CLH 10-K & 10-Q changes, risk factors and insider trading

Providing our suite of services to our customers and operating our facilities involves risks such as equipment defects, malfunctions and failures and natural or man-made disasters, which could potentially result in releases of hazardous materials, damage to or total loss of our property or assets, injury or death of our employees, subcontractors or others, reduced perceived value of our brand or damage to our reputation, or a need to shut down or reduce operation of our facilities while remedial actions are undertaken. Our employees and subcontractors, when necessary, often work under potentially hazardous conditions. These risks expose us to potential liability for pollution and other environmental damages, personal injury, loss of life, business interruption andinterruption, property damage or destruction.destruction, reputational damage, loss of operating permits or restrictions placed on our operations. We must also maintain a solid safety record in order to remain a preferred supplier to our major customers and protect the value of our brand in the marketplace. While weWe seek to minimize our exposure to such risks primarily through (i) comprehensive training programs, (ii) utilizing proper equipment and the latest technologies, (iii) our Environmental Compliance Internal Audit Program, (iv) vehicle and equipment maintenance programs, (v) subcontracting with reputable third-parties, (vi) industrial control systems and (vii) insurance,insurance. suchSuch actions and insurance though may not be adequate to cover all of our potential liabilitiesliabilities, which could negatively impact our results of operations and cash flows.

Our operations are increasingly dependent upon technology. Failure of these technologies, failure to upgrade or innovate these technologies, failure to property implement and maintain these technologies or failure to identify and develop new technologies could have an adverse impact on our results.

Our information technology systems are critical to our operations, customer experience and financial reporting. Malfunctions of these technologies, including disruptions due to natural or man-made disasters (e.g., terrorism), could interrupt operations, create incremental operational and safety risksrisks, such as those noted aboveabove, or negatively impact our service to our customers and our business reputation. System failures could also impede our ability to collect and report financial results timely or comply with regulations associated with our operations. In addition to our information technology systems, we rely on operational technology, including industrial control systems, to manage and monitor certain treatment, incineration and transportation activities. Disruptions, failures or cyber intrusions affecting these systems could impair our ability to operate facilities safely or profitably, comply with permit conditions or respond effectively to incidents, and could increase the risk of environmental releases or personal injury.

Identification of new and emerging technologies,technologies includingwith theregard useto ofwaste artificialdisposal intelligence,and recycling may be a risk and an opportunity to our business. Research and development of new technologies may require significant spending whichthat may negatively impact our operating results and cash flows. Failure to innovate and focus on new technologies that provide superior alternatives to traditional environmental services, waste disposal or oil collection and re-refining service offerings may negatively impact our financial results. Our industry competitiveness could be affected by the introduction of new technological solutions that offer lower cost alternatives to incineration methods for waste disposal.

We use technology in substantially all aspects of our business operations. Mobile devices and other online technologies connect our employees to our customers and our networks. Such uses give rise to cybersecurity risks, including security breach, espionage, ransomware, system disruption, theft, disruption of our business operations, remediation costs for repairs of system damage and inadvertent release of information. Our business involves operational technology integral to our day to dayday-to-day business and the storage and transmission of numerous classes of sensitive and/or confidential information and intellectual propertyproperty, including, but not limited to, private information about employees and financial and strategic information about our Companycompany and our business partners. Furthermore, as we pursue our strategy to grow through acquisitions and new initiatives that improve our operations and cost structure, we are also expanding and improving our information technologies, resulting in a larger technological presence and corresponding exposure to cybersecurity risk.

We maintain what we believe is sufficient insurance coverage that may (subject to certain policy terms and conditions, including deductibles) cover certain aspects of third-party security and cybersecurity risks and business interruption,interruption; however, our insurance coverage may not always cover all related costs or losses.

We actively assess our cybersecurity and technology risks and modify our operational response to such risks as circumstances and technology change. If we fail to assess and identify current cybersecurity risks and those associated with acquisitions and new initiatives, we may become increasingly vulnerable to such risks. We have implemented measures aimed at preventing security breaches and cyber incidents, including the establishment of processes, procedures and systems focused on response readiness, planning, disaster recovery and business continuity. To avoid the collection and housing of customer payment records, we partner with a Payment Card Industry compliant third party to handle our customers’ credit card transactions in a secure a manner. Despite our best efforts, our preventative measures and incident response efforts may not be entirely effective. The theft, destruction, loss, misappropriation or release of sensitive and/or confidential information or intellectual property, or interference with our operational technology, information technology systems or the technology systems of third parties on which we rely,rely could result in business disruption, negative publicity, damage to our assets, brand reputational damage, violation of privacy laws, loss of customers, potential liability and competitive disadvantage, which could have a material adverse effect on our financial position, results of operations or cash flows.flows and could subject us to regulatory enforcement actions, contractual liability or increased insurance costs.

Natural disasters or other catastrophic eventsevents, as well as their residual macroeconomic effects, could negatively affect our business.

Natural disasters such as hurricanes, tornados, earthquakes, wildfires or other catastrophic eventsevents, including public health threats or the effects of climate change, could negatively affect our operations and financial performance and harm our reputation. The direct and indirect impact of such events could include physical damage to one or more of our facilities, equipment or operating locations in which we operate,; the temporary lack of an adequate workforce in a market; and the temporary disruption in rail or other modes of transportation upon which we rely. These events could prevent or delay shipments to and collections from customers and those from suppliers. Residual and lingering macroeconomic effects from such events could impact our supply chain, distribution network and/or workforce via longer disruptions or increased costs. These impacts could have a material effect on our business, financial condition, results of operations and cash flows.

Weather conditions and other event drivenevent-driven special projects could also cause interim variations in our results. These events could adversely impact the ability of the Company’sour suppliers and customers to conduct business activities and could ultimately do so for an indefinite period of time. As a result, we may be required to suspend operations in some or all of our locations, which could have a material adverse effect on our business, financial condition and results of operations.

As of December 31, 2024,2025, we have recorded closure, post-closure and remedial liabilities valued at $241.5$230.7 million, substantially all of which we assumed in connection with certain acquisitions. We calculate these environmental liabilities on a present value basis in accordance with generally accepted accounting principles, which take into consideration both the estimated cost to remediate such liabilities and the estimated timing of the remediation. We anticipate our environmental liabilities will be payable over many years and that cash flows generated from our operations will generally be sufficient to fund the payment of such liabilities when required. Though we have the ability to perform much of the required remediation efforts internally, which helps to limit the cost exposure, events not now anticipatedanticipated, (including future changes in environmental laws and regulations, including laws, regulations) or guidance addressing emerging contaminants such as PFAS, changes to the natural landscape at or surrounding our facilities or remediation sites, or new information identified during remediation, could require that such payments be made earlier or in greater amounts than we now estimate, which could adversely affect our financial condition, results of operations and cash flows.

TheOur future operating results may be affected by such factors as our ability to utilize our facilities and workforce profitably in the face of price competition, maintain or increase market share in an industry whichthat has in the past experienced significant downsizing and consolidation, realize benefits from cost reduction programs, collect incremental volumes of waste to be handled through our facilities from existing and acquired sales offices and service centers, obtain sufficient volumes of waste at prices whichthat produce revenue sufficient to offset the operating costs of our facilities, minimize downtime and disruptions of operations and develop our field services business. In particular, economic downturns or recessionary conditions in North America, and increased outsourcing by North American manufacturers to plants located in countries with lower wage costs and less stringent environmental regulations, have adversely affected and may in the future adversely affect the demand for our services. Our business is also cyclical to the extent that it is dependent upon a streamstreams of waste from cyclical industries such as chemical and petrochemical. If those cyclical industries slow significantly, the business that we receive from them would likely decrease.

Our operations, specifically within the Environmental Services segment, can be affected by the commencement and completion of cleanup of major spills and other events, customers’ decisions to undertake remedial projects, seasonal fluctuations due to weather and budgetary cycles influencing the timing of customers' spending for remedial activities, the timing of regulatory decisions relating to hazardous waste management projects, changes in regulations governing the management of hazardous waste, secular changes in the waste processing industry towards waste minimization and the propensity for delays in the demand for remedial servicesservices, and changes in the myriad of government regulations governing our diverse operations. We do not control such factorsfactors, and,and as a result, our revenue and income can vary from quarter to quarter, and past financial results for certain quarters may not be a reliable indicator of future results for comparable quarters in subsequent years.

