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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
-------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
--------- ----------
COMMISSION FILE NUMBER: 1-12154
USA WASTE SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 73-1309529
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
5400 LBJ FREEWAY
SUITE 300 - TOWER ONE
DALLAS, TEXAS 75240
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(214) 383-7900
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
NO CHANGE
(FORMER NAME, FORMER ADDRESS, AND FORMER FISCAL YEAR,
IF CHANGED SINCE LAST REPORT)
__________
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL
REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES X NO
-------- --------
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S
CLASSES OF COMMON STOCK AS OF AUGUST 12, 1996:
COMMON STOCK $.01 PAR VALUE 91,744,106 SHARES
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
USA WASTE SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Par Value Amounts)
(Unaudited)
June 30, December 31,
1996 1995
---- ----
ASSETS
Current assets:
Cash and cash equivalents $ 30,262 $ 18,223
Accounts receivable, net 109,958 89,228
Notes and other receivables 14,343 15,001
Deferred income taxes 38,870 20,101
Prepaid expenses and other 23,364 26,110
----------- -----------
Total current assets 216,797 168,663
Notes and other receivables 28,937 16,082
Property and equipment, net 880,981 798,629
Excess of cost over net assets of acquired
businesses, net 134,840 108,664
Other intangible assets, net 39,918 34,127
Other assets 88,475 64,199
----------- -----------
Total assets $ 1,389,948 $ 1,190,364
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 44,681 $ 42,018
Accrued liabilities 57,250 46,975
Deferred revenues 8,945 5,988
Current maturities of long-term debt 12,665 40,157
----------- -----------
Total current liabilities 123,541 135,138
Long-term debt, less current maturities 558,590 410,683
Closure, post-closure, and other liabilities 90,927 87,156
----------- -----------
Total liabilities 773,058 632,977
----------- -----------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $1.00 par value;
10,000,000 shares authorized;
none issued -- --
Common stock, $.01 par value;
150,000,000 shares authorized; 91,721,891 and
87,030,697 shares issued, respectively 917 870
Additional paid-in capital 817,724 796,236
Accumulated deficit (201,267) (237,900)
Less treasury stock at cost, 23,485 shares and
138,810 shares, respectively (484) (1,819)
----------- -----------
Total stockholders' equity 616,890 557,387
----------- -----------
Total liabilities and stockholders' equity 1,389,948 $ 1,190,364
=========== ===========
The accompanying notes are an integral part of these condensed
consolidated financial statements.
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USA WASTE SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
1996 1995 1996 1995
--------- --------- --------- ---------
(Restated) (Restated)
Operating revenues $ 227,336 $ 179,714 $ 428,861 $ 348,594
--------- --------- --------- ---------
Costs and expenses:
Operating 127,711 105,946 245,812 207,397
General and administrative 25,358 26,930 50,101 53,093
Depreciation and amortization 22,947 21,846 44,821 41,188
Merger costs 38,100 25,073 38,100 25,073
Unusual items 12,952 4,040 12,952 4,733
--------- --------- --------- ---------
227,068 183,835 391,786 331,484
--------- --------- --------- ---------
Income (loss) from operations 268 (4,121) 37,075 17,110
--------- --------- --------- ---------
Other income (expense):
Interest expense:
Nonrecurring interest -- (7,481) -- (10,994)
Other (7,685) (9,225) (14,450) (18,913)
Interest and other income, net 1,914 1,986 4,202 4,308
--------- --------- --------- ---------
(5,771) (14,720) (10,248) (25,599)
--------- --------- --------- ---------
Income (loss) before provision for income taxes (5,503) (18,841) 26,827 (8,489)
Provision for (benefit from) income taxes (15,364) 4,458 (9,806) 10,274
--------- --------- --------- ---------
Net income (loss) $ 9,861 $ (23,299) $ 36,633 $ (18,763)
========= ========= ========= =========
Earnings (loss) per common share $ 0.10 $ (0.31) $ 0.39 $ (0.25)
========= ========= ========= =========
Weighted average number of common and
common equivalent shares outstanding 95,137 75,230 94,201 74,761
========= ========= ========= =========
The accompanying notes are an integral part of these condensed
consolidated financial statements.
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USA WASTE SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(In Thousands)
(Unaudited)
Additional
Preferred Common Paid-in Accumulated Treasury
Stock Stock Capital Deficit Stock
----- ----- ------- ------- -----
Balance, December 31, 1995 $ -- $ 870 $ 796,236 $(237,900) $ (1,819)
Common stock issued in acquisitions
accounted for as poolings of interests -- 30 8,000 -- --
Common stock issued in purchase acquisitions -- 1 2,342 -- --
Common stock issued for investment in
company -- 4 1,588 -- --
Common stock issued for stock option exercises -- 7 6,130 -- --
Common stock issued for stock warrant exercises -- 2 3,686 -- --
Common stock returned to treasury for
acquisition settlement -- -- -- -- (751)
Common stock issued from treasury upon
exercise of stock options -- -- (481) -- 1,698
Common stock issued from treasury upon
exercise of stock warrants -- -- (119) -- 388
Common stock issued to 401(k) plan -- 3 342 -- --
Net income -- -- -- 36,633 --
-------- ------- --------- --------- ---------
Balance, June 30, 1996 $ -- $ 917 $ 817,724 $(201,267) $ (484)
======== ======= ========= ========= =========
The accompanying notes are an integral part of these condensed
consolidated financial statements.
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USA WASTE SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Six Months Ended June 30,
------------------------
1996 1995
--------- ---------
(Restated)
Cash flows from operating activities:
Net cash provided by operating activities $ 51,437 $ 26,649
--------- ---------
Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired (49,236) (2,400)
Capital expenditures (75,964) (57,734)
Loans and advances to others (15,086) (6,322)
Collection of loans to others 1,472 2,304
Proceeds from sale of assets 2,060 5,112
Proceeds from sale of investments -- 1,200
Increase in restricted assets (14,175) (4,773)
Other -- (845)
--------- ---------
Net cash used in investing activities (150,929) (63,458)
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of long-term debt 510,670 352,781
Principal payments on long-term debt (410,533) (306,411)
Proceeds from exercise of stock options 7,354 961
Proceeds from exercise of stock warrants 3,957 --
Other 83 1,027
--------- ---------
Net cash provided by financing activities 111,531 48,358
--------- ---------
Increase in cash and cash equivalents 12,039 11,549
Cash and cash equivalents at beginning of period 18,223 36,645
--------- ---------
Cash and cash equivalents at end of period $ 30,262 $ 48,194
========= =========
The accompanying notes are an integral part of these condensed
consolidated financial statements.
