(Mark
One)
|
|
|
|
||
þ
|
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
|
|
||
|
|
For
the quarterly period ended June 30,
2006
|
|
||
or
|
||
|
||
£
|
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
|
|
||
|
|
For
the transition period from ____________ to
_____________
|
Page
|
||
1
|
||
2
|
||
3
|
||
4
|
||
5
|
||
23
|
||
35
|
||
37
|
||
38
|
||
39
|
||
Item 4. Submission of Matters to a Vote of Security Holders |
40
|
|
Item 5. Other Information |
41
|
|
42
|
||
43
|
ASSETS
|
December 31,
2005
|
June 30,
2006
|
|||||
Current
assets:
|
|||||||
Cash
and equivalents
|
$
|
7,514
|
$
|
7,727
|
|||
Accounts
receivable, net of allowance for doubtful accounts of $2,826 and
$2,820 at
December 31, 2005 and June 30, 2006,
respectively
|
94,438
|
99,402
|
|||||
Deferred
tax assets
|
5,145
|
5,416
|
|||||
Prepaid
expenses and other current assets
|
17,279
|
19,053
|
|||||
Total
current assets
|
124,376
|
131,598
|
|||||
Property
and equipment, net
|
700,508
|
727,847
|
|||||
Goodwill
|
723,120
|
744,843
|
|||||
Intangible
assets, net
|
87,651
|
87,743
|
|||||
Restricted
assets
|
13,888
|
14,793
|
|||||
Other
assets, net
|
26,764
|
28,742
|
|||||
$
|
1,676,307
|
$
|
1,735,566
|
||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable
|
$
|
54,795
|
$
|
56,794
|
|||
Book
overdraft
|
8,869
|
3,536
|
|||||
Accrued
liabilities
|
44,522
|
55,937
|
|||||
Deferred
revenue
|
30,957
|
32,484
|
|||||
Current
portion of long-term debt and notes payable
|
10,858
|
7,014
|
|||||
Total
current liabilities
|
150,001
|
155,765
|
|||||
Long-term
debt and notes payable
|
586,104
|
652,587
|
|||||
Other
long-term liabilities
|
20,478
|
15,365
|
|||||
Deferred
income taxes
|
175,167
|
183,970
|
|||||
Total
liabilities
|
931,750
|
1,007,687
|
|||||
Commitments
and contingencies (Note 12)
|
|||||||
Minority
interests
|
26,357
|
27,485
|
|||||
Stockholders’
equity:
|
|||||||
Preferred
stock: $0.01 par value; 7,500,000 shares authorized; none issued
and
outstanding
|
-
|
-
|
|||||
Common
stock: $0.01 par value; 100,000,000 shares authorized; 45,924,686
and
45,560,879 shares issued and outstanding at December 31, 2005 and
June 30, 2006, respectively
|
459
|
456
|
|||||
Additional
paid-in capital
|
373,382
|
311,417
|
|||||
Deferred
stock compensation
|
(2,234
|
)
|
-
|
||||
Treasury
stock at cost, 106,600 shares outstanding at December 31,
2005
|
(3,672
|
)
|
-
|
||||
Retained
earnings
|
345,308
|
380,231
|
|||||
Accumulated
other comprehensive income
|
4,957
|
8,290
|
|||||
Total
stockholders’ equity
|
718,200
|
700,394
|
|||||
$
|
1,676,307
|
$
|
1,735,566
|
Three
months ended June 30,
|
Six
months ended June 30,
|
||||||||||||
2005
|
2006
|
2005
|
2006
|
||||||||||
Revenues
|
$
|
180,265
|
$
|
206,970
|
$
|
344,709
|
$
|
397,139
|
|||||
Operating
expenses:
|
|||||||||||||
Cost
of operations
|
103,616
|
126,574
|
197,766
|
239,637
|
|||||||||
Selling,
general and administrative
|
17,096
|
20,621
|
34,237
|
40,422
|
|||||||||
Depreciation
