CLEAN HARBORS INC 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Page No Report of Independent Registered Public Accounting Firm (PC AOB I D No. 34 ) 49 Consolidated Balance Sheets 51 Consolidated Statements of Operations 52 Consolidated Statements of Comprehensive Income 53 Consolidated Statements of Cash Flows 54 Consolidated Statements of Stockholders' Equity 55 Notes to Consolidated Financial Statements 56 (1) Operations 56 (2) Significant Accounting Policies 56 (3) Revenues 64 (4) Business Combinations 68 (5) Disposition of Business 71 (6) Inventories and Supplies 72 (7) Property, Plant and Equipment 72 (8) Goodwill and Other Intangible Assets 73 (9) Accrued Expense s a nd Other Current Liabilities 74 (10) Closure and Post-Closure Liabilities 75 (11) Remedial Liabilities 76 (12) Financing Arrangements 78 (13) Income Taxes 81 (14) Earnings Per Share 81 (15) Stockholders' Equity 85 (16) Accumulated Other Comprehensive Loss 85 (17) Stoc k - b ased Compensation 86 (18) Commitments and Contingencies 87 (19) Leases 89 (20) Segment Reporting 90 48 Table Of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Clean Harbors, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Clean Harbors, Inc. and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, cash flows, and stockholders’ equity, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 19, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Remedial Liabilities - Refer to Note 2, "Significant Accounting Policies", and Note 11, "Remedial Liabilities", to the financial statements Critical Audit Matter Description Remedial liabilities include the costs of removal or containment of contaminated material, the treatment of potentially contaminated groundwater and maintenance and monitoring costs necessary to comply with regulatory requirements. The estimate of remedial liabilities involves an analysis of numerous factors that are inherently difficult to estimate and involve a significant amount of judgment. The Company routinely reviews and evaluates the sites for which remedial liabilities have been recognized to determine if there should be changes in the cost estimates. As a result, the valuation of liabilities is subject to material changes as additional information becomes available, particularly as it relates to changes in technologies and changes in laws and regulations that govern the remediation efforts. Total remedial liabilities recorded as of December 31, 2024 were $111.7 million. Given the subjectivity and judgment involved in measuring remedial liabilities, auditing remedial liabilities involved especially subjective judgment and an increased extent of effort, including the need to involve our specialists who have expertise in environmental remediation. 49 Table Of Contents How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to remedial liabilities included the following, among others: • We tested the effectiveness of controls related to the recognition and measurement of remedial liabilities, including those controls over changes in estimates. • We evaluated the methods and assumptions used by management to estimate the remedial liabilities by confirming specific facts and circumstances related to a selection of sites with project managers and other Company personnel responsible for monitoring these sites, including legal counsel. • With the assistance of auditor specialists who have expertise in environmental matters and specialized skills and training, we evaluated the reasonableness of the Company’s estimates by: – Searching for information in the public domain for completeness of sites identified for remediation. – Assessing the completeness of the Company’s cost estimates for a selection of sites, specifically, comparing the cost estimates to relevant regulatory guidelines and specifications. – Testing the accuracy of the amounts recorded for a selection of sites, specifically, verifying the mathematical accuracy of the calculation, agreeing cost components to supporting documents, and/or developing an independent range of cost estimates. /s/ Deloitte & Touche LLP Boston, Massachusetts February 19, 2025 We have served as the Company's auditor since 2005. 50 Table Of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollars in thousands) As of December 31, 2024 2023 ASSETS Current assets: Cash and cash equivalents $ 687,192 $ 444,698 Short-term marketable securities 102,634 106,101 Accounts receivable, net of allowances aggregating $ 47,242 and $ 42,209 , respectively 1,015,357 983,111 Unbilled accounts receivable 162,215 107,859 Inventories and supplies 384,657 327,511 Prepaid expenses and other current assets 81,741 82,939 Total current assets 2,433,796 2,052,219 Property, plant and equipment, net 2,447,941 2,193,318 Other assets: Operating lease right-of-use assets 250,853 187,060 Goodwill 1,477,199 1,287,736 Permits and other intangibles, net 701,987 602,797 Other long-term assets 65,502 59,739 Total other