-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E2HW8yaXsdpoZNEmtUwBAO6usc8/1G80n7FnDD9ciOxxPmywgyXrkOCwjucJgOtB wDtUEL+y3xJ/N20Wu+T9Uw== 0000950129-99-002687.txt : 19990616 0000950129-99-002687.hdr.sgml : 19990616 ACCESSION NUMBER: 0000950129-99-002687 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990615 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BROWNING FERRIS INDUSTRIES INC CENTRAL INDEX KEY: 0000014827 STANDARD INDUSTRIAL CLASSIFICATION: REFUSE SYSTEMS [4953] IRS NUMBER: 741673682 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-06805 FILM NUMBER: 99646460 BUSINESS ADDRESS: STREET 1: 757 N ELDRIDGE CITY: HOUSTON STATE: TX ZIP: 77079 BUSINESS PHONE: 7138708100 11-K 1 BROWNING-FERRIS INDUSTRIES, INC. - DATED 12/31/98 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission file number 1-6805 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: BFI Employee Stock Ownership and Savings Plan (the "Plan") B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Browning-Ferris Industries, Inc. 757 N. Eldridge Houston, Texas 77079 2 BFI EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN FINANCIAL STATEMENTS In accordance with Item 4 of the required information for Form 11-K, the following financial statements for the BFI Employee Stock Ownership and Savings Plan have been prepared in accordance with the financial reporting requirements of the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder. -2- 3 BFI EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN INDEX TO THE FINANCIAL STATEMENTS AND SCHEDULES Report of Independent Public Accountants Statements of Net Assets Available for Benefits as of December 31, 1998 and 1997 Statements of Changes in Net Assets Available for Benefits for the Years Ended December 31, 1998 and 1997 Notes to Financial Statements as of December 31, 1998 and 1997 Schedule I--Item 27(a) - Schedule of Assets Held for Investment Purposes as of December 31, 1998 Schedule II--Item 27(d) - Schedule of Reportable Transactions for the Year Ended December 31, 1998 Schedule III--Item 27(e) - Schedule of Nonexempt Transactions for the Year Ended December 31, 1998 -3- 4 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Benefits Administration Committee of the BFI Employee Stock Ownership and Savings Plan: We have audited the accompanying statements of net assets available for benefits of the BFI Employee Stock Ownership and Savings Plan as of December 31, 1998 and 1997, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements and supplemental schedules referred to below are the responsibility of the Benefits Administration Committee. Our responsibility is to express an opinion on these financial statements and supplemental schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the BFI Employee Stock Ownership and Savings Plan as of December 31, 1998 and 1997, and the changes in its net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes as of December 31, 1998, and reportable transactions and nonexempt transactions for the year then ended are presented for purposes of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. Houston, Texas June 4, 1999 -4- 5 BFI EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 1998 AND 1997
1998 1997 ------------ ------------ ASSETS: Investments, at fair value- Common stock of Browning-Ferris Industries, Inc. $113,357,194 $142,647,942 Equity investment funds 223,702,133 180,708,059 Short-term investments 3,972,221 2,068,934 ------------ ------------ 341,031,548 325,424,935 ------------ ------------ Investments, at contract value- Guaranteed/bank investment contracts 33,414,269 51,757,521 Other investment contracts 29,479,932 8,075,250 ------------ ------------ 62,894,201 59,832,771 ------------ ------------ 403,925,749 385,257,706 ------------ ------------ Receivables- Employer contribution 896,850 1,372,601 Employee contributions 2,577,849 3,964,994 Dividends receivable 753,301 723,176 ------------ ------------ 4,228,000 6,060,771 ------------ ------------ 408,153,749 391,318,477 ------------ ------------ LIABILITIES: Accrued expenses 70,292 112,748 Contribution refunds payable 187,400 -- ------------ ------------ 257,692 112,748 ------------ ------------ NET ASSETS AVAILABLE FOR BENEFITS $407,896,057 $391,205,729 ============ ============
The accompanying notes are an integral part of these financial statements. -5- 6 BFI EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
1998 1997 ------------- ------------- ADDITIONS TO NET ASSETS ATTRIBUTED TO: Investment income- Net appreciation (depreciation) in fair value of investments $ (4,218,581) $ 64,695,953 Interest income 3,955,906 3,882,247 Dividends on common stock of Browning-Ferris Industries, Inc. 2,995,357 2,821,255 Dividends and gain distributions on equity investment funds 15,422,126 12,631,505 ------------- ------------- 18,154,808 84,030,960 ------------- ------------- Contributions- Employer 12,384,416 12,541,893 Employee 36,028,953 36,341,897 ------------- ------------- 48,413,369 48,883,790 ------------- ------------- Total additions 66,568,177 132,914,750 ------------- ------------- DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Distributions to participants 49,592,844 48,541,094 Administrative expenses 285,005 319,265 ------------- ------------- Total deductions 49,877,849 48,860,359 ------------- ------------- Net increase 16,690,328 84,054,391 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 391,205,729 307,151,338 ------------- ------------- End of year $ 407,896,057 $ 391,205,729 ============= =============
