Clean Harbors, Inc. (NYSE:CLH) Q3 2022 Earnings Conference Call November 2, 2022 9:00 AM ET Company Participants Michael McDonald - General Counsel Alan McKim - Founder, Chairman, President & CEO Michael Battles - EVP & CFO Eric Gerstenberg - COO Conference Call Participants Tyler Brown - Raymond James Michael Hoffman - Stifel Jerry Revich - Goldman Sachs David Manthey - Baird James Ricchiuti - Needham & Company Noah Kaye - Oppenheimer Pete Lucas - CJS Securities Zane Karimi - D.A. Davidson Scott Levine - B ...

Table of Contents Title of each class Trading Symbol Name of each exchange on which registered Common Stock, $0.01 par value CLH New York Stock Exchange UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION ...

Clean Harbors, Inc. (NYSE:CLH) Q2 2022 Earnings Conference Call August 3, 2022 9:00 AM ET Company Participants Michael McDonald - General Counsel Alan McKim - Founder, Chairman, President & CEO Michael Battles - EVP & CFO Eric Gerstenberg - COO Conference Call Participants Noah Kaye - Oppenheimer Patrick Brown - Raymond James & Associates Lawrence Solow - CJS Securities Zane Karimi - D.A. Davidson & Co. Michael Hoffman - Stifel, Nicolaus & Company David Manthey - Robert W. Baird & Co. James Ricchiuti - Need ...

Q2 2022 Performance Highlights - Revenue reached $1.36 billion, a 46% year-over-year increase, driven by the addition of HPC, organic growth, and pricing adjustments to offset inflation[5] - Adjusted EBITDA increased by 65% to $309.1 million, with an Adjusted EBITDA margin of 22.8%[5] - GAAP EPS was $2.71, and Adjusted EPS was $2.44[5] - Adjusted free cash flow was $94.6 million, compared to $114.6 million in Q2 2021[5] Segment Performance - Environmental Services segment experienced strong demand across its disposal network and service businesses, including contributions from HPC[5] - Safety-Kleen Sustainability Solutions segment achieved record performance due to effective base oil spread management and favorable market pricing dynamics, with revenue of $265.5 million, a 31% increase from Q2 2021's $202.3 million[5, 9] - Safety-Kleen Sustainability Solutions segment Adjusted EBITDA increased by 53% to $97.0 million from $63.3 million in Q2 2021[9] Financial Position - Cash and short-term marketable securities totaled $415.4 million as of June 30, 2022[13] - Current and long-term debt amounted to $2.5285 billion as of June 30, 2022[13] Full-Year 2022 Guidance - The company projects net income between $355 million and $390 million[16] - Adjusted EBITDA is expected to range from $975 million to $1.005 billion[16] - Adjusted free cash flow is projected to be between $310 million and $350 million[16]

Table of Contents Title of each class Trading Symbol Name of each exchange on which registered Common Stock, $0.01 par value CLH New York Stock Exchange UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIO ...

Stifel 2022 Cross Sector Insight Conference 1 June 8, 2022 THREE INDUSTRY LEADERS UNITED INTO ONE COMPANY 2022 CLEAN HARBORS - CONFIDENTIAL Forward Looking Statements and GAAP Disclaimer These slides contain (and the accompanying oral discussion will contain) forward-looking statements, which are generally identifiable by use of the words "believes," "expects," "intends," "anticipates," "plans to," "seeks," "should," "estimates," "projects," "may," "likely" or similar expressions. Such statements may includ ...

Financial Data and Key Metrics Changes - Revenue increased by 45% in Q1 2022, driven by the addition of HPC and healthy organic growth in legacy businesses, with topline growth excluding HPC at 22% [27] - Adjusted EBITDA rose by 39% year-over-year, reaching $180.3 million [27] - SG&A expense as a percentage of revenue improved by 220 basis points to 12.9%, attributed to effective cost controls and leveraging HPC revenue [28] - Cash and short-term marketable securities at quarter-end were $415 million, with debt over $2.5 billion and a leverage ratio of approximately 3 times [30] Business Line Data and Key Metrics Changes - Environmental Services revenue grew by 45% in Q1, reflecting the HPC acquisition and strong organic growth, with legacy industrial service revenue (excluding HPC) growing by 24% [11][12] - Safety Kleen Environmental revenue increased by 9% year-over-year [12] - SKSS segment revenue was up 44%, driven by healthy production levels and higher pricing [17] Market Data and Key Metrics Changes - Incineration utilization improved to 85% from 80% year-over-year, with average incineration pricing up 2% [15] - Revenue from COVID decontamination work totaled approximately $9 million, down from $28 million in Q1 2021 [16] - Waste oil collection volumes grew by 13% to 53 million gallons [17] Company Strategy and Development Direction - The company is focusing on integrating HPC and cross-selling opportunities, with a renewed emphasis on branding and service simplification [19][20] - Capital allocation strategy prioritizes internal investments to expand throughput in disposal, recycling, and re-refining, with ongoing evaluations for bolt-on acquisitions [22] - The company anticipates strong demand driven by trends such as US infrastructure spending and re-shoring of industries [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong demand across all verticals, despite potential macroeconomic slowdowns [41] - The company is optimistic about achieving strong profitable growth and robust free cash flow in 2022, supported by pricing and cost reduction strategies [25][39] - Management highlighted a culture of accountability and continuous improvement as key drivers of results [25] Other Important Information - The company concluded Q1 with a total recordable incident rate (TRIR) of 0.97, emphasizing safety as a core value [6] - The company expects adjusted free cash flow in the range of $250 million to $290 million for 2022 [38] Q&A Session Summary Question: How is the company thinking about key verticals in the coming year? - Management noted strong market demand across all verticals, with waste streams experiencing increased deferred revenue [41] Question: What is the current staffing situation? - Management rated staffing levels at a 7 or 8 out of 10, indicating reliance on subcontracted labor which pressures margins [42][43] Question: What is the market share in Industrial and Field Services? - Management indicated a leadership position in emergency response capabilities but did not provide specific market share percentages [46] Question: When will the mix of blended products in the Safety Kleen segment normalize? - Management expects improvements in volumes by mid-May, with a return to growth in the following year [49][50] Question: What are the expectations for EBITDA guidance? - Management confirmed that the raised guidance reflects better-than-expected Q1 results and strong Q2 expectations [54] Question: What are the cost reduction strategies in light of inflation? - Management emphasized ongoing cost containment efforts, including consolidating sites and leveraging operational efficiencies [65][66] Question: What is the outlook for the environmental services market in the next few years? - Management anticipates increased outsourcing and demand driven by environmental regulations and infrastructure needs [88]

First Quarter 2022 Investor Review 1 May 4, 2022 THREE INDUSTRY LEADERS UNITED INTO ONE COMPANY 2022 CLEAN HARBORS - CONFIDENTIAL Forward Looking Statements and GAAP Disclaimer These slides contain (and the accompanying oral discussion will contain) forward-looking statements, which are generally identifiable by use of the words "believes," "expects," "intends," "anticipates," "plans to," "seeks," "should," "estimates," "projects," "may," "likely" or similar expressions. Such statements may include, but are ...