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USA WASTE SERVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The condensed consolidated balance sheets of USA Waste Services, Inc. and
subsidiaries (the "Company") as of June 30, 1996 and December 31, 1995, the
condensed consolidated statements of operations for the three and six months
ended June 30, 1996 and 1995, the condensed consolidated statement of
stockholders' equity for the six months ended June 30, 1996, and the condensed
consolidated statements of cash flows for the six months ended June 30, 1996 and
1995 are unaudited. In the opinion of management, such financial statements
include all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation of financial position, results of operations,
and cash flows for the periods presented. The Company has restated the
previously issued financial statements for the three months ended March 31, 1996
to reflect the acquisitions of Western Waste Industries ("Western") and Grand
Central consummated on May 7, 1996 and May 15, 1996, respectively, both
accounted for using the pooling of interests method of accounting. The Company
has also restated the previously issued financial statements for the three and
six months ended June 30, 1995 to reflect the acquisition of Western. Periods
prior to 1996 were not restated to reflect the acquisition of Grand Central as
combined results are not materially different from results as presented. In
addition, certain 1995 amounts have been reclassed to conform to the 1996
presentation. The financial statements presented herein should be read in
connection with the Company's consolidated financial statements and related
notes thereto included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1995, the Company's Joint Proxy Statement and Prospectus
dated April 2, 1996, included in the Company's Registration Statement on Form
S-4 filed in connection with the acquisition of Western, and the supplemental
consolidated financial statements and the supplemental condensed consolidated
financial statements and related notes thereto included in the Company's Current
Report on Form 8-K/A dated May 7, 1996, filed in connection with the acquisition
of Western.
1. BUSINESS COMBINATIONS
On May 7, 1996, the Company consummated an Agreement and Plan of Merger (the
"Merger Agreement") to acquire Western through a merger transaction ("Western
Merger") accounted for as a pooling of interests and, accordingly, the
accompanying financial information has been restated to include the accounts
and operations of Western for all periods presented. Under the terms of the
Merger Agreement, the Company issued 1.50 shares of its common stock for each
share of Western outstanding common stock. Prior to the Western Merger, the
Company owned approximately 4.1% of Western's outstanding shares (634,900
common shares), which were canceled on the Western Merger's effective date.
The Western Merger increased the Company's outstanding shares of common stock
by approximately 22,028,000 shares and the Company assumed options under
Western's stock option plans equivalent to approximately 5,200,000 underlying
Company shares of common stock.
On May 15, 1996, the Company consummated a merger agreement with Grand Central,
accounted for as a pooling of interests, pursuant to which the Company issued
2,067,605 shares of its common stock in exchange for all outstanding shares of
Grand Central.
Combined and separate results of operations of the Company prior to
consummation of the mergers ("USA Waste"), Western, and Grand Central for the
restated periods are as follows (in thousands):
Grand
USA Waste Western Central Adjustments Combined
--------- ------- ------- ----------- --------
Three months ended March 31, 1996:
Operating revenues $ 124,629 $ 68,441 $ 8,455 $ -- $ 201,525
Net income 20,516 4,703 1,538 15(a) 26,772
Three months ended March 31, 1995:
Operating revenues $ 101,242 $ 67,638 -- $ -- $ 168,880
Net income 184 4,339 -- 15(a) 4,538
Six months ended June 30, 1995:
Operating revenues $ 212,471 $ 136,123 -- $ -- $ 348,594
Net income (loss) (27,657) 8,864 -- 30(a) (18,763)
(a) In February 1992, USA Waste acquired a 55% interest in a collection
company from a third party in which Western owned the remaining 45%. In
March 1993, USA Waste acquired the remaining 45% interest in the collection
company from Western. The combined financial information reflects the
combined company's 100% ownership of the acquired collection company as of
February 1992. Western's earnings in minority interest from February 1992
through March 1993 and the gain on sale to USA Waste of $2,829,000 have
been eliminated. The excess of cost over net assets of acquired businesses,
net of accumulated amortization, recorded by USA Waste in February 1992,
has also been eliminated.
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During the six months ended June 30, 1996, the Company acquired 24 collection
businesses, one landfill, one transfer station, and two recycling businesses
for approximately $49,236,000 in cash and 113,224 shares of the Company's
common stock. These acquisitions were accounted for under the purchase method
of accounting and the pro forma effect of the acquisitions is not material to
the Company's financial position or results of operations.
On May 31, 1996, the Company consummated a merger with an Orlando, Florida,
collection business accounted for as a pooling of interests, pursuant to which
the Company issued 900,001 shares of its common stock in exchange for all
outstanding shares of the acquired company. Periods presented herein were not
restated to include the accounts and operations of the acquired company as
combined results are not materially different from the results as presented.
On June 22, 1996, the Company entered into an Agreement and Plan of Merger to
acquire Sanifill, Inc. ("Sanifill") through a merger transaction. The
completion of the merger is subject to, among other conditions, approval of
both companies' shareholders. It is anticipated that the merger will be
completed in late August 1996 and will be accounted for as a pooling of
interests. The merger agreement provides that on the effective date of the
merger, the Company will issue 1.70 shares of its common stock for each share of
Sanifill's outstanding common stock. The merger is expected to increase the
Company's outstanding shares of common stock by approximately 43,100,000 shares
and the Company will assume Sanifill's options and warrants equivalent to
approximately 43,100,000 underlying shares of Company common stock. The Company
expects to incur up to $50,000,000 in estimated nonrecurring costs related to
the merger. These costs will be accrued as of the consummation date and are
expected to be incurred within twelve months of consummation.