and amortization
|
15,938
|
18,736
|
30,549
|
36,968
|
|||||||||
Loss
(gain) on disposal of assets
|
(12
|
)
|
236
|
(133
|
)
|
154
|
|||||||
Operating
income
|
43,627
|
40,803
|
82,290
|
79,958
|
|||||||||
Interest
expense
|
(5,575
|
)
|
(6,619
|
)
|
(10,510
|
)
|
(14,113
|
)
|
|||||
Other
income (expense), net
|
65
|
11
|
171
|
(3,982
|
)
|
||||||||
Income
before income tax provision and minority interests
|
38,117
|
34,195
|
71,951
|
61,863
|
|||||||||
Minority
interests
|
(3,426
|
)
|
(3,317
|
)
|
(6,114
|
)
|
(6,028
|
)
|
|||||
Income
from continuing operations before income taxes
|
34,691
|
30,878
|
65,837
|
55,835
|
|||||||||
Income
tax provision
|
(12,905
|
)
|
(11,678
|
)
|
(24,491
|
)
|
(20,912
|
)
|
|||||
Income
from continuing operations
|
21,786
|
19,200
|
41,346
|
34,923
|
|||||||||
Loss
on discontinued operations, net of tax (Note 3)
|
(378
|
)
|
-
|
(579
|
)
|
-
|
|||||||
Net
income
|
$
|
21,408
|
$
|
19,200
|
$
|
40,767
|
$
|
34,923
|
|||||
Basic
earnings per common share:
|
|||||||||||||
Income
from continuing operations
|
$
|
0.47
|
$
|
0.43
|
$
|
0.88
|
$
|
0.77
|
|||||
Discontinued
operations
|
(0.01
|
)
|
-
|
(0.01
|
)
|
-
|
|||||||
Net
income per common share
|
$
|
0.46
|
$
|
0.43
|
$
|
0.87
|
$
|
0.77
|
|||||
Diluted
earnings per common share:
|
|||||||||||||
Income
from continuing operations
|
$
|
0.45
|
$
|
0.41
|
$
|
0.85
|
$
|
0.74
|
|||||
Discontinued
operations
|
(0.01
|
)
|
-
|
(0.01
|
)
|
-
|
|||||||
Net
income per common share
|
$
|
0.44
|
$
|
0.41
|
$
|
0.84
|
$
|
0.74
|
|||||
Shares
used in calculating basic income per share
|
46,727,722
|
45,174,415
|
47,097,918
|
45,420,613
|
|||||||||
Shares
used in calculating diluted income per share
|
48,558,866
|
46,885,224
|
48,709,641
|
47,236,483
|
|||||||||
STOCKHOLDERS’
EQUITY
|
|||||||||||||||||||||||||||||||
Common
Stock
|
Additional
|
Accumulated
Other
|
Deferred
|
Treasury
Stock
|
|||||||||||||||||||||||||||
Comprehensive
Income
|
Shares
|
Amounts
|
Paid-In
Capital
|
Comprehensive
Income
|
Stock
Compensation
|
Shares
|
Amounts
|
Retained
Earnings
|
Total
|
||||||||||||||||||||||
Balances
at December 31, 2005
|
45,924,686
|
$
|
459
|
$
|
373,382
|
$
|
4,957
|
$
|
(2,234
|
)
|
106,600
|
$
|
(3,672
|
)
|
$
|
345,308
|
$
|
718,200
|
|||||||||||||
Vesting
of restricted stock
|
19,983
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||
Cancellation
of unvested restricted stock
|
-
|
-
|
(378
|
)
|
-
|
-
|
-
|
-
|
-
|
(378
|
)
|
||||||||||||||||||||
Stock-based
compensation
|
-
|
-
|
1,576
|
-
|
-
|
-
|
-
|
-
|
1,576
|
||||||||||||||||||||||
Exercise
of stock options and warrants
|
1,095,735
|
11
|
30,406
|
-
|
-
|
-
|
-
|
-
|
30,417
|
||||||||||||||||||||||
Repurchase
of common stock
|
(2,440,700
|
)
|
(24
|
)
|
(87,720
|
)
|
-
|
-
|
-
|
-
|
-
|
(87,744
|
)
|
||||||||||||||||||
Retirement
of treasury stock
|
-
|
-
|
(3,672
|
)
|
-
|
-
|
(106,600
|
)
|
3,672
|
-
|
-
|
||||||||||||||||||||
Conversion
of 2022 Floating Rate Convertible Subordinated Notes
