What changed in this filing

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Item 1. Business

2022-02-23 compared with 2021-02-24 · 216 added, 158 removed, 346 unchanged (52% of the section changed)

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One of our primary goals as a company is supporting our customers in providing environmentally responsible solutions to further their sustainability goals in today's world.

We have two operating segments ;

(i) the Environmental Services segment and (ii) the Safety-Kleen segment.

• Environmental Services - Environmental Services segment results are predicated upon the demand by our customers for waste services directly attributable to waste volumes generated by them and project work for which waste handling and/or disposal is required.

In managing the business and evaluating performance, management tracks the volumes and mix of waste handled and disposed of through our incinerators, treatment, storage and disposal facilities ("TSDFs") and landfills, as well as utilization of such incinerators, labor and billable hours and equipment among other key metrics.

During the first quarter of 2021, we reorganized our Safety-Kleen business.

The collection services for waste oil, used oil filters, antifreeze and related items as well as bulk blended oil sales operations were combined with the Safety-Kleen Oil business to form the Safety-Kleen Sustainability Solutions business.

Under this structure, Safety-Kleen Sustainability Solutions operations focus on the life-cycle of oil, from the used oil collection services through the ultimate sale and delivery of base and blended oils so that we can more directly manage both sides of the spread in our re-refinery business.

We expect this change to continue to drive additional growth in our sustainable lubricant products and related services.

Concurrently with this change, we consolidated the Safety-Kleen branches' core service offerings, including containerized waste, parts washer and vacuum services, into the legacy Clean Harbors Environmental Services sales and service operations.

We believe this change fosters enhanced cross-selling opportunities within the environmental businesses and increases market presence with small quantity generators of hazardous waste.

In restructuring the operations of the Company in this manner, the information that the chief operating decision maker regularly reviews for purposes of allocating resources and assessing performance was changed to conform to this new operating structure of the business.

As a result, we reevaluated the identification of our operating segments and concluded that, starting in the first quarter of 2021, we now have two operating segments:

(i) the Environmental Services Segment and (ii) the Safety-Kleen Sustainability Solutions Segment.

• Environmental Services - Environmental Services segment results are predicated upon the demand by our customers for waste services, waste volumes generated by such services and project work for which waste handling and/or disposal is required.

Environmental Services results are also impacted by the demand for planned and unplanned industrial related cleaning and maintenance services at customer sites, environmental cleanup services on a scheduled or emergency basis, including response to national events such as major chemical spills, natural disasters, or other events where immediate and specialized services are required.

As a result of the Coronavirus ("COVID-19") pandemic, the business has seen increased demand for response services relative to contagion disinfection, decontamination and disposal.

With the addition of the Safety-Kleen branches' core service offerings, including containerized waste disposal, parts washer and vacuum services, the Environmental Services results are further 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, treatment, storage and disposal facilities ("TSDFs") and landfills, the utilization rates of our incinerators, equipment and workforce, including billable hours, and number of parts washer services performed, among other key

Levels of activity and ultimate performance associated with this segment can be impacted by several factors including overall U.S.

industrial production, weather conditions, efficiency of our operations, technology, changing regulations, competition, market pricing of our services and the management of our related operating costs.

Environmental Services results are also impacted by the demand for planned and unplanned industrial related cleaning and maintenance services at customer sites and for environmental cleanup services on a scheduled or emergency basis, including response to national events such as major chemical spills, natural disasters or other events where immediate and specialized services are required.

As a result of the recent coronavirus ("COVID-19") pandemic, the business has also seen increased demand for contagion disinfection, decontamination and disposal response services.

• Safety-Kleen - Safety-Kleen segment results are impacted by an array of core service and product offerings that serve to attract small quantity waste producers as customers and integrate them into the Clean Harbors waste network.

Core service offerings include parts washer services, containerized waste services, vac services, used motor oil collection and contract blending and packaging services.

Key performance indicators tracked by the Company relative to these services include the number of parts washers placed and services performed and pricing and volume of used motor oil and waste collected.

Results from these services are primarily driven by the overall number of parts washers placed and services performed at customer sites and volumes of waste collected, as well as the demand for and frequency of other offered services.

These factors can be impacted by overall economic conditions in the marketplace, especially in the automotive and manufacturing related areas.

Both the overall market price of oil and regulations that change the number of potential outlets for used motor oil, including the International Maritime Organization's 2020 regulation, impact the premium the segment can charge for used motor oil collections.

In addition to its core service offerings, Safety-Kleen also offers high quality, eco-friendly recycled base and blended oil products to end users including fleet

customers, distributors and manufacturers of oil products.

Other product offerings include automotive related fluids and shop supplies.

Relative to its oil related products, management tracks the Company's volumes and relative percentages of base and blended oil sales along with various pricing metrics associated with this commodity driven marketplace.

The segment’s revenues are significantly impacted by overall market pricing and product mix associated with base and blended oil products.

The segment's results are impacted by the Company's ability to manage the pricing for used oil collections with the overall market pricing for base and blended oil products.

Costs incurred in connection with the collection of used oil and other raw materials associated with the segment’s oil related products can also fluctuate.

Our OilPlus ® closed loop initiative, which results in the sale of our renewable oil products directly to our end customers, may also be impacted by changes in customer demand for high-quality, environmentally responsible recycled oil.

industrial production, economic conditions in the automotive and manufacturing markets, 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 - Safety-Kleen Sustainability Solutions segment results are impacted by our customers' demand for high-quality, environmentally responsible recycled oil products and their demand for our related service offerings and products.

Safety-Kleen Sustainability Solutions offers high quality recycled base and blended oil products to end users including fleet customers, distributors and manufacturers of oil products.

Segment results are impacted by overall demand as well as product mix as it relates to these oil products.

Segment results are also predicated on the demand for Safety-Kleen Sustainability Solutions' other product and service offerings including collection services for used oil, used oil filters and other automotive fluids.

These fluid collections are used as feedstock in our oil re-refining to make our base and blended oil products and our recycled automotive related fluid products or are integrated into the Clean Harbors' recycling and disposal network.

In operating the business and evaluating performance, management tracks the volumes and relative percentages of base and blended oil sales along with various pricing metrics associated with the commodity driven margin.

Management also tracks the volumes and pricing of used oil and automotive fluid collections.

Levels of activity and ultimate performance associated with this segment can be impacted by economic conditions in the automotive services and manufacturing markets, efficiency of our operations, technology, weather conditions, changing regulations, competition and the management of our related operating costs.

Costs incurred in connection with the collection of used oil and other raw materials associated with the segment’s oil related products can also be volatile.

The overall market price of oil and regulations that change the possible usage of used oil, including the International Maritime Organization's 2020 regulation ("IMO 2020") and other regulations related to the burning of used motor oil as a fuel, impact the premium the segment can charge for used oil collections.

Clean Harbors, Inc.

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Through a link on this website, we provide free access to our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after electronic filing with the SEC.

Our guidelines on corporate governance, the charters for our board committees and our code of ethics for members of the board of directors, our chief executive officer and our other senior officers are also available on our website, and we will post on our website any waivers of, or amendments to, such code of ethics.

We have published our inaugural Corporate Sustainability Report, which is available at the Investor Relations section of our website under "ESG".

Our guidelines on corporate governance, the charters for our board committees, and our code of ethics for members of the board of directors, our chief executive officer and our other senior officers are available on our website.

Should it be necessary, any waivers for such policies will also be posted on our website.

Our website and the information contained therein or connected thereto are not incorporated by reference into this annual report on Form 10-K.