PART I: FINANCIAL INFORMATION [ITEM 1: Unaudited Financial Statements](index=4&type=section&id=ITEM%201%3A%20Unaudited%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the quarter ended March 31, 2022, including key statements and detailed notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to $5.73 billion, and stockholders' equity increased by 5.24% to $1.59 billion as of March 31, 2022 Consolidated Balance Sheets | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | Change (in thousands) | % Change | | :----- | :---------------------------- | :------------------------------- | :-------------------- | :------- | | Total Assets | $5,726,257 | $5,653,699 | $72,558 | 1.28% | | Total Current Assets | $1,807,248 | $1,741,171 | $66,077 | 3.79% | | Total Liabilities | $4,133,020 | $4,139,812 | $(6,792) | -0.16% | | Total Stockholders' Equity | $1,593,237 | $1,513,887 | $79,350 | 5.24% | [Unaudited Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Operations) Total revenues grew 44.66% to $1.17 billion, driving a 108.48% increase in net income for the first quarter of 2022 Unaudited Consolidated Statements of Operations | Metric | 2022 (in thousands) | 2021 (in thousands) | Change (in thousands) | % Change | | :----- | :------------------ | :------------------ | :-------------------- | :------- | | Total Revenues | $1,169,109 | $808,148 | $360,961 | 44.66% | | Income from Operations | $87,093 | $50,855 | $36,238 | 71.26% | | Net Income | $45,314 | $21,736 | $23,578 | 108.48% | | Basic EPS | $0.83 | $0.40 | $0.43 | 107.50% | | Diluted EPS | $0.83 | $0.39 | $0.44 | 112.82% | [Unaudited Consolidated Statements of Comprehensive Income](index=6&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Comprehensive%20Income) Total comprehensive income increased 135.03% to $79.2 million, driven by strong net income and other comprehensive income Unaudited Consolidated Statements of Comprehensive Income | Metric | 2022 (in thousands) | 2021 (in thousands) | Change (in thousands) | % Change | | :----- | :------------------ | :------------------ | :-------------------- | :------- | | Net Income | $45,314 | $21,736 | $23,578 | 108.48% | | Other Comprehensive Income | $33,849 | $11,948 | $21,901 | 183.30% | | Total Comprehensive Income | $79,163 | $33,684 | $45,480 | 135.03% | [Unaudited Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities shifted to an outflow of $(38.6) million, a significant decrease from a $103.0 million inflow in the prior year Unaudited Consolidated Statements of Cash Flows | Metric | 2022 (in thousands) | 2021 (in thousands) | Change (in thousands) | | :----- | :------------------ | :------------------ | :-------------------- | | Net cash (used in) from operating activities | $(38,629) | $103,000 | $(141,629) | | Net cash used in investing activities | $(58,861) | $(86,737) | $27,876 | | Net cash used in financing activities | $(16,080) | $(40,620) | $24,540 | | Decrease in cash and cash equivalents | $(112,991) | $(22,718) | $(90,273) | | Cash and cash equivalents, end of period | $339,584 | $496,383 | $(156,799) | [Unaudited Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Total stockholders' equity increased to $1.59 billion, driven by net income and other comprehensive income Stockholders' Equity Changes (January 1 to March 31, 2022) | Item | Amount (in thousands) | | :--- | :-------------------- | | Balance at January 1, 2022 | $1,513,887 | | Net income | $45,314 | | Other comprehensive income | $33,849 | | Stock-based compensation | $5,712 | | Issuance of common stock for restricted share vesting, net of employee tax withholdings | $(1,831) | | Repurchases of common stock | $(3,694) | | Balance at March 31, 2022 | $1,593,237 | [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section details the basis of presentation, accounting policies, revenue, acquisitions, and other key financial statement components [(1) BASIS OF PRESENTATION](index=9&type=section&id=%281%29%20BASIS%20OF%20PRESENTATION) - Interim financial statements are unaudited and prepared in accordance with SEC rules, including normal recurring adjustments[23](index=23&type=chunk) - Management's estimates and assumptions were used, and actual results could differ from those estimates[23](index=23&type=chunk) [(2) SIGNIFICANT ACCOUNTING POLICIES](index=9&type=section&id=%282%29%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - No material changes to significant accounting policies since the December 31, 2021, Annual Report on Form 10-K[24](index=24&type=chunk) [(3) REVENUES](index=9&type=section&id=%283%29%20REVENUES) - Revenue disaggregation is based on geographic location and source, reflecting how economic factors affect revenue and cash flows[25](index=25&type=chunk) - Services like Technical, Field & Emergency Response, and Industrial Services recognize revenue over time using the input method (time and materials)[25](index=25&type=chunk)[26](index=26&type=chunk)[29](index=29&type=chunk) - Product revenue (e.g., Safety-Kleen Oil) is recognized at a point in time upon transfer of control to the customer[31](index=31&type=chunk)[32](index=32&type=chunk) Total Third-Party Revenues by Segment and Geography (Three Months Ended March 31, 2022 vs. 2021) | Segment/Geography | 2022 (in thousands) | 2021 (in thousands) | | :---------------- | :------------------ | :------------------ | | **Total Third-Party Revenues** | **$1,169,109** | **$808,148** | | Environmental Services | $940,798 | $652,878 | | Safety-Kleen Sustainability Solutions | $228,239 | $155,191 | | United States | $1,037,280 | $714,577 | | Canada | $131,829 | $93,571 | Total Third-Party Revenues by Source (Three Months Ended March 31, 2022 vs. 2021) | Source of Revenue | 2022 (in thousands) | 2021 (in thousands) | | :---------------- | :------------------ | :------------------ | | Technical Services | $323,656 | $272,040 | | Field and Emergency Response Services | $132,359 | $105,168 | | Industrial Services and Other | $308,910 | $119,889 | | Safety-Kleen Environmental Services | $220,333 | $194,838 | | Safety-Kleen Oil | $183,851 | $116,213 | [(4) BUSINESS COMBINATIONS](index=13&type=section&id=%284%29%20BUSINESS%20COMBINATIONS) - Acquired HydroChemPSC on October 8, 2021, for approximately **$1.23 billion**, integrating it into the Environmental Services segment[39](index=39&type=chunk) - Received a **$5.0 million** working capital adjustment in Q1 2022, decreasing the overall purchase price[39](index=39&type=chunk)[40](index=40&type=chunk) - Goodwill of **$676.9 million** was assigned to the Environmental Sales & Service reporting unit from the HydroChemPSC acquisition[40](index=40&type=chunk) Pro-Forma Combined Financial Data (Three Months Ended March 31, 2021) | Metric | Amount (in thousands) | | :----- | :-------------------- | | Pro forma combined revenues | $986,188 | | Pro forma combined net income | $27,552 | [(5) INVENTORIES AND SUPPLIES](index=14&type=section&id=%285%29%20INVENTORIES%20AND%20SUPPLIES) Inventories and Supplies (in thousands) | Category | March 31, 2022 | December 31, 2021 | | :------- | :------------- | :---------------- | | Oil and oil related products | $105,011 | $101,965 | | Supplies | $136,031 | $126,602 | | Solvent and solutions | $9,141 | $8,099 | | Other | $14,550 | $14,026 | | **Total inventories and supplies** | **$264,733** | **$250,692** | [(6) PROPERTY, PLANT AND EQUIPMENT](index=14&type=section&id=%286%29%20PROPERTY%2C%20PLANT%20AND%20EQUIPMENT) - Depreciation expense (inclusive of landfill and finance lease amortization) for the three months ended March 31, 2022, was **$72.1 million**, an increase from $64.6 million in the comparable 2021 period[47](index=47&type=chunk) Property, Plant and Equipment, Net (in thousands) | Metric | March 31, 2022 | December 31, 2021 | | :----- | :------------- | :---------------- | | Total property, plant and equipment, net | $1,881,542 | $1,863,175 | [(7) GOODWILL AND OTHER INTANGIBLE ASSETS](index=15&type=section&id=%287%29%20GOODWILL%20AND%20OTHER%20INTANGIBLE%20ASSETS) - Amortization expense for permits, customer and supplier relationships, and other intangible assets was **$12.2 million** for the three months ended March 31, 2022, up from $7.6 million in the comparable 2021 period[50](index=50&type=chunk) Goodwill by Segment (in thousands) | Segment | January 1, 2022 | Measurement Period Adjustments | Foreign Currency Translation | March 31, 2022 | | :------ | :-------------- | :----------------------------- | :--------------------------- | :------------- | | Environmental Services | $1,085,534 | $(6,557) | $671 | $1,079,648 | | Safety-Kleen Sustainability Solutions | $141,508 | — | $243 | $141,751 | | **Totals** | **$1,227,042** | **$(6,557)** | **$914** | **$1,221,399** | Total Permits and Other Intangible Assets, Net (in thousands) | Metric | March 31, 2022 | December 31, 2021 | | :----- | :------------- | :---------------- | | Total permits and other intangible assets, net | $633,445 | $644,912 | [(8) ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES](index=15&type=section&id=%288%29%20ACCRUED%20EXPENSES%20AND%20OTHER%20CURRENT%20LIABILITIES) Accrued Expenses and Other Current Liabilities (in thousands) | Category | March 31, 2022 | December 31, 2021 | | :------- | :------------- | :---------------- | | Accrued insurance | $99,819 | $102,853 | | Accrued interest | $9,271 | $19,785 | | Accrued compensation and benefits | $101,486 | $133,604 | | Accrued income, real estate, sales and other taxes | $42,758 | $29,954 | | Interest rate swap liability | $1,622 | $17,383 | | Accrued other | $83,879 | $87,835 | | **Total** | **$338,835** | **$391,414** | [(9) CLOSURE AND POST-CLOSURE LIABILITIES](index=17&type=section&id=%289%29%20CLOSURE%20AND%20POST-CLOSURE%20LIABILITIES) - New asset retirement obligations incurred in Q1 2022 were discounted at a credit-adjusted risk-free rate of **5.37%**[55](index=55&type=chunk) Closure and Post-Closure Liabilities (in thousands) | Category | January 1, 2022 | March 31, 2022 | | :------- | :-------------- | :------------- | | Landfill Retirement Liability | $53,425 | $53,939 | | Non-Landfill Retirement Liability | $45,678 | $46,760 | | **Total** | **$99,103** | **$100,699** | [(10) REMEDIAL LIABILITIES](index=17&type=section&id=%2810%29%20REMEDIAL%20LIABILITIES) - A **$13.1 million** liability was assumed in a real estate acquisition in 2022, which was factored into the purchase price[56](index=56&type=chunk) Remedial Liabilities (in thousands) | Category | January 1, 2022 | March 31, 2022 | | :------- | :-------------- | :------------- | | Remedial Liabilities for Landfill Sites | $1,780 | $1,790 | | Remedial Liabilities Inactive for Sites | $59,787 | $59,890 | | Remedial Liabilities (Including Superfund) for Non-Landfill Operations | $50,306 | $63,049 | | **Total** | **$111,873** | **$124,729** | [(11) FINANCING ARRANGEMENTS](index=18&type=section&id=%2811%29%20FINANCING%20ARRANGEMENTS) - The Company has a **$400.0 million** revolving credit facility with **$290.3 million** available to borrow as of March 31, 2022[62](index=62&type=chunk) - Interest rate swap agreements effectively fix interest rates on **$350.0 million** of 2024 Term Loans (at ~4.67%) and **$600.0 million** of 2028 Term Loans (at ~2.931%)[64](index=64&type=chunk)[65](index=65&type=chunk) Long-Term Debt Summary (in thousands) | Debt Type | March 31, 2022 | December 31, 2021 | | :-------- | :------------- | :---------------- | | Secured senior term loans due 2024 | $710,207 | $712,091 | | Secured senior term loans due 2028 | $987,500 | $990,000 | | Unsecured senior notes, 4.875%, due 2027 | $545,000 | $545,000 | | Unsecured senior notes, 5.125%, due 2029 | $300,000 | $300,000 | | **Long-term debt, at carrying value** | **$2,513,944** | **$2,517,024** | [(12) INCOME TAXES](index=20&type=section&id=%2812%29%20INCOME%20TAXES) - The decrease in the effective tax rate is largely due to a decrease in unbenefited losses in certain of the Company's Canadian entities[70](index=70&type=chunk) Income Tax Provision and Effective Tax Rate (Three Months Ended March 31) | Metric | 2022 (in thousands) | 2021 (in thousands) | | :----- | :------------------ | :------------------ | | Provision for income taxes | $17,466 | $9,973 | | Effective tax rate | 27.8% | 31.5% | [(13) EARNINGS PER SHARE](index=20&type=section&id=%2813%29%20EARNINGS%20PER%20SHARE) - Weighted-average basic shares outstanding were **54,408 thousand** in 2022, down from 54,723 thousand in 