NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except for per share data)
Casella Waste Systems, Inc. (the Parent), its wholly-owned subsidiaries and certain partially owned entities over
which it has a controlling financial interest (collectively, we, us or our) is a regional, vertically-integrated solid waste services company that provides collection, transfer, disposal, landfill, landfill
gas-to-energy, recycling and organics services in the northeastern United States. We market recyclable metals, aluminum, plastics, paper and corrugated cardboard, which have been processed at our recycling facilities, as well as recyclables
purchased from third parties. We manage our solid waste operations on a geographic basis through two regional operating segments, the Eastern and Western regions, each of which includes a full range of solid waste services, and our larger-scale
recycling and commodity brokerage operations through our Recycling segment. Ancillary operations, major customer accounts, discontinued operations and earnings through equity method investees are included in our Other segment.
The accompanying consolidated financial statements, which include the accounts of the Parent, its wholly-owned subsidiaries and certain partially owned
entities over which it has a controlling financial interest, have been prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) pursuant to the rules and regulations of the Securities and
Exchange Commission (the SEC). All significant intercompany accounts and transactions are eliminated in consolidation. Investments in entities in which we do not have a controlling financial interest are accounted for under either the
equity method or cost method of accounting, as appropriate. Assets and liabilities of discontinued operations and assets held-for-sale are segregated from those of continuing operations and reported in separate captions in the balance sheet, as
applicable. The results of operations that have been disposed of or classified as held-for-sale and qualify for discontinued operations accounting are reported in discontinued operations, as applicable. See Note 18 for disclosure over assets
held-for-sale and discontinued operations.
For comparative purposes, certain prior year amounts have been reclassified to conform to the
current fiscal year presentation. This includes an adjustment to our self insurance reserve, which was reclassified to properly state the current and non-current obligations.
2.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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Managements Estimates and Assumptions
Preparation of our consolidated financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the accounting for
and recognition and disclosure of assets, liabilities, equity, revenues and expenses. We must make these estimates and assumptions because certain information that we use is dependent on future events, cannot be calculated with a high degree of
precision given the available data or simply cannot be readily calculated. In the opinion of management, these consolidated financial statements include all adjustments, which include normal recurring and nonrecurring adjustments, necessary for a
fair presentation of the financial position, results of operations, and cash flows for the periods presented. Summarized below are the estimates and assumptions that we consider to be significant in the preparation of our consolidated financial
statements.
Landfill Development Costs
We estimate the total cost to develop each of our landfill sites to its remaining permitted and expansion capacity. This estimate includes such costs as landfill liner material and installation,
excavation for airspace, landfill leachate collection systems, landfill gas collection systems, environmental monitoring equipment for groundwater and landfill gas, directly related engineering, capitalized interest, on-site road construction and
other capital infrastructure costs. Additionally, landfill development includes all land purchases for landfill footprint and required landfill buffer property. The projection of these landfill costs is dependent, in part, on future events. The
remaining amortizable basis of each landfill includes costs to develop a site to its remaining permitted and expansion capacity and includes amounts previously expended and capitalized, net of accumulated airspace amortization, and projections of
future purchase and development costs. The interest capitalization rate is based on our weighted average interest rate incurred on borrowings outstanding during the period. Interest capitalized for the fiscal years ended April 30, 2013, 2012
and 2011 was $368, $407 and $1,078, respectively.
Under life-cycle accounting, all costs related to acquisition and construction of landfill
sites are capitalized and charged to expense based on tonnage placed into each site. Landfill permitting, acquisition and preparation costs are amortized on the units-of-consumption method as landfill airspace is consumed. In determining the
amortization rate for these landfills, preparation costs include the total estimated costs to complete construction of the landfills permitted and expansion capacity.
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We apply the following guidelines in determining a landfills remaining permitted and expansion
airspace:
Remaining Permitted Airspace.
Our engineers, in consultation with third-party engineering consultants and surveyors, are
responsible for determining remaining permitted airspace at our landfills. The remaining permitted airspace is determined by an annual survey, which is then used to compare the existing landfill topography to the expected final landfill topography.
Expansion Airspace
. We currently include unpermitted expansion airspace in our estimate of remaining permitted and expansion airspace
in certain circumstances. To be considered expansion airspace all of the following criteria must be met:
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we control the land on which the expansion is sought;
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all technical siting criteria have been met or a variance has been obtained or is reasonably expected to be obtained;
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we have not identified any legal or political impediments which we believe will not be resolved in our favor;
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we are actively working on obtaining any necessary permits and we expect that all required permits will be received; and
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senior management has approved the project.
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For unpermitted airspace to be initially included in our estimate of remaining permitted and expansion airspace, the expansion effort must meet all of the criteria listed above. These criteria are
evaluated annually by our engineers, accountants, lawyers, managers and others to identify potential obstacles to obtaining the permits. Once the remaining permitted and expansion airspace is determined in cubic yards, an airspace utilization factor
(the AUF) is established to calculate the remaining permitted and expansion capacity in tons. The AUF is established using the measured density obtained from previous annual surveys. When we include the expansion airspace in our
calculation of remaining permitted and expansion airspace, we include the projected costs for development, as well as the projected asset retirement costs related to capping, closure and post-closure of the expansion airspace in the amortization
basis of the landfill.
After determining the costs and the remaining permitted and expansion capacity at each of our landfills, we determine
the per ton rates that will be expensed as waste is received and deposited at the landfill by dividing the costs by the corresponding number of tons. We calculate per ton amortization rates for assets associated with each capping event, for assets
related to closure and post-closure activities and for all other costs capitalized or to be capitalized in the future for each landfill. These rates per ton are updated annually, or more frequently, as significant facts change.
Landfill Capping, Closure and Post-Closure Costs
The following is a description of our asset retirement activities:
Capping Costs.
Capping
activities include the installation of liners, drainage, compacted soil layers and topsoil over areas of a landfill where total airspace has been consumed and waste is no longer being received. Capping activities occur throughout the life of the
landfill. Our engineering personnel estimate the cost for each capping event based on the acreage to be capped and the capping materials and activities required. The estimates also consider when these costs would actually be paid and factor in
inflation and discount rates. The engineers then quantify the landfill capacity associated with each capping event and the costs for each event are amortized over that capacity as waste is received at the landfill.
Closure and Post-Closure Costs.
Closure and post-closure costs represent future estimated costs related to monitoring and maintenance of a solid
waste landfill, after a landfill facility ceases to accept waste and closes. We estimate, based on input from our engineers, lawyers, accounting personnel and consultants, our future cost requirements for closure and post-closure monitoring and
maintenance based on our interpretation of the technical standards of the Subtitle D regulations and the air emissions standards under the Clean Air Act of 1970, as amended, as they are being applied on a state-by-state basis. Closure and
post-closure accruals for the cost of monitoring and maintenance include site inspection, groundwater monitoring, leachate management, methane gas control and recovery, and operation and maintenance costs to be incurred for a period which is
generally for a term of 30 years after final closure of a landfill. In determining estimated future closure and post-closure costs, we consider costs associated with permitted and permittable ai
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space.
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Our estimate of costs to discharge capping, closure and post-closure asset retirement obligations for
landfills are developed in todays dollars. These costs are then inflated to the period of performance using an estimate of inflation which is updated annually (2.7% for fiscal years 2013 and 2012, respectively). Capping, closure and
post-closure liabilities are discounted using the credit adjusted risk-free rate in effect at the time the obligation is incurred. The weighted average rate applicable to our asset retirement obligations at April 30, 2013 is between 8.5% and
10.0%, the range of the credit adjusted risk free rates effective since the adoption of guidance associated with asset retirement obligations in fiscal year 2004. Accretion expense is necessary to increase the accrued capping, closure and
post-closure liabilities to the future anticipated obligation. To accomplish this, we accrete our capping, closure and post-closure accrual balances using the same credit-adjusted risk-free rate that was used to calculate the recorded liability.
Accretion expense on recorded landfill liabilities is recorded to cost of operations from the time the liability is recognized until the costs are paid. Accretion expense on recorded landfill liabilities amounted to $3,538, $3,341 and $3,193 in
fiscal years 2013, 2012 and 2011, respectively.
We provide for the accrual and amortization of estimated future obligations for closure and
post-closure based on tonnage placed into each site. With regards to capping, the liability is recognized and these costs are amortized based on the airspace related to the specific capping event.
We operate in states which require a certain portion of landfill capping, closure and post-closure obligations to be secured by financial assurance,
which may take the form of surety bonds, letters of credit and restricted cash. Surety bonds securing closure and post-closure obligations at April 30, 2013 and 2012 totaled $128,551 and $124,600, respectively. Letters of credit securing
closure and post-closure obligations at April 30, 2013 and 2012 totaled $1,752. Restricted cash securing closure and post-closure obligations is disclosed in Note 5.
Landfill Accounting-Landfill Operating Lease Contracts
We entered into three
landfill operation and management agreements in fiscal year 2004 and one landfill operation and management agreement in fiscal year 2006. These agreements are long-term landfill operating contracts with government bodies whereby we receive tipping
revenue, pay normal operating expenses and assume future capping, closure and post-closure liabilities. The government body retains ownership of the landfill. There is no bargain purchase option and title to the property does not pass to us at the
end of the lease term. We allocate the consideration paid to the landfill airspace rights and underlying land lease based on the relative fair values.
In addition to up-front or one-time payments, the landfill operating agreements require us to make future minimum rental payments, including success/expansion fees, other direct costs and capping, closure
and post closure costs. The value of all future minimum lease payments is amortized and charged to cost of operations over the life of the contract. We amortize the consideration allocated to airspace rights as airspace is utilized on a
units-of-consumption basis and such amortization is charged to cost of operations as airspace is consumed (e.g., as tons are placed into the landfill). The underlying value of the land lease is amortized to cost of operations on a straight-line
basis over the estimated life of the operating agreement.
Environmental Remediation Liabilities
We have recorded environmental liabilities representing our estimate of the most likely outcome of the matters for which we have determined that a
liability is probable. These liabilities include potentially responsible party investigations, settlements, certain legal and consultant fees, as well as costs directly associated with site investigation and clean up, such as materials and
incremental internal costs directly related to the remedy. We provide for expenses associated with environmental remediation obligations when such amounts are probable and can be reasonably estimated. We estimate costs required to remediate sites
where it is probable that a liability has been incurred based on site-specific facts and circumstances. Estimates of the cost for the likely remedy are developed using third-party environmental engineers or other service providers. Where we believe
that both the amount of a particular environmental remediation liability and timing of payments are reliably determinable, we inflate the cost in current dollars until the expected time of payment and discount the cost to present value. See Note 11
for disclosure over environmental remediation liabilities.
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Goodwill and Other Intangibles
We do not amortize goodwill. We annually assess goodwill impairment at the end of the fourth quarter of our fiscal year, or more frequently if events or circumstances indicate that impairment may exist.
We assess whether a goodwill impairment exists using both qualitative and quantitative assessments. Our qualitative assessment involves
determining whether events or circumstances exist that indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If based on this qualitative assessment we determine it is not
more likely than not that the fair value of a reporting unit is less than its carrying amount, we will not perform a quantitative assessment.
If the qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or if
we elect not to perform a qualitative assessment, we perform a quantitative assessment, or two-step impairment test, to determine whether goodwill impairment exists at the reporting unit.
In the first step of testing for goodwill impairment, we estimate the fair value of each reporting unit, which we have determined to be our geographic operating segments, and our Recycling segment, and
compare the fair value with the carrying value of the net assets of each reporting unit. If the fair value is less than its carrying value, then we would perform a second step and determine the fair value of the goodwill. In this second step, the
fair value of goodwill is determined by deducting the fair value of a reporting units identifiable assets and liabilities from the fair value of the reporting unit as a whole, as if that reporting unit had just been acquired and the purchase
price were being initially allocated. If the fair value of the goodwill is less than its carrying value for a reporting unit, an impairment charge would be recorded to earnings.
To determine the fair value of each of our reporting units as a whole we use discounted cash flow analyses, which require significant assumptions and estimates about the future operations of each
reporting unit. Significant judgments inherent in this analysis include the determination of appropriate discount rates, the amount and timing of expected future cash flows and growth rates. The cash flows employed in our discounted cash flow
analyses are based on financial forecasts developed internally by management. Our discount rate assumptions are based on an assessment of our risk adjusted discount rate, applicable for each reporting unit. In assessing the reasonableness of our
determined fair values of our reporting units, we evaluate our results against our current market capitalization.
In addition to an annual
goodwill impairment assessment, we would evaluate a reporting unit for impairment if events or circumstances change between annual tests indicating a possible impairment. Examples of such events or circumstances include the following:
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a significant adverse change in legal status or in the business climate;
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an adverse action or assessment by a regulator;
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a more likely than not expectation that a segment or a significant portion thereof will be sold; or
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the testing for recoverability of a significant asset group within the segment.
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We elected not to perform a qualitative analysis as part of our annual goodwill impairment test for fiscal year 2013. We incurred no goodwill impairment
in fiscal years 2013, 2012 or 2011 as a result of our annual fourth quarter goodwill impairment test. However, there can be no assurance that goodwill will not be impaired at any time in the future. See Note 7 for disclosure over goodwill.
Covenants not to compete and customer lists are amortized based on the economic benefit provided or the straight-line method over their
estimated useful lives, typically no more than 10 years. See Note 7 for disclosure over intangible assets.
Recovery of
Long-Lived Assets
We continually assess whether events or changes in circumstances have occurred that may warrant revision of the
estimated useful lives of our long-lived assets (other than goodwill) or whether the remaining balances of those assets should be evaluated for possible impairment. Long-lived assets include, for example, capitalized landfill costs, other property
and equipment, and identifiable intangible assets. Events or changes in circumstances that may indicate that an asset may be impaired include the following:
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a significant decrease in the market price of an asset or asset group;
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a significant adverse change in the extent or manner in which an asset or asset group is being used or in its physical condition;
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a significant adverse change in legal factors or in the business climate that could affect the value of an asset or asset group, including an adverse
action or assessment by a regulator;
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an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset;
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a current period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates
continuing losses associated with the use of a long-lived asset or asset group;
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a current expectation that, more likely than not, a long-lived asset or asset group will be sold or otherwise disposed of significantly before the end
of its previously estimated useful life; or
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an impairment of goodwill at a reporting unit.
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There are certain indicators listed above that require significant judgment and understanding of the waste industry when applied to landfill development or expansion. For example, a regulator may
initially deny a landfill expansion permit application although the expansion permit is ultimately granted. In addition, management may periodically divert waste from one landfill to another to conserve remaining permitted landfill airspace.
Therefore, certain events could occur in the ordinary course of business and not necessarily be considered indicators of impairment due to the unique nature of the waste industry.
If an impairment indicator occurs, we perform a test of recoverability by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows. We group our long-lived
assets for this purpose at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets or asset groups. If the carrying values are in excess of undiscounted expected future cash flows, we measure any
impairment by comparing the fair value of the asset or asset group to its carrying value.
To determine fair value, we use discounted cash
flow analyses and estimates about the future cash flows of the asset or asset group. This analysis includes a determination of an appropriate discount rate, the amount and timing of expected future cash flows and growth rates. The cash flows
employed in our discounted cash flow analyses are typically based on financial forecasts developed internally by management. The discount rate used is commensurate with the risks involved. We may also rely on third party valuations and or
information available regarding the market value for similar assets.
If the fair value of an asset or asset group is determined to be less
than the carrying amount of the asset or asset group, impairment in the amount of the difference is recorded in the period that the impairment occurs. Estimating future cash flows requires significant judgment and projections may vary from the cash
flows eventually realized.
In the fourth quarter of fiscal year 2013, we initiated a plan to dispose of KTI Bio Fuels, Inc. (Bio
Fuels), a construction and demolition material processing facility located in Lewiston, Maine, and as a result, the assets associated with Bio Fuels were classified as held-for-sale and the results of operations were recorded as loss from
discontinued operations. Assets of the disposal group classified as held-for-sale include certain inventory and plant and equipment. We recognized a $3,261 charge associated with the adjustment of the disposal group to fair value as a loss from
discontinued operations. The impairment was measured based on the asset groups highest and best use using an in-exchange valuation premise under the market approach, utilizing the estimated purchase consideration of the asset group and
consideration of costs to be incurred to sell. There are inherent judgments and estimates used in determining impairment charges and the actual sale of Bio Fuels may result in the recognition of an additional gain or loss. See Note 18 for further
disclosure.
In the fourth quarter of fiscal year 2012, we entered into negotiations regarding the sale of Maine Energy Recovery Company LP
(Maine Energy). Based on the proposed purchase consideration, we reviewed the asset group for impairment and recorded a $40,746 impairment charge to the asset group within the Eastern region segment. The impairment was measured based on
the asset groups highest and best use under the market approach, utilizing the discounted present cash flows associated with the purchase consideration of the facility, adjusted for costs to demolish the facility. We used a discount rate of
3.5%, which approximates the buyers borrowing rate. In the first quarter of fiscal year 2013, we executed a purchase and sale agreement to sell the real property of Maine Energy to the City of Biddeford, Maine. In the third quarter of fiscal
year 2013, we closed and initiated the decommissioning process of the facility. See Note 18 for further disclosure.
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In the fourth quarter of fiscal year 2011, we recorded an impairment charge of $3,654 related to a recycling
processing facility.
Accounts Receivable Trade, Net of Allowance for Doubtful Accounts
Accounts receivable trade represent receivables from customers for collection, transfer, recycling, disposal and other services. Our accounts
receivable trade are recorded when billed or when related revenue is earned, if earlier, and represent claims against third-parties that will be settled in cash. The carrying value of our accounts receivable trade, net of allowance for
doubtful accounts, represents their estimated net realizable value. Estimates are used in determining our allowance for doubtful accounts and are based on our historical collection experience, current trends, credit policy and a review of our
accounts receivable trade by aging category. Our reserve is evaluated and revised on a monthly basis. Past-due receivables are written off when deemed to be uncollectible.
Self-Insurance Liabilities and Related Costs
We are self insured for vehicles and
workers compensation. Our maximum exposure in fiscal year 2013 under the workers compensation plan is $1,000 per individual event, after which reinsurance takes effect. Our maximum exposure under the automobile plan is $750 per
individual event, after which reinsurance takes effect. The liability for unpaid claims and associated expenses, including incurred but not reported losses, is determined by management with the assistance of a third-party actuary and reflected in
our consolidated balance sheet as an accrued liability. We use a third-party to track and evaluate actual claims experience for consistency with the data used in the annual actuarial valuation. The actuarially determined liability is calculated
based on historical data, which considers both the frequency and settlement amount of claims. Our self insurance reserves totaled $11,362 and $12,024 at April 30, 2013 and 2012, respectively. Our estimated accruals for these liabilities could
be significantly different than our ultimate obligations if variables such as the frequency or severity of future events differ significantly from our assumptions.
Income Tax Accruals
We use estimates to determine our provision for income taxes
and related assets and liabilities and any valuation allowance recorded against our net deferred tax assets. Valuation allowances have been established for the possibility that tax benefits may not be realized for certain deferred tax assets.
Deferred income taxes are recognized based on the expected future tax consequences of differences between the financial statement basis and the tax basis of assets and liabilities, calculated using currently enacted tax rates. We record net deferred
tax assets to the extent we believe these assets will more likely than not be realized. In making this determination, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected
future taxable income, tax planning strategies and recent financial operations. In the event we determine that we would be able to realize our deferred income tax assets in the future in excess of their net recorded amount, we will make an
adjustment to the valuation allowance which would reduce the provision for income taxes.
We account for income tax uncertainties according to
guidance on the recognition, de-recognition and measurement of potential tax benefits associated with tax positions. We recognize interest and penalties relating to income tax matters as a component of income tax expense. See Note 15 for disclosure
related to income taxes.
Loss Contingencies
We are subject to various legal proceedings, claims and regulatory matters, the outcomes of which are subject to significant uncertainty. We determine whether to disclose or accrue for loss contingencies
based on an assessment of whether the risk of loss is remote, reasonably possible or probable, and whether it can be reasonably estimated. We analyze our litigation and regulatory matters based on available information to assess the potential
liabilities. Managements assessment is developed based on an analysis of possible outcomes under various strategies. We accrue for loss contingencies when such amounts are probable and reasonably estimable. If a contingent liability is only
reasonably possible, we will disclose the potential range of the loss, if estimable. We record losses related to contingencies in cost of operations or general and administration expenses, depending on the nature of the underlying transaction
leading to the loss contingency. See Note 11 for disclosure over loss contingencies.
Stock-Based Compensation
All share-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the
employees requisite service period. Stock-based compensation expense is based on the number of awards ultimately expected to vest and is therefore reduced for an estimate of the awards that are expected to be forfeited prior to vesting.
The fair value of each stock option is estimated using a Black-Scholes option pricing model, which requires extensive use of accounting
judgment and financial estimation, including estimates of the expected term option holders will retain their vested stock options before exercising them and the estimated volatility of our common stock price over the expected term. See Note 12 for
disclosure over stock-based compensation.