assets 2,495,541 2,137,332 Total assets $ 7,377,278 $ 6,382,869 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 15,102 $ 10,000 Accounts payable 487,286 451,806 Deferred revenue 88,545 95,230 Accrued expenses and other current liabilities 419,445 397,157 Current portion of closure, post-closure and remedial liabilities 20,625 26,914 Current portion of operating lease liabilities 71,663 56,430 Total current liabilities 1,102,666 1,037,537 Other liabilities: Closure and post-closure liabilities, less current portion of $ 10,304 and $ 13,556 , respectively 119,484 105,044 Remedial liabilities, less current portion of $ 10,321 and $ 13,358 , respectively 101,424 97,885 Long-term debt, less current portion 2,771,117 2,291,717 Operating lease liabilities, less current portion 182,883 131,743 Deferred tax liabilities 363,623 353,107 Other long-term liabilities 162,552 118,330 Total other liabilities 3,701,083 3,097,826 Commitments and contingent liabilities (See Note 18) Stockholders' equity: Common stock, $ 0.01 par value: Authorized 80,000,000 shares; issued and outstanding 53,832,692 and 53,929,703 shares, respectively 538 539 Additional paid-in capital 421,749 459,728 Accumulated other comprehensive loss ( 213,635 ) ( 175,339 ) Retained earnings 2,364,877 1,962,578 Total stockholders' equity 2,573,529 2,247,506 Total liabilities and stockholders' equity $ 7,377,278 $ 6,382,869 The accompanying notes are an integral part of these consolidated financial statements. 51 Table Of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands except per share amounts) For the years ended December 31, 2024 2023 2022 Revenues: Service revenues $ 4,928,023 $ 4,449,542 $ 4,133,184 Product revenues 961,929 959,610 1,033,421 Total revenues 5,889,952 5,409,152 5,166,605 Cost of revenues: (exclusive of items shown separately below) Service revenues 3,370,231 3,054,594 2,892,726 Product revenues 695,482 691,530 651,204 Total cost of revenues 4,065,713 3,746,124 3,543,930 Selling, general and administrative expenses 739,629 671,161 627,391 Accretion of environmental liabilities 13,456 13,667 12,943 Depreciation and amortization 400,922 365,761 347,594 Income from operations 670,232 612,439 634,747 Other (expense) income, net ( 1,454 ) 2,315 2,472 Loss on early extinguishment of debt ( 371 ) ( 2,880 ) ( 422 ) Gain on sale of business — — 8,864 Interest expense, net of interest income of $ 19,437 , $ 11,930 and $ 4,607 , respectively ( 134,964 ) ( 108,595 ) ( 107,663 ) Income before provision for income taxes 533,443 503,279 537,998 Provision for income taxes 131,144 125,423 126,254 Net income $ 402,299 $ 377,856 $ 411,744 Earnings per share: Basic $ 7.46 $ 6.99 $ 7.59 Diluted $ 7.42 $ 6.95 $ 7.56 Shares used to compute earnings per share — Basic 53,902 54,071 54,223 Shares used to compute earnings per share — Diluted 54,199 54,382 54,487 The accompanying notes are an integral part of these consolidated financial statements. 52 Table Of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) For the years ended December 31, 2024 2023 2022 Net income $ 402,299 $ 377,856 $ 411,744 Other comprehensive (loss) income, net of tax: Unrealized gain (loss) on available-for-sale securities 37 559 ( 413 ) Unrealized gain on fair value of interest rate hedges 12,056 5,163 61,124 Reclassification adjustment for interest rate hedge amounts realized in net income ( 14,295 ) ( 16,425 ) ( 683 ) Reclassification adjustment for settlement of interest rate hedges — ( 5,905 ) — Pension adjustments 269 ( 550 ) 318 Foreign currency translation adjustments ( 36,363 ) 9,000 ( 31,515 ) Other comprehensive (loss) income, net of tax ( 38,296 ) ( 8,158 ) 28,831 Comprehensive income $ 364,003 $ 369,698 $ 440,575 The accompanying notes are an integral part of these consolidated financial statements. 53 Table Of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) For the years ended December 31, 2024 2023 2022 Cash flows from operating activities: Net income $ 402,299 $ 377,856 $ 411,744 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 400,922 365,761 347,594 Allowance for doubtful accounts 8,129 5,956 7,783 Amortization of deferred financing costs and debt discount 6,321 5,309 6,301 Accretion of environmental liabilities 13,456 13,667 12,943 Changes in environmental liability estimates 4,139 4,828 8,272 Deferred income taxes 18,437 12,685 17,549 Other expense (income), net 1,454 ( 2,315 ) ( 2,472 ) Stock-based compensation 27,981 20,703 26,844 Loss on early extinguishment of debt 371 2,880 422 Gain on sale of business — — ( 8,864 ) Environmental expenditures ( 27,522 ) ( 28,960 ) ( 13,946 ) Changes in assets and liabilities, net of acquisitions: Accounts receivable and unbilled accounts receivable ( 28,822 ) 2,453 ( 201,087 ) Inventories and supplies ( 49,588 ) ( 4,312 ) ( 74,547 ) Other current and non-current assets ( 57,220 ) ( 22,645 ) ( 17,303 ) Accounts payable 12,327 ( 27,425 ) 74,460 Other current and long-term liabilities 