2021[71](index=71&type=chunk) Earnings Per Share (Three Months Ended March 31) | Metric | 2022 | 2021 | | :----- | :--- | :--- | | Basic EPS | $0.83 | $0.40 | | Diluted EPS | $0.83 | $0.39 | [(14) ACCUMULATED OTHER COMPREHENSIVE LOSS](index=20&type=section&id=%2814%29%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) - Other comprehensive income for the period was **$33.8 million**, contributing to the reduction in accumulated loss[72](index=72&type=chunk) Accumulated Other Comprehensive Loss (in thousands) | Component | January 1, 2022 | March 31, 2022 | | :-------- | :-------------- | :------------- | | Foreign Currency Translation | $(177,824) | $(171,312) | | Unrealized (Loss) Gain on Available-For-Sale Securities | $(150) | $(678) | | Unrealized (Loss) Gain on Interest Rate Hedge | $(17,383) | $10,492 | | Unrealized Loss on Unfunded Pension Liability | $(655) | $(665) | | **Total** | **$(196,012)** | **$(162,163)** | [(15) STOCK-BASED COMPENSATION](index=21&type=section&id=%2815%29%20STOCK-BASED%20COMPENSATION) - Unrecognized compensation cost for restricted stock awards was **$31.1 million** as of March 31, 2022, with a weighted average recognition period of 3.1 years[75](index=75&type=chunk) - Unrecognized compensation cost for performance stock awards was **$11.1 million** as of March 31, 2022[77](index=77&type=chunk) Stock-Based Compensation Expense (Three Months Ended March 31) | Metric | 2022 (in thousands) | 2021 (in thousands) | | :----- | :------------------ | :------------------ | | Total stock-based compensation cost | $5,712 | $3,480 | | Income tax benefit | $1,100 | $700 | [(16) COMMITMENTS AND CONTINGENCIES](index=22&type=section&id=%2816%29%20COMMITMENTS%20AND%20CONTINGENCIES) - The Company is subject to legal proceedings and claims, including commercial, employment, and environmental matters[79](index=79&type=chunk) - The Company believes it is not reasonably possible that potential liability beyond recorded amounts will materially affect its financial position, results of operations, or cash flows[80](index=80&type=chunk) - Safety-Kleen is a defendant in approximately **61 product liability lawsuits** as of March 31, 2022, for which the Company maintains insurance coverage[82](index=82&type=chunk)[85](index=85&type=chunk) - The Company has been identified as a potentially responsible party (PRP) at **131 Superfund related sites**, with potential liability exceeding $1.0 million at three of these sites[86](index=86&type=chunk)[87](index=87&type=chunk) Reserves for Legal and Administrative Proceedings (in thousands) | Category | March 31, 2022 | December 31, 2021 | | :------- | :------------- | :---------------- | | Total reserves | $36,200 | $36,100 | | Related to pending legal/administrative proceedings (including Superfund) | $24,000 | $24,100 | | Primarily related to federal, state, and provincial enforcement actions | $12,200 | $12,000 | [(17) SEGMENT REPORTING](index=24&type=section&id=%2817%29%20SEGMENT%20REPORTING) - The Company is managed and reports as two operating segments: **Environmental Services** and **Safety-Kleen Sustainability Solutions**[93](index=93&type=chunk) - Primary financial measure for segment performance evaluation is **"Adjusted EBITDA"**[93](index=93&type=chunk) Direct Revenues by Segment (Three Months Ended March 31) | Segment | 2022 (in thousands) | 2021 (in thousands) | Change (in thousands) | % Change | | :------ | :------------------ | :------------------ | :-------------------- | :------- | | Environmental Services | $947,445 | $654,602 | $292,843 | 44.7% | | Safety-Kleen Sustainability Solutions | $221,592 | $153,467 | $68,125 | 44.4% | | Corporate Items | $72 | $79 | $(7) | N/M | | **Total** | **$1,169,109** | **$808,148** | **$360,961** | **44.7%** | Adjusted EBITDA by Segment (Three Months Ended March 31) | Segment | 2022 (in thousands) | 2021 (in thousands) | Change (in thousands) | % Change | | :------ | :------------------ | :------------------ | :-------------------- | :------- | | Environmental Services | $183,602 | $140,254 | $43,348 | 30.9% | | Safety-Kleen Sustainability Solutions | $51,877 | $31,632 | $20,245 | 64.0% | | Corporate Items | $(55,220) | $(42,435) | $(12,785) | (30.1)% | | **Total** | **$180,259** | **$129,451** | **$50,808** | **39.2%** | [ITEM 2: Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=ITEM%202%3A%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2022 financial performance, highlighting revenue growth, segment results, cost pressures, and liquidity [Forward-Looking Statements](index=26&type=section&id=Forward-Looking%20Statements) - Forward-looking statements are identified by words like "believes," "expects," "intends," and "anticipates"[97](index=97&type=chunk) - Such statements are subject to risks and uncertainties, including those identified as "Risk Factors" in SEC filings, which could cause actual results to differ materially[97](index=97&type=chunk) [Overview](index=26&type=section&id=Overview) - Clean Harbors is North America's leading provider of environmental and industrial services, including hazardous waste management, emergency response, industrial cleaning, and recycling[98](index=98&type=chunk) - The company operates the largest number of hazardous waste incinerators, landfills, and TSDFs in North America[98](index=98&type=chunk) - It is also the largest re-refiner and recycler of used oil and provider of parts washer services in North America[98](index=98&type=chunk) - Segment performance is primarily evaluated using **Adjusted EBITDA**, considering factors like customer demand, waste volumes, utilization rates, and macroeconomic trends[99](index=99&type=chunk)[100](index=100&type=chunk)[102](index=102&type=chunk) [Highlights](index=27&type=section&id=Highlights) - Environmental Services direct revenues increased by **$292.8 million (44.7%)**, partly due to the HydroChemPSC acquisition[103](index=103&type=chunk) - Safety-Kleen Sustainability Solutions direct revenues increased by **$68.1 million (44.4%)**, primarily due to higher pricing of base and blended oil products[103](index=103&type=chunk) - Increased costs in both segments were due to higher business levels, revenue mix, and inflationary pressures[104](index=104&type=chunk) Q1 