|
961,175
|
10
|
(10
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Issuance
of common stock warrants to consultants
|
-
|
-
|
67
|
-
|
-
|
-
|
-
|
-
|
67
|
||||||||||||||||||||||
Cumulative
change from adoption of accounting policy
|
-
|
-
|
(2,234
|
)
|
-
|
2,234
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Amounts
reclassified into earnings, net of taxes
|
-
|
-
|
-
|
(1,757
|
)
|
-
|
-
|
-
|
-
|
(1,758
|
)
|
||||||||||||||||||||
Change
in fair value of interest rate swaps, net of taxes
|
-
|
-
|
-
|
5,090
|
-
|
-
|
-
|
-
|
5,091
|
||||||||||||||||||||||
Net
income
|
$
|
34,923
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
34,923
|
34,923
|
||||||||||||||||||||
Other
comprehensive income
|
5,290
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Income
tax effect of other comprehensive income
|
(1,957
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||
Comprehensive
income
|
$
|
38,256
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||
Balances
at June 30, 2006
|
45,560,879
|
$
|
456
|
$
|
311,417
|
$
|
8,290
|
$
|
-
|
-
|
$
|
-
|
$
|
380,231
|
$
|
700,394
|
Six
months ended June 30,
|
|||||||
2005
|
2006
|
||||||
Cash
flows from operating activities:
|
|||||||
Net
income
|
$
|
40,767
|
$
|
34,923
|
|||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
Loss
(gain) on disposal of assets
|
(330
|
)
|
154
|
||||
Depreciation
|
29,538
|
34,946
|
|||||
Amortization
of intangibles
|
1,261
|
2,022
|
|||||
Deferred
income taxes, net of acquisitions
|
(4,097
|
)
|
6,026
|
||||
Minority
interests
|
6,114
|
6,028
|
|||||
Amortization
of debt issuance costs
|
861
|
5,271
|
|||||
Stock-based
compensation
|
511
|
1,576
|
|||||
Interest
income on restricted assets
|
(169
|
)
|
(288
|
)
|
|||
Closure
and post-closure accretion
|
342
|
300
|
|||||
Tax
benefit on the exercise of stock options
|
6,443
|
-
|
|||||
Excess
tax benefit on the exercise of stock options
|
-
|
(5,501
|
)
|
||||
Net
change in operating assets and liabilities, net of
acquisitions
|
16,243
|
10,539
|
|||||
Net
cash provided by operating activities
|
97,484
|
95,996
|
|||||
Cash
flows from investing activities:
|
|||||||
Payments
for acquisitions, net of cash acquired
|
(12,854
|
)
|
(34,838
|
)
|
|||
Capital
expenditures for property and equipment
|
(34,271
|
)
|
(49,038
|
)
|
|||
Proceeds
from disposal of assets
|
3,933
|
313
|
|||||
Decrease
(increase) in restricted assets, net of interest income
|
958
|
(617
|
)
|
||||
Increase
in other assets
|
(156
|
)
|
(236
|
)
|
|||
Net
cash used in investing activities
|
(42,390
|
)
|
(84,416
|
)
|
|||
Cash
flows from financing activities:
|
|||||||
Proceeds
from long-term debt
|
70,064
|
631,997
|
|||||
Principal
payments on notes payable and long-term debt
|
(61,960
|
)
|
(569,619
|
)
|
|||
Change
in book overdraft
|
(6,742
|
)
|
(5,333
|
)
|
|||
Proceeds
from option and warrant exercises
|
23,813
|
24,916
|
|||||
Excess
tax benefit on the exercise of stock options
|
-
|
5,501
|