Acquisition of HydroChemPSC

On October 8, 2021, we acquired HydroChemPSC, a leading U.S.

provider of industrial cleaning, specialty maintenance and utility services, for a cash purchase price of approximately $1.23 billion.

The acquisition was financed with net proceeds from our concurrent issuance of $1.0 billion of senior secured term loans with the remaining purchase price being funded through existing cash.

The HydroChemPSC business serves customers across a broad range of markets and provides solutions to customers focused on cleaning, maintenance and environmental compliance of essential, mission critical equipment and infrastructure.

The acquired operations, including more than 4,500 employees, over 240 service locations and a fleet of specialized vehicles and equipment, expand our existing presence within the industrial services market and enhance the Environmental Services Segment.

We believe that the acquired business is a strategic acquisition for Clean Harbors.

As stated in Item 8, "Financial Statements and Supplementary Data," our consolidated results of operations for the year ended December 31, 2021 include $166.1 million of direct revenue and $166.4 million of expense attributable to the HydroChemPSC operations, including $12.3 million of incremental depreciation and amortization and $6.0 million of severance and integration costs.

Beyond expanding the size and scale of our operations, HydroChemPSC is an established leader in industrial services, with proprietary technology and a manufacturing center dedicated to fabricating tools aimed at reducing costs and increasing efficiency and safety.

We expect that the combined company will benefit from (i) enhanced technologies aimed at increasing safety, (ii) incremental waste volumes for processing through Clean Harbors' network of waste disposal facilities, (iii) long-established customer relationships that bring opportunities for cross selling of Clean Harbors' suite of services and (iv) synergistic opportunities within customer service, corporate functions, transportation, real estate, asset rentals and vehicle maintenance.

Health and Safety

Health and Safety is our #1 core value.

Employees at all levels of our Company share this philosophy and are committed to ensuring our safety goals are met.

Employees at all levels of our Company share this philosophy, including those joining the Company from HydroChemPSC where health and safety were also a key priority.

We are all committed to ensuring our safety goals are met.

Our commitment to health and safety benefits all of our stakeholders including our employees, our customers, the community and the environment.

We finished the eighth year of our Safety Starts with Me:

Live It 3-6-5 program, which is a key component in our overall safety approach.

This program, along with other targeted safety programs, have enabled us to maintain better safety metrics as compared to the years prior to their implementation.

Our Safety Starts with Me:

Live It 3-6-5 program is a key component in our overall safety approach.

This program, along with other targeted safety programs, have enabled us to maintain leading safety metrics.

Our key safety metrics are Total Recordable Incident Rate, or "TRIR" and Days Away, Restricted Activity and Transfer Rate, or "DART".

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Live It 3-6-5 program, which includes three Safety Philosophies, six Golden Rules of Safety and each employee’s five personal reasons why they choose to be safe at work, on the road and at home.

Our commitment to ensuring the health and safety of our employees was paramount in 2020 when reacting to COVID-19's impact on our Company and our employees.

For more detailed discussion on our corporate response to the COVID-19 pandemic, including our commitment to the health and safety of our employees, refer to " Impacts of COVID-19" under "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 of this report.

We regard compliance with applicable regulations as a critical component of our overall operations.

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Our compliance staff is responsible for the facilities' permitting and regulatory compliance, compliance training, transportation compliance and related record keeping.

To ensure the effectiveness of our regulatory compliance program, our compliance staff monitors our facilities.

To ensure the effectiveness of our regulatory compliance program, our facilities operations are monitored by our compliance staff.

Our facilities are frequently inspected and audited by regulatory agencies, as well as by customers.

Although our facilities have been cited on occasion for regulatory violations, we believe that each of our facilities is currently in substantial compliance with applicable permit requirements.

We also perform periodic audits and inspections of the disposal facilities we utilize which are owned by other companies.

Our strategy is to develop and maintain ongoing relationships with a diversified group of customers that have recurring needs for our products and services.

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• Cross-Sell Across Businesses - We believe the breadth of our service offerings allows us to provide additional services to existing and new customers in order to continually satisfy our customers' environmental and sustainability objectives.

We believe we can provide industrial and field services to customers that traditionally have only used our technical services and provide technical services to customers that use our industrial services.

At the same time, there are a variety of cross-selling opportunities between our Environmental Services and Safety-Kleen segments.

Reflecting this strategy, we have been successfully cross-selling our Environmental Services waste disposal services to our Safety-Kleen customers and cross-selling the products and services of Safety-Kleen, such as parts washers, various recycling services, cleaning products, and our OilPlus ® products through our closed loop initiative, to Environmental Services customers.

We believe leveraging our ability to cross-sell across our segments will drive additional revenue for our Company.

• Capture Large-Scale Projects - We provide turnkey offsite transportation and landfill or incineration disposal services for soil and other contaminated materials generated from remediation activities.

We also assist remediation contractors and project managers with support services including groundwater disposal, waste disposal, roll-off container management and many other related services.

We believe this will drive incremental waste volume to our existing facilities, thereby increasing utilization and enhancing overall profitability.

• Expand Throughput Capacity of Existing Facilities - We operate and have made substantial investments in an extensive network of hazardous waste management facilities and oil re-refineries, which provide us with significant operating leverage as volumes increase.

In addition, there are opportunities to expand waste handling capacity or waste oil processing at these facilities by modifying the terms of the existing permits and by adding equipment and new technology.

At the same time, there are a variety of cross-selling opportunities between our Safety-Kleen branches' core service customers and our traditional Environmental Services waste disposal customers which we hope to expand via our reorganization in the first quarter of 2021.

We believe leveraging our ability to cross-sell among and across our segments will drive additional revenue for our Company.

• Expand Network through Growth and Technology - We operate and continue to make substantial investments and technological upgrades in an extensive network of hazardous waste management facilities and oil re-refineries, which provide us with significant operating leverage as volumes increase.

We also look for opportunities to expand waste handling capacity or waste oil processing at these facilities by modifying the terms of the existing permits, improving technology or, in certain instances, significantly expanding our facilities.

For example, in 2021, we began the process of building a new incinerator at our Kimball, Nebraska facility.

This incinerator is expected to increase our annual practical capacity by approximately 70,000 tons and is designed using the same world-class air emissions control technology as our El Dorado incinerator.

Through selected permit modifications, we can expand the range of treatment services offered to our customers without the significant capital investment necessary to acquire or build new waste management facilities.

• Execute Strategic Acquisitions and Divestitures - We actively pursue selective acquisitions with certain services or market sectors where we believe the acquisitions can enhance and expand our business.

HydroChemPSC in late 2021.

We believe that we can expand existing services through strategic acquisitions in order to generate incremental revenues from existing and new customers and to obtain greater market share.

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• Focus on Cost, Pricing and Productivity Initiatives - We continually seek to increase efficiency, reduce costs through enhanced technology, process improvements and strategic expense management and price our goods and services competitively.

For instance, in 2020, we successfully undertook site consolidations and increased leverage of our employee and asset bases to reduce subcontractor, transportation and equipment rental costs.

Additionally, we seek to identify areas in our business where strategic investments in automation, process improvements, tools and employees can serve to increase productivity, efficiency and safety compliance.

• Expand Geographic Coverage of Service Offerings - We believe our Environmental Services and Safety-Kleen segments have a competitive advantage due to their vast network of locations across North America, particularly in areas where we maintain service locations at or near a TSDF.