2022 Financial Highlights (Three Months Ended March 31) | Metric | 2022 (in thousands) | 2021 (in thousands) | Change (in thousands) | % Change | | :----- | :------------------ | :------------------ | :-------------------- | :------- | | Total Revenues | $1,169,109 | $808,148 | $360,961 | 44.7% | | Income from Operations | $87,093 | $50,855 | $36,238 | 71.3% | | Net Income | $45,314 | $21,736 | $23,578 | 108.5% | | Adjusted EBITDA | $180,259 | $129,451 | $50,808 | 39.2% | | Net cash (used in) from operating activities | $(38,629) | $103,000 | $(141,629) | N/A | | Adjusted free cash flow | $(107,617) | $62,291 | $(169,908) | N/A | [Segment Performance](index=28&type=section&id=Segment%20Performance) Direct Revenues by Segment (Three Months Ended March 31) | Segment | 2022 (in thousands) | 2021 (in thousands) | Change (in thousands) | % Change | | :------ | :------------------ | :------------------ | :-------------------- | :------- | | Environmental Services | $947,445 | $654,602 | $292,843 | 44.7% | | Safety-Kleen Sustainability Solutions | $221,592 | $153,467 | $68,125 | 44.4% | | **Total** | **$1,169,109** | **$808,148** | **$360,961** | **44.7%** | Adjusted EBITDA by Segment (Three Months Ended March 31) | Segment | 2022 (in thousands) | 2021 (in thousands) | Change (in thousands) | % Change | | :------ | :------------------ | :------------------ | :-------------------- | :------- | | Environmental Services | $183,602 | $140,254 | $43,348 | 30.9% | | Safety-Kleen Sustainability Solutions | $51,877 | $31,632 | $20,245 | 64.0% | | Corporate Items | $(55,220) | $(42,435) | $(12,785) | (30.1)% | | **Total** | **$180,259** | **$129,451** | **$50,808** | **39.2%** | [Direct Revenues](index=29&type=section&id=Direct%20Revenues) - Revenues are impacted by industrial activity, economic growth, environmental projects, competitive pricing, acquisitions, emergency response, weather, oil pricing, and regulatory changes[110](index=110&type=chunk) [Environmental Services](index=29&type=section&id=Environmental%20Services) - Direct revenues increased by **$292.8 million (44.7%)** due to HydroChemPSC operations and organic growth[111](index=111&type=chunk) - Industrial service offerings revenues increased by **$184.4 million**, with HydroChemPSC contributing approximately $155.8 million[111](index=111&type=chunk) - Technical services revenues increased by **$63.8 million** largely due to higher throughput at facilities and increased pricing for disposal services[111](index=111&type=chunk) - Incinerator utilization increased to **85%** in Q1 2022 from 80% in Q1 2021[111](index=111&type=chunk) [Safety-Kleen Sustainability Solutions](index=29&type=section&id=Safety-Kleen%20Sustainability%20Solutions) - Direct revenues increased by **$68.1 million (44.4%)** predominantly due to higher pricing of base and blended oil products[112](index=112&type=chunk) - Base oil sales revenues increased by approximately **$50.4 million**, almost entirely due to pricing, with flat volumes[112](index=112&type=chunk) - Blended oil products revenues increased by **$11.0 million** due to pricing increases, more than offsetting slightly lower volumes[112](index=112&type=chunk) [Cost of Revenues](index=29&type=section&id=Cost%20of%20Revenues) - Costs increased due to higher business levels, revenue mix, and inflationary pressures on internal and external labor, transportation, general supplies, and energy-related costs[113](index=113&type=chunk) - Management is addressing cost increases through constant cost monitoring, customer pricing strategies, technology upgrades, facility modifications, and strategic sourcing[113](index=113&type=chunk) [Environmental Services](index=30&type=section&id=Environmental%20Services_Cost) - Cost of revenues increased by **$234.1 million**, driven by higher direct revenues and additional costs from HydroChemPSC operations[115](index=115&type=chunk) - Cost of revenues as a percentage of direct revenues increased by **3.4%** due to service mix changes (lower COVID-19 decontamination, higher industrial services with lower margins) and inflationary pressures[115](index=115&type=chunk) - Overall, labor and benefit related costs increased **$110.1 million**, equipment and supply costs increased **$67.4 million**, and external transportation, vehicle and fuel related costs increased **$40.4 million**[115](index=115&type=chunk) [Safety-Kleen Sustainability Solutions](index=30&type=section&id=Safety-Kleen%20Sustainability%20Solutions_Cost) - Cost of revenues increased by **$43.6 million**, primarily due to a $31.7 million increase in oil additives and other raw materials, including higher costs to obtain used oil feedstock[116](index=116&type=chunk) - Cost of revenues as a percentage of direct revenues improved by **2.0%** due to increased product pricing outpacing cost increases, reflecting effective spread management[117](index=117&type=chunk) - Other cost increases included external transportation, vehicle and fuel costs (**$4.5 million**) and labor and benefit related costs (**$2.5 million**)[116](index=116&type=chunk) [Selling, General and Administrative Expenses](index=30&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) - SG&A expenses are managed commensurate with segment performance and revenue levels to maintain competitiveness[118](index=118&type=chunk) [Environmental Services](index=30&type=section&id=Environmental%20Services_SG&A) - SG&A expenses increased by **$15.4 million**, primarily due to an $11.0 million increase in labor and benefit related costs, largely from HydroChemPSC operations[118](index=118&type=chunk) - SG&A as a percentage of direct revenues improved by **1.3%**[118](index=118&type=chunk) [Safety-Kleen Sustainability Solutions](index=31&type=section&id=Safety-Kleen%20Sustainability%20Solutions_SG&A) - SG&A expenses increased by **$4.2 million**, with $3.4 million attributed to labor and benefit related costs, aligning with increased direct revenues[120](index=120&type=chunk) - SG&A as a percentage of direct revenues remained relatively consistent[120](index=120&type=chunk) [Corporate Items](index=31&type=section&id=Corporate%20Items_SG&A) - Corporate Items SG&A expenses increased by **$9.9 million**, mainly due to a $6.2 million increase