45,087 8,111 30,521 Net cash from operating activities 777,771 734,552 626,214 Cash flows used in investing activities: Additions to property, plant and equipment ( 432,241 ) ( 422,300 ) ( 345,056 ) Proceeds from sale and disposal of fixed assets 9,099 9,650 8,779 Acquisitions, net of cash acquired ( 478,011 ) ( 119,596 ) ( 86,278 ) Proceeds from sale of business, net of transaction costs 750 750 16,811 Additions to intangible assets including costs to obtain or renew permits ( 9,607 ) ( 2,649 ) ( 1,966 ) Purchases of available-for-sale securities ( 117,861 ) ( 158,264 ) ( 49,845 ) Proceeds from sale of available-for-sale securities 124,197 117,359 68,611 Net cash used in investing activities ( 903,674 ) ( 575,050 ) ( 388,944 ) Cash flows from (used in) financing activities: Change in uncashed checks ( 1,473 ) 2,759 552 Tax payments related to withholdings on vested restricted stock ( 13,759 ) ( 13,838 ) ( 8,801 ) Repurchases of common stock ( 55,178 ) ( 51,164 ) ( 50,183 ) Deferred financing costs paid ( 8,954 ) ( 6,736 ) ( 410 ) Payments on finance leases ( 30,886 ) ( 15,937 ) ( 12,821 ) Proceeds from employee stock purchase plan 3,009 — — Principal payments on debt ( 15,102 ) ( 623,975 ) ( 115,652 ) Proceeds from issuance of debt, net of discount 499,375 500,000 — Borrowing from revolving credit facility — 114,000 — Payment on revolving credit facility — ( 114,000 ) — Net cash from (used in) financing activities 377,032 ( 208,891 ) ( 187,315 ) Effect of exchange rate change on cash ( 8,635 ) 1,484 ( 9,927 ) Increase (decrease) in cash and cash equivalents 242,494 ( 47,905 ) 40,028 Cash and cash equivalents, beginning of year 444,698 492,603 452,575 Cash and cash equivalents, end of year $ 687,192 $ 444,698 $ 492,603 Supplemental information: Cash payments for interest and income taxes: Interest paid $ 153,059 $ 114,560 $ 105,643 Income taxes paid, net of refunds 130,606 132,314 78,526 Non-cash investing activities: Property, plant and equipment accrued 43,750 52,376 30,950 Remedial liability assumed in acquisition of property, plant and equipment — — 8,092 The accompanying notes are an integral part of these consolidated financial statements. 54 Table Of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in thousands) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Total Stockholders' Equity Number of Shares $ 0.01 Par Value Retained Earnings Balance at January 1, 2022 54,419 $ 544 $ 536,377 $ ( 196,012 ) $ 1,172,978 $ 1,513,887 Net income — — — — 411,744 411,744 Other comprehensive income — — — 28,831 — 28,831 Stock-based compensation — — 26,844 — — 26,844 Issuance of common stock for restricted share vesting, net of employee tax withholdings 183 2 ( 8,803 ) — — ( 8,801 ) Repurchases of common stock ( 537 ) ( 5 ) ( 50,178 ) — — ( 50,183 ) Balance at December 31, 2022 54,065 541 504,240 ( 167,181 ) 1,584,722 1,922,322 Net income — — — — 377,856 377,856 Other comprehensive loss — — — ( 8,158 ) — ( 8,158 ) Stock-based compensation — — 20,703 — — 20,703 Issuance of common stock for restricted share vesting, net of employee tax withholdings 193 1 ( 13,839 ) — — ( 13,838 ) Repurchases of common stock ( 328 ) ( 3 ) ( 51,376 ) — — ( 51,379 ) Balance at December 31, 2023 53,930 539 459,728 ( 175,339 ) 1,962,578 2,247,506 Net income — — — — 402,299 402,299 Other comprehensive loss — — — ( 38,296 ) — ( 38,296 ) Stock-based compensation — — 27,981 — — 27,981 Issuance of common stock for restricted share vesting, net of employee tax withholdings 125 1 ( 13,760 ) — — ( 13,759 ) Repurchases of common stock ( 237 ) ( 2 ) ( 55,209 ) — — ( 55,211 ) Employee stock purchase plan 15 — 3,009 — — 3,009 Balance at December 31, 2024 53,833 $ 538 $ 421,749 $ ( 213,635 ) $ 2,364,877 $ 2,573,529 The accompanying notes are an integral part of these consolidated financial statements. 55 Table Of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) OPERATIONS Clean Harbors, Inc., through its subsidiaries (collectively, the "Company"), is a leading provider of sustainable environmental and industrial services throughout North America. The Company is also the largest re-refiner and recycler of used oil and the premier provider of parts cleaning and related environmental services to commercial, industrial and automotive customers in North America. (2) SIGNIFICANT ACCOUNTING POLICIES The accompanying consolidated financial statements of the Company reflect the application of certain significant accounting policies as described below: Principles of Consolidation The accompanying consolidated financial statements include the accounts of Clean Harbors, Inc. and its majority-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP), requires management to make estimates and assumptions about future events that affect the amounts reported in the consolidated financial statements and the accompanying notes. Management bases its estimates on historical experience and other assumptions that it believes to be reasonable at