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Revenue Recognition
We recognize collection, transfer, recycling and disposal revenues as the services are provided. Certain customers are billed in advance and, accordingly, recognition of the related revenues is deferred
until the services are provided.
Revenues from the sale of recycled materials are recognized upon shipment. Rebates to certain municipalities
based on sales of recyclable materials are recorded upon the sale of such recyclables to third-parties and are included as a reduction of revenues. Revenues for processing of recyclable materials are recognized when the related service is provided.
Revenues from the brokerage of recycled materials are recognized on a net basis at the time of shipment.
Fair Value of Financial
Instruments
Our financial instruments include cash and cash equivalents, trade receivables, restricted trust and escrow accounts,
interest rate derivatives, trade payables and long-term debt. Accounting standards include disclosure requirements around fair values used for certain financial instruments and establish a fair value hierarchy. The three-tier hierarchy prioritizes
valuation inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of three levels: Level 1, defined as quoted market prices in active
markets for identical assets or liabilities; Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; and Level 3, defined as unobservable inputs that
are not corroborated by market data. See Note 10 and Note 13 for fair value disclosure over long-term debt and financial instruments, respectively. See
Derivatives and Hedging
accounting policy below for fair value disclosure over interest
rate derivatives.
Cash and Cash Equivalents
We consider all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.
Inventory
Inventory includes secondary fibers, recyclables ready for sale and supplies
and is stated at the lower of cost (first-in, first-out) or market. Inventory consisted of finished goods and supplies totaling $3,494 and $3,503 at April 30, 2013 and 2012, respectively.
Property, Plant and Equipment
Property, plant and equipment is recorded at cost, less accumulated depreciation and amortization. We provide for depreciation and amortization using the
straight-line method by charges to operations in amounts that allocate the cost of the assets over their estimated useful lives as follows:
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Asset Classification
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Estimated
Useful Life
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Buildings
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25-30 years
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Machinery and equipment
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5-10 years
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Rolling stock
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5-10 years
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Containers
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5-12 years
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Furniture and Fixtures
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3-8 years
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Building improvements are amortized over a ten year period or the remaining life of the building, whichever is shorter.
Machinery and equipment includes landfill equipment, balers and shredders with useful lives ranging from eight to ten years and maintenance equipment with useful lives ranging from five to ten years. Rolling stock includes collection vehicles,
trailers and automobiles with useful lives ranging from five to ten years. Containers include steel containers in a variety of sizes generally ranging from two to 40 cubic yards with estimated useful lives of ten to twelve years. Containers also
include residential carts and recycling bins with useful lives of five to ten years. The cost of maintenance and repairs is charged to operations as incurred. See Note 6 for disclosure over property, plant and equipment.
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Investments in Unconsolidated Entities
Investments in unconsolidated entities over which we have significant influence over the investees operating and financing activities are accounted for under the equity method of accounting.
Investments in affiliates in which we do not have the ability to exert significant influence over the investees operating and financing activities are accounted for under the cost method of accounting. The following table summarizes our equity
and cost method investments as of April 30, 2013 and 2012:
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April 30,
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2013
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2012
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Equity method investments
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$
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3,766
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$
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6,795
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Cost method investments
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16,486
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15,986
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Investments in unconsolidated entities
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$
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20,252
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$
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22,781
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Equity Method Investments
GreenFiber.
In fiscal year 2001, we entered into a joint venture agreement with Louisiana-Pacific Corporation (LP) to combine our respective cellulose insulation businesses into a
single operating entity, US GreenFiber LLC (GreenFiber). We account for our 50% membership interest in GreenFiber using the equity method of accounting.
In fiscal year 2013, our loss on equity method investment associated with GreenFiber includes a $531 asset impairment charge recorded by GreenFiber as a result of GreenFibers annual long-lived asset
impairment analysis that indicated the carrying value of one of their asset groups exceeded its fair value.
In fiscal year 2012, our loss on
equity method investment associated with GreenFiber includes a $5,090 goodwill impairment charge as GreenFiber performed a goodwill impairment analysis that indicated the carrying value of their reporting unit exceeded the fair value of their
reporting unit and determined that the entire amount of their goodwill was impaired.
Based on the goodwill impairment analysis performed by
GreenFiber in fiscal year 2012, we determined that the book value of our investment in GreenFiber exceeded its fair value. The analysis calculated GreenFibers fair value based on the income approach using discounted cash flows taking into
account current expectations for asset utilization, housing starts and the remaining useful life of related assets. We recorded a charge of $10,680 as impairment on equity method investment in fiscal year 2012.
Our investment in GreenFiber amounted to $3,509 and $6,502 at April 30, 2013 and April 30, 2012, respectively. Summarized financial information
for GreenFiber is as follows:
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April 30,
2013
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April 30,
2012
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Current assets
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$
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16,644
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$
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17,513
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Noncurrent assets
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$
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28,139
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$
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34,597
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Current liabilities
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$
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19,247
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$
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12,815
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Noncurrent liabilities
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$
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1,227
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$
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5,382
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Fiscal Year Ended April 30,
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2013
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2012
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2011
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Revenue
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$
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67,062
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|
$
|
77,544
|
|
|
$
|
84,903
|
|
Gross profit
|
|
$
|
12,502
|
|
|
$
|
10,521
|
|
|
$
|
14,025
|
|
Net loss
|
|
$
|
(8,810)
|
|
|
$
|
(20,003)
|
|
|
$
|
(8,192)
|
|
77
Effective December 1, 2011, we and LP each guaranteed up to $2,200 in support of GreenFibers modified
and restated loan and security agreement. The guaranty could be drawn on upon an event of default and remained in place through, either, payment of the associated term loan under the security agreement or December 1, 2014, the extended term of
GreenFibers modified and restated loan and security agreement. In March 2013, we received notification that GreenFibers term loan had been called for redemption due to an event of default. In the fourth quarter of fiscal year 2013, we
recorded a liability of $2,073, included in other accrued liabilities, as an investment in GreenFiber based on our guaranty. In May 2013, we and LP each contributed $2,073 to GreenFiber to satisfy the guaranty and pay off the term loan in full. See
Note 13 for disclosure over the fair value of the guaranty.
As of April 30, 2013, we and LP are each committed to fund any liquidity
shortfalls, if any such shortfalls exist, of GreenFiber related to covenant compliance as defined in GreenFibers modified and restated loan and security agreement. We have agreed to provide an equity contribution of our pro-rata share of
funds, based on ownership percentage, sufficient to cure such shortfall.
Tompkins.
In May 2011, we finalized the terms of a joint
venture agreement with FCR, LLC (FCR) to form Tompkins County Recycling LLC (Tompkins), a joint venture that operates a material recovery facility (MRF) located in Tompkins County, NY and processes and sells
commodities delivered to the Tompkins MRF. We account for our 50% membership interest in Tompkins using the equity method of accounting. Our investment in Tompkins amounted to $257 and $293 at April 30, 2013 and 2012, respectively.
Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss is a component of stockholders equity included in the accompanying consolidated balance sheets and includes,
as applicable, the effective portion of changes in the fair value of our cash flow hedges that consist of commodity hedges and interest rate swaps, the changes in fair value of our marketable securities, as well as our portion of the changes in the
fair value of GreenFibers commodity hedges.
The components of accumulated other comprehensive loss for the fiscal years ended
April 30, 2013 and 2012 are shown as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 30, 2013
|
|
|
April 30, 2012
|
|
|
|
Gross
|
|
|
Tax
|
|
|
Net
|
|
|
Gross
|
|
|
Tax
|
|
|
Net
|
|
Marketable securities
|
|
$
|
33
|
|
|
$
|
(6)
|
|
|
$
|
27
|
|
|
$
|
11
|
|
|
$
|
(6)
|
|
|
$
|
5
|
|
GreenFibers commodity hedges
|
|
|
(370)
|
|
|
|
(249)
|
|
|
|
(619)
|
|
|
|
661
|
|
|
|
(249)
|
|
|
|
412
|
|
Interest rate hedges
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,369)
|
|
|
|
-
|
|
|
|
(2,369)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive loss
|
|
$
|
(337)
|
|
|
$
|
(255)
|
|
|
$
|
(592)
|
|
|
$
|
(1,697)
|
|
|
$
|
(255)
|
|
|
$
|
(1,952)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives and Hedging
We account for derivatives and hedging activities in accordance with derivatives and hedging accounting guidance that establishes accounting and reporting standards requiring that every derivative
instrument (including certain derivative instruments embedded in other contracts) be recorded in the balance sheet as either an asset or liability measured at its fair value. The guidance also requires that changes in the derivatives fair
value be recognized currently in earnings unless specific hedge accounting criteria are met. Our objective for utilizing derivative instruments is to reduce our exposure to fluctuations in cash flows due to changes in the commodity prices of
recycled paper and adverse movements in interest rates.
Our strategy to hedge against fluctuations in the commodity prices of recycled paper
is to enter into hedges to mitigate the variability in cash flows generated from the sales of recycled paper at floating prices, resulting in a fixed price being received from these sales. We evaluate the hedges and ensure that these instruments
qualify for hedge accounting pursuant to derivative and hedging guidance. Designated as effective cash flow hedges, the change in the fair value of these derivatives is recognized in other comprehensive income (loss) until the hedged item is settled
and recognized as part of commodity revenue.
78
If the price per short ton of the underlying commodity, as reported on the Official Board Market, is less
than the contract price per short ton, we receive the difference between the average price and the contract price (multiplied by the notional tons) from the respective counter-party. If the price of the commodity exceeds the contract price per short
ton, we pay the calculated difference to the counter-party.
The fair values of the commodity hedges are obtained or derived from third-party
counter-parties and are determined using valuation models with assumptions about market prices for commodities being based on those in underlying active markets. We were not party to any commodity hedge contracts as of April 30, 2013 and 2012.
Our strategy to hedge against fluctuations in variable interest rates involves entering into interest rate derivative agreements to hedge
against adverse movements in interest rates. In fiscal year 2012, we entered into two forward starting interest rate derivative agreements, which we initially entered into to hedge the interest rate risk associated with a forecasted financing
transaction to redeem our previously outstanding 11% senior second lien notes (the Second Lien Notes) effective January 15, 2013. The total notional amount of these interest rate derivative agreements is $150,000. The agreements
require us to receive interest based on changes in the London Interbank Offered Rate (LIBOR) index and pay interest at a rate of approximately 1.40%. The agreements mature on March 15, 2016.
For interest rate derivatives deemed to be effective cash flow hedges, the change in fair value is recorded in our stockholders equity as a
component of accumulated other comprehensive loss and included in interest expense at the same time as interest expense is affected by the hedged transaction. Differences paid or received over the life of the agreements are recorded as additions to
or reductions of interest expense on the underlying debt. For interest rate derivatives deemed to be ineffective cash flow hedges, the change in fair value is recorded through earnings and included in loss on derivative instruments.
In the second quarter of fiscal year 2013, we dedesignated both of the $75,000 forward starting interest rate derivative agreements and discontinued
hedge accounting in accordance with Accounting Standards Codification (the ASC) 815-30 because the interest payments associated with the forecasted financing transaction were no longer deemed probable due to the redemption of our Second
Lien Notes as discussed in Note 10. We reclassified a $3,626 loss from accumulated other comprehensive loss to earnings as a loss on derivative instruments in fiscal year 2013.
The fair values of the interest rate derivatives are calculated based on the three month LIBOR yield curve that is observable at commonly quoted intervals for the full term of the swaps, adjusted by the
credit risk of our counter-parties and us based on observable credit default swap rates. We recognize all derivatives on the balance sheet at fair value.
Earnings per Share
Basic earnings per share is computed by dividing the net (loss) income
from continuing operations attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated based on the combined weighted average number of common shares and
potentially dilutive shares, which include, where appropriate, the assumed exercise of employee stock options, unvested restricted stock awards, unvested restricted stock units and unvested performance stock units. In computing diluted earnings per
share, we utilize the treasury stock method.
Concentrations of Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk consist of cash, accounts receivable and derivative instruments. We maintain cash and cash equivalents with banks that at
times exceed applicable insurance limits. We reduce our exposure to credit risk by maintaining such deposits with high quality financial institutions. Concentration of credit risk with respect to accounts receivable is limited because a large number
of geographically diverse customers comprise our customer base, thus spreading the trade credit risk. At April 30, 2013 and 2012, no single group or customer represented greater than 5% of total accounts receivable-trade. We manage credit risk
through credit evaluations, credit limits and monitoring procedures. We may also use credit insurance from time to time. We perform ongoing credit evaluations of our customers, but generally do not require collateral to support accounts
receivable-trade. Credit risk related to derivative instruments results from the fact we enter into interest rate derivative and commodity price hedge agreements with various counterparties. However, we monitor our derivative positions by regularly
evaluating positions and the creditworthiness of the counterparties.
Business Combinations
We acquire businesses in the waste industry, including non-hazardous waste collection, transfer station, material recovery facilities and disposal
operations, as part of our growth strategy. Businesses are included in the consolidated financial statements from the date of acquisition.
We
recognize, separately from goodwill, the identifiable assets acquired and liabilities assumed at their estimated acquisition-date fair values. We measure and recognize goodwill as of the acquisition date as the excess of: (a) the aggregate of
the fair value of consideration transferred, the fair value of any noncontrolling interest in the acquiree (if any) and the acquisition-date fair value of our previously held equity interest in the acquiree (if any), over (b) the fair value of
net assets acquired and liabilities assumed. If information about facts and circumstances existing as of the acquisition date is incomplete by the end of the reporting period in which
79
a business combination occurs, we will report provisional amounts for the items for which the accounting is incomplete. The measurement period ends once we receive the information we were
seeking; however, this period will not extend beyond one year from the acquisition date. Any material adjustments recognized during the measurement period will be recognized retrospectively in the consolidated financial statements of the current
period. All acquisition-related transaction and restructuring costs are to be expensed as incurred. See Note 4 for disclosure over business acquisitions.
Discontinued Operations
We analyze our operations that have been divested or classified
as held-for-sale to determine if they qualify for discontinued operations accounting. Only operations that qualify as a component of an entity, as defined by the ASC, can be classified as a discontinued operation. In addition, only components where
the cash flows of the component have been or will be eliminated from ongoing operations by the end of the assessment period and where we do not have a significant continuing involvement with the divested operations would qualify for discontinued
operations accounting. See Note 18 for disclosure over discontinued operations.
Subsequent Events
Except as disclosed, no material subsequent events have occurred since April 30, 2013 through the date of this filing that require recognition or
disclosure in our current period consolidated financial statements.
3.
|
NEW ACCOUNTING STANDARDS
|
Adoption of New Accounting Pronouncements
Comprehensive Income
In June 2011, the Financial Accounting Standards Board (the
FASB) issued an accounting standards update for the presentation of comprehensive income. This guidance requires the presentation of comprehensive income, the components of net income and the components of other comprehensive income
either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The updated standard also requires presentation of adjustments for items that are reclassified from other comprehensive income to net
income in the statement where the components of net income and the components of other comprehensive income are presented. The FASB deferred certain portions of the accounting standard update related to presentation of reclassification adjustments
from other comprehensive income to net income. This guidance, except for the deferred portion noted above, is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 with early adoption permitted.
We adopted this guidance effective May 1, 2012. It only impacts the presentation of our financial statements and does not impact our consolidated financial position or results of operations.
New Accounting Pronouncements Pending Adoption
Comprehensive Income
In February 2013, the FASB issued an accounting standards
update for the reporting of reclassifications out of accumulated other comprehensive income. This guidance requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line
items in net income if the amount being reclassified is required under U.S. GAAP to be reclassified in its entirety to net income. For other amounts not required under U.S. GAAP to be reclassified in their entirety to net income in the same
reporting period, an entity is required to cross-reference other disclosures required under U.S. GAAP that provide additional detail about those amounts. This guidance is effective prospectively for annual, and interim reporting periods within those
years, beginning after December 15, 2012 and it will only impact the presentation of our financial statements or require additional disclosure and will not impact our consolidated financial position or results of operations.
Indefinite-Lived Intangible Assets Impairment Test
In July 2012, the FASB issued an accounting standards update on indefinite-lived intangible assets impairment testing. This guidance permits an entity to first assess qualitative factors to determine
whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative impairment test. If after assessing the totality of events or
circumstances, an entity determines that it is not more likely than not that an indefinite-lived intangible asset is impaired, then the entity will not need to perform the quantitative impairment test in accordance with ASC 350-30. This guidance is
80
effective for annual and interim indefinite-lived assets impairment tests performed for fiscal years beginning after September 15, 2012 with early adoption permitted and it will only impact
the presentation of our financial statements, not our consolidated financial position or results of operations.
Disclosures About
Offsetting Assets and Liabilities
In December 2011, the FASB issued an accounting standards update regarding the disclosure of
offsetting assets and liabilities in financial statements. This guidance requires an entity to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and
instruments and transactions subject to an agreement similar to a master netting arrangement. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of GAAP and those
entities that prepare their financial statements on the basis of International Financial Reporting Standards. In January 2013, the FASB issued an accounting standards update to address implementation issues about the December 2011 accounting
standards update by clarifying the scope of the offsetting disclosures. This guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods, and it will only impact the
presentation of our financial statements, not our consolidated financial position or results of operations.
During the fiscal year ended April 30, 2013, we acquired six solid waste hauling operations in the Western region for total
consideration of $5,631, including $5,080 in cash and $551 in holdbacks to the sellers. We also acquired all of the outstanding capital stock of Bestway Disposal Services and BBI Waste Services (BBI) in the Eastern region for total
consideration, after recording a working capital adjustment defined in the agreement, of $22,375, including $19,725 in cash and 625 shares of our Class A common stock, valued at an aggregate of $2,650. We recorded $5,084 to goodwill for the
deferred tax liability related to the BBI acquisition based on the impact of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and such amount recognized for income tax purposes. See Note
15 for further discussion. The acquisition of BBI, a provider of solid waste collection, transfer and liquid waste services in New Hampshire and Maine, on December 6, 2012, provides us the opportunity to internalize additional waste and
recyclables and to consolidate operations, routes and transportation within the Eastern region. Revenue generated from BBI amounted to approximately $7,281 from December 6, 2012, through April 30, 2013. During the fiscal year ended
April 30, 2012, we acquired five solid waste hauling operations and completed the acquisition of the McKean County landfill business in Pennsylvania by acquiring additional equipment not included in the original transaction for total
consideration of $2,217, including $2,102 in cash and $115 in holdbacks to sellers.
The operating results of these businesses are included in
the accompanying consolidated statements of operations from the dates of acquisition, and the purchase prices have been allocated to the net assets acquired based on fair values at the dates of acquisition, with the residual amounts allocated to
goodwill. Acquired intangible assets other than goodwill that are subject to amortization include client lists and non-compete covenants. These are amortized over a five to ten year period from the date of acquisition. All amounts recorded to
goodwill are expected to be deductible for tax purposes, except for $12,916 of the current fiscal year goodwill related to the BBI acquisition. The purchase price allocated to net assets acquired during the fiscal years ended April 30, 2013 and
2012 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
April 30,
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
Equipment
|
|
$
|
9,423
|
|
|
$
|
606
|
|
|
Goodwill
|
|
|
14,222
|
|
|
|
502
|
|
|
Intangible assets
|
|
|
9,850
|
|
|
|
1,135
|
|
|
Current assets
|
|
|
1,422
|
|
|
|
-
|
|
|
Current liabilities
|
|
|
(7,009)
|
|
|
|
(26)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
27,908
|
|
|
$
|
2,217
|
|
|
|
|
|
|
|
|
|
|
|
|
The following unaudited pro forma combined information shows the results of our continuing operations for the fiscal
years ended April 30, 2013 and 2012 as though each of the acquisitions completed in the fiscal years ended April 30, 2013 and 2012 had occurred as of May 1, 2011.
81
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
Ended
April 30,
|
|
|
|
2013
|
|
|
2012
|
|
Revenue
|
|
$
|
465,083
|
|
|
$
|
487,707
|
|
Operating income (loss)
|
|
$
|
13,118
|
|
|
$
|
(9,670)
|
|
Net loss attributable to common stockholders
|
|
$
|
(54,440)
|
|
|
$
|
(78,230)
|
|
Basic and diluted loss per common share attributable to common stockholders
|
|
$
|
(1.60)
|
|
|
$
|
(2.92)
|
|
Basic and diluted weighted average shares outstanding
|
|
|
34,015
|
|
|
|
26,749
|
|
The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the actual
results of operations had the acquisitions taken place or the results of our future operations. Furthermore, the pro forma results do not give effect to all cost savings or incremental costs that may occur as a result of the integration and
consolidation of the completed acquisitions.