2. LONG-TERM DEBT
Long-term debt consists of the following (in thousands):
June 30, December 31,
1996 1995
-------- --------
Credit facility:
Revolving credit facility $420,000 $ 51,613
Term loan facility -- 215,835
Western credit facility -- 41,000
Industrial revenue bonds 129,179 115,421
Other 22,076 26,971
-------- --------
571,255 450,840
Less current maturities 12,665 40,157
-------- --------
$558,590 $410,683
======== ========
As of December 31, 1995, the Company had borrowed $267,448,000 under its
$550,000,000 financing agreement, which consisted of a $300,000,000 five-year
revolving credit and letter of credit facility and a $250,000,000 term loan
facility. Revolving credit loans under the credit facility were limited to
$160,000,000 at December 31, 1995, less the amount of any future industrial
revenue bonds enhanced by letters of credit under the credit facility. Loans
bore interest at a rate based on the Eurodollar rate or the prime rate, plus a
spread not to exceed 1.75% per annum (the applicable interest rate at December
31, 1995 was 7.31%). The credit facility was also used for letters of credit
purposes with variable fees from 0.75% to 1.75% per annum (1.50% at December
31, 1995) charged on amounts issued. A commitment fee of up to 0.5% was
required on the unused portion of the credit facility.
On May 7, 1996, in connection with the acquisition of Western, the Company
replaced its existing credit facility with a $750,000,000 senior revolving
credit facility ("Credit Facility") and retired amounts outstanding under
Western's credit facility. The Credit Facility was used to refinance existing
bank loans and letters of credit and will be used to fund additional
acquisitions and working capital. The Credit Facility also provides for the
availability of standby letters of credit of up to $300,000,000. Loans under
the Credit Facility bear interest at a rate based on the Eurodollar rate plus a
spread not to exceed 0.75% per annum (spread set at 0.405% per annum as of June
30, 1996). The Credit Facility requires a facility fee not to exceed 0.375%
per annum on the entire available credit facility (facility fee set at 0.22%
per annum as of June 30, 1996). The Credit Facility contains financial
covenants with respect to interest coverage and debt capitalization ratios.
The Credit Facility also contains limitations on dividends, additional
indebtedness, leins, and asset sales.
In connection with the pending acquisition of Sanifill, the Company is
currently negotiating a new $1,200,000,000 credit facility with a consortium
of banks. The Company anticipates that the credit facility will be effective
with the closing of the Sanifill merger. The credit facility will be available
for standby letters of credit up to $400,000,000. Loans under this credit
facility will bear interest at a rate based on the Eurodollar rate plus a spread
not to exceed 0.75% per annum (spread is expected to be set at 0.35% per annum).
The credit facility will require a facility fee not to exceed 0.375% per annum
on the entire available credit facility (facility fee is expected to be set at
0.20% per annum).
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3. INCOME TAXES
The difference in federal income taxes at the statutory rate and the provision
for (benefit from) income taxes for the six months ended June 30, 1996, is
primarily due to the net change in the valuation allowance. The valuation
allowance for deferred tax assets had a net decrease of $37,947,000 in the
first half of 1996 due to changes in the Company's gross deferred tax assets
and liabilities and the decrease in the valuation allowance and corresponding
recognition of an additional $18,769,000 of net deferred tax assets. Future
taxable income was projected utilizing annualized second quarter taxable
income, excluding merger costs and unusual items.
4. COMMITMENTS AND CONTINGENCIES
Environmental matters -- The Company is subject to extensive and evolving
federal, state, and local environmental laws and regulations that have been
enacted in response to technological advances and the public's increased
concern over environmental issues. As a result of changing governmental
attitudes in this area, management anticipates that the Company will
continually modify or replace facilities and alter methods of operation. The
majority of the expenditures necessary to comply with the environmental laws
and regulations are made in the normal course of business. Although the
Company, to the best of its knowledge, is in compliance in all material
respects with the laws and regulations affecting its operations, there is no
assurance that the Company will not have to expend substantial amounts for
compliance in the future.
Litigation and investigation -- See Part II, Item 1, of this Form 10-Q for
discussion of legal matters.
Insurance -- The Company carries a broad range of insurance coverages, which
management considers prudent for the protection of the Company's assets and
operations. Some of these coverages are subject to varying retentions of risk
by the Company. The casualty coverages currently include $2,000,000 primary
commercial general liability and $1,000,000 primary automobile liability
supported by $100,000,000 in umbrella insurance protection. The property
policy provides insurance coverage for all of the Company's real and personal
property.
The Company maintains workers' compensation insurance in accordance with laws
of the various states in which it has employees. The Company also currently
has an environmental impairment liability ("EIL") insurance policy for certain
of its landfills and transfer stations that provides coverage for property
damages and/or bodily injuries to third parties caused by off-site pollution
emanating from such landfills or transfer stations. This policy provides
$5,000,000 of coverage per incident with a $10,000,000 aggregate limit. To
date, the Company has not had any difficulty in obtaining insurance. However,
if the Company in the future is unable to obtain adequate insurance, or decides
to operate without insurance, a partially or completely uninsured claim against
the Company, if successful and of sufficient magnitude, could have a material
adverse effect upon the Company's business or its financial condition.
Additionally, continued availability of casualty and EIL insurance with
sufficient limits at acceptable terms is an important aspect of obtaining
revenue-producing waste service contracts.
Employment agreements -- The Company has entered into employment agreements
with certain of its officers. These employment agreements include provisions
governing compensation and benefits to be paid upon termination of employment
with the Company or certain changes in control of the Company. Under certain
conditions, the agreements can be terminated by the Company or the officer.
Upon termination of an agreement, the officer's compensation would continue at
approximately 75% of his prior compensation for periods ranging from three to
five years. During the three to five year period, the officer would be
available to the Company on a part-time basis for consulting and also would not
be permitted to engage in any activities in direct competition with the
Company. If these officers were to be terminated without cause during 1996 or
if certain officers elected to terminate their agreements, the aggregate annual
compensation on a part-time basis would be approximately $2,032,000. If a
change in control were to occur in 1996 and the officers were to elect to take
the change in control payments, they would receive approximately $8,223,000.