• Expand Geographic Coverage of Service Offerings - We believe our Environmental Services and Safety-Kleen Sustainability Solutions segments have a competitive advantage due to their vast network of locations across North America, particularly in areas where we maintain service locations at or near a TSDF and our expansive truck and rail transportation network.

By opening additional service locations in strategic locations, we believe that we can increase our market share within these segments, which will drive additional waste into our network of facilities and increase overall profitability.

Our centrally managed transportation network allows us to provide cost effective transportation throughout our customer base.

In addition, our management team continues to assess the competitive landscape in order to identify new business opportunities.

• Capture Large-Scale Projects - We monitor for opportunities to quickly respond to the ever changing needs of the marketplace, whether they be from external factors, like the recent need for our decontamination services, changing regulations or customers' needs for large-scale environmental remediation services.

We believe we are a national leader in emergency response services.

We provide turnkey offsite transportation and landfill or incineration disposal services for soil and other contaminated materials generated from remediation activities.

We also assist remediation contractors and project managers with support services including groundwater disposal, waste disposal, roll-off container management and many other related services.

We believe this will drive revenue growth as well as incremental waste volume to our existing facilities, thereby increasing utilization and enhancing overall profitability.

Acquisitions and Divestitures

Acquisitions are an element of our business strategy that involve expansion through the purchase of businesses that complement our existing Company and create opportunities for profitable growth.

In 2021, in addition to the acquisition of HydroChemPSC discussed above, we also acquired a privately-owned business for a purchase price of $22.8 million.

The acquisition expands the Safety-Kleen Sustainability Solutions segment's network within the south central United States.

On June 29, 2021, we signed a definitive agreement with Vertex Energy, Inc.

("Vertex") to acquire certain assets related to Vertex's used motor oil collection and re-refinery business.

On January 25, 2022, the parties mutually agreed to terminate the planned acquisition.

In connection with the early termination, Vertex paid us a breakup fee of $3.0 million in 2022.

In 2020, we acquired a privately-owned business for a purchase price of $8.8 million.

The acquisition expands the Safety-Kleen segment's oil re-refining operations to the northeast United States.

The acquisition expands the Safety-Kleen Sustainability Solutions segment's oil re-refining operations to the northeast United States.

In 2019, we acquired two privately-owned businesses for a combined purchase price of $25.2 million.

One acquisition expands the environmental services and hazardous materials management services of the Environmental Services segment while the second complements the Safety-Kleen segment's core service offerings, such as used motor oil collection, parts washers, oil filter recycling and vacuum services.

In 2018, we acquired the U.S.

Industrial Cleaning Business of Veolia Environmental Services North America LLC (the "Veolia Business") as well as a privately-owned company for a combined purchase price of $151.2 million.

The acquisitions provide significant scale and industrial services capabilities, while increasing the size of our existing U.S.

Industrial Services business.

The acquisitions were financed with cash on hand.

The Veolia Business is included in our Environmental Services segment while the privately-owned company has components included in both the Environmental Services and Safety-Kleen segments.

One acquisition expands the environmental services and hazardous materials management services of the Environmental Services segment while the second has components included in both the Environmental Services and Safety-Kleen Sustainability Solutions segments.

For additional information relating to our acquisition activities during 2021, 2020 and 2019, see Note 4, "Business Combinations," to our consolidated financial statements included in Item 8 of this report.

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Clean Harbors recognizes that sustainability stewardship is a core aspect of our brand and an important part of our responsibility in protecting generations to come through balancing environmental, economic and social concerns.

Sustainability is not only about doing less to harm the earth or consuming less resources, it is also about doing more good and minimizing the cumulative impact of other companies.

Sustainability

is not only about doing less to harm the earth or consuming less resources, it is also about doing more good and minimizing the cumulative impact of other companies.

Our core business is to provide industry, government and the public a wide range of sustainable solutions that protect and restore North America's natural environment.

Our sustainability program expands our commitment beyond our services and products to include our operations, employees and community.

The program focuses on the following key strategies:

We communicate our sustainability activities and progress across various channels.

In February 2021, we issued our inaugural Sustainability Report aligned to the Sustainability Accounting Standards Board framework.

A copy of this report can be found at our website.

We also have requirements for periodic regulatory reporting to the Environmental Protection Agency ("EPA") and other agencies that are available to the public.

We voluntarily provide data to various sustainability reporting organizations, many of which provide subscribers and the public with their rankings or scorecards of companies based on a combination of public and private information.

We utilize these formal reporting platforms to inform customers and other stakeholders of our sustainability efforts and we have been pleased to see our efforts to improve the reporting of our sustainable business practices reflected in improved scores from various rating organizations.

The improvement in our scores/ranking has been significant over the past few years.

For example, in 2021 we received a bronze rating from EcoVadis, a rating agency specialized in assessing environmental performance and corporate social responsibility.

We have also improved each of the Environmental, Social and Governance scores that the Institutional Shareholder Services Inc.

("ISS") publishes.

As of the end of 2021, our ISS Social score has improved eight points since 2018, with the ISS Governance and ISS Environmental scores improving two and three points, respectively.

While we are proud of the improvements in third-party scoring and rankings, the focus of our program is on tangible improvements that positively impact the environment, our community and our employees.

Our overall sustainability program expands our commitment beyond our services and products to include our operations, employees and community.

The program focuses on the following key elements:

Health and Safety

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Our programs and procedures focus on delivering services with unparalleled safety to our employees, our customers, local communities and other key stakeholders.

Eight of our U.S.

Seven of our U.S.

sites have been recognized by the U.S.

Occupational Safety & Health Administration’s Voluntary Protection Program ("VPP") for their effective safety management systems and low injury and illness rates.

To put that in context, only approximately 2,100 workplaces in the U.S.

have earned VPP recognition.

We are committed to fundamental human rights principles.

To put this accomplishment in context, less than 0.1% of the eight million U.S.

workplaces have earned this elite VPP recognition.

We are committed to fundamental human rights principles and we have a comprehensive Humans Rights Policy to formalize the standards to which we hold ourselves and others accountable.

Respect for human rights is essential to our interactions with employees, customers, shareholders and the public at large.

In 2020, we published a comprehensive Human Rights Policy to formalize the standards to which we hold ourselves and others accountable.

Operations/ Customer Solutions

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Clean Air Act.

In 2021, we commenced the permitting and planning for a new hazardous waste incinerator at our Kimball, Nebraska facility, which will also be built to these high standards.

When providing these services, we are committed to the recycling, reuse and reclamation of these waste streams whenever possible using a variety of methods more fully explained below in the sections describing our general operations.

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By collecting used motor oil from customers and delivering new re-refined oil products, customers are implementing a closed-loop process for sustainability in the oil industry.

Environmental regulations prohibit the disposal of oil in sewers or landfills as improper disposal can lead to widespread environmental problems.

Our re-refining process extends the life of crude oil resources, reduces the likelihood of improper oil disposal and is energy efficient as, per the Department of Energy, it can take less energy to recycle used oil than to create new lubricating oil from virgin crude oil.

As our customers

respond to the consumer and investor focus on environmental and socially responsible practices, we expect that the use of our re-refined oil products will be one component of their ESG story.

We deploy our fleet of trucks, tankers, rail-cars and barges to collect used oil.

In 2020, we gathered nearly 200 million gallons of used oil in North America and our state-of-the-art processes enable us to fully realize oils' remarkable capacity to be recycled, re-refined and reused.