5.
|
RESTRICTED CASH / RESTRICTED ASSETS
|
Restricted cash / restricted assets consists of cash and investments held in trust on deposit with various banks as collateral for our
obligations relative to our landfill capping, closure and post-closure costs and other facilities closure costs. Cash is also restricted by specific agreements for facilities maintenance and other purposes. A summary of restricted cash /
restricted assets is as follows:
|
|
|
|
|
|
|
|
|
|
|
April 30,
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
Current:
|
|
|
|
|
|
|
|
|
Landfill closure
|
|
$
|
76
|
|
|
$
|
76
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
76
|
|
|
$
|
76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non Current:
|
|
|
|
|
|
|
|
|
Landfill closure
|
|
$
|
545
|
|
|
$
|
424
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
545
|
|
|
$
|
424
|
|
|
|
|
|
|
|
|
|
|
6.
|
PROPERTY, PLANT AND EQUIPMENT
|
Property, plant and equipment at April 30, 2013 and 2012 consists of the following:
|
|
|
|
|
|
|
|
|
|
|
April 30,
|
|
|
|
2013
|
|
|
2012
|
|
Land
|
|
$
|
20,722
|
|
|
$
|
21,100
|
|
Landfills
|
|
|
475,855
|
|
|
|
445,812
|
|
Landfill operating lease contracts
|
|
|
109,363
|
|
|
|
103,103
|
|
Buildings and improvements
|
|
|
133,330
|
|
|
|
121,344
|
|
Machinery and equipment
|
|
|
120,314
|
|
|
|
116,091
|
|
Rolling stock
|
|
|
128,038
|
|
|
|
125,033
|
|
Containers
|
|
|
80,447
|
|
|
|
73,416
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,068,069
|
|
|
|
1,005,899
|
|
Less: accumulated depreciation and amortization
|
|
|
645,567
|
|
|
|
591,233
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
422,502
|
|
|
$
|
414,666
|
|
|
|
|
|
|
|
|
|
|
Depreciation expense for the fiscal years ended April 30, 2013, 2012 and 2011 was $34,065, $37,829 and $35,939,
respectively. Landfill amortization expense for the fiscal years ended April 30, 2013, 2012 and 2011 was $21,206, $19,957 and $21,342, respectively. Depletion expense on landfill operating lease contracts for the fiscal years ended
April 30, 2013, 2012 and 2011 was $9,372, $8,482 and $7,878, respectively, and was recorded in cost of operations.
82
7.
|
INTANGIBLE ASSETS AND GOODWILL
|
Intangible assets at April 30, 2013 and 2012 consist of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Covenants
Not to
Compete
|
|
|
Client Lists
|
|
|
Total
|
|
Balance, April 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets
|
|
$
|
17,043
|
|
|
$
|
11,660
|
|
|
$
|
28,703
|
|
Less accumulated amortization
|
|
|
(14,800)
|
|
|
|
(2,229)
|
|
|
|
(17,029)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,243
|
|
|
$
|
9,431
|
|
|
$
|
11,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, April 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets
|
|
$
|
15,601
|
|
|
$
|
3,093
|
|
|
$
|
18,694
|
|
Less accumulated amortization
|
|
|
(14,324)
|
|
|
|
(1,400)
|
|
|
|
(15,724)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,277
|
|
|
$
|
1,693
|
|
|
$
|
2,970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible amortization expense for the fiscal years ended April 30, 2013, 2012 and 2011 was $1,306, $629 and $840,
respectively. The intangible amortization expense estimated as of April 30, 2013 for the five fiscal years following fiscal year 2013 and thereafter is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
|
Thereafter
|
|
$ 2,216
|
|
$
|
1,907
|
|
|
$
|
1,525
|
|
|
$
|
1,262
|
|
|
$
|
1,309
|
|
|
$
|
3,455
|
|
The following table shows the activity and balances related to goodwill from April 30, 2011 through April 30,
2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 30, 2012
|
|
|
Acquisitions
|
|
|
Other (1)
|
|
|
April 30, 2013
|
|
Eastern region
|
|
$
|
58
|
|
|
$
|
12,939
|
|
|
$
|
3,861
|
|
|
$
|
16,858
|
|
Western region
|
|
|
89,458
|
|
|
|
1,283
|
|
|
|
(3,861
|
)
|
|
|
86,880
|
|
Recycling
|
|
|
12,190
|
|
|
|
-
|
|
|
|
-
|
|
|
|
12,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
101,706
|
|
|
$
|
14,222
|
|
|
|
-
|
|
|
$
|
115,928
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Goodwill movement between the Eastern and Western regions is associated with the movement of certain operations between the reporting units during fiscal year 2013.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 30, 2011
|
|
|
Acquisitions
|
|
|
April 30, 2012
|
|
Eastern region
|
|
$
|
38
|
|
|
$
|
20
|
|
|
$
|
58
|
|
Western region
|
|
|
88,976
|
|
|
|
482
|
|
|
|
89,458
|
|
Recycling
|
|
|
12,190
|
|
|
|
-
|
|
|
|
12,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
101,204
|
|
|
$
|
502
|
|
|
$
|
101,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We perform our annual assessment of goodwill impairment at the end of the fourth quarter of the fiscal year, or more
frequently if events or circumstances indicate that impairment may exist.
We assess whether a goodwill impairment exists using both
qualitative and quantitative assessments. Our qualitative assessment involves determining whether events or circumstances exist that indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount,
including goodwill. If based on this qualitative assessment we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, we will not perform a quantitative assessment.
83
If the qualitative assessment indicates that it is more likely than not that the fair value of a reporting
unit is less than its carrying amount, or if we elect not to perform a qualitative assessment, we perform a quantitative assessment or two-step impairment test to determine whether goodwill impairment exists at the reporting unit.
The first step (defined as Step 1) of the goodwill impairment test, used to identify potential impairment, compares the fair value of the
reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, thus the second step (defined as Step 2) of the
impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, Step 2 of the goodwill impairment test must be performed to measure the amount of impairment loss, if any.
As a part of the Step 1 testing for goodwill impairment, we estimate the fair value of each reporting unit, which we determined to be our three operating
regions (Eastern, Western, and Recycling). The estimated fair value of each reporting unit is compared with the carrying value of the net assets of each reporting unit. The sum of the fair values of the reporting units is reconciled to our current
market capitalization (based on our stock price). The discounted cash flow method is used to measure the fair value of our equity under the income approach for each reporting unit. Determining the fair value using a discounted cash flow method
requires us to make significant estimates and assumptions, including market conditions, discount rates, and long-term projections of cash flows. Our estimates are based upon historical experience, current market trends, projected future volumes and
other information. We believe that the estimates and assumptions underlying the valuation methodology are reasonable; however, different estimates and assumptions could result in a different estimate of fair value. In estimating future cash flows,
we rely on internally generated projections for a defined time period for revenue and operating profits, including capital expenditures, changes in net working capital, and adjustments for non-cash items to arrive at the free cash flow available to
invested capital. A terminal value utilizing a constant growth rate of cash flows is used to calculate a terminal value after the explicit projection period. The future projected cash flows for the discrete projection period and the terminal value
are discounted at a risk adjusted discount rate to determine the fair value of the reporting unit.
Step 2 of the goodwill impairment test,
used to measure the amount of impairment loss, compares the implied fair value of reporting unit goodwill with the carrying amount of that goodwill. If the carrying amount of our goodwill exceeds the implied fair value of that goodwill, an
impairment loss shall be recognized in an amount equal to that excess. The loss recognized cannot exceed the carrying amount of goodwill. After a goodwill impairment loss is recognized, the adjusted carrying amount of goodwill becomes its new
accounting basis. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination is determined. The excess of the fair value of the reporting unit over the amounts assigned to its
assets and liabilities is the implied amount of goodwill. We estimate the fair value of several tangible and intangible assets during the process that are valued during this process. Intangible assets included landfill air rights, customer
relationships and trade names. For intangible assets, we select an income approach to value the air rights, customer relationships, and trade names. The landfill air rights and customer relationships are valued using the multi-period excess earnings
method under the income approach, which estimates the fair value of the asset by discounting the future projected earnings of the asset to present value as of the valuation date. The trade names were valued using a relief from royalty method.
We elected not to perform a qualitative analysis as a part of our annual goodwill impairment test for fiscal year 2013. As of April 30,
2013, the Step 1 testing for goodwill impairment performed for the Eastern, Western and Recycling reporting units indicated that the fair value of each reporting unit exceeded its carrying amount, including goodwill. Furthermore, the Step 1 test
indicated that the fair value of the Eastern, Western and Recycling reporting units exceeded their carrying values by 22.7%, 23.3% and 20.8%, respectively. We incurred no impairment of goodwill as a result of our annual fourth quarter goodwill
impairment tests in fiscal years 2013, 2012 or 2011.
8.
|
ACCRUED CAPPING, CLOSURE AND POST CLOSURE
|
Accrued capping, closure and post-closure costs include the current and non-current portion of costs associated with obligations for
closure and post-closure of our landfills. We estimate our future capping, closure and post-closure costs in order to determine the capping, closure and post-closure expense per ton of waste placed into each landfill as further described in Note 2
to these consolidated financial statements. The anticipated timeframe for paying these costs varies based on the remaining useful life of each landfill, as well as the duration of the post-closure monitoring period. The changes to accrued capping,
closure and post-closure liabilities are as follows:
84
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended April 30,
|
|
|
|
2013
|
|
|
2012
|
|
Beginning balance
|
|
$
|
39,629
|
|
|
$
|
36,407
|
|
Obligations incurred
|
|
|
3,188
|
|
|
|
3,123
|
|
Revisions in estimates (1)
|
|
|
(694)
|
|
|
|
(1,682)
|
|
Accretion expense
|
|
|
3,538
|
|
|
|
3,341
|
|
Payments
|
|
|
(2,491)
|
|
|
|
(1,560)
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
43,170
|
|
|
$
|
39,629
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The revisions in estimates for capping, closure and post-closure for the years ended April 30, 2013 and 2012 consist of changes in cost estimates and timing of
capping and closure events as well as changes to expansion airspace and tonnage placement assumptions.
|
9.
|
OTHER ACCRUED LIABILITIES
|
Other accrued liabilities, classified as current liabilities, at April 30, 2013 and 2012 consist of the following:
|
|
|
|
|
|
|
|
|
|
|
April 30,
|
|
|
|
2013
|
|
|
2012
|
|
Maine Energy impairment reserve
|
|
$
|
4,500
|
|
|
$
|
-
|
|
Other accrued liabilities
|
|
|
16,514
|
|
|
|
14,119
|
|
|
|
|
|
|
|
|
|
|
Total other accrued liabilities
|
|
$
|
21,014
|
|
|
$
|
14,119
|
|
|
|
|
|
|
|
|
|
|
85
10.
|
LONG-TERM DEBT AND CAPITAL LEASES
|
Long-term debt and capital leases as of April 30, 2013 and 2012 consist of the following:
|
|
|
|
|
|
|
|
|
|
|
April 30,
|
|
|
|
2013
|
|
|
2012
|
|
Senior subordinated notes due February 15, 2019, bearing interest at 7.75%, interest payable semiannually, unsecured and
unconditionally guaranteed (including unamortized discount of $1,735 and $0)
|
|
$
|
323,265
|
|
|
$
|
200,000
|
|
|
|
|
Senior secured revolving credit facility, which provides for advances or letters of credit of up to $227,500, due March 18,
2016, bearing interest at LIBOR plus 3.75%, (approximately 3.95% at April 30, 2013 based on one month LIBOR), secured by substantially all of our assets
|
|
|
123,200
|
|
|
|
69,600
|
|
|
|
|
Senior second lien notes, due July 15, 2014 and redeemed on November 8, 2012, bearing interest at 11.00%, interest
payable semiannually, secured by second priority lien on substantially all of our assets (including unamortized discount of $0 and $2,572)
|
|
|
-
|
|
|
|
177,428
|
|
|
|
|
Finance authority of Maine Solid Waste Disposal Revenue Bonds Series 2005R-2 due January 1, 2025, dated February 1,
2012, bearing interest at 6.25% through January 31, 2017, unsecured and guaranteed by our significant wholly-owned subsidiaires
|
|
|
21,400
|
|
|
|
21,400
|
|
|
|
|
Vermont Economic Development Authority Solid Waste Disposal Long-Term Revenue Bonds Series 2013 due April 1, 2036, dated
March 1, 2013, bearing interest at 4.75% through April 4, 2019, unsecured and guaranteed by our significant wholly-owned subsidiaires
|
|
|
16,000
|
|
|
|
-
|
|
|
|
|
Business Finance Authority of the State of New Hampshire Solid Waste Disposal Revenue Bonds Series 2013 due April 1, 2029,
dated March 1, 2013, bearing interest at BMA Index (approximately 0.28% at April 30, 2013) enhanced by an irrevocable, transferable direct-pay letter of credit (3.875% at April 30, 2013)
|
|
|
5,500
|
|
|
|
-
|
|
|
|
|
Finance Authority of Maine Solid Waste Disposal Revenue Bonds Series 2005R-1 due January 1, 2025, dated December 1,
2005, bearing interest at BMA Index (approximately 0.28% at April 30, 2013) enhanced by an irrevocable, transferable direct-pay letter of credit (3.875% at April 30, 2013)
|
|
|
3,600
|
|
|
|
3,600
|
|
|
|
|
Notes payable in connection with businesses acquired, bearing interest at rates of 2.49% - 6.50%, due in monthly or annual
installments varying to $575, maturing May 2013 through April 2017
|
|
|
1,228
|
|
|
|
2,033
|
|
|
|
|
Capital leases for facilities and equipment, bearing interest rates of up to 4.72%, due in monthly or annual installments varying
to $78, expiring through January 2015
|
|
|
195
|
|
|
|
548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
494,388
|
|
|
|
474,609
|
|
Lesscurrent maturities
|
|
|
857
|
|
|
|
1,228
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
493,531
|
|
|
$
|
473,381
|
|
|
|
|
|
|
|
|
|
|
Senior Secured Revolving Credit Facility
The amended and restated senior secured revolving credit facility (the 2011 Revolver) is a $227,500 revolving credit and letter of credit facility due March 18, 2016 (the Senior
Credit Facility). We have the right to request, at our discretion, an increase in the amount of the Senior Credit Facility by an aggregate amount of $100,000, subject to certain conditions set forth in the Senior Credit Facility agreement. The
Senior Credit Facility is guaranteed jointly and severally, fully and unconditionally by all of our significant wholly-owned subsidiaries. We entered into a second amendment and consent under our Senior Credit Facility on September 20, 2012.
The amendment provided us the ability to redeem our Second Lien Notes and adjusted our financial covenants.
86
The Senior Credit Facility, as amended, is subject to customary affirmative, negative and financial
covenants. We entered into a third amendment under our Senior Credit Facility on June 25, 2013 to further adjust our financial covenants. The amendment loosened our minimum interest coverage ratio and our maximum consolidated total funded debt to
consolidated EBITDA ratio and tightened our maximum senior funded debt to consolidated EBITDA ratio and maximum allowed capital expenditures. As of April 30, 2013, these covenants restrict capital expenditures to 1.1 times our consolidated
depreciation expense, depletion expense and landfill amortization expense, set a minimum interest coverage ratio of 2.15, a maximum consolidated total funded debt to consolidated EBITDA ratio of 5.85 and a maximum senior funded debt to consolidated
EBITDA ratio of 2.50.
In addition to the financial covenants described above, the Senior Credit Facility, as amended, also contains a number
of important negative covenants which restrict, among other things, our ability to sell assets, pay dividends, invest in non-wholly owned entities, repurchase stock, incur debt, grant liens and issue preferred stock. As of April 30, 2013, we
were in compliance with all covenants under the indenture governing the Senior Credit Facility and we do not believe that these restrictions impact our ability to meet future liquidity needs except that they may impact our ability to increase our
investments in non-wholly owned entities, including the joint ventures to which we are already party.
Further advances were available under
the 2011 Revolver in the amount of $69,013 as of April 30, 2013. The available amount is net of outstanding irrevocable letters of credit totaling $35,287 as of April 30, 2013, at which date no amount had been drawn.
Senior Subordinated Notes
In the
fiscal year ended April 30, 2012, we completed the offering of $200,000 of senior subordinated notes due February 15, 2019 (the 2019 Notes). The net proceeds from the 2019 Notes, together with other available funds, were used
to refinance our then outstanding senior subordinated notes due February 1, 2013 (the 2013 Notes) and to pay related transaction costs.
In the fiscal year ended April 30, 2013, we completed the offering of an additional $125,000 of 2019 Notes. The 2019 Notes were issued at a discount of $1,863, which is amortized to interest expense
over the life of the 2019 Notes. The net proceeds from the offering of additional 2019 Notes, along with $50,000 of 2011 Revolver borrowings, $42,184 of net equity proceeds from the offering and sale of Class A common stock and other available
funds were used to redeem our Second Lien Notes in full and to pay related transaction costs.
As of April 30, 2013, we had outstanding
$325,000 aggregate principal amount of the 2019 Notes, which will mature on February 15, 2019. The 2019 Notes accrue interest at the rate of 7.75% per annum and interest is payable semiannually in arrears on February 15 and
August 15 of each year.
The indenture governing the 2019 Notes contains certain negative covenants which restrict, among other things,
our ability to sell assets, make investments in joint ventures, pay dividends, repurchase stock, incur debt, grant liens and issue preferred stock. As of April 30, 2013, we were in compliance with all covenants under the indenture governing the
2019 Notes and we do not believe that these restrictions impact our ability to meet future liquidity needs except that they may impact our ability to increase our investments in non-wholly owned entities, including the joint ventures to which we are
already party.
The 2019 Notes are fully and unconditionally guaranteed on a senior subordinated basis by substantially all of our existing
and future domestic restricted subsidiaries that guarantee our Senior Credit Facility.
Senior Second Lien Notes
As of April 30, 2013, we did not have any aggregate principal amount of our 11% Second Lien Notes outstanding. In fiscal year 2013, we initiated a
cash tender offer and consent solicitation for our Second Lien Notes (the Tender Offer). In the second quarter of fiscal year 2012, we repurchased $107,318 in aggregate principal amount of our then outstanding Second Lien Notes through
the Tender Offer, leaving $72,682 in aggregate principal amount of Second Lien Notes outstanding. Holders who tendered the Second Lien Notes prior to the early tender date received $1,060 for each $1,000 in principal amount of Second Lien Notes
repurchased, which included an early tender premium of $30 per $1,000 in principal amount of Second Lien Notes, plus accrued and unpaid interest to, but not including the early tender offer settlement date. In the third quarter of fiscal year 2013,
we redeemed the remaining $72,682 in aggregate principal amount the outstanding Second Lien Notes. The remaining holders who tendered the Second Lien Notes received $1,055 for each $1,000 in principal amount of Second Lien Notes redeemed, plus
accrued and unpaid interest to, but not including the redemption date.
87
Maine Bonds
In fiscal year 2006, we completed a financing transaction involving the issuance, by the Finance Authority of Maine (the Authority), of $25,000 aggregate principal amount of its Solid Waste
Disposal Revenue Bonds Series 2005R-1 (the Bonds). The Bonds were issued pursuant to an indenture, dated as of December 1, 2005 and were enhanced by an irrevocable, transferable direct-pay letter of credit issued by Bank of
America, N.A. Pursuant to a Financing Agreement, dated as of December 1, 2005, by and between us and the Authority, we have borrowed the proceeds of the Bonds to pay for certain costs relating to landfill development and construction, vehicle,
container and related equipment acquisition for solid waste collection and transportation services, improvements to existing solid waste disposal, hauling, transfer station and other facilities, other infrastructure improvements, and machinery and
equipment for solid waste disposal operations owned and operated by us, or a related party, all located in Maine.
In the fourth quarter of
fiscal year 2012, we converted the interest rate period on, and remarketed, $21,400 aggregate principal amount of the $25,000 Bonds. The mandatorily tendered Finance Authority of Maine Solid Waste Disposal Revenue Bonds Series 2005R-2 due
January 1, 2025 (the Converted Bonds) were converted from a variable rate to a five year fixed term interest rate of 6.25% per annum and included additional covenants and credit support for the benefit of the holders of those
Converted Bonds, including guarantees by certain of our subsidiaries. The Converted Bonds are no longer secured by a letter of credit issued by a bank. The remaining $3,600 of outstanding Bonds will remain as variable rate bonds secured by a letter
of credit issued by a bank. The Bonds and Converted Bonds mature on January 1, 2025.
Vermont Bonds
In the fourth quarter of fiscal year 2013, we completed a financing transaction involving the issuance, by the Vermont Economic Development Authority, of
$16,000 aggregate principal amount of its Solid Waste Disposal Long-Term Revenue Bonds Series 2013 (the Vermont Bonds). The Vermont Bonds were issued pursuant to an indenture, dated as of March 1, 2013. We have borrowed the
proceeds of the Vermont Bonds to repay borrowings under our 2011 Revolver for qualifying property, plant and equipment assets purchased in Vermont since October 5, 2011. The Vermont Bonds, which are guaranteed by certain of our subsidiaries,
accrue interest at 4.75% per annum through April 4, 2019, at which time they may be converted from a fixed rate to a variable rate. The Vermont Bonds mature on April 1, 2036.