The accompanying notes are an integral part of these financial statements. -6- 7 BFI EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 1998 AND 1997 1. DESCRIPTION OF THE PLAN: Organization and Administration Browning-Ferris Industries, Inc. (the Company), established the BFI Employee Stock Ownership and Savings Plan (the Plan) effective January 1, 1980. The Plan is a defined contribution plan covering all United States and certain expatriate personnel of the Company with one or more years of service, except certain employees subject to collective bargaining agreements. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. Management of the Plan is provided by the Benefits Administration Committee (the Plan Administrator), which is currently composed of six members, all of whom are management employees of the Company. Members of the Plan Administrator do not receive any compensation from the Plan. Fees charged by the trustee and certain other expenses are reflected in the accompanying financial statements. Certain other costs associated with internal administration are paid by the Company and are not charged to the Plan. Fidelity Management Trust Company (Fidelity) is the sole trustee of the Plan's assets under a trust agreement dated April 12, 1993. Investment Programs and Contributions The following details the investment options available to each Plan participant: Fund 1 - Fixed Income Fund Fund 2 - Fidelity Puritan Fund Fund 3 - Fidelity Growth and Income Portfolio Fund 4 - Fidelity Growth Company Fund Fund 5 - Templeton Foreign Fund Fund 6 - BFI Common Stock Fund 7 - Fidelity Balanced Fund Effective February 3, 1997, Fund 7 was no longer available as an investment option under the Plan and Funds 2 and 5 were added. The assets of Fund 7 were liquidated to cash and automatically reinvested into Fund 2. Participants may invest their contributions in increments of 5 percent in any or all of the above funds; however, no more than 50 percent of a participant's contributions can be invested in Fund 6. A participant may contribute up to 5 percent of his total earnings as a "Basic Contribution" and up to an additional 10 percent as a "Supplemental Contribution" subject to Internal Revenue Service (IRS) limitations. The Company's matching contributions (defined as 50 percent of the Basic Contribution subject to IRS limitations) are invested in Fund 6. -7- 8 Participants can change the allocation of their savings contributions in the above funds but not more than once monthly, or they can discontinue, increase or decrease their savings participation rate within the 1 percent to 15 percent contribution levels permitted by the Plan by giving at least 30 days' written notice prior to the end of a calendar quarter. The Plan allows for participants who have reached age 55 to transfer the total balance associated with the Company's matching contributions from Company common stock to other funds. Participant Accounts Each participant's account is credited with the participant's contributions, the Company's matching contributions and allocation of Plan earnings. Plan earnings are allocated by fund in proportion to the participant's balances in each fund. Administrative expenses are allocated to each participant. Vesting Participants are fully vested in all amounts reflected in their accounts. Distribution of Benefits Benefits are payable to participants or to a designated beneficiary only at the time of their retirement, death or termination of employment. In limited circumstances, account withdrawals may be made for financial hardship in accordance with IRS guidelines for such withdrawals. The Plan allows for participants who have reached age 65 and continue to be employed by the Company to receive distributions from their accounts. Distribution of a participant's account balance depends largely on the value of the account and the fund from which the distribution is paid. In 1997, if the account balance was $3,500 or less, the distribution was lump-sum cash. If the account balance was greater than $3,500, the participant had the option to defer receipt in accordance with the Plan or take a lump-sum cash payment. Effective January 1, 1998, this $3,500 threshold amount mentioned above was increased to $5,000. In either case, with certain requirements, the participant may elect to roll all or a portion of such distribution to a qualified retirement plan. Funds 1 through 5 are distributed in cash only and are based on the account balances as of the date the distribution is processed. In addition, Fund 7 was distributed in cash based on the account balance as of the date of distribution. For Fund 6, the participant determines whether the form of distribution will be either the shares of the Company's common stock with uninvested amounts in cash or a lump-sum cash distribution. The market value of the Company's common stock at the date the shares are sold for cash is used to determine the amount of the distribution. Distributions to participants for the year ended December 31, 1998, include amounts to be refunded to certain highly compensated participants subsequent to year-end for contributions determined to be in excess of the maximum contribution levels for such participants. The Company may terminate the Plan at any time by appropriate resolution of its board of directors. If the Plan is so terminated, all amounts credited to the accounts of each participant shall be paid after payment of all appropriate expenses. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Investment Valuation Investments in common stock, equity investment funds and short-term investments are recorded at fair value based on quoted market prices. Investments in guaranteed/bank investment contracts and other investment contracts are reported at contract value. -8- 9 The financial statements are presented on the accrual basis whereby interest and dividend income are recognized as earned and expenses are recorded as incurred. Risks and Uncertainties The Plan provides for various investments in common stock, equity investment funds, short-term investments and guaranteed and other investment contracts. Investment securities, in general, are exposed to various risks, such as interest rate, credit and overall market volatility risk. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for benefits and participant account balances. 3. GUARANTEED/BANK AND OTHER INVESTMENT CONTRACTS: Investments in guaranteed/bank and other investment contracts are fully benefit-responsive and, therefore, are reported at contract value which represents the principal balance of the investment contracts plus accrued interest at the stated contract rate (the crediting interest rate), less payments received and contract charges by the insurance company. Investments in other investment contracts represent synthetic investment contracts comprised of both an investment and a contract component. A fully benefit-responsive investment contract provides a liquidity guarantee by a financially responsible third party of principal and previously accrued interest for liquidations, transfers, loans or hardship withdrawals initiated by Plan participants under terms of the ongoing Plan. The estimated fair value of guaranteed/bank and other investment contracts was $62,983,826 and $59,092,571 as of December 31, 1998 and 1997, respectively. The contractual component of the other investment contracts was not material as of December 31, 1998 or 1997, and has been netted with the other investment contracts in the statements of net assets available for benefits. The crediting interest rate for the guaranteed/bank investment contracts is established at the time of the purchase of the contract and does not vary throughout the duration of the contract. The crediting interest rate of the other investment contracts is reset on a quarterly basis based upon the terms of the contract and the performance of the underlying assets; however, the minimum crediting interest rate is zero under these contracts. As of December 31, 1998 and 1997, the crediting interest rate for the Fixed Income Fund was 6.02 percent and 6.36 percent, respectively. The average yield of this fund was 6.37 percent and 6.58 percent for the years ended December 31, 1998 and 1997, respectively. There are limitations on returns of certain of the guaranteed/bank and other investment contracts upon certain changes to the Plan's provisions or upon the termination or partial termination of the investment contracts by the Company or Fidelity. 4. FEDERAL INCOME TAXES: The Plan obtained its latest determination letter on November 13, 1996, in which the IRS stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code (IRC). Although the Plan has been amended since receiving the determination letter, the Plan Administrator believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the IRC and that the Plan is qualified and the related trust is tax-exempt as of December 31, 1998 and 1997. Neither the Company's contributions nor the income of the trust fund are taxable to the participants prior to distribution. 5. NONEXEMPT TRANSACTIONS: As reported on Schedule III, certain Plan contributions were not remitted to the trust within the time frame specified by the Department of Labor's Regulation 29 CFR 2510.3-102, thus constituting nonexempt transactions between the Plan and the Company. -9- 10 6. SUBSEQUENT EVENT: On March 8, 1999, the Company and Allied Waste Industries, Inc. (Allied), announced that they had entered into a definitive merger agreement under which Allied will acquire the Company for $45 in cash for each outstanding share of the Company's common stock. The transaction is structured as a merger of the Company with a subsidiary of Allied and is subject to the approval of the Company's stockholders and other customary conditions. The Company and Allied are pursuing the necessary approvals. The merger agreement may be terminated and the merger may be abandoned under a number of conditions. If this were to occur, dependent upon the reasons for termination of the merger agreement, a termination fee of $225 million could be payable by the Company to Allied, receivable by the Company from Allied, or no fee may be payable. Consummation of the merger will have a significant, favorable impact on the value of participant accounts due to the $45 in cash received for each outstanding share of the Company's common stock held. The value of the Company's common stock in the Plan would have been approximately $66 million greater had such stock been valued at $45 per share at December 31, 1998. Further, no determination has been made concerning the future of this Plan subsequent to consummation of the merger. 7. INVESTMENTS: Investments that represent 5 percent or more of the Plan's net assets are separately identified in the following table:
December 31, ------------------------------------------------------ 1998 1997 ------------------------ ------------------------- Number of Fair Value/ Number of Fair Value/ Shares Contract Shares Contract Or Units Value Or Units Value --------- ------------ --------- ------------ Common stock of Browning-Ferris Industries, Inc. 3,986,117 $113,357,194 3,855,350 $142,647,942 ------------ ------------ Equity investment funds- Fidelity Puritan Fund 2,276,522 45,689,795 2,042,282 39,579,429 Fidelity Growth and Income Portfolio 2,258,648 103,536,420 2,114,289 80,554,412 Fidelity Growth Company Fund 1,410,094 71,942,979 1,347,579 58,377,135 Other 301,900 2,532,939 220,812 2,197,083 ------------ ------------ 223,702,133 180,708,059 ------------ ------------ Short-term investments 3,972,221 2,068,934 ------------ ------------ Guaranteed/bank investment contracts 33,414,269 51,757,521 ------------ ------------ Other investment contracts 29,479,932 8,075,250 ------------ ------------ Total $403,925,749 $385,257,706 ============ ============
-10- 11 During 1998 and 1997, the Plan's investments (including investments bought, sold and held during the year) appreciated (depreciated) in value as follows:
1998 1997 ------------ ------------ Common stock of Browning-Ferris Industries, Inc. $(33,517,526) $ 42,077,792 Equity investment funds 29,298,945 22,618,161 ------------ ------------ Net appreciation (depreciation) in fair value of investments $ (4,218,581) $ 64,695,953 ============ ============
8. ALLOCATION TO INVESTMENT PROGRAMS: The following schedules reflect the allocation of net assets available for benefits and changes in net assets available for benefits to the separate investment programs for the respective periods: Allocation of Net Assets Available for Benefits to Investment Programs As of December 31, 1998
Fund 3 Fund 1 Fund 2 ------------ ------------ ------------ Fidelity Fixed Fidelity Growth and Income Puritan Income Fund Fund Portfolio ------------ ------------ ------------ Assets- Investments, at fair value- Common stock of Browning-Ferris Industries, Inc. $ -- $ -- $ -- Equity investment funds -- 45,689,795 103,536,420 Short-term investments 3,972,221 -- -- ------------ ------------ ------------ 3,972,221 45,689,795 103,536,420 ------------ ------------ ------------ Investments, at contract value- Guaranteed/bank investment contracts 33,414,269 -- -- Other investment contracts 29,479,932 -- -- ------------ ------------ ------------ 62,894,201 -- -- ------------ ------------ ------------ 66,866,422 45,689,795 103,536,420 ------------ ------------ ------------ Receivables- Employer contribution -- -- -- Employee contributions 552,431 342,616 667,173 Dividends receivable -- -- -- ------------ ------------ ------------ 552,431 342,616 667,173 ------------ ------------ ------------ 67,418,853 46,032,411 104,203,593 ------------ ------------ ------------ Liabilities- Accrued expenses 12,167 5,954 9,079 Contribution refunds payable 20,516 25,037 69,810 ------------ ------------ ------------ 32,683 30,991 78,889 ------------ ------------ ------------ Net assets available for benefits $ 67,386,170 $ 46,001,420 $104,124,704 ============ ============ ============
(Remaining funds and total on following page.) -11- 12 Allocation of Net Assets Available for Benefits to Investment Programs As of December 31, 1998 (Continued)
Fund 4 Fidelity Fund 5 Fund 6 Growth Templeton BFI Company Foreign Common Fund Fund Stock(a) Total ------------ ------------ ------------ ------------ Assets- Investments, at fair value- Common stock of Browning-Ferris Industries, Inc $ -- $ -- $113,357,194 $113,357,194 Equity investment funds 71,942,979 2,532,939 -- 223,702,133 Short-term investments -- -- -- 3,972,221 ------------ ------------ ------------ ------------ 71,942,979 2,532,939 113,357,194 341,031,548 ------------ ------------ ------------ ------------ Investments, at contract value- Guaranteed/bank investment contracts -- -- -- 33,414,269 Other investment contracts -- -- -- 29,479,932 ------------ ------------ ------------ ------------ -- -- -- 62,894,201 ------------ ------------ ------------ ------------ 71,942,979 2,532,939 113,357,194 403,925,749 ------------ ------------ ------------ ------------ Receivables- Employer contribution -- -- 896,850 896,850 Employee contributions 578,519 49,228 387,882 2,577,849 Dividends receivable -- -- 753,301 753,301 ------------ ------------ ------------ ------------ 578,519 49,228 2,038,033 4,228,000 ------------ ------------ ------------ ------------ 72,521,498 2,582,167 115,395,227 408,153,749 ------------ ------------ ------------ ------------ Liabilities- Accrued expenses 34,196 6,090 2,806 70,292 Contribution refunds payable 42,103 2,427 27,507 187,400 ------------ ------------ ------------ ------------ 76,299 8,517 30,313 257,692 ------------ ------------ ------------ ------------ Net assets available for benefits $ 72,445,199 $ 2,573,650 $115,364,914 $407,896,057 ============ ============ ============ ============
- ------------------ (a) The following table separately identifies participant-directed and nonparticipant-directed net assets available for benefits of the BFI Common Stock Fund, Fund 6. -12- 13 Allocation of Net Assets Available for Benefits to Investment Programs As of December 31, 1998 (Continued)