Our plants have re-refined more than 3.9 billion gallons of used oil since their opening, allowing such oils to have a second life as high quality recycled lubricants and avoiding more than an estimated 30.3 million metric tons of greenhouse gases.

In 2021, we gathered more than 226 million gallons of used oil in North America and our state-of-the-art processes enable us to fully realize oils' remarkable capacity to be recycled, re-refined and reused.

Our plants have re-refined more than 4.1 billion gallons of used oil since their opening, allowing such oils to have a second life as high quality recycled lubricants and avoiding an estimated 32.1 million metric tons of greenhouse gases.

This closed loop process, for oil and other sustainable lubricant products, is the main focus of our new Safety-Kleen Sustainability Solutions segment.

Clean Harbors instills sustainability within its operations through continuous improvements and well-defined strategic initiatives that show the highest positive impact on the environment, the communities and the economy in which we work and live.

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Our Asset Refurbishment Program is a comprehensive effort to rebuild key vehicles to "like new" quality while reusing or recycling as much of the material as possible.

Our goal is to refurbish approximately 100 highly technical vehicles used in our operations, like vacuum trucks, industrial air movers and waste oil trucks, every year.

Similarly, we refurbish and place back into service thousands of parts washers and parts washer components each year, allowing us to extend the life of our parts washers and avoid disposing of over 500 tons of metals and plastics annually.

Our goal every year is to refurbish approximately 100 highly technical vehicles used in our operations, like vacuum trucks, industrial air movers and waste oil trucks.

We also have a field repair/refurbishment program for our parts washers.

In 2021, we repaired or refurbished approximately 8,500 parts washers in the field, saving transportation to our refurbishment facility.

Parts washers that required repairs or refurbishment beyond what could be accomplished in the field were returned to our refurbishment facility.

We were able to recondition the majority of these machines and salvaged the components from any machines that were beyond reconditioning.

These operations at our refurbishment facility avoid disposing of about 500 tons of metals and plastics annually.

Environmental Commitment

One of the Company’s sustainability goals is to contribute to a cleaner environment by maximizing energy and water conservation across the organization.

One of the Company’s sustainability goals is to contribute to a cleaner environment by maximizing energy and water conservation across our organization.

Energy usage at our facilities is the focus of our Facility Energy Conservation program, which provides ongoing oversight and recommendations to our facilities to help support their electricity management efforts.

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As part of our commitment to protecting the environment, we have made the conscious decision to reduce our water usage.

In 2021, we plan to implement a process to obtain a baseline of water usage so that we may make quantifiable reductions in the future.

In 2022, we will improve our water usage as part of our commitment to baseline key environmental metrics while planning for quantifiable reductions in the future.

All of these items above exemplify how we, as a company, are working to minimize our footprint on the environment;

however, our environmental commitment extends beyond our internal focus to how we can help other companies minimize their environmental footprint and achieve their sustainability goals.

The core of our operations is to provide our customers with environmentally responsible solutions, whether they be our commitment to environmentally conscious services and waste disposal or our re-refined oil offerings.

We believe in holding ourselves to high standards for sustainability and human rights practices and have taken efforts to drive sustainable practices through rigorous supply chain oversight.

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We are dedicated to being a good neighbor in the communities in which we work.

When warranted, we utilize formal reporting platforms to inform customers and other stakeholders of our sustainability efforts, including CDP, EcoVadis and SP Global, among others.

We develop partnerships with key environmental programs to build awareness, while fostering more sustainable business practices.

One of our most highly visible public programs for various government and community entities is known as our Home Hazardous Waste service line.

Communities trust us to collect paints, solvents, batteries, fluorescent lamps, pesticides, cleaners and other hazardous materials that otherwise might be improperly disposed of or become dangerous to the communities where they are stored.

One of our most highly visible public programs for various government and community entities is known as our Household Hazardous Waste service line.

Communities trust us to collect paints, solvents,

batteries, fluorescent lamps, pesticides, cleaners and other hazardous materials that otherwise might be improperly disposed of or become dangerous to the communities where they are stored.

Our commitment and our business go hand in hand as we work to provide services and products that complement our customers' sustainability plans and hold ourselves and others accountable to environmental, social and corporate governance standards and best practices.

Competitive Strengths

• Leading Provider of Environmental and Industrial Services - We are a leading provider of environmental and industrial services.

• Leading Provider of Environmental and Industrial Services - We are a leading provider of environmental and industrial services which provide solutions that help our customers protect the environment.

We own nine commercial hazardous waste incinerators, making us the largest operator of such facilities in North America.

We are also one of the few industrial services companies with national footprints in both the U.S.

We have a highly skilled workforce that is trained to safely respond to customer needs across a variety of service lines.

We provide multi-faceted, high-quality services to a broad mix of customers.

Our vast capabilities, valuable and unique assets and breadth of services as well as our overall size, scale and geographic locations help us attract customers and provide environmentally responsible solutions.

Our vast capabilities, valuable and unique assets, skilled workforce, safety profile and breadth of services as well as our overall size, scale and geographic locations help us attract customers and provide environmentally responsible solutions for our customers.

• Integrated Network of Assets - We believe we operate, in the aggregate, the largest number of commercial hazardous waste incinerators, landfills, treatment facilities and TSDFs in North America.

Our broad service network enables us to effectively handle a waste stream from its origin through disposal and to efficiently internalize our waste streams to reduce costs.

We also have a significant fleet across a vast transportation network throughout the U.S.

Our broad service network enables us to effectively handle a waste stream from its origin through disposal and to efficiently internalize our waste streams and transportation to reduce costs.

Our size allows us to leverage our network and increase our profit margins as we can internalize a greater volume of waste in our incinerators, landfills and other disposal facilities.

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As such, these high barriers of entry provide increased value to our network.

• Comprehensive Service Capabilities - Our comprehensive service offerings allow us to act as a full-service provider to our customers.

Our breadth of service offerings creates incremental revenue growth as customers seek to minimize the number of outside vendors utilized and demand "one-stop-shop" service providers.

• Comprehensive Service Capabilities Complementing our Customers Sustainability Goals - Our comprehensive service offerings and product catalog allow us to act as a full service provider of sustainable options for our customers' needs.

Not only can our customers rely on Clean Harbors to be part of their sustainability plan, but they can minimize the number of outside vendors utilized and rely on us as "one stop shop" service provider.

Our breadth of service offerings creates incremental revenue growth with no one competitor having the portfolio of services that we can provide to our customers.

Our workforce is trained to swiftly pivot to fulfill customer needs should markets change or demand shift and our complementary lines of business help keep us steady in turbulent times.

• Largest Collector and Recycler of Used Motor Oil - As the largest re-refiner and recycler of used oil in North America, during 2021 and 2020, we returned approximately 196 million and 166 million gallons, respectively, of new re-refined oil, lubricants and byproducts back into the marketplace.

In 2021 and 2020, our re-refining process eliminated more than an estimated 2.1 million and 1.7 million metric tons, respectively, of greenhouse gas ("GHG").

For 2020 alone, the estimated GHG's eliminated as a result of our re-refining process has the net carbon benefit equivalent to growing approximately 30 million trees for 10 years in an urban environment or taking over 387,000 passenger cars off the road for one year.

• Effective Cost Management - Our significant scale allows us to maintain low costs through standardized compliance procedures, significant purchasing power, leveraging our investment in technology and our ability to efficiently utilize logistics and transportation to economically direct waste streams to the most efficient facility.

For 2021 alone, the estimated GHG's eliminated as a result of our re-refining process has the net carbon benefit equivalent to growing approximately 35 million trees for 10 years or taking over 457,000 passenger cars off the road for one year.

