What are the main reasons for the new charges reported by Republic Services?

The charges are primarily due to environmental remediation efforts at two facilities. In Ohio, it's for conditions at the Countywide Recycling and Disposal Facility resulting from a chemical reaction involving aluminum production waste, requiring actions mandated by the Ohio EPA. In California, it's for increased leachate disposal costs and necessary equipment upgrades at the West Contra Costa County Landfill due to a consent agreement.

How will these charges impact Republic Services' reported earnings for 2007?

The company will record charges totaling $32.9 million, which equates to approximately $0.11 per diluted share, during the third quarter of 2007. This is in addition to a previously recorded $22.0 million charge in the first quarter of 2007 related to the Ohio facility. The company expects to report full-year 2007 earnings in a range of $1.47 to $1.48 per diluted share, including these charges.

Has Republic Services raised its overall financial outlook despite these charges?

Yes, the company has increased its 2007 earnings per share guidance to a range of $1.65 to $1.66 per diluted share, excluding the impact of these specific remediation charges. The guidance for free cash flow in 2007 remains reaffirmed at $320.0 million to $325.0 million.

Is Republic Services seeking to recover any of these remediation costs?

Yes, the company is vigorously pursuing financial contributions from third parties to help cover the costs associated with complying with the OEPA's Final Findings and Orders and the additional remedial actions at the Countywide facility in Ohio.

RSG 8-K: Regulation FD — Oct 18, 2007

Summary

Republic Services, Inc. (RSG) filed an 8-K on October 18, 2007, primarily to disclose significant environmental remediation charges and an increase in its earnings per share guidance for fiscal year 2007. The company will record charges totaling $32.9 million (approximately $0.11 per diluted share) related to two landfill sites: the Countywide Recycling and Disposal Facility in Ohio and the West Contra Costa County Landfill in California. The substantial charge for the Countywide facility stems from environmental conditions attributed to a chemical reaction from aluminum production waste, requiring extensive remediation actions mandated by the Ohio EPA. The West Contra Costa County Landfill charge is due to increased leachate disposal costs and upgrades to leachate treatment equipment, resulting from a consent agreement with the California Department of Toxic Substance Control. Despite these charges, Republic Services raised its 2007 adjusted earnings per share guidance to a range of $1.65 to $1.66, excluding these specific remediation costs, reflecting underlying operational strength.

Key Highlights

1Republic Services will record a total of $32.9 million in charges during the third quarter of 2007 related to environmental remediation at two facilities.
2The majority of the costs are associated with the Countywide Recycling and Disposal Facility in Ohio, requiring extensive actions to address environmental conditions from a chemical reaction.
3Additional charges are also related to the West Contra Costa County Landfill in California for leachate management and equipment upgrades.
4The company is actively pursuing financial contributions from third parties for the remediation costs at the Ohio facility.
5Despite these charges, Republic Services increased its 2007 earnings per share guidance to a range of $1.59-$1.62 (adjusted, excluding charges) to $1.65-$1.66 per diluted share.
6Free cash flow guidance for 2007 remains unchanged at $320.0 million to $325.0 million, inclusive of payments related to these charges.

REPUBLIC SERVICES, INC. 8-K Report, Regulation FD Disclosure (Oct 18, 2007)

Summary

Key Highlights

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