New Hampshire Bonds
In the fourth quarter of fiscal year 2013, we completed a financing
transaction involving the issuance, by the Business Finance Authority of the State of New Hampshire, of $5,500 aggregate principal amount of its Solid Waste Disposal Revenue Bonds Series 2013 (the New Hampshire Bonds). The New
Hampshire Bonds were issued pursuant to an indenture, dated as of March 1, 2013. We have borrowed the proceeds of the New Hampshire Bonds to repay borrowings under our 2011 Revolver for qualifying property, plant and equipment assets purchased
in New Hampshire since October 5, 2011. The New Hampshire Bonds are variable rate bonds secured by a letter of credit issued by our administrative agent bank. The New Hampshire Bonds also contain a drawdown structure that allows us to issue up
to an additional $5,500 of bonds at a future date. The New Hampshire Bonds mature on April 1, 2029.
Loss on Debt Extinguishment
In the fiscal year ended April 30, 2013, we recorded a charge of $15,584 as a loss on debt extinguishment related to the full
refinancing of our Second Lien Notes. The loss on debt extinguishment consisted of a $2,667 non-cash write off of deferred financing costs, a $2,074 non-cash write off of the unamortized original issue discount and a $10,743 charge associated with
the early tender premium and tender fees associated with the redemption of the Second Lien Notes.
In the fiscal year ended April 30,
2012, we recorded a charge of $300 as a loss on debt extinguishment related to the non-cash write off of unamortized deferred financing costs associated with the original issuance of the Bonds.
In the fiscal year ended April 30, 2011, we recorded a charge of $7,390 as a loss on debt extinguishment associated with fiscal year 2011
refinancing efforts, which include the write off of $1,415 and $1,812 in deferred financing costs associated with the senior secured term B loan due April 9, 2014 (the 2009 Term Loan) and the 2013 Notes, the write-off of the $4,976
discount and $1,706 premium associated with the 2009 Term Loan and 2013 Notes, a $1,043 gain associated with the discount on the tender of the 2013 Notes and a $1,821 loss associated with the consent payment on the 2013 Notes. Also included in this
loss is a charge attributable to the $115 non-cash write-off of unamortized financing costs associated with the repayment of financing lease obligations and other costs.
88
Interest Expense
The components of interest expense for the fiscal years ended April 30, 2013, 2012 and 2011 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended April 30,
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
Interest expense on debt, capital lease and financing lease obligations
|
|
$
|
36,955
|
|
|
$
|
40,156
|
|
|
$
|
42,021
|
|
Amortization of debt financing costs
|
|
|
3,325
|
|
|
|
3,307
|
|
|
|
3,424
|
|
Amortization of debt discounts
|
|
|
626
|
|
|
|
964
|
|
|
|
801
|
|
Amortization of debt premium
|
|
|
-
|
|
|
|
-
|
|
|
|
(611
|
)
|
Letter of credit fees
|
|
|
1,032
|
|
|
|
988
|
|
|
|
986
|
|
Less: capitalized interest
|
|
|
(368
|
)
|
|
|
(407
|
)
|
|
|
(1,078
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest expense
|
|
$
|
41,570
|
|
|
$
|
45,008
|
|
|
$
|
45,543
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value of Debt
As of April 30, 2013, the fair value of our fixed rate debt, including the 2019 Notes, the Converted Bonds and the Vermont Bonds was approximately $360,665 and the carrying value was $353,100. The
fair value of the 2019 Notes is considered to be Level 1 within the fair value hierarchy as the fair value is based off of a quoted market price in an active market. The fair value of the Converted Bonds is considered to be Level 2 within the fair
value hierarchy as the fair value is determined using market approach pricing that utilizes pricing models and pricing systems, mathematical tools and judgment to determine the evaluated price for the security based on the market information of the
Converted Bonds or securities with similar characteristics. The fair value of the Vermont Bonds is considered to be Level 2 within the fair value hierarchy as the fair value is determined based on changes in the pricing of an observable five year
municipal bond index. As of April 30, 2013, the fair value of the 2011 Revolver approximated its carrying value of $123,200 based on current borrowing rates for similar types of borrowing arrangements.
Future Maturities of Debt
As of
April 30, 2013, debt and capital leases mature as follows:
|
|
|
|
|
2014
|
|
$
|
857
|
|
2015
|
|
|
328
|
|
2016
|
|
|
123,410
|
|
2017
|
|
|
28
|
|
2018
|
|
|
-
|
|
Thereafter (1)
|
|
|
369,765
|
|
|
|
|
|
|
|
|
$
|
494,388
|
|
|
|
|
|
|
(1)
|
Includes unamortized discount of $1,735 on 2019 Notes.
|
89
11. COMMITMENTS AND CONTINGENCIES
Leases
The
following is a schedule of future minimum operating lease and finance lease obligation payments, together with the present value of the net minimum lease payments under finance lease obligations, as of April 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
Operating
Leases
|
|
|
Financing Lease
Obligations
|
|
2014
|
|
$
|
11,639
|
|
|
$
|
472
|
|
2015
|
|
|
11,931
|
|
|
|
472
|
|
2016
|
|
|
10,246
|
|
|
|
1,098
|
|
2017
|
|
|
9,712
|
|
|
|
-
|
|
2018
|
|
|
11,294
|
|
|
|
-
|
|
Thereafter
|
|
|
118,332
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Total minimum lease payments
|
|
$
|
173,154
|
|
|
|
2,042
|
|
Less amount representing interest
|
|
|
|
|
|
|
225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,817
|
|
Less current maturities of finance lease obligations
|
|
|
|
|
|
|
361
|
|
|
|
|
|
|
|
|
|
|
Present value of long term finance lease obligations
|
|
|
|
|
|
$
|
1,456
|
|
|
|
|
|
|
|
|
|
|
We lease real estate and equipment under leases that qualify for treatment as capital leases. In fiscal year 2009, we
completed a financing transaction for the construction of two single stream MRFs as well as engines for a landfill gas-to-energy project with a third-party leasing company. The financing lease obligation has a seven year term at a fixed rate of
interest (approximately 6.7%). The assets related to the obligation in the amount of $3,213 have been capitalized and are included in property, plant and equipment at April 30, 2013 and 2012, respectively. Depreciation expense associated with
these assets amounted to $293 for fiscal years ended April 30, 2013, 2012 and 2011, respectively.
We lease operating facilities and
equipment under operating leases with monthly payments varying up to $26. Future minimum lease payments under these operating leases include the effect of escalation clauses, lease concessions and capital project funding, as applicable. Future
minimum lease payments are recognized on a straight-line basis over the minimum lease term. Total rent expense under operating leases charged to operations was $5,372, $5,213 and $5,109 in fiscal years ended April 30, 2013, 2012 and 2011,
respectively.
We entered into three landfill operation and management agreements in fiscal year 2004 and one landfill operation and
management agreement in fiscal year 2006. These agreements are long-term landfill operating contracts with government bodies whereby we receive tipping revenue, pay normal operating expenses and assume future capping, closure and post-closure
liabilities. The government body retains ownership of the landfill. There is no bargain purchase option and title to the property does not pass to us at the end of the lease term. We allocate the consideration paid to the landfill airspace rights
and underlying land lease based on the relative fair values.
In addition to up-front or one-time payments, the landfill operating agreements
require us to make future minimum rental payments, including success/expansion fees, other direct costs and capping, closure, and post closure costs. The value of all future probable lease payments is amortized and charged to cost of operations over
the life of the contract. We amortize the consideration allocated to airspace rights as airspace is utilized on a units-of-consumption basis and such depletion is charged to cost of operations as airspace is consumed (e.g., as tons are placed
into the landfill). The underlying value of the land lease is amortized to cost of operations on a straight-line basis over the estimated life of the operating agreement. Depletion expense on landfill operating lease contracts charged to operations
was $9,372, $8,482 and $7,878 in fiscal years ended April 30, 2013, 2012 and 2011, respectively.
Legal Proceedings
In the ordinary course of our business and as a result of the extensive governmental regulation of the solid waste industry, we are subject to various
judicial and administrative proceedings involving state and local agencies. In these proceedings, an agency may seek to impose fines or to revoke or deny renewal of an operating permit held by us. From time to time, we may also be subject to actions
brought by special interest or other groups, adjacent landowners or residents in connection with the permitting and licensing of landfills and transfer stations, or alleging environmental damage or violations of the permits and licenses pursuant to
which we operate. In addition, we have been named defendants in various claims and suits pending for alleged damages to persons and property, alleged violations of certain laws and alleged liabilities arising out of matters occurring during the
ordinary operation of the waste management business.
90
In accordance with ASC 450-20, we accrue for legal proceedings when losses become probable and reasonably
estimable. As of the end of each applicable reporting period, we review each of our legal proceedings to determine whether it is probable, reasonably possible or remote that a liability has been incurred and, if it is at least reasonably possible,
whether a range of loss can be reasonably estimated under the provisions of ASC 450-20-25-2. In instances where we determine that a loss is probable and we can reasonably estimate a range of losses we may incur with respect to such a matter, we
record an accrual for the amount within the range that constitutes our best estimate of the possible loss. If we are able to reasonably estimate a range but no amount within the range appears to be a better estimate than any other, we record an
accrual in the amount that is the low end of such range. When a loss is reasonably possible, but not probable, we will not record an accrual but we will disclose our estimate of the possible range of loss where such estimate can be made in
accordance with ASC 450-20-25-3. As of April 30, 2013, there were no accruals established related to our outstanding legal proceedings.
We offer no prediction of the outcome of any of the proceedings or negotiations described below. We are vigorously defending each of the unresolved
lawsuits and claims described below. However, litigation is subject to inherent uncertainty and there can be no guarantee we will prevail or that any judgments against us, if sustained on appeal, will not have a material adverse effect on our
business, financial condition, results of operations or cash flows.
Penobscot Energy Recovery Company Matter
On May 31, 2011, we received formal written notice from the Penobscot Energy Recovery Company (PERC) submitting to arbitration what it
alleges is a disputed invoice in the amount of approximately $3,195 dated March 2, 2011. PERC contended that Pine Tree Waste, Inc., our subsidiary, failed since 2001 to honor a put-or-pay waste disposal arrangement. Arbitration
of this matter was initiated, but in January 2012 a global settlement was reached in principle and memorialized in a letter of intent dated February 1, 2012, which documented the final terms of the settlement and dismissal of the
arbitration action. The final global settlement documents were executed effective October 1, 2012. Pursuant to the terms of the settlement, we will not be required to make a cash payout. We anticipate that there may be nonmaterial incremental
operational expenses that arise from implementing the terms of the settlement with regard to waste deliveries. This matter is now closed.
New York State Tax Litigation Matter
On January 18, 2011, certain of our subsidiaries doing business in New York State received a Notice of Deficiency (the Notices) from the New York State Department of Taxation and Finance
asserting liability for corporation franchise tax for one or more of the tax years ended April 30, 2004 through April 30, 2006. The Notices, in the aggregate, asserted liability of $3,852, comprising $2,220 of tax and $1,632 of penalties
and interest. New York State had alleged that we were not permitted to file a single combined corporation franchise tax return with our subsidiaries for each of the years audited. Subsequent tax years through the present would also have been subject
to additional Notices of Deficiency.
We filed Petitions for Redetermination (Petitions) with the State of New York Division of
Tax Appeals on April 13-14, 2011, and an administrative hearing before a single tax tribunal administrative law judge on all Petitions that was scheduled for December 12, 2012, was rescheduled to April 18-19, 2013. Prior to the
hearing, we reached agreement with the State, and executed a Closing Agreement, dated April 16, 2013, pursuant to which we agreed to pay $800 to the State to satisfy all alleged actual or potential tax deficiencies through
April 30, 2010. Payment was made in May 2013. Of the $800 payment, $430 represented taxes and $370 represented interest. This settlement was a small portion of the potential tax liability sought by the State, and we have not made any change to
our practice of filing combined returns in New York. No audit has been initiated for tax years after 2010.
Environmental Liability
We are subject to liability for environmental damage, including personal injury and property damage, that our solid waste, recycling
and power generation facilities may cause to neighboring property owners, particularly as a result of the contamination of drinking water sources or soil, possibly including damage resulting from conditions existing before we acquired the
facilities. We may also be subject to liability for similar claims arising from off-site environmental contamination caused by pollutants or hazardous substances if we or our predecessors arrange or arranged to transport, treat or dispose of those
materials.
On December 20, 2000, the State of New York Department of Environmental Conservation (DEC) issued an Order on
Consent (Order) which named Waste-Stream, Inc. (WSI), our subsidiary, General Motors Corporation (GM) and Niagara Mohawk Power Corporation (NiMo) as Respondents. The Order required that the
Respondents undertake certain work on a 25-acre scrap yard and solid waste transfer station owned by WSI, including the preparation of a Remedial Investigation and Feasibility Study (the Study). A draft of the Study was submitted to DEC
in January 2009 (followed by a final report in May 2009). The Study estimated
91
that the undiscounted costs associated with implementing the preferred remedies will be approximately $10,219 and it is unlikely that any costs relating to onsite remediation will be incurred
until fiscal year 2014. On February 28, 2011, the DEC issued a Proposed Remedial Action Plan for the site and accepted public comments on the proposed remedy through March 29, 2011. We submitted comments to the DEC on this matter. In
April 2011, the DEC issued the final Record of Decision (ROD) for the site. The ROD was subsequently rescinded by the DEC for failure to respond to all submitted comments. The preliminary ROD, however, estimated that the present
cost associated with implementing the preferred remedies would be approximately $12,130. The DEC issued the final ROD in June 2011 with proposed remedies consistent with its earlier ROD. A new Order on Consent and Administrative Settlement
naming WSI and NiMo as Respondents was received by us on November 13, 2012, requiring that we enter into a Consent Order with DEC within 60 days and mandating implementation of the ROD. The deadline for execution of the Consent Order has
recently been extended until July 31, 2013.
WSI is jointly and severally liable for the total cost to remediate and we initially
expected to be responsible for approximately 30% upon implementation of a cost-sharing agreement with NiMo and GM. Based on these estimates, we recorded an environmental remediation charge of $2,823 in the third quarter of fiscal year 2009. In the
fourth quarter of fiscal year 2009, we recognized an additional charge of $1,532, representing an additional 15% of the estimated costs, in recognition of the deteriorating financial condition and eventual bankruptcy filing of GM. In the fourth
quarter of fiscal year 2010, we recognized an additional charge of $335 based on changes in the expected timing of cash outflows. Based on the estimated costs in the ROD, and changes in the estimated timing of cash flows, we recorded an
environmental remediation charge of $549 in the fourth quarter of fiscal year 2011. Such charges could be significantly higher if costs exceed estimates. We inflate these estimated costs in current dollars until the expected time of payment and
discount the cost to present value using a risk free interest rate (2.70%). As of April 30, 2013 and April 30, 2012, we have recorded liabilities of $5,297 and $5,210, respectively, including the recognition of $138 of accretion expense in
the fiscal years ended April 30, 2013 and 2012, respectively.
In September 2011, the DEC settled its environmental claim against
the estate of the former GM (known as the Motors Liquidation Trust) for future remediation costs relating to the WSI site for face value of $3,000. In addition, in November 2011 we settled our own claim against the Motors
Liquidation Trust for face value of $100. These claims will be paid by GM in warrants to obtain stock of the reorganized GM. We began receiving the warrants in May 2013 and expect the remainder of the warrants to be issued in fiscal year 2014. We
have not assumed that any proceeds from the sale of securities received in payment of these claims will reduce our exposure.
The payments we
expect to make, in todays dollars, for each of the five succeeding fiscal years and the aggregate amount thereafter are as follows:
|
|
|
|
|
2014
|
|
$
|
225
|
|
2015
|
|
|
3,368
|
|
2016
|
|
|
661
|
|
2017
|
|
|
26
|
|
2018
|
|
|
42
|
|
Thereafter
|
|
|
750
|
|
|
|
|
|
|
Total
|
|
$
|
5,072
|
|
|
|
|
|
|
A reconciliation of the expected aggregate undiscounted amount to the amount recognized in the statements of financial
position is as follows as of April 30, 2013:
|
|
|
|
|
Undiscounted liability
|
|
$
|
5,072
|
|
Plus inflation / discount
|
|
|
225
|
|
|
|
|
|
|
Liability balance
|
|
$
|
5,297
|
|
|
|
|
|
|
Any substantial liability incurred by us arising from environmental damage could have a material adverse effect on our
business, financial condition and results of operations. We are not presently aware of any other situations that would have a material adverse impact on our business, financial condition, results of operations or cash flows.
92
Employment Contracts
We have entered into employment contracts with four of our executive officers. Contracts are dated June 18, 2001, March 31, 2006, July 6, 2010 and September 1, 2012. Each contract had an
initial term between one and three years and a covenant not to compete ranging from one to two years from the date of termination. These contracts automatically extend for a one year period at the end of the initial term and any renewal period.
Total annual commitments for salaries under these contracts are $1,201. In the event of a change in control of us, or in the event of involuntary termination without cause, the employment contracts provide for a payment ranging from one to three
years of salary and bonuses. We also have other employment contracts or arrangements with employees who are not senior officers.
12. STOCKHOLDERS EQUITY
Common Stock
The
holders of the Class A common stock are entitled to one vote for each share held. The holders of the Class B common stock are entitled to ten votes for each share held, except for the election of one director, who is elected by the holders
of the Class A common stock exclusively. The Class B common stock is convertible into Class A common stock on a share-for-share basis at the option of the shareholder.
In the second quarter of fiscal year 2013, in a registered public offering we sold 11,500 shares of Class A common stock at an average price of $4.00 per share. The net proceeds received from the
registered public offering, after deducting underwriting discounts, commissions and offering expenses, were $42,184 and were used to refinance our Second Lien Notes.
Preferred Stock
We are authorized to issue up to 944 shares of preferred stock in one or
more series. As of April 30, 2013 and 2012, we had zero shares issued.
Stock Incentive Plans
1997 Stock Option Plan
In
fiscal year 1998, we adopted the 1997 Stock Option Plan (the 1997 Plan) a stock option plan for employees, officers and directors of, and consultants and advisors to us. As of April 30, 2013 and 2012, respectively, options to
purchase 599 and 1,081 shares of Class A common stock at weighted average exercise prices of $12.23 and $11.82 were outstanding under the 1997 Plan. The 1997 Plan terminated as of July 31, 2007 and as a result no additional awards may be
made pursuant to the 1997 Plan.
1997 Non-Employee Director Stock Option Plan
In fiscal year 1998, we adopted a stock option plan for our non-employee directors. The 1997 Non-Employee Director Stock Option Plan (the
Non-Employee Director Plan) provided for the issuance of a maximum of 200 shares of Class A common stock pursuant to the grant of non-statutory options. As of April 30, 2013 and 2012, respectively, options to purchase 75 and 95
shares of Class A common stock at weighted average exercise prices of $12.45 and $11.04 were outstanding. The Non-Employee Director Plan terminated as of July 31, 2007.
2006 Stock Incentive Plan
In fiscal year 2007, we adopted the 2006 Stock Incentive
Plan (the 2006 Plan). The 2006 Plan was subsequently amended in fiscal year 2010. Up to an aggregate amount equal to the sum of: (i) 2,475 shares of Class A common stock (subject to adjustment in the event of stock splits and
other similar events), plus (ii) such additional number of shares of Class A common stock as are currently subject to options granted under our 1993 Incentive Stock Option Plan, 1994 Non-statutory Stock Option Plan, 1996 Option Plan, and
1997 Plan (the Prior Plans) which are not actually issued under the Prior Plans because such options expire or otherwise result in shares not being issued, may be issued pursuant to awards granted under the 2006 Plan. As of
April 30, 2013 there were 1,602 Class A common stock equivalents available for future grant under the 2006 Plan inclusive of additional Class A common stock equivalents which were previously issued under our terminated plans, and
which have become available for grant because such awards expired or otherwise resulted in shares not being issued.
93
Options granted under the 2006 Plan are granted at a price equal to the prevailing fair market value of our
Class A common stock at the date of grant. Generally, options granted have a term not to exceed ten years and vest over a one to four year period from the date of grant. As of April 30, 2013 and 2012, respectively, options to purchase 768
and 485 shares of Class A common stock at weighted average exercise prices of $5.16 and $7.64 were outstanding under the 2006 Plan.
Restricted stock units and performance stock units granted under the 2006 Plan are granted at a price equal to the fair market value of our Class A common stock at the date of grant. Restricted stock
units vest incrementally over a three year period beginning on the first anniversary date of the grant and are based on continued employment. Performance stock units vest on April 30
th
of the third fiscal year end following the grant date and are based on the attainment of a targeted average return on
net assets as of the vesting date.
Restricted stock awards granted to non-employee directors under the 2006 Plan are granted at a price equal
to the fair market value of our Class A common stock at the date of grant. Restricted stock awards granted to non-employee directors vest incrementally over a three year period beginning on the first anniversary of the grant date.