• Effective Cost Management - In these times of cost increases due to significant inflationary pressures, we have focused our cost management in order to maintain our overall margins.

Our significant scale allows us to maintain low costs through standardized compliance procedures and significant purchasing power.

Leveraging our investment in technology and our ability to efficiently utilize logistics and transportation, we can economically direct waste streams to the most efficient facility.

We also have the ability to use internal resources to transport and process the substantial majority of all hazardous waste that we manage for our customers.

As evidenced in our 2020 results, we reduced subcontractor, outside transportation and third-party disposal costs by leveraging our employee and asset bases.

In addition, our Safety-Kleen results are significantly impacted by the overall market pricing and product mix associated with base and blended oil products.

We charge fees related to our used oil collection services which allow us to effectively manage the profit spreads inherent in our Safety-Kleen business.

• Large and Diversified Customer Base - Our customers range from small companies to Fortune 500 companies and include public and private entities that span multiple industries and business types, including government entities.

This diversification limits our credit exposure to any one customer and potential cyclicality in any one industry.

As a percentage of our 2020 revenues, the top ten industries we serviced totaled approximately 76% of 2020 revenues and included general manufacturing (17%), chemical (15%), automotive (9%), refineries (8%), base and blended oils (6%), government (5%), transportation (5%), utilities (4%), brokers (4%) and construction (3%).

In addition, our Safety-Kleen Sustainability Solutions segment results are significantly impacted by the overall market pricing and product mix associated with base and blended oil products.

We manage the pricing on our used oil collection services which allow us to effectively manage the profit spreads inherent in our Safety-Kleen Sustainability Solutions business.

• Large and Diversified Customer Base - Our customer portfolio ranges from small companies to Fortune 500 companies and include public and private entities that span multiple industries and business types, including some government entities.

This diversification opens opportunities for cross-selling our large portfolio of services and limits our credit exposure to any one customer and potential cyclicality in any one industry.

As a percentage of our 2021 revenues, the top ten industries we serviced totaled approximately 79% of revenues and included chemical (16%), general manufacturing (16%), base and blended oils (9%), refineries (9%), automotive (8%), government (6%), utilities (5%), transportation (4%), retail (3%) and construction (3%).

• Stable and Recurring Revenue Base - We have long-standing relationships with our large customers, many of whom have worked with our Company for decades.

We will also benefit from the long-standing customer relationships that HydroChemPSC will bring to our business, including many instances where HydroChemPSC operations are embedded in a customer facility (insite locations).

Our diversified customer base provides stable and recurring revenues, as a significant portion of our revenues are derived from previously served customers with recurring needs for our services.

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• Regulatory Compliance - We continue to make capital investments in our facilities to ensure that they are in compliance with current federal, state, provincial and local regulations.

Companies that rely on in-house disposal may

find the current regulatory requirements to be too capital intensive or complicated, and may choose to outsource many of their hazardous waste disposal needs.

Companies that rely on in-house disposal may find the current regulatory requirements to be too capital intensive or complicated, and may choose to outsource many of their hazardous waste disposal needs.

• Proven and Experienced Management Team - Our executive management team provides depth and continuity.

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Our Chief Executive Officer founded our Company in 1980 and, since the Company's formation, has served as both the Chief Executive Officer and Chairman of the Board.

This team has the depth of knowledge of both the industry and our operations to be able to quickly pivot in times of change and identify and respond to new market demands.

Environmental Services

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Our CleanPack ® services include the collection, identification, categorization, specialized packaging, transportation and disposal of laboratory chemicals and household hazardous waste.

We also perform a wide range of industrial maintenance and specialty industrial services and utilize specialty equipment and resources to perform field services at any chosen location on a planned or emergency response basis.

We perform a wide range of industrial maintenance and specialty industrial services and utilize specialty equipment and resources to perform field services at any chosen location on a planned or emergency response basis.

We also collect containerized waste and provide parts washer and vacuum services to small quantity generators of hazardous waste.

All of these services are designed to protect the environment and address environmental related challenges through the use of innovation and the latest technologies.

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By leveraging Clean Harbors' expertise and capabilities, our on-site staff are dedicated to developing the safest, most cost-effective and sustainable solutions to service customers’ needs.

Collection, Transportation and Logistics Management.

As an integral part of our services, we collect industrial waste from customers and transport such waste to and between our facilities for treatment or bulking for shipment to final disposal locations.

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In providing this service, we utilize a variety of specially designed and constructed tank trucks and semi-trailers as well as third-party transporters, including railroads.

Treatment and Disposal.

We recycle, treat and dispose of hazardous and non-hazardous industrial waste.

The waste handled includes substances which are classified as "hazardous" because of their corrosive, ignitable, infectious, reactive or toxic properties and other substances subject to federal, state and provincial environmental regulation.

We provide final treatment and disposal services designed to manage waste which cannot be otherwise economically recycled or reused.

We provide final treatment and disposal services

designed to manage waste which cannot be otherwise economically recycled or reused.

The waste that we handle comes in solid, sludge, liquid and gas form.

We operate a network of TSDFs that collect, temporarily store and/or consolidate compatible waste streams for more efficient transportation to final recycling, treatment or disposal destinations.

These facilities hold special permits, such as Part B permits under the Resource Conservation and Recovery Act ("RCRA") in the United States, which allow them to process, transfer and dispose of waste through various technologies including recycling, incineration, landfill and wastewater treatment depending on each location's permitted and constructed capabilities.

Resource Recovery and Fuel Blending.

We operate recycling systems for the reclamation and reuse of certain waste, particularly solvent-based waste generated by industrial cleaning operations, metal finishing and other manufacturing processes.

Resource recovery involves the treatment of waste using various methods, which effectively remove contaminants from the original material to restore its fitness for its intended purpose and to reduce the volume of waste requiring disposal.

We also operate a recycling facility that recycles refinery waste and spent catalyst.

The recycled oil and catalysts, depending on market conditions, are sold to third parties.

Incineration.

Incineration is the preferred method for the treatment of organic hazardous waste because it effectively destroys the contaminants at high temperatures.

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As of December 31, 2021, we had nine active incinerators operating in five incinerator facilities that offer a wide range of technological capabilities to customers.

In the United States, we operate a fluidized bed thermal oxidation unit for maximum destruction efficiency of hazardous waste with an estimated annual practical capacity of 58,808 tons and three solids and liquids capable incinerator facilities with a combined estimated annual practical capacity of 377,387 tons.

In the United States, we operate one fluidized bed thermal oxidation unit for maximum destruction efficiency of hazardous waste with an estimated annual practical capacity of 58,808 tons and three solids and liquids capable incinerator facilities with a combined estimated annual practical capacity of 377,387 tons.

We also operate one hazardous waste liquid injection incinerator in Canada with total annual practical capacity of 125,526 tons.

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Our non-hazardous landfill facility is permitted to accept commercial industrial waste, including waste from demolition and construction.

Wastewater Treatment.

We operate nine wastewater treatment facilities that offer or employ a range of wastewater treatment technologies.

These wastewater treatment operations involve processing hazardous and non-hazardous waste through use of physical and chemical treatment methods.

Another waste disposal outlet in our network of facilities are our TSDFs that collect, temporarily store and/or consolidate compatible waste streams for more efficient transportation to final recycling, treatment or disposal destinations.

We also operate a recycling facility that recycles refinery waste and spent catalyst.

The recycled oil and catalysts, depending on market conditions, are sold to third parties.