|||||
Distributions
to minority interest holders
|
(5,341
|
)
|
(4,900
|
)
|
|||
Payments
for repurchase of common stock
|
(71,101
|
)
|
(87,744
|
)
|
|||
Debt
issuance costs
|
(40
|
)
|
(6,185
|
)
|
|||
Net
cash used in financing activities
|
(51,307
|
)
|
(11,367
|
)
|
|||
Net
increase in cash and equivalents
|
3,787
|
213
|
|||||
Cash
and equivalents at beginning of period
|
3,610
|
7,514
|
|||||
Cash
and equivalents at end of period
|
$
|
7,397
|
$
|
7,727
|
|||
Non-cash
financing activity:
|
|||||||
Liabilities
assumed and notes payable issued to sellers of businesses
acquired
|
$
|
1,921
|
$
|
1,172
|
|||
1. |
BASIS
OF
PRESENTATION AND
SUMMARY
|
2. |
NEW
ACCOUNTING STANDARDS
|
3. |
DISCONTINUED
OPERATIONS
|
Three
months
ended
June 30,
2005
|
Six
months
ended
June 30,
2005
|
||||||
Revenues
|
$
|
294
|
$
|
1,367
|
|||
Operating
expenses:
|
|||||||
Cost
of operations
|
906
|
2,041
|
|||||
Selling,
general and administrative
|
95
|
195
|
|||||
Depreciation
and amortization
|
92
|
250
|
|||||
Gain
on disposal of assets and operations
|
(197
|
)
|
(197
|
)
|
|||
Operating
loss
|
(602
|
)
|
(922
|
)
|
|||
Other
income, net
|
-
|
-
|
|||||
Loss
from operations of discontinued operations
|
(602
|
)
|
(922
|
)
|
|||
Income
tax benefit
|
224
|
343
|
|||||
Loss
on discontinued operations
|
$
|
(378
|
)
|
$
|
(579
|
)
|
4. |
STOCK-BASED
COMPENSATION
|
Three
months
ended
June 30,
2005
|
Six
months
ended
June 30,
2005
|
||||||
Net
income, as reported
|
$
|
21,408
|
$
|
40,767
|
|||
Add:
stock-based employee compensation expense included in reported net
income,
net of related tax efforts
|
161
|
321
|
|||||
Deduct:
total stock-based employee compensation expense determined under
fair
value method for all awards, net of related tax efforts
|
(1,794
|
)
|
(3,629
|
)
|
|||
Pro
forma net income
|
$
|
19,775
|
$
|
37,459
|
|||
Earnings
per share:
|
|||||||
Basic
- as reported
|
$
|
0.46
|
$
|
0.87
|
|||
Basic
- pro forma
|
$
|
0.42
|
$
|
0.80
|
|||
Diluted
- as reported
|
$
|
0.44
|
$
|
0.84
|
|||
Diluted
- pro forma
|
$
|
0.41
|
$
|
0.77
|
Three
months ended June 30,
|
Six
months ended June 30,
|
|||||||
2005
|
2006
|
2005
|
2006
|
|||||
Expected
life
|
3
to 4 years
|
4
years
|
3
to 4 years
|
4
years
|
||||
Risk-free
interest rate
|
3.6%
- 3.7%
|
5.0%
|
3.6%
- 3.7%
|
4.8%
|
||||
Expected
volatility
|
20%
|
20%
|
20%
|
20%
|
Unvested
Shares
|
Vested
Shares
|
Total
Shares
|
Weighted-Average
Exercise Price
|
|||||
Outstanding
at December 31, 2005
|
-
|
5,482,934
|
5,482,934
|
$
25.62
|
||||
Granted
|
344,600
|
1,000
|
345,600
|
34.81
|
||||
Forfeited
|
(7,000)
|
(9,875)
|
(16,875)
|
35.10
|
||||
Exercised
|
-
|
(1,084,721)
|
(1,084,721)
|
22.97
|
||||
Outstanding
at June 30, 2006
|
337,600
|
4,389,338
|
4,726,938
|
26.87
|
||||
Exercisable
at June 30, 2006
|
-
|
4,389,338
|
4,389,338
|
26.26
|
Weighted-Average
Remaining
Contractual
Term
(in
years)
|
Aggregate
Intrinsic
Value
|
||||
Outstanding
at June 30, 2006
|
7.1
|
$
45,056
|
|||
Exercisable