the time. Actual results could differ from those estimates, and any such differences may be material to the consolidated financial statements. Estimates and assumptions are reviewed periodically and the effects of changes, if any, are reflected in our consolidated financial statements in the period they are determined. Cash, Cash Equivalents, Marketable Securities and Uncashed Checks Cash consists primarily of cash on deposit and money market accounts. The Company, through its wholly-owned captive insurance subsidiary, invests in cash equivalents and marketable securities. Marketable securities with maturities of three months or less from the date of purchase are classified as cash equivalents. As of December 31, 2024 and 2023, the Company had total marketable securities as follows (in thousands): December 31, 2024 December 31, 2023 Commercial paper $ 4,035 $ 27,542 Total cash equivalents 4,035 27,542 Commercial paper 17,489 56,172 Corporate notes and bonds 85,145 49,929 Total marketable securities 102,634 106,101 Total $ 106,669 $ 133,643 Realized gains and losses on sales of available-for-sale marketable securities in the years presented were immaterial. The majority of the marketable securities have a remaining maturity of less than one year and fair value approximates cost. The Company's cash management program with its revolving credit lender allows the Company to maintain a zero balance in the U.S. bank disbursement accounts that are used to issue vendor and payroll checks. When checks are presented to the bank for payment, cash deposits in amounts sufficient to fund the checks are made, at the Company's discretion, either from funds provided by other accounts or under the terms of the Company's revolving credit facility. Checks that have been written to vendors or employees but have not yet been presented for payment at the Company's bank are classified as uncashed checks in accounts payable and changes in the balance are reported as a financing activity in the consolidated statements of cash flows. Allowance for Doubtful Accounts and Revenue Allowance On a regular basis, the Company evaluates its accounts receivable and establishes the allowance for doubtful accounts 56 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) based on an evaluation of certain criteria and evidence of collection uncertainty including historical collection trends, reasonable expectations of future collections, current economic trends and changes in customer payment patterns. Past-due receivable balances are written off when the Company's collection efforts have been deemed unsuccessful in collecting the outstanding balance due. Due to the nature of the Company's businesses and the invoices that result from the services provided, customers may withhold payments and attempt to renegotiate amounts invoiced. In addition, for some of the services provided, the Company's invoices are based on quotes that, in limited instances, can result in adjustments to revenue subsequent to billing. Based on industry knowledge and historical trends, the Company records a revenue allowance in anticipation of these expected adjustments. This practice causes the volume of activity flowing through the revenue allowance during the year to be higher than the balance at the end of the year. The revenue allowance is intended to cover the net amount of revenue adjustments that may need to be credited to customers' accounts in future periods. Management determines the appropriate total revenue allowance by evaluating the following factors on an invoice-by-invoice basis as well as on a consolidated level: trends in adjustments to previously billed amounts, existing economic conditions, communications with customers and other information as deemed applicable. Revenue allowance estimates can differ from the actual adjustments, but historically the revenue allowance has been sufficient to cover the net amount of the reserve adjustments issued in subsequent reporting periods. The following table reflects the activity in the allowance for doubtful accounts and revenue allowance (in thousands): Allowance for Doubtful Accounts Revenue Allowance 2024 2023 2022 2024 2023 2022 Balance at January 1, $ 22,568 $ 24,659 $ 24,136 $ 19,641 $ 20,594 $ 16,004 Additions charged to earnings 8,129 5,956 7,783 48,301 46,467 54,836 Deductions from reserves, net of recoveries ( 7,789 ) ( 8,047 ) ( 7,260 ) ( 43,608 ) ( 47,420 ) ( 50,246 ) Balance at December 31, $ 22,908 $ 22,568 $ 24,659 $ 24,334 $ 19,641 $ 20,594 Credit Concentration Concentration of credit risks in accounts receivable is limited due to the large number of customers comprising the Company's customer base throughout North America. The Company maintains policies over credit extension that include credit evaluations, credit limits and collection monitoring procedures on a customer-by-customer basis. However, the Company generally does not require collateral before services are performed. No