissions or
rentals based on a stipulated percentage of gross sales or net
profits, sometimes with a minimum rental or payment. Most of the
facility management contracts are on a cost-plus-a-fee basis but
a number of such contracts provide for a sharing of profits and
losses between Entertainment and the facility owner.
Entertainment offers its customers a wide range of project-
development options, including the operational design review,
consultation during construction, and assistance with financing
arrangements, as well as operations of facilities, usually in
return for long-term services and concession contracts. In some
cases Ogden Corporation guarantees Entertainment's performance of
these contracts as well as the financing arrangements.
In 1995, Entertainment acquired a 50% interest in The
Metropolitan Entertainment Co., Inc. ("Metropolitan"), a leading
concert promoter in New York, New Jersey, Connecticut, and parts
of Massachusetts. Metropolitan and Entertainment, through their
joint venture called the Metropolitan Entertainment Group
("MEG"), will continue existing concert promotion activities,
operate amphitheaters in the eastern United States and
concentrate on national and global music tours, artist
management, Broadway and television productions, recording, and
music publishing. In December of 1995, Metropolitan entered into
a 25-year agreement to renovate and operate a 21,000 capacity
amphitheater in Darien Lake, New York (located between Buffalo
and Rochester).
In 1995, Ogden acquired 100% of Firehole Entertainment Corp.
("Firehole"), an innovative themed attraction/film and
merchandising developer. Through Firehole, Ogden now owns and
operates Grizzly Park, a nature-based entertainment center
located at the entrance to Yellowstone National Park. Within
Grizzly Park are, among other attractions, the Grizzly Discovery
Center, a natural habitat with grizzly bears and gray wolves, and
a variety of stores and restaurants. Through the acquisition of
Firehole, Entertainment plans the development of several new
nature-themed attractions at major tourist destinations in the
United States.
Food, Beverage and Novelty Services at Stadiums and Arenas
Food, beverage and novelty services are provided by
Entertainment in the United States and Canada at a number of
locations including those listed in the following table:
Name Location
Wrigley Field Chicago, Illinois
Anaheim Stadium Anaheim, California
Rich Stadium Buffalo, New York
USAir Arena Landover, Maryland
Milwaukee Exposition and Convention Center Milwaukee, Wisconsin
Los Angeles Convention Center Los Angeles, California
The Kingdome Seattle, Washington
Veterans Stadium Philadelphia, Pennsylvania
Market Square Arena Indianapolis, Indiana
McNichols Arena Denver, Colorado
Cobo Hall Detroit, Michigan
Tempe Diablo Stadium Tempe, Arizona
University of Oklahoma Stadium Norman, Oklahoma
The MGM Grand Gardens Arena Las Vegas, Nevada
Saint John Regional Exhibition Centre New Brunswick, Canada
Lansdowne Park Ottawa, Canada
During 1995 Entertainment began providing services at General
Motors Place, a new sports and entertainment arena in Vancouver,
British Columbia which opened in late 1995 and which is the home
of the National Hockey League's Vancouver Canucks and the
National Basketball Association's Vancouver Grizzlies.
In 1995, Entertainment was also awarded an exclusive food and
beverage contract for the MCI Center under construction in
downtown Washington, D.C. This new 20,000-seat facility is
anticipated to open in the fall of 1997 and will serve as the
home of the Washington Bullets National Basketball Association
team and the Washington Capitals National Hockey League team. In
addition to operating three restaurants within the arena,
Entertainment will provide concession services to the general
seating area as well as in-seat services to 110 suites and more
than 2,000 club seats.
In 1995, Entertainment also acquired a 50% interest in the
Australian and New Zealand business of the International Facility
Corporation Pty Ltd. ("IFC"), a private facility management firm
based in Brisbane, Australia. IFC is the managing general
partner for all of the Entertainment/IFC joint venture accounts
in Australia and New Zealand. These accounts include the
Brisbane Entertainment Centre, the Newcastle Entertainment
Centre, the Cairns Convention Centre, and a significant interest
in Convex, operator of the Brisbane Convention and Exposition
Centre. IFC is also acting as a consultant for the design,
construction, and ongoing management of the Olympic 2000 Stadium
in Sydney, Australia.
In addition, in 1995 Entertainment purchased 100% of IFC's
Asian business and established Ogden-IFC (Asia Pacific) Pty Ltd.
("Ogden-IFC Asia Pacific"), a wholly-owned subsidiary, to manage
certain Asian projects. The first contract award to Ogden-IFC
Asia Pacific is a 10-year agreement to manage the Bangkok Arena
and Trade & Exposition Centre, both of which are now under
construction. The new 20,000-seat arena will be the site of the
1998 Asian Games. Ogden-IFC Asia Pacific has also formed joint
venture relationships in other Asian countries such as Malaysia,
Taiwan, and Singapore.
Food, Beverage and Novelty Services at Amphitheaters
Entertainment also provides food and beverage services at
amphitheaters throughout the United States, including the
Starlake Amphitheater (near Pittsburgh, Pennsylvania); the
Fiddler's Green Amphitheatre (Englewood, Colorado); the Sandstone
Amphitheatre (Kansas City, Missouri); the Cynthia Woods Mitchell
Pavilion (Woodlands, Texas); the Mega Star Amphitheater (Eufaula,
Oklahoma); the all-seasons Meadows Music Theater (Hartford,
Connecticut); the all-seasons Camden Amphitheater (Camden, New
Jersey); the Polaris Amphitheater (Columbus, Ohio); and the
Nissan Amphitheater (Manassas, Virginia).
In 1995, Entertainment was awarded a 20-year contract to
provide food and beverage services, parking and support for the
long-term financing at an amphitheatre under construction in
Virginia Beach, Virginia, to be operated by the Cellar Door
Companies, expected to open during 1996.
Facility Management and Concession Services
Entertainment, through long-term management agreements
operates and manages, and in some cases provides concession
services, various convention centers, arenas and public
facilities including the Pensacola Civic Center in Pensacola,
Florida; the Sullivan Arena and Egan Convention Center in
Anchorage, Alaska; the Rosemont Horizon, near Chicago, Illinois;
the Target Center in Minneapolis; the Northlands Coliseum in
Edmonton, Alberta; and The Great Western Forum in Los Angeles.
The Ottawa Palladium, a 19,000-seat multipurpose indoor arena
in Ottawa, Canada, which is owned by a third party, opened in
January of 1996, and Entertainment commenced operations under a
30-year contract to provide complete facility management and
concession services at this arena, which is the home of the
Ottawa Senators of the National Hockey League. Pursuant to the
30-year contract, Entertainment agreed to advance funds, if
necessary, to a customer to assist in financing senior secured
debt incurred in connection with construction of the facility.
Such requirements are not expected to exceed $75,000,000 at
maturity of the senior secured debt, which is expected to be on
or about March 1, 2001. In addition, at December 31, 1995 Ogden
has guaranteed indebtedness of $6.2 million of an affiliate and
principal tenant of Entertainment's customer. Ogden has agreed
that the Ottawa Palladium, under Entertainment's management, will
generate a minimum amount of revenues computed in accordance with
its 30-year contract. The owners of the Ottawa Palladium are
parties to a 30-year license agreement with the owner of the
Ottawa Senators, pursuant to which the Ottawa Senators began to
play their home games at the arena in January 1996.
Pursuant to a management agreement between the City of
Anaheim, California and a wholly owned subsidiary of Ogden,
Entertainment manages and operates the Arrowhead Pond, a facility
owned by and located within the City of Anaheim. The Arrowhead
Pond is a multi-purpose facility capable of accommodating
professional basketball and hockey, concerts and other
attractions, and has a maximum seating capacity of approximately
19,400. Ogden has agreed that the Arrowhead Pond, under
Entertainment's management, will generate a minimum amount of
revenues computed in accordance with the 30-year management
agreement with the City. Entertainment also has a 30-year lease
agreement with The Walt Disney Company at the Arrowhead Pond
where the Anaheim Mighty Ducks, a National Hockey League team
owned by The Walt Disney Company, plays its home games.
In 1995, the 19,000 seat Victoria Station Arena in Manchester,
England opened; Entertainment will manage and operate this
building pursuant to a 20-year lease. In 1995, Entertainment
secured a 20-year contract to provide total facility management
services at the 10,000-seat Newcastle Arena, a new sports and
entertainment arena located in Newcastle, England, which opened
in November 1995 and which will feature ice hockey, concerts and
other events.
Also in 1995, the Port Authority of New York and New Jersey
awarded Entertainment an eleven and one-half year lease to
renovate and operate the 107th Floor Observation Deck at the
World Trade Center in New York City. The Observation Deck will
undergo a $5 to $6 million renovation which will include wide-
screen, high-definition television theaters that will take
visitors on an aerial sightseeing tour of New York City and
environs; interactive, multi-lingual kiosks at various viewing
points; a nightly rooftop light show; and exhibits showcasing the
region's pre-eminence in international trade, finance and the
arts. The lease agreement provides that Entertainment will pay
the Port Authority an annual fee plus a percentage of gross
revenues above a certain level.
In Mexico, Entertainment provides food and beverage
concessions at the Sports Palace, a 22,000 seat arena, and the
Autodrome, a 45,000 seat open air facility, located in Mexico
City, as well as the new Autodrome Fundidora Amphitheater in
Monterey, Mexico that is able to accommodate 18,000 people.
Other Activities
During 1996, Entertainment acquired a long-term leasehold
interest in Silver Springs and Wild Waters, two nature-based
attractions located near Ocala, Florida, as well as other
associated assets. Silver Springs is located on a 250-acre park
which is open 365 days a year and features attractions consisting
of jungle cruise boat rides, jeep safari rides, animal shows, a
petting zoo, gift shops and eateries. Wild Waters is located on
a six acre park featuring a variety of slides, a wave pool,
miniature golf, food services and other attractions. Wild Waters
is open March through Labor Day.
In 1995, Entertainment formed a joint venture to operate La
Rural de Palermo, a 28-acre fair and exhibition center located in
Buenos Aires, Argentina. The joint venture will continue the
existing fair and exhibition business on the property while
developing a master plan for the development of the property to
include an entertainment attraction. Entertainment owns a 50%
interest in the joint venture and will serve as the managing
partner. As such, Entertainment will direct day-to-day
operations and be responsible for creating and implementing the
development plan for this property.
Entertainment also leases and operates a thoroughbred and
harness racetrack and six off-track betting parlors in Illinois
where it telecasts races from Fairmount Park and other racing
facilities. Restaurants and other food and beverage services are
provided by Entertainment at these facilities. A large portion of
the track's revenue is derived from its share of the pari-mutuel
handle, which can be adjusted by state legislation. Other income
is derived from admission charges, parking, programs and
concessions.
Entertainment also owns an equity interest in Parques
Tecnocultiroles, S.A. ("Partecsa"), a Spanish Corporation based
in Seville, Spain. Partecsa was awarded a 30-year contract to
convert, remodel, manage and operate a 200-acre site in Seville,
Spain where the 1992 Exposition Fair was held.
Entertainment also provides concessions at zoos located in
Seattle, Washington; Cleveland, Ohio; and Columbia, South
Carolina.
AVIATION SERVICES
Aviation Services provides specialized support services to
185 airlines at over 100 locations throughout the United States,
Canada, Europe, Latin America and the Pacific Rim. The
specialized support services provided by this group include
comprehensive ground handling, ramp, passenger, cargo and
warehouse, aviation fueling and in-flight catering services.
These services are performed through contracts with individual
airlines, through consolidated agreements with several airlines,
and contracts with various airport authorities.
Aviation Services continues to pursue opportunities associated
with the privatization of airport operations and related airport
projects. To capitalize on these opportunities, Ogden combines
its Aviation Services skills with the development, financing and
construction management expertise of its Projects business
segment.
Ground Handling and Specialized Support Services
Ground handling services include diversified ramp operations
such as baggage unloading and loading, aircraft cleaning,
aircraft maintenance, flight planning, de-icing, cargo handling,
warehouse operations and passenger-related services such as
ticketing, check-in, porter ("sky-cap") service, passenger lounge
operations, cargo/warehouse services and other miscellaneous
services.
Global expansion by the Aviation group has resulted in
providing comprehensive ground handling and related services at
many international locations throughout Europe, Canada, South
America and other countries. Set forth below is a list of major
foreign airports where Aviation currently conducts ground
handling operations:
Airport Location
Heathrow Airport England
Schiphol International Airport Netherlands
Auckland International Airport New Zealand
Jorge Chaves International Airport Lima, Peru
Guarulhos International Airport Sao Paulo, Brazil
Galeao International Airport Rio de Janeiro, Brazil
Pearson International Airport Toronto, Canada
Mirabel and Dorval Airports Montreal, Canada
Simon Bolivar International Airport Caracas, Venezuela
Mexico International Airport Mexico City, Mexico
Aviation also performs ground handling operations at eight
different airports throughout Germany; the Czech Republic through
a 50% interest in a Prague-based airport handling company; VIP
lounge and ground handling operations at the Arturo Merino
Benitez Airport in Santiago, Chile and through a joint venture
with a Turkish company, aircraft cleaning, security and
commissary supplies to carriers at Ataturk Airport in Istanbul
and other locations in Turkey. Ogden Aviation continues to
perform services at St. Maarten's Princess Juliana International
Airport. In Aruba through a corporation jointly owned by
Aviation Services and Air Aruba, Aviation Services provides ramp
and passenger services at Reina Beatrix International Airport.