Our operations, predominately within the SKSS segment, involve collecting used oil, re-refining a portion of such used oil into base and blended lubricating oils and then selling both base and blended oil products to customers. Reduced demand for oil products, whether temporary due to market conditions or a lasting long-term trend, may also lower demand for our services of collecting used oil and, in turn, reduce our feedstock oil volumes for processing through our re-refineries. There are significant fixed costs associated with operating our re-refinery facilitiesfacilities, and should production volumes at these facilities decrease, our results of operations and profitability may be materially impacted.

Factors such as geopolitical developments, supply and demand imbalances and macroeconomic shifts may contribute to heightened oil price volatility in global oil markets. This volatility may lead to reduced profitability and increased operating costs in our oil operations and also may impact the cost of fuels throughout our transportation network and facilities. These volatility impacts may affect the Company’sour financial condition, results of operations and cash flows.

OtherCertain businesses,portions of our business, including our Safety-Kleen branches’ core service offerings of containerized waste collection services, parts washer services and vacuum services, are inextricably connected to the automotive industry. Miles driven and routine automotive maintenance, along with other automotive industry trends, impact demand for parts-washer services, containerized waste collections and vacuum services. Declines in this industry, whether temporary or areflecting lastinglonger-term trend,fundamental changes in transportation, energy usage or vehicle technology, may reduce the demand for these core service offeringsofferings, which may adversely impact our financial results.

Our businesses are subject to numerous statutory and regulatory requirements, which may increasechange in the future.

Our businesses are subject to numerous statutory and regulatory requirements. Our ability to continue to hold licenseslicenses, permits and permitstransportation operating authority required for our businesses is subject to maintaining satisfactory compliance with such requirements. We may incur significant costs to maintain compliance. Our ability to obtain modifications to our permits or obtain permits to expand our facilities may be met with resistance, substantial statutory or regulatory requirements or may be too costly to achieve. These requirements may cause us to postpone or cancel our plans. Additionally, our operations are subject to numerous national, state, provincial and local transportation regulations that have various compliance requirements and associated operational costs. Future statutory and regulatory requirements, including any legislation focused on combating climate change, may require significant cost to comply or may require changes to our products or services.

Regulators, in addition to investors, customers and the public in general, have been increasingly focused on environmental, socialgovernance and cybersecurity practices of companies. We may be subject to additional regulations and disclosure requirements in the future arising from the increased focus in these areas.

The occurrence of any of the foregoing could have a material impact on our financial condition or results of operations. Further, although we are very committed to compliance and safety, we could be subject to significant fines and penalties, our reputation could be adversely affected and/or we may incur significant costs to maintain or improve our compliance,compliance if our businesses, or third-parties with whom we have a relationship, were to fail to comply with such statutory and regulatory requirements.

Our operations and those of others in the environmental services industry are subject to extensive federal, state, provincial and local environmental requirements in both the United States and Canada, including those outlined in the “Government Regulations” section in Item 1 of this reportAnnual Report on Form 10-K. If we fail to comply with regulations governing the transport, handling and disposal of hazardous materials, such failure could negatively impact our ability to collect, process and ultimately dispose of hazardous waste generated by our customers. Efforts to conduct our operations in compliance with all applicable laws and regulations, require programs to promote compliance, such as training employees and customers, purchasing health and safety equipment and in some cases hiring outside consultants and lawyers. Even with these programs, we and other companies in the environmental services industry are routinely faced with government enforcement proceedings, which can result in fines or other sanctions and require expenditures for remedial work on waste management facilities and contaminated sites. Certain of these laws impose strict and, under certain circumstances, joint and several liability on current and former owners and operators of facilities that release regulated materials or that generate those materials and arrange for their disposal or treatment at contaminated sites. Such liabilities can relate to required cleanup of releases of regulated materials and related natural resource damages.

From time to time, fines and/or penalties have been levied upon the Companyus in government environmental enforcement proceedings. Such fines typically have related to our waste treatment, storage and disposal operations. Although none of these fines or penalties that we have paid in the past have had a material adverse effect upon us, future fines and penalties may be more substantial. Further, in the future we may be required to make substantial capital expenditures as a result of government proceedings which would have a negative impact on our financial condition, cash flow and results of operations. Regulators also have the power to suspend or revoke permits or licenses needed for operation of our plants, equipment and vehicles based on, among other factors, our compliance record, and customers may decide not to use a particular disposal facility or do business with us because of concerns about our compliance record. Suspension or revocation of permits or licenses would impact our operations and could have a material impact on our financial results. Although we have never had any of our facilities’ operating permits revoked, suspended or non-renewed involuntarily, it is possible that such an event could occur in the future.

We are subject to existing and potential product liability lawsuits relating to our parts washer services.

CleanThrough Harbors, through itsour Safety-Kleen branded operations within the Environmental Services segment, we have been from time to time has been named as a defendant in product liability lawsuits in various courts and jurisdictions throughout the United States. As of December 31, 2024,2025, thewe Company waswere involved in 6876 such proceedings (including cases which have been settled but not formally dismissed) wherein persons claim personal injury resulting from the use of itsour parts cleaning equipment or cleaning products. These proceedings typically involve allegations that the solvents used in the parts cleaning equipment containcontained contaminants or that the solvent recycling process does not effectively remove the contaminants that become entrained in the solvents during their use. In addition, certain claimants assert that the Companywe failed to adequately warn the product user of potential risks, including a historic failure to warn that such solvents contain trace amounts of toxic or hazardous substances such as benzene.

We maintain insurance that we believe will provide coverage for these claims (over amounts accrued for self-insured retentions and deductibles in certain limited cases), though this insurance may not provide coverage for potential awards of punitive damages.damages and be inadequate if the number of claims grows substantially. Although we have vigorously defended and will continue to vigorously defend the Companyourselves and the safety of itsour products against all of these claims, these lawsuits are subject to many uncertainties and outcomes that cannot be predicted with assurance. We may also be named in additional product liability lawsuits in the future, including claims for which insurance coverage may not be available. If any one or more of these lawsuits were decided unfavorably and the plaintiffs were awarded punitive damages, or if insurance coverage were not available for any such claim, our financial condition and results of operations could be materially and adversely affected. Additionally, if any one or more of these lawsuits were decided unfavorably, such outcome may encourage more lawsuits against us.

Failure to correctly identify and execute upon strategic acquisitions and divestitures or effectively execute large-scale capital projects could adversely impact our future results.

We continuously evaluate potential acquisition candidates and from time to time acquire companies that we believe will strategically fit into our business and growth objectives. If we are unable to successfully identify, integrate and developoperate acquired businesses, we could fail to achieve anticipated synergies and cost savings, including any expected increases in revenues and operating results, which could have a material adverse effect on our financial results. We also continually review our portfolio of assets to determine the extent to which assets or groups of assets are contributing to our objectives and growth strategy. WhenIf we decide to sell a business or specific asset group, we may be unable to do so on satisfactory terms and within our anticipated time frame.

If there are unknown liabilities or other obligations, including contingent liabilities, environmental remediation costs or unknown legal matters arising from potential acquisitions, our business could be materially affected. We may learn additional information about potential acquired companies that adversely affects us, such as unknown liabilities or other issues relating to internal controls over financial reporting, issues that could affect our ability to comply with the Sarbanes-Oxley Act or issues that could affect our ability to comply with other applicable laws.

We carry a range of insurance policies intended to protect our assets and operations, including general liability insurance, property damage, business interruption andinterruption, environmental risk and vehicle liability insurance. These policies are outlined in the “Insurance and Financial Assurance” section in Item 1 of this Annual Report on Form 10-K. While we endeavor to purchase insurance coverage appropriate to our risk assessment, we are unable to predict with certainty the frequency, nature or magnitude of claims for direct or consequential damages, and as a result our insurance program may not fully cover us for losses we may incur.

As a result of a number of catastrophic weather and other events, insurance companies have incurred substantial losses and in many cases they have substantially reduced the nature and amount of insurance coverage available to the market, have broadened exclusions and/or have substantially increased the cost of such coverage. If this trend continues, we may not be able to maintain insurance of the types and coverage we desire at reasonable rates or at all, or we may need to take on higher deductibles to obtain such coverage. In many cases, we have made the decision to increase our policy deductibles in order to address the rising cost of insurance premiums, which may expose us to a higher level of retained risk. A partially or completely uninsured claim against us (including liabilities associated with cleanup or remediation at our facilities), if successful and of sufficient magnitude, could have a material adverse effect on our business, financial condition and results of operations. Higher deductibles could result in more volatility in our results of operations as well. Any future difficulty in obtaining insurance could also impair our ability to secure future contracts, which may be conditioned upon the availability of adequate insurance coverage. In addition, claims associated with risks for which we are self-insured to some extent self-insured (property, workers’ compensation, employee medical, comprehensive general liability and vehicle liability) may exceed our recorded reserves, which could negatively impact future earnings.