Our wastewater treatment facilities process hazardous and non-hazardous waste through use of physical and chemical treatment methods.

With the acquisition of HydroChemPSC, we now have ten wastewater treatment facilities that offer or employ a range of wastewater treatment technologies.

These facilities treat a broad range of industrial liquid and semi-liquid waste containing heavy metals, organics and suspended solids.

Total Project Management.

We also provide total project management services in areas such as chemical packing, on-site waste management, remediation, compliance training and emergency spill response, while leveraging Clean Harbors' network of service centers and environmental capabilities.

Our household hazardous waste collection services provide municipalities with a partner for the collection and disposal of household paints, solvents, batteries, fluorescent lamps, pesticides, cleaners and other hazardous materials.

Field and Emergency Response Services

Our crews and equipment are dispatched on a planned or emergency basis and perform services such as confined space entry for tank cleaning, site disinfecting, decontamination and disposal, including such work for COVID-19 decontamination, large remediation projects, demolition, spill cleanup on land and water, railcar cleaning, product recovery and transfer, scarifying and media blasting, vacuum services and water treatment services.

We are also a leader in providing response services for environmental emergencies of any scale from man-made disasters such as oil spills and natural disasters such as hurricanes.

Industrial Services and Other.

We perform industrial maintenance services and specialty industrial services at refineries, mines, upgraders, chemical plants, pulp and paper mills, manufacturing and power generation facilities.

We provide these services throughout North America.

Our crews handle as-needed in-plant services to support ongoing in-plant cleaning and maintenance services, including liquid/dry vacuum, hydro-blasting, dewatering and materials processing, water and chemical hauling and steam cleaning.

We provide a variety of specialized industrial services including plant outage and turnaround services, decoking and pigging, chemical cleaning, high and ultra-high pressure water cleaning, pipeline inspection and coating services and large tank and surface impoundment cleaning.

We provide daylighting services which, through the use of specialized hydro vac equipment,

deliver safer, cleaner and more precise hydro excavation services to safely uncover highly sensitive underground targets.

Our crews also handle oilfield transport and production services supporting drilling, production and completion programs and upstream energy services, such as exploration and drilling for industrial oil and gas customers.

Our Safety-Kleen business offers an array of environmental services and complementary products to a diverse range of customers including automobile repair shops, car and truck dealers, metal fabricators, machine manufacturers, fleet maintenance shops and other automotive, industrial and retail customers.

As the largest provider of parts cleaning services in North America, Safety-Kleen offers a complete line of specially designed parts washers to customer locations and then delivers recurring service that includes machine cleaning and maintenance and disposal and replacement of clean solvent or aqueous fluids.

We also sell automotive and industrial cleaning products which include antifreeze, windshield washer fluid, degreasers, glass and floor cleaners, hand cleaners, absorbents, mats and spill kits.

Utilizing our collection network, we provide pickup and transportation of hazardous and non-hazardous containerized waste for recycling or disposal, primarily through the Clean Harbors network of recycling, treatment and disposal facilities.

We also collect used oil which serves as feedstock for our oil re-refineries discussed below, or process the oil into recycled fuel oil, or “RFO,” which is then sold to customers such as asphalt plants, industrial plants, pulp and paper companies.

The used oil is also processed into vacuum gas oil which can be further re-refined into lubricant base oils or sold directly into the marine diesel oil fuel market.

Our crews and equipment are dispatched on a planned or emergency basis and perform services such as confined space entry for tank cleaning, site disinfecting, decontamination and disposal, including such work for COVID-19 decontamination, large remediation projects, demolition, spill cleanup on land and water, railcar cleaning, hydro excavation, manhole/vault clean outs, product recovery and transfer, scarifying and media blasting, vacuum services and water treatment services.

We are also a leader in providing response services for environmental emergencies of any scale from man-made disasters such as oil spills and from natural disasters such as hurricanes.

Industrial Services

We perform industrial cleaning and maintenance services and specialty industrial services at refineries, mines, upgraders, chemical plants, pulp and paper mills, manufacturing facilities, power generation facilities and other industrial customers throughout North America.

Our industrial services crews handle services to support ongoing in-plant cleaning and maintenance services on our customers' mission critical equipment and infrastructure.

These services include liquid/dry vacuum, hydro-blasting, dewatering and materials processing, leak detection and repair, water and chemical hauling and steam cleaning.

We provide a variety of specialized industrial services including plant outage and turnaround services, specialty cleaning services including chemical cleaning and high and ultra-high pressure water cleaning, daylighting, production services and upstream energy services.

With the addition of the HydroChemPSC business into our industrial services operations, we expanded our on-site/in-plant service delivery program for industrial services and are focused on the integration of automation, technology and innovation into the industrial services operations.

Safety-Kleen Environmental Core Services

Our Safety-Kleen Environmental branches' core service offerings focus on the small quantity waste generators predominately within the automotive, industrial and retail space.

We provide containerized waste, parts-washer and vacuum services to a diverse range of customers including automobile repair shops, car and truck dealers, metal fabricators, machine manufacturers, fleet maintenance shops and other automotive, industrial and retail customers.

We provide pickup and transportation of hazardous and non-hazardous containerized waste for recycling or disposal, primarily through the Clean Harbors' network of recycling, treatment and disposal facilities.

As the largest provider of parts cleaning services in North America, we offer a complete line of specially designed parts washers to customer locations and then deliver recurring service that includes machine cleaning and maintenance and disposal and replenishment of clean solvent or aqueous fluids.

Our vacuum services remove solids, residual oily water and sludge and other fluids from customers' oil/water separators, sumps and collection tanks.

We also remove and collect waste fluids found at large and small industrial locations, including metal fabricators, auto maintenance providers and general manufacturers.

Utilizing used oil collected by Safety-Kleen branches, we manufacture, formulate, package, distribute and market high-quality lubricants.

We offer these products direct to business end-users and customers that can in turn market to retailers and end-users.

The used oil collected by Safety-Kleen's branch network is processed or re-refined to convert into a variety of products, mostly base and blended lubricating oils, and much smaller quantities of asphalt-like material, glycols and fuels.

As the largest re-refiner of used oil in North America, we can process the used oil collected through our seven re-refineries located in East Chicago, Indiana;

Safety-Kleen Sustainability Solutions

Our Safety-Kleen Sustainability Solutions business offerings span the life-cycle of oil and other sustainable lubricant products.

Our teams collect used oil which serves as feedstock for our oil re-refineries.

In 2021, we collected 226 million gallons of used oil.

We can process the used oil collected through our seven re-refineries located in East Chicago, Indiana;

Newark, California;

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and Breslau, Ontario.

In 2020, in order to respond to the reduced availability of used motor oils and reduced demand for base and blended oil products stemming from the COVID-19 pandemic, we temporarily shuttered nearly half of the total production capacity of these re-refineries.

By the end of 2020, our re-refinery production capacity had returned to mid-2019 levels.

One of the primary goals of our Safety-Kleen business is to produce and sell high-quality eco-friendly blended oils, which are created by combining our re-refined base and other base oils with performance additives in accordance with our proprietary formulations and American Petroleum Institute licenses.

At our facilities, we manufacture, formulate, package, distribute and market high-quality lubricants that provide our customers with a sustainable solution to their oil demands.

The used oil collected is processed or re-refined to convert into a variety of products, mostly base and blended lubricating oils, and much smaller quantities of asphalt-like material, glycols and fuels.