As of June 30, 1996, the Company has not recorded any accruals in the financial
statements related to these employment agreements.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion reviews the Company's operations for the three and six
months ended June 30, 1996 and 1995, and should be read in conjunction with the
Company's condensed consolidated financial statements and related notes thereto
included elsewhere herein, as well as the Company's consolidated financial
statements and related notes thereto included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, the Company's Joint Proxy
Statement and Prospectus dated April 2, 1996, included in the Company's
Registration Statement on Form S-4 filed in connection with the acquisition of
Western, and the supplemental consolidated financial statements and
supplemental condensed consolidated financial statements included in the
Company's Current Report on Form 8-K/A dated May 7, 1996, filed in connection
with the acquisition of Western.
INTRODUCTION
The Company provides non-hazardous solid waste management services, consisting
of collection, transfer, disposal, soil remediation, and recycling services in
24 states. Since August 1990, the Company has experienced significant growth
principally through the acquisition and integration of solid waste businesses
and is now the third largest non-hazardous solid waste company in North
America. The company owns or operates 42 landfills, 25 transfer stations, and
73 collection companies serving more than 1,300,000 customers.
The Company's revenues consist primarily of fees charged for its collection and
disposal services. Revenues for collection services include fees from
residential, commercial, industrial, and municipal collection customers. A
portion of these fees are billed in advance; a liability for future service is
recorded upon receipt of payment and revenues are recognized as services are
actually provided. Fees for residential services are normally based on the
type and frequency of service. Fees for commercial and industrial services are
normally based on the type and frequency of service and the volume of solid
waste collected.
The Company's revenues from its landfill operations consist of disposal fees
(known as tipping fees) charged to third parties and are normally billed
monthly. Tipping fees are based on the volume or weight of solid waste being
disposed of at the Company's landfill sites. Fees are charged at transfer
stations based on the volume of solid waste deposited, taking into account the
Company's cost of loading, transporting, and disposing of the solid waste at a
landfill. Intercompany revenues between the Company's landfill and collection
operations have been eliminated in the financial statements presented herein.
Operating expenses include direct and indirect labor and the related taxes and
benefits, fuel, maintenance and repairs of equipment and facilities, tipping
fees paid to third party landfills, property taxes, and accruals for future
landfill closure and post-closure costs. Certain direct landfill development
expenses are capitalized and depreciated over the estimated useful life of a
site as capacity is consumed, and include acquisition, engineering, upgrading,
construction, and permitting costs. All indirect development expenses, such as
administrative salaries and general corporate overhead, are expensed in the
period incurred.
General and administrative costs include management salaries, clerical and
administrative costs, professional services, facility rentals, and related
insurance costs, as well as costs related to the Company's marketing and sales
force.
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RESULTS OF OPERATIONS
The following table presents, for the periods indicated, the period to period
change in dollars (in thousands) and percent for the various Condensed
Consolidated Statements of Operations items:
Period to Period Period to Period
Change for the Change for the
Three Months Ended Six Months Ended
June 30, June 30,
1996 and 1995 1996 and 1995
----------------------- ----------------------
$ % $ %
----- ----- ----- -----
Operating revenues $ 47,622 26.5% $ 80,267 23.0%
-------- --------
Costs and expenses:
Operating 21,765 20.5 38,415 18.5
General and administrative (1,572) (5.8) (2,992) (5.6)
Depreciation and amortization 1,101 5.0 3,633 8.8
Merger costs 13,027 52.0 13,027 52.0
Unusual items 8,912 220.6 8,219 173.7
-------- --------
43,233 23.5 60,302 18.2
-------- --------
Income (loss) from operations 4,389 (106.5) 19,965 116.7
Other income (expense):
Interest expense:
Nonrecurring interest 7,481 100.0 10,994 100.0
Other 1,540 16.7 4,463 23.6
Interest and other income, net (72) (3.6) (106) (2.5)
-------- --------
8,949 60.8 15,351 60.0
-------- --------
Income (loss) before provision for income taxes 13,338 70.8 35,316 416.0
Provision for (benefit from) income taxes (19,822) (444.6) (20,080) (195.4)
-------- --------
Net income (loss) $ 33,160 142.3% $ 55,396 295.2%
======== ========
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The following table presents, for the periods indicated, the percentage
relationship that the various components of the Condensed Consolidated
Statements of Operations bear to operating revenues:
Three Months Ended Six Months Ended
June 30, June 30,
--------------- ---------------
1996 1995 1996 1995
---- ---- ---- ----
Operating revenues:
Disposal 23.9% 23.9% 24.1% 23.1%
Waste collection 60.9 60.9 61.0 61.6
Transfer stations 11.3 11.0 10.9 10.3
Other 3.9 4.2 4.0 5.0
----- ----- ----- -----
100.0 100.0 100.0 100.0
----- ----- ----- -----
Costs and expenses:
Operating 56.2 59.0 57.3 59.5
General and administrative 11.2 15.0 11.7 15.2
Depreciation and amortization 10.1 12.2 10.5 11.8
Merger costs 16.7 13.9 8.9 7.2
Unusual items 5.7 2.2 3.0 1.4
----- ----- ----- -----
99.9 102.3 91.4 95.1
----- ----- ----- -----
Income (loss) from operations 0.1 (2.3) 8.6 4.9
----- ----- ----- -----
Other income (expense):
Interest expense:
Nonrecurring interest -- (4.2) -- (3.1)
Other (3.3) (5.1) (3.4) (5.4)
Interest and other income, net 0.8 1.1 1.0 1.2
----- ----- ----- -----
(2.5) (8.2) (2.4) (7.3)
----- ----- ----- -----
Income (loss) before provision for income taxes (2.4) (10.5) 6.2 (2.4)
Provision for (benefit from) income taxes (6.7) 2.5 (2.3) 3.0
----- ----- ----- -----
Net income (loss) 4.3% (13.0)% 8.5% (5.4)%
===== ===== ===== =====
THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
Operating Revenues
Operating revenues increased $47,622,000 or 26.5% and $80,267,000 or 23.0% for
the three and six months ended June 30, 1996, respectively, as compared to the
corresponding periods of 1995. The increase in operating revenues is
attributable to the effect of acquisitions, less dispositions, and the growth
in operating revenues from comparable operations, excluding the decline in
certain non-core businesses which do not provide a significant contribution to
earnings. Acquisitions during 1996 and the effect of acquisitions made during
1995 accounted for increases in operating revenues of 19.9% and 17.4% for the
three and six month periods ended June 30, 1996, respectively. During the
second quarter, operating revenues from comparable disposal and collection
operations increased 1.6% due to price increases and approximately 6.4% due to
volume increases with declines in other non-core revenues accounting for the
remaining decrease of approximately 1.4%.