During 1995 Aviation Services (i) was awarded a 10-year
license to provide services at the new airport at Chek Lap Kok,
Hong Kong, expected to open in April 1998. Aviation will provide
a wide range of support services including ground services,
passenger services, cargo handling, loading and unloading of mail
and baggage, and aircraft marshalling, among others; (ii) was
awarded a contract as the exclusive provider of ground handling
services for all airlines at the La Union Airport in Puerto
Plata, Dominican Republic; (iii) began ground handling operations
at Belo Horizonte International Airport, Brazil as well as at
Huatulco, Zihautanejo, and Mazatlan International Airports in
Mexico; (iv) formed a joint venture with Aldeasa S.A. of Spain to
provide cargo handling and warehousing services at airports
located in Madrid and Barcelona, Spain.
Fueling Services
Aviation operates fueling facilities, including storage and
hydrant fueling systems for the fueling of aircraft. This
operation assists airlines in designing, arranging financing for,
and installing underground fueling systems. These fueling
operation services are principally performed in the North
American market. However, pursuant to a 10-year contract running
through 2004, Aviation Services is the sole fueling handling
agent at Tocumen International Airport in Panama City, Panama.
Also, pursuant to a 5-year contract which commenced in 1995,
Aviation fuels aircrafts at the Luis Munoz International Airport
in San Juan, Puerto Rico. During 1995 Aviation was also awarded
a contract for the maintenance and operation of a new Fuel Farm
located at the San Diego International Airport.
In-Flight Catering
Aviation operates 16 in-flight kitchens for over 85 airline
customers at a number of locations, including John F. Kennedy
International and LaGuardia Airports in New York; Newark
International Airport in New Jersey; Los Angeles and San
Francisco International Airports in California; Miami
International Airport in Florida; Washington Dulles International
Airport near Washington, D.C.; McCarren International in Las
Vegas, Nevada; and Honolulu International in Hawaii. The
Aviation in-flight kitchen at Honolulu International also
provides catering services to two cruise ships owned by NAVATEK,
a Hawaiian cruise line.
During 1995 Aviation was awarded several long-term catering
contracts in Spain at Gran Canaria Airport, Las Palmas; Palma De
Mallorca Airport, Palma De Mallorca; and Tenerife-Sur/Reina Sofia
Airport. At these locations Aviation will be providing catering
for more than twenty-five different airlines.
Airport Privatization and Related Projects
In 1994 a consortium, composed of Ogden Aviation Services,
Inc., Macau Aviation Services Corporation, EVA Airways, Air Macau
and several local companies and prominent businessmen, was
awarded a 19-year contract, with a 16-year exclusivity
arrangement, to provide ramp and cargo handling, passenger
services, and aircraft line maintenance service at the new Macau
International Airport, which opened and began operations in
November 1995. The consortium, of which Aviation Services is the
managing partner with a 29% participation, is providing all
necessary passenger and ramp equipment, has constructed a cargo
warehouse and is in process of building cargo and engineering
facilities, an aircraft hangar and a state-of-the-art training
center at the airport. The consortium's investment in
infrastructure improvements and equipment in the new Macau
airport is expected to exceed $40 million.
Aviation Services is also part of a consortium, of which
Aviation has a 19% interest, that has been awarded a 20-year
concession contract by the Civil Aviation Authority of Colombia
to finance, build and operate a second runway at the El Dorado
Airport, in Bogota, Colombia. Aviation's consortium partners,
including Spain's Dragados y Contrucciones SA and Colombia's
Conconcreto, will build the 3.8-kilometer runway at an estimated
cost of $97 million. Construction is expected to begin in 1996
and be completed by May 1998. The consortium will maintain the
new runway, and the pre-existing runway, for approximately 17
years in return for runway landing fees.
Applied Data Technology
During January 1995 Ogden acquired Applied Data Technology,
Inc. ("ADTI"), located in San Diego, California. ADTI is a
leading supplier of air combat maneuvering instrumentation
systems and after-action reporting and display systems. ADTI's
range systems are installed at Navy and Air Force aircraft
training ranges to facilitate air-to-air combat exercises and
monitor, record and graphically display the exact maneuvers of
the aircraft on the ranges and simulate the various weapons
systems aboard the aircraft. These range automated systems are
used by the U.S. Navy and Air Force to train pilots for combat
conditions and by the Department of Defense in training pilots to
avoid "friendly fire" incidents. ADTI's systems are currently
installed at four of the 14 domestic ranges, including the range
at the Top Gun school at Miramar, California. The range systems
business includes new ranges, expansion and upgrade of existing
ranges, product support and related programs.
In March 1995, ADTI was awarded a contract by the Naval Air
Warfare Center - Aircraft Division to provide technical support
services at the Patuxant River Naval Air Station in Patuxant
River, Maryland. Pursuant to the contract, ADTI teamed with
Raytheon Corporation, a leading defense contractor, to develop
the Joint Tactical Combat Training System (JTCTS). JTCTS is the
next generation training range, will be transportable for each
deployment and will replace all existing "Top Gun" training
ranges for the United States Navy and Air Force. The technology
will be used until the year 2010. Also during 1995, ADTI, as
part of a team with Lockhead Martin, was awarded a contract to
develop Advanced Distributed Simulation Technologies II, another
combat simulation system.
ADTI also developed a proprietary flight line test set
designed to test and trouble-shoot the Auxiliary Power Unit
("APU") on-board a Boeing air-to-air refueling aircraft. The APU
tester was developed to fill the military's demand for a
practical low cost flightline support unit that will isolate
faults within the APU on-board the Boeing aircraft.
OTHER SERVICES
Environmental Services
Ogden Environmental and Energy Services Co., Inc. ("OEES")
provides a comprehensive range of environmental, infrastructure
and energy consulting, engineering and design services to
industrial and commercial companies, electric utilities and
governmental agencies. These services include analysis and
characterization, remedial investigations, engineering and
design, data management, project management, and regulatory
assistance.
OEES provides services to a variety of clients in the public
and private sectors in the United States and abroad. Principal
clients include major Federal agencies, particularly the
Department of Defense and the Department of Energy, as well as
major corporations in the chemical, petroleum, transportation,
public utility and health care industries and Federal and state
regulatory authorities. United States Government contracts may
be terminated, in whole or in part, at the convenience of the
government or for cause. In the event of a convenience
termination, the government is obligated to pay the costs
incurred by Environmental under the contract plus a fee based
upon work completed.
Professional environmental engineering services, including
program management, environmental analysis, and restoration
continues to be provided by OEES to the United States Navy CLEAN
Program (Comprehensive Long Term Environmental Action Navy)
pursuant to a 10-year contract awarded during 1991. Thus far
OEES has provided these services at Navy bases in Hawaii, Guam,
Japan, Hong Kong, the Philippines, Australia and Korea.
OEES also continues to oversee the removal of storage tanks
and contaminated soil from Air Force bases across the United
States and in U.S. territories.
See Operational Restructuring below for further discussion
concerning Environmental Services.
Atlantic Design
Atlantic Design, Inc., with principal offices located in
Charlotte, North Carolina and engineering facilities located in
Fairfield, New Jersey and locations within New York state,
provides engineering design, drafting and technical services, as
well as turn-key, integrated services in electronics contract
manufacturing and assembly. Through its Lenzar operation in
Florida, Atlantic Design develops and markets medical products
and custom image capturing products. Atlantic Design provides
services to customers primarily in the computer, medical and
electronic industries, including IBM, General Electric, Seiko,
Compaq, Martin Marietta, AT&T, EMC2 Corporation, Netrix
Corporation and Pratt and Whitney.
In 1995, Atlantic Design formed a strategic business and
operations partnership with Genicom Corporation, based in
Chantilly, Virginia, an international supplier of multivendor
services, network systems management, and computer printer
technologies. Under this long-term agreement, the group acquired
the operating assets of Genicom's Reynosa, Mexico, and McAllen,
Texas, manufacturing and distribution facilities. Atlantic
Design will provide primary manufacturing support worldwide for
impact printer products as well as related integration
requirements, spares, and other proprietary supplies to service
Genicom's original equipment manufacturer's customer base.
Additionally, Atlantic Design purchased the operating assets
of Logitech Ireland Limited of Cork, Ireland, and its 50,000-
square-foot facility. Under terms of the agreement, the group
will continue to provide manufacturing, warehousing, and
engineering design services for the Logitech line of PC mice and
peripherals. The acquisition enables Atlantic Design to grow
into new markets, service the requirements of current United
States customers, and extend its contract services business into
Europe.
OPERATIONAL RESTRUCTURING
During 1995, Ogden began taking steps necessary to restructure
its operations and concentrate its resources on its
Entertainment, Aviation and Projects (Independent Power, Water
and Wastewater and Waste-to-Energy) core businesses. The
restructuring is expected to be completed during 1996 and entails
the disposition of the non-core businesses Of Ogden as set forth
and described below.
Technology Services
W.J. Schafer Associates, Inc. provides technology and
engineering services and consultation in space-based and free
electron laser technology and high energy systems research to the
Ballistic Missile Defense Organization as well as technical
research to the other agencies within the Department of Defense
and the U.S. Government. This unit is also currently working
under contract with the Defense Nuclear Agency to define and
analyze sensor architectures that assess bomb damage to
underground targets. WJSA is also involved in a program with the
Department of Energy to develop an advanced technique for
producing large-scale electric power. WJSA continues its efforts
under contract with the Coleman Research Corporation to provide
system engineering and technical assistance support for the
Theater High Altitude Area Defense Project.
Ogden Professional Services, Inc. provides automated business
systems and software engineering and computer/telephone-related
products and services to Government agencies and private
industry. Some of their largest clients are the U.S. General
Services Administration (GSA), the Department of Defense, and the
Office of Personnel Management. During 1995, this operation was
awarded several large contracts ranging from one to five years in
duration.
Ogden BioServices Corporation which provides biomedical
research, support and biological repository services for such
customers as the National Institute of Health, the Walter Reed
Army Institute of Research, the U.S. Food and Drug
Administration, the Center for Disease Control and Prevention,
the National Cancer Institute and other health agencies was sold
during December 1995 to McKesson Corp., a leading provider of
health care products and services.
The laboratory operations of Environmental Services are in the
process of being sold as part of Ogden's restructuring program.
Facility Management Services
Facility Services, Inc. and its subsidiaries' provides a
comprehensive range of facility management, maintenance and
manufacturing support services to industrial, commercial, and
office buildings electric utilities, governmental agencies and
education and institutional customers throughout the United
States and Canada.
The range of services provided include total facility
management; facility operations and maintenance; operations,
maintenance and repair of production equipment; security and
protection; housekeeping; landscaping and grounds care; energy
management; warehousing and distribution; project and
construction management; and skilled craft support services.
PROJECTS
Operations in the Company's Projects business segment are
conducted by the Company's Ogden Projects, Inc. ("OPI")
subsidiary. In 1995 OPI substantially reorganized its operations
to permit better focus on its three principal business areas:
independent power, water and waste water and waste-to-energy.
Independent power operations and waste-to-energy are now
conducted by separate wholly-owned subsidiaries of OPI. Water
and wastewater operations are conducted by Ogden's joint venture
with Yorkshire Water Plc. Although the foregoing operations are
linked in that the Company seeks through them to make equity
investments in infrastructure assets and obtain long-term
operating or service contracts, differences in the nature of the
physical assets and the markets for such services led management
to believe that each operation should have dedicated marketing
and operational staff. The reorganization has accomplished this
objective. Services such as overall management, financial, human
resources, legal and construction management in which the
requirements of the operating companies overlap are provided by
staff at the OPI level.
INDEPENDENT POWER
Ogden's independent power business is conducted by a wholly-
owned subsidiary of OPI, Ogden Energy, Inc. ("OEI"). OEI
develops, operates and, in some cases, invests in and owns
independent (i.e., non-utility) electric energy generation
("Independent Power Production" or "IPP") projects which sell
their output to utilities, electricity distribution companies or
industrial consumers in the United States and abroad.
OEI presently has an ownership interest in, or is the operator
or designated to be the operator of, eight generation facilities
with a total nameplate capacity of 594 MW, located in the United
States, Costa Rica and Bolivia. Additionally, it has an
ownership interest and operates a geothermal resource in the
United States which provides the geothermal brine required by two
of its geothermal power plants. OEI continues to seek to expand
its ownership and operation of IPP projects and is presently
focusing on opportunities in the United States, Central and South
America, the Pacific Rim and India.
(a) Methods of doing business. OEI generally seeks to
participate in IPP projects in which it can make an equity
investment and become the operator. OEI also seeks to have a
role in the development of the projects. The types of projects
in which OEI seeks to participate sell the electrical power they
generate under long term contracts or market concessions to
utilities, government agencies providing power distribution or
creditworthy industrial users. For power projects utilizing a
combustible fuel or geothermal sources, OEI seeks projects which
have a secure supply of fuel or geothermal brine through long-
term supply arrangements or by obtaining control of the fuel
source. OEI generally looks to finance its projects using equity
or capital commitments provided by OEI or other investors,
combined with non-recourse debt for which the lender's sole
source of payment is project revenues and assets.
In 1995 the Company opened an office in Hong Kong to
facilitate OEI's ability to develop projects in Asia.