in labor and benefits, incentive compensation, and stock-based compensation costs[121](index=121&type=chunk) - These increases were partially offset by a **$3.0 million** breakup fee received related to the termination of a proposed asset acquisition[121](index=121&type=chunk) - As a percentage of total Clean Harbors' direct revenues, Corporate Items SG&A decreased by **0.9%**[121](index=121&type=chunk) [Adjusted EBITDA](index=31&type=section&id=Adjusted%20EBITDA) - Adjusted EBITDA is a non-GAAP measure used by management to understand operating performance, communicate with lenders, and determine compensation[122](index=122&type=chunk)[124](index=124&type=chunk) Adjusted EBITDA (Three Months Ended March 31) | Metric | 2022 (in thousands) | 2021 (in thousands) | Change (in thousands) | % Change | | :----- | :------------------ | :------------------ | :-------------------- | :------- | | Environmental Services | $183,602 | $140,254 | $43,348 | 30.9% | | Safety-Kleen Sustainability Solutions | $51,877 | $31,632 | $20,245 | 64.0% | | Corporate Items | $(55,220) | $(42,435) | $(12,785) | (30.1)% | | **Total Adjusted EBITDA** | **$180,259** | **$129,451** | **$50,808** | **39.2%** | Reconciliation of Net Income to Adjusted EBITDA (Three Months Ended March 31) | Metric | 2022 (in thousands) | 2021 (in thousands) | | :----- | :------------------ | :------------------ | | Net income | $45,314 | $21,736 | | Accretion of environmental liabilities | $3,156 | $2,953 | | Stock-based compensation | $5,712 | $3,480 | | Depreciation and amortization | $84,298 | $72,163 | | Other (income) expense, net | $(704) | $1,228 | | Interest expense, net of interest income | $25,017 | $17,918 | | Provision for income taxes | $17,466 | $9,973 | | **Adjusted EBITDA** | **$180,259** | **$129,451** | [Depreciation and Amortization](index=32&type=section&id=Depreciation%20and%20Amortization) - The increase is primarily due to the depreciation and amortization of HydroChemPSC tangible and intangible assets acquired in Q4 2021[129](index=129&type=chunk) Depreciation and Amortization (Three Months Ended March 31) | Category | 2022 (in thousands) | 2021 (in thousands) | Change (in thousands) | % Change | | :------- | :------------------ | :------------------ | :-------------------- | :------- | | Depreciation of fixed assets and amortization of landfills and finance leases | $72,058 | $64,574 | $7,484 | 11.6% | | Permits and other intangibles amortization | $12,240 | $7,589 | $4,651 | 61.3% | | **Total depreciation and amortization** | **$84,298** | **$72,163** | **$12,135** | **16.8%** | [Provision for Income Taxes](index=32&type=section&id=Provision%20for%20Income%20Taxes) - The decrease in the effective tax rate is largely due to a decrease in unbenefited losses in certain of the Company's Canadian entities[130](index=130&type=chunk) Provision for Income Taxes (Three Months Ended March 31) | Metric | 2022 (in thousands) | 2021 (in thousands) | Change (in thousands) | % Change | | :----- | :------------------ | :------------------ | :-------------------- | :------- | | Provision for income taxes | $17,466 | $9,973 | $7,493 | 75.1% | | Effective tax rate | 27.8% | 31.5% | (3.7)% | N/A | [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) - The Company's primary cash requirements are to fund operations, capital expenditures, interest payments, and investments in line with its business strategy[133](index=133&type=chunk) - Future operating cash flows are expected to be sufficient to meet future operating and internal investing cash needs[133](index=133&type=chunk) - Existing cash balance and the availability of additional borrowings under the revolving credit facility provide additional potential sources of liquidity[133](index=133&type=chunk) [Summary of Cash Flow Activity](index=33&type=section&id=Summary%20of%20Cash%20Flow%20Activity) Summary of Cash Flow Activity (Three Months Ended March 31) | Metric | 2022 (in thousands) | 2021 (in thousands) | | :----- | :------------------ | :------------------ | | Net cash (used in) from operating activities | $(38,629) | $103,000 | | Net cash used in investing activities | $(58,861) | $(86,737) | | Net cash used in financing activities | $(16,080) | $(40,620) | [Net cash (used in) from operating activities](index=33&type=section&id=Net%20cash%20%28used%20in%29%20from%20operating%20activities) - The decrease in operating cash flows from the comparable period of 2021 was attributable to an increase in working capital and higher incentive compensation and interest payments in Q1 2022, partially offset by greater levels of operating income[135](index=135&type=chunk) [Net cash used in investing activities](index=33&type=section&id=Net%20cash%20used%20in%20investing%20activities) - The decrease in net cash used in investing activities was primarily due to a **$28.0 million** positive change in marketable securities cash flows and a **$27.9 million** decrease in acquisitions (including a $5.0 million working capital adjustment from HydroChemPSC)[136](index=136&type=chunk) - Additions to property, plant and equipment increased by **$28.4 million**[136](index=136&type=chunk) [Net cash used in financing activities](index=33&type=section&id=Net%20cash%20used%20in%20financing%20activities) - The decrease in net cash used in financing activities was primarily due to a **$22.9 million** decrease in repurchases of common stock during Q1 2022[137](index=137&type=chunk) [Adjusted Free Cash Flow](index=33&type=section&id=Adjusted%20Free%20Cash%20Flow) - Adjusted free cash flow is a key liquidity measure and a basis for management incentive compensation[138](index=138&type=chunk) Adjusted Free Cash Flow (Three Months Ended March 31) | Metric | 2022 (in thousands) | 2021 (in thousands) | | :----- | :------------------ | :------------------ | | Net cash (used in) from operating activities | $(38,629) | $103,000 | | Additions to property, plant and equipment | $(70,308) | $(41,913) | | Proceeds from sale and disposal of fixed assets | $1,320 | $1,204 | | **Adjusted free cash flow** | **$(107,617)** | **$62,291** | [Summary of Capital Resources](index=34&type=section&id=Summary%20of%20Capital%20Resources) - **$290.3 million** was available to borrow under