Fund 6 BFI Common Stock Fund ---------------------------------------------- Participant- Nonparticipant- Directed Directed Total ------------ --------------- ------------ Assets- Common stock of Browning-Ferris Industries, Inc. $ 35,664,553 $ 77,692,641 $113,357,194 Contributions receivable 387,882 896,850 1,284,732 Dividends receivable 236,311 516,990 753,301 ------------ ------------ ------------ 36,288,746 79,106,481 115,395,227 ------------ ------------ ------------ Liabilities- Accrued expenses 2,806 -- 2,806 Contribution refunds payable 27,507 -- 27,507 ------------ ------------ ------------ 30,313 -- 30,313 ------------ ------------ ------------ Net assets available for benefits $ 36,258,433 $ 79,106,481 $115,364,914 ============ ============ ============
-13- 14 Allocation of Net Assets Available for Benefits to Investment Programs As of December 31, 1997
Fund 3 Fund 1 Fund 2 ----------- ----------- ---------- Fidelity Fixed Fidelity Growth and Income Puritan Income Fund Fund Portfolio ----------- ----------- ----------- Assets- Investments, at fair value- Common stock of Browning-Ferris Industries, Inc. $ -- $ -- $ -- Equity investment funds -- 39,579,429 80,554,412 Short-term investments 2,068,934 -- -- ----------- ----------- ----------- 2,068,934 39,579,429 80,554,412 ----------- ----------- ----------- Investments, at contract value- Guaranteed investment contracts 51,757,521 -- -- Other investment contracts 8,075,250 -- -- ----------- ----------- ----------- 59,832,771 -- -- ----------- ----------- ----------- 61,901,705 39,579,429 80,554,412 ----------- ----------- ----------- Receivables- Employer contribution -- -- -- Employee contributions 851,736 538,436 992,462 Dividends receivable -- -- -- ----------- ----------- ----------- 851,736 538,436 992,462 ----------- ----------- ----------- 62,753,441 40,117,865 81,546,874 ----------- ----------- ----------- Liabilities- Accrued expenses 71,309 -- 30,044 ----------- ----------- ----------- 71,309 -- 30,044 ----------- ----------- ----------- Net assets available for benefits $62,682,132 $40,117,865 $81,516,830 =========== =========== ===========
(Remaining funds and total on following page.) -14- 15 Allocation of Net Assets Available for Benefits to Investment Programs As of December 31, 1997 (Continued)
Fund 4 ------------ Fund 5 Fund 6 Fidelity ------------ ------------ Growth Templeton BFI Company Foreign Common Fund Fund Stock(a) Total ------------ ------------ ------------ ------------ Assets- Investments, at fair value- Common stock of Browning-Ferris Industries, Inc. $ -- $ -- $142,647,942 $142,647,942 Equity investment funds 58,377,135 2,197,083 -- 180,708,059 Short-term investments -- -- -- 2,068,934 ------------ ------------ ------------ ------------ 58,377,135 2,197,083 142,647,942 325,424,935 ------------ ------------ ------------ ------------ Investments, at contract value- Guaranteed investment contracts -- -- -- 51,757,521 Other investment contracts -- -- -- 8,075,250 ------------ ------------ ------------ ------------ -- -- -- 59,832,771 ------------ ------------ ------------ ------------ 58,377,135 2,197,083 142,647,942 385,257,706 ------------ ------------ ------------ ------------ Receivables- Employer contribution -- -- 1,372,601 1,372,601 Employee contributions 893,595 73,928 614,837 3,964,994 Dividends receivable -- -- 723,176 723,176 ------------ ------------ ------------ ------------ 893,595 73,928 2,710,614 6,060,771 ------------ ------------ ------------ ------------ 59,270,730 2,271,011 145,358,556 391,318,477 ------------ ------------ ------------ ------------ Liabilities- Accrued expenses 6,050 -- 5,345 112,748 ------------ ------------ ------------ ------------ 6,050 -- 5,345 112,748 ------------ ------------ ------------ ------------ Net assets available for benefits $ 59,264,680 $ 2,271,011 $145,353,211 $391,205,729 ============ ============ ============ ============
- ------------------ (a) The following table separately identifies participant-directed and nonparticipant-directed net assets available for benefits of the BFI Common Stock Fund, Fund 6. -15- 16 Allocation of Net Assets Available for Benefits to Investment Programs As of December 31, 1997 (Continued)
Participant- Nonparticipant- Directed Directed Total ------------ --------------- ------------ Assets- Common stock of Browning-Ferris Industries, Inc. $ 45,925,010 $ 96,722,932 $142,647,942 Contributions receivable 614,837 1,372,601 1,987,438 Dividends receivable 232,984 490,192 723,176 ------------ ------------ ------------ 46,772,831 98,585,725 145,358,556 ------------ ------------ ------------ Liabilities- Accrued expenses 5,345 -- 5,345 ------------ ------------ ------------ 5,345 -- 5,345 ------------ ------------ ------------ Net assets available for benefits (Fund 6) $ 46,767,486 $ 98,585,725 $145,353,211 ============ ============ ============
-16- 17 Allocation of Changes in Net Assets Available for Benefits to Investment Programs For the Year Ended December 31, 1998
Fund 3 Fund 1 Fund 2 ------------ ------------ ------------ Fidelity Fixed Fidelity Growth and Income Puritan Income Fund Fund Portfolio ------------ ------------ ------------ Additions to net assets attributed to- Investment income- Net appreciation (depreciation) in fair value of investments $ -- $ 1,916,829 $ 17,315,497 Interest income 3,955,906 -- -- Dividends on common stock of Browning-Ferris Industries, Inc. -- -- -- Dividends and gain distributions on equity investment funds -- 4,651,441 5,468,778 ------------ ------------ ------------ 3,955,906 6,568,270 22,784,275 ------------ ------------ ------------ Contributions- Employer -- -- -- Employee 8,347,506 4,822,628 8,796,083 ------------ ------------ ------------ 8,347,506 4,822,628 8,796,083 ------------ ------------ ------------ Total additions 12,303,412 11,390,898 31,580,358 ------------ ------------ ------------ Deductions from net assets attributed to- Distributions to participants 9,612,024 5,195,567 11,077,812 Administrative expenses 80,647 26,158 37,776 ------------ ------------ ------------ Total deductions 9,692,671 5,221,725 11,115,588 ------------ ------------ ------------ Transfers between funds 2,093,297 (285,618) 2,143,104 ------------ ------------ ------------ Net increase (decrease) 4,704,038 5,883,555 22,607,874 Net assets available for benefits- Beginning of year 62,682,132 40,117,865 81,516,830 ------------ ------------ ------------ End of year $ 67,386,170 $ 46,001,420 $104,124,704 ============ ============ ============
