Clean Harbors(CLH) - 2025 Q2 - Quarterly Report

PART I: FINANCIAL INFORMATION This section provides a comprehensive overview of the company's unaudited consolidated financial statements and management's discussion and analysis ITEM 1: Unaudited Consolidated Financial Statements This section presents the company's unaudited consolidated financial statements, including balance sheets, statements of operations, comprehensive income, cash flows, and stockholders' equity, along with detailed notes explaining accounting policies, revenue recognition, business combinations, and other financial details for the periods ended June 30, 2025 and December 31, 2024 Consolidated Balance Sheets This section presents the company's financial position, detailing assets, liabilities, and equity at specific points in time Consolidated Balance Sheet Highlights (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :----------------------------- | :-------------- | :------------------ | | Total Assets | $7,439,929 | $7,377,278 | | Total Liabilities | $4,725,862 | $4,803,749 | | Total Stockholders' Equity | $2,714,067 | $2,573,529 | | Cash and cash equivalents | $600,186 | $687,192 | | Accounts receivable, net | $1,117,714 | $1,015,357 | | Goodwill | $1,479,805 | $1,477,199 | - Total assets increased by $62.651 million, and total stockholders' equity increased by $140.538 million from December 31, 2024, to June 30, 2025[10] Unaudited Consolidated Statements of Operations This section outlines the company's financial performance, reporting revenues, expenses, and net income over specific periods Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenues | $1,549,854 | $1,552,719 | $2,981,804 | $2,929,414 | | Income from operations | $210,298 | $215,493 | $321,917 | $340,968 | | Net income | $126,905 | $133,280 | $185,585 | $203,112 | | Basic EPS | $2.37 | $2.47 | $3.46 | $3.77 | | Diluted EPS | $2.36 | $2.46 | $3.44 | $3.75 | - Net income decreased by 4.8% for the three months and 8.6% for the six months ended June 30, 2025, compared to the prior year, primarily due to increased depreciation and amortization expense[12] Unaudited Consolidated Statements of Comprehensive Income This section presents net income alongside other comprehensive income items, reflecting total equity changes from non-owner sources Consolidated Statements of Comprehensive Income Highlights (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $126,905 | $133,280 | $185,585 | $203,112 | | Other comprehensive income (loss), net of tax | $20,038 | $(4,864) | $15,106 | $(9,151) | | Comprehensive income | $146,943 | $128,416 | $200,691 | $193,961 | - Comprehensive income increased by 14.4% for the three months and 3.5% for the six months ended June 30, 2025, driven by positive foreign currency translation adjustments[14] Unaudited Consolidated Statements of Cash Flows This section details cash inflows and outflows from operating, investing, and financing activities over specific periods Consolidated Statements of Cash Flows Highlights (in thousands, Six Months Ended June 30) | Item | 2025 | 2024 | | :--------------------------------- | :--------- | :--------- | | Net cash from operating activities | $209,645 | $234,594 | | Net cash used in investing activities | $(200,742) | $(730,670) | | Net cash (used in) from financing activities | $(101,169) | $455,503 | | Decrease in cash and cash equivalents | $(87,006) | $(42,706) | | Cash and cash equivalents, end of period | $600,186 | $401,992 | - Net cash from operating activities decreased by $24.9 million, while net cash used in investing activities significantly decreased by $529.9 million, primarily due to lower acquisition spending in 2025[17] - Financing activities shifted from a net inflow of $455.5 million in 2024 to a net outflow of $101.2 million in 2025, mainly due to prior year debt issuance for acquisitions and increased stock repurchases[17] Unaudited Consolidated Statements of Stockholders' Equity This section tracks changes in the company's equity accounts, including common stock, retained earnings, and other comprehensive income Consolidated Statements of Stockholders' Equity Highlights (in thousands) | Item | Balance at January 1, 2025 | Balance at June 30, 2025 | | :--------------------------------- | :------------------------- | :----------------------- | | Common Stock, $0.01 par value | $538 | $536 | | Additional Paid-in Capital | $421,749 | $361,598 | | Accumulated Other Comprehensive Loss | $(213,635) | $(198,529) | | Retained Earnings | $2,364,877 | $2,550,462 | | Total Stockholders' Equity | $2,573,529 | $2,714,067 | - Total stockholders' equity increased by $140.538 million from January 1, 2025, to