Operating Costs and Expenses
Operating costs and expenses increased $21,765,000 or 20.5% and $38,415,000 or
18.5% for the three and six months ended June 30, 1996, respectively, as
compared to the corresponding periods of 1995. The increase in operating costs
and expenses is primarily attributable to the impact of new business
acquisitions, net of dispositions, made in 1996 and 1995 of $25,619,000 and
$41,417,000 for the three and six months ended June 30, 1996, respectively.
Offsetting this increase is the effect of reduced operating costs and expenses
for the existing operations of Chambers Development Company, Inc. ("Chambers")
since the Company's merger with Chambers in June 1995 of approximately
$1,390,000 and $4,271,000 for the three and six months ended June 30, 1996,
respectively, and the increased utilization of internal disposal, excluding
Western locations, from 49.9% and 49.8% to 52.5% and 52.8% for the three and
six months ended June 30, 1996, respectively, which equates to approximately
$1,358,000 and $2,685,000 in decreased costs, respectively. Operating costs
and expenses for other
11
12
comparable operations decreased $3,854,000 and $3,002,000 for the three and six
months ended June 30,1996, respectively.
As a percentage of operating revenues, operating costs and expenses decreased
from 59.0% and 59.5% for the three and six months ended June 30, 1995,
respectively, to 56.2% and 57.3% for the corresponding periods in 1996. This
decrease occurred for the reasons described above.
General and Administrative
General and administrative expenses decreased $1,572,000 and $2,992,000 for the
three and six months ended June 30, 1996, respectively, compared to the
corresponding 1995 periods, and also decreased as a percentage of operating
revenues. This is primarily the result of the Company's ability to integrate
new business acquisitions without a proportionate increase in general and
administrative expenses and cost reductions as a result of the mergers with
Western and Chambers consummated in May 1996 and June 1995, respectively.
Depreciation and Amortization
Depreciation and amortization increased $1,101,000 and $3,633,000 for the three
and six months ended June 30, 1996, respectively, compared to the corresponding
periods of 1995 due primarily to the acquisition of new businesses. As a
percentage of operating revenues, depreciation and amortization decreased due
to improved utilization of equipment through the internal volume growth in the
collection and disposal operations without a corresponding increase in
equipment and facilities.
Merger Costs
In the second quarter of 1996, the Company incurred $35,000,000, $2,700,000,
and $400,000 of merger costs related to the acquisitions of Western, Grand
Central, and an Orlando, Florida, collection company, respectively. The
$35,000,000 of merger costs related to Western include $6,800,000 of
transaction costs, $15,000,000 of severance and other termination benefits, and
$13,200,000 of costs related to integrating operations. In the second quarter
of 1995, the Company incurred $25,073,000 of merger costs related to the
Chambers acquisition, including $11,900,000 of transaction costs, $9,473,000 of
severance and other termination benefits, and $3,700,000 of costs related to
integrating operations.
Unusual Items
In the second quarter of 1996, unusual items include approximately $4,800,000 of
retirement benefits associated with Western's pre-merger retirement plan and
approximately $8,100,000 of estimated future losses related to municipal solid
waste contracts in California as a result of the continuing decline in prices of
recyclable materials. In 1995, unusual items represent $2,800,000 of severance
and other termination benefits paid to former Chambers employees in connection
with its pre-merger reorganization, $1,300,000 of estimated future losses
associated with a New Jersey municipal solid waste contract, and $600,000 of
shareholder litigation settlement costs.
Income (Loss) from Operations
For reasons discussed above, income from operations as a percent of operating
revenues was 0.1% and 8.6% for the three and six months ended June 30, 1996,
respectively, as compared to (2.3)% and 4.9% in the respective 1995 periods.
Income (loss) from recurring operations was 22.6% and 20.5% for the three and
six months ended June 30, 1996, respectively. The improvement in recurring
operations is the result of economies of scale realized by the Company with
respect to recent acquisitions and improvements in comparable operations.
Other Income and Expense
Other income and expense consists of interest expense, interest income, and
other income. Interest expense, gross of amounts capitalized, decreased as a
result of an overall reduction in indebtedness and the refinancing of Chambers
pre-merger indebtedness and the Company's existing indebtedness to lower rates
at June 30, 1995. In addition, $7,481,000 and $10,994,000 of nonrecurring
interest was incurred during the three and six months ended June 30, 1995,
respectively, relating to extension fees and other charges associated with the
aforementioned debt refinancing by Chambers. Capitalized interest for the
three and six months ended June 30, 1996 was $2,047,000 and $4,237,000,
respectively, as compared to $1,918,000 and $3,403,000 in the corresponding
1995 periods.
12
13
Provision for (Benefit from) Income Taxes
The provision for (benefit from) income taxes decreased $19,882,000 and
$20,080,000 for the three and six months ended June 30, 1996, respectively, as
compared to the corresponding periods of 1995. The 1995 provision for income
taxes represents current income taxes of USA Waste and Chambers on a separate
basis. The decrease in the provision for income taxes in 1996 is the result of
the change in the valuation allowance and corresponding recognition of the
benefit for a portion of the Company's net deferred tax asset.
Net Income (Loss)
For the reasons discussed above, net income (loss) increased $33,160,000 and
$55,396,000 during the three and six months ended June 30, 1996, respectively,
as compared to the corresponding periods of 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company operates in an industry that requires a high level of capital
investment. The Company's capital requirements basically stem from (i) its
working capital needs for its ongoing operations, (ii) capital expenditures for
cell construction and expansion of its landfill sites, as well as new trucks
and equipment for its collection operations, and (iii) business acquisitions.