(Remaining funds and total on following page.) -17- 18 Allocation of Changes in Net Assets Available for Benefits to Investment Programs For the Year Ended December 31, 1998 (Continued)
Fund 4 ------------- Fund 5 Fund 6 Fidelity ------------- ------------- Growth Templeton BFI Company Foreign Common Fund Fund Stock(a) Total ------------- ------------- ------------- ------------- Additions to net assets attributed to- Investment income- Net appreciation (depreciation) in fair value of investments $ 10,491,383 $ (424,764) $ (33,517,526) $ (4,218,581) Interest income -- -- -- 3,955,906 Dividends on common stock of Browning-Ferris Industries, Inc. -- -- 2,995,357 2,995,357 Dividends and gain distributions on equity investment funds 5,035,644 266,263 -- 15,422,126 ------------- ------------- ------------- ------------- 15,527,027 (158,501) (30,522,169) 18,154,808 ------------- ------------- ------------- ------------- Contributions- Employer -- -- 12,384,416 12,384,416 Employee 7,808,525 721,966 5,532,245 36,028,953 ------------- ------------- ------------- ------------- 7,808,525 721,966 17,916,661 48,413,369 ------------- ------------- ------------- ------------- Total additions 23,335,552 563,465 (12,605,508) 66,568,177 ------------- ------------- ------------- ------------- Deductions from net assets attributed to- Distributions to participants 8,618,175 298,511 14,790,755 49,592,844 Administrative expenses 108,256 17,273 14,895 285,005 ------------- ------------- ------------- ------------- Total deductions 8,726,431 315,784 14,805,650 49,877,849 ------------- ------------- ------------- ------------- Transfers between funds (1,428,602) 54,958 (2,577,139) -- ------------- ------------- ------------- ------------- Net increase (decrease) 13,180,519 302,639 (29,988,297) 16,690,328 Net assets available for benefits- Beginning of year 59,264,680 2,271,011 145,353,211 391,205,729 ------------- ------------- ------------- ------------- End of year $ 72,445,199 $ 2,573,650 $ 115,364,914 $ 407,896,057 ============= ============= ============= =============
- ---------- (a) The following table separately identifies participant-directed and nonparticipant-directed changes in net assets available for benefits of the BFI Common Stock Fund, Fund 6. -18- 19 Allocation of Changes in Net Assets Available for Benefits to Investment Programs For the Year Ended December 31, 1998 (Continued)
Fund 6 BFI Common Stock --------------------------------------------------- Participant- Nonparticipant- Directed Directed Total ------------- --------------- ------------- Additions to net assets attributed to- Investment income- Net depreciation in fair value of investments $ (10,558,791) $ (22,958,735) $ (33,517,526) Dividends on common stock of Browning-Ferris Industries, Inc. 944,731 2,050,626 2,995,357 ------------- ------------- ------------- (9,614,060) (20,908,109) (30,522,169) ------------- ------------- ------------- Contributions 5,532,245 12,384,416 17,916,661 ------------- ------------- ------------- Total additions (4,081,815) (8,523,693) (12,605,508) ------------- ------------- ------------- Deductions from net assets attributed to- Distributions to participants 4,801,978 9,988,777 14,790,755 Administrative expenses 5,693 9,202 14,895 ------------- ------------- ------------- Total deductions 4,807,671 9,997,979 14,805,650 ------------- ------------- ------------- Transfers between funds (1,619,567) (957,572) (2,577,139) ------------- ------------- ------------- Net decrease (10,509,053) (19,479,244) (29,988,297) Net assets available for benefits- Beginning of year 46,767,486 98,585,725 145,353,211 ------------- ------------- ------------- End of year $ 36,258,433 $ 79,106,481 $ 115,364,914 ============= ============= =============
-19- 20 Allocation of Changes in Net Assets Available for Benefits to Investment Programs For the Year Ended December 31, 1997
Fund 3 Fund 1 Fund 2 ------------ ------------ ------------ Fidelity Fixed Fidelity Growth and Income Puritan Income Fund Fund Portfolio ------------ ------------ ------------ Additions to net assets attributed to- Investment income- Net appreciation (depreciation) in fair value of investments $ -- $ 2,884,985 $ 15,080,332 Interest income 3,882,247 -- -- Dividends on common stock of Browning-Ferris Industries, Inc. -- -- -- Dividends and gain distributions on equity investment funds -- 3,165,482 3,668,149 ------------ ------------ ------------ 3,882,247 6,050,467 18,748,481 ------------ ------------ ------------ Contributions- Employer -- -- -- Employee 8,747,246 4,878,203 8,580,035 ------------ ------------ ------------ 8,747,246 4,878,203 8,580,035 ------------ ------------ ------------ Total additions 12,629,493 10,928,670 27,328,516 ------------ ------------ ------------ Deductions from net assets attributed to- Distributions to participants 10,031,956 4,838,292 9,906,903 Administrative expenses 202,445 338 84,262 ------------ ------------ ------------ Total deductions 10,234,401 4,838,630 9,991,165 ------------ ------------ ------------ Transfers between funds (118,204) 34,027,825 3,394,237 ------------ ------------ ------------ Net increase (decrease) 2,276,888 40,117,865 20,731,588 Net assets available for benefits- Beginning of year 60,405,244 -- 60,785,242 ------------ ------------ ------------ End of year $ 62,682,132 $ 40,117,865 $ 81,516,830 ============ ============ ============