We are subject to various taxes in the United States, Canada, India, Mexico, Puerto Rico and certain statestate, provincial and local jurisdictions. Tax interpretations, regulations and legislation, including cross-border tariffs, in the various jurisdictions in which we operate are subject to change and uncertainty and may impact our results of operations and cash flows. Our interpretation of tax rules and regulations, including those relating to foreign jurisdictions, requires judgment that may be challenged by taxation authorities upon audit. Although we believe our assumptions, judgments and estimates are reasonable, changes in tax laws or our interpretation of tax laws and the resolution of any tax audits could significantly impact the amounts provided for income taxes in our consolidated financial statements.

We earn revenues, pay expenses, own assets and incur liabilities in countries using currencies other than the U.S. Dollar. In particular, we recorded approximately 9.1%9% of our fiscal 20242025 revenues in Canada and employ over 7%9% of our full timefull-time active employees at our Global Capabilities Center in India. Because our consolidated financial statements are presented in U.S. Dollars, we must translate revenues, expenses and income, as well as assets and liabilities, into U.S. Dollars at exchange rates in effect during or at the end of each reporting period. Therefore, increases or decreases in the value of the U.S. Dollar against other currencies in countries where we operate affect our results of operations and the value of balance sheet items denominated in foreign currencies.

We review our long-lived tangible and intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. We also test our goodwill and indefinite-lived intangible assets for impairment at least annually on December 31, or when events or changes in the business environment indicate that the carrying value of a reporting unit or indefinite lived intangible may exceed its fair value. The impairment testing for goodwill and other indefinite-lived intangible assetassets impairment analysis is basedrelies on estimates of fair value basedassessments onderived from estimated future cash flowflows, projectionswhich thatare subject to inherent variability and may differ from actual future results. During each of 2024,2025, 20232024 and 2022,2023, we determined that no asset write-downs were required. However, if conditions in any of the businesses in which we operate were to deteriorate, we could determine that certain of our assets are impaired and we would then be required to write-off all or a portion of the value of such assets. Any significant write-offs would adversely affect our balance sheet and results of operations.

Our revolving credit agreement and the indenture and loan agreement governing our other outstanding debt limit, among other things, the extent to which the Companywe or our restricted subsidiaries can:

Sections 8.06 and 7.02 of the Massachusetts Business Corporation Act provide that Massachusetts corporations whichthat are publicly-held must have a staggered Boardboard of Directorsdirectors and that written demand by holders of at least 40% of the outstanding shares of each relevant voting group of stockholders is required for stockholders to call a special meeting unless such corporations take certain actions to affirmatively “opt-out” of such requirements. In accordance with these provisions, our By-Laws provide for a staggered Board of DirectorsDirectors, which consists of three classes of directors of which one class is elected each year for a three-year term, and require that written application by holders of at least 25% (which is less than the 40% whichthat would otherwise be applicable without such a specific provision in our By-Laws) of our outstanding shares of common stock is required for stockholders to call a special meeting. In addition, our By-Laws prohibit the removal by the stockholders of a director except for cause. These provisions could inhibit a takeover of our Companycompany by restricting stockholders’ action to replace the existing directors or approve other actions whichthat a party seeking to acquire us might propose. A takeover transaction would frequently afford stockholders an opportunity to sell their shares at a premium over then market prices.

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-K, including information with respect to our plans, strategies, objectives, expectations and intentions for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Annual Report on Form 10-K, our actual results could differ materially from the results described in or implied by these forward-looking statements. Please also see the section titled “Disclosure Regarding Forward-Looking Statements.”

We are North America’s leading provider of environmental and industrial services supporting our customers in finding environmentally responsible solutions to further their sustainability goals in today'stoday’s world. Everywhere industry meets the environment, we strive to provide eco-friendlysustainable services and products that protect and restore North America’s natural environment. We believe we operate, in the aggregate, the largest number of hazardous waste incinerators, landfills and treatment, storage and disposal facilitiesfacilities, (“TSDFs”)or TSDFs, in North America. We serve over 350,000 customers, including the majority of Fortune 500 companies, across various markets including chemical and manufacturing, as well as numerous government agencies. These customers rely on us to safely deliver a broad range of services including but not limited to end-to-end hazardous waste management, emergency response, industrial cleaning and maintenance and recycling services. We are also a leading provider of parts cleaning and related environmental services to general manufacturing, automotive and commercial customers in North America and the largest re-refiner and recycler of used oil in North America.

Performance of our segments is evaluated on several factors of which the primary financial measure is Adjusted EBITDA, asa non-GAAP measure that is reconciled to our GAAP net income and described more fully below. The following is a discussion of how management evaluates itsour segments in regards to other factors including key performance indicators that management uses to assess the segments’ results, as well as certain macroeconomic trends and influences that impact each reportable segment:

•Environmental Services - The Environmental Services segment results are driven by the customer demand for our wide variety of services, the volumevolume, pricing and mix of waste managed and project work requiring responsible waste handling and disposal. Environmental Services results are also impacted by the demand for planned and unplanned industrial related cleaning and maintenance services at customer sites,sites and environmental cleanup services on a scheduled or emergency basis, including response to large scalelarge-scale events such as major chemical spills, natural disasters, or other instances where immediate and specialized services are required. The Environmental Services segment results also include the Safety-Kleen branches’ core environmental service offerings of containerized waste disposal, parts washer and vacuum services. These results are driven by the volumes of waste collected from these customers, the overall number of parts washers placed at customer sitessites, and the demand for and frequency of other offered services. The results and integration of the acquired operations of HEPACO Blocker, Inc. and its subsidiaries (collectively, “HEPACO”),HEPACO, which we acquired in March,March 2024, also impact the overall segment results as we integrated this business into our Field Services operations. In managing the business and evaluating performance, management tracks the volumes and mix of waste handled and disposed of or recycled, generally through our incinerators, TSDFs and landfills,landfills; the utilization rates of our incinerators, equipment and workforce, including billable hours,hours and the number of parts washer services performed,performed; and pricing realized by our business and peer companies as well as other key metrics. Levels of activity and ultimate performance associated with this segment can be impacted by several factors including overall North American GDP, U.S. industrial production, economic conditions in the general manufacturing, chemical and automotive marketsmarkets, including efforts and economic incentives to increase domestic operations, available capacity at waste disposal outlets, demand for industrial cleaning and related industrial services, weather conditions, efficiency of our operations, technology, changing regulations, competition, market pricing of our services, costs incurred to deliver our services and the management of our related operating costs.

•Safety-Kleen Sustainability Solutions - The Safety-Kleen Sustainability SolutionsSolutions, (“SKSS”)or SKSS, segment results are impacted by our customers’ demand for high-quality, environmentally responsible recycled oil products and their demand for our related service and product offerings. SKSS provides collection services for used oil, used oil filters and other automotive related fluids, which allows customers to manage these wastes in a responsible and compliant way while also converting these waste streams into high-quality products for re-use. SKSS offers high qualityhigh-quality recycled base and blended oil products and other automotive and industrial lubricants to end usersusers, including fleet customers, distributors, manufacturers of oil products and industrial plants. Segment results are impacted by market pricing, overall demand and the mix of our oil products sales. Segment results are also predicated on the demand for other SKSS product and service offeringsofferings, including collection services for used oil, used oil filters and other automotive fluids. The used oil collected is used as feedstock in our oil re-refining process to produce our base and blended oil products and other hydraulic oils, lubricants and recycled fuel oil or are integrated into the Clean Harbors’our recycling and disposal network. The results and integration of the acquired operations of Noble Oil Services, Inc. and its subsidiaries (collectively “Noble”) also impact the overall segment results. In operating the business and evaluating performance, management tracks the volumes of used oil and other waste streams collected and relative percentages of base and blended oil sales along with various pricing metrics associated with the commodity driven margin between product pricing and the overall costsrevenue associatedgeneration along with therelated collection of used oil.costs. Levels of activity and ultimate performance associated with this segment can be impacted by economic conditions in the manufacturing and automotive services markets, efficiency of our operations, technology, weather conditions, changing regulations, competition and the management of our related operating costs. Overall product pricing as well as revenues generated and/or costs incurred in connection with the collection of used oil and other raw materials associated with the segment’s oil relatedoil-related products can also be volatile and can be impacted by global events and their relative impact on commodity products and pricing. The overall market price of oil and regulations that change the possible usage of used oil or burning of used oil as a fuel, impact the premium the segment can charge for used oil collections.