at June 30, 2006
|
6.9
|
$
44,513
|
Unvested
Shares
|
||||
Outstanding
at December 31, 2005
|
102,867
|
|||
Granted
|
304,300
|
|||
Forfeited
|
(7,129
|
)
|
||
Vested
|
(30,897
|
)
|
||
Outstanding
at June 30, 2006
|
369,141
|
Warrants
|
Weighted-Average
Exercise Price
|
||||||
Outstanding
at December 31, 2005
|
61,099
|
$
|
23.52
|
||||
Granted
|
5,963
|
39.33
|
|||||
Forfeited
|
-
|
-
|
|||||
Exercised
|
(31,050
|
)
|
24.93
|
||||
Outstanding
at June 30, 2006
|
36,012
|
24.92
|
5. |
LANDFILL
ACCOUNTING
|
(1)
|
The
land where the expansion is being sought is contiguous to the current
disposal site, and the Company either owns the expansion property
or is
under an option, purchase, operating or other similar agreement;
|
(2)
|
Total
development costs, final capping costs, and closure/post-closure
costs
have been determined;
|
(3)
|
Internal
personnel have performed a financial analysis of the proposed expansion
site and have determined that it has a positive financial and operational
impact;
|
(4)
|
Internal
or external personnel are actively working to obtain the necessary
approvals to obtain the landfill expansion permit;
|
(5)
|
Obtaining
the expansion is considered probable (for a pursued expansion to
be
considered probable, there must be no significant known technical,
legal,
community, business, or political restrictions or similar issues
existing
that could impair the success of the expansion); and
|
(6)
|
The
land where the expansion is being sought has the proper zoning or
proper
zoning can readily be obtained.
|
Final
capping, closure and post-closure liability at December 31,
2005
|
$
|
15,906
|
||
Decrease
in final capping, closure and post-closure liability from changes
in
annual engineering cost estimates
|
(2,630
|
)
|
||
Liabilities
incurred
|
439
|
|||
Accretion
expense
|
300
|
|||
Change
in third party final capping, closure and post-closure
liability
|
(3,494
|
)
|
||
Final
capping, closure and post-closure liability at June 30,
2006
|
$
|
10,521
|
6. |
ACQUISITIONS
|
2005
Acquisitions
|
2006
Acquisitions
|
||||||
Acquired
Assets:
|
|||||||
Accounts
receivable
|
$
|
892
|
$
|
392
|
|||
Prepaid
expenses and other current assets
|
52
|
367
|
|||||
Property
and equipment
|
7,978
|
12,286
|
|||||
Goodwill
|
4,858
|
21,935
|
|||||
Long-term
franchise agreements and contracts
|
90
|
1,859
|
|||||
Other
intangibles
|
-
|
182
|
|||||
Non-competition
agreements
|
102
|
74
|
|||||
Other
assets
|
-
|
591
|
|||||
Assumed
Liabilities:
|
|||||||
Accounts
payable
|
(314
|
)
|
(129
|
)
|
|||
Accrued
liabilities
|
(1,169
|
)
|
(1,422
|
)
|
|||
Debt
and other liabilities assumed
|
(1,921
|
)
|
(1,172
|
)
|
|||
Deferred
revenue
|
(264
|
)
|
(81
|
)
|
|||
Deferred
taxes
|
-
|
(549
|
)
|
||||
Total
consideration, net
|
$
|
10,304
|
$
|
34,333
|
7. |
INTANGIBLE
ASSETS
|
Gross
Carrying
Amounts
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
||||||||
Amortizable
intangible assets:
|
||||||||||
Long-term
franchise agreements and contracts