(b) OEI's projects. OEI, through Catalyst New Martinsville
Hydroelectric Corporation, manages and operates a hydroelectric
power generating facility under a long-term contract with the
City of New Martinsville, West Virginia. The plant has been in
operation since 1988 and is rated at approximately 40 megawatts
("MW"). The plant's electrical output is sold to the Monongahela
Power Company under a long-term power sales agreement.
OEI, as a 50% partner in the Heber Geothermal Company ("HGC")
(a partnership with Centennial Geothermal, Inc.), leases and
manages a 52MW geothermal power plant in Heber, California. The
power is sold to Southern California Edison under a long-term
power sales agreement. An OEI subsidiary is also the operations
and maintenance contractor at HGC.
In 1994, OEI acquired the Second Imperial Geothermal Company
("SIGC") and its principal asset, a leasehold interest in a 48MW
geothermal power plant located in Heber, California. SIGC is a
party to a 30-year power purchase contract with Southern
California Edison. An OEI subsidiary is also the operations and
maintenance contractor at SIGC.
OEI owns 50% of the lessee of the geothermal resource, which
is adjacent to and supplies fluid to both the HGC and SIGC power
plants. An OEI subsidiary operates and maintains the geothermal
resource, which currently produces approximately fifteen million
pounds per hour of fluid.
OEI's operations were expanded into the Latin American market
through the acquisition in 1994 of an approximate 6% equity
interest in Energia Global, Inc. ("EGI") which interest will
probably be reduced as a result of an offering of EGI stock in
1996 and a nominal ownership interest in each of the two run-of-
river hydroelectric power plants being developed by EGI in Costa
Rica (combined 31 MW). In addition, a subsidiary of OEI has
entered into a long term contract to operate and maintain the
first plant, Don Pedro, which is under construction and is
scheduled for commercial operation in late 1996. The second
hydroelectric power plant, Rio Volcan, is scheduled to begin
construction in 1996 with commercial operation by mid 1997. An
OEI subsidiary will also enter into a long-term operation and
maintenance contract regarding Rio Volcan. During the design and
construction phases of these two plants, OEI, through a
subsidiary, will serve as a consultant.
In June 1995, OPDB, Ltd. a subsidiary of OEI, along with its
partners Constellation Energy International Holdings, Inc., PMDC
Energia, Inc. and Energia Andina S.A., were the successful
bidders for an interest in a Bolivian generating company, Empresa
Valle Hermoso ("EVH"). EVH was formed by the Bolivian government
as part of the capitalization of the government-owned utility
ENDE. OEI owns a 20% interest in the consortium company, The
Bolivian Generating Group, Ltd. (BGG), which in turn owns a 50%
interest in EVH. The majority of the balance is held by Bolivian
pension funds. EVH currently owns and operates a 87 MW gas-fired
electric generating facility and is constructing two gas fired
electric generating facilities (54 MW each) in Bolivia. Both of
the units under construction are expected to be in commercial
operation in 1996. In addition, a subsidiary of OEI is a
participant in a joint venture which is under contract to supply
EVH with management services support.
OEI is providing start-up services and will be the operator of
a 240MW gas-fired cogeneration facility located in Maryland. The
plant is expected to begin full commercial operation in 1996.
As part of an incorporated consortium, OEI is developing a
480MW coal-fired independent electric generating facility in the
Republic of the Philippines. The other members of the consortium
are International Generating Company, a corporation formed by
subsidiaries of Bechtel Enterprises, Inc. and PG&E Enterprises,
Inc., and PMR Power, Inc., a company doing business exclusively
in the Philippines. In August 1994, the consortium entered into
a power purchase agreement with Manila Electric Company
("Meralco"), the largest electric distribution company in the
Philippines, which serves the area surrounding and including the
metropolitan Manila area and other areas. Under the terms of the
agreement, Meralco is obligated, for a period of 25 years, to
purchase stated minimum annual quantities of electricity produced
by the facility pursuant to price terms set forth in the
agreement. The consortium has entered into contracts for the
supply of coal at stated prices for a portion of the term of the
power purchase agreement.
The power purchase agreement has been approved by the
Philippines Energy Regulatory Board, and the project has applied
for and substantially completed the substantive requirements in
order to receive an environmental clearance certificate, the
primary environmental permit required for construction and
operation. A site for the facility, on the east coast of Luzon
Island in the Quezon province, has been selected, and site
acquisition is under way. An information memorandum describing
the project has been circulated among several multi-lateral
finance agencies and the Export-Import Bank of the United States,
and applications have been filed with these agencies seeking debt
financing for the project. Financing is expected to be completed
in 1996. Total cost of development and construction of the
project is expected to be approximately $800 million.
Commencement of construction is subject to a number of
conditions including completion of financing and site
acquisition, new agreement and an agreement with Meralco regarding
the project transmission line and issuance of required
governmental permits and approvals. There can be no assurance
that the conditions, some of which are in whole or in part beyond
the control of the Company, will be satisfied. If the project
proceeds, OEI intends to retain a portion of its equity interest
in the entity owning the facility and to sell the balance of its
equity. OEI will also operate and maintain the facility under a
25 year contract with the owner.
WATER AND WASTEWATER
In 1994, Ogden and OPI, through a subsidiary formed a joint
venture, Ogden Yorkshire Water Company ("OYWC"), with a wholly-
owned subsidiary of Yorkshire Water, plc, a major British water
and wastewater utility. The purpose of the joint venture is to
develop, design, construct, maintain, operate, and in some cases
own, water and wastewater treatment facilities and distribution
and collection networks in the United States, Canada, Latin
America and elsewhere. The Company has a 55% interest in the
joint venture, but such percentage interest may be greater with
respect to projects outside the United States.
In the United States, OYWC seeks to participate in projects in
which under contracts with municipalities, it privatizes water or
wastewater facilities, agrees to build new or substantially
augment existing facilities and agrees to operate and maintain
the facilities under long term contracts. Although OYWC in
certain situations would consider entering into operational
contracts for facilities in which it has no ownership or long
term leasehold interest, and presently has such contracts with
three small communities in New York State, OYWC generally does
not believe such contracts provide adequate returns. To the
extent such projects require debt financing, OYWC intends to
obtain such financing on a non-recourse basis in which the only
source of repayment are project revenues and project assets.
The development of the privatization market for water and
wastewater projects in the United States has been hampered by
certain legal constraints. Many of the water and waste water
facilities that could be considered for privatization were
financed with tax-exempt municipal bonds or grants from the
Federal government. Sale of all or a significant portion of the
assets could trigger a loss of the tax exempt status of the bonds
issued to finance these facilities or obligations to refund the
grant. The financial burdens these constraints place on municipalities
and the likelihood that their effect would be to raise the cost
of service to consumers has been a disincentive to privatization.
Nonetheless, there are opportunities for such projects in the
United States, especially in circumstances where substantial new
construction is required.
In countries other than the United States, OYWC is seeking
opportunities in which it will provide water services to
municipalities in which it can own an equity interest in water
facilities under a concession which grants it the right to
provide service to, and collect revenues from, consumers. OYWC
believes that the lack of creditworthiness of non-U.S.
municipalities, which may result from their limited ability to
raise revenues or from other causes, makes the collection of
tariffs from the consumer a more secure source of revenue.
Under contractual arrangements, OYWC may be required to
warrant certain levels of performance and may be subject to
financial penalties or termination if it fails to meet these
warranties. The Company and Yorkshire may be required to
guarantee the performance of OYWC. OYWC seeks not to take
responsibility for conditions that are beyond its control.
OYWC's projects. OYWC operates and maintains wastewater
treatment facilities for three small municipalities in New York
State. Such facilities cumulatively process approximately 11.8
million gallons per day ("mgd"). In addition, OYWC operates and
maintains the municipal wastewater treatment facilities for
several other small government and privately owned concerns that
cumulatively process less than 1 mgd. All of the facilities are
operated pursuant to short-term contracts.
In December 1995 OYWC, through a joint venture in which it has
a majority interest, entered into a 25 year concession contract
with the Tourist, Historical and Cultural District of Santa Marta
Colombia to provide water and wastewater services.
Implementation of the contract is subject to substantial
conditions, some of which are beyond the control of OYWC and is
not assured.
WASTE-TO-ENERGY
The Waste-to-Energy operations have been consolidated in a
wholly-owned subsidiary of OPI, Ogden Waste to Energy, Inc.
("OWTE"). Waste-to-energy facilities combust municipal solid
waste to make saleable energy in the form of electricity or
steam. This group completed construction of its first waste-to-
energy projects in 1986. It currently operates 28 waste-to-
energy facilities at 27 locations. OWTE is the owner or lessee
of 17 of its facilities and has been awarded a contract for one
additional facility that is not yet under construction. OWTE has
the exclusive right to market in the United States the
proprietary, mass-burn technology of Martin Gmbh fur Umwelt-und
Energietechnik ("Martin"). All of the facilities OWTE has
constructed use this Martin technology. In addition OWTE
operates facilities using other technologies.
Generally, OWTE, through wholly-owned subsidiaries ("Operating
Subsidiaries"), provides waste-to-energy services pursuant to
long-term service contracts ("Service Agreements") with local
governmental units sponsoring the waste-to-energy project
("Client Communities"). Certain of its facilities do not have
sponsoring Client Communities and in the future OWTE may
undertake projects for which there is no such sponsoring Client
Community.
(a) Terms and Conditions of Service Agreements. Projects
generally have been awarded by Client Communities pursuant to
competitive procurement. However, OWTE has also built and is
operating projects that were not competitively bid.
Following execution of a Service Agreement between the
Operating Subsidiary and the Client Community, several conditions
must be met before construction commences. These usually
include, among other things, financing the facility, executing an
agreement providing for the sale of the energy produced by the
facility, purchasing or leasing the facility site, and obtaining
of required regulatory approvals, including the issuance of
environmental and other permits required for construction. In
many respects, satisfaction of these conditions is not wholly
within OWTE's control and, accordingly, implementation of an
awarded project is not assured, or may occur only after
substantial delays.
Each Service Agreement is different in order to reflect the
specific needs and concerns of the Client Community, applicable
regulatory requirements, and other factors. The following
description sets forth terms that are generally common to these
agreements: (i) the Operating Subsidiary designs the facility,
generally applies for the principal permits required for its
construction and operation, helps to arrange for financing, and
then constructs and equips the facility on a fixed price and
schedule basis. The actual construction and installation of
equipment is performed by contractors under the supervision of
the Operating Subsidiary. The Operating Subsidiary bears the
risk of costs exceeding the fixed price of the facility and may
be charged liquidated damages for construction delays, unless
caused by the Client Community or by unforeseen circumstances
beyond its control, such as changes of law ("Unforeseen
Circumstances"). After the facility successfully completes
acceptance testing, the Operating Subsidiary operates and
maintains the facility for an extended term, generally 20 years
or more; (ii) the Operating Subsidiary generally guarantees that
the facility will meet minimum processing capacity and efficiency
standards, energy production levels, and environmental standards.
The Operating Subsidiary's failure to meet these guarantees or to
otherwise observe the material terms of the Service Agreement
(unless caused by the Client Community or by Unforeseen
Circumstances) may result in liquidated damages to the Operating
Subsidiary or, if the breach is substantial, continuing, and
unremedied, the termination of the Service Agreement. In the case
of such Service Agreement termination, the Operating Subsidiary
may be obligated to discharge project indebtedness; (iii) the
Client Community is generally required to deliver minimum
quantities of municipal solid waste ("MSW") to the facility and,
regardless of whether that quantity of waste is delivered to the
facility, to pay a service fee. Generally, the Client Community
also provides or arranges for debt financing. Additionally, the
Client Community bears the costs of disposing of ash residue from
the facility and, in many cases, of transporting the residue to
the disposal site. Generally, expenses resulting from the
delivery of unacceptable and hazardous waste to the facility, and
from the presence of hazardous materials on the site, are also
borne by the Client Community. In addition, the Client Community
is also generally responsible to pay increased expenses and
capital costs resulting from Unforeseen Circumstances, subject to
limits which may be specified in the Service Agreement; (iv)
Ogden typically guarantees each Operating Subsidiary's
performance under its respective Service Agreement.
After construction is completed and the facility is accepted,
the Client Community pays the Operating Subsidiary a fixed
operating fee which escalates in accordance with specified
indices, reimburses the Operating Subsidiary for certain costs
specified in the Service Agreement including taxes, governmental
impositions (other than income taxes), ash disposal and utility
expenses, and shares with the Operating Subsidiary a portion of
the energy revenues (generally 10%) generated by the facility.
If the facility is owned by the Operating Subsidiary, the Client
Community also pays as part of the Service Fee an amount equal to
the debt service due to be paid on the bonds issued to finance
the facility. At most facilities, OWTE may earn additional fees
from accepting waste from the Client Community or others
utilizing the capacity of the facility which exceeds the amount
of waste committed by the Client Community.
OWTE operates transfer stations in connection with some of its
waste-to-energy facilities and, in connection with the Montgomery
County, Maryland project, uses a railway system to transport
Municipal Solid Waste (MSW) and ash residue to and from the
facility. OWTE leases and operates a landfill located at its
Haverhill, Massachusetts, facility, and leases, but does not
operate, a landfill in connection with its Bristol, Connecticut,
facility.