Total direct revenues for 20242025 increased 8.9%2.4% or $480.8$140.9 million to $5,890.0$6,030.8 million, compared with $5,409.2$5,890.0 million in 2023.2024. Our Environmental Services segment direct revenues increased $493.3$188.5 million or 10.9%3.8% in 20242025, compared with 20232024, driven by growth in Field and Emergency Response Services, including the contributions from the acquisition of HEPACO, as well as growth in our Technical Services andServices, Safety-Kleen branch core service offerings.offerings and Field and Emergency Response services. These increased revenues offset lower contributions from our Industrial Services organization. Direct revenues recorded by our SKSS segment decreased $12.5$47.4 million in 20242025 compared to 2023 primarily2024 due to lower market-based pricing onfor ourboth base oil and blended oil product salesproducts as well as reduced volumes of these products sold. ContributionsThese declines were partially offset by higher revenue from the acquisitioncollection of Nobleused partially offset these decreases. Foreign currency translation of our Canadian operations negatively impacted our consolidated direct revenues by $9.0 million in 2024oil as comparedpricing tofor 2023.this service increased throughout the year.

Income from operations in 2024 was $670.2 million as compared with $612.4 million in 2023, an increase of 9.4%. We reported net income in 2024 and 2023 of $402.3 million and $377.9 million, respectively. Adjusted EBITDA, which is the primary financial measure by which we evaluate our operations, was $1,169.9 million in 2025 and $1,116.9 million in 2024 and $1,012.6 million in 2023,2024, an increase of over 10%,4.7% driven by the results of our Environmental Services segment. Additional information regarding Adjusted EBITDA, which is a non-GAAP measure, including a reconciliation of net income to Adjusted EBITDA, appears below under “Adjusted EBITDA.”

Net cash from operating activities for 20242025 was $777.8$866.7 million, an increase of $43.2$89.0 million from 2023.2024 primarily due to improvement in working capital balances, lower cash paid for taxes and lower environmental expenditures as compared to the prior year. Adjusted free cash flow, which management uses to measure our financial strength and ability to generate cash, was $357.9$509.3 million in 2024,2025, which represented a $32.7$151.4 million increase over 2023.2024. This increase was due to incrementalthe netreasons noted above impacting cash generatedflow byfrom operating activities,activities partiallyand offset by higherlower spend on property plant and equipment, net of proceeds from the sale and disposal of fixed assets. Additional information regarding adjusted free cash flow, which is a non-GAAP measure, including a reconciliation of net cash from operating activities to adjusted free cash flow, appears below under “Adjusted Free Cash Flow.”

N/M = not meaningful (1)Direct revenue is revenue allocated to the segment performing the provided service.service or selling the product.

(3)Selling, general and administrative or SG&A expenses is shown exclusive of stock-based compensation which is presented in Selling, general and administrativeSG&A expenses on theour Company’sConsolidated Statements of Operations, but is not included in our measurement of Adjusted EBITDA. Additionally, in 2025, SG&A expenses are shown exclusive of $3.5 million of third-party transaction related costs, which are presented in SG&A expenses on our Consolidated Statements of Operations but isare not included in the Company’sour measurement of Adjusted EBITDA. See Adjusted EBITDA section below for a reconciliation of net income to Adjusted EBITDA.

(5)Calculated as a percentage of our total Company revenue.

There are many factors whichthat can impact our revenues including, but not limited to:to, overall levels of industrial activity and economic growth in North America,America; competitive industry pricing; overall market incineration capacity including captive incineration closures; changes in the regulatory environment including those related to per- and polyfluoroalkyl substancessubstances, (“or PFAS”),; impacts of acquisitions and divestitures, competitive industry pricing, overall market incineration capacity including the closure of captive incinerators,divestitures; the level of emergency response services,services; government infrastructure investment,investment; reshoring industrialof productiondomestic and manufacturing,manufacturing; existence or non-existence of large scale environmental waste and remediation projects,projects; weather related events,events; the number of parts washers placed at customer sites,sites; miles driven and related lubricant demand,demand; base and blended oil pricing,pricing; market supply for base oil products,products; market changes relative to the collection of used oil, our ability to manage the spread between oil product prices, and prices for the collection of used oil and foreign currency translation.fluctuations. In addition, customer efforts to minimize hazardous waste and regulatory changes in regulation can impact our revenues.

Environmental Services direct revenues for the year ended December 31, 20242025, increased $493.3$188.5 million from the comparable period in 2023 driven by incremental revenues from legacy operations combined with acquisitive growth. Field and emergency response service revenues increased $285.2 million from 2023 driven by approximately $220.4 million of incremental revenue from the acquisition of HEPACO as well as contributions from legacy operations.2024. Technical services revenue increased $169.7$126.2 million with contributions across our portfolio of waste disposal servicesservices, drivenincluding by favorablestronger volumes ofat our incinerator and landfill facilities, higher revenues from waste disposed,and mostremediation notablyprojects and greater pricing of services provided. On a comparative basis and excluding the impacts of the new incinerator in ourKimball, incineratorsNebraska, andwhich TSDFs,is andnot favorableexpected pricing.to Utilizationbe running at full utilization until the end of 2026, utilization at our incinerators was 89% for 2024the wasyear 88%ended December 31, 2025, as compared to 84%88% in the priorsame year.period in 2024. Including the new Kimball incinerator, utilization at our incinerators was 85% for the year ended December 31, 2025. Revenue from our Safety-Kleen branches' core service offerings increased $76.9$67.3 millionmillion, asprimarily bothdriven pricingby improved pricing, and demandto increaseda lesser extent, volume, for our containerized waste, vacuum and parts washer services. Field and emergency response services revenues increased $42.2 million from 2024 primarily driven by incremental revenue from the acquisition of HEPACO. Revenue from our industrial services operations declineddecreased $41.4$49.6 million due to lower turnaround activity and related high-value services compared to 2023. The Canadian operations of the Environmental Services segment were negatively impacted by $7.4 million due to foreign currency translation.2024.

SKSS direct revenues for the year ended December 31, 20232025 decreased $97.1$47.4 million from the comparable period in 2022.2024 Baselargely due to revenues from base oil, which decreased $68.1 million driven by lower pricing and, to a lesser extent, lower volumes sold. Blended oil sales revenues decreased $97.6$34.8 millionmillion, duedriven by lower volumes sold and, to a lesser extent, lower pricing despite an 8% increase in the volume sold during 2023.pricing. Revenues from contract packaging alsoservices decreased $18.0$13.2 million andin revenuesthe fromyear recycledended fuelDecember oil31, and2025, refinerycompared byproductsto decreasedthe $12.2prior million.year. BlendedThese oildecreases saleswere revenuespartially increasedoffset $19.5 million,by a 23%$43.5 million increase in gallons sold, which offset the lower pricing of these products. Revenuesrevenue from the collection of used oil as we increased $14.1 million driven by higher pricing for these services.waste Theoil Canadiancollection operationsservices throughout 2025. Additionally, revenues from the sale of vacuum gas oil and specialty refinery products increased $18.1 million, primarily driven by the incremental contributions of the SKSSacquired segmentNoble were negatively impacted by $4.8 million in 2023 due to foreign currency translation.operations.

We believe that management of operating costs is vital to our ability to remain price competitive. We continue to experience inflationary pressures across several cost categories, but most notably related to transportation, energy related costs and internal and external laborlabor, healthcare, transportation, maintenance and energy-related costs. We are also subject to uncertainties and cost increases due to the changing regulatory landscape, including trade restrictions and tariffs. We aim to manage these increases through constant cost monitoring and a focus on cost savingsavings areas, including lowering employee turnover, as well as our overall customer pricing strategies designed to offset the negative inflationary impacts on our margins.

We continue to upgrade the quality and efficiency of our services through the development of new technology and continued modifications and expansion at our facilities while also leveraging certain fixed costs of our operating infrastructure. We invest in new business opportunities and aggressively implement strategic sourcing and logistics solutions, while also continuing to optimize our managementworkforce and operating structure in an effort to manage our operating margins.