The following table summarizes the grant activity for stock options, restricted stock units, performance stock units and restricted stock awards for the
fiscal years ended April 30, 2013, 2012 and 2011, respectively:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
Weighted
Average
Grant Date
Fair Value
|
|
|
Unissued
at April
30, 2013
|
|
Fiscal year 2011 grants
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options
|
|
|
280
|
|
|
$
|
2.85
|
|
|
|
250
|
|
Restricted stock units
|
|
|
499
|
|
|
$
|
3.57
|
|
|
|
83
|
|
Performance stock units (1)
|
|
|
469
|
|
|
$
|
4.20
|
|
|
|
-
|
|
Restricted stock awards
|
|
|
62
|
|
|
$
|
4.81
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,310
|
|
|
|
|
|
|
|
333
|
|
Fiscal year 2012 grants
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options
|
|
|
7
|
|
|
$
|
4.14
|
|
|
|
7
|
|
Restricted stock units
|
|
|
305
|
|
|
$
|
6.12
|
|
|
|
143
|
|
Performance stock units (1)
|
|
|
255
|
|
|
$
|
6.06
|
|
|
|
196
|
|
Restricted stock awards
|
|
|
51
|
|
|
$
|
5.83
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
618
|
|
|
|
|
|
|
|
346
|
|
Fiscal year 2013 grants
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options
|
|
|
388
|
|
|
$
|
3.03
|
|
|
|
388
|
|
Restricted stock units
|
|
|
340
|
|
|
$
|
5.15
|
|
|
|
273
|
|
Performance stock units (1)
|
|
|
316
|
|
|
$
|
5.17
|
|
|
|
259
|
|
Restricted stock awards
|
|
|
79
|
|
|
$
|
4.45
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,123
|
|
|
|
|
|
|
|
920
|
|
(1)
|
Performance stock units are included at the 100% attainment level.
|
94
A summary of stock options, restricted stock and restricted / performance stock units outstanding as of
April 30, 2013 and 2012, and changes during the fiscal year ended April 30, 2013, is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested
Options
|
|
|
Vested
Options
|
|
|
Total
Options
|
|
|
Weighted
Average
Exercise
Price
|
|
|
Aggregate
Intrinsic
Value of
Vested
Options
|
|
|
Weighted
Average
Remaining
Term
(Years)
|
|
|
Restricted
Stock Units,
Restricted
Stock and
Performance
Stock
Units
Unvested (1)
|
|
Outstanding, April 30, 2012
|
|
|
174
|
|
|
|
1,487
|
|
|
|
1,661
|
|
|
$
|
10.55
|
|
|
$
|
592
|
|
|
|
3.6
|
|
|
|
1,380
|
|
Granted
|
|
|
388
|
|
|
|
-
|
|
|
|
388
|
|
|
|
4.10
|
|
|
|
|
|
|
|
|
|
|
|
735
|
|
Vested (options only) (2)
|
|
|
(125)
|
|
|
|
125
|
|
|
|
-
|
|
|
|
4.08
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
Forfeited
|
|
|
-
|
|
|
|
(607)
|
|
|
|
(607)
|
|
|
|
11.37
|
|
|
|
|
|
|
|
|
|
|
|
(533)
|
|
Exercised/Issued
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
(494)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, April 30, 2013
|
|
|
437
|
|
|
|
1,005
|
|
|
|
1,442
|
|
|
|
8.48
|
|
|
|
240
|
|
|
|
5.3
|
|
|
|
1,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable, April 30, 2011
|
|
|
|
|
|
|
1,998
|
|
|
|
1,998
|
|
|
$
|
11.80
|
|
|
$
|
52
|
|
|
|
3.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable, April 30, 2012
|
|
|
|
|
|
|
1,487
|
|
|
|
1,487
|
|
|
$
|
11.33
|
|
|
$
|
222
|
|
|
|
3.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable, April 30, 2013
|
|
|
|
|
|
|
1,005
|
|
|
|
1,005
|
|
|
$
|
10.41
|
|
|
$
|
94
|
|
|
|
3.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expected to vest at April 30, 2013
|
|
|
436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Performance stock units are included at the 100% attainment level. Attainment of performance metrics at maximum levels could result in the issuance of an additional 357
shares of Class A common stock.
|
(2)
|
The total fair value of the 125 stock options vested during the fiscal year and outstanding as of April 30, 2013 was approximately $378.
|
Stock-Based Compensation
We recognized
stock-based compensation expense of $2,236, $1,855 and $1,592 for the fiscal years ended April 30, 2013, 2012 and 2011, respectively. Of these amounts, expense recorded with respect to stock options was $528, $258 and $387, expense recorded
with respect to our employee stock purchase plan was $99, $113 and $122, and expense recorded with respect to restricted stock, restricted stock units and performance stock units was $1,609, $1,485 and $1,083 for the fiscal years ended
April 30, 2013, 2012 and 2011, respectively. The tax benefit in the provision for income taxes associated with stock-based compensation expense for the fiscal years ended April 30, 2013, 2012 and 2011 was $0, $0, and $97, respectively.
As a result of the sale of the non-integrated recycling assets and select intellectual property assets in fiscal year 2011, we modified
certain awards associated with our grants to allow employees who left us as a result of the transaction to become immediately vested in full with respect to their performance stock units and partially vested with respect to their restricted stock
units based on their continued employment through the transaction date. This modification resulted in the issuance of 259 shares of Class A common stock and the recognition of $1,438 in total compensation expense as discontinued operations in
the fiscal year 2011.
The unrecognized stock-based compensation expense at April 30, 2013 related to unvested stock options, restricted
stock and restricted stock units was $2,750, to be recognized over a weighted average period of 1.64 years. Maximum unrecognized stock-based compensation expense at April 30, 2013 related to outstanding performance stock units, and subject to
the attainment of targeted maximum annual returns on net assets, was $3,805, which would be recognized over a weighted average period of 1.64 years. As of April 30, 2013, we do not expect to recognize any expense related to outstanding
performance stock units over the weighted average period based on our expectation that we will not meet our attainment levels.
We recorded a
tax benefit of $96, $254 and $129 to additional paid in capital related to the exercise of various share based awards in the fiscal years ended April 30, 2013, 2012 and 2011, respectively. Tax savings from equity based compensation resulting
from tax deductions in excess of expense are reflected as a financing cash flow in our consolidated financial statements.
95
Our calculations of stock-based compensation expense associated with stock options and our Employee Stock
Purchase Plan for the fiscal years ended April 30, 2013, 2012 and 2011 were made using the Black-Scholes valuation model. The fair values of our stock option grants and shares to be purchased under our Employee Stock Purchase Plan were
estimated assuming no expected dividend yield using the following weighted average assumptions for the fiscal years ended April 30, 2013, 2012 and 2011:
|
|
|
|
|
|
|
|
|
Fiscal Year Ended April 30,
|
|
|
2013
|
|
2012
|
|
2011
|
Stock Options:
|
|
|
|
|
|
|
Expected life
|
|
6.82 years
|
|
5.5 years
|
|
6.5 years
|
Risk-free interest rate
|
|
1.14%
|
|
0.82%
|
|
1.80%
|
Expected volatility
|
|
84.40%
|
|
91.54%
|
|
85.59%
|
|
|
|
|
Stock Purchase Plan:
|
|
|
|
|
|
|
Expected life
|
|
0.5 years
|
|
0.5 years
|
|
0.5 years
|
Risk-free interest rate
|
|
0.12%
|
|
0.10%
|
|
0.20%
|
Expected volatility
|
|
46.95%
|
|
49.05%
|
|
46.53%
|
Expected life is calculated based on the weighted average historical life of the vested stock options, giving
consideration to vesting schedules and historical exercise patterns. Risk-free interest rate is based on the U.S. Treasury yield curve for the period of the expected life of the stock option. Expected volatility is calculated using the historical
volatility of our Class A common stock over the expected life.
The Black-Scholes valuation model requires extensive use of accounting
judgment and financial estimation, including estimates of the expected term option holders will retain their vested stock options before exercising them, the estimated volatility of our Class A common stock price over the expected term, and the
number of stock options that will be forfeited prior to the completion of their vesting requirements. Application of alternative assumptions could produce significantly different estimates of the fair value of stock-based compensation and
consequently, the related amounts recognized in the consolidated statements of operations.
Noncontrolling interest
Casella-Altela Regional Environmental Services, LLC (CARES) is a joint venture that owns and operates one water and leachate treatment
facility for the natural gas drilling industry in Pennsylvania. Our joint venture partner in CARES is Altela, Inc. In the third quarter of fiscal year 2013, we entered into an agreement with Altela, Inc., which increased our membership interest in
CARES from 51% to 66.1% subject to a one-year claw back provision. As of April 30, 2013, Altela, Inc. had taken advantage of the claw back provision to reestablish its 49% membership interest in CARES. In accordance with ASC 810-10-15, we
consolidate the assets, liabilities, noncontrolling interest, and results of operations of CARES into our consolidated financial statements due to our controlling financial interest in the joint venture.
13. FAIR VALUE OF FINANCIAL INSTRUMENTS
We use a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring
basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. These tiers include: Level 1, defined as quoted market prices in active markets for identical assets or
liabilities; Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, and Level 3, defined as unobservable inputs that are not corroborated by market
data.
We use valuation techniques that maximize the use of market prices and observable inputs and minimize the use of unobservable inputs.
In measuring the fair value of our financial assets and liabilities, we rely on market data or assumptions which we believe market participants would use in pricing an asset or a liability.
Our financial instruments include cash and cash equivalents, trade receivables, restricted trust and escrow accounts, interest rate derivatives, trade payables and long-term debt. The carrying values of
cash and cash equivalents, trade receivables and trade payables approximate their respective fair values. See Note 10 for disclosure over the fair value of debt.
96
As of April 30, 2013, our financial assets and liabilities that are measured at fair value on a
recurring basis include the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurement at April 30, 2013
Using:
|
|
|
|
Quoted Prices
in
Active
Markets for
Identical
Assets
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted assets
|
|
$
|
545
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate derivatives
|
|
$
|
-
|
|
|
$
|
4,229
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of April 30, 2012, our financial assets and liabilities that are measured at fair value on a recurring basis
include the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurement at April 30, 2012
Using:
|
|
|
|
Quoted Prices
in
Active
Markets for
Identical
Assets
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted assets
|
|
$
|
424
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate derivatives
|
|
$
|
-
|
|
|
$
|
2,369
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In fiscal year 2013, our financial assets and liabilities recorded at fair value on a non-recurring basis include our
guaranty of GreenFibers modified and restated loan and security agreement and our assets related to Bio Fuels, a construction and demolition material processing facility located in Lewiston, Maine, which is classified as held-for-sale as of
April 30, 2013. The fair value of our guaranty was determined based on the value of the contribution required to satisfy the guaranty and pay off the term loan in May 2013. The fair value of our Bio Fuels asset group was measured based on the
asset groups highest and best use using an in-exchange valuation premise under the market approach, utilizing the estimated purchase consideration of the asset group and consideration of costs to be incurred to sell.
As of April 30, 2013, our assets and liabilities that are measured at fair value on a non-recurring basis include the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurement at April 30, 2013
Using:
|
|
|
|
Quoted Prices
in
Active
Markets for
Identical
Assets
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset group held-for-sale - Bio Fuels
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Guaranty
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In fiscal year 2012, our financial assets and liabilities recorded at fair value on a non-recurring basis include our
investment in GreenFiber, our guaranty of GreenFibers modified and restated loan and security agreement and our long-lived asset group related to Maine Energy. The fair value of our investment in GreenFiber was based on a third party valuation
that calculated the fair value relying on the income approach using discounted cash flows taking into account current expectations for asset utilization, housing starts and the remaining useful life of related assets. The fair value of our guaranty
was determined using the cost approach based primarily on an estimated bond rate that would be incurred to collateralize a bond of similar nature to the guaranty. The fair value of our Maine Energy asset group was measured based on the asset
groups highest and best use under the market approach, utilizing the discounted present cash flows associated with the purchase consideration of the facility, adjusted for costs to demolish the facility.
97
As of April 30, 2012, our assets and liabilities that are measured at fair value on a non-recurring
basis include the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurement at April 30, 2012 Using:
|
|
|
|
Quoted Prices
in
Active Markets for
Identical
Assets
(Level 1)
|
|
|
Significant
Other
Observable Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in unconsolidated entity - GreenFiber
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
6,502
|
|
Long lived asset group - Maine Energy
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,551
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Guaranty
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
264
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14. EMPLOYEE BENEFIT PLANS
Defined Contribution Plan
We offer our eligible employees the opportunity to contribute to a 401(k) plan (the 401(k) Plan). Under the provisions of the 401(k) Plan participants may direct us to defer a
portion of their compensation to the 401(k) Plan, subject to Internal Revenue Code limitations. We provide an employer matching contribution equal to fifty cents for every dollar an employee invests in the 401(k) Plan up to our maximum
match of one thousand dollars per calendar year, subject to revision. Participants vest in employer contributions ratably over a three year period. Employer contributions for the fiscal years ended April 30, 2013, 2012, and 2011 amounted to
$645, $603 and $600, respectively.
Employee Stock Purchase Plan
In fiscal year 1998, we implemented our employee stock purchase plan. Under this plan, qualified employees may purchase shares of Class A common stock by payroll deduction at a 15% discount from
the market price. 900 shares of Class A common stock have been reserved for this purpose. During the fiscal years ended April 30, 2013, 2012 and 2011, 76, 65 and 105 shares, respectively, of Class A common stock were issued under this
plan. As of April 30, 2013, 183 shares of Class A common stock were available for distribution under this plan.
98
15. INCOME TAXES
The provision (benefit) for income taxes from continuing operations for the fiscal years ended April 30, 2013, 2012 and 2011
consists of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended April 30,
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
Federal
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
$
|
-
|
|
|
$
|
121
|
|
|
$
|
-
|
|
Deferred
|
|
|
(2,827)
|
|
|
|
1,468
|
|
|
|
(8,653)
|
|
Deferred benefit of loss carryforwards
|
|
|
-
|
|
|
|
-
|
|
|
|
(15,748)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,827)
|
|
|
|
1,589
|
|
|
|
(24,401)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
1,040
|
|
|
|
(352)
|
|
|
|
(599)
|
|
Current benefit of loss carryforwards
|
|
|
(22)
|
|
|
|
-
|
|
|
|
-
|
|
Deferred
|
|
|
(717)
|
|
|
|
372
|
|
|
|
2,353
|
|
Deferred benefit of loss carryforwards
|
|
|
-
|
|
|
|
(16)
|
|
|
|
(1,076)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
301
|
|
|
|
4
|
|
|
|
678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(2,526)
|
|
|
$
|
1,593
|
|
|
$
|
(23,723)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in the current state tax provision for year ending April 30, 2013 is an $800 settlement with New York
State, comprised of $430 of tax and $370 of interest. As discussed in Note 11, New York State had alleged that we were not permitted to file a single combined corporation franchise tax return with our subsidiaries. On January 18, 2011, the
State had assessed a liability of $3,852, comprising $2,220 tax and $1,632 penalties and interest, for tax years ending April 30, 2004 through April 30, 2006. We had filed Petitions of Redetermination with the State of New York Division of
Tax Appeals and had been scheduled for an administrative hearing on April 18-19, 2013. Tax years ending April 30, 2007 through April 30, 2009 were also being audited for the same tax matter. The settlement, which represented less than
8% of the potential cumulative liability for the years settled, was a monetary settlement without any change to our filing combined returns in New York and it closed years ending April 30, 2004 through April 30, 2010. We had not
established any reserve under ASC 740, since we believed our position would more likely than not be successful in contesting the deficiencies. No audit has been initiated for tax years after 2010.
The differences in the provision (benefit) for income taxes and the amounts determined by applying the Federal statutory rate to income before provision
(benefit) for income taxes for the years ended April 30, 2013, 2012 and 2011 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended April 30,
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
Federal statutory rate
|
|
|
35%
|
|
|
|
35%
|
|
|
|
35%
|
|
Tax benefit at statutory rate
|
|
$
|
(18,378)
|
|
|
$
|
(26,638)
|
|
|
$
|
(9,341)
|
|
State income taxes, net of federal benefit
|
|
|
(1,076)
|
|
|
|
(3,050)
|
|
|
|
281
|
|
Decrease in valuation allowance due to BBI acquisition
|
|
|
(5,084)
|
|
|
|
-
|
|
|
|
-
|
|
Other increase (decrease) in valuation allowance
|
|
|
22,510
|
|
|
|
27,247
|
|
|
|
(14,454)
|
|
Non-deductible impairment of investment in GreenFiber
|
|
|
-
|
|
|
|
3,738
|
|
|
|
-
|
|
Non-deductible GreenFiber goodwill impairment and equity income in subsidiaries
|
|
|
180
|
|
|
|
1,182
|
|
|
|
-
|
|
Tax credits
|
|
|
(660)
|
|
|
|
(650)
|
|
|
|
(637)
|
|
Non-deductible expenses
|
|
|
494
|
|
|
|
823
|
|
|
|
408
|
|
Non-deductible stock option charges
|
|
|
-
|
|
|
|
73
|
|
|
|
107
|
|
Other, net
|
|
|
(512)
|
|
|
|
(1,132)
|
|
|
|
(87)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(2,526)
|
|
|
$
|
1,593
|
|
|
$
|
(23,723)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99
Deferred income taxes reflect the impact of temporary differences between the amounts of assets and
liabilities recognized for financial reporting purposes and such amounts recognized for income tax purposes. Deferred tax assets and liabilities consist of the following at April 30, 2013 and 2012:
|
|
|
|
|
|
|
|
|
|
|
April 30,
|
|
|
|
2013
|
|
|
2012
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
Net operating loss carryforwards
|
|
$
|
34,217
|
|
|
$
|
9,724
|
|
Accrued expenses and reserves
|
|
|
29,884
|
|
|
|
28,383
|
|
Book over tax depreciation of property and equipment
|
|
|
19,881
|
|
|
|
24,899
|
|
Alternative minimum tax credit carryforwards
|
|
|
3,330
|
|
|
|
3,330
|
|
General business tax credit carryforwards
|
|
|
2,095
|
|
|
|
1,438
|
|
|
|
|
Unrealized loss on commodity hedges
|
|
|
1,852
|
|
|
|
688
|
|
Stock awards
|
|
|
1,177
|
|
|
|
1,140
|
|
Deferred revenue
|
|
|
-
|
|
|
|
218
|
|
Other
|
|
|
964
|
|
|
|
370
|
|
|
|
|
|
|
|
|
|
|
Total deferred tax assets
|
|
|
93,400
|
|
|
|
70,190
|
|
Less: valuation allowance
|
|
|
(70,352)
|
|
|
|
(50,700)
|
|
|
|
|
|
|
|
|
|
|
Total deferred tax assets after valuation allowance
|
|
|
23,048
|
|
|
|
19,490
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities:
|
|
|
|
|
|
|
|
|
Amortization of intangibles
|
|
|
(25,973)
|
|
|
|
(21,114)
|
|
Other
|
|
|
(143)
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Total deferred tax liabilities
|
|
|
(26,116)
|
|
|
|
(21,114)
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax (liability) asset
|
|
$
|
(3,068)
|
|
|
$
|
(1,624)
|
|
|
|
|
|
|
|
|
|
|
At April 30, 2013 we have, for federal income tax purposes, net operating loss carryforwards of approximately
$71,965 that expire in fiscal years 2024 through 2033 and state net operating loss carryforwards of approximately $85,304 that expire in fiscal years 2014 through 2033. The net operating loss carryforwards include approximately $383 for which a
benefit will be recorded in additional paid-in capital when realized. In addition, we have $3,330 minimum tax credit carryforwards available that are not subject to a time limitation and $2,095 general business credit carryforwards which expire in
fiscal years 2023 through 2033. Sections 382 and 383 of the Internal Revenue Code can limit the amount of net operating loss and credit carryforwards which may be used in a tax year in the event of certain stock ownership changes. We are not
currently subject to these limitations but could become subject to them if there were significant changes in the ownership of our stock.
In
assessing the realizability of carryforwards and other deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. We adjust the valuation allowance in the
period management determines it is more likely than not that deferred tax assets will or will not be realized.
For the fiscal year ended
April 30, 2013, the net increase in the valuation allowance was $19,652. Included in this amount is a $5,084 decrease in the valuation allowance due to the recognition of additional reversing temporary differences from the deferred tax
liability recorded through goodwill related to the BBI acquisition. The $5,084 deferred tax liability related to the BBI acquisition resulted from temporary differences related to the amounts of assets and liabilities recognized for financial
reporting purposes and such amounts recognized for income tax purposes.
In determining the need for a valuation allowance, we have assessed
the available means of recovering deferred tax assets, including the ability to carryback net operating losses, the existence of reversing temporary differences, the availability of tax planning strategies, and available sources of future taxable
income. We have also considered the ability to implement certain strategies, such as a potential sale of assets that would, if necessary, be implemented to accelerate taxable income and use expiring deferred tax assets. We believe we are able to
support the deferred tax assets recognized as of the end of the year based on all of the available evidence. The net deferred tax liability as of April 30, 2013 includes deferred tax liabilities related to amortizable goodwill, which are
anticipated to reverse in an indefinite future period and which are not currently available as a source of taxable income.
The provisions of
ASC 740-10-25-5 prescribe the minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. Additionally, ASC 740-10-25-5 provides guidance on de-recognition, measurement, classification,
interest and penalties, accounting in interim periods, disclosure and transition. Under ASC 740-10-25-5, an entity may only recognize or continue to recognize tax positions that meet a more likely than not threshold.