June 30, 2025, primarily driven by net income and other comprehensive income, partially offset by common stock repurchases[18] Notes to Unaudited Consolidated Financial Statements This section provides detailed explanations and additional information supporting the consolidated financial statements and accounting policies Note 1: Basis of Presentation This note describes the basis for preparing interim financial statements, including SEC compliance and management's use of estimates - The accompanying consolidated interim financial statements are unaudited and prepared pursuant to SEC rules and regulations[20] - Management's estimates and assumptions are used, and actual results could differ from these estimates[20] - Interim period results are not necessarily indicative of results for the entire year or other interim periods[20] Note 2: Significant Accounting Policies This note outlines key accounting policies and recent accounting pronouncements relevant to the company's financial reporting - The One Big Beautiful Bill Act, enacted July 4, 2025, is not expected to have a material impact on the company's financial position, results of operations, or cash flows[21] - ASU No. 2023-07 (Segment Reporting) was adopted for the year ended December 31, 2024, primarily impacting disclosures[22] - ASU No. 2023-09 (Income Taxes) and ASU No. 2024-03 (Expense Disaggregation) are not yet adopted but are being evaluated for disclosure impacts, with no expected impact on financial condition, results, or cash flows[23][24] Note 3: Revenues This note details revenue recognition policies and disaggregates revenues by operating segment and source - The company generates revenues through two operating segments: Environmental Services and Safety-Kleen Sustainability Solutions (SKSS)[25] - Revenue from services is generally recognized over time, while product revenue is recognized at a point in time upon transfer of control[31] Third-Party Revenues by Source and Segment (Three Months Ended June 30, 2025, in thousands) | Sources of Revenue | Environmental Services | Safety-Kleen Sustainability Solutions | Corporate | Total | | :-------------------------------- | :----------------------- | :-------------------------------------- | :---------- | :---------- | | Technical Services | $463,421 | — | — | $463,421 | | Industrial Services and Other | $361,580 | — | $89 | $361,669 | | Field and Emergency Response Services | $242,791 | — | — | $242,791 | | Safety-Kleen Environmental Services | $262,267 | $72,463 | — | $334,730 | | Safety-Kleen Oil | — | $147,243 | — | $147,243 | | Total third-party revenues | $1,330,059 | $219,706 | $89 | $1,549,854 | Note 4: Business Combinations This note provides information on recent acquisitions, including purchase accounting finalizations and their impact on segments - The company finalized purchase accounting for the HEPACO acquisition (March 22, 2024) in Q1 2025, expanding the Environmental Services segment's field services for $392.2 million cash[36][37] - Purchase accounting for the Noble Oil Services acquisition (March 1, 2024) was finalized in Q1 2025, expanding the SKSS segment's oil collection operations for $68.7 million cash[39][40] - Three additional privately-owned businesses were acquired in 2024 for $17.1 million, consolidated into the Environmental Services and SKSS segments[42] Note 5: Inventories and Supplies This note presents the breakdown of inventories and supplies, including oil, solvents, and other materials Inventories and Supplies (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :------------------------ | :-------------- | :------------------ | | Supplies | $215,415 | $200,905 | | Oil and oil related products | $137,812 | $152,992 | | Solvent and solutions | $11,837 | $12,458 | | Other | $18,287 | $18,302 | | Total inventories and supplies | $383,351 | $384,657 | - Total inventories and supplies remained relatively stable, decreasing slightly by $1.306 million from December 31, 2024, to June 30, 2025[43] Note 6: Property, Plant and Equipment This note details property, plant, and equipment, net of depreciation, and related depreciation expenses Property, Plant and Equipment, net (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :------------------ | | Total property, plant and equipment, net | $2,507,101 | $2,447,941 | - Net property, plant and equipment increased by $59.160 million from December 31, 2024, to June 30, 2025[44] - Depreciation expense, inclusive of landfill and finance lease amortization, increased to $201.2 million for the six months ended June 30, 2025, from $168.7 million in the prior year, driven by the Kimball incinerator and other assets[46] Note 7: Goodwill and Other Intangible Assets This note provides information on goodwill by segment and other intangible assets, including changes and amortization expense Goodwill by Segment (in thousands) | Segment | Balance at January 1, 2025 | Balance at June 30, 2025 | | :-------------------------------- | :------------------------- | :----------------------- | | Environmental Services | $1,296,204 | $1,298,174 | | Safety-Kleen Sustainability Solutions | $180,995 | $181,631 | | Totals | $1,477,199 | $1,479,805 | - Goodwill increased by $2.606 million for the six months ended June 30, 2025, due to measurement period adjustments and foreign currency translation[47] Total Permits and Other Intangible Assets, net (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :------------------ | | Total permits and other intangible assets | $677,180 | $701,987 | - Amortization expense for permits and other intangible assets was $27.0 million for the six months ended June 30, 2025, consistent with $26.9 million in the prior year[50] Note 8: Accrued Expenses and Other Current Liabilities This note itemizes various accrued expenses and other current liabilities, such as insurance, compensation, and taxes Accrued Expenses and Other Current Liabilities (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :------------------ | | Accrued insurance | $111,550 | $112,367 | | Accrued compensation and benefits | $97,129 | $134,458 | | Accrued income, real estate, sales and other taxes | $37,419 | $35,394 | | Accrued interest | $33,254 | $33,259 | | Accrued other | $97,233 | $103,967 | | Total | $376,585 | $419,445 | - Total accrued expenses and other current liabilities decreased by $42.860 million from December 31, 2024, to June 30, 2025, primarily due to lower accrued compensation and benefits[52] Note 9: Closure and Post-Closure Liabilities This note details liabilities for facility closure and post-closure care, including changes during the period Changes to Closure and Post-Closure Liabilities (in thousands, Six Months Ended June 30, 2025) | Item | Amount | | :--------------------------------- | :------- | | Balance at January 1, 2025 | $129,788 | | Accretion | $5,241 | | New asset retirement obligations | $1,813 | | Expenditures | $(2,392) | | Balance at June 30, 2025 | $136,887 | - Closure and post-closure liabilities increased by $7.099 million for the six months ended June 30, 2025, driven by accretion and new obligations[53] Note 10: Remedial Liabilities This note describes liabilities for environmental remediation, including changes in estimates and expenditures Changes to Remedial Liabilities (in thousands, Six Months Ended June 30, 2025) | Item | Amount | | :--------------------------------- | :------- | | Balance at January 1, 2025 | $111,745 | | Changes in estimates recorded to consolidated statement of operations | $(9,772) | | Expenditures | $(4,659) | | Balance at June 30, 2025 | $99,312 | - Remedial liabilities decreased by $12.433 million for the six months ended June 30, 2025, primarily due to a $10 million reduction for a site where loss was no longer probable[54] Note 11: Financing Arrangements This note outlines long-term debt, revolving credit facilities, and interest rate swap agreements Long-Term Debt (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :------------------ | | Long-term debt, at carrying value | $2,766,530 | $2,771,117 | - The estimated fair value of outstanding long-term debt was $2.8 billion as of June 30, 2025[57] - The company maintains a $600.0 million revolving credit facility with $452.1 million available to borrow as of June 30, 2025[58] - Interest rate swap agreements effectively fixed the interest rate on $600.0 million of term loans at 3.71% (including margin), expiring September 30, 2027[60] Note 12: Earnings Per Share This note presents the calculation of basic and diluted earnings per share, including weighted-average shares outstanding Earnings Per Share (except per share amounts) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic earnings per share | $2.37 | $2.47 | $3.46 | $3.77 | | Diluted earnings per share | $2.36 | $2.46 | $3.44 | $3.75 | | Weighted-average shares outstanding, diluted | 53,799 | 54,248 | 53,895 | 54,231 | - Both basic and diluted EPS decreased for the three and six months ended June 30, 2025, compared to the prior year, reflecting lower net income[64] Note 13: Accumulated Other Comprehensive Loss This note details components and changes in accumulated other comprehensive loss, including foreign currency adjustments Changes in Accumulated Other Comprehensive Loss (in thousands, Six Months Ended June 30, 2025) | Component | Balance at January 1, 2025 | Other