Environmental Services cost of revenues for the year ended December 31, 2024 increased $303.0 million from the comparable period in 2023, while improving as a percentage of revenues. Overall, labor and benefit related costs increased $170.3 million, equipment and supply costs increased $95.2 million and external transportation, vehicle, and fuel costs increased $24.6 million.million in 2024 as compared to 2023. These cost increases were generally in line with the revenue growth in the business and the addition of the acquired operations in 2024. HoweverHowever, better leverage of our costs and increases in revenues further improved our cost efficiency as a percentage of revenues.

SKSS cost of revenues for the year ended December 31, 20242024, increased $12.9 million from 2023 and as a percentage of revenues, these costs increased 2.5%. The cost increase iswas due to additional expenses from the Noble operations, which were partially offset by reduced costs resulting from the lower revenue volumes noted above. Total cost of revenues as a percentage of direct revenues increased primarily due to the market related pricing decreases discussed in the“Direct revenueRevenue” section,above, higher cost per gallon of base oil products sold and the overall mix of products and services sold during 2024 as compared to the prior year.

We aim to manage our selling, general and administrative ("SG&A") expenses in line with the overall performance of our segments and corresponding revenue levels. This is achieved through enhanced technology, process improvements and strategic expense management. Expanding our support functions globally has led to both profitability and productivity improvements. We believe our ability to properly align these costs with business performance is reflective of our strong management of the businesses and further promotes our ability to remain competitive in the marketplace. The SG&A balances in this section exclude stock-based compensation expense which is presented in SG&A on the Company’s Consolidated Statement of Operations but is not included in the Company’s measurement of Adjusted EBITDA. For a discussion on significant changes in consolidated stock-based compensation expense, please refer to the separate section below.

Environmental Services SG&A expenses for the year ended December 31, 20242025, increased $24.5$16.3 million from the comparable period in 2023,2024 and slightlyremained improvedrelatively consistent as a percentage of revenues by maintaining leverage of our SG&A base in the midst of the revenue growth discussed above.revenues. Overall, labor and benefitbenefits related costs, including higher employee healthcare costs increasedand $13.2 million primarily driven by additionalincremental costs from the acquired HEPACO operations.operations, increased $27.1 million compared to the same period in 2024. The remainingresults increasesof werethe spreadyear acrossended variousDecember cost31, categories2025, andinclude werethe drivenimpact of reducing the estimated costs to remediate a site by overallapproximately growth$10 million in the segmentfirst results.quarter of 2025 to reflect our conclusion that loss was no longer probable based on the evaluation of available evidence.

Environmental Services SG&A expenses for the year ended December 31, 20232024, increased $31.1$24.5 million from the comparable period in 2022,2023, butand remainedslightly relatively consistentimproved as a percentage of revenues by maintaining leverage of our SG&A base in the midst of the revenue growth discussed above. Overall, labor and benefit related costs, including travel,costs increased $32.0$13.2 million primarily driven by incrementaladditional headcount,costs includingfrom the acquisitionsHEPACO occurringoperations. duringThe remaining increases were spread across various cost categories and were driven by overall growth in the periods,segment and higher incentive compensation.results.

We manage our Corporate SG&A expenses commensurate with the overall total Companycompany performance and direct revenue levels. As a percentage of our total Company revenuesrevenues, these costs remained relatively consistent in 2024,2025, 20232024 and 2022.2023.

In total, Corporate SG&A expenses increased by $36.2 million in 2024; however, as noted above, these costs remained relatively consistent as a percentage of revenues. In general, the overall cost increase included a $29.4 million increase in labor and benefit related expenses predominately driven by incremental headcount from the operations acquired during 2024. Additionally, IT costs increased by $5.1 million. Severance and integration related costs increased $4.9 million to a total of $14.3 million in 2024.

Management considers Adjusted EBITDA to be a measurement of performance whichthat provides useful information to both management and investors. Adjusted EBITDA should not be considered an alternative to net income or other measurements under generallyGAAP. acceptedAs accountingreflected principlesin ("GAAP").the reconciliation below, we define Adjusted EBITDA as net income plus accretion of environmental liabilities, stock-based compensation, depreciation and amortization, net other expense, net interest expense and provision for income taxes. Adjusted EBITDA also excludes impacts from certain transactions that are not deemed representative of fundamental segment results. Adjusted EBITDA is not calculated identically by all companies, and therefore our measurements of Adjusted EBITDA, while defined consistently and in accordance with our existing credit agreement, may not be comparable to similarly titled measures reported by other companies.

The information about our operating performance provided by Adjusted EBITDA is used by our management for a variety of purposes. We regularly communicate Adjusted EBITDA results to our lenders since our loan covenants are based upon levels of Adjusted EBITDA achieved and to our Board of DirectorsDirectors, and we discuss with the Board our interpretation of such results. We also compare our Adjusted EBITDA performance against internal targets as a key factor in determining cash and equity bonus compensation for executives and other employees, largely because we believe that this measure is indicative of how the fundamental business is performing and being managed.

Stock-based compensation for the year ended December 31, 20242025 increased $7.3$4.7 million from the comparable period in 2023.2024. This increase was driven by recent stock price appreciation and higher expenses related to the probable future achievement of performance metrics inas 2024.well as incremental expense related to our Employee Stock Purchase Plan, or ESPP.

Stock-based compensation for the year ended December 31, 20232024, decreasedincreased $6.1$7.3 million from the comparable period in 2022.2023. This reductionincrease was duedriven by stock price appreciation and higher expenses related to certainthe achievement of performance targets not being metmetrics in 2023, leading to lower share-based compensation costs compared with 2022.2024.

Depreciation and amortization for the year ended December 31, 20242025 increased $35.2$45.1 million from the comparable period in 20232024 due to incrementaldepreciation depreciationof fixed assets and amortization associatedof withintangible assets acquired from the March 2024 HEPACO and Noble acquisitions; completeddepreciation for the new Kimball incinerator, which was placed in Marchservice in December 2024 as well as; incremental assets placed in service to support the growth of the business and higher finance lease amortization.

Depreciation and amortization for the year ended December 31, 20232024, increased $18.2$35.2 million from the comparable period in 20222023 due to incremental depreciation and amortization associated with the Thompson Industrial assets acquired on March 31,2024 2023HEPACO and increasedNoble acquisitions, as well as incremental finance lease and landfill amortization in the period.amortization.

Other Income (Expense) Income,, net

The increase in the loss on early extinguishment of debt for the year ended December 31, 20232025 was due to the loss recognized for the repaymentrefinancing of certainour Term Loans.Loan Indebt alldue in 2028 and our Senior Notes due in 2027, which occurred in the fourth quarter of the2025. periods presented, weWe also recognized small losses driven by the repricing of certain of our debt in 2024 and 2023a and$2.9 million loss on the repayment of a portion of our outstanding debt in late 2022.2023. For additional information regarding our current portfolio of long-term debt and related significant activity, see Note 12,11, “Financing Arrangements,” to our consolidated financial statements included in Item 8 of this report.Annual Report on Form 10-K.

Interest expense, net of interest income for the year ended December 31, 2024 increased by $26.4 million from the comparable period in 2023. During the year ended December 31, 20232023, interest expense, net of interest income included a $8.3 million benefit from settling certain interest rate swaps in January 2023. Absent this benefit, interest expense, net of interest income increased $18.1 million due to higher levels of outstanding debt as a result of the 2024 Incremental Term Loans entered into on March 22, 2024 in connection with completed acquisitions, partially offset by a $7.5 million increase in interest income, generally on our cash investments, for the year ended December 31, 2024. The effective interest rates on our long-term debt for the years ended December 31, 2024 and December 31, 2023 were 5.40% and 5.19%, respectively.

As weof exitDecember 2024,31, 2025, the effective rate on our debt iswas approximately 5.38%5.32% given the current interest rate environment and our portfolio of long-term debt and related interest rate swaps. For additional information regarding our current portfolio of long-term debt, see Note 12,11, "“Financing Arrangements,"” to our consolidated financial statements included in Item 8 of this report.Annual Report on Form 10-K.

We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. Our primary ongoing cash requirements will be to fund operations, capital expenditures, interest payments and investments in line with our business strategy.strategy as of the date of this Annual Report on Form 10-K. We believe our future operating cash flows will be sufficient to meet our future operating and internal investing cash needs. We monitor our actual needs and forecasted cash flows, our liquidity and our capital resources, enabling us to plan our present needs and fund items that may arise during the year as a result of changing business conditions or opportunities. Furthermore, our existing cash balance and the availability of additional borrowings under our revolving credit facility provide additional potential sources of liquidity should they be required.