(Remaining funds and total on following page.) -20- 21 Allocation of Changes in Net Assets Available for Benefits to Investment Programs For the Year Ended December 31, 1997 (Continued)
Fund 4 ------------- Fund 5 Fund 6 Fund 7 Fidelity ------------- ------------- ------------- Growth Templeton BFI Fidelity Company Foreign Common Balanced Fund Fund Stock(a) Fund Total ------------- ------------- ------------- ------------- ------------- Additions to net assets attributed to- Investment income- Net appreciation (depreciation) in fair value of investments $ 3,897,030 $ (257,952) $ 42,077,792 $ 1,013,766 $ 64,695,953 Interest income -- -- -- -- 3,882,247 Dividends on common stock of Browning-Ferris Industries, Inc. -- -- 2,821,255 -- 2,821,255 Dividends and gain distributions on equity investments 5,566,545 231,329 -- -- 12,631,505 ------------- ------------- ------------- ------------- ------------- 9,463,575 (26,623) 44,899,047 1,013,766 84,030,960 ------------- ------------- ------------- ------------- ------------- Contributions- Employer -- -- 12,541,893 -- 12,541,893 Employee 7,973,787 404,486 5,673,245 84,895 36,341,897 ------------- ------------- ------------- ------------- ------------- 7,973,787 404,486 18,215,138 84,895 48,883,790 ------------- ------------- ------------- ------------- ------------- Total additions 17,437,362 377,863 63,114,185 1,098,661 132,914,750 ------------- ------------- ------------- ------------- ------------- Deductions from net assets attributed to- Distributions to participants 6,974,418 170,500 16,433,249 185,776 48,541,094 Administrative expenses 16,682 79 15,459 -- 319,265 ------------- ------------- ------------- ------------- ------------- Total deductions 6,991,100 170,579 16,448,708 185,776 48,860,359 ------------- ------------- ------------- ------------- ------------- Transfers between funds (1,601,071) 2,063,727 (4,378,403) (33,388,111) -- ------------- ------------- ------------- ------------- ------------- Net increase (decrease) 8,845,191 2,271,011 42,287,074 (32,475,226) 84,054,391 Net assets available for benefits- Beginning of year 50,419,489 -- 103,066,137 32,475,226 307,151,338 ------------- ------------- ------------- ------------- ------------- End of year $ 59,264,680 $ 2,271,011 $ 145,353,211 $ -- $ 391,205,729 ============= ============= ============= ============= =============
- ------------------ (a) The following table separately identifies participant-directed and nonparticipant-directed changes in net assets available for benefits of the BFI Common Stock Fund, Fund 6. -21- 22 Allocation of Changes in Net Assets Available for Benefits to Investment Programs For the Year Ended December 31, 1997 (Continued)
Fund 6 BFI Common Stock Fund --------------------------------------------------- Participant- Nonparticipant- Directed Directed Total ------------- ---------------- ------------- Additions to net assets attributed to- Investment income- Net appreciation in fair value of investments $ 14,080,535 $ 27,997,257 $ 42,077,792 Dividends on common stock of Browning-Ferris Industries, Inc. 930,845 1,890,410 2,821,255 ------------- ------------- ------------- 15,011,380 29,887,667 44,899,047 ------------- ------------- ------------- Contributions 5,673,245 12,541,893 18,215,138 ------------- ------------- ------------- Total additions 20,684,625 42,429,560 63,114,185 ------------- ------------- ------------- Deductions from net assets attributed to- Distributions to participants 5,465,341 10,967,908 16,433,249 Administrative expenses 9,033 6,426 15,459 ------------- ------------- ------------- Total deductions 5,474,374 10,974,334 16,448,708 ------------- ------------- ------------- Transfers between funds (3,465,319) (913,084) (4,378,403) ------------- ------------- ------------- Net increase 11,744,932 30,542,142 42,287,074 Net assets available for benefits- Beginning of year 35,022,554 68,043,583 103,066,137 ------------- ------------- ------------- End of year $ 46,767,486 $ 98,585,725 $ 145,353,211 ============= ============= =============
-22- 23 SCHEDULE I BFI EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1998
Number of Cost/ Current/ Shares or Contract Contract Identity of Issue/Description Units Value Value ----------------------------- --------- ------------ ------------ COMMON STOCK OF BROWNING-FERRIS INDUSTRIES, INC.* 3,986,117 $109,992,574 $113,357,194 ------------ ------------ EQUITY INVESTMENT FUNDS: Fidelity Puritan Fund* 2,276,522 41,811,310 45,689,795 Fidelity Growth and Income Portfolio* 2,258,648 64,884,950 103,536,420 Fidelity Growth Company Fund* 1,410,094 52,759,842 71,942,979 Templeton Foreign Fund 301,900 3,136,215 2,532,939 ------------ ------------ Total equity investment funds 162,592,317 223,702,133 ------------ ------------ SHORT-TERM INVESTMENTS: Fidelity Short Term Investment Fund* 3,972,221 3,972,221 ------------ ------------ GUARANTEED/BANK INVESTMENT CONTRACTS: Allstate Life Insurance GIC, April 30, 2001, 6.94% 3,346,753 3,346,753 CDC Capital, May 15, 2003, 6.13% 2,015,052 2,015,052 John Hancock Mutual GIC, March 31, 1999, 7.68% 5,021,892 5,021,892 Life of Virginia GIC, March 31, 2002, 6.62% 2,721,313 2,721,313 New York Life GIC, July 30, 1999, 7.13% 6,436,010 6,436,010 Ohio National Life Insurance GIC, January 31, 2000, 6.52% 3,124,404 3,124,404 Principal Life Insurance GIC, January 31, 2000, 7.15% 4,655,157 4,655,157 Security Life of Denver GIC, June 30, 2000, 6.22% 3,093,171 3,093,171 Transamerican Occidental GIC, January 31, 2000, 6.08% 3,000,517 3,000,517 ------------ ------------ Total guaranteed investment contracts 33,414,269 33,414,269 ------------ ------------