|
$
|
58,476
|
$
|
(6,334
|
)
|
$
|
52,142
|
|||
Non-competition
agreements
|
4,857
|
(3,717
|
)
|
1,140
|
||||||
Other
|
13,287
|
(2,674
|
)
|
10,613
|
||||||
76,620
|
(12,725
|
)
|
63,895
|
|||||||
Nonamortized
intangible assets:
|
||||||||||
Indefinite-lived
intangible assets
|
23,848
|
-
|
23,848
|
|||||||
Intangible
assets, exclusive of goodwill
|
$
|
100,468
|
$
|
(12,725
|
)
|
$
|
87,743
|
For
the year ended December 31, 2006
|
$
|
4,024
|
||
For
the year ended December 31, 2007
|
3,916
|
|||
For
the year ended December 31, 2008
|
3,727
|
|||
For
the year ended December 31, 2009
|
3,559
|
|||
For
the year ended December 31, 2010
|
3,492
|
8. |
LONG-TERM
DEBT
|
December 31,
2005
|
June 30,
2006
|
||||||
Revolver
under Credit Facility, bearing interest ranging from 5.7% to
8.0%*
|
$
|
367,000
|
$
|
411,500
|
|||
2026
Senior Convertible Notes, bearing interest at 3.75%
|
-
|
200,000
|
|||||
2022
Floating Rate Convertible Subordinated Notes^
|
175,000
|
-
|
|||||
2001
Wasco Bonds, bearing interest from 7.0% to 7.3%*
|
12,165
|
11,740
|
|||||
California
Tax-Exempt Bonds, bearing interest ranging from 3.1% to 4.0%*
|
24,045
|
22,270
|
|||||
Notes
payable to sellers in connection with acquisitions, bearing interest
at
5.5% to 7.5%*
|
7,849
|
4,928
|
|||||
Notes
payable to third parties, bearing interest at 5.1% to
11.0%*
|
10,903
|
9,163
|
|||||
596,962
|
659,601
|
||||||
Less
- current portion
|
(10,858
|
)
|
(7,014
|
)
|
|||
$
|
586,104
|
$
|
652,587
|
Date
Entered
|
Notional
Amount
|
Interest
Rate*
|
Effective
Date
|
Expiration
Date
|
|||||||||
May
2003
|
$
|
87,500
|
2.67%
|
|
February
2004
|
February
2007
|
|||||||
May
2003
|
$
|
87,500
|
2.68%
|
|
February
2004
|
February
2007
|
|||||||
March
2004
|
$
|
37,500
|
2.25%
|
|
March
2004
|
March
2007
|
|||||||
March
2004
|
$
|
37,500
|
2.25%
|
|
March
2004
|
March
2007
|
|||||||
September
2005
|
$
|
175,000
|
4.33%
|
|
February
2007
|
February
2009
|
|||||||
September
2005
|
$
|
75,000
|
4.34%
|
|
March
2007
|
March
2009
|
|||||||
December
2005
|
$
|
150,000
|
4.76%
|
|
June
2006
|
June
2009
|
9. |
NET
INCOME PER SHARE INFORMATION
|
Three
months ended June 30,
|
Six
months ended June 30,
|
||||||||||||
2005
|
2006
|
2005
|
2006
|
||||||||||
Numerator:
|
|||||||||||||
Net
income for basic and diluted earnings per share
|
$
|
21,408
|
$
|
19,200
|
$
|
40,767
|
$
|
34,923
|
|||||
Denominator:
|
|||||||||||||
Basic
shares outstanding
|
46,727,722
|
45,174,415
|
47,097,918
|
45,420,613
|
|||||||||
Dilutive
effect of 2022 Notes
|
576,015
|
432,755
|
377,259
|
524,034
|
|||||||||
Dilutive
effect of stock options and warrants
|
1,230,130
|
1,190,465
|
1,202,461
|
1,222,422
|
|||||||||
Dilutive
effective of restricted stock
|
24,999
|
87,589
|
32,003
|
69,414
|
|||||||||
Diluted
shares outstanding
|
48,558,866
|
46,885,224
|
48,709,641
|
47,236,483
|
Three
months ended June 30,
|
Six
months ended June 30,
|
||||||||||||
2005
|
2006
|
2005
|
2006
|
||||||||||
Net