Net cash from operating activities for the year ended December 31, 20232025 was $734.6$866.7 million,million as compared to $626.2$777.8 million for the year ended December 31, 2022.2024. This $108.3$89.0 million increase in operating cash flows was attributableprimarily due to improvement in working capital balances, partially offset byspecifically higher collections of accounts receivable, as compared to the prior year period, lower cash paid for incometaxes taxes,and lower environmental expenditures and interest.expenditures.

In addition to historical information, this Quarterly Report on Form 10-Q contains forward-looking statements, which are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans to,” “aims,” “will,” “seeks,” “should,” “estimates,” “projects,” “may,” “likely,” “potential” or similar expressions. Such statements may include, but are not limited to, statements about our future financial and operating results, plans, strategy, objectives and goals, strategic initiatives, cost management initiatives, pricing and productivity initiatives, contingent liabilities, interest expense, liquidity, business, economic and market conditions, trends, customer demand, expectations regarding new customer contracts, impacts of tariffs and new legislation, acquisitions, capital spending, growth opportunities,opportunities and investments, expectations, challenges and other statements that are not historical facts. Such statements are based upon the beliefs and expectations of our management as of the date of this report only and are subject to certain risks and uncertainties that could cause actual results, performance or achievements to differ materially, including, without limitation: operational and safety risks; risks relating to the failure of new or existing technologies; risks associated with the use of artificial intelligence; cybersecurity risks; the occurrence of natural disasters or other catastrophic events, as well as their residual macroeconomic effects; risks associated with retaining and hiring key personnel; environmental liability and product liability risks relating to hazardous waste management and other components of our business; negative economic, industry or other developments, including market volatility or economic downturns; risks associated with our assumptions relating to expansion of our landfills; reductions in the demand for emergency response services at industrial facilities or on roadways, railways or waterways, and other remedial projects and regulatory developments; reductions in the demand for oil products and automotive services and volatility in oil prices in the markets we serve; changes in statutory and regulatory requirements and risks relating to extensive environmental laws and regulations; risks associated with existing and potential litigation; risks associated with our identification and execution of strategic capital expenditures, acquisitions and divestitures and their related liabilities; risks relating to the availability and sufficiency of our insurance coverage, self-insurance, surety bonds, letters of credit and other forms of financial assurance; impact of new tax legislation or changes in tax regulations and interpretations; the imposition of trade sanctions or tariffs; fluctuations in interest rates and foreign currency exchange rates; risks relating to our indebtedness and covenants in our debt agreements; risks associated with certain anti-takeover provisions under the Massachusetts Business Corporation Act and our By-Laws; and those items discussed elsewhere in this report or identified as “Risk Factors” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on February 18, 2026, and in other documents we file from time to time with the SEC. Therefore, readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s opinions only as of the date hereof. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements.

•Environmental Services - The Environmental Services segment results are driven by customer demand for our wide variety of services,services: the volume, pricing and mix of waste managed; and project work requiring responsible waste handling and disposal. Environmental Services results are also impacted by the demand for planned and unplanned industrial related cleaning and maintenance services at customer sites and environmental cleanup services on a scheduled or emergency basis, including response to large-scale events such as major chemical spills, natural disasters, or other instances where immediate and specialized services are required. The Environmental Services segment results include the Safety-Kleen branches’ core environmental service offerings of containerized waste disposal, parts washer and vacuum services. These results are driven by the volumes of waste collected from these customers, the overall number of parts washers placed at customer sites, and the demand for and frequency of other offered services. In managing the business and evaluating performance, management tracks the volumes and mix of waste handled and disposed of or recycled, generally through our incinerators, TSDFs and landfills; the utilization rates of our incinerators, equipment and workforce, including billable hours and the number of parts washer services performed; and pricing realized by our business and peer companies as well as other key metrics. Levels of activity and ultimate performance associated with this segment can be impacted by several factors including overall North American GDP; U.S. industrial production; economic conditions in the general manufacturing, chemical and automotive markets; efforts and economic incentives to increase domestic operations; available capacity at waste disposal outlets; demand for industrial cleaning and related industrial services; weather conditions; efficiency of our operations; technology, including the increased use of artificial intelligence; changing regulations; competition; market pricing of our services; costs incurred to deliver our services; and the management of our related operating costs.

Total direct revenues for the three and six months ended MarchJune 31,30, 2026 were $1,459.5$1,735.0 million and $3,194.5 million, compared with $1,432.0$1,549.9 million and $2,981.8 million for the three and six months ended MarchJune 31,30, 2025.2025, respectively. For the three and six months ended MarchJune 31,30, 2026, our Environmental Services segment direct revenues increased $43.4$104.5 millionmillion, or 3.6%7.7%, and increased $147.9 million, or 5.8%, respectively, from the comparable periodperiods in 2025, driven by growth in Technical Services, Safety-Kleen core services and Field and Emergency Response Services, offset by lower contributions from our Industrial Services organization.Services. For the three and six months ended MarchJune 31,30, 2026, our SKSS segment direct revenues decreasedincreased $15.7$80.7 million or 7.1%,40.8% and increased $65.0 million or 15.5%, respectively, from the comparable periodperiods in 2025, driven predominantlyprimarily by lowerhigher pricing of base and blended oil products and specialty refinery products, partiallyas offsetwell byas incremental revenues from higher volumespricing of basewaste oil soldcollection and higher charge for oil revenue for the three months ended March 31, 2026.services.

Income from operations for the three and six months ended MarchJune 31,30, 2026 was $118.9$268.9 million and $387.8 million, as compared with $111.6income from operations of $210.3 million and $321.9 million in the three months ended March 31, 2025. Depreciation and amortization expense for the threesix months ended MarchJune 31,30, 20262025, was $3.8 million higher than the comparable period in 2025.respectively. Net income for the three and six months ended MarchJune 31,30, 2026 was $63.2$170.5 million and $233.7 million, an increaseincreases of $4.534.3% million,and or 7.7%,25.9% as compared with net income of $58.7$126.9 million and $185.6 million in the three and six months ended MarchJune 31,30, 2025.2025, respectively.

Net cash from operating activities for the threesix months ended MarchJune 31,30, 2026 increased $4.7$35.8 million from $1.6$209.6 million in 2025 to $6.3$245.5 million in 20262026, primarily due to lowerhigher cashoperating paid for interestincome partially offset by higher working capital impacts in 2026 as compared to the prior year period. Adjusted free cash flow, which management uses to measure our financial strength and ability to generate cash, was an outflow of $75.8$59.8 million in the threesix months ended MarchJune 31,30, 2026, as compared to an outflow of $115.7$17.4 million in the comparablesame period ofin 2025, an improvement of $39.9$42.4 million, primarily driven by lowerhigher cash paidflows forfrom additionsoperating to property, plant and equipment.activities. Additional information regarding adjusted free cash flow, which is a non-GAAP measure, including a reconciliation of net cash from operating activities to adjusted free cash flow, appears below under “Adjusted Free Cash Flow.”

N/M = not meaningful (1)Direct revenuerevenues isare revenuerevenues allocated to the segment performing the provided service or selling the product.

(3)Selling, general and administrative or SG&A expenses isare shown exclusive of stock-based compensation, which is presented in SG&A expenses on our Consolidated Statements of Operations, but isare not included in our measurement of Adjusted EBITDA. See Adjusted EBITDA section below for a reconciliation of net income to Adjusted EBITDA.

(4)Calculated as a percentage of individual segment direct revenue.revenues.

(5)Calculated as a percentage of our total direct revenue.revenues.

There are many factors that can impact our revenues including, but not limited to, macroeconomic conditions,conditions; overall levels of industrial activity and economic growth in North America,America; competitive industry pricing,pricing; commodity pricing,pricing; overall market incineration capacitycapacity, including captive incineration closures,closures; changes in the regulatory environmentenvironment, including those related to per- and polyfluoroalkyl substances, or PFAS,PFAS; impacts of acquisitions and divestitures,divestitures; the level of emergency response services,services; government infrastructure investment,investment; reshoring of domestic manufacturing,manufacturing; existence or non-existence of large-scale environmental waste and remediation projects,projects and the related project pipeline; weather-related events,events; the number of parts washers placed at customer sites,sites; miles driven and related lubricant demand,demand; base and blended oil pricing,pricing; market supply for base oil products,products; market changes relative to the collection of used oil; and foreign currency fluctuations. In addition, customer efforts to minimize hazardous waste and changes in regulationregulations can impact our revenues.