(b) Other Arrangements for Providing Waste-to-Energy
Services. OWTE owns two facilities that are not operated
pursuant to Service Agreements with Client Communities and may
undertake in the future additional such projects. In such
projects, OWTE must obtain sufficient waste under contracts with
haulers or communities to ensure sufficient project revenues. In
these cases, OWTE is subject to risks usually assumed by the
Client Community, such as those associated with Unforeseen
Circumstances and the supply and price of municipal waste to the
extent not contractually assumed by other parties. This group's
current contracts with waste suppliers for these two facilities
provide that the fee charged for waste disposal service is
subject to limited increases in the event that costs of operation
increase as a result of Unforeseen Circumstances. On the other
hand, in these cases, OWTE generally retains all of the energy
revenues from sales of power to utilities or industrial power
users and disposal fees for waste accepted at these facilities.
Accordingly, OWTE believes that such projects carry both greater
risks and greater potential rewards than projects in which there
is a Client Community.
For the projects that are not operated pursuant to a Service
Agreement, tipping fees, which are generally subject to
escalation in accordance with specified indices, and energy
revenues are paid to the OWTE group. Electricity generated by
these projects is sold to public utilities and in one instance,
steam and a portion of the electricity generated is sold to
industrial users. In certain of the contracts under which waste
is provided to these facilities, OWTE may be entitled to fee
adjustments to reflect certain Unforeseen Circumstances.
(c) Project Financing. Financing for projects is generally
accomplished through the issuance of a combination of tax-exempt
and taxable revenue bonds issued by a public authority. If the
facility is owned by the Operating Subsidiary, the authority
lends the bond proceeds to the Operating Subsidiary and the
Operating Subsidiary contributes additional equity to pay the
total cost of the project. For such facilities, project-related
debt is included as a liability in Ogden's consolidated financial
statements. Generally, such debt is secured by the revenues
pledged under the respective indenture and is collateralized by
the assets of the Operating Subsidiary and otherwise provides no
recourse to Ogden, subject to construction and operating
performance guarantees and commitments.
(d) OWTE Projects. Certain information with respect to
projects as of March 1, 1996 is summarized in the following
table:
WASTE-TO-ENERGY PROJECTS
Tons Boiler Commencement
In Operation Per Day Units of Operations
Tulsa,OK(I)(1)............. 750 2 1986
Haverhill/Lawrence,
MA-RDF(8)................. 950 1 1984
Marion County, OR.......... 550 2(2) 1987
Hillsborough County, FL(3). 1,200 3(2) 1987
Tulsa, OK(II)(1)(4)........ 375 1 1987
Bristol, CT................ 650 2(2) 1988
Alexandria/Arlington, VA... 975 3 1988
Indianapolis, IN........... 2,362 3(2) 1988
Hennepin County, MN (1)(5). 1,000 2 1990
Stanislaus County, CA...... 800 2 1989
Babylon, NY................ 750 2(2) 1989
Haverhill, MA-Mass Burn.... 1,650 2 1989
Warren County, NJ (5)...... 400 2 1990
Kent County, MI(3)......... 625 2(2) 1990
Wallingford, CT(5)......... 420 3(2) 1990
Fairfax County, VA......... 3,000 4(2) 1990
Huntsville, AL(3).......... 690 2(2) 1990
Lake County, FL............ 528 2(2) 1990
Lancaster County, PA(3).... 1,200 3(2) 1991
Pasco County, FL(3)........ 1,050 3(2) 1991
Huntington, NY (6)......... 750 3(2) 1991
Hartford, CT (3)(7)(8)..... 2,000 3 1989
Detroit, MI (1)(8)......... 3,300 3 1989
Honolulu, HI (1)(8)........ 2,160 2 1990
Union County, NJ(3)........ 1,440 3 1994
Lee County, FL (3)......... 1,200 3(2) 1994
Onondaga, NY(6)............ 990 3 1995
Montgomery County, MD. (3). 1,800 3(2) 1995
Total................ 33,565
Estimated
Construction
Expected Revenues
Awarded--Not yet Tons Boiler Commencement (in thousands
Under Construction Per Day Units of Construction of dollars)
Mercer County, NJ (9)... 1,450 2 1996 $188,200
(1) Facility is owned by an owner/trustee pursuant to a sale/leaseback
arrangement.
(2) Facility has been designed to allow for the addition of another unit.
(3) Facility is owned (or, with respect to facilities not under
construction, is to be owned) by the Client Community.
(4) Phase II of the Tulsa facility, which was financed as a separate
project, expanded the capacity of the facility from two to three
units.
(5) Operating Subsidiaries were purchased after completion, and use a
mass-burn technology that is not the Martin Technology.
(6) Owned by a limited partnership in which the limited partners are not
affiliated with Ogden.
(7) Under contracts with the Connecticut Resource Recovery Authority and
Northeast Utilities, OWTE operates only the boiler and turbine for
this facility.
(8) Operating contracts were acquired after completion. Facility uses a
refuse-derived fuel technology and does not employ the Martin
Technology.
(9) All permits for the Mercer County project have been received, and some
construction tasks have commenced. However, substantial construction
has been delayed as the Mercer County Improvement Authority considers
the impact of legal challenges to New Jersey's flow control system and
the continuing lack of curative legislation in Congress. The
Authority has confirmed its commitment to the project and is exploring
changes to its waste management system that would permit the project
to proceed without legal flow control. OWTE and the Authority are
working toward this end, and in this regard have discussed the
possibility of OWTE owning the project. Were this occur, the OWTE
would recognize no revenues in connection with the construction of
this facility.
(e) Technology. The principal feature of the Martin Technology is the
reverse-reciprocating stoker grate upon which the waste is burned. The
patent for the basic stoker grate technology used in the Martin Technology
expired in 1989. Ogden has no information that would cause it to believe
that any other company uses the basic stoker grate technology that was
protected by the expired patent. Moreover, Ogden believes that unexpired
patents on other portions of the Martin technology would limit the ability
of other companies to effectively use the basic stoker grate technology in
competition with Ogden. There are several unexpired patents related to the
Martin Technology including: (i) Grate Bar for Grate Linings, Especially in
Incinerators - expires, 1999; (ii) Method and Arrangement for Reducing NOx
Emissions from Furnaces - expires 2000; (iii) Method and Apparatus for
Regulating the Furnace Output of Incineration Plants - expires 2007; (iv)
Method for Regulating the Furnace Output in Incineration Plants - expires
2008; and (v) Feed Device with Filling Hopper and Adjoining Feed Chute for
Feeding Waste to Incineration Plants - expires 2008. More importantly,
Ogden believes that it is Martin's know-how in designing and manufacturing
stoker and grate components, Martin's worldwide reputation in the waste-to-
energy field, and Ogden's know-how in designing, constructing and operating
waste-to-energy facilities, rather than the use of patented technology,
that is important to Ogden's competitive position in the waste-to-energy
industry in the United States. Ogden does not believe that the expiration
of the patent covering the basic stoker grate technology or patents on
other portions of the Martin Technology will have a material adverse effect
on Ogden's financial condition or competitive position.
The Company believes that mass burn technology is now the predominant
technology used for the combustion of solid waste. Although the Company
believes the Martin technology as superior overall, there are several other
mass-burn technologies available in the market including those of Von Roll,
Widmer & Ernst, Takuma, Volund, Steinmueller, Deutsche Babcock, O'Connor,
and Detroit Stoker. In addition, other innovative non-mass burn
technologies have been developed from time-to-time. Such technologies may
claim reduced air emissions, but to date have been unproven on a large
scale operation and appear likely to be substantially more expensive.
Martin seeks to implement improvements and modifications to its technology
in order to maintain its competitive position with non-mass burn
technologies. However, should such technologies develop that offer
competitive advantages to mass burn, OWTE's ability to respond in the
United States would be limited by the Cooperation Agreement--see(f) below.
(f) The Cooperation Agreement. Under an agreement between Martin and
Ogden (the "Cooperation Agreement"), OPI has the exclusive rights to market
the proprietary technology (the "Martin Technology") of Martin in the
United States, Canada, Mexico, Bermuda, certain Caribbean countries, most
of Central and South America, and Israel. In addition, in Germany, Turkey,
Saudi Arabia, Kuwait, the Netherlands, Denmark, Norway, Sweden, Finland,
Poland, and Italy, OPI has the preferential right to cooperate with Martin
to utilize the Martin Technology to provide full service design, construct,
and operate projects. Martin is obligated to assist OPI in installing,
operating, and maintaining facilities incorporating the Martin Technology.
The fifteen year term of the Cooperation Agreement renews automatically
each year unless notice of termination is given, in which case the
Cooperation Agreement would terminate 15 years after such notice.
Additionally, the Cooperation Agreement may be terminated by either party
if the other fails to remedy its material default within 90 days of notice.
The Cooperation Agreement is also terminable by Martin if there is a change
of control (as defined in the Cooperation Agreement) of Ogden Martin
Systems, Inc. ("OMS"), a wholly-owned subsidiary of OPI or any direct or
indirect parent of OMS not approved by its respective board of directors.
Although termination would not affect the rights of OPI to design,
construct, operate, maintain, or repair waste-to-energy facilities for
which contracts have been entered into or proposals made prior to the date
of termination, the loss of OPI's right to use the Martin Technology could
have a material adverse effect on OPI's future business and prospects.
(g) Backlog. OWTE's backlog as of December 31, 1995, is set forth
under (d) above. As of December 31, 1994, the estimated unrecognized
construction revenues for projects under construction was $44,764,000 and
the estimated construction revenues for projects awarded but not yet under
construction was approximately $260,000,000. The amounts in 1995 and 1994
for projects under construction were estimated based on the difference
between the total contract value and the cumulative construction revenue
recognized as of that date. The completion of the facility in Montgomery
County, Maryland, accounted for the entire decrease in the amount for
projects under construction. As of December 31, 1995, there were no longer
any projects under construction. The decrease in the amount for projects
awarded but not yet under construction was due to the termination of the
project in Halifax, Nova Scotia.
PROJECTS' FOREIGN BUSINESS DEVELOPMENT
OWTE, OEI and OYWC develop projects in foreign countries. In 1995 OWTE
modified its strategy for the development of its waste-to-energy business
in selected international markets to focus on a limited number of
opportunities which can be developed in conjunction with local companies.
OWTE has entered into an agreement with CTCI Corporation in Taiwan to
jointly pursue waste-to-energy operation and maintenance contracts in
Taiwan. The agreement provides that OPI will perform as a technical
advisor to CTCI and will receive a share of pretax profits from certain
awarded contracts. In 1995, CTCI bid and was awarded the operation and
maintenance of a 900-metric tonnes per day facility in Hsintien, Taipei
County, for a period of six years commencing November 1995. In addition,
as indicated in the discussions about their businesses, OEI and OYWC are
actively pursuing opportunities in many foreign countries and OEI has
established an office in Hong Kong where opportunities for the services
provided by these groups are highly dependent upon the elimination of
historic legal and political barriers to the participation of foreign
capital and foreign companies in the financing, construction, ownership and
operation of infrastructure facilities. For example, in many countries,
the production, distribution and delivery of electricity has traditionally
been provided by governmental or quasi-governmental agencies. Although a
number of these countries have recently liberalized their laws and policies
with regard to the participation of private interests and foreign capital
in their electric sectors, not all have done so, and not all that have done
so may afford acceptable opportunities for OPI.
The development, construction, ownership and operation of facilities in
foreign countries also exposes the Company to several potential risks that
typically are not involved in such activities in the United States.
Many of the countries in which OWTE, OEI and OYWC are or intend to be
active in developing projects are lesser developed countries or developing
countries. The financial condition and creditworthiness of the potential
purchasers of power and services provided by OWTE, OEI and OYWC which may
be a governmental or private utility or industrial consumer--or of the
suppliers of fuel for alternate energy projects or of waste for waste-to-
energy projects in these countries--may not be as strong as those of
similar entities in developed countries. The obligations of the purchaser
under the power purchase agreement, the services recipient under the
related service agreement and the supplier under the fuel supply agreement
generally are not guaranteed by any host country governmental or other
creditworthy agency.
OWTE and OEI projects in particular are keenly dependent on the reliable
and predictable delivery of fuel, municipal solid waste in the case of
waste-to-energy, meeting the quantity and quality requirements of the
project facilities. OWTE and OEI will in all cases seek to negotiate long-
term contracts for the supply of fuel with creditworthy and reliable
suppliers under terms that will permit it to project the future cost of
fuel through the life of the contract. However, the reliability of fuel
deliveries may be compromised by one or more of several factors that may be
more acute or may occur more frequently in developing countries than in
developed countries, including a lack of sufficient infrastructure to
support deliveries under all circumstances, bureaucratic delays in the
import, transportation and storage of fuel in the host country, customs and
tariff disputes and local or regional unrest or political instability.
Payment for services that OWTE, OEI and OYWC provide will often be made
in whole or part in the domestic currencies of the host countries.
Conversion of such currencies into U.S. dollars generally as not assured by
a governmental or other creditworthy host country agency, and may be
subject to limitations in the currency markets, as well as restrictions of
the host country. In addition, fluctuations in value of such currencies
against the value of the U.S. dollar may cause OPI's participation in such
projects to yield less return than expected. Transfer of earnings and
profits in any form beyond the borders of the host country may be subject
to special taxes or limitations imposed by host country laws.