individual customer accounted for more than 10% of accounts receivable or more than 10% of total third-party revenues in the periods presented. Inventories and Supplies Inventories are stated at the lower of cost or net realizable value. The cost of oil and oil products as well as the cost of supplies and drums, solvent and solution and other inventories is principally determined on a first-in, first-out ("FIFO") basis. The Company continually reviews its inventories for obsolete or unsalable items and adjusts its carrying value to reflect estimated realizable values. Property, Plant and Equipment, net (excluding landfill assets and finance lease right-of-use assets) Property, plant and equipment, net is stated at cost less accumulated depreciation. Expenditures for major renewals and improvements which extend the life or usefulness of the asset are capitalized. Items of an ordinary repair or maintenance nature are charged directly to operating expense as incurred. During the construction and development period of an asset, the costs incurred, including interest expense, are classified as construction-in-progress. When the asset is ready for its intended use, the asset is reclassified to an appropriate asset classification and depreciation or amortization commences. 57 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The Company depreciates and amortizes the capitalized cost of these assets, using the straight-line method as follows: Asset Classification Estimated Useful Life Buildings and building improvements Buildings 20 - 42 years Leasehold and building improvements 2 - 45 years Vehicles 2 - 15 years Equipment Capitalized software and computer equipment 3 - 5 years Containers and railcars 8 - 16 years All other equipment 4 - 30 years Furniture and fixtures 5 - 8 years Gains and losses on the sale of property, plant and equipment are included in Other (expense) income, net. Fully depreciated assets are retained in property, plant and equipment and accumulated depreciation until they are removed from service. The Company tests asset groups for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment in the carrying value of long-lived assets is recognized if the expected future undiscounted cash flows derived from the assets, or group of assets, are less than their carrying value. The Company did not record any impairment charges related to long-lived assets in the periods presented. Business Combinations In accordance with the acquisition method of accounting, the purchase price paid for an acquisition is allocated to the assets and liabilities acquired based upon their estimated fair values as of the acquisition date, with the excess of the purchase price over the net assets acquired recorded as goodwill. As required, a preliminary fair value is determined once a business is acquired, with the final determination of the fair value being completed no later than one year from the date of acquisition. Goodwill Goodwill is comprised of the purchase price of business acquisitions in excess of the fair value of the net assets acquired. Goodwill is reviewed for impairment annually as of December 31 or when events or changes in the business environment indicate the carrying value of a reporting unit may exceed its fair value. This review is performed by comparing the fair value of each reporting unit to its carrying value, including goodwill. If the fair value is less than the carrying amount, a loss is recorded for the excess of the carrying value over the fair value up to the carrying amount of goodwill. The Company determines its reporting units by identifying the components of each operating segment. As of December 31, 2024, the Company had four reporting units consisting of, Environmental Sales and Service, Industrial Services, Environmental Facilities and Safety-Kleen Sustainability Solutions ("SKSS"). See Note 8, "Goodwill and Other Intangible Assets," for additional information related to the Company's goodwill impairment tests. Permits and Other Intangibles Costs related to acquiring licenses, permits and intangible assets, such as legal fees, site surveys, engineering costs and other expenditures are capitalized. Other intangible assets consist primarily of customer and supplier relationships, trademarks and trade names and developed technology. Permits relating to landfills are amortized on a units-of-consumption basis. All other permits are amortized over periods ranging from five to 30 years on a straight-line basis. Finite-lived other intangible assets are amortized on a straight-line basis over their respective useful lives, which range from two to 25 years. All finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. When such factors and circumstances exist, management compares the projected undiscounted future cash flows associated with the related asset or group of assets to the carrying amount. The impairment loss, if any, is measured as the excess of the carrying amount over the fair value of the asset or group of assets. 