100
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for the fiscal years
ended April 30, 2013 and 2012 are as follows:
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended April 30,
|
|
|
|
2013
|
|
|
2012
|
|
Unrecognized tax benefits at beginning of period
|
|
$
|
4,447
|
|
|
$
|
4,932
|
|
Gross increases for tax positions of prior years
|
|
|
543
|
|
|
|
42
|
|
Gross decreases for tax positions of prior years
|
|
|
(26)
|
|
|
|
(45)
|
|
Reductions resulting from lapse of statute of limitations
|
|
|
(655)
|
|
|
|
(482)
|
|
Settlements
|
|
|
(430)
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Unrecognized tax benefits at end of period
|
|
$
|
3,879
|
|
|
$
|
4,447
|
|
|
|
|
|
|
|
|
|
|
The gross increases for tax positions of prior years for 2013 includes $430 tax from the settlement with New York State,
which is offset by the ($430) settlements for 2013. Included in the balances at April 30, 2013 and 2012 are $0 of unrecognized tax benefits (net of the federal benefit on state issues) that, if recognized, would favorably affect the effective
income tax rate in future periods. We anticipate that approximately $398 of unrecognized tax benefits, all related to deferred tax assets which are subject to a full valuation allowance, may be reversed within the next 12 months due to the
expiration of the applicable statute of limitations.
Our continuing practice is to recognize interest and penalties related to income tax
matters in income tax expense. Related to uncertain tax positions, we have accrued interest of $76 and penalties of $9 during fiscal year 2013, including $41 accrued in income tax expense during the year ended April 30, 2013. We accrued
interest of $34 and penalties of $9 related to uncertain tax positions during fiscal year 2012, including ($95) accrued in income tax expense during the fiscal year ended April 30, 2012. To the extent interest and penalties are not assessed
with respect to uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision.
We
are subject to U.S. federal income tax, as well as income tax of multiple state jurisdictions. Due to Federal and state net operating loss carryforwards, income tax returns from fiscal years 1998 through 2013 remain open for examination, with
limited exceptions.
16.
|
DEVELOPMENT PROJECT CHARGES
|
In the second quarter of fiscal year 2012, we recorded a charge of $131 for deferred costs associated with certain development
projects no longer deemed viable. As of April 30, 2013 and 2012, we had $1,644 and $1,163 of deferred costs associated with development projects included in other non-current assets within our consolidated balance sheets.
17.
|
SEVERANCE AND REORGANIZATION
|
In the first quarter of fiscal year 2013, we realigned our operations in order to streamline functions and improve our cost structure.
Through the reorganization we have targeted improvements in certain aspects of the sales function to better facilitate customer service and retention, pricing growth, and support of strategic growth initiatives; better aligned transportation, route
management and maintenance functions at the local level; and reduced corporate overhead and staff to match organizational needs and reduce costs. We recorded a severance and reorganization charge of $1,793 in the second quarter of fiscal year 2013
with respect to the realignment.
In the third and fourth quarters of fiscal year 2013, we recorded a $1,882 severance charge related
primarily to the closing of Maine Energy, see Note 18 for further discussion, and a reorganization of senior management. The liability associated with severance and reorganization as of April 30, 2013, which is recorded in other accrued
liabilities, is $680.
18.
|
DIVESTITURE TRANSACTIONS AND DISCONTINUED OPERATIONS
|
We review planned business dispositions based on available information and events that have occurred to determine whether or not a
business or disposal group qualifies for discontinued operations treatment. The review consists of evaluating whether the business qualifies as a component of an entity for which the operations and cash flows are clearly distinguishable, whether it
is anticipated that
101
the cash flows of the component have been or will be eliminated from ongoing operations after the disposal transaction and by the end of the assessment period and whether we will have any
significant continuing involvement in the operations of the component after the disposal transaction. Planned business dispositions are presented as discontinued operations when all three criteria are met. Additionally, we evaluate whether the
component has met the criteria to be classified as held-for-sale. To be classified as held-for-sale, the criteria established by ASC 360-10-45 must be met as of the reporting date, including an active program to market the business and the
disposition of the business within one year. A business that has not been disposed of may not be classified as discontinued operations until the held-for-sale criteria are met. No depreciation is recorded during the periods in which a disposal group
is classified as held-for-sale.
Businesses that qualify as held-for-sale are carried at the lower of their carrying value or fair value less
costs to sell in the period the held-for-sale criteria are met. For a business that is classified as held-for-sale and meets the discontinued operations criteria, all initial or subsequent adjustments to the carrying value of the component are
classified in discontinued operations.
Discontinued Operations
In the fourth quarter of fiscal year 2013, we initiated a plan to dispose of Bio Fuels, a construction and demolition material processing facility located in Lewiston, Maine, and as a result, the assets
associated with Bio Fuels were classified as held-for-sale and the results of operations were recorded as loss from discontinued operations. Assets of the disposal group classified as held-for-sale include certain inventory and plant and equipment.
We recognized a $3,261 charge associated with the adjustment of the disposal group to fair value as a loss from discontinued operations. There are inherent judgments and estimates used in determining impairment charges and the actual sale of a
business can result in the recognition of an additional gain or loss.
In the third quarter of fiscal year 2011, we entered into a purchase
and sale agreement and related agreements to sell non-integrated recycling assets and select intellectual property assets for $130,400 in gross proceeds. Pursuant to these agreements, we divested non-integrated recycling assets located outside our
core operating regions of New York, Massachusetts, Vermont, New Hampshire, Maine and northern Pennsylvania, including 17 MRFs, one transfer station and certain related intellectual property assets. Following the transaction, we retained four
integrated MRFs located in our core operating regions. As a part of the disposition, we also entered into a ten-year commodities marketing agreement with the purchaser to market 100% of the tonnage from three of our remaining integrated MRFs.
We completed the transaction in the fourth quarter of fiscal year 2011 for $134,195 in gross cash proceeds. This included an estimated $3,795
working capital and other purchase price adjustment, which was subject to further adjustment, as defined in the purchase and sale agreement. After netting transaction costs and cash taxes payable in conjunction with the divestiture, net cash
proceeds amounted to approximately $122,953. We used cash proceeds from the divestiture and borrowings under our Senior Credit Facility to repay the aggregate balance of our 2009 Term Loan in full upon completion of the disposition. This resulted in
a gain on disposal of discontinued operations (net of tax) of $43,718 in the fourth quarter of fiscal year 2011. The final working capital adjustment, along with additional legal expenses related to the transaction, of $646 was recorded to gain on
disposal of discontinued operations (net of tax) in the first quarter of fiscal year 2012. In the second quarter of fiscal year 2012, we recorded an additional working capital adjustment of $79 to gain on disposal of discontinued operations (net of
tax), which related to our subsequent collection of receivable balances that were released to us for collection by the purchaser.
During the
third quarter of fiscal year 2011, we also completed the sale of the assets of the Trilogy Glass business for cash proceeds of $1,840. A loss of to $128 (net of tax) was recorded to gain on disposal of discontinued operations in fiscal year 2011.
The operating results of these operations, including those related to prior years, have been reclassified from continuing to discontinued
operations in the accompanying consolidated financial statements. Revenues and loss before income taxes attributable to discontinued operations for the fiscal year ended April 30, 2013, 2012 and 2011, respectively, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended April 30,
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
Revenues
|
|
$
|
12,033
|
|
|
$
|
12,865
|
|
|
$
|
73,889
|
|
Loss before income taxes
|
|
$
|
(4,480)
|
|
|
$
|
(1,025)
|
|
|
$
|
(3,492)
|
|
We allocate interest expense to discontinued operations. We have also eliminated inter-company activity associated with
discontinued operations.
102
Divestiture Transactions
In the first quarter of fiscal year 2013, we executed a purchase and sale agreement with the City of Biddeford, Maine pursuant to which we agreed to sell the real property of Maine Energy, which is
located in our Eastern region, to the City of Biddeford, subject to satisfaction of conditions precedent and closing. We agreed to sell Maine Energy for undiscounted purchase consideration of $6,650, which shall be paid to us in equal installments
over the next 21 years, subject to the terms of the purchase and sale agreement. The transaction closed in November 2012, and we waived certain conditions precedent not satisfied at that time. In December 2012, we closed the facility and initiated
the decommissioning process in accordance with the provisions of the agreement. Following the decommissioning of Maine Energy, it is our responsibility to demolish the facility, at our cost, within twelve months of the closing date and in accordance
with the terms of the purchase and sale agreement. We initially recorded a charge to loss on divestiture of $353 in the third quarter of fiscal year 2013 as a result of this transaction. In the fourth quarter of fiscal year 2013, as more information
became available, we made revisions to the estimated closing costs associated with the divestiture resulting in the reversal of the initial loss on divestiture of $353. We will continue to finalize estimates and obtain additional information
regarding the estimated costs associated with the divestiture. Due to the inherent judgments and estimates regarding the remaining costs to fulfill our obligation under the purchase and sale agreement to demolish the facility and remediate the site,
recognition of a loss on divestiture, which we do not expect, or a potential gain on divestiture is possible.
As a part of the closure and
decommissioning of Maine Energy, we are withdrawing from a multiemployer pension plan that we have made contributions to for the benefit of Maine Energy employees covered under a collective bargaining agreement. We have a potential liability
associated with our withdrawal from the multiemployer pension plan based on the value of the plans unfunded vested benefits. In accordance with ASC 715-80, in a situation with unfunded vested benefits, a liability is not recorded by a
participating employer as no single employer has an identifiable share of the actuarial obligation of the multiemployer pension plan.
In
accordance with ASC 450-20, we accrue for an obligation when an obligation becomes probable and reasonably estimable. We currently believe that an obligation associated with withdrawal from the multiemployer pension plan is probable, but we cannot
reasonably estimate the amount of loss or possible range of loss due to a lack of information being made available by the fund administrator in regards to the unfunded vested benefits. The fund administrator will quantify our withdrawal liability
based on the unfunded vested benefits as of the plan year preceding actual withdrawal. As we expect to completely withdraw from the plan in early fiscal year 2014, we expect the plan administrator to base our obligation on the plan year ended
January 31, 2013. We expect to record an obligation associated with our portion of unfunded vested benefits in fiscal year 2014. As of April 30, 2013, no accrual is established related to withdrawal from the multiemployer pension plan.
In the first quarter of fiscal year 2011, we completed the sale of certain assets in Southeastern Massachusetts and recorded a gain on sale
of assets of $3,502. Total consideration amounted to $7,750 with cash proceeds of $7,533.
The following table sets forth the numerator and denominator used in the computation of earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended April 30,
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations before discontinued operations attributable to common stockholders
|
|
$
|
(49,662)
|
|
|
$
|
(77,697)
|
|
|
$
|
(2,964)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares outstanding, end of period:
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common stock
|
|
|
38,662
|
|
|
|
25,991
|
|
|
|
25,589
|
|
Class B common stock
|
|
|
988
|
|
|
|
988
|
|
|
|
988
|
|
Unvested restricted stock
|
|
|
(134)
|
|
|
|
(127)
|
|
|
|
(141)
|
|
Effect of weighted average shares outstanding during period
|
|
|
(5,501)
|
|
|
|
(103)
|
|
|
|
(331)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares used in basic and diluted EPS
|
|
|
34,015
|
|
|
|
26,749
|
|
|
|
26,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the fiscal years ended April 30, 2013, 2012 and 2011, 2,074, 2,445 and 3,264 shares, respectively, of potential
common stock related to restricted stock, restricted stock units, performance stock units, and stock options were excluded from the calculation of dilutive shares since we experienced a loss from continuing operations in each fiscal year period and
the inclusion of potential shares would be anti-dilutive.
103
20.
|
RELATED PARTY TRANSACTIONS
|
Services
During
fiscal years ended April 30, 2013, 2012 and 2011, we retained the services of a related party, a company wholly owned by John Casella, our Chairman and Chief Executive Officer, and Douglas Casella, a member of our Board of Directors, as a
contractor in developing or closing certain landfills owned by us. Total purchased services charged to operations or capitalized to landfills for the fiscal years ended April 30, 2013, 2012 and 2011 were $6,577, $2,612 and $6,067, respectively,
of which $1,189 and $45 were outstanding and included in either accounts payable or other current liabilities at April 30, 2013 and 2012, respectively.
Leases
In fiscal year 1994, we entered into two leases for operating facilities with a
partnership of which John Casella, our Chairman and Chief Executive Officer, and Douglas Casella, a member of our Board of Directors are the general partners. The leases have since been extended and according to the terms of the agreements called
for monthly payments of approximately $25. These leases expired in April 2013, and were subsequently extended on May 1, 2013 for five years. Total expense charged to operations for fiscal years ended April 30, 2013, 2012 and 2011 under these
agreements was $286, $300 and $311, respectively.
Landfill Post-closure
We have agreed to pay the cost of post-closure on a landfill owned by two of our major stockholders and members of the Board of Directors (one of whom is also an officer). We paid the cost of closing this
landfill in 1992, and the post-closure maintenance obligations are expected to last until 2024. In the fiscal years ended April 30, 2013, 2012 and 2011, we paid $8, $8 and $8 respectively, pursuant to this agreement. As of April 30, 2013
and 2012, we have accrued $100 and $84, respectively, for costs associated with its post-closure obligations.
Employee Loan
As of April 30, 2013 and 2012, we have a recourse loan to an employee outstanding, which is included in Notes receivable
related party in the accompanying consolidated balance sheet, in the amount of $147 and $144, respectively. The principal and interest on this note is payable upon demand by us. Interest which has been fully accrued for as of April 30, 2013 is
at the Wall Street Journal Prime Rate (3.25% at April 30, 2013)
We report selected information about operating segments in a manner consistent with that used for internal management reporting. We
classify our solid waste operations on a geographic basis through regional operating segments. Revenues are derived mainly from collection, transfer, disposal, landfill, landfill-gas-to energy, recycling and organic services in the northeastern
United States. Our revenues in the Recycling segment are derived from municipalities and customers in the form of processing fees, tipping fees and commodity sales. Ancillary operations, major customer accounts, discontinued operations, and earnings
from equity method investees are included in our Other reportable segment. Segment data for the fiscal years ended April 30, 2012 and 2011 has been revised to properly align with internal management reporting.
104
Fiscal Year Ended April 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
|
|
Outside
revenues
|
|
|
Inter-company
revenue
|
|
|
Depreciation and
amortization
|
|
|
Operating
income (loss)
|
|
|
Interest
expense (net)
|
|
|
Capital
expenditures
|
|
|
Goodwill
|
|
|
Total assets
|
|
Eastern
|
|
$
|
168,361
|
|
|
$
|
33,738
|
|
|
$
|
24,410
|
|
|
$
|
(3,504)
|
|
|
$
|
26,509
|
|
|
$
|
21,854
|
|
|
$
|
16,858
|
|
|
$
|
210,889
|
|
Western
|
|
|
205,747
|
|
|
|
65,390
|
|
|
|
26,446
|
|
|
|
20,058
|
|
|
|
(1,311)
|
|
|
|
30,384
|
|
|
|
86,880
|
|
|
|
348,455
|
|
Recycling
|
|
|
39,131
|
|
|
|
(84)
|
|
|
|
4,188
|
|
|
|
(456)
|
|
|
|
5,553
|
|
|
|
915
|
|
|
|
12,190
|
|
|
|
50,830
|
|
Other
|
|
|
42,096
|
|
|
|
1,328
|
|
|
|
1,532
|
|
|
|
(3,677)
|
|
|
|
10,678
|
|
|
|
1,608
|
|
|
|
-
|
|
|
|
49,453
|
|
Eliminations
|
|
|
-
|
|
|
|
(100,372)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
Total
|
|
$
|
455,335
|
|
|
$
|
-
|
|
|
$
|
56,576
|
|
|
$
|
12,421
|
|
|
$
|
41,429
|
|
|
$
|
54,761
|
|
|
$
|
115,928
|
|
|
$
|
659,627
|
|
|
|
|
|
|
Fiscal Year Ended April 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
|
|
Outside
revenues
|
|
|
Inter-company
revenue
|
|
|
Depreciation and
amortization
|
|
|
Operating
income (loss)
|
|
|
Interest
expense (net)
|
|
|
Capital
expenditures
|
|
|
Goodwill
|
|
|
Total assets
|
|
Eastern
|
|
$
|
163,063
|
|
|
$
|
35,616
|
|
|
$
|
25,993
|
|
|
$
|
(42,130)
|
|
|
$
|
31,019
|
|
|
$
|
22,207
|
|
|
$
|
58
|
|
|
$
|
177,185
|
|
Western
|
|
|
212,227
|
|
|
|
67,776
|
|
|
|
26,168
|
|
|
|
29,715
|
|
|
|
80
|
|
|
|
27,467
|
|
|
|
89,458
|
|
|
|
333,381
|
|
Recycling
|
|
|
47,934
|
|
|
|
(248)
|
|
|
|
4,016
|
|
|
|
5,375
|
|
|
|
6,794
|
|
|
|
5,485
|
|
|
|
12,190
|
|
|
|
55,249
|
|
Other
|
|
|
44,726
|
|
|
|
2,714
|
|
|
|
2,238
|
|
|
|
(3,993)
|
|
|
|
7,073
|
|
|
|
3,204
|
|
|
|
-
|
|
|
|
67,928
|
|
Eliminations
|
|
|
-
|
|
|
|
(105,858)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
Total
|
|
$
|
467,950
|
|
|
$
|
-
|
|
|
$
|
58,415
|
|
|
$
|
(11,033)
|
|
|
$
|
44,966
|
|
|
$
|
58,363
|
|
|
$
|
101,706
|
|
|
$
|
633,743
|
|
|
|
|
|
|
Fiscal Year Ended April 30, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
|
|
Outside
revenues
|
|
|
Inter-company
revenue
|
|
|
Depreciation and
amortization
|
|
|
Operating
income (loss)
|
|
|
Interest
expense (net)
|
|
|
Capital
expenditures
|
|
|
Goodwill
|
|
|
Total assets
|
|
Eastern
|
|
$
|
158,856
|
|
|
$
|
38,238
|
|
|
$
|
25,081
|
|
|
$
|
(3,978)
|
|
|
$
|
23,195
|
|
|
$
|
24,600
|
|
|
$
|
38
|
|
|
$
|
223,229
|
|
Western
|
|
|
207,345
|
|
|
|
63,833
|
|
|
|
26,897
|
|
|
|
32,163
|
|
|
|
2,487
|
|
|
|
25,761
|
|
|
|
88,975
|
|
|
|
335,163
|
|
Recycling
|
|
|
43,557
|
|
|
|
(402)
|
|
|
|
3,573
|
|
|
|
4,116
|
|
|
|
4,550
|
|
|
|
1,764
|
|
|
|
12,191
|
|
|
|
52,047
|
|
Other
|
|
|
44,927
|
|
|
|
2,788
|
|
|
|
2,570
|
|
|
|
(2,873)
|
|
|
|
15,257
|
|
|
|
2,603
|
|
|
|
-
|
|
|
|
80,142
|
|
Eliminations
|
|
|
-
|
|
|
|
(104,457)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
Total
|
|
$
|
454,685
|
|
|
$
|
-
|
|
|
$
|
58,121
|
|
|
$
|
29,428
|
|
|
$
|
45,489
|
|
|
$
|
54,728
|
|
|
$
|
101,204
|
|
|
$
|
690,581
|
|
|
|
|
|
|
Amounts of our total revenue attributable to services provided are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended April 30,
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
Collection
|
|
$
|
208,973
|
|
|
|
45.9%
|
|
|
$
|
205,296
|
|
|
|
43.9%
|
|
|
$
|
199,892
|
|
|
|
44.0%
|
|
Disposal
|
|
|
115,049
|
|
|
|
25.3%
|
|
|
|
123,620
|
|
|
|
26.4%
|
|
|
|
118,831
|
|
|
|
26.1%
|
|
Power generation
|
|
|
11,354
|
|
|
|
2.4%
|
|
|
|
11,894
|
|
|
|
2.6%
|
|
|
|
12,831
|
|
|
|
2.8%
|
|
Organics and processing
|
|
|
45,373
|
|
|
|
10.0%
|
|
|
|
40,904
|
|
|
|
8.7%
|
|
|
|
39,211
|
|
|
|
8.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Solid waste operations
|
|
|
380,749
|
|
|
|
83.6%
|
|
|
|
381,714
|
|
|
|
81.6%
|
|
|
|
370,765
|
|
|
|
81.5%
|
|
Customer resource solutions
|
|
|
35,455
|
|
|
|
7.8%
|
|
|
|
38,302
|
|
|
|
8.2%
|
|
|
|
40,363
|
|
|
|
8.9%
|
|
Recycling
|
|
|
39,131
|
|
|
|
8.6%
|
|
|
|
47,934
|
|
|
|
10.2%
|
|
|
|
43,557
|
|
|
|
9.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
$
|
455,335
|
|
|
|
100.0%
|
|
|
$
|
467,950
|
|
|
|
100.0%
|
|
|
$
|
454,685
|
|
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We have revised our table of revenue by source to more closely align the types of revenue generated by our operating
segments. Amounts for fiscal years ended April 30, 2012 and 2011 have been revised to conform to this presentation.