comprehensive income (loss) | Amounts reclassified out | Tax (provision) benefit | Balance at June 30, 2025 | | :--------------------------------- | :------------------------- | :-------------------------------- | :----------------------- | :---------------------- | :----------------------- | | Foreign Currency Translation Adjustments | $(236,702) | $24,714 | — | — | $(211,988) | | Unrealized Gain on Available-For-Sale Securities | $33 | $120 | — | $(25) | $128 | | Unrealized Gain on Fair Value of Interest Rate Hedges | $23,652 | $(6,132) | $(7,114) | $3,576 | $13,982 | | Unrealized Loss on Pension | $(618) | $(33) | — | — | $(651) | | Total | $(213,635) | $18,669 | $(7,114) | $3,551 | $(198,529) | - Accumulated other comprehensive loss decreased by $15.106 million for the six months ended June 30, 2025, primarily due to positive foreign currency translation adjustments[65] Note 14: Stock-Based Compensation This note provides information on stock-based compensation expense, including unrecognized costs for various award types Stock-Based Compensation Cost (in thousands) | Period | 2025 | 2024 | | :--------------------------------- | :------- | :------- | | Three Months Ended June 30 | $6,100 | $8,500 | | Six Months Ended June 30 | $13,700 | $14,900 | - Total stock-based compensation cost decreased by 28.8% for the three months and 7.8% for the six months ended June 30, 2025, compared to the prior year[66] - As of June 30, 2025, unrecognized compensation cost for restricted stock awards was $44.7 million (weighted average period of 2.3 years) and for performance stock awards was $9.9 million[68][71] Note 15: Commitments and Contingencies This note discloses legal proceedings, environmental liabilities, and other commitments and contingencies Reserves for Legal and Administrative Proceedings (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :------------------ | | Total reserves | $17,200 | $29,800 | | Related to pending legal/administrative proceedings (incl. Superfund) | $9,600 | $23,300 | | Related to federal, state, provincial enforcement actions | $7,600 | $6,500 | - The company is involved in approximately 70 pending Safety-Kleen product liability cases and 132 Superfund-related sites[78][80] - Management believes that potential liability beyond recorded amounts will not have a material effect on the company's financial position, results of operations, or cash flows[76] Note 16: Segment Reporting This note provides financial information by operating segment, including revenues and Adjusted EBITDA, as evaluated by management - The company is managed and reports as two operating segments: Environmental Services and Safety-Kleen Sustainability Solutions (SKSS)[85] - Adjusted EBITDA is the primary financial measure used by the chief operating decision maker (CODM) to evaluate segment performance[88] Total Reportable Segment Adjusted EBITDA (in thousands, Six Months Ended June 30) | Segment | 2025 | 2024 | | :-------------------------------- | :--------- | :--------- | | Environmental Services | $650,785 | $624,390 | | Safety-Kleen Sustainability Solutions | $66,565 | $81,176 | | Total Reportable Segment Adjusted EBITDA | $717,350 | $705,566 | ITEM 2: Management's Discussion and Analysis of Financial Condition and Results of Operations Management's Discussion and Analysis provides an overview of the company's business, highlights key financial performance, and offers a detailed analysis of segment-specific revenues, costs, and expenses. It also covers liquidity, capital resources, and critical accounting policies, explaining the factors influencing financial results for the periods presented Forward-Looking Statements This section cautions readers about forward-looking statements, subject to risks and uncertainties that may cause actual results to differ - This report contains forward-looking statements identifiable by words like 'believes,' 'expects,' 'intends,' and 'anticipates,' which are subject to risks and uncertainties that could cause actual results to differ materially[95] - Readers are cautioned not to place undue reliance on these statements, and the company undertakes no obligation to revise or publicly release results of any revisions[95] Overview This section describes the company's business, market position, and how segment performance is evaluated - Clean Harbors is North America's leading provider of environmental and industrial services, serving over 350,000 customers, including most Fortune 500 companies[96] - The company operates the largest number of hazardous waste incinerators, landfills, and treatment, storage, and disposal facilities (TSDFs) in North America[96] - Segment performance