58 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Indefinite-lived intangible assets are not amortized but are reviewed for impairment annually as of December 31, or when events or changes in the business environment indicate that the carrying value may be impaired. If the fair value of the asset is less than the carrying amount, the impairment loss is measured as the excess of the carrying value of the asset over its fair value. Landfill Accounting The Company amortizes landfill improvements and certain landfill-related permits over the estimated useful lives. The units-of-consumption method is used to amortize land, landfill cell construction, asset retirement costs and remaining landfill cells and sites. The Company also utilizes the units-of-consumption method to record closure and post-closure obligations for landfill cells and sites. Under the units-of-consumption method, the Company includes future estimated construction and asset retirement costs, as well as costs incurred to date, in the amortization base of the landfill assets. Additionally, where appropriate, as described below, the Company includes probable expansion airspace that has yet to be permitted in the calculation of the total remaining useful life of the landfill. If it is determined that expansion capacity should no longer be considered in calculating the recoverability of a landfill asset, the Company may be required to recognize an asset impairment or incur significantly higher amortization expense. If at any time the Company makes the decision to abandon the expansion effort, the capitalized costs related to the expansion effort are expensed immediately. Landfill assets —Landfill assets include the costs of landfill site acquisition, permits and cell construction incurred to date. These amounts are recorded at cost, which includes capitalized interest as applicable. Landfill assets, net of amortization, are combined with management's estimate of the costs required to complete construction of the landfill to determine the amount to be amortized over the remaining estimated useful economic life of a site. Amortization of landfill assets is recorded on a units-of-consumption basis, such that the landfill assets should be completely amortized at the date the landfill ceases accepting waste. Amortization totaled $ 10.6 million, $ 18.6 million and $ 16.2 million for the years ended December 31, 2024, 2023 and 2022, respectively. Changes in the determination of when the landfill will cease accepting waste, either through a business decision by the Company, determination that expansion capacity should no longer be considered probable or changes in estimates on annual airspace consumption, will impact the amortization expense of the landfill assets. Changes in estimated costs to complete construction are applied prospectively to the amortization rate. Landfill capacity —Landfill capacity, which is the basis for the amortization of landfill assets and for the accrual of final closure and post-closure obligations, represents total permitted airspace plus unpermitted airspace that management believes is highly probable of ultimately being permitted. As of December 31, 2024, there were no unpermitted expansions included in the Company's landfill accounting model. If actual expansion airspace is significantly different from management's estimate of expansion airspace, the amortization rates used for the units-of-consumption method would change, therefore impacting the Company's profitability. As of December 31, 2024, the Company had eight active landfill sites (including the Company's non-commercial landfill), which have estimated remaining lives (based on anticipated waste volumes and the remaining highly probable airspace) as follows: Facility Name Location Remaining Lives (Years) Permitted Remaining Highly Probable Airspace (cubic yards) (in thousands) Buttonwillow California 21 4,909 Deer Trail Colorado 17 1,347 Grassy Mountain Utah 37 4,253 Kimball Nebraska 22 520 Lambton Ontario, Canada 46 4,218 Lone Mountain Oklahoma 13 2,913 Ryley Alberta, Canada 40 5,594 Sawyer North Dakota 61 3,197 26,951 At December 31, 2024 and 2023, the Company had no cubic yards of permitted, but not highly probable, airspace. 