105
22.
|
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
|
The following is a summary of certain items in the consolidated statements of operations by quarter for fiscal years ended
April 30, 2013, 2012 and 2011. The impact of the discontinued operations described in Note 18 is included in all periods in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2013
|
|
First Quarter
|
|
|
Second
Quarter
|
|
|
Third
Quarter
|
|
|
Fourth
Quarter
|
|
Revenues
|
|
$
|
117,638
|
|
|
$
|
116,836
|
|
|
$
|
112,167
|
|
|
$
|
108,694
|
|
Operating income
|
|
$
|
5,807
|
|
|
$
|
4,426
|
|
|
$
|
78
|
|
|
$
|
2,110
|
|
Loss from continuing operations before discontinued operations
|
|
$
|
(8,163)
|
|
|
$
|
(20,857)
|
|
|
$
|
(11,146)
|
|
|
$
|
(9,817)
|
|
Net loss attributable to common stockholders
|
|
$
|
(8,371)
|
|
|
$
|
(20,967)
|
|
|
$
|
(11,407)
|
|
|
$
|
(13,397)
|
|
Loss per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations before discontinued operations
|
|
$
|
(0.30)
|
|
|
$
|
(0.68)
|
|
|
$
|
(0.28)
|
|
|
$
|
(0.25)
|
|
Net loss attributable to common stockholders
|
|
$
|
(0.31)
|
|
|
$
|
(0.68)
|
|
|
$
|
(0.29)
|
|
|
$
|
(0.34)
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations before discontinued operations
|
|
$
|
(0.30)
|
|
|
$
|
(0.68)
|
|
|
$
|
(0.28)
|
|
|
$
|
(0.25)
|
|
Net loss attributable to common stockholders
|
|
$
|
(0.31)
|
|
|
$
|
(0.68)
|
|
|
$
|
(0.29)
|
|
|
$
|
(0.34)
|
|
|
|
|
|
|
Fiscal Year 2012
|
|
First Quarter
|
|
|
Second
Quarter
|
|
|
Third
Quarter
|
|
|
Fourth
Quarter
|
|
Revenues
|
|
$
|
124,066
|
|
|
$
|
125,989
|
|
|
$
|
111,520
|
|
|
$
|
106,375
|
|
Operating income (loss)
|
|
$
|
10,468
|
|
|
$
|
11,730
|
|
|
$
|
4,448
|
|
|
$
|
(37,679)
|
|
Loss from continuing operations before discontinued operations
|
|
$
|
(3,502)
|
|
|
$
|
(693)
|
|
|
$
|
(24,517)
|
|
|
$
|
(48,991)
|
|
Net loss attributable to common stockholders
|
|
$
|
(3,062)
|
|
|
$
|
(765)
|
|
|
$
|
(24,635)
|
|
|
$
|
(49,124)
|
|
Loss per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations before discontinued operations
|
|
$
|
(0.13)
|
|
|
$
|
(0.03)
|
|
|
$
|
(0.91)
|
|
|
$
|
(1.82)
|
|
Net loss attributable to common stockholders
|
|
$
|
(0.12)
|
|
|
$
|
(0.03)
|
|
|
$
|
(0.92)
|
|
|
$
|
(1.83)
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations before discontinued operations
|
|
$
|
(0.13)
|
|
|
$
|
(0.03)
|
|
|
$
|
(0.91)
|
|
|
$
|
(1.82)
|
|
Net loss attributable to common stockholders
|
|
$
|
(0.12)
|
|
|
$
|
(0.03)
|
|
|
$
|
(0.92)
|
|
|
$
|
(1.83)
|
|
106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2011
|
|
First Quarter
|
|
|
Second
Quarter
|
|
|
Third
Quarter
|
|
|
Fourth
Quarter
|
|
Revenues
|
|
$
|
119,143
|
|
|
$
|
119,694
|
|
|
$
|
109,076
|
|
|
$
|
106,772
|
|
Operating income (loss)
|
|
$
|
12,918
|
|
|
$
|
12,263
|
|
|
$
|
6,571
|
|
|
$
|
(2,324)
|
|
(Loss) income from continuing operations before discontinued operations
|
|
$
|
(1,587)
|
|
|
$
|
258
|
|
|
$
|
(6,003)
|
|
|
$
|
4,368
|
|
Net (loss) income attributable to common stockholders
|
|
$
|
(2,902)
|
|
|
$
|
(1,154)
|
|
|
$
|
(6,365)
|
|
|
$
|
48,849
|
|
Loss per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing operations before discontinued operations
|
|
$
|
(0.06)
|
|
|
$
|
0.01
|
|
|
$
|
(0.23)
|
|
|
$
|
0.17
|
|
Net (loss) income attributable to common stockholders
|
|
$
|
(0.11)
|
|
|
$
|
(0.04)
|
|
|
$
|
(0.24)
|
|
|
$
|
1.85
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing operations before discontinued operations
|
|
$
|
(0.07)
|
|
|
$
|
0.01
|
|
|
$
|
(0.24)
|
|
|
$
|
0.17
|
|
Net (loss) income attributable to common stockholders
|
|
$
|
(0.11)
|
|
|
$
|
(0.04)
|
|
|
$
|
(0.24)
|
|
|
$
|
1.85
|
|
Our transfer and disposal revenues historically have been lower during the months of November through March. This
seasonality reflects the lower volume of waste during the late fall, winter and early spring months. Since certain of our operating and fixed costs remain constant throughout the fiscal year, operating income is impacted by a similar seasonality. In
addition, particularly harsh weather conditions typically result in increased operating costs.
Our recycling business experiences increased
volumes of newspaper in November and December due to increased newspaper advertising and retail activity during the holiday season. GreenFiber experiences lower sales from April through July due to lower retail activity.
23.
|
SUBSIDIARY GUARANTORS
|
Our 2019 Notes are guaranteed jointly and severally, fully and unconditionally, by our significant wholly-owned subsidiaries. The
Parent is the issuer and a non-guarantor of the 2019 Notes and the Parent has no independent assets or operations. The information which follows presents the condensed consolidating financial position as of April 30, 2013 and April 30,
2012, the consolidating results of operations and comprehensive loss for the fiscal years ended April 30, 2013, 2012 and 2011, and the condensed consolidating statements of cash flows for the fiscal years ended April 30, 2013, 2012 and
2011 of (a) the Parent company only, (b) the combined guarantors (the Guarantors) , each of which is 100% wholly-owned by the Parent, (c) the combined non-guarantors (the
Non-Guarantors) , (d) eliminating entries and (e) the consolidated total.
107
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF APRIL 30, 2013
(in thousands, except for share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
Parent
|
|
|
Guarantors
|
|
|
Non-
Guarantors
|
|
|
Elimination
|
|
|
Consolidated
|
|
CURRENT ASSETS :
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,260
|
|
|
$
|
253
|
|
|
$
|
242
|
|
|
$
|
-
|
|
|
$
|
1,755
|
|
Accounts receivable - trade, net of allowance for doubtful accounts
|
|
|
571
|
|
|
|
47,644
|
|
|
|
474
|
|
|
|
-
|
|
|
|
48,689
|
|
Refundable income taxes
|
|
|
128
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
128
|
|
Deferred income taxes
|
|
|
238
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
238
|
|
Other current assets
|
|
|
1,837
|
|
|
|
8,284
|
|
|
|
61
|
|
|
|
-
|
|
|
|
10,182
|
|
Current assets held-for-sale
|
|
|
-
|
|
|
|
61
|
|
|
|
-
|
|
|
|
-
|
|
|
|
61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
4,034
|
|
|
|
56,242
|
|
|
|
777
|
|
|
|
-
|
|
|
|
61,053
|
|
|
|
|
|
|
|
Property, plant and equipment, net of accumulated depreciation and amortization
|
|
|
2,771
|
|
|
|
411,284
|
|
|
|
8,447
|
|
|
|
-
|
|
|
|
422,502
|
|
Goodwill
|
|
|
-
|
|
|
|
115,928
|
|
|
|
-
|
|
|
|
-
|
|
|
|
115,928
|
|
Intangible assets, net
|
|
|
249
|
|
|
|
11,425
|
|
|
|
-
|
|
|
|
-
|
|
|
|
11,674
|
|
Restricted assets
|
|
|
-
|
|
|
|
545
|
|
|
|
-
|
|
|
|
-
|
|
|
|
545
|
|
Investments in unconsolidated entities
|
|
|
16,486
|
|
|
|
2,189
|
|
|
|
3,509
|
|
|
|
(1,932)
|
|
|
|
20,252
|
|
Investments in subsidiaries
|
|
|
(59,759)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
59,759
|
|
|
|
-
|
|
Other non-current assets
|
|
|
15,921
|
|
|
|
11,752
|
|
|
|
-
|
|
|
|
-
|
|
|
|
27,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(24,332)
|
|
|
|
553,123
|
|
|
|
11,956
|
|
|
|
57,827
|
|
|
|
598,574
|
|
|
|
|
|
|
|
Intercompany receivable
|
|
|
580,328
|
|
|
|
(539,752)
|
|
|
|
(42,508)
|
|
|
|
1,932
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
560,030
|
|
|
$
|
69,613
|
|
|
$
|
(29,775)
|
|
|
$
|
59,759
|
|
|
$
|
659,627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY
|
|
Parent
|
|
|
Guarantors
|
|
|
Non -
Guarantors
|
|
|
Elimination
|
|
|
Consolidated
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current maturities of long-term debt and capital leases
|
|
$
|
-
|
|
|
$
|
857
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
857
|
|
Current maturities of financing lease obligations
|
|
|
-
|
|
|
|
361
|
|
|
|
-
|
|
|
|
-
|
|
|
|
361
|
|
Accounts payable
|
|
|
23,492
|
|
|
|
27,847
|
|
|
|
635
|
|
|
|
-
|
|
|
|
51,974
|
|
Accrued interest
|
|
|
6,071
|
|
|
|
3
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,074
|
|
Current accrued capping, closure and post-closure costs
|
|
|
-
|
|
|
|
3,832
|
|
|
|
3
|
|
|
|
-
|
|
|
|
3,835
|
|
Other current liabilities
|
|
|
10,539
|
|
|
|
14,341
|
|
|
|
117
|
|
|
|
-
|
|
|
|
24,997
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
40,102
|
|
|
|
47,241
|
|
|
|
755
|
|
|
|
-
|
|
|
|
88,098
|
|
|
|
|
|
|
|
Long-term debt and capital leases, less current maturities
|
|
|
492,965
|
|
|
|
566
|
|
|
|
-
|
|
|
|
-
|
|
|
|
493,531
|
|
Financing lease obligations, less current maturities
|
|
|
-
|
|
|
|
1,456
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,456
|
|
Accrued capping, closure and post-closure costs, less current portion
|
|
|
-
|
|
|
|
39,298
|
|
|
|
37
|
|
|
|
-
|
|
|
|
39,335
|
|
Deferred income taxes
|
|
|
3,306
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,306
|
|
Other long-term liabilities
|
|
|
12,372
|
|
|
|
6,078
|
|
|
|
-
|
|
|
|
-
|
|
|
|
18,450
|
|
|
|
|
|
|
|
STOCKHOLDERS EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Casella Waste Systems, Inc. stockholders equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common stock -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Authorized - 100,000,000 shares, $ 0.01 par value per share, issued and outstanding - 38,662,000 shares
|
|
|
387
|
|
|
|
100
|
|
|
|
-
|
|
|
|
(100)
|
|
|
|
387
|
|
Class B common stock -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Authorized - 1,000,000 shares, $ 0.01 par value per share, 10 votes per share, issued and outstanding - 988,000
shares
|
|
|
10
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10
|
|
Additional paid-in capital
|
|
|
335,857
|
|
|
|
43,897
|
|
|
|
4,797
|
|
|
|
(48,694)
|
|
|
|
335,857
|
|
Accumulated deficit
|
|
|
(324,377)
|
|
|
|
(69,051)
|
|
|
|
(38,910)
|
|
|
|
107,961
|
|
|
|
(324,377)
|
|
Accumulated other comprehensive income (loss)
|
|
|
(592)
|
|
|
|
28
|
|
|
|
(620)
|
|
|
|
592
|
|
|
|
(592)
|
|
Total Casella Waste Systems, Inc. stockholders equity
|
|
|
11,285
|
|
|
|
(25,026)
|
|
|
|
(34,733)
|
|
|
|
59,759
|
|
|
|
11,285
|
|
Noncontrolling interests
|
|
|
-
|
|
|
|
-
|
|
|
|
4,166
|
|
|
|
-
|
|
|
|
4,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders equity
|
|
|
11,285
|
|
|
|
(25,026)
|
|
|
|
(30,567)
|
|
|
|
59,759
|
|
|
|
15,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
560,030
|
|
|
$
|
69,613
|
|
|
$
|
(29,775)
|
|
|
$
|
59,759
|
|
|
$
|
659,627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
108
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF APRIL 30, 2012
(in thousands, except for share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
Parent
|
|
|
Guarantors
|
|
|
Non-
Guarantors
|
|
|
Elimination
|
|
|
Consolidated
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
3,799
|
|
|
$
|
368
|
|
|
$
|
367
|
|
|
$
|
-
|
|
|
$
|
4,534
|
|
Accounts receivable - trade, net of allowance for doubtful accounts
|
|
|
652
|
|
|
|
46,820
|
|
|
|
-
|
|
|
|
-
|
|
|
|
47,472
|
|
Refundable income taxes
|
|
|
1,281
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,281
|
|
Deferred income taxes
|
|
|
3,712
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,712
|
|
Other current assets
|
|
|
1,903
|
|
|
|
8,362
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,265
|
|
Current assets held for sale
|
|
|
-
|
|
|
|
92
|
|
|
|
-
|
|
|
|
-
|
|
|
|
92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
11,347
|
|
|
|
55,642
|
|
|
|
367
|
|
|
|
-
|
|
|
|
67,356
|
|
|
|
|
|
|
|
Property, plant and equipment, net of accumulated depreciation and amortization
|
|
|
3,486
|
|
|
|
407,332
|
|
|
|
3,848
|
|
|
|
-
|
|
|
|
414,666
|
|
Goodwill
|
|
|
-
|
|
|
|
101,706
|
|
|
|
-
|
|
|
|
-
|
|
|
|
101,706
|
|
Intangible assets, net
|
|
|
340
|
|
|
|
2,630
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,970
|
|
Restricted assets
|
|
|
-
|
|
|
|
424
|
|
|
|
-
|
|
|
|
-
|
|
|
|
424
|
|
Investments in unconsolidated entities
|
|
|
15,986
|
|
|
|
2,225
|
|
|
|
6,502
|
|
|
|
(1,932)
|
|
|
|
22,781
|
|
Investments in subsidiaries
|
|
|
(34,443)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
34,443
|
|
|
|
-
|
|
Other non-current assets
|
|
|
15,778
|
|
|
|
6,011
|
|
|
|
-
|
|
|
|
-
|
|
|
|
21,789
|
|
Non-current assets held-for-sale
|
|
|
-
|
|
|
|
2,051
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,147
|
|
|
|
522,379
|
|
|
|
10,350
|
|
|
|
32,511
|
|
|
|
566,387
|
|
|
|
|
|
|
|
Intercompany receivable
|
|
|
532,950
|
|
|
|
(494,819)
|
|
|
|
(40,063)
|
|
|
|
1,932
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
545,444
|
|
|
$
|
83,202
|
|
|
$
|
(29,346)
|
|
|
$
|
34,443
|
|
|
$
|
633,743
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY
|
|
Parent
|
|
|
Guarantors
|
|
|
Non-
Guarantors
|
|
|
Elimination
|
|
|
Consolidated
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current maturities of long-term debt and capital leases
|
|
$
|
142
|
|
|
$
|
1,086
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,228
|
|
Current maturities of financing lease obligations
|
|
|
-
|
|
|
|
338
|
|
|
|
-
|
|
|
|
-
|
|
|
|
338
|
|
Accounts payable
|
|
|
21,952
|
|
|
|
24,757
|
|
|
|
-
|
|
|
|
-
|
|
|
|
46,709
|
|
Accrued interest
|
|
|
9,800
|
|
|
|
3
|
|
|
|
-
|
|
|
|
-
|
|
|
|
9,803
|
|
Current accrued capping, closure and post-closure costs
|
|
|
-
|
|
|
|
4,907
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,907
|
|
Other current liabilities
|
|
|
13,938
|
|
|
|
3,780
|
|
|
|
543
|
|
|
|
-
|
|
|
|
18,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
45,832
|
|
|
|
34,871
|
|
|
|
543
|
|
|
|
-
|
|
|
|
81,246
|
|
|
|
|
|
|
|
Long-term debt and capital leases, less current maturities
|
|
|
472,028
|
|
|
|
1,353
|
|
|
|
-
|
|
|
|
-
|
|
|
|
473,381
|
|
Financing lease obligations, less current maturities
|
|
|
-
|
|
|
|
1,818
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,818
|
|
Accrued capping, closure and post-closure costs, less current portion
|
|
|
-
|
|
|
|
34,681
|
|
|
|
41
|
|
|
|
-
|
|
|
|
34,722
|
|
Deferred income taxes
|
|
|
5,336
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,336
|
|
Other long-term liabilities
|
|
|
5,817
|
|
|
|
13,192
|
|
|
|
-
|
|
|
|
-
|
|
|
|
19,009
|
|
|
|
|
|
|
|
STOCKHOLDERS EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Casella Waste Systems, Inc. stockholders equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common stock-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Authorized - 100,000,000 shares, $0.01 par value per share, issued and outstanding - 25,991,000 shares
|
|
|
260
|
|
|
|
100
|
|
|
|
-
|
|
|
|
(100)
|
|
|
|
260
|
|
Class B common stock-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Authorized - 1,000,000 shares, $0.01 par value per share, 10 votes per share, issued and outstanding - 988,000
shares
|
|
|
10
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10
|
|
Additional paid-in capital
|
|
|
288,348
|
|
|
|
46,279
|
|
|
|
1,998
|
|
|
|
(48,277)
|
|
|
|
288,348
|
|
Accumulated deficit
|
|
|
(270,235)
|
|
|
|
(49,097)
|
|
|
|
(34,140)
|
|
|
|
83,237
|
|
|
|
(270,235)
|
|
Accumulated other comprehensive income (loss)
|
|
|
(1,952)
|
|
|
|
5
|
|
|
|
412
|
|
|
|
(417)
|
|
|
|
(1,952)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Casella Waste Systems, Inc. stockholders equity
|
|
|
16,431
|
|
|
|
(2,713)
|
|
|
|
(31,730)
|
|
|
|
34,443
|
|
|
|
16,431
|
|
Noncontrolling interests
|
|
|
-
|
|
|
|
-
|
|
|
|
1,800
|
|
|
|
-
|
|
|
|
1,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders equity
|
|
|
16,431
|
|
|
|
(2,713)
|
|
|
|
(29,930)
|
|
|
|
34,443
|
|
|
|
18,231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
545,444
|
|
|
$
|
83,202
|
|
|
$
|
(29,346)
|
|
|
$
|
34,443
|
|
|
$
|
633,743
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
109
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF OPERATIONS
FISCAL YEAR ENDED APRIL 30, 2013
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
|
|
|
Guarantors
|
|
|
Non-
Guarantors
|
|
|
Elimination
|
|
|
Consolidated
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
-
|
|
|
$
|
453,589
|
|
|
$
|
1,746
|
|
|
$
|
-
|
|
|
$
|
455,335
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of operations
|
|
|
(295
|
)
|
|
|
321,382
|
|
|
|
1,927
|
|
|
|
-
|
|
|
|
323,014
|
|
General and administration
|
|
|
220
|
|
|
|
57,898
|
|
|
|
87
|
|
|
|
-
|
|
|
|
58,205
|
|
Depreciation and amortization
|
|
|
1,017
|
|
|
|
55,142
|
|
|
|
417
|
|
|
|
-
|
|
|
|
56,576
|
|
Severance and reorganization costs
|
|
|
1,766
|
|
|
|
1,943
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,709
|
|
Expense from divestiture, acquisition and financing costs
|
|
|
303
|
|
|
|
1,107
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,011
|
|
|
|
437,472
|
|
|
|
2,431
|
|
|
|
-
|
|
|
|
442,914
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
(3,011
|
)
|
|
|
16,117
|
|
|
|
(685
|
)
|
|
|
-
|
|
|
|
12,421
|
|
|
|
|
|
|
|
Other expense (income), net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
(32,896
|
)
|
|
|
(113
|
)
|
|
|
-
|
|
|
|
32,868
|
|
|
|
(141
|
)
|
Interest expense
|
|
|
42,405
|
|
|
|
32,033
|
|
|
|
-
|
|
|
|
(32,868
|
)
|
|
|
41,570
|
|
Loss (income) from equity method investments
|
|
|
24,723
|
|
|
|
36
|
|
|
|
4,405
|
|
|
|
(24,723
|
)
|
|
|
4,441
|
|
Loss on derivative instruments
|
|
|
4,512
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,512
|
|
Loss on debt extinguishment
|
|
|
15,584
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
15,584
|
|
Other income
|
|
|
(671
|
)
|
|
|
(365
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,036
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense, net
|
|
|
53,657
|
|
|
|
31,591
|
|
|
|
4,405
|
|
|
|
(24,723
|
)
|
|
|
64,930
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes
|
|
|
(56,668
|
)
|
|
|
(15,474
|
)
|
|
|
(5,090
|
)
|
|
|
24,723
|
|
|
|
(52,509
|
)
|
Provision (benefit) for income taxes
|
|
|
(2,526
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,526
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
(54,142
|
)
|
|
|
(15,474
|
)
|
|
|
(5,090
|
)
|
|
|
24,723
|
|
|
|
(49,983
|
)
|
|
|
|
|
|
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from discontinued operations, net
|
|
|
-
|
|
|
|
(4,480
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(4,480
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
(54,142
|
)
|
|
|
(19,954
|
)
|
|
|
(5,090
|
)
|
|
|
24,723
|
|
|
|
(54,463
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income (loss) attributable to noncontrolling interests
|
|
|
-
|
|
|
|
-
|
|
|
|
(321
|
)
|
|
|
-
|
|
|
|
(321