is primarily evaluated using Adjusted EBITDA, alongside operational factors like waste volumes, utilization rates, and market pricing[97] Highlights This section summarizes key financial performance metrics, including revenues, net income, Adjusted EBITDA, and cash flow Key Financial Highlights (in millions) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Direct Revenues | $1,549.9 | $1,552.7 | $2,981.8 | $2,929.4 | | Income from operations | $210.3 | $215.5 | $321.9 | $341.0 | | Net income | $126.9 | $133.3 | $185.6 | $203.1 | | Adjusted EBITDA | $336.2 | $327.8 | $571.1 | $557.9 | | Net cash from operating activities | N/A | N/A | $209.6 | $234.6 | | Adjusted free cash flow | N/A | N/A | $17.4 | $(34.1) | - Environmental Services direct revenues increased by 3.3% (three months) and 3.2% (six months), while Safety-Kleen Sustainability Solutions direct revenues decreased by 18.7% (three months) and 6.0% (six months)[99] - Adjusted free cash flow improved significantly, moving from an outflow of $34.1 million in 2024 to an inflow of $17.4 million in 2025 for the six-month period[101] Segment Performance This section analyzes the financial performance of the company's operating segments, including direct revenues and Adjusted EBITDA Segment Performance Summary (in thousands, Six Months Ended June 30) | Item | Environmental Services 2025 | Environmental Services 2024 | SKSS 2025 | SKSS 2024 | Corporate 2025 | Corporate 2024 | Total 2025 | Total 2024 | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------- | :-------- | :------------- | :------------- | :--------- | :--------- | | Direct Revenues | $2,561,148 | $2,481,893 | $420,470 | $447,320 | $186 | $201 | $2,981,804 | $2,929,414 | | Cost of Revenues | $1,720,813 | $1,666,603 | $318,005 | $325,321 | $16,563 | $14,688 | $2,055,381 | $2,006,612 | | Selling, General & Administrative Expenses | $189,550 | $190,900 | $35,900 | $40,823 | $129,882 | $133,168 | $355,332 | $364,891 | | Adjusted EBITDA | $650,785 | $624,390 | $66,565 | $81,176 | $(146,259) | $(147,655) | $571,091 | $557,911 | | Adjusted EBITDA as a % of Direct Revenues | 25.4% | 25.2% | 15.8% | 18.1% | (4.9)% | (5.0)% | 19.2% | 19.0% | - Environmental Services Adjusted EBITDA increased by 4.2% for the six months ended June 30, 2025, while Safety-Kleen Sustainability Solutions Adjusted EBITDA decreased by 18.0%[102] Direct Revenues This section discusses factors influencing changes in direct revenues for Environmental Services and SKSS segments - Environmental Services direct revenues increased by $42.7 million (3.3%) for the three months and $79.3 million (3.2%) for the six months ended June 30, 2025[108][109] - Growth in Environmental Services was driven by Safety-Kleen core services, Technical Services (higher incineration volumes), and incremental revenue from the HEPACO acquisition, partially offset by fewer large-scale emergency response events[108][109] - Safety-Kleen Sustainability Solutions (SKSS) direct revenues decreased by $45.5 million (18.7%) for the three months and $26.9 million (6.0%) for the six months ended June 30, 2025, primarily due to lower base and blended oil product sales[110][111] - SKSS declines were partially offset by increased revenue from used oil collection due to higher pricing and incremental contributions from the Noble acquisition[110][111] Cost of Revenues This section examines changes in cost of revenues for each segment and their impact on gross margins - Environmental Services cost of revenues increased by $27.2 million (3.2%) for the three months and $54.2 million (3.3%) for the six months ended June 30, 2025, remaining consistent as a percentage of revenues (65.2% and 67.2% respectively)[114][115] - Cost increases in Environmental Services were due to equipment, supplies, and labor, partially offset by $12.2 million in decreased third-party labor costs due to internalization efforts[114][115] - SKSS cost of revenues decreased by $29.9 million (17.5%) for the three months and $7.3 million (2.2%) for the six months ended June 30, 2025, driven by lower sales volumes and used oil feedstock costs[116][119] - As a percentage of revenues, SKSS cost of revenues increased to 71.1% (three months) and 75.6% (six months) due to market-related volume and pricing decreases and product mix changes[116][119] Selling, General and Administrative Expenses This section analyzes trends and drivers behind selling, general, and administrative expenses across the company and its segments - Environmental Services SG&A expenses decreased by $1.4 million (0.7%) for the six months ended June 30, 2025, and remained consistent as a percentage of revenues (7.4%)[124] - This decrease included