The Company's strategy is to meet these capital needs first from internally
generated funds and secondly from various financing sources available to the
Company, including the issuance of its common stock. It is further part of the
Company's strategy to minimize working capital while maintaining available
commitments under bank credit agreements to fund any capital needs in excess of
internally generated cash flow.
As of June 30, 1996, the Company had working capital of $93,256,000 (a ratio of
current assets to current liabilities of 1.75:1) and a cash balance of
$30,262,000, which compares to working capital of $33,525,000 (a ratio of
current assets to current liabilities of 1.25:1) and a cash balance of
$18,223,000 as of December 31, 1995. For the first six months of 1996, net
cash from operations was approximately $51,437,000, and net cash from financing
activities was approximately $111,531,000. These funds were used primarily to
fund investments in other businesses of $49,236,000 and for capital
expenditures of approximately $75,964,000.
The Company's capital expenditure and working capital requirements have
increased reflecting the Company's business strategy of growth through
acquisitions and development projects. The Company's budgeted cash
requirements for the remainder of 1996 include estimated capital expenditures
of approximately $81,600,000. The Company intends to finance the remainder of
its 1996 capital requirements through internally generated cash flow and
amounts available under its revolving credit facility. At June 30, 1996, the
available line of credit for cash borrowings was $174,200,000.
On May 7, 1996, in connection with the acquisition of Western, the Company
replaced its existing credit facility with a $750,000,000 senior revolving
credit facility ("Credit Facility") and retired amounts outstanding under
Western's credit facility. The Credit Facility was used to refinance existing
bank loans and letters of credit and will be used to fund additional
acquisitions and for working capital. The Credit Facility also provides for
the availability of standby letters of credit up to $300,000,000. Loans under
the Credit Facility bear interest at a rate based on the Eurodollar rate plus a
spread not to exceed 0.75% per annum (spread initially set at 0.405% per
annum). The Credit Facility requires a facility fee not to exceed 0.375% per
annum on the entire available credit facility (facility fee initially set at
0.22% per annum).
In connection with the pending acquisition of Sanifill, the Company intends to
replace its existing Credit Facility with a $1,200,000,000 senior revolving
credit facility and retire amounts outstanding under Sanifill's credit
facility. The credit facility will be available for standby letters of credit
up to $400,000,000. Loans under this credit facility will bear interest at a
rate based on the Eurodollar rate plus a spread not to exceed 0.75% per annum
(spread is expected to be set at 0.35% per annum). The credit facility will
require a facility fee not to exceed 0.375% per annum on the entire available
credit facility (facility fee is expected to be set at 0.20% per annum). The
unused portion of the credit facility available to fund future acquisitions
will approximate $450,000,000 as of the merger's anticipated closing date in
late August 1996.
The Company's business plan is to grow through acquisitions as well as
development projects. The Company has issued equity securities in business
acquisitions and expects to do so in the future. Furthermore, the Company's
future growth will depend greatly upon its ability to raise additional capital.
Management believes that it can arrange the necessary financing required to
accomplish its business plan; however, to the extent the Company is not
successful in its future financing strategies the Company's growth could be
limited.
13
14
Subsequent to June 30, 1996, the Company acquired four collection businesses,
one landfill, and one transfer station for approximately $14,900,000 in cash.
The Company also announced the pending acquisition of certain solid waste
businesses, including certain assets of Philip Environmental, Inc. for
approximately $118,000,000 of common stock and cash, at least $60,000,000 of
which will be paid in cash. Businesses representing $75,500,000 of the
purchase price can not be acquired until after Laidlaw Waste Systems Canada
Ltd. ("Laidlaw") reviews and considers its rights of first refusal to acquire
these assets. Subject to Laidlaw's review and regulatory approvals, these
acquisitions are expected to close in late August 1996. The Company regularly
engages in discussions relating to potential acquisitions and has identified
several possible acquisition opportunities. The Company may announce
additional acquisition transactions at any time.
SEASONALITY AND INFLATION
Because the volumes of certain types of waste, such as yard clippings and
construction debris, tend to be higher in the spring and summer, the Company
experiences seasonal variations in its revenues. As a result, during spring
and summer, the Company's revenues tend to be higher than its revenues in fall
and winter. In addition, during the winter, harsh weather conditions often
temporarily affect the Company's ability to collect, transport, and dispose of
waste, as experienced by certain operating locations in the first quarter of
1996. The seasonal impact is often offset by revenues added through
acquisitions such that the Company's reported revenues have historically
reflected increases in period to period comparisons.
The Company believes that inflation and changing prices have not had, and are
not expected to have, any material adverse effect on the results of operations
in the near future.
14
15
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On or about March 8, 1993, an action was filed in the United States District
Court for the Western District of Pennsylvania, captioned Option Resource
Group, et al. v. Chambers Development Company, Inc., et al., Civil Action No.
93-354. This action was brought by a market maker in options in Chambers stock
and two of its general partners and asserts federal securities law and common
law claims alleging that Chambers, in publicly disseminated materials,
intentionally or negligently misstated its earnings and that Chambers' officers
and directors committed mismanagement and breach of fiduciary duties. These
plaintiffs allege that, as a result of large amounts of put options traded on
the Chicago Board of Options Exchange between March 13 and March 18, 1992, they
engaged in offsetting transactions resulting in approximately $2,100,000 in
losses. The plaintiffs in Option Resource Group had successfully requested
exclusion from a now settled class action of consolidated suits instituted on
similar claims ("Class Action") and Option Resource Group is continuing as a
separate lawsuit. Discovery has been completed and a trial date of January 2,
1997 has been set. Plaintiffs filed a motion for summary judgment which is
untimely under the court's case management procedures. The court has stayed
responses to the motion for summary judgment. In response to discovery on
damages, the plaintiffs reduced their damages claim to $433,000 in alleged
losses, plus interest and attorneys' fees, for a total damage claim of
$658,000, as of August 21, 1995. The Company intends to continue to vigorously
defend against this action. Management of the Company believes the ultimate
resolution of such complaint will not have a material adverse effect on the
Company's financial position or results of operations.
