American Ecology increases reserve for non-operating
Boise, ID— American Ecology
Corporation announced a $542,000 increase in its estimate for
closure and post-closure costs for a non-operating hazardous waste
facility formerly operated by the Company near Winona, Texas.
The revised cost estimate and
related reserve increase reflect a monitored natural attenuation
plan which the Company has determined, in consultation with the
State of Texas, to be the most likely long-term remedy.
The revised cost estimate includes
activities and costs to be incurred through 2036. An independent
environmental engineering and consulting firm provided peer review
of the Company’s planned activities and estimated future
Accounting for closure and post
closure liabilities is governed by Statement of Financial Accounting
Standard (SFAS) No. 143, “Accounting for Asset Retirement
Obligations.” The result of the change in estimated costs
and the application of SFAS No. 143 will be an additional $542,000
expense and a commensurate increase in the closure and post closure
reserve during the fourth quarter of 2005. Including the $542,000,
the updated reserve for the Winona facility is now $1,646,000.
Consistent with SFAS No. 143, the Company periodically, but at
least annually, reviews closure and post closure reserves for
adequacy. The Company will review its remaining closure and post
closure reserves at year-end.
The Company also reported proceeds
of $1,290,000 received from its property and business interruption
insurance carrier in partial resolution of a claim on a 2004 fire
at its Robstown, Texas hazardous waste facility. While portions
of the claim remain under review by the insurer and additional
amounts may be received before year-end or in 2006, the Company
will recognize a gain of $860,000 from the recent payment in the
fourth quarter of 2005.