59 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table presents the remaining highly probable airspace from January 1, 2023 through December 31, 2024 (in thousands of cubic yards): 2024 2023 Remaining capacity, beginning of year 27,753 28,270 Changes in highly probable airspace, net — 464 Consumed ( 802 ) ( 981 ) Remaining capacity, end of year 26,951 27,753 In the year ended December 31, 2023 the Company received a permit for expansion of its Kimball, Nebraska landfill. Amortization of cell construction costs and accrual of cell closure obligations —Landfills are typically comprised of a number of cells, which are constructed within a defined acreage (or footprint). The cells are typically discrete units, which require both separate construction and separate capping and closure procedures. Cell construction costs are the costs required to excavate and construct the landfill cell. These costs are typically amortized on a units-of-consumption basis, such that they are completely amortized when the specific cell ceases accepting waste. In some instances, the Company has landfills that are engineered and constructed as "progressive trenches." In progressive trench landfills, a number of contiguous cells form a progressive trench. In those instances, the Company amortizes cell construction costs over the airspace within the entire trench, such that the cell construction costs will be fully amortized at the end of the trench useful life. The design and construction of a landfill does not create a landfill asset retirement obligation. Rather, the asset retirement obligation for cell closure (the cost associated with capping each cell) is incurred in relatively small increments as waste is placed in the landfill. Therefore, the cost required to construct the cell cap is capitalized as an asset retirement cost and a liability of an equal amount is established, based on the discounted cash flow associated with each capping event, as airspace is consumed. Spending for cell capping is reflected as environmental expenditures within operating activities in the consolidated statements of cash flows. Landfill final closure and post-closure liabilities —The balance of landfill final closure and post-closure liabilities was $ 59.4 million at both December 31, 2024 and 2023 respectively. The Company has material financial commitments for the costs associated with requirements of the Environmental Protection Agency ("EPA") and the comparable regulatory agency in Canada for landfill final closure and post-closure activities. The Company develops estimates for the cost of these activities based on an evaluation of site-specific facts and circumstances, including the Company's interpretation of current regulatory requirements and proposed regulatory changes. Such estimates may change in the future due to various circumstances including, but not limited to, permit modifications, changes in legislation or regulations, technological changes and results of environmental studies. Final closure costs are the costs incurred after the site ceases to accept waste, but before the landfill is certified as closed by the applicable state regulatory agency. These costs generally include the costs required to cap the final cell of the landfill (if not included in cell closure), the costs required to dismantle certain structures for landfills and other landfill improvements, and regulation-mandated groundwater monitoring and leachate management. Post-closure costs involve the maintenance and monitoring of a landfill site that has been certified closed by the applicable regulatory agency. These costs generally include groundwater monitoring and leachate management. Regulatory post-closure periods are generally 30 years after landfill closure. Final closure and post-closure obligations are accrued on a units-of-consumption basis, such that the present value of the final closure and post-closure obligations are fully accrued at the date the landfill ceases accepting waste. Cell closure, final closure and post-closure costs (also referred to as "asset retirement obligations") are calculated by estimating the total obligation in current dollars, adjusted for future inflation estimates and discounted at the Company's credit-adjusted risk-free interest rate ( 6.57 % and 6.51 % during 2024 and 2023, respectively). Non-Landfill Closure and Post-Closure Liabilities The balance of non-landfill closure and post-closure liabilities at December 31, 2024 and 2023 was $ 70.4 million and $ 59.2 million, respectively. Non-landfill closure and post-closure obligations arise when the Company commences non-landfill facility operations and include costs required to dismantle and decontaminate certain structures and other costs incurred during the closure process. Post-closure costs, if required, include associated maintenance and monitoring costs as required by the closure permit. Post-closure periods are performance-based and are not typically specified in terms of years in the closure permit, but generally range from 10 to 30 years or more. 60 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The Company records its non-landfill closure and post-closure liability by: (i) estimating the current cost of closing a non-landfill facility and the post-closure care of that facility, if required, based upon the closure plan that the Company is required to follow under its operating permit, or in the event the facility operates with a permit that does not contain a closure plan, based upon legally enforceable closure commitments made by the Company to various government agencies; (ii) estimates