Environmental Services direct revenues for the three months ended MarchJune 31,30, 2026 increased $43.4$104.5 million from the comparable period in 2025. Technical Services revenues increased $22.1$81.5 million. A PFAS-related filtration project associated with a large emergency response event earlier in the year contributed more than $30 million from the comparable prior year period driven primarily by stronger volumes at our landfill facilities and higherof revenues from remediation projects. Revenues from Safety-Kleen core service offerings forduring the three months ended MarchJune 31,30, 20262026. grewAdditional growth in Technical Services revenues was driven by $17.4fuel millionsurcharges and higher volumes across our disposal network, including volumes generated from theremediation comparable period in 2025 due to improved pricingprojects and volumesPFAS-related for our containerized waste, vacuum and parts washer services.work. Utilization at our incinerators was 80%91% in the first three months ofended 2026June 30, 2026, as compared to 81%86% in the same period in 2025. Utilization rates at our incinerator facilities in each period include the impact of our second Kimball incinerator, which was placed in service in late 2024. Revenues from Safety-Kleen core service offerings for the three months ended June 30, 2026 grew by $29.4 million from the comparable period in 2025 due to greater volumes and pricing of our containerized waste, vacuum and parts washer services. Field and Emergency Response Services revenues increased $15.7$6.2 million for the three months ended MarchJune 31,30, 2026 from the comparable period in 2025 driven by incremental revenues from emergency response projects during the current period, including a large scale emergency response event. Partially offsetting this growth from prior year is a $19.8 million reduction in revenues from our Industrial Services operations due to lower demand for industrial maintenance and turnaround services as compared to 2025.

In the three months ended MarchJune 31,30, 2026, SKSS direct revenues decreasedincreased $15.7$80.7 million compared to the same period in 2025.2025, Revenuesprimarily fromdriven theby salehigher market pricing of blendedoil-based oil products decreased $12.3 million due to lower volumes sold.products. Revenues from the sale of base oil products decreasedincreased $9.3$37.2 million asdue lowerto higher pricing, and blended oil product revenues grew $19.1 million due to improved pricing wasand partially offset by highergreater volumes sold. Additionally, revenuesRevenues from the sale of vacuum gas oil and specialty refinery products decreasedincreased $6.1$10.5 million fromcompared to the same period in 2025. These decreases were partially offset by a $13.9 million increase inAdditionally, revenues from the collection of used oil attributedcollection services increased $9.5 million, attributable to the higher pricing for these waste oil collection services.

We believe disciplined management of operating costs is vital to our ability to remain price competitive. We experience cost pressures across several categories, most notably internal and external labor and benefits, insurance, transportation, maintenance, fuel and other energy relatedenergy-related costs. In addition, we are subject to uncertainty and potential cost increases arising from evolving regulatory and macroeconomic conditions. We aim to manage these increases through constant cost monitoring and a focus on cost savings areas,savings, including lowering employee turnover, as well as our overall customer pricing strategiesstrategies, which are designed to offset the inflationary impacts on our margins.

We continue to upgrade the quality and efficiency of our services through the development or adoption of new technology, including through the increased use of artificial intelligence, and continued modifications and expansion at our facilities while also leveraging certain fixed costs of our operating infrastructure. We invest in new business opportunities and aggressively implement strategic sourcing and logistics solutions, while also continuing to optimize our workforce and operating structure in an effort to manage our operating margins.

Environmental Services cost of revenues for the three months ended MarchJune 31,30, 2026 increased $12.4$62.9 million from the comparable period in 2025, but improvedwere lower as a percentage of revenuesrevenues. asDue weto attainedhigher greatermarket-based leveragefuel ofpricing, ourtransportation fixedand fuel related costs whileincreased growing$30.9 totalmillion revenue.during Commensuratethe three months ended June 30, 2026 compared to the same period in 2025. Additionally, commensurate with the revenue growth in the business discussed above, labor and benefit related costs increased $6.9$20.5 million and equipment and supply costs increased $4.6$14.9 million for the three months ended MarchJune 31,30, 20262026, as compared to the threesame monthsperiod ended March 31,in 2025. These increases were partially offset by reductions in various other cost categories. Overall, Environmental Services revenues grew at a rate greater than cost of revenues and gross margins expanded in the quarter.

SKSS cost of revenues for the three months ended MarchJune 31,30, 2026 decreasedincreased $22.8$22.1 million from the comparable period in 2025,2025; andhowever, these costs improved 5.0%12.7% as a percentage of revenues. The decrease both in dollars and as a percentage of revenuerevenues was primarily driven by the higher market pricing for base and blended oil products discussed above and lower acquisition costs of used oil feedstock and lower labor and benefit related costs of $2.5 million duecompared to strategic headcount management actions executed in the secondsame quarter of 2025. The overall dollar increase was primarily driven by increased transportation and fuel costs due to higher market-based fuel pricing.

We aim to manage our SG&A expenses in line with the overall performance of our segments and corresponding revenue levels. Our goal is to achieve this through efficient use of labor resources, enhanced technology, including the increased use of artificial intelligence, process improvements and strategic expense management. Expanding our support functions globally has led to both profitability and productivity improvements. We believe our ability to properly align these costs with business performance is reflective of our strong management of the businessesbusiness and further promotes our ability to remain competitive in the marketplace.

The SG&A expenses set forth below exclude stock-based compensation expense, which is presented in SG&A on our Consolidated Statement of Operations, but isare not included in our measurement of Adjusted EBITDA.

Environmental Services SG&A expenses for the three months ended MarchJune 31,30, 2026 increased $15.2$11.8 million from the comparable period in 2025 and remained relatively consistent as a percentage of revenue.2025. The resultsincrease forin SG&A expenses in the three months ended MarchJune 31,30, 20252026 includewas driven by increased labor and benefits related costs of $6.2 million, primarily driven by higher commission costs commensurate with the impact of reducing the estimated costs to remediate a site by approximately $10 millionincrease in therevenues. first quarter of 2025. Absent this benefit in 2025, which accounted for 80 basis points as a percentage of revenues, theThe remaining $5.1 million increase was spread across various cost categories and was proportional with the costsincrease as a percentage ofin revenues werefor flat.the period.

SKSS SG&A expenses for the three months ended MarchJune 31,30, 2026 increased $2.3$4.0 million as compared to the same period in 2025 primarily driven by a $1.2$3.2 million increase in labora legal reserve and benefitincreased relatedcommissions costs,costs mainlycommensurate resultingwith fromthe higherincrease incentivein compensation.revenues discussed above. As a percentage of revenues, these costs increasedimproved 1.7% both1.3% due to the increase in labor and benefit related costs and the overall declineincrease in segment revenues discussed above.

We manage our Corporate SG&A expenses commensurate with our overall total performance and direct revenuerevenues levels. Corporate SG&A expenses for the three months ended MarchJune 31,30, 2026 increased $4.8$3.9 million as compared to the same period in the prior year and remained relatively consistent as a percentage of our total revenues.year. The increase in Corporate SG&A expenses was primarily attributable to a $5.9$3.2 million increase in labor and benefits related costs driven by higher incentive compensation partially offset by lower salary costs.compensation. For the year, we anticipate that thethese Corporate SG&A expenses will trend slightly higher than the prior year but will remain flat as a percentage of revenue.revenues.

The information about our operating performance provided by Adjusted EBITDA is used by our management for a variety of purposes. We regularly communicate Adjusted EBITDA results to our lenderslenders, since our loan covenants are based upon levels of Adjusted EBITDA achievedachieved, and to our Board of Directors, and we discuss with our Board our interpretation of such results. We also compare our Adjusted EBITDA performance against internal targets as a key factor in determining cash and equity bonus compensation for executives and other employees, largely because we believe that this measure is indicative of how the fundamental business is performing and being managed.

Depreciation and amortization for the three months ended MarchJune 31,30, 2026 increased by $3.8$5.5 million from the comparable period in 2025 due to incremental depreciation for assets placed in service to support the growth of the business and higher finance lease amortization. Incremental amortization of intangibles acquired in acquisitions completed during the first six months of 2026 comprised the majority of the increase in amortization of permits and other intangible assets for the three months ended June 30, 2026.

Interest expense, net of interest income for the threesix months ended MarchJune 31,30, 2026 decreased $2.2$2.1 million from the comparable period in 2025 primarily due to lower interest rates on outstanding debt during the period resulting from the debt refinancing transactions executed in October 2025 and lower variable interest rates on our SOFR-based debt.debt partially offset by lower interest income.

