These excerpts taken from the SON 10-K filed Feb 28, 2008.
other respondents to jointly take various actions to clean up Operating Units 2 5. The order establishes two phases of work. The first phase consists of planning and design work as well as preparation for dredging and other remediation work and must be completed by December 31, 2008. The second phase consists primarily of dredging and disposing of contaminated sediments and capping of the dredged and less contaminated areas of the river bottom. The second phase is required to begin in 2009 when weather conditions permit and is expected to continue for several years. The order also provides for a $32.5 per day penalty for failure by a respondent to comply with its terms as well as exposing a non-complying respondent to potential treble damages. Although U.S. Mills has reserved its rights to contest liability for any portion of the work, it is cooperating with the other respondents to comply with the first phase of the order.
The mediation proceedings caused U.S. Mills to revise its estimate of the range of loss probable to be incurred in connection with the remediation of Operating Units 2 5. Based on information currently available, there is no amount within the range that appears to be a better estimate than any other. Accordingly, pursuant to applicable accounting rules, U.S. Mills recorded a charge of $20,000 in the second quarter of 2007 for the remediation of Operating Units 2 5. The second quarter charge represents the minimum estimated amount of potential loss U.S. Mills believes it is likely to incur. Developments since the second quarter, including the ongoing mediation and issuance of the Administrative Order, have not yet provided U.S. Mills with a reasonable basis for further revising its estimate of the range of possible loss. U.S. Mills ultimate share of the liability, and any claims against the Company, could conceivably exceed the net worth of U.S. Mills. The Company does not believe it is probable that the effect of U.S. Mills Fox River liabilities would result in a pre-tax loss that would materially exceed the net worth of U.S. Mills, which was approximately $80,000 at December 31, 2007.
The Company has been named as a potentially responsible party at several other environmentally contaminated sites. All of the sites are also the responsibility of other parties. The potential remediation liabilities are shared with such other parties, and, in most cases, the Companys share, if any, cannot be reasonably estimated at the current time.
As of December 31, 2007 and 2006, the Company (and its subsidiaries) had accrued $31,058 and $15,316, respectively, related to environmental contingencies. Of these, a total of $28,996 and $11,661 relate to U.S. Mills at December 31, 2007 and 2006, respectively. These accruals are included in Accrued expenses and other on the Companys Consolidated Balance Sheets. U.S. Mills has insurance pursuant to which it may recover some or all of the costs it ultimately incurs, or it may be able to recoup some or all of such costs from third parties. There can be no assurance that such claims for recovery would be successful and no amounts have been recognized in the consolidated financial statements of the Company for such potential recovery or recoupment.
The mediation proceedings caused U.S. Mills to revise its estimate of the range of
FACE="Times New Roman" SIZE="2">The Company has been named as a potentially responsible party at several other environmentally contaminated sites. All of the sites are also the responsibility of other parties. The potential remediation liabilities
SIZE="2">As of December 31, 2007 and 2006, the Company (and its subsidiaries) had accrued $31,058 and $15,316, respectively, related to environmental contingencies. Of these, a total of $28,996 and $11,661 relate to U.S. Mills at
As of December 31, 2007, the Company had long-term obligations to purchase
COLOR="#5b593d">14. Shareholders Equity and Earnings per Share