In addition, OWTE, OEI and OYWC will generally participate in projects,
the facilities for which will be fixed and practically immovable. The
provision of electric power, waste disposal and water and wastewater
services are treated as a matter of national or key economic importance by
the laws and politics of many host countries. There is therefore some risk
that the assets constituting the facilities of these projects could be
temporarily or permanently expropriated or nationalized by a host country,
or made subject to martial or exigent law or control.
OPI will seek to manage and mitigate these risks through all available
means that it deems appropriate. They will include: careful political and
financial analysis of the host countries and the key participants in each
project; guarantees of relevant agreements with creditworthy entities;
political risk and other forms of insurance; participation by international
finance institutions, such as affiliates of the World Bank, in financing of
projects in which it participates; and joint ventures with other companies
to pursue the development, financing and construction of these projects.
GAIN ON SALE OF LIMITED PARTNERSHIP INTERESTS
During 1994, an Operating Subsidiary of OWTE that is the owner of the
Onondaga County, New York, facility sold limited partnership interests and
tax benefits to third party investors. Under the Onondaga limited
partnership agreement, the Operating Subsidiary is the general partner and
retains responsibility for the operation and maintenance of the facility.
OTHER ACTIVITIES
OPI also intends to develop, operate and, in some cases, own projects
that process recyclable paper products into containerboard for reuse in the
commercial sector. As with OWTE's projects, such projects involve various
contractual arrangements with a variety of private and public entities,
including municipalities, lenders, joint venture partners (which may
provide some of the financing or technical support), purchasers of the
plant output, and contractors and subcontractors which build the
facilities. In addition, such projects require significant amounts of
energy in the form of steam, which may be provided by present or future
waste-to-energy projects operated by OWTE.
In 1993, OPI discontinued the fixed-site hazardous waste business
conducted through American Envirotech, Inc., an indirect subsidiary. In
light of substantial and adverse changes in the market for hazardous waste
incineration services and regulatory uncertainty stemming from EPA
pronouncements, OPI ceased all development activities. Although OPI
continues to hold permits and certain related assets pending resolution of
certain litigation, any other related assets have been disposed of or
otherwise abandoned. (See "Item 3. Legal Proceedings and Environmental
Matters" of this Form 10-K.)
OTHER INFORMATION
MARKETS, COMPETITION AND GENERAL BUSINESS CONDITIONS
Ogden's Services and Projects business segments can be
adversely affected by general economic conditions, war,
inflation, adverse competitive conditions, governmental
restrictions and controls, natural disasters, energy shortages,
weather, the adverse financial condition of customers and
suppliers, various technological changes and other factors over
which Ogden has no control.
The economic climate can also adversely affect several of
Ogden's Services' operations, including, but not limited to,
fewer airline flights, reduced inflight meals and flight
cancellations in Services' Aviation group; and, reduced event
attendance in Services' Entertainment group. In addition,
disputes between owners of professional sports organizations and
the professional players of such organizations have affected and
may continue to affect the operations of the Entertainment group.
OWTE markets its services principally to governmental
entities, including city, county, and state governments as well
as public authorities or special purpose districts established by
one or more local government units for the purpose of managing
the collection and/or disposal of municipal solid waste ("MSW").
Since 1989 there has been a decline in the number of communities
requesting proposals for waste-to-energy facilities.
The Company believes that it is likely that there will be few
or no opportunities for new waste-to-energy facilities in the
United States in the next three to five years. Ogden believes
that this decline has resulted from a number of factors that
adversely affected communities' willingness to make long-term
capital commitments to waste disposal projects, including:
declining prices at which energy can be sold; declining
alternative disposal costs; uncertainties about the impact of
recycling on the waste stream; and continuing concerns arising
from the Clean Air Act Amendments of 1990.
Ogden believes that waste-to-energy facilities and recycling
are complementary methods of managing a community's waste
disposal needs. The fact that many of Ogden's Client Communities
have recycling rates in excess of national averages demonstrates
that a properly sized waste-to-energy facility does not hinder
achievement of aggressive recycling goals.
MSW is typically supplied to OWTE's facilities pursuant to
long-term contracts. In most of the markets that OWTE currently
serves, the cost of waste-to-energy services to its current
Client Communities is competitive with the cost of other disposal
alternatives, mainly landfilling.
Compliance with regulations adopted in 1996 by the United
States Environmental Protection Agency (the "EPA") to control air
pollutant emissions from landfills will to some extent increase
the cost of landfilling, although landfills may be less expensive
in some cases, in the short term, than waste-to-energy
facilities. Landfills generally do not commit their capacity for
extended periods. Much of the landfilling done in the United
States is done on a spot market or through short term contracts
(less than 5 years). Accordingly, landfill pricing tends to be
more volatile as a result of periodic changes in waste generation
and available capacity than Ogden's pricing, which is based on
long-term contracts. Ogden believes that landfills have not been
required to comply with permitting requirements under existing
law relating to the emission of air pollutants and that this
provides landfills with a competitive advantage.
Another factor affecting the competitiveness of waste-to-
energy fees are the additional charges imposed by Client
Communities and included in such fees to support recycling
programs, household hazardous waste collections, citizen
education, and similar initiatives. The cost competitiveness of
waste-to-energy facilities also depends on the prices at which
the facility can sell the energy it generates. Waste-to-energy
facilities also compete with other disposal technologies such as
mixed solid-waste composting. Mixed waste composting is not a
proven technology, and Ogden believes that it has not been
applied successfully to date in a large scale facility.
Another factor affecting the demand for new waste-to-energy
projects was a 1994 United States Supreme Court decision
invalidating state and local laws and regulations mandating that
waste generated within a given jurisdiction be taken to a
designated facility. See "Flow Control."
Notwithstanding the decline in opportunities for new waste-to-
energy facilities, OWTE believes there may be opportunities at
existing facilities for expansion.
Competition for projects is intense in all markets in which
Projects does business or intends to do business. There are
numerous companies in the United States and in several foreign
countries that pursue these projects. Many of these companies
have more experience, capital and other resources than does
Ogden.
OWTE, OEI and OYWC expend substantial amounts for the
development of new businesses some of which expenditures are
capitalized. Expenditures include the costs of contract and site
acquisition, feasibility and environmental studies, technical and
financial analysis, and in some cases the preparation of
extensive proposals in response to public or private requests for
proposals. Development of independent power projects involves
substantial risk to the developers which is not within their
control. Success depends upon obtaining in a timely manner
acceptable contractual arrangements and financing, appropriate
sites, acceptable licenses and environmental permits and other
government approvals. Even after the required contractual
arrangements are achieved, implementation of the contract often
is subject to substantial conditions that may be outside the
control of the developer. If development opportunities in which
the Company is involved are no longer viewed as viable, such
costs are written off as an expense. OWTE has made contractual
arrangements with some of its Client Communities for the partial
recovery of development costs if the project fails to be
implemented for reasons beyond OWTE's control.
EQUAL EMPLOYMENT OPPORTUNITY
In recent years, governmental agencies (including the Equal
Employment Opportunity Commission) and representatives of
minority groups and women have asserted claims against many
companies, including some Ogden subsidiaries, alleging that
certain persons have been discriminated against in employment,
promotions, training, or other matters. Frequently, private
actions are brought as class actions, thereby increasing the
practical exposure. In some instances, these actions are brought
by many plaintiffs against groups of defendants in the same
industry, thereby increasing the risk that any defendant may
incur liability as a result of activities which are the primary
responsibility of other defendants. Although Ogden and its
subsidiaries have attempted to provide equal opportunity for all
of its employees, the combination of the foregoing factors and
others increases the risk of financial exposure.
EMPLOYEE AND LABOR RELATIONS
As of January 31, 1996, Ogden and its subsidiaries employed
approximately 45,000 people.
Certain employees of Ogden are employed pursuant to collective
bargaining agreements with various unions. During 1995 Ogden
successfully renegotiated collective bargaining agreements in
certain of its business sectors with no strike-related loss of
service. However, in January, 1996 negotiations between New York
City commercial office building owners and Local 32B-32J Service
Employees International Union, AFL-CIO broke off following the
December 31, 1995 expiration of the previous industry wide
collective bargaining agreement. As a result thereof
approximately 30,000 Union employees went on strike on January 4,
1996. Ogden's Facility Management Services employs approximately
1,700 Union employees which were effected by the strike under
contracts with the building owners. The strike was settled in
February 1996 and there was no significant impact on Ogden's
consolidated operations as a result of this strike. Ogden
considers relations with its employees to be good and does not
anticipate any further significant labor disputes in 1996.
ENVIRONMENTAL REGULATORY LAWS
Ogden's business activities are pervasively regulated pursuant
to federal, state, and local environmental laws. Federal laws,
such as the Clean Air Act and Clean Water Act, and their state
counterparts, govern discharges of pollutants to air and water.
Other federal, state, and local laws, such as RCRA,
comprehensively govern the generation, transportation, storage,
treatment, and disposal of solid waste, including hazardous waste
(such laws and the regulations thereunder, "Environmental
Regulatory Laws").
The Environmental Regulatory Laws and other federal, state,
and local laws, such as the Comprehensive Environmental Response
Compensation and Liability Act ("CERCLA") (collectively,
"Environmental Remediation Laws"), make Ogden potentially liable
on a joint and several basis for any environmental contamination
which may be associated with its activities at sites, including
landfills, which OPI has owned, operated, or leased or at which
there has been disposal of residue or other waste handled or
processed by OPI. OPI leases and operates a landfill in
Haverhill, Massachusetts, and leases a landfill in Bristol,
Connecticut, in connection with its projects at those locations.
Some state and local laws also impose liabilities for injury to
persons or property caused by site contamination. Some Service
Agreements provide for indemnification of the Operating
Subsidiaries from some such liabilities.
The Environmental Regulatory Laws require that many permits be
obtained before the commencement of construction and operation of
waste-to-energy, independent power and water and wastewater
projects. There can be no assurance that all required permits
will be issued, and the process of obtaining such permits can
often cause lengthy delays, including delays caused by third
party appeals challenging permit issuance. Failure to meet
conditions of these permits or of the Environmental Regulatory
Laws and the corresponding regulations can subject an Operating
Subsidiary to regulatory enforcement actions by the appropriate
governmental unit, which could include monetary penalties, and
orders requiring certain remedial actions or limiting or
prohibiting operation. To date, OPI has not incurred material
penalties, been required to incur material capital costs or
additional expenses, nor been subjected to material restrictions
on its operations as a result of violations of environmental
laws, regulations, or permits. Certain of the Environmental
Regulatory Laws also authorize suits by private parties for
damages and injunctive relief. Repeated unexcused failure to
comply with environmental standards may also constitute a default
by OWTE or OYWC.
The Environmental Regulatory Laws and federal and state
governmental regulations and policies governing their enforcement
are subject to revision. New technology may be required or
stricter standards may be established for the control of
discharges of air or water pollutants or for solid waste or ash
handling and disposal. Thus, as new technology is developed and
proven, it may be required to be incorporated into new facilities
or major modifications to existing facilities. This new
technology may often be more expensive than that used previously.
The Clean Air Act Amendments of 1990 required EPA to
promulgate New Source Performance Standards ("NSPS") and Emission
Guidelines ("EG") applicable to new and existing municipal waste
combustion units for particulate matter (total and fine), opacity
(as appropriate), sulfur dioxide, hydrogen chloride, oxides of
nitrogen, carbon monoxide, dioxins and dibenzofurans. The laws
of other countries also may require permitting, regulate
emissions into the environment, and provide governmental entities
with authority to impose sanctions for violations, although these
requirements are generally not as rigorous as those of the United
States. Compliance with environmental standards comparable to
those of the United States may also be conditions to the
provision of credit from multi-lateral lenders such as the World
Bank.
The NSPS and EG, which were issued in final form in 1995, will
require capital improvements or operating changes to most of the
waste to energy facilities operated by OWTE to control nitrogen
oxides, organics, mercury and acid gases. The exact timing and
cost of such modifications cannot be stated definitively because
State regulations embodying these have generally not been finally
adopted. The costs to meet new rules for existing facilities
owned by Client Communities will be borne by the Client
Communities. For projects owned or leased by Ogden and operated
under a Service Agreement, the Client Community has the
obligation to fund such capital improvements, to which Ogden may
be required to make an equity contribution, generally 20%. In
addition, Ogden is required to fund the full cost of these
capital improvements at those facilities that are either not
operated pursuant to a Service Agreement or whose Service
Agreement does not require the costs to be borne by the Client
Community. At December 31, 1995, the Company estimates that its
commitments for these capital improvements to total approximately
$30,000,000 over the next four years. Ogden believes that most
costs incurred to meet EG and operating permit requirements at
facilities it operates may be recovered from Client Communities
and other users of its facilities through increased tipping fees
permitted under applicable contracts.
The Clean Air Act also requires each state to develop a state
implementation plan that outlines how areas out of compliance
with federally-established national ambient air quality standards
will achieve compliance. In addition, states must also develop
an operating permit program. Most states are now in the process
of implementing these requirements. The state implementation
plans and the operating permits to be issued under them may place
new requirements on waste-to-energy facilities. Under federal
law, the new operating permits may have a term of up to 12 years
after issuance or renewal, subject to review every five years.
Domestic drinking water facilities developed in the future by
OYWC will be subject to regulation of water quality by the EPA
under the Federal Safe Drinking Water Act and by similar state
laws. Domestic wastewater facilities are subject to regulation
under the Federal Clean Water Act and by similar state laws.