the **$400.0 million** revolving credit facility as of March 31, 2022[142](index=142&type=chunk) Cash and Marketable Securities (in thousands) | Metric | March 31, 2022 | December 31, 2021 | | :----- | :------------- | :---------------- | | Cash and cash equivalents and marketable securities | $414,900 | $534,300 | [Material Capital Requirements](index=34&type=section&id=Material%20Capital%20Requirements) - Anticipated 2022 capital spending (net of disposals) is **$310.0 million to $330.0 million**, including $40.0 million to $45.0 million for a new incinerator in Kimball, Nebraska[143](index=143&type=chunk) Capital Expenditures (Three Months Ended March 31) | Metric | 2022 (in thousands) | 2021 (in thousands) | | :----- | :------------------ | :------------------ | | Capital expenditures | $70,300 | $41,900 | [Financing Arrangements](index=34&type=section&id=Financing%20Arrangements_Liquidity) - Financing arrangements include **$717.7 million** of senior secured term loans due 2024, **$545.0 million** of 4.875% senior unsecured notes due 2027, **$997.5 million** of senior secured term loans due 2028, and **$300.0 million** of 5.125% senior unsecured notes due 2029[145](index=145&type=chunk) - The Company maintains a **$400.0 million** revolving credit facility with **$290.3 million** available to borrow as of March 31, 2022[145](index=145&type=chunk) - The Company was in compliance with the covenants of all its debt agreements as of December 31, 2021[146](index=146&type=chunk) [Capital Expenditures](index=34&type=section&id=Capital%20Expenditures_Liquidity) - Capital expenditures during the first three months of 2022 were **$70.3 million**, compared to $41.9 million during the first three months of 2021[143](index=143&type=chunk) - Anticipated 2022 capital spending, net of disposals, will be in the range of **$310.0 million to $330.0 million**[143](index=143&type=chunk) [Common Stock Repurchases Pursuant to Publicly Announced Plan](index=34&type=section&id=Common%20Stock%20Repurchases%20Pursuant%20to%20Publicly%20Announced%20Plan) - As of March 31, 2022, an additional **$151.7 million** remained available for repurchase of shares under the $600.0 million board-approved program[148](index=148&type=chunk) Common Stock Repurchases (Three Months Ended March 31) | Metric | 2022 | 2021 | | :----- | :--- | :--- | | Shares repurchased (in thousands) | 41.1 | 300.0 | | Total expenditures (in millions) | $3.7 | $26.5 | [Environmental Liabilities](index=35&type=section&id=Environmental%20Liabilities_Liquidity) - The increase is primarily due to new liabilities, including those assumed in a real estate acquisition (**$14.0 million**), and accretion (**$3.2 million**), partially offset by expenditures (**$3.6 million**)[150](index=150&type=chunk) Total Environmental Liabilities (in thousands) | Category | March 31, 2022 | December 31, 2021 | Change | % Change | | :------- | :------------- | :---------------- | :----- | :------- | | Closure and post-closure liabilities | $100,699 | $99,103 | $1,596 | 1.6% | | Remedial liabilities | $124,729 | $111,873 | $12,856 | 11.5% | | **Total environmental liabilities** | **$225,428** | **$210,976** | **$14,452** | **6.9%** | [Letters of Credit](index=35&type=section&id=Letters%20of%20Credit) - As of March 31, 2022, **$109.7 million** in standby letters of credit were outstanding, serving as security for financial assurances required by regulatory bodies for hazardous waste facilities[153](index=153&type=chunk) [Critical Accounting Policies and Estimates](index=35&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - There were no material changes in the first three months of 2022 to the information provided under the heading "Critical Accounting Policies and Estimates" included in the Annual Report on Form 10-K for the year ended December 31, 2021[154](index=154&type=chunk) [ITEM 3: Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=ITEM%203%3A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk disclosures occurred in Q1 2022 compared to the 2021 Annual Report on Form 10-K - No material changes to the quantitative and qualitative disclosures about market risk in Q1 2022[155](index=155&type=chunk) [ITEM 4: Controls and Procedures](index=35&type=section&id=ITEM%204%3A%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were effective, with no material changes to internal controls - CEO and CFO concluded that disclosure controls and procedures were **effective** as of March 31, 2022[156](index=156&type=chunk) - **No material changes** in internal control over financial reporting were identified during the three months ended March 31, 2022[157](index=157&type=chunk) [Evaluation of Disclosure Controls and Procedures](index=35&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Disclosure controls and procedures were evaluated under the supervision of the CEO and CFO and concluded to be effective as of March 31, 2022[156](index=156&type=chunk) [Changes in Internal Control over Financial Reporting](index=35&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - No changes in the Company's internal control over financial reporting were identified during the three months ended March 31, 2022, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[157](index=157&type=chunk) PART II: OTHER INFORMATION [ITEM 1: Legal Proceedings](index=38&type=section&id=ITEM%201%3A%20Legal%20Proceedings) This section incorporates by reference the detailed discussion of legal proceedings from Note 16 of the financial statements - Legal proceedings information is incorporated by reference from Note 16, "Commitments and Contingencies," to the unaudited consolidated financial statements[162](index=162&type=chunk) [ITEM 1A: Risk Factors](index=38&type=section&id=ITEM%201A%3A%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the Company's 2021 Annual Report on Form 10-K - No material changes to the risk factors from the information provided in Item 1A. in the Company's Annual Report on Form 10-K for the year ended December 31, 2021[163](index=163&type=chunk) [ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=ITEM%202%3A%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's common stock repurchase program, including shares purchased and