*Party in interest -23- 24 SCHEDULE I Continued BFI EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1998 (Continued)
Cost/ Current/ Contract Contract Identity of Issue/Description Value Value ----------------------------- ------------ ------------ OTHER INVESTMENT CONTRACTS: AIG Financial Products Asset Backed Security, June 15, 1999 $ 1,666,346 $ 1,666,346 AIG Financial Products Asset Backed Security, March 15, 2001 2,028,240 2,028,240 Chase Manhattan Bank Asset Backed Security, March 15, 2002 3,066,059 3,066,059 Monumental Life Insurance Asset Backed Security, May 8, 2001 2,006,862 2,006,862 Monumental Life Insurance Mortgage Backed Security, November 15, 2000 2,477,645 2,477,645 Monumental Life Insurance Mortgage Backed Security, May 28, 2002 2,013,786 2,013,786 Morgan Guaranty Asset Backed Security, July 25, 2003 2,000,591 2,000,591 Morgan Guaranty Mortgage Backed Security, September 17, 2001 1,897,296 1,897,296 State Street Bank Asset Backed Security, October 17, 2000 2,516,556 2,516,556 State Street Bank Collateralized Mortgage Obligation, August 15, 2001 1,997,605 1,997,605 Transamerica Life Insurance Asset Backed Security, September 15, 2000 2,004,051 2,004,051 UBS AG Asset Backed Security, January 19, 2004 2,011,282 2,011,282 Westdeutsche Landesbank Asset Backed Security, June 15, 2000 2,012,437 2,012,437 Westdeutsche Landesbank Asset Backed Security, March 17, 2003 1,781,176 1,781,176 ------------ ------------ Total other investment contracts 29,479,932 29,479,932 ------------ ------------ Total assets held for investment purposes $339,451,313 $403,925,749 ============ ============
*Party in interest -24- 25 SCHEDULE II BFI EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1998 The following table presents series of transactions which were greater than 5 percent of the Plan's assets as of January 1, 1998:
Purchase Selling Cost of Description Price*(a) Price*(a) Asset Sold Net Gain ----------- ----------- ----------- ----------- ----------- COMMON STOCK OF BROWNING-FERRIS INDUSTRIES, INC $22,212,696 $17,985,918 $14,288,310 $ 3,697,608 FIDELITY GROWTH AND INCOME PORTFOLIO 19,422,104 13,755,593 9,277,559 4,478,034 FIDELITY GROWTH COMPANY FUND 15,067,761 11,993,300 9,210,107 2,783,193 FIDELITY SHORT-TERM INVESTMENT FUND 42,832,106 40,928,819 40,928,819 --
*Expenses incurred are netted against purchase/selling price, as applicable. - ---------- (a) Amounts represent current value at the date of transaction. -25- 26 SCHEDULE III BFI EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN ITEM 27(e) - SCHEDULE OF NONEXEMPT TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1998
Relationship to Plan, Description of Transactions, Including Interest Identity of Employer or Other Maturity Date, Rate of Interest, Amount Incurred Party Involved Party in Interest Collateral and Maturity Loaned on Loan - ------------------- ---------------------- ------------------------------------------ ------------ --------- Browning-Ferris Employer Lending of monies from the Plan to the Industries, Inc. Employer (contributions not timely remitted to the Plan) as follows: Deemed loan dated February 20, 1998, maturity of March 4, 1998, with interest at 9% per annum $ 1,635,523 $ 4,840 Deemed loan dated February 20, 1998, maturity of March 9, 1998, with interest at 9% per annum 1,304,046 5,466 Deemed loan dated March 20, 1998, maturity of March 24, 1998, with interest at 9% per annum 1,384,887 1,366 Deemed loan dated May 21, 1998, maturity of May 27, 1998, with interest at 8% per annum 325,563 428 -------- $ 12,100 ========
Interest in the amount of $12,100 was remitted to the Plan by the Employer subsequent to December 31, 1998. -26- 27 SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the Benefits Administration Committee, which administers the employee benefit plan, has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. BFI EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN June 14, 1999 /s/ Gerald K. Burger ---------------------------- Gerald K. Burger /s/ Jeffrey E. Curtiss ---------------------------- Jeffrey E. Curtiss /s/ Ronald E. Long ---------------------------- Ronald E. Long /s/ J. Gregory Muldoon ---------------------------- J. Gregory Muldoon /s/ Bruce E. Ranck ---------------------------- Bruce E. Ranck /s/ Kim B. Clarke ---------------------------- Kim B. Clarke The Members of the Benefits Administration Committee -27- 28 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 23 Consent of Independent Public Accountants
EX-23 2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS 1 EXHIBIT 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference of our report dated June 4, 1999, included in this Annual Report on Form 11-K into the Browning-Ferris Industries, Inc., previously filed Form S-8 Registration Statement File No. 33-56583. ARTHUR ANDERSEN LLP Houston, Texas June 15, 1999 -----END PRIVACY-ENHANCED MESSAGE-----