One of the primary goals of our Safety-Kleen Sustainability Solutions business is to produce and sell high-quality eco-friendly blended oils, which are created by combining our re-refined base and other base oils with performance additives in accordance with our proprietary formulations and American Petroleum Institute licenses.

Our Performance Plus ® and EcoPower ® family of products are sold to on- and off-road corporate fleets, government entities, automotive service shops and industrial plants, which are serviced through our internal distribution network, as well as an extensive United States and Canada-wide independent distributor network.

We also sell unbranded blended oils to distributors that resell them under their private label brands.

We also sell unbranded blended oils to distributors that resell them under their

private label brands.

Our OilPlus ® program consists of selling our renewable oil products directly to our end customers.

We sell the base oil that we do not blend and sell ourselves to independent blenders/packagers that use it to blend their own branded or private label oils.

With nearly 200 million gallons of used oil processed annually, we were able to return approximately 166 million gallons of new re-refined oil, lubricants and byproducts back into the marketplace in 2020.

We believe our position as the largest collector and re-refiner of used oil in North America, along with our vast service and distributions network, provide a distinct competitive advantage in our ability to provide our customers with collection and oil distribution services through our OilPlus ® closed loop program.

With 226 million gallons of used oil processed in 2021, we were able to return approximately 196.1 million gallons of new re-refined oil, lubricants and byproducts back into the marketplace helping our customers meet the growing demand for the use of sustainable products in their operations.

The used oil can also be processed into recycled fuel oil, or “RFO,” which is then sold to customers such as asphalt plants, industrial plants, pulp and paper companies.

The used oil is also processed into vacuum gas oil which can be further re-refined into lubricant base oils or sold directly into the marine diesel oil fuel market.

We also collect and either recycle or dispose of related automotive products including antifreeze and oil filters.

We sell automotive and industrial products including antifreeze recycled through our collections above, windshield washer fluid, degreasers, glass and floor cleaners, hand cleaners, absorbents, mats and spill kits.

Our operations may be affected by seasonal fluctuations primarily due to weather and budgetary cycles influencing the timing of customers' spending for products and services.

Typically during the first and fourth quarters of each year there is less demand for our products, oil collection, recycling services and environmental services due to lower customer activity levels resulting from the cold weather, particularly in Canada and the northern and midwestern regions of the United States.

Typically during the first and fourth quarters of each year there is less demand for our oil collection, recycling services and environmental services due to lower customer activity levels resulting from the cold weather, particularly in Canada and the northern and midwestern regions of the United States.

As a result, reduced volumes of waste are received at our facilities, higher operating costs are realized due to sub-freezing weather and high levels of snowfall and lower volumes of used oil are generated for our collection.

Customer factory closings for year-end holidays also contribute to reduced waste volumes in our network of facilities during this time.

Customer factory closings for year-end holidays can also contribute to reduced waste volumes in our network of facilities during this time.

In 2021, for various macroeconomic reasons, the effects of seasonality were not as apparent as they have been in prior years.

That said, we do anticipate that we may see these seasonal trends again in the future.

Geographical Information

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For the year ended December 31, 2020, we generated $2,706.9 million or 86.1% of our direct revenues in the United States and $437.2 million or 13.9% of our direct revenues in Canada.

For additional information about the geographical areas from which our direct revenues are derived and in which our assets are located, see Note 3, "Revenues," and Note 19, "Segment Reporting," respectively, to our consolidated financial statements included in Item 8 of this report.

For additional information about the geographical areas from which our revenues are derived and in which our assets are located, see Note 3, "Revenues," and Note 19, "Segment Reporting," respectively, to our consolidated financial statements included in Item 8 of this report.

Competitive Markets

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We believe that our technical proficiency, safety record, customer service oriented culture and overall reputation are important considerations to our customers in selecting and continuing to utilize our services.

We also believe that the depth of our recycling, treatment and disposal capabilities, our ability to collect and transport waste products efficiently and our pricing are additional significant factors in the market for treatment and disposal services.

We also believe that the depth of our recycling, treatment and disposal capabilities, our ability to collect and transport waste materials efficiently and our pricing are additional significant differentiating factors which create an advantage for us in the market for treatment and disposal services.

Competition within our Environmental Services segment varies by locality and type of service rendered.

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We believe the availability of skilled, technical and professional personnel, quality of performance, diversity of services, safety record, quality of assets and use of current technologies, as well as price, are the key competitive factors in this service industry.

• For our industrial, field and emergency response services, competitors vary by locality and by type of service rendered, with competition coming from national and regional service providers and hundreds of privately-owned firms that offer industrial services.

Envirosystems and HydroChemPSC in the United States, and CEDA International Corporation and Tervita in Canada, are the principal national firms with which we compete for this work.

Each of these competitors is able to provide one or more of the industrial and field services we offer.

For our industrial, field emergency response and Safety-Kleen branches' core services, competitors vary by locality and by type of service rendered, with competition coming from national and regional service providers and hundreds of privately-owned firms that offer similar services.

Envirosystems and Heritage-Crystal Clean in the United States, and CEDA International Corporation and Secure Energy Services in Canada, are the principal national firms with which we compete for this work.

There are also several regional and local firms with which we compete.

Each of these

competitors is able to provide one or more of the industrial and field services we offer.

We believe the availability of specialized equipment and latest technologies, skilled, technical, and professional personnel, quality of performance, diversity of services, safety record and price are the key competitive factors in this industry.

For our Safety-Kleen segment, competitors vary by locality and by type of services rendered, with competition coming from Heritage-Crystal Clean, along with several regional and local firms.

We believe that geographic coverage, pricing and breadth of services and products are key competitive factors in this industry.

For our Safety-Kleen Sustainability Solutions segment, competitors vary by locality and by type of services rendered, with competition coming from Heritage-Crystal Clean, along with many regional and local firms.

We believe that geographic coverage, pricing and breadth of services and products, including our ability to produce high quality sustainable lubricants from the used motor oil we collected, are key competitive factors in this industry.

With our Safety-Kleen Oil Plus ® closed loop offering, we are competing in certain markets with other North American lubricant distributors.

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In response to the needs of our business, we also employ temporary and part time employees.

As of December 31, 2020, the total of all active employees was nearly 14,000.

As of December 31, 2021, the total of all active employees was approximately 19,100, including over 3,600 previous HydroChemPSC employees.

Our human capital objectives focus on the health and safety of our employees, employee development and training and compensation and benefits.

Key metrics that management uses to measure these objectives include TRIR and voluntary turnover rates, both of which are monitored at all levels of the organization.

We believe that our relationship with our employees is positive and we engage with our employees through an annual employee engagement survey, and other mechanisms, to continue the development of these relationships.

Key metrics that management uses to measure these objectives include TRIR, voluntary turnover rates and time to job ready, all of which are monitored at all levels of the organization.

We believe that our relationship with our employees is positive and we engage with our employees through periodic employee engagement surveys, and other mechanisms, to continue the development of these relationships.

As part of our commitment to employee safety and quality customer service, we have an extensive compliance program and trained environmental, health and safety staff.

We continually

strive to invest in our employees through training programs as well as competitive compensation and benefit programs, including matching employee contributions towards retirement savings plans and covering annual healthcare cost increases.

We continually strive to invest in our employees through training programs, including training specifically aimed at workplace safety and cyber-security.

We provide the training and licensing necessary to maintain a skilled and experienced workforce.

We also provide competitive compensation and benefit programs, including matching employee contributions towards retirement savings plans and covering annual healthcare cost increases.