On August 3, 1995, Frederick A. Moran and certain related persons and entities
filed a lawsuit against Chambers Development Company, Inc., certain former
officers and directors of Chambers, and Grant Thronton, LLP, in the United
States District Court for the Southern District of New York under the caption
Moran, et al. v. Chambers, et al., Civil Action No. 95-6034. Plaintiffs, who
claim to represent approximately 484,000 shares of Chambers stock, requested
exclusion from the settlement agreements which resulted in the resolution of
the Class Action and assert that they have incurred losses attributable to
shares purchased during the class period and certain additional losses by
reason of alleged management misstatements during and after the class period.
The claimed losses include damages to Mr. Moran's business and reputation. The
Judicial Panel on Multidistrict Litigation has transferred this case to the
United States District Court for the Western District of Pennsylvania. The
Company has filed its answer to the complaint and intends to vigorously defend
against these claims. The case is currently in discovery. Management of the
Company believes the ultimate resolution of such complaint will not have a
material adverse effect on the Company's financial position or results of
operations.
On or about February 1, 1996, an action was filed in the Circuit Court of Cook
County, Illinois, captioned Allabastro v. USA Waste Services, Inc., Action No.
96L01165. The case was subsequently removed to the United States District
Court for the Northern District of Illinois, Action No. 96-CV-1336. The
plaintiff alleges to have entered into an oral agreement with the Company for
brokerage services and is demanding a fee of $950,000 based on the alleged
contract and on common law for acting as a broker/advisor to the Company in its
1993 purchase of an Indiana landfill and hauling operation from Chambers.
Based on the same facts, the plaintiff is also demanding an additional
$36,250,000 fee in connection with the June 1995 merger of Chambers with the
Company. The plaintiff is also seeking unspecified damages for acting as a
management advisor to the Company in its procurement of a landfill
renovation/operation contract in Charleston, West Virginia. Interest and other
costs are also demanded. The case is in the early stages of discovery. The
Company has filed its answer and intends to vigorously defend against this
action, and management believes the ultimate resolution of this suit will not
have a material adverse effect on the Company's financial position or results
of operations.
In or about August 1994, a case was filed against Western in the United States
District Court for the Western District of Arkansas. This is an action
originally filed by seven landowners who live near a landfill operated by
Western in Miller County, Arkansas. The landowners allege that Western
unlawfully received hazardous waste and that the pollutants from the waste
received by Western had contaminated their property or threatened to
contaminate their property in the future. The landowners seek an unspecified
amount of damages based on the contamination or threat of contamination. In
addition, the landowners seek to recover damages based on the devaluation of
their property due to the stigma of being located near a disposal site for
hazardous waste and based upon their fear of developing adverse health effects.
In July 1995, 135 additional plaintiffs intervened and asserted claims similar
to those raised by the original plaintiffs. Western and the other defendants
have denied that any unlawful disposal of waste took place at the landfill. In
or about June 1995, a case was filed by eight land owners who own property
along a creek downstream from Western's Miller County landfill. Plaintiffs
allege that their property has been contaminated by releases of hazardous
substances from the landfill and other hazardous substance disposal sites
operated by the other defendants. The Company believes it has valid defenses
to the allegations and is vigorously defending the action, and management
believes the ultimate resolution of this suit will not have a material adverse
effect on the Company's financial position or results of operations.
In late December 1994, a lawsuit was filed in Los Angeles County Superior Court
by 24 plaintiffs. Western is among 19 named defendants. The complaint asserts
causes of action for nuisance and trespass seeking damages for personal
injuries and property damage. The complaint alleges that Western owns a parcel
of property, acquired from Cadillac
15
16
Fairview/California located in Torrance, California. The complaint alleges
that Montrose Chemical Corporation and others manufactured DDT on property at
or adjacent to the property owned by Western. The plaintiffs further allege
that contaminants from this property escaped to plaintiff's property, injured
plaintiff, and damaged the value of plaintiff's property. On June 29, 1995,
this case was removed to the United States District Court. Western has filed
an answer denying any liability. The Company believes it has valid defenses
to the allegations and intends to vigorously contest the case and is
contemplating filing a cross-complaint once its investigation of the facts is
completed, and management believes the ultimate resolution of this suit will
not have a material adverse effect on the Company's financial position or
results of operations.
On or about February 2, 1995, a complaint was filed in a taxpayer lawsuit.
The complaint does not name Western as a defendant. The plaintiffs allege that
the Riverside County and the other defendants, in connection with a contract
with Western regarding the operation and management of the El Sobrante Landfill
(the "Landfill") located within the Riverside County (the "Agreement"), engaged
in various improper actions, including the unlawful sale of public property,
wasting public funds, and making an unconstitutional gift of public property
and funds. The complaint seeks an order voiding the Agreement and an
injunction ordering the defendants to pay to the County allegedly unlawful
revenues earned from the Landfill, to cease further dumping at the Landfill of
out-of-county waste, return of alleged windfall profits, and limiting dumping
fees charged to incounty residents. The complaint also seeks general damages
of $10,000,000, special and punitive damages, attorneys' fees, and costs. The
Company believes the taxpayer suit is based upon erroneous assumptions and
that there are valid defenses available to the County to each of the claims
asserted in the complaint. The Company has now filed a motion to intervene in
the litigation and will thereafter become a party to the lawsuit.
Recent newspaper articles have indicated that Western, either alone or with
others engaged in the solid waste industry, may be a subject of an
investigation by the United States government relating to political corruption.
The Company has not, however, been charged with any wrongdoing and does not
know whether such an investigation is, in fact, ongoing. Western has not been
advised by the government that it is a target of any such investigation. Upon
written inquiry under the Freedom of Information Act, Western was advised that
there were no records of any such investigations.
The Company is a party to various other litigation matters arising in the
ordinary course of business. Management believes that the ultimate resolution
of these matters will not have a material adverse impact on the Company's
financial position and results of operations. In the normal course of its
business and as a result of the extensive government regulation of the solid
waste industry, the Company periodically may become subject to various judicial
and administrative proceedings involving federal, state, or local agencies. To
date, the Company has not been required to pay any material fine or had a
judgment entered against it for violation of any environmental law. From time
to time the Company also may be subjected to actions brought by citizen's
groups in connection with the permitting of landfills or transfer stations, or
alleging violations of the permits pursuant to which the Company operates. From
time to time, the Company is also subject to claims for personal injury or
property damage arising out of accidents involving its vehicles.