These laws provide for the establishment of uniform minimum
national water quality standards, as well as governmental
authority to specify the type of treatment processes to be used
for public drinking water. Under the federal Clean Water Act,
OYWC may be required to obtain and comply with National Pollutant
Discharge Elimination System permits for discharges from its
treatment stations. Generally, under its current contracts the
client community is responsible for fines and penalties resulting
from the delivery to OYWC's treatment facilities of water not
meeting standards set forth in the contract.
The Environmental Remediation Laws prohibit disposal of
hazardous waste other than in small, household-generated
quantities at OWTE's municipal solid waste facilities. The
Service Agreements recognize the potential for improper
deliveries of hazardous wastes and specify procedures for dealing
with hazardous waste that is delivered to a facility. Although
certain Service Agreements require the Operating Subsidiary to be
responsible for some costs related to hazardous waste deliveries,
to date, no Operating Subsidiary has incurred material hazardous
waste disposal costs.
ENERGY AND WATER REGULATION
OWTE and OEI's domestic businesses are subject to the
provisions of federal, state and local energy laws applicable to
their development, ownership and operation of their domestic
facilities, and to similar laws applicable to their foreign
operations. Federal laws and regulations govern transactions
with utilities, the types of fuel used and the power plant
ownership. State regulatory regimes govern rate approval and
other terms under which utilities purchase electricity from
independent producers, except to the extent such regulation is
pre-empted by federal law.
Pursuant to federal Public Utility Regulatory Policies Act
("PURPA"), the Federal Energy Regulatory Commission ("FERC") has
promulgated regulations that exempt qualifying facilities
(facilities meeting certain size, fuel and ownership
requirements) from compliance with certain provisions of the
Federal Power Act ("FPA"), the Public Utility Holding Company Act
of 1935 ("PUHCA"), and, except under certain limited
circumstances, state laws regulating the rates charged by, or the
financial and organizational activities of, electric utilities.
PURPA was promulgated in 1978 to encourage the development of
cogeneration facilities and small facilities making use of non-
fossil fuel power sources, including waste-to-energy facilities.
The exemptions afforded by PURPA to qualifying facilities from
the FPA and PUHCA and most aspects of state electric utility
regulation are of great importance to OPI and its competitors in
the waste-to-energy and independent power industries.
State public utility commissions must approve the rates, and
in some instances other contract terms, by which public utilities
purchase electric power from Ogden's projects. PURPA requires
that electric utilities purchase electric energy produced by
qualifying facilities at negotiated rates or at a price equal to
the incremental or "avoided" cost that would have been incurred
by the utility if it were to generate the power itself or
purchase it from another source. While public utilities are not
required by PURPA to enter into long-term contracts, PURPA
creates a regulatory environment in which such contracts can
typically be negotiated.
In 1995, the FERC issued two orders in which it modified its
previous interpretation of PURPA and held that state laws and
regulatory orders directing utilities to purchase electricity
from qualifying facilities at rates in excess of the utility's
projected avoided costs were pre-empted by PURPA and that
contracts providing for such above-avoided cost rates were void.
Such laws and regulations have been used in the past by states to
encourage the development of environmentally beneficial
facilities such as waste-to-energy facilities. The FERC stated
in both orders that it intends to apply its reinterpretation of
PURPA only on a prospective basis and that it will not entertain
requests by utilities to invalidate power sales agreements
entered into pursuant to such state laws and regulatory orders
unless the purchasing utility raised the issue of the legality of
the rate at the time of contract execution. Ogden does not
believe any of the power sales agreements related to its OWTE and
OEI facilities is subject to challenge based on the prospective
nature of the orders.
Under PUHCA, any entity owning or controlling ten percent or
more of the voting securities of a "public utility company" or
company which is a "holding company" of a public utility company
is subject to registration with the Securities and Exchange
Commission (the "SEC") and regulation by the SEC unless exempt
from registration. Under PURPA, projects that satisfy the
definition of a "qualifying facility" are exempt from regulation
under PUHCA. Under the Energy Policy Act of 1992, projects that
satisfy the definition of an "exempt wholesale generator" ("EWG")
are not public utility companies under PUHCA. Finally, projects
that satisfy the definition of "foreign utility companies" are
exempt from regulation under PUHCA. Ogden believes that all of
its projects involved in the generation, transmission and/or
distribution of electricity, both domestically and
internationally, will qualify for an exemption from PUHCA and
Ogden will not be required to register with the SEC.
In October, 1992, Congress enacted, and the President signed
into law, comprehensive energy legislation, several provisions of
which are intended to foster the development of competitive,
efficient bulk power generation markets throughout the country.
Although the impact of the legislation cannot be fully known
because Federal and State regulatory agencies are still engaged
in the process of developing policies and promulgating
implementing regulations, OPI believes that, over the long term,
the legislation will create business opportunities both in the
waste-to-energy field as well as in other power generation
fields.
At present, certain members of Congress have indicated their
intention of introducing legislation designed to increase
competition in the electric utility industry. Modification or
repeal of the PURPA and PUHCA are among the legislative changes
that have been discussed. Ogden cannot predict when or if energy
legislation will be enacted or what impact, if any, such
legislation will have on its businesses.
OEI presently has, and intends to continue to acquire,
ownership and operating interests in projects outside the United
States. Most countries have expansive systems for the regulation
of the power business. These generally include provisions
relating to ownership, licensing, rate setting and financing of
generating and transmission facilities.
OYWC's business may be subject to the provisions of state,
local and, in the case of foreign operations, national utility
laws applicable to the development, ownership and operation of
water supply and waste-water facilities. Whether such laws apply
depends upon the local regulatory scheme as well as the manner in
which OYWC provides its services. Where such regulations apply,
they may relate to rates charged, services provided, accounting
procedures, acquisitions and other matters. In the United
States, rate regulations have typically been structured to
provide a pre-determined return on the regulated entities
investments. In other jurisdictions, the trend is towards
periodic price reviews comparing rates to anticipated capital and
operating revenues. The regulated entity benefits from
efficiencies achieved during the period for which the rate is
set.
FLOW CONTROL
Many states provide for local and regional solid waste
planning and require that new solid waste facilities may be
constructed only in conformity with these plans. Certain of
these laws, sometimes referred to as legal flow control,
authorize state agencies to require delivery of waste generated
within their jurisdiction to designated facilities. In 1994, the
United States Supreme court held that such laws were
constitutionally invalid. Federal legislation proposed to
authorize flow control has not been adopted to date.
Although the rates OWTE charges its Client Community are
generally competitive with other disposal options, additional
administrative, recycling and similar charges added to OWTE's
rates may raise the costs of disposal at its facilities. Some
Client Communities have experienced erosion of waste deliveries.
Under most Service Agreements, the Client Community bears the
economic impact of waste delivery shortfalls. Client Communities
are now evaluating options to attract additional waste to
facilities. Certain of these options have been tested in the
federal courts and sustained.
Although it is likely that the Supreme Court's decision has
adversely effected the market for new waste-to-energy facilities,
other factors are believed by Ogden to be more significant for
the inactive market. See Other Information: MARKETS,
COMPETITION, AND GENERAL BUSINESS CONDITIONS.
ASH RESIDUE
In 1994, the United States Supreme Court held that municipal
solid waste ash residue demonstrated by testing to possess
hazardous characteristics is subject to RCRA's provisions for
management as a hazardous waste relating to transportation,
disposal and treatment downstream of the point of generation.
The Supreme Court's ruling has not had a significant impact on
OWTE's business. Following that decision and related EPA
actions, OWTE made adjustments to its operations and, as required
by EPA guidelines issued after the Court's decision, sampled and
tested the ash residue leaving its facilities. No ash residue
from a fully operational facility operated by Ogden has been
characterized as hazardous under the present or past EPA
prescribed test procedures and such ash residue is currently
disposed of in permitted landfills as non-hazardous waste. In
certain states, ash residue from certain waste-to-energy
facilities of other vendors or communities has, on occasion, been
found to have hazardous characteristics under these test
procedures.
In 1994, as previously reported, trade association of which
Ogden is a member, Ogden and other industry members filed an
action against the EPA in federal court challenging certain
actions taken by the EPA following the Court's ruling which could
have required some waste-to-energy facilities to obtain permits
under RCRA in connection with their handling of ash. Subsequent
agency actions confirmed that such permitting would not be
required and the suit has been withdrawn.
Item 2. PROPERTIES
(a) Services
The principal physical properties of Services are the fueling
installations at various airports in the United States and Canada
and the corporate premises located at Two Pennsylvania Plaza, New
York, New York 10121 under lease, which expires on April 30,
2008 and which contains an option by Ogden to renew for an
additional five years.
Atlantic Design Company's corporate offices are located in
Charlotte, North Carolina. Atlantic Design owns a 51,000 square
foot operating facility on 3.5 acres of land in Vestal, New York.
Atlantic Design also leases operating facilities at various
locations in Florida, New Jersey and New York. The leases range
from a term of one year to as long as ten years.
Ogden Services Corporation, through wholly-owned subsidiaries,
owns and leases buildings in various areas in the United States
and several foreign countries which house office, laboratory and
warehousing operations. The leases range from a month-to-month
term to as long as five years. Ogden Services Corporation also
owns a 12,000 square-foot warehouse and office facility located
in Long Island City, New York.
The Aviation Services in-flight food service operation
facilities, aggregating approximately 600,000 square feet, are
leased, except at Newark, New Jersey; Miami, Florida; and Las
Vegas, Nevada, which are owned.
Entertainment operates Fairmount Park racetrack pursuant to a
long-term lease which expires in 2017. Fairmount Park conducts
thoroughbred and harness racing on a 150-acre site located in
Collinsville, Illinois, eight miles from downtown St. Louis.
Entertainment also owns a 148-acre site located at East St.
Louis, Illinois.
Entertainment also owns and operates Grizzly Park, a nature-
based entertainment facility located on approximately 25-acres
near Yellowstone National Park in West Yellowstone, Montana.
Pursuant to a lease agreement with the State of Florida, which
expires in 2008, Entertainment also has a leasehold interest in
Silver Springs, a 250-acre nature-based park, and Wild Waters, a
6-acre park featuring a variety of water slides and events, both
parks are located near Ocala, Florida.
Ogden Technology leases most of its facilities, consisting
almost entirely of office space. This includes a 15-year lease
which began in 1995 for its headquarters facility in Fairfax,
Virginia, for approximately 139,000 square feet as well as office
space in other locations throughout the United States under lease
terms of five years or less. Ogden Professional Services
occupies approximately 77,000 square feet and Ogden
Communications, Inc. occupies approximately 15,000 square feet of
the Fairfax headquarters facility.
Environmental also leases an aggregate of approximately
347,000 square feet of office and laboratory space in 40 separate
locations in 17 states in the United States. These leases are
generally short term in nature, with terms which range from five
to ten years or less and include (i) the headquarters office
described above, (ii) office and laboratory space in Nashville
and Oak Ridge, Tennessee; San Diego, California; Pensacola,
Florida; and Phoenix, Arizona, and (iii) laboratory office space
owned in Fort Collins, Colorado. In addition to its Fairfax,
Virginia headquarters, Environmental maintains regional
headquarters in San Diego, California and Nashville, Tennessee.
Many of the other Services segment facilities operate from
leased premises located principally within the United States.
(b) Projects
OPI's principal executive offices are located in Fairfield,
New Jersey, in an office building located on a 5.4-acre site
owned by OPI. It also leases approximately 47,000 square feet of
office space in Fairfax, Virginia.
The following table summarizes certain information relating to
the locations of the properties owned or leased by OPI or its
subsidiaries as of January 31, 1996(1).