income
|
$
|
21,408
|
$
|
19,200
|
$
|
40,767
|
$
|
34,923
|
|||||
Unrealized
gain on interest rate swaps, net of tax (benefit) expense of $(604)
and
$727 for the three months ended June 30, 2005 and 2006, respectively,
and $286 and $1,957 for the six months ended June 30, 2005 and 2006,
respectively
|
(1,019
|
)
|
1,236
|
482
|
3,333
|
||||||||
Comprehensive
income
|
$
|
20,389
|
$
|
20,436
|
$
|
41,249
|
$
|
38,256
|
Three
months ended June 30, 2005
|
|||||||||||
Gross
|
Tax
effect
|
Net
of tax
|
|||||||||
Amounts
reclassified into earnings
|
$
|
(306)
|
$
|
(114)
|
$
|
(192)
|
|||||
Changes
in fair value of interest rate swaps
|
(1,317)
|
(490)
|
(827)
|
||||||||
$
|
(1,623)
|
$
|
(604)
|
$
|
(1,019)
|
||||||
Three
months ended June 30, 2006
|
|||||||||||
Gross
|
Tax
effect
|
Net
of tax
|
|||||||||
Amounts
reclassified into earnings
|
$
|
(1,552)
|
$
|
(574)
|
$
|
(978)
|
|||||
Changes
in fair value of interest rate swaps
|
3,515
|
1,301
|
2,214
|
||||||||
$
|
1,963
|
$
|
727
|
$
|
1,236
|
||||||
Six
months ended June 30, 2005
|
|||||||||||
Gross
|
Tax
effect
|
Net
of tax
|
|||||||||
Amounts
reclassified into earnings
|
$
|
(305)
|
$
|
(113)
|
$
|
(192)
|
|||||
Changes
in fair value of interest rate swaps
|
1,073
|
399
|
674
|
||||||||
$
|
768
|
$
|
286
|
$
|
482
|
||||||
Six
months ended June 30, 2006
|
|||||||||||
Gross
|
Tax
effect
|
Net
of tax
|
|||||||||
Amounts
reclassified into earnings
|
$
|
(2,790)
|
$
|
(1,033)
|
$
|
(1,757)
|
|||||
Changes
in fair value of interest rate swaps
|
8,080
|
2,990
|
5,090
|
||||||||
$
|
5,290
|
$
|
1,957
|
$
|
3,333
|
11. |
SHARE
REPURCHASE PROGRAM
|
12. |
COMMITMENTS
AND CONTINGENCIES
|
Three
months ended June 30,
|
Six
months ended June 30,
|
|||||||||||
2005
|
2006
|
2005
|
2006
|
|||||||||
Collection
|
$126,485
|
61.3%
|
$151,370
|
63.9%
|
$245,567
|
62.4%
|
$291,650
|
64.3%
|
||||
Disposal
and transfer
|
59,654
|
28.9
|
66,165
|
28.0
|
109,534
|
27.8
|
124,593
|
27.5
|
||||
Intermodal,
recycling and other
|
20,198
|
9.8
|
19,192
|
8.1
|
38,704
|
9.8
|
37,324
|
8.2
|
||||
Total
|
$206,337
|
100.0%
|
$236,727
|
100.0%
|
$393,805
|
100.0%
|
$453,567
|
100.0%
|
||||
Intercompany
eliminations
|
$
26,072
|
$
29,757
|
$
49,096
|
$
56,428
|
Six
months ended June 30,
|
||||||||
2005
|
2006
|
|||||||
Number
of
Sites
|
Total
Tons
|
Number
of
Sites
|
Total
Tons
|
|||||
Owned
landfills or landfills operated under life-of-site
contracts
|
25
|
3,151
|
27
|
3,483
|
||||
Landfill
classified as discontinued operations
|
1
|
54
|
-
|
-
|
||||
Operated
landfills
|
8
|
477
|
8
|
535
|
||||
34
|
3,682
|
35
|
4,018
|
Three
months ended June 30,
|
Six
months ended June 30,
|
||||||||||||
2005
|
2006
|
2005
|
2006
|
||||||||||
Revenues
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
|||||
Cost
of operations
|
57.5
|
61.1
|
57.4
|
60.4
|
|||||||||
Selling,
general and administrative
|
9.5
|
10.0
|
9.9
|
10.2
|
|||||||||
Depreciation
and amortization expense
|
8.8
|
9.1
|
8.8
|
9.3
|
|||||||||
Gain