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common stockholders
|
|
$
|
(54,142
|
)
|
|
$
|
(19,954
|
)
|
|
$
|
(4,769
|
)
|
|
$
|
24,723
|
|
|
$
|
(54,142
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
110
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF OPERATIONS
FISCAL YEAR ENDED APRIL 30, 2012
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
|
|
|
Guarantors
|
|
|
Non-
Guarantors
|
|
|
Elimination
|
|
|
Consolidated
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
-
|
|
|
$
|
467,950
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
467,950
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of operations
|
|
|
16
|
|
|
|
318,047
|
|
|
|
5
|
|
|
|
-
|
|
|
|
318,068
|
|
General and administration
|
|
|
576
|
|
|
|
59,677
|
|
|
|
11
|
|
|
|
-
|
|
|
|
60,264
|
|
Depreciation and amortization
|
|
|
1,568
|
|
|
|
56,850
|
|
|
|
(3)
|
|
|
|
-
|
|
|
|
58,415
|
|
Asset impairment charge
|
|
|
-
|
|
|
|
40,746
|
|
|
|
-
|
|
|
|
-
|
|
|
|
40,746
|
|
Legal settlement
|
|
|
1,000
|
|
|
|
359
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,359
|
|
Development project charge
|
|
|
-
|
|
|
|
131
|
|
|
|
-
|
|
|
|
-
|
|
|
|
131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,160
|
|
|
|
475,810
|
|
|
|
13
|
|
|
|
-
|
|
|
|
478,983
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
(3,160)
|
|
|
|
(7,860)
|
|
|
|
(13)
|
|
|
|
-
|
|
|
|
(11,033)
|
|
|
|
|
|
|
|
Other expense/(income), net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
(39,871)
|
|
|
|
(34)
|
|
|
|
-
|
|
|
|
39,863
|
|
|
|
(42)
|
|
Interest expense
|
|
|
46,058
|
|
|
|
38,813
|
|
|
|
-
|
|
|
|
(39,863)
|
|
|
|
45,008
|
|
Loss (income) from equity method investments
|
|
|
66,832
|
|
|
|
(7)
|
|
|
|
10,001
|
|
|
|
(66,832)
|
|
|
|
9,994
|
|
Impairment of equity method investment
|
|
|
-
|
|
|
|
-
|
|
|
|
10,680
|
|
|
|
-
|
|
|
|
10,680
|
|
Loss on debt extinguishment
|
|
|
300
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
300
|
|
Other income
|
|
|
(486)
|
|
|
|
(377)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(863)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense, net
|
|
|
72,833
|
|
|
|
38,395
|
|
|
|
20,681
|
|
|
|
(66,832)
|
|
|
|
65,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes
|
|
|
(75,993)
|
|
|
|
(46,255)
|
|
|
|
(20,694)
|
|
|
|
66,832
|
|
|
|
(76,110)
|
|
Provision (benefit) for income taxes
|
|
|
1,593
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,593
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
(77,586)
|
|
|
|
(46,255)
|
|
|
|
(20,694)
|
|
|
|
66,832
|
|
|
|
(77,703)
|
|
|
|
|
|
|
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from discontinued operations, net
|
|
|
-
|
|
|
|
(614)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(614)
|
|
Gain (loss) on disposal of discontinued operations, net of tax
|
|
|
-
|
|
|
|
725
|
|
|
|
-
|
|
|
|
-
|
|
|
|
725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
(77,586)
|
|
|
|
(46,144)
|
|
|
|
(20,694)
|
|
|
|
66,832
|
|
|
|
(77,592)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income (loss) attributable to noncontrolling interests
|
|
|
-
|
|
|
|
-
|
|
|
|
(6)
|
|
|
|
-
|
|
|
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common stockholders
|
|
$
|
(77,586)
|
|
|
$
|
(46,144)
|
|
|
$
|
(20,688)
|
|
|
$
|
66,832
|
|
|
$
|
(77,586)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
111
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF OPERATIONS
FISCAL YEAR ENDED APRIL 30, 2011
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
|
|
|
Guarantors
|
|
|
Non -
Guarantors
|
|
|
Elimination
|
|
|
Consolidated
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
-
|
|
|
$
|
454,685
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
454,685
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of operations
|
|
|
73
|
|
|
|
305,938
|
|
|
|
3
|
|
|
|
-
|
|
|
|
306,014
|
|
General and administration
|
|
|
873
|
|
|
|
62,519
|
|
|
|
4
|
|
|
|
-
|
|
|
|
63,396
|
|
Depreciation and amortization
|
|
|
1,590
|
|
|
|
56,526
|
|
|
|
5
|
|
|
|
-
|
|
|
|
58,121
|
|
Asset impairment charge
|
|
|
-
|
|
|
|
3,654
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,654
|
|
Environmental remediation charge
|
|
|
-
|
|
|
|
549
|
|
|
|
-
|
|
|
|
-
|
|
|
|
549
|
|
Bargain purchase gain
|
|
|
-
|
|
|
|
(2,975)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,975)
|
|
Gain on sale of assets
|
|
|
-
|
|
|
|
(3,502)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,502)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,536
|
|
|
|
422,709
|
|
|
|
12
|
|
|
|
-
|
|
|
|
425,257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
(2,536)
|
|
|
|
31,976
|
|
|
|
(12)
|
|
|
|
-
|
|
|
|
29,428
|
|
|
|
|
|
|
|
Other expense (income), net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
(31,748)
|
|
|
|
(27)
|
|
|
|
-
|
|
|
|
31,721
|
|
|
|
(54)
|
|
Interest expense
|
|
|
86,074
|
|
|
|
(8,810)
|
|
|
|
-
|
|
|
|
(31,721)
|
|
|
|
45,543
|
|
Loss (income) from equity method investments
|
|
|
(78,357)
|
|
|
|
-
|
|
|
|
4,096
|
|
|
|
78,357
|
|
|
|
4,096
|
|
Loss on debt extinguishment
|
|
|
7,276
|
|
|
|
114
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7,390
|
|
Other income
|
|
|
(486)
|
|
|
|
(374)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(860)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense, net
|
|
|
(17,241)
|
|
|
|
(9,097)
|
|
|
|
4,096
|
|
|
|
78,357
|
|
|
|
56,115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes
|
|
|
14,705
|
|
|
|
41,073
|
|
|
|
(4,108)
|
|
|
|
(78,357)
|
|
|
|
(26,687)
|
|
Provision (benefit) for income taxes
|
|
|
(23,723)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(23,723)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
38,428
|
|
|
|
41,073
|
|
|
|
(4,108)
|
|
|
|
(78,357)
|
|
|
|
(2,964)
|
|
|
|
|
|
|
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from discontinued operations, net
|
|
|
-
|
|
|
|
(2,198)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,198)
|
|
Gain (loss) on disposal of discontinued operations, net of tax
|
|
|
-
|
|
|
|
43,590
|
|
|
|
-
|
|
|
|
-
|
|
|
|
43,590
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common stockholders
|
|
$
|
38,428
|
|
|
$
|
82,465
|
|
|
$
|
(4,108)
|
|
|
$
|
(78,357)
|
|
|
$
|
38,428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
112
CASELLA WASTE SYSTEMS , INC . AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)
FISCAL YEAR ENDED APRIL 30, 2013
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
|
|
|
Guarantors
|
|
|
Non -
Guarantors
|
|
|
Elimination
|
|
|
Consolidated
|
|
Net income (loss)
|
|
$
|
(54,142)
|
|
|
$
|
(19,954)
|
|
|
$
|
(5,090)
|
|
|
$
|
24,723
|
|
|
$
|
(54,463)
|
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) resulting from changes in fair value of derivative instruments, net of tax
|
|
|
(1,257)
|
|
|
|
-
|
|
|
|
(1,653)
|
|
|
|
-
|
|
|
|
(2,910)
|
|
Realized loss (gain) on derivative instruments reclassified into earnings, net of tax
|
|
|
3,626
|
|
|
|
-
|
|
|
|
621
|
|
|
|
-
|
|
|
|
4,247
|
|
Unrealized gain (loss) resulting from changes in fair value of marketable securities
|
|
|
-
|
|
|
|
23
|
|
|
|
-
|
|
|
|
-
|
|
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss)
|
|
|
2,369
|
|
|
|
23
|
|
|
|
(1,032)
|
|
|
|
-
|
|
|
|
1,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss)
|
|
|
(51,773)
|
|
|
|
(19,931)
|
|
|
|
(6,122)
|
|
|
|
24,723
|
|
|
|
(53,103)
|
|
Less: Comprehensive income (loss) attributable to noncontrolling interests
|
|
|
-
|
|
|
|
-
|
|
|
|
(321)
|
|
|
|
-
|
|
|
|
(321)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss) attributable to common stockholders
|
|
$
|
(51,773)
|
|
|
$
|
(19,931)
|
|
|
$
|
(5,801)
|
|
|
$
|
24,723
|
|
|
$
|
(52,782)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
113
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)
FISCAL YEAR ENDED APRIL 30, 2012
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
|
|
|
Guarantors
|
|
|
Non -
Guarantors
|
|
|
Elimination
|
|
|
Consolidated
|
|
Net income (loss)
|
|
$
|
(77,586)
|
|
|
$
|
(46,144)
|
|
|
$
|
(20,694)
|
|
|
$
|
66,832
|
|
|
$
|
(77,592)
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) resulting from changes in fair value of derivative instruments, net of tax
|
|
|
(2,253)
|
|
|
|
-
|
|
|
|
504
|
|
|
|
-
|
|
|
|
(1,749)
|
|
Realized loss (gain) on derivative instruments reclassified into earnings, net of tax
|
|
|
(77)
|
|
|
|
-
|
|
|
|
(501)
|
|
|
|
-
|
|
|
|
(578)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) resulting from changes in fair value of marketable securities
|
|
|
-
|
|
|
|
(3)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss), net of tax
|
|
|
(2,330)
|
|
|
|
(3)
|
|
|
|
3
|
|
|
|
-
|
|
|
|
(2,330)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss)
|
|
|
(79,916)
|
|
|
|
(46,147)
|
|
|
|
(20,691)
|
|
|
|
66,832
|
|
|
|
(79,922)
|
|
Less: Comprehensive income (loss) attributable to noncontrolling interests
|
|
|
-
|
|
|
|
-
|
|
|
|
(6)
|
|
|
|
-
|
|
|
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss) attributable to common stockholders
|
|
$
|
(79,916)
|
|
|
$
|
(46,147)
|
|
|
$
|
(20,685)
|
|
|
$
|
66,832
|
|
|
$
|
(79,916)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
114
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS )
FISCAL YEAR ENDED APRIL 3 0, 2011
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
|
|
|
Guarantors
|
|
|
Non -
Guarantors
|
|
|
Elimination
|
|
|
Consolidated
|
|
Net income (loss)
|
|
$
|
38,428
|
|
|
$
|
82,465
|
|
|
$
|
(4,108)
|
|
|
$
|
(78,357)
|
|
|
$
|
38,428
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) resulting from changes in fair value of derivative instruments, net of tax
|
|
|
1,607
|
|
|
|
-
|
|
|
|
279
|
|
|
|
-
|
|
|
|
1,886
|
|
Realized loss (gain) on derivative instruments reclassified into earnings, net of tax
|
|
|
(975)
|
|
|
|
-
|
|
|
|
268
|
|
|
|
-
|
|
|
|
(707)
|
|
Unrealized gain (loss) resulting from changes in fair value of marketable securities, net of tax
|
|
|
-
|
|
|
|
(16)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(16)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss), net of tax
|
|
|
632
|
|
|
|
(16)
|
|
|
|
547
|
|
|
|
-
|
|
|
|
1,163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss) attributable to common stockholders
|
|
$
|
39,060
|
|
|
$
|
82,449
|
|
|
$
|
(3,561)
|
|
|
$
|
(78,357)
|
|
|
$
|
39,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
115
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FISCAL YEAR ENDED APRIL 30, 2013
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
|
|
|
Guarantors
|
|
|
Non -
Guarantors
|
|
|
Elimination
|
|
|
Consolidated
|
|
Net cash provided by (used in) operating activities
|
|
$
|
(5,319)
|
|
|
$
|
50,482
|
|
|
$
|
(1,302)
|
|
|
$
|
-
|
|
|
$
|
43,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions, net of cash acquired
|
|
|
-
|
|
|
|
(25,225)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(25,225)
|
|
Additions to property, plant and equipment - acquisitions
|
|
|
-
|
|
|
|
(1,746)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,746)
|
|
- growth
|
|
|
-
|
|
|
|
(7,172)
|
|
|
|
(5,020)
|
|
|
|
-
|
|
|
|
(12,192)
|
|
- maintenance
|
|
|
(203)
|
|
|
|
(40,620)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(40,823)
|
|
Payments on landfill operating lease contracts
|
|
|
-
|
|
|
|
(6,261)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(6,261)
|
|
Payment for capital related to divestiture
|
|
|
-
|
|
|
|
(618)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(618)
|
|
Investments in unconsolidated entities
|
|
|
(4,166)
|
|
|
|
(2,707)
|
|
|
|
3,666
|
|
|
|
-
|
|
|
|
(3,207)
|
|
Proceeds from sale of property and equipment
|
|
|
-
|
|
|
|
883
|
|
|
|
-
|
|
|
|
-
|
|
|
|
883
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
(4,369)
|
|
|
|
(83,466)
|
|
|
|
(1,354)
|
|
|
|
-
|
|
|
|
(89,189)
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term borrowings
|
|
|
334,497
|
|
|
|
41,849
|
|
|
|
-
|
|
|
|
-
|
|
|
|
376,346
|
|
Principal payments on long-term debt
|
|
|
(359,342)
|
|
|
|
(1,516)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(360,858)
|
|
Payment of tender premium on second lien notes
|
|
|
(10,743)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(10,743)
|
|
Payment of financing costs
|
|
|
(4,609)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(4,609)
|
|
Net proceeds from the sale of class A common stock
|
|
|
42,184
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
42,184
|
|
Contributions from noncontrolling interest holders
|
|
|
-
|
|
|
|
-
|
|
|
|
2,531
|
|
|
|
-
|
|
|
|
2,531
|
|
Other
|
|
|
96
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
96
|
|
Intercompany borrowings
|
|
|
5,066
|
|
|
|
(5,066)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
7,149
|
|
|
|
35,267
|
|
|
|
2,531
|
|
|
|
-
|
|
|
|
44,947
|
|
Net cash provided by (used in) discontinued operations
|
|
|
-
|
|
|
|
(2,398)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,398)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(2,539)
|
|
|
|
(115)
|
|
|
|
(125)
|
|
|
|
-
|
|
|
|
(2,779)
|
|
Cash and cash equivalents, beginning of period
|
|
|
3,799
|
|
|
|
368
|
|
|
|
367
|
|
|
|
-
|
|
|
|
4,534
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
1,260
|
|
|
$
|
253
|
|
|
$
|
242
|
|
|
$
|
-
|
|
|
$
|
1,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
116
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FISCAL YEAR ENDED APRIL 30, 2012
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
|
|
|
Guarantors
|
|
|
Non -
Guarantors
|
|
|
Elimination
|
|
|
Consolidated
|
|
Net cash provided by (used in) operating activities
|
|
$
|
4,552
|
|
|
$
|
59,088
|
|
|
$
|
531
|
|
|
$
|
-
|
|
|
$
|
64,171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions, net of cash acquired
|
|
|
-
|
|
|
|
(2,102)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,102)
|
|
Additions to property, plant and equipment - acquisitions
|
|
|
-
|
|
|
|
(529)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(529)
|
|
- growth
|
|
|
-
|
|
|
|
(9,632)
|
|
|
|
(2,579)
|
|
|
|
-
|
|
|
|
(12,211)
|
|
- maintenance
|
|
|
(574)
|
|
|
|
(44,889)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(45,463)
|
|
Payments on landfill operating lease contracts
|
|
|
-
|
|
|
|
(6,616)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(6,616)
|
|
Investments in unconsolidated entities
|
|
|
(2,740)
|
|
|
|
(4,184)
|
|
|
|
1,879
|
|
|
|
-
|
|
|
|
(5,045)
|
|
Proceeds from sale of property and equipment
|
|
|
-
|
|
|
|
1,492
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
(3,314)
|
|
|
|
(66,460)
|
|
|
|
(700)
|
|
|
|
-
|
|
|
|
(70,474)
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term borrowings
|
|
|
163,500
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
163,500
|
|
Principal payments on long-term debt
|
|
|
(151,390)
|
|
|
|
(1,416)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(152,806)
|
|
Payments of financing costs
|
|
|
(1,592)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,592)
|
|
Contributions from noncontrolling interest holders
|
|
|
-
|
|
|
|
-
|
|
|
|
536
|
|
|
|
-
|
|
|
|
536
|
|
Other
|
|
|
591
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
591
|
|
Intercompany borrowings
|
|
|
(10,079)
|
|
|
|
10,079
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
1,030
|
|
|
|
8,663
|
|
|
|
536
|
|
|
|
-
|
|
|
|
10,229
|
|
Net cash provided by (used in) discontinued operations
|
|
|
-
|
|
|
|
(1,209)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,209)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
2,268
|
|
|
|
82
|
|
|
|
367
|
|
|
|
-
|
|
|
|
2,717
|
|
Cash and cash equivalents, beginning of period
|
|
|
1,531
|
|
|
|
286
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
3,799
|
|
|
$
|
368
|
|
|
$
|
367
|
|
|
$
|
-
|
|
|
$
|
4,534
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
117
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FISCAL YEAR ENDED APRIL 30, 2011
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
|
|
|
Guarantors
|
|
|
Non -
Guarantors
|
|
|
Elimination
|
|
|
Consolidated
|
|
Net cash provided by (used in) operating activities
|
|
$
|
(49,944)
|
|
|
$
|
97,605
|
|
|
$
|
548
|
|
|
$
|
-
|
|
|
$
|
48,209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions, net of cash acquired
|
|
|
-
|
|
|
|
(1,744)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,744)
|
|
Additions to property, plant and equipment - acquisitions
|
|
|
-
|
|
|
|
(5)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(5)
|
|
- growth
|
|
|
-
|
|
|
|
(2,803)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,803)
|
|
- maintenance
|
|
|
(2,328)
|
|
|
|
(49,452)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(51,780)
|
|
Payments on landfill operating lease contracts
|
|
|
-
|
|
|
|
(5,655)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,655)
|
|
Purchase of gas rights
|
|
|
-
|
|
|
|
(1,608)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,608)
|
|
Proceeds from sale of assets
|
|
|
-
|
|
|
|
7,533
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7,533
|
|
Proceeds from sale of property and equipment
|
|
|
-
|
|
|
|
959
|
|
|
|
-
|
|
|
|
-
|
|
|
|
959
|
|
Investments in unconsolidated entities
|
|
|
548
|
|
|
|
-
|
|
|
|
(548)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
(1,780)
|
|
|
|
(52,775)
|
|
|
|
(548)
|
|
|
|
-
|
|
|
|
(55,103)
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term borrowings
|
|
|
382,899
|
|
|
|
858
|
|
|
|
-
|
|
|
|
-
|
|
|
|
383,757
|
|
Principal payments on long-term debt
|
|
|
(490,254)
|
|
|
|
(1,415)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(491,669)
|
|
Payments of financing costs
|
|
|
(10,588)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(10,588)
|
|
Other
|
|
|
605
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
605
|
|
Intercompany borrowings
|
|
|
169,359
|
|
|
|
(169,359)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
52,021
|
|
|
|
(169,916)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(117,895)
|
|
Net cash provided by (used in) discontinued operations
|
|
|
-
|
|
|
|
124,571
|
|
|
|
-
|
|
|
|
-
|
|
|
|
124,571
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
297
|
|
|
|
(515)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(218)
|
|
Cash and cash equivalents, beginning of period
|
|
|
1,234
|
|
|
|
801
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,035
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
1,531
|
|
|
$
|
286
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
118