Approximate
Site Size
Location in Acres Site Use Nature of Interest
Fairfield, New Jersey 5.4 Office space Own
Marion County, Oregon 15.2 Waste-to-energy facility Own (2)
Alexandria/Arlington,
Virginia 3.3 Waste-to-energy facility Acquiring the Alexandria
Authority's and the Arlington
Authority's interest under Site
lease (expires Oct. 1, 2025)
pursuant to Conditional Sale
Agreement
Bristol, Connecticut 18.2 Waste-to-energy facility Own (2)
Bristol, Connecticut 35.0 Landfill Site lease (expires Jul. 1, 2014)
Indianapolis, Indiana 23.5 Waste-to-energy facility Site lease (expires Dec., 2008
subject to four 5-year renewal
options) (2)
Stanislaus County,
California 16.5 Waste-to-energy facility Site lease (expires Aug. 20, 2021
subject to 15-year renewal option)
(2)
Babylon, New York 9.5 Waste-to-energy facility Site lease (expires Dec. 19, 2010,
with renewal options)
Haverhill, Massachusetts 12.7 Waste-to-energy facility Site lease (expires Mar. 16, 1997,
subject to sixteen 5-year renewal
options) (2)
Haverhill, Massachusetts 16.8 RDF processing facility Site lease (expires Mar. 16, 1997,
subject to sixteen 5-year renewal
options) (2)
Haverhill, Massachusetts 20.2 Landfill Site lease (expires Mar. 16, 1997,
subject to sixteen 5-year renewal
options) (2)
Lawrence, Massachusetts 11.8 RDF power plant Own (2)
Lake County, Florida 15.0 Waste-to-energy facility Own (2)
Wallingford, Connecticut 10.3 Waste-to-energy facility Site lease (expires Dec. 1, 2026)
(2)
Fairfax County, Virginia 22.9 Waste-to-energy facility Acquiring Fairfax Authority's
interest under Site Lease (expires
Mar. 10, 2016) pursuant to
Conditional Sale Agreement
Imperial County,
California 83.0 Undeveloped land Own
Montgomery County,
Maryland 35.0 Waste-to-energy facility Site lease (expires Nov. 16, 2030)
(2)
Huntington, New York 13.0 Waste-to-energy facility Site lease (expires Oct. 28, 2012,
subject to successive renewal terms
through Jan. 28, 2029)(2)
Warren County, New Jersey 19.8 Waste-to-energy facility Site lease (expires Nov. 16, 2005
subject to two ten-year
renewals)(2)
Hennepin County, Minnesota 14.6 Waste-to-energy facility Leases of site and facility
(expires Oct. 1, 2017 subject to
renewal options to December 20,
2024)(2)(3)
Stockton, California 4.5 Contaminated soil Site lease (expired remediation
remediation facility February 1,
1994) (discontinued)
Tulsa, Oklahoma 22.0 Waste-to-energy facility Leases of site and facility
(expires April 30, 2012 subject to
renewal options to August 2,
2026)(2)(3)
Harris County, Texas 14.0 Undeveloped land Own
Onondaga County, New York 12.0 Facility site Site lease expires
contemporaneously with service
agreement, subject to renewal
options to May 9, 2020(2)
New Martinsville,
West Virginia N/A Hydroelectric Power (See description under
Generating Facility "Projects Independent Power")
Heber, California N/A Geothermal Power Plant (See description under "Projects
Independent Power")
Heber, California N/A Geothermal Power Plant (See description under "Projects
Independent Power")
_______________________
(1) Two Facilities not listed in the table were initially owned
by political subdivisions and were sold to a leveraged
lessor. The leverage lessor entered into lease agreements
with the respective Operating subsidiaries as accommodation
leases. All of the lease obligations, including the
obligation to pay rent, are passed through to the client
communities.
(2) The Operating Subsidiary's ownership or leasehold interest
is subject to material liens in connection with the
financing of the related project.
(3) Sublease of site expires contemporaneously with facility
lease.
Item 3. LEGAL PROCEEDINGS AND ENVIRONMENTAL MATTERS
(a) Legal Proceedings
Ogden Corporation and its subsidiaries (the "Company") are
parties to various legal proceedings involving matters arising in
the ordinary course of business. The Company does not believe
that there are any pending legal proceedings for damages against
the Company, including the legal proceeding described below, the
outcome of which would have a material adverse effect on the
Company on a consolidated basis.
As previously disclosed, Ogden was the defendant in actions
brought in state court in Fort Worth and Houston, Texas by
several individuals who claimed that Ogden had breached its
obligations to them to develop a hazardous waste facility. In
March 1995, the Fort Worth court entered partial summary judgment
for the plaintiffs (the "Fort Worth Plaintiffs") in that action
on the issue of whether Ogden had breached its contractual
obligations. Subsequently, the Houston case was abated and the
plaintiffs in that case (the "Intervening Plaintiffs") intervened
in the Fort Worth action. In October 1995 the Company settled
with the Fort Worth Plaintiffs, pursuant to which the summary
judgment was vacated. In February 1996, the Intervening
Plaintiffs and Ogden reached an oral agreement to settle their
action as well. A definitive settlement agreement is being
prepared.
(b) Environmental Matters
The Company conducts regular inquiries of its subsidiaries
regarding litigation and environmental violations which include
determining the nature, amount and likelihood of liability for
any such claims, potential claims or threatened litigation.
In the ordinary course of its business, the Company may
become 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 a Company subsidiary
operates. Such proceedings also include actions brought by
individuals or local governmental authorities seeking to overrule
governmental decisions on matters relating to the subsidiaries'
operations in which the subsidiary may be, but is not
necessarily, a party. Most proceedings brought against the
Company by governmental authorities or private parties under
these laws relate to alleged technical violations of regulations,
licenses, or permits pursuant to which a subsidiary operates.
The Company believes that such proceedings will not have a
material adverse effect on the Company on a consolidated basis.
The Company's operations are subject to various Federal,
state and local environmental laws and regulations, including the
Clean Air Act, the Clean Water Act, the Comprehensive
Environmental Response Compensation and Liability Act (CERCLA)
and Resource Conservation and Recovery Act (RCRA). Although the
Company operations are occasionally subject to proceedings and
orders pertaining to emissions into the environment and other
environmental violations, the Company believes that it is in
substantial compliance with existing environmental laws and
regulations.
In connection with certain previously divested operations,
the Company may be identified, along with other entities, as
being among potentially responsible parties responsible for
contribution for costs associated with the correction and
remediation of environmental conditions at various hazardous
waste disposal sites subject to CERCLA. In certain instances the
Company may be exposed to joint and several liability for
remedial action or damages. The Company's ultimate liability in
connection with such environmental claims will depend on many
factors, including its volumetric share of waste, the total cost
of remediation, the financial viability of other companies that
also sent waste to a given site and its contractual arrangement
with the purchaser of such operations.
The potential costs related to such matters and the possible
impact on future operations are uncertain due in part to the
complexity of government laws and regulations and their
interpretations, the varying costs and effectiveness of cleanup
technologies, the uncertain level of insurance or other types of
recovery, and the questionable level of the Company's
responsibility. Although the ultimate outcome and expense of
environmental remediation is uncertain, the Company believes that
required remediation and continuing compliance with environmental
laws will not have a material adverse effect on the Company on a
consolidated basis.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the security holders
of Ogden during the fourth quarter of 1995.
EXECUTIVE OFFICERS OF OGDEN
Set forth below are the names, ages, position and office
held and year appointed, of all "executive officers" (as defined
by Rule 3b-7 of the Securities Exchange Act of 1934) of Ogden as
of March 31, 1996:
CONTINUALLY AN
POSITIONS & AGE AS OF OGDEN OFFICER
NAME OFFICE HELD 3/31/96 SINCE
_________________________________________________________________
Ralph E. Ablon Chairman of the Board 79 1962
R. Richard Ablon President & 46 1987
Chief Executive
Officer
Constantine G.Caras Executive Vice 57 1990
President & Chief
Administrative Officer
Scott G. Mackin President & Chief 39 1992
Operating Officer,
Ogden Projects, Inc.,
a wholly-owned
subsidiary of Ogden
Philip G. Husby Senior Vice 49 1991
President, Chief Financial
Officer and Treasurer
Lynde H. Coit Senior Vice 41 1991
President & General
Counsel
David L. Hahn Senior Vice President 44 1995
Rodrigo Arboleda Senior Vice President 55 1995
Robert M. DiGia Vice President, 71 1965
Controller & Chief
Accounting Officer
Quintin G. Marshall Vice President- 34 1995
Investor Relations
Kathleen Ritch Vice President & 53 1981
Secretary
There is no family relationship by blood, marriage or
adoption (not more remote than first cousins) between any of the
above individuals and any Ogden director, except that R. Richard
Ablon, an Ogden director and President and Chief Executive
Officer, is the son of Ralph E. Ablon, an Ogden director and
Chairman of the Board.
The term of office of all officers shall be until the next
election of directors and until their respective successors are
chosen and qualified.
There are no arrangements or understandings between any of
the above officers and any other person pursuant to which any of
the above was selected as an officer.
The following briefly describes the business experience, the
principal occupation and employment of the foregoing Executive
Officers during the past five years:
Ralph E. Ablon has been Chairman of the Board of Ogden since
1962 and served as its Chief Executive Officer prior to May
1990.
R. Richard Ablon has been President and Chief Executive
Officer of Ogden since May 1990 and has served as Chairman
of the Board and Chief Executive Officer of Ogden Projects,
Inc., since November 1990.
Constantine G. Caras has been Executive Vice President and
Chief Administrative Officer since July 1990.
Scott G. Mackin has been considered an Executive Officer of
Ogden since 1992. He has been President and Chief Operating
Officer of Ogden Projects, Inc. since January 1991.
Philip G. Husby has been Senior Vice President and Chief
Financial Officer of Ogden since January 1, 1991 and
Treasurer since January 19, 1995.
Lynde H. Coit has been a Senior Vice President and General
Counsel of Ogden since January 17, 1991.
David L. Hahn was elected Senior Vice President of Ogden in
January 1995. He has served as Vice President-Marketing of
Ogden Services Corporation for more than the past five
years.
Rodrigo Arboleda was elected Senior Vice President of Ogden
in January 1995. Since 1992, he has served as Senior Vice
President-Business Development for Latin America of Ogden
Services Corporation. From 1989 to 1992 he owned and served
as the President and Chief Executive Officer of
Interamerican Consulting Group, Inc., a consulting firm
located in Miami, Florida specializing in management,
financing, and restructuring of troubled companies.
Robert M. DiGia has been Vice President, Controller and
Chief Accounting Officer for more than the past five years.
Quintin G. Marshall has served as Vice President - Investor
Relations since October 1995. From May 1993 to October 1995
he served as Managing Director of CDA Investment
Technologies, a division of Thomson Financial. From July
1992 to May 1993 he served as Senior Vice President at Gavin
Andersen & Company, an investor relations consulting firm.
From September 1986 to March 1992 he served first as
Managing Director and then Co-Chief Operation Officer of
Georgeson & Company, a proxy solicitation and consulting
company.
Kathleen Ritch has been Vice President and Secretary of
Ogden for more than the past five years.
Part II
Item 5. MARKET FOR OGDEN'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Pursuant to General Instruction G (2), the information called
for by this item is hereby incorporated by reference from Page 55
of Ogden's 1995 Annual Report to Shareholders.
As of March 1, 1996, the approximate number of record holders
of Ogden common stock was 9,100.
Item 6. SELECTED FINANCIAL DATA
Pursuant to General Instruction G (2), the information called
for by this item is hereby incorporated by reference from Page 32
of Ogden's 1995 Annual Report to Shareholders.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Pursuant to General Instruction G (2), the information called
for by this item is hereby incorporated by reference from Pages 28
through 31 of Ogden's 1995 Annual Report to Shareholders.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Pursuant to General Instruction G (2), the information called
for by this item is hereby incorporated by reference from Pages 32
through 52 and Page 55 of Ogden's 1995 Annual Report to
Shareholders.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not Applicable.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF OGDEN
Pursuant to General Instruction G (3), the information
regarding directors called for by this item is hereby incorporated
by reference from Ogden's 1996 Proxy Statement to be filed with the
Securities and Exchange Commission.
Item 11. EXECUTIVE COMPENSATION
Pursuant to General Instruction G (3), the information called
for by this item is hereby incorporated by reference from Ogden's
1996 Proxy Statement to be filed with the Securities and Exchange
Commission. The information regarding officers called for by this
item is included at the end of Part I of this document under the
heading "Executive Officers of Ogden."
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Pursuant to General Instruction G (3), the information called
for by this item is hereby incorporated by reference from Ogden's
1996 Proxy Statement to be filed with the Securities and Exchange
Commission.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to General Instruction G (3), the information called
for by this item is hereby incorporated by reference from Ogden's
1996 Proxy statement to be filed with the Securities and Exchange
Commission.
Part IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a) Listed below are the documents filed as a part of this
report:
1). All financial statements contained on pages 33 through 52
and the Independent Auditors' Report on page 53 of
Ogden's 1995 Annual Report to Shareholders are
incorporated herein by reference.
2). Financial statement schedules as follows:
(i) Schedule II - Valuation and Qualifying Accounts for
the years ended December 31, 1995, 1994 and 1993.
3). Those exhibits required to be filed by Item 601 of
Regulation S-K:
EXHIBITS
2.0 Plans of Acquisition, Reorganization, Arrangement,
Liquidation or Succession.
2.1 Agreement and Plan of Merger, dated as of October
31, 1989, among Ogden, ERCI Acquisition Corporation
and ERC International, Inc.*
2.2 Agreement and Plan of Merger among Ogden
Corporation, ERC International, Inc., ERC
Acquisition Corporation and ERC Environmental and
Energy Services Co., Inc., dated as of January 17,
1991.*
2.3 Amended and Restated Agreement and Plan of Merger
among Ogden Corporation, OPI Acquisition Corp. and
Ogden Projects, Inc., dated as of September 27,
1994.*
3.0 Articles of Incorporation and By-laws.
3.1 Ogden's Restated Certificate of Incorporation as
amended.*
3.2 Ogden's By-Laws, as amended.*
4.0 Instruments Defining Rights of Security Holders.
4.1 Fiscal Agency Agreement between Ogden and Bankers
Trust Company, dated as of June 1, 1987, and
Offering Memorandum dated June 12, 1987, relating
to U.S. $85 million Ogden 6% Convertible
Subordinated Debentures, Due 2002.*
4.2 Fiscal Agency Agreement between Ogden and Bankers
Trust Company, dated as of October 15, 1987, and
Offering Memorandum, dated October 15, 1987,
relating to U.S. $75 million Ogden 5-3/4%
Convertible Subordinated Debentures, Due 2002.*
4.3 Indenture dated as of March 1, 1992 from Ogden
Corporation to The Bank of New York, Trustee,
relating to Ogden's $100 million debt offering.*
10.0 Material Contracts
10.1 Credit Agreement by and among Ogden, The Bank of
New York, as Agent and the signatory bank Lenders
thereto dated as of September 20, 1993.*
(i) Amendment to Credit Agreement, dated as of
November 16, 1995. Transmittal herewith as Exhibit
10.1(i).