16
17
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's annual meeting of stockholders held on May 7, 1996, a proposal
to elect the nominees listed in the following table as directors of the Company
was submitted to a vote of the Company's stockholders. The following table
also shows the results of voting as to each nominee:
NOMINEE VOTES FOR VOTES WITHHELD
------- --------- --------------
David Sutherland-Yoest 56,551,922 276,284
Peter J. Gibbons 56,662,990 165,216
Richard J. Heckman 56,570,724 157,482
At the same meeting, proposals to (i) approve and adopt an Agreement and Plan
of Merger dated as of December 18, 1995 by and among the Company, Riviera
Acquisition Corp. and Western Waste Industries, (ii) approve and adopt the USA
Waste Services, Inc. 1996 Stock Option Plan for Non-Employee Directors, (iii)
approve and adopt the USA Waste Services, Inc. Corporate Performance-Based
Compensation Plan; (iv) approve an amendment to the USA Waste Services,
Inc.1993 Stock Incentive Plan to provide an annual limit on awards to a
participant in the plan of up to 1,500,000 shares and to increase the number of
shares that may be issued under the plan by 2,500,000 shares, (v) approve an
amendment to the Restated Certificate of Incorporation of the Company to delete
a provision relating to stockholders' and creditors' rights, and (vi) ratify
the appointment of Coopers & Lybrand L.L.P. as independent auditors for the
ensuing year were submitted to a vote of the Company's stockholders. All
proposals were adopted by the stockholders. The voting was as follows:
VOTED BROKER
VOTES FOR AGAINST ABSTENTIONS NON-VOTES
--------- ------- ----------- ---------
Western Waste Merger 48,672,347 65,097 61,177 8,029,585
1996 Stock Option Plan for
Non-Employee Directors 52,515,960 2,976,328 1,335,918 --
Corporate Performance-
Based Compensation Plan 55,098,798 401,074 1,328,334 --
1993 Stock Incentive Plan
Amendment 54,777,164 702,202 1,348,840 --
Restated Certificate of
Incorporation Amendment 43,713,192 3,611,210 1,476,946 8,026,858
Ratification of Independent
Auditors 56,720,513 72,885 34,808 --
17
18
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
The exhibits to this report are listed in the Exhibit Index elsewhere herein.
(b) Reports on Form 8-K:
A report on Form 8-K dated May 7, 1996 was filed May 22, 1996 and amended on
Forms 8-K/A filed May 29, 1996, June 28, 1996, and July 1, 1996. The Company
filed information with respect to a replacement revolving credit facility and
filed financial statements for the acquired company Western Waste Industries
and restated supplemental financial statements of USA Waste Services, Inc.
A report on Form 8-K dated June 22, 1996 was filed June 29, 1996. The Company
filed information with respect to the announcement of its acquisition of
Sanifill, Inc.
18
19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
USA WASTE SERVICES, INC.
Registrant
August 13, 1996 BY: s/ Earl E. DeFrates
- ---------------------- ---------------------------
Date Earl E. DeFrates,
Executive Vice President,
Chief Financial Officer
August 13, 1996 BY: s/ Bruce E. Snyder
- ---------------------- ---------------------------
Date Bruce E. Snyder,
Vice President - Controller,
Chief Accounting Officer
19
20
USA WASTE SERVICES, INC.
EXHIBIT INDEX
Number and Description of Exhibit *
2 None
3 None
4 None
10 None
11 Computation of Earnings (Loss) Per Common Share
15 None
18 None
19 None
22 None
23 None
24 None
27 Financial Data Schedule
99 None
_______________________________________
* Exhibits not listed are inapplicable.
20
1
EXHIBIT 11
USA WASTE SERVICES, INC.
COMPUTATION OF EARNINGS (LOSS) PER COMMON SHARE
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1996 1995 1996 1995
-------- -------- -------- --------
Primary
Net income (loss) $ 9,861 ($23,299) $ 36,633 ($18,763)
-------- -------- -------- --------
Number of common shares outstanding 91,722 72,796 91,722 72,796
Effect of using weighted average common stock
outstanding (1,362) (100) (1,538) (356)
Common stock equivalents (1) 4,777 2,534 4,017 2,321
-------- -------- -------- --------
Total 95,137 75,230 94,201 74,761
======== ======== ======== ========
Earnings (loss) per common share $ 0.10 ($ 0.31) $ 0.39 ($ 0.25)
======== ======== ======== ========
Fully Diluted
Net income (loss) $ 9,861 ($23,299) $ 36,633 (18,763)
-------- -------- -------- --------
Number of common shares outstanding 91,722 72,796 91,722 72,796
Effect of using weighted average common stock
outstanding (1,362) (100) (1,538) (356)
Common stock equivalents (1) 4,951 2,534 4,301 2,321
-------- -------- -------- --------
Total 95,311 75,230 94,485 74,761
======== ======== ======== ========
Earnings (loss) per common share (2) $ 0.10 ($ 0.31) $ 0.39 ($ 0.25)
======== ======== ======== ========
- -------------------
(1) Common stock equivalents were determined based on the "Treasury Stock
Method" as set forth in Accounting Principles Board Opinion No. 15.
(2) The dilutive effect between primary and fully dilutive earnings (loss)
per common share is less than 3% or is anti-dilutive for all periods
presented and is therefore not disclosed in the consolidated statements
of operations.
5
1,000
6-MOS
DEC-31-1996
JAN-01-1996
JUN-30-1996
30,262,000
0
135,614,000
(11,313,000)
0
216,797,000
1,295,815,000
(414,834,000)
1,389,948,000
123,541,000
558,590,000
917,000
0
0
615,973,000
1,389,948,000
428,861,000
428,861,000
245,812,000
391,786,000
(4,202,000)
0
14,450,000
26,827,000
(9,806,000)
36,633,000
0
0
0
36,633,000
0.39
0.39