as to when future operations may cease; (iii) cost estimates of closing the non-landfill facility using the inflation rate to the time of closing; and (iv) discounting the future value back to the present using the credit-adjusted risk-free interest rate. The estimates for non-landfill closure and post-closure liabilities are inherently uncertain due to the possibility that permit and regulatory requirements will change in the future, impacting the estimation of total costs and the timing of the expenditures. Management reviews non-landfill closure and post-closure liabilities for changes to key assumptions that would impact the amount of the recorded liabilities. Changes that would prompt management to revise a liability estimate include changes in legal requirements that impact the Company's expected closure plan or scope of work, in the market price of a significant cost item, in the estimate as to when future operations at a location might cease or in the expected timing of the costs. Changes in estimates for non-landfill closure and post-closure events immediately impact the liability and the value of the corresponding asset. If a change is made to a fully-amortized asset, the adjustment is charged immediately to expense. When a change in estimate relates to an asset that has not been fully amortized, the adjustment to the asset is recognized in income prospectively as a component of amortization. Historically, changes to non-landfill closure and post-closure estimates have not been material. Remedial Liabilities The balance of remedial liabilities at December 31, 2024 and 2023 was $ 111.7 million and $ 111.2 million, respectively. Remedial liabilities, including Superfund liabilities, include the costs of removal or containment of contaminated material, treatment of potentially contaminated groundwater and maintenance and monitoring costs necessary to comply with regulatory requirements. Most of the Company's remedial liabilities relate to the active and inactive hazardous waste treatment and disposal facilities which the Company acquired and Superfund sites owned by third-parties for which the Company, or the prior owners of certain of the Company's facilities for which the Company may have certain indemnification obligations, have been identified as potentially responsible parties ("PRPs") or potential PRPs. The Company's estimate of remedial liabilities involves an analysis of such factors as: (i) the nature and extent of environmental contamination (if any); (ii) the terms of applicable permits and agreements with regulatory authorities as to cleanup procedures and whether modifications to such permits and agreements will likely need to be negotiated; (iii) the cost of performing anticipated cleanup activities based upon current technology; and (iv) in the case of Superfund and other sites where other parties will also be responsible for a portion of the cleanup costs, the likely allocation of such costs and the ability of such other parties to pay their share. The measurement of remedial liabilities is reviewed at least quarterly and changes in estimates are recognized in the consolidated statements of operations when identified. Where the Company concludes that it is probable that a liability has been incurred and an amount can be estimated, a liability is recognized. Remedial liabilities are inherently difficult to estimate. Estimating remedial liabilities requires that the existing environmental contamination be understood. There are risks that the actual quantities of contaminants differ from the results of the site investigation, and that contaminants exist that have not been previously identified. In addition, the value of the remedial liabilities is dependent on the remedial method selected. There is a risk that funds will be expended on a remedial solution that is not successful, which could result in the Company incurring the incremental costs of an alternative solution. Such estimates, which are subject to change, are subsequently revised if and when additional or new information becomes available. Remedial liabilities are discounted when the timing of the payments is determinable and the amounts are estimable. In the case of remedial liabilities assumed in connection with acquisitions, acquired liabilities are recorded at fair value as of the dates of the acquisitions calculated by inflating costs in current dollars using an estimate of future inflation rates as of the respective acquisition dates until the expected time of payment, and then discounting the amount of the payments to their present value using a risk-free discount rate as of the acquisition dates. Discount rates used in the present value determination of the Company's remedial liabilities range from 1.37 % to 4.90 %. Self-Insurance Liabilities The Company self-insures a significant portion of expected losses related to workers' compensation, employee medical, comprehensive general liability and vehicle