10.2 Stock Purchase Agreement, dated May 31, 1988,
between Ogden and Ogden Projects, Inc.*
10.3 Tax Sharing Agreement, dated January 1, 1989,
between Ogden, Ogden Projects, Inc. and
subsidiaries, Ogden Allied Services, Inc. an
subsidiaries, and Ogden Financial Services, Inc.
and subsidiaries.*
10.4 Stock Purchase Option Agreement, dated June 14,
1989, between Ogden and Ogden Projects, Inc. as
amended on November 16, 1989.*
10.5 Preferred Stock Purchase Agreement, dated July 7,
1989, between Ogden Financial Services, Inc. and
Image Data Corporation.*
10.6 Rights Agreement between Ogden Corporation and
Manufacturers Hanover Trust Company, dated as of
September 20, 1990 and amended August 15, 1995 to
provide The Bank of New York as successor agent.*
10.7 Executive Compensation Plans
(a) Ogden Corporation 1986 Stock Option Plan.*
(b) Ogden Corporation 1990 Stock Option Plan.*
(i) Ogden Corporation 1990 Stock Option Plan
as Amended and Restated as of January 19,
1994.*
(c) Ogden Services Corporation Executive Pension
Plan.*
(d) Ogden Services Corporation Select Savings
Plan.*
(i) Ogden Services Corporation Select Savings
Plan Amendment and Restatement as of
January 1, 1995.*
(e) Ogden Services Corporation Select Savings Plan
Trust.*
(i) Ogden Services Corporation Select Savings
Plan Trust Amendment and Restatement
dated as of January 1, 1995.*
(f) Ogden Services Corporation Executive Pension
Plan Trust.*
(g) Changes effected to the Ogden Profit Sharing
Plan effective January 1, 1990.*
(h) Ogden Corporation Profit Sharing Plan.*
(i) Ogden Profit Sharing Plan as amended and
restated January 1, 1991 and as in effect
through January 1, 1993.*
(ii) Ogden Profit Sharing Plan as amended and
restated effective as of January 1,
1995.*
(i) Ogden Corporation Core Executive Benefit
Program.*
(j) Ogden Projects Pension Plan.*
(k) Ogden Projects Profit Sharing Plan.*
(l) Ogden Projects Supplemental Pension and Profit
Sharing Plans.*
(m) Ogden Projects Employee's Stock Option Plan.*
(i) Amendment, dated as of December 29, 1994
to the Ogden Projects Employees' Stock
Option Plan. Transmitted herewith as
Exhibit 10.7 (u)(i).*
(n) Ogden Projects Core Executive Benefit
Program.*
(o) Form of amendments to the Ogden Projects, Inc.
Pension Plan and Profit Sharing Plans
effective as of January 1, 1994.*
(i) Form of Amended Ogden Projects, Inc.
Profit Sharing Plan, effective as of
January 1, 1994. Transmitted herewith as
Exhibit 10.7 (w)(i).*
(ii) Form of Amended Ogden Projects, Inc.
Pension Plan, effective as of January 1,
1994. Transmitted herewith as Exhibit
10.7 (w)(ii).*
(p) Ogden Corporation CEO Formula Bonus Plan.*
10.8 Employment Agreements
(a) Employment Letter Agreement between Ogden and
Lynde H. Coit dated January 30, 1990.*
(b) Employment Agreement between Ogden and R.
Richard Ablon dated as of May 24, 1990.*
(i) Letter Amendment Employment Agreement
between Ogden and R. Richard Ablon dated
as of October 11, 1990.*
(c) Employment Agreement between Ogden and C. G.
Caras dated as of July 2, 1990.*
(i) Letter Amendment to Employment Agreement
between Ogden Corporation and C.G. Caras,
dated as of October 11, 1990.*
(d) Employment Agreement between Ogden and Philip
G. Husby as of July 2, 1990.*
(e) Termination Letter Agreement between Maria P.
Monet and Ogden dated as of October 22, 1990.*
(f) Letter Agreement between Ogden Corporation and
Ogden's Chairman of the Board, dated as of
January 16, 1992.*
(g) Employment Agreement between Ogden and Ogden's
Chief Accounting Officer dated as of December
18, 1991.*
(h) Employment Agreement between Scott G. Mackin
and Ogden Projects, Inc. dated as of January
1, 1994.*
(i) Employment Agreement between David L. Hahn and
Ogden Corporation, dated December 1, 1995.
Transmitted herewith as Exhibit 10.8(i).
10.9 First Amended and Restated Ogden Corporation
Guaranty Agreement made as of January 30, 1992
by Ogden Corporation for the benefit of
Mission Funding Zeta and Pitney Bowes Credit
Corporation.*
10.10 Ogden Corporation Guaranty Agreement as of
January 30, 1992 by Ogden Corporation for the
benefit of Allstate Insurance Company and
Ogden Martin Systems of Huntington Resource
Recovery Nine Corporation.*
11 Ogden Corporation and Subsidiaries Detail of
Computation of Earnings Applicable to Common
Stock for the years ended December 31, 1995,
1994 and 1993. Transmitted herewith as
Exhibit 11.
13 Those portions of the Annual Report to
Stockholders for the year ended December 31,
1995, which are incorporated herein by
reference. Transmitted herewith as Exhibit
13.
21 Subsidiaries of Ogden. Transmitted herewith
as Exhibit 21.
23 Consent of Deloitte & Touche LLP. Transmitted
herewith as Exhibit 23.
27 Financial Data Schedule (EDGAR Filing Only).
* Incorporated by reference as set forth in the
Exhibit Index of this Annual Report on Form 10-K.
(b) No Reports on Form 8-K were filed by Ogden during
the fourth quarter of 1995.
SIGNATURES
Pursuant to the requirements of Section 13 and 15(d) 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 CORPORATION
Date: March 27, 1996 By /S/ R. Richard Ablon
R. Richard Ablon
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities indicated.
SIGNATURE TITLE
/S/ Ralph E. Ablon Chairman of the Board & Director
RALPH E. ABLON
/S/ R. Richard Ablon President & Chief Executive Officer
R. RICHARD ABLON and Director
/S/ Philip G. Husby Senior Vice President, Treasurer and
PHILIP G. HUSBYChief Financial Officer
/S/ Robert M. DiGia Vice President, Controller and Chief
ROBERT M. DIGIA Accounting Officer
/S/ David M. Abshire Director
DAVID M. ABSHIRE
/S/ Norman G. Einspruch Director
NORMAN G. EINSPRUCH
/S/ Constantine G. Caras Director
CONSTANTINE G. CARAS
/S/ Attallah Kappas Director
ATTALLAH KAPPAS
Director
TERRY ALLEN KRAMER
Director
MARIA P. MONET
/S/ Judith D. Moyers Director
JUDITH D. MOYERS
/S/ Homer A. Neal Director
HOMER A. NEAL
/S/ Stanford S. Penner Director
STANFORD S. PENNER
/S/ Jesus Sainz Director
JESUS SAINZ
/S/ Frederick Seitz Director
FREDERICK SEITZ
/S/ Robert E. Smith Director
ROBERT E. SMITH
/S/ Helmut F.O. Volcker Director
HELMUT F.O. VOLCKER
/S/ Abraham Zaleznik Director
ABRAHAM ZALEZNIK
INDEPENDENT AUDITORS' REPORT
Ogden Corporation:
We have audited the consolidated financial statements of Ogden
Corporation and subsidiaries as of December 31, 1995 and 1994 and
for each of the three years in the period ended December 31, 1995,
and have issued our report thereon dated February 5, 1996, which
report includes an explanatory paragraph relating to the adoption
of Statements of Financial Accounting Standards Nos. 106, 112, 115,
and 121; such consolidated financial statements and report are
included in your 1995 Annual Report to Shareholders and are
incorporated herein by reference. Our audits also included the
consolidated financial statement schedule of Ogden Corporation and
subsidiaries, listed in Item 14. This consolidated financial
statement schedule is the responsibility of the Corporation's
management. Our responsibility is to express an opinion based on
our audits. In our opinion, such consolidated financial statement
schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
/s/Deloitte & Touche, LLP
New York, New York
February 5, 1996
SCHEDULE II
OGDEN CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEAR ENDED DECEMBER 31, 1994
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
ADDITIONS
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND CHARGED TO END OF
DESCRIPTION OF PERIOD EXPENSES OTHER ACCOUNTS DEDUCTIONS PERIOD
Allowances deducted in the balance sheet
from the assets to which they apply:
Doubtful receivables - current $25,547,000 $ 5,869,000 $10,241,000 (A) $ 9,047,000 (D) $32,783,000
31,000 (B)
142,000 (C)
Deferred charges on projects 750,000 5,650,000 1,350,000 (B) 750,000 (E) 7,000,000
TOTAL $26,297,000 $11,519,000 $11,764,000 $ 9,797,000 $39,783,000
Allowances not deducted:
Provision for consolidation of facilities $ 4,720,000 $ 1,320,000 (G) $ 3,400,000
Estimated cost of disposal of discontinued
operations 1,008,000 $ 1,485,000 (F) 1,548,000 (G) 945,000
Reserves relating to tax indemnification
and other contingencies in connection
with the sale of limited partnership
interests in and related tax benefits of
a waste-to-energy facilty $ 6,000,000 6,000,000
Other 1,477,000 3,500,000 (1,350,000) (B) 23,000 (G) 3,604,000
TOTAL $ 7,205,000 $ 9,500,000 $ 135,000 $ 2,891,000 $13,949,000
Notes:
(A) Reserve for contract billing adjustments.
(B) Transfer from other accounts.
(C) Recoveries of amounts previously written off.
(D) Write-offs of receivables considered uncollectible.
(E) Write-offs of unsuccessful development costs.
(F) Net proceeds from operations and sale of assets relating to
discontinued operations credited to provision.
(G) Payments charged to allowances.
SCHEDULE II
OGDEN CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEAR ENDED DECEMBER 31, 1993
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
ADDITIONS
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND CHARGED TO END OF
DESCRIPTION OF PERIOD EXPENSES OTHER ACCOUNTS DEDUCTIONS PERIOD
Allowances deducted in the balance sheet
from the assets to which they apply:
Doubtful receivables - current $19,730,000 $7,682,000 $4,073,000 (A) $ 6,034,000 (D) $25,547,000
119,000 (B) 94,000 (E)
71,000 (C)
Deferred charges on projects 750,000 750,000
TOTAL $20,480,000 $7,682,000 $4,263,000 $ 6,128,000 $26,297,000
Allowances not deducted:
Provision for consolidation of facilities $ 6,040,000 $ 1,320,000 (G) $ 4,720,000
Estimated cost of disposal of discontinued
operations 7,620,000 $1,706,000 $4,061,000 (F) 12,379,000 (H) 1,008,000
Other 285,000 1,350,000 158,000 (G) 1,477,000
TOTAL $13,945,000 $3,056,000 $4,061,000 $13,857,000 $ 7,205,000
Notes:
(A) Reserve for contract billing adjustments.
(B) Transfer from other accounts.
(C) Recoveries of amounts previously written off.
(D) Write-offs of receivables considered uncollectible.
(E) Transfer to other accounts.
(F) Net proceeds from on-site remediation utilizing mobile technology
$3,853,000 and reclassification of liabilities pertaining to fixed-
site hazardous waste business $208,000.
(G) Payments charged to allowances.
(H) Gain from on-site remediation business utilizing mobile technology.
SCHEDULE II
OGDEN CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEAR ENDED DECEMBER 31, 1995
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
ADDITIONS
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND CHARGED TO END OF
DESCRIPTION OF PERIOD EXPENSES OTHER ACCOUNTS DEDUCTIONS PERIOD
Allowances deducted in the balance sheet
from the assets to which they apply:
Doubtful receivables - current $32,783,000 $ 7,204,000 $ 64,000 (A) $ 3,012,000 (B) $37,039,000
Deferred charges on projects 7,000,000 3,670,000 7,000,000 (C) 3,670,000
TOTAL $39,783,000 $10,874,000 $ 64,000 $10,012,000 $40,709,000
Allowances not deducted:
Provision for consolidation of facilities $ 3,400,000 $ 2,850,000 (D)
550,000 (E)
Estimated cost of disposal of discontinued
operations 945,000 $ 4,510,000 5,269,000 (E) $ 186,000
Estimated cost of disposal of assets 14,993,000 14,993,000
Provision for restructuring 8,200,000 2,090,000 (E) 6,110,000
Reserves relating to tax indemnification and
other contingencies in connection with the
sale of limited partnership interests in and
related tax benefits a of waste-to-energy
facility 6,000,000 3,000,000 (D) 3,000,000
Other 3,604,000 7,267,000 1,500,000 (D) 9,371,000
TOTAL $13,949,000 $34,970,000 $15,259,000 $33,660,000
Notes:
(A) Recoveries of amounts previously written off.
(B) Write-offs of receivables considered uncollectible.
(C) Write-offs of unsuccessful development costs.
(D) Reversal to operating costs of provisions no longer required.
(E) Payments charged to allowances.