a $10 million reduction in estimated remediation costs for a site, partially offset by higher labor and benefits from the HEPACO acquisition[124] - SKSS SG&A expenses decreased by $4.9 million (12.1%) for the six months ended June 30, 2025, due to cost reduction initiatives and strategic headcount management[126] - Corporate SG&A expenses decreased by $3.3 million (2.5%) for the six months ended June 30, 2025, primarily due to $5.3 million lower environmental and legal reserve related costs[128] Adjusted EBITDA This section provides a reconciliation and analysis of Adjusted EBITDA, a key non-GAAP measure of operating performance - Adjusted EBITDA increased by $8.4 million (2.6%) for the three months and $13.2 million (2.4%) for the six months ended June 30, 2025[133] - Adjusted EBITDA is a non-GAAP measure used by management and investors to understand operating performance, excluding certain non-core expenses[129][130] Adjusted EBITDA Reconciliation (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $126,905 | $133,280 | $185,585 | $203,112 | | Accretion of environmental liabilities | $3,591 | $3,304 | $7,211 | $6,521 | | Stock-based compensation | $6,063 | $8,515 | $13,698 | $14,853 | | Depreciation and amortization | $116,285 | $100,504 | $228,265 | $195,569 | | Other expense, net | $603 | $167 | $1,535 | $1,308 | | Interest expense, net of interest income | $37,106 | $36,449 | $73,183 | $64,988 | | Provision for income taxes | $45,684 | $45,597 | $61,614 | $71,560 | | Adjusted EBITDA | $336,237 | $327,816 | $571,091 | $557,911 | Stock-based Compensation This section details stock-based compensation expense and factors contributing to its changes during the periods Stock-based Compensation (in thousands) | Period | 2025 | 2024 | Change | % Change | | :--------------------------------- | :------- | :------- | :------- | :------- | | Three Months Ended June 30 | $6,063 | $8,515 | $(2,452) | (28.8)% | | Six Months Ended June 30 | $13,698 | $14,853 | $(1,155) | (7.8)% | - The decrease in stock-based compensation was due to higher expense in 2024 for performance awards, a longer recognition period for 2025 awards, and higher forfeitures in 2025, partially offset by increased ESPP expense[134] Depreciation and Amortization This section explains changes in depreciation and amortization expense, driven by capital investments and acquisitions Total Depreciation and Amortization (in thousands) | Period | 2025 | 2024 | Change | % Change | | :--------------------------------- | :------- | :------- | :------- | :------- | | Three Months Ended June 30 | $116,285 | $100,504 | $15,781 | 15.7% | | Six Months Ended June 30 | $228,265 | $195,569 | $32,696 | 16.7% | - The increase was primarily driven by depreciation for the new Kimball incinerator, assets from the HEPACO and Noble acquisitions, and other business growth investments[135][136] Interest Expense, Net of Interest Income This section analyzes the company's net interest expense, including the impact of outstanding debt and interest rates Interest Expense, Net of Interest Income (in thousands) | Period | 2025 | 2024 | Change | % Change | | :--------------------------------- | :------- | :------- | :------- | :------- | | Three Months Ended June 30 | $37,106 | $36,449 | $657 | 1.8% | | Six Months Ended June 30 | $73,183 | $64,988 | $8,195 | 12.6% | - The increase for the six-month period was primarily due to higher levels of outstanding debt from the March 2024 issuance, partially offset by a $2.8 million increase in interest income[138] - The effective interest rate on debt was 5.3% as of June 30, 2025[139] Provision for Income Taxes This section discusses the provision for income taxes and the effective tax rate, highlighting factors influencing tax expense Provision for Income Taxes (in thousands) | Period | 2025 | 2024 | Change | % Change | | :--------------------------------- | :------- | :------- | :------- | :------- | | Three Months Ended June 30 | $45,684 | $45,597 | $87 | 0.2% | | Six Months Ended June 30 | $61,614 | $71,560 | $(9,946) | (13.9)% | | Effective tax rate (6 months) | 24.9% | 26.1% | (1.2)% | N/A | - The decrease for the six-month period was driven by lower pre-tax income and a reduced effective tax rate, influenced by the write-off of a deferred tax asset related to a remedial liability change[141] Liquidity and Capital Resources This section assesses the company's cash flows, capital expenditures, debt, and financial flexibility to meet obligations Summary of Cash Flow Activity (in thousands, Six Months Ended June 30) | Item | 2025 | 2024 | | :--------------------------------- | :--------- | :--------- | | Net cash from operating activities | $209,645 | $234,594 | | Net cash used in investing activities | $(200,742) | $(730,670) | | Net cash (used in) from financing activities | $(101,169) | $455,503 | - Net cash from operating activities decreased by $24.9 million due to increased working capital balances[144] - Net cash used in investing activities decreased by $529.9 million, primarily due to lower acquisition payments in 2025 compared to the prior year's HEPACO and Noble acquisitions[145] - Adjusted free cash flow was an inflow of $17.4 million for the six months ended June 30, 2025, compared to an outflow of $34.1 million in the prior year, mainly due to lower cash paid for property, plant, and equipment[148] - Capital expenditures for the first six months of 2025 were $208.7 million, a decrease of $64.3 million from 2024, with full-year 2025 capital spending expected to be $360.0 million to $390.0 million[151] - The company repurchased $66.8 million of common stock during the six months ended June 30, 2025, with $432.4 million remaining available under the board-approved plan[155][156] - Total environmental liabilities decreased by $5.3 million to $236.2 million as of June 30, 2025, primarily due to reductions in estimates and expenditures[157] ITEM 3: Quantitative and Qualitative Disclosures About Market Risk This section states that there have been no material changes to the company's quantitative and qualitative disclosures about market risk from the information provided in its Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to market risk disclosures compared to the prior annual report on Form 10-K[163] ITEM 4: Controls and Procedures The Co-Chief Executive Officers and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025. There were no material changes in internal control over financial reporting during the quarter - Disclosure controls and procedures were effective as of June 30, 2025[164] - No material changes in internal control over financial reporting were identified during the quarter ended June 30, 2025[165] PART II: OTHER INFORMATION This section includes information on legal proceedings, risk factors, equity security sales, defaults, and other required disclosures ITEM 1: Legal Proceedings This section refers to Note 15 of the unaudited consolidated financial statements for detailed information regarding the company's legal proceedings and claims - Details on legal proceedings are incorporated by reference from Note 15, 'Commitments and Contingencies,' in Item 1 of this report[167] ITEM 1A: Risk Factors No material changes to risk factors from the prior annual report on Form 10-K were reported - No material changes to the risk factors from the information provided in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[168] ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased common stock, with $432.4 million remaining available for repurchases as of June 30, 2025 Common Stock Repurchase Program (April 1, 2025 through June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :--------------------------------- | :------------------------------- | :--------------------------- | | April 1, 2025 through April 30, 2025 | 64,299 | $191.09 | | May 1, 2025 through May 31, 2025 | 1,252 | $217.38 | | June 1, 2025 through June 30, 2025 | 4,260 | $226.79 | | Total | 69,811 | $193.74 | - As of June 30, 2025, $432.4 million remained available for repurchase under the board-approved plan[169][171] - Repurchases are funded through available cash resources and may be made on the open market or in privately negotiated transactions[171] ITEM 3: Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - No defaults upon senior securities were reported[170] ITEM 4: Mine Safety Disclosures This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[170] ITEM 5: Other Information No director or officer adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter - No director or officer adopted, modified, or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[170] ITEM 6: Exhibits This section lists exhibits filed with the Form 10-Q, including certifications from executive officers and XBRL taxonomy documents - Exhibits include Rule 13a-14a/15d-14(a) Certifications from the Co-CEOs and CFO, Section 1350 Certifications, and Inline XBRL Taxonomy Extension documents[172] Signatures The report is duly signed on behalf of Clean Harbors, Inc. by its Co-Chief Executive Officers and Chief Financial Officer - The report was signed by Michael L. Battles (Co-Chief Executive Officer and Co-President), Eric W. Gerstenberg (Co-Chief Executive Officer and Co-President), and Eric J. Dugas (Executive Vice President and Chief Financial Officer) on July 30, 2025[177]