on disposal of assets
|
-
|
0.1
|
-
|
-
|
|||||||||
Operating
income
|
24.2
|
19.7
|
23.9
|
20.1
|
|||||||||
|
|||||||||||||
Interest
expense, net
|
(3.1
|
)
|
(3.2
|
)
|
(3.1
|
)
|
(3.5
|
)
|
|||||
Other
income (expense)
|
-
|
-
|
0.1
|
(1.0
|
)
|
||||||||
Minority
interests
|
(1.9
|
)
|
(1.6
|
)
|
(1.8
|
)
|
(1.5
|
)
|
|||||
Income
tax expense
|
(7.1
|
)
|
(5.6
|
)
|
(7.1
|
)
|
(5.3
|
)
|
|||||
Loss
on discontinued operations, net of tax
|
(0.2
|
)
|
-
|
(0.2
|
)
|
-
|
|||||||
Net
income
|
11.9
|
%
|
9.3
|
%
|
11.8
|
%
|
8.8
|
%
|
Payments
Due by Period
|
||||||||||
Recorded
Obligations
|
Total
|
Less
Than 1 Year
|
2
to 3 Years
|
4
to 5 Years
|
Over
5 Years
|
|||||
Long-term
debt (1),
(2), (3)
|
$
659,601
|
$
7,014
|
$
18,587
|
$
417,434
|
$
216,566
|
(1) |
Long-term
debt payments include $411.5 million in principal payments due 2011
related to our senior secured revolving credit facility. As of
June 30, 2006, our credit facility allowed us to borrow up to
$850 million, including stand-by letters of credit.
|
(2) |
Holders
of the 2026 Notes may require us to purchase their notes in cash at a
price of par plus accrued interest, if any, upon a change in control
of
the Company, as defined in the indenture, or, for the first time,
on
April 1, 2011. Under certain conditions, the 2026 Notes could be
earlier converted.
|
(3) |
Excludes
future payments of interest expense, as the majority of our recorded
contractual obligations are in the form of variable rate loans.
|
Amount
of Commitment Expiration Per Period
|
||||||||||
Unrecorded
Obligations
|
Total
|
Less
Than 1 Year
|
2
to 3 Years
|
4
to 5 Years
|
Over
5 Years
|
|||||
Operating
leases(4)
|
$
51,419
|
$
6,747
|
$
10,391
|
$
8,108
|
$
26,173
|
|||||
Unconditional
purchase obligations(4)
|
1,667
|
1,667
|
-
|
-
|
-
|
|||||
Total
unrecorded obligations
|
$
53,086
|
$
8,414
|
$
10,391
|
$
8,108
|
$
26,173
|
(4) |
We
are party to operating lease agreements and unconditional purchase
obligations. These lease agreements and purchase obligations are
established in the ordinary course of our business and are designed
to
provide us with access to facilities and products at competitive,
market-driven prices. These arrangements have not materially affected
our
financial position, results of operations or liquidity during the
six
months ended June 30, 2006, nor are they expected to have a material
impact on our future financial position, results of operations or
liquidity.
|
Six
months ended June 30,
|
|||||||
2005
|
2006
|
||||||
Net
cash provided by operating activities
|
$
|
97,484
|
$
|
95,996
|
|||
Change
in book overdraft
|
(6,742
|
)
|
(5,333
|
)
|
|||
Plus:
Cash proceeds from disposal of assets
|
3,933
|
313
|
|||||
Plus:
Excess tax benefit on the exercise of stock options
|
6,443
|
5,501
|
|||||
Less:
Capital expenditures
|
(34,271
|
)
|
(49,038
|
)
|
|||
Less:
Distributions to minority interest holders
|
(5,341
|
)
|
(4,900
|
)
|
|||
Free
cash flow
|
$
|
61,506
|
$
|
42,539
|
& |