8-KOther Events

REPUBLIC SERVICES, INC. 8-K Report, Corporate Update (Apr 3, 2007)

Filed April 3, 2007For Securities:RSG

Summary

Republic Services, Inc. (RSG) disclosed in an 8-K filing on April 3, 2007, that its wholly-owned subsidiary, Republic Services of Ohio II, LLC, received Final Findings and Orders (F&Os) from the Ohio Environmental Protection Agency (OEPA). These F&Os pertain to environmental conditions at the Countywide Recycling and Disposal Facility in East Sparta, Ohio, stemming from the disposal of aluminum production waste. The OEPA mandates specific actions to address these conditions, including operational restrictions, engineering plan updates, and expanded environmental control systems. In response, RSG anticipates incurring approximately $22 million in costs to comply with the OEPA's directives, which will be recorded as a charge to income from continuing operations in the first quarter of 2007. The majority of these expenses are expected to be paid in 2007. Furthermore, the company will recognize an additional $3.3 million in amortization and depletion expense in 2007 due to a reduction in the facility's available airspace. While RSG plans to seek financial contributions from third parties, these events will impact the company's 2007 operating income and cash flows.

Key Highlights

  • 1Republic Services' subsidiary, Republic-Ohio, received Final Findings and Orders (F&Os) from the Ohio EPA regarding environmental conditions at the Countywide facility.
  • 2The environmental issues are attributed to chemical reactions from the disposal of aluminum production waste.
  • 3RSG estimates compliance costs for the F&Os at approximately $22 million, to be recorded as a charge to income in Q1 2007.
  • 4A significant portion of the $22 million compliance cost is expected to be paid during 2007.
  • 5An additional $3.3 million in amortization and depletion expense will be incurred in 2007 due to reduced available airspace at the facility.
  • 6The company intends to actively pursue financial contributions from third parties to offset compliance costs.
  • 7The Stark County Health Department is currently evaluating the facility's operating license renewal, with a decision expected in May 2007.

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