remaining authorization [Common Stock Repurchase Program](index=38&type=section&id=Common%20Stock%20Repurchase%20Program) - The board of directors has authorized the repurchase of up to **$600.0 million** of common stock, with **$151.7 million** remaining available as of March 31, 2022[165](index=165&type=chunk) Common Stock Repurchases (Q1 2022) | Period | Total Number of Shares Purchased (1) | Average Price Paid Per Share (2) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3) (in thousands) | | :----- | :----------------------------- | :--------------------------- | :------------------------------------------------------------------------------- | :---------------------------------------------------------------------------------------------------- | | January 1, 2022 through January 31, 2022 | 20,910 | $89.24 | 20,768 | $153,590 | | February 1, 2022 through February 28, 2022 | 24,689 | $91.04 | 20,350 | $151,748 | | March 1, 2022 through March 31, 2022 | 13,619 | $103.66 | — | $151,748 | | **Total** | **59,218** | **$93.30** | **41,118** | | [ITEM 3: Defaults Upon Senior Securities](index=38&type=section&id=ITEM%203%3A%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reporting period - No defaults upon senior securities were reported[166](index=166&type=chunk) [ITEM 4: Mine Safety Disclosures](index=38&type=section&id=ITEM%204%3A%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - This item is not applicable to the Company[166](index=166&type=chunk) [ITEM 5: Other Information](index=38&type=section&id=ITEM%205%3A%20Other%20Information) No other information was reported in this section for the current period - No other information was reported[166](index=166&type=chunk) [ITEM 6: Exhibits](index=40&type=section&id=ITEM%206%3A%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including various certifications and data files - Exhibits include CEO and CFO certifications (31.1, 31.2), Section 1350 Certifications (32), and Interactive Data Files (101, 104)[169](index=169&type=chunk) [Signatures](index=41&type=section&id=Signatures) The report was duly signed on May 4, 2022, by the CEO and CFO on behalf of Clean Harbors, Inc - The report was signed by Alan S. McKim (Chairman, President, and Chief Executive Officer) and Michael L. Battles (Executive Vice President and Chief Financial Officer) on May 4, 2022[173](index=173&type=chunk)

Financial Data and Key Metrics Changes - Clean Harbors achieved over $1 billion in quarterly revenue for the first time in Q4 2021, with adjusted EBITDA of $174.3 million, marking a 23% increase year-over-year [4][15] - Revenue increased by 41% in Q4, driven by the addition of HydroChemPSC (HPC) and a 20% growth in legacy business [15] - Adjusted EBITDA margins for the SKSS segment topped 29% due to product pricing gains and strong management of collection costs [9] Business Line Data and Key Metrics Changes - Environmental Services revenue grew 36% in Q4, with adjusted EBITDA 8% higher due to revenue growth and the addition of HPC [6][7] - Safety-Kleen Environmental reported a 6% revenue increase from Q4 a year ago, indicating a steady rebound [6] - The SKSS segment saw revenue increase by over 60%, driven by higher base oil pricing and robust demand [9] Market Data and Key Metrics Changes - Incineration utilization was strong at 92% in Q4, up from 84% a year earlier, due to fewer turnaround days and increased project wins [8] - Landfill tonnage grew by 15% year-over-year, supported by a pickup in environmental remediation projects [8] - The average price per pound for disposal remained flat year-over-year, reflecting the mix of projects [8] Company Strategy and Development Direction - The company plans to continue expanding its disposal capabilities and re-refining capacity, with a focus on disciplined organic growth and potential acquisitions [10][11] - Clean Harbors aims to achieve a $40 million run rate of synergies from the HPC integration by the end of 2022 [13] - The company is actively managing inflationary pressures through pricing initiatives and cost control measures [7][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for services across various sectors, driven by labor shortages and a robust project pipeline [12][31] - The company anticipates 2022 to be an active year with numerous initiatives aimed at driving success and shareholder value [13] - Management acknowledged challenges such as inflation and labor availability but remains optimistic about maintaining profitable growth [22] Other Important Information - Cash from operations in Q4 was $177.8 million, with adjusted free cash flow reaching a record $326.3 million for the full year [18] - The company expects 2022 adjusted EBITDA in the range of $755 million to $795 million, with a significant contribution from the HPC business [19][20] - Clean Harbors has a strong balance sheet with cash and short-term marketable securities totaling $534 million at the end of Q4 [17] Q&A Session Summary Question: What is the assumption built into the '22 guide around decon work? - Management expects decon work to contribute less than $10 million in 2022, indicating a decline from previous levels [24] Question: Are core ES margins expected to expand in '22? - Management indicated that while first-half margins may be under pressure, they expect overall margins to improve in the second half of the year due to pricing initiatives [26] Question: What is the outlook for incinerator utilization? - Management expects overall annual utilization to improve in 2022, supported by a strong backlog and project pipeline [27] Question: What are the implications of the RSG acquisition of US Ecology? - Management noted that staffing challenges are affecting the entire industry, leading to less competitive pricing behavior [31] Question: What is the current market share in hazardous landfill volume and incinerator capacity? - Management stated that their market share remains consistent, with approximately 70% in incinerator capacity and around 30% in hazardous landfill volume [36] Question: How is the company managing inflationary pressures? - Management is actively driving price increases to cover inflationary costs, with customers being receptive to these adjustments [41][63]