As of MarchJune 31,30, 2026, the effective interest rate on our debt was 5.2%. For the remainder of 2026, we expect interest expense, net of interest income to continue to be lower than the prior year assuming current rates and our current debt portfolio. For additional information regarding our current portfolio of long-term debt, see Note 11, “Financing Arrangements,” to the accompanying unaudited consolidated financial statements.

For the three months ended MarchJune 31,30, 2026, the provision for income taxes increased $5.2$16.0 million compared to the same period in 2025. This increase was driven by both higher pre-tax income as well as a higher effective tax rate in 2026. In the firstcurrent quarteryear of 2025, our effective tax rate was favorably impacted by a one-time tax benefit related to a change in estimate for a remedial liability.period.

Net cash from operating activities for the threesix months ended MarchJune 31,30, 2026 was $6.3$245.5 million as compared to $1.6$209.6 million in the same period of 2025. This $4.7$35.8 million increase in operating cash flows was primarily driven by lowerhigher cashoperating paidincome, forwhich interestwas partially offset by higher working capital balances for the threesix months ended MarchJune 31,30, 2026 compared to the same period in 2025.2025, reflecting the strong revenue growth and timing of collections.

Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 was $222.7$560.5 million, an increase of $102.4$359.8 million from the comparable period in 2025. This increase was driven by $131.8$357.6 million of cash paid in 2026 to acquire certain businesses from Depot Connect International.International Thisand higherthe cashacquisition outflowof wasTerra partiallyNova offsetSolutions byas well as a $20.4$16.3 million decreaseincrease in additions to property, plant and equipment, net of proceeds from sale and disposal of fixed assetsassets. andPartially $6.2offsetting these higher cash outflows was a $14.3 million increase in net salecash inflows due to the timing of marketabletransactions securitieswithin our wholly-owned captive insurance company for the threesix months ended MarchJune 31,30, 2026, as2026 compared to a $2.7 net purchase of marketable securities in the comparablesame period in 2025.

Net cash used in financing activities for the threesix months ended MarchJune 31,30, 2026 was $58.3$98.2 million, as compared to $79.3$101.2 million for the threesix months ended MarchJune 31,30, 2025.2025, a decrease of $2.9 million. This decrease compared to the prior year period was primarily due to a$14.9 decreasemillion less in cash paid for repurchases of common stock of $30.0 million. The reduction in cash outflows was partially offset by an incremental outflow of $5.8$8.7 million from the change in uncashed checks and an increase in payments on finance lease liabilities of $2.5 million.liabilities.

Management considers adjusted free cash flow, a non-GAAP measure, to be a measure of liquidity that provides useful information to management, creditors and investors about our financial strength and our ability to generate cash. Additionally, adjusted free cash flow is a metric on which a portion of management incentive compensation is based. We define adjusted free cash flow as net cash from operating activities, less additions to property, plant and equipment, plus proceeds from sales or disposals of fixed assets. When necessary, management adjusts for the cash impact of items derived from non-operating activities. Additionally, adjusted free cash flow excludes significant one-time growth investments, as they are not indicative of free cash flow generation for the current period. For 2026, these significant strategic growth investments include current year spend on (i) the multi-year construction of a Solvent De-Asphalting unit, or SDA, adjacent to our East Chicago, Indiana re-refineryre-refinery, and current year spend on(ii) our multi-year vacuum truck fleet expansion project.project and (iii) our multi-year investment in specialty assets to support our data center market offering. We expect to spend approximately $85 million, $25 million and $25$10 million, respectively, in 2026 for these projects from which we expect to realize future long-term benefits. In 2025, significant strategic growth investments included spend on the SDA project and the acquisition and build out of a hub facility in Phoenix, Arizona, which we refer to as our Phoenix Hub. No amounts were spent on these projects in the first quarter of 2025, but spending did occur later in 2025. Adjusted free cash flow should not be considered an alternative to net cash from operating activities or other measurements under GAAP. Adjusted free cash flow is not calculated identically by all companies, and thereforetherefore, our measurements of adjusted free cash flow may not be comparable to similarly titled measures reported by other companies.

(1) Includes $12.4$17.8 million and $2.4$17.5 million of capital investments in the SDA unit and fleet expansion project, respectively, during the threesix months ended MarchJune 31,30, 2026.2026, and $12.4 million of capital investments in the Phoenix Hub during the six months ended June 30, 2025.

At MarchJune 31,30, 2026, cash and cash equivalents and marketable securities totaled $669.0$516.7 million, comparedwhich to $953.7 million at December 31, 2025. At March 31, 2026,includes cash and cash equivalents held by our Canadian subsidiaries totaled $207.7 million. The cash and cash equivalents and marketable securities balance for our U.S. operations wasof $461.3$402.0 million atin Marchaddition 31,to 2026.$114.7 million held by our Canadian subsidiaries. Our U.S. operations had net operating cash inflowsflows of $14.3$261.0 million for the threesix months ended MarchJune 31,30, 2026.

WeIn addition to our cash balances, we maintain a $600.0 million revolving credit facility, of which, as of MarchJune 31,30, 2026, approximately $454.7$460.8 million was available to borrow under the facility, with letters of credit of $145.3$139.2 million outstanding.

Capital expenditures during the first threesix months of 2026 were $98.4$224.6 million, including the investments in strategic growth investments outlined in the table below.million. We anticipate 2026 capital spending, net of disposals, will be in the range of $460.0$490.0 million to $520.0$550.0 million.million, This range also includesincluding the strategic growth investment spend in 2026 outlined in the table below. We’ve increased this range during the second quarter of 2026 to account for additional investments for key market opportunities.

The following table summarizes our current key strategic growth investments, including: 2025 andfull-year expenditures, 2026 expenditures through MarchJune 31,30, 20252026, total 2026 expected expenditures, expected full project cost and Marchexpected 31,completion 2026, respectivelydate:

The twothree strategic growth investments outlined in the table above are considered projects from which we expect to realize future long-term benefits once placed in service. These are incremental to the capital expenditures needed to maintain current operations.

As of MarchJune 31,30, 2026, our financing arrangements included (i) $1.3 billion of secured senior term loans due 2032, (ii) $300.0 million of 5.125% unsecured senior notes due 2029, (iii) $500.0 million of 6.375% unsecured senior notes due 2031, and (iv) $745.0 million of 5.750% unsecured senior notes due 2033. As noted above, we also maintain our $600.0 million revolving credit facility with no amountsloans owedoutstanding as of MarchJune 31,30, 2026.

As of MarchJune 31,30, 2026, we were in compliance with the covenants of all of our debt agreements, and we believe we will continue to meet such covenants.

During the three and six months ended MarchJune 31,30, 2026 and March 31, 2025,2026, we repurchased and retired 87,16684,023 and 256,473171,189 shares, respectively, of our common stock for total expenditures of $25.0 million and $55.0$50.0 million, respectively. During the three and six months ended June 30, 2025, we repurchased and retired 61,657 and 318,130 shares, respectively, of our common stock for total expenditures of $11.8 million and $66.8 million, respectively. On February 18, 2026, our Board of Directors authorized a $350.0 million expansion of our share repurchase program. As of MarchJune 31,30, 2026, an additional $574.4$549.4 million remained available for the repurchase of shares.

Total environmental liabilities as of MarchJune 31,30, 2026 were $229.5$230.8 million, arelatively decreaseflat to the balance as of $1.2 million compared to December 31, 2025. DuringDespite theremaining threerelatively months ended March 31, 2026,consistent, the environmental liability balance increased $7.0 million from accretion and $2.1 million from new environmental liabilities and decreased due to expenditures of $4.1$7.1 million and reductions in environmental liability estimates of $1.4$1.7 million. These decreases were partially offset by accretion of $3.5 million and new environmental liabilities of $0.9 million.

We obtain standby letters of credit as security for financial assurances we have been required to provide to regulatory bodies for our hazardous waste facilities and which would be called only in the event that we fail to satisfy closure, post-closure and other obligations under the permits issued by those regulatory bodies for such licensed facilities. As of MarchJune 31,30, 2026, therewe were $145.3 millionhad outstanding letters of credit.credit totaling $139.2 million. See Note 11, “Financing Arrangements,” to the accompanying unaudited consolidated financial statements.

In the first threesix months of 2026, there were no material changes to the information provided under the heading “Critical Accounting Estimates” included in our Annual Report on Form 10-K for the year ended December 31, 2025. For more information regarding our accounting policies, please refer to Note 2, “Significant Accounting Policies” to the accompanying unaudited consolidated financial statements.