We have invested significantly in the development of proprietary technologies and also to establish and maintain an extensive knowledge of leading technologies.

We incorporate these technologies into the services we offer and provide to our customers.

For example, our internally developed proprietary software system, Waste Information Network, electronically tracks each step taken by any particular load of waste in our business.

The acquisition of HydroChemPSC increased this portfolio of leading technologies and innovation, specifically in the industrial services business.

We incorporate these technologies into the services we offer and provide to our customers to enhance the service, reduce the time and/or increase the safety of such services.

For example, our internally developed proprietary software system, Waste Information Network, electronically tracks each step taken by any particular load of waste in our business, allowing customers assurance and transparency into their waste disposal.

As of December 31, 2021, we held a total of 55 U.S.

and 8 foreign issued or granted patents (which will expire between 2021 and 2031), two foreign pending patent applications and 91 U.S.

and 18 foreign issued or granted patents (which will expire between 2022 and 2031), one foreign and three U.S.

pending patent applications and 108 U.S.

and 57 foreign trademark registrations.

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We believe that we hold adequate rights to all intellectual property used in our business and that we do not infringe upon any intellectual property rights held by other parties.

We must obtain and maintain permits and licenses for transportation and industrial needs in both Environmental Services and Safety-Kleen.

We must obtain and maintain permits and licenses for transportation and industrial needs in both Environmental Services and Safety-Kleen Sustainability Solutions.

We are required to obtain federal, state, provincial and local permits or approvals for each of our hazardous waste facilities.

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We dispose of waste at our incinerator, wastewater treatment and landfill facilities, or at facilities owned and operated by other firms that we have audited and approved.

We apply established technologies to treatment, storage and recovery of hazardous waste.

We apply established technologies to treatment, storage and recovery of

hazardous waste.

We believe our operations are conducted in a safe and prudent manner and in substantial compliance with applicable laws and regulations.

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We have acquired all material operating permits and approvals now required for the current operation of our business and have applied for, or are in the process of applying for, all permits and approvals needed in connection with planned expansion or modifications of our operations.

We make a continuing effort to anticipate regulatory, political and legal developments that might affect operations, but are not always able to do so.

We are constantly monitoring the regulatory environment which is often influenced by changes in leadership at the federal, state, provincial and local levels.

We make a continuing effort to anticipate regulatory, political and legal developments

that might affect operations, but are not always able to do so.

We cannot predict the extent to which any legislation or regulation that may be enacted or enforced in the future may affect our operations.

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RCRA is the principal federal statute governing hazardous waste generation, treatment, transportation, storage and disposal.

Pursuant to RCRA, the Environmental Protection Agency ("EPA") has established a comprehensive "cradle-to-grave" system for the management of a wide range of materials identified as hazardous waste.

Pursuant to RCRA, the EPA has established a comprehensive "cradle-to-grave" system for the management of a wide range of materials identified as hazardous waste.

States that have adopted hazardous waste management programs with standards at least as stringent as those promulgated by the EPA have been delegated authority by the EPA to administer their facility permitting programs in lieu of the EPA's program.

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Federal Regulations.

In addition to regulations specifically directed at our transportation, storage and disposal facilities, there are a number of regulations that may "pass-through" to the facilities based on the acceptance of regulated waste from affected customer facilities.

affected customer facilities.

Each facility that accepts affected waste must comply with the regulations for that waste, facility or industry.

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Some states regulate other aspects of our operations, as well.

For example, California and New York have set strict regulations regarding the level of volatile organic compounds in parts washer solvents.

We are and will remain in compliance with state regulations.

For example, Delaware and New York have set strict regulations regarding the level of volatile organic compounds in parts washer solvents.

We endeavor to be and remain in compliance with all applicable state regulations.

Our facilities are also regulated pursuant to state statutes, including those addressing clean water and clean air.

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However, there can be no assurance that regulations governing future licensing will remain static, or that we will be able to comply with such requirements.

Regulations by the International Maritime Organization ("IMO") primarily impact shipping businesses, however we continue to monitor the impact of the new regulation for a 0.50% global sulphur cap for marine fuels which began on January 1, 2020 (known as IMO 2020).

Under the new global cap, ships that traverse the oceans are required to use marine fuels with a sulphur content of no more than 0.50% sulphur, versus the previous cap of 3.50%, in an effort to reduce the amount of sulphur oxide and decrease pollution and greenhouse gas emissions from the global shipping fleet, which now uses an estimated 3.5 to 4 million barrels per day of fuel oil.

Regulations by the International Maritime Organization ("IMO") primarily impact shipping businesses, and we continue to monitor the impact of the new IMO regulation for a 0.50% global sulphur cap for marine fuels which began on January 1, 2020 (known as "IMO 2020").

The shipping industry is the last major transportation sector to utilize fuel with high levels of sulfur, which is the reason the IMO pushed the industry to more closely align with other transport sectors for pollution reduction.

Given the disruption to global economies and the marine shipping industry from the COVID-19 pandemic there are several variables around this regulatory change whereby the impacts of such changes still remain unclear.

However, it is expected that if marine activity returns to pre-pandemic levels, the implementation of IMO 2020 will result in a significant increase in demand for a broad range of low sulfur distillates including diesel, marine gas oil, marine diesel oil and vacuum gas oil, among others.

At this time we cannot predict the impact IMO 2020 could ultimately have on Safety-Kleen's re-refining and fuels distribution operations, however we will continue to monitor the impact on our business as demand increases and industries rebound.

Given the disruption to global economies and supply chains, the marine shipping industry, and oil related commodity prices stemming from the COVID-19 pandemic, there are several variables around this regulatory change whereby the impacts of such changes still remain unclear.

In particular this lack of clarity applies to our expectation of a significant increase in demand for a broad range of low sulfur distillates including diesel, marine gas oil, marine diesel oil and vacuum gas oil.

However, it does seem clear that IMO 2020 has shifted the supply/demand balance for used motor oil, creating a surplus in the market that has materially reduced its value, although the exact amount remains unclear due to other factors affecting used oil markets.

We will continue to monitor the impact of IMO 2020 on our business as markets return to more ‘normal’ conditions.

Canadian Hazardous Waste Regulation

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Environment Canada is the federal agency with responsibility for environmental matters and the main legislative instrument is the CEPA 99.

This act charges Environment Canada and Health Canada, the Federal agency responsible for the

health of individuals, with protection of human health and the environment and seeks to control the production, importation and use of substances in Canada and to control their impact on the environment.

This act charges Environment Canada and Health Canada, the Federal agency responsible for the health of individuals, with protection of human health and the environment and seeks to control the production, importation and use of substances in Canada and to control their impact on the environment.

The Export and Import of Hazardous Waste and Hazardous Recyclable Material Regulations under CEPA 99 control the export and import of hazardous waste and hazardous recyclable materials.

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The environmental regulations discussed above require that we remediate contaminated sites, operate our facilities in accordance with enacted regulations, obtain required financial assurance for closure and post-closure care of our facilities should such facilities cease operations and make capital investments in order to keep our facilities in compliance with environmental regulations.

As further discussed in Note 9, "Closure and Post-Closure Liabilities," and Note 10, "Remedial Liabilities," to our consolidated financial statements included in Item 8 of this report, we have accrued environmental liabilities as of December 31, 2020, of $202.7 million.

December 31, 2021, of $211.0 million.

For the years ended December 31, 2021, 2020 and 2019, we spent $15.5 million, $12.4 million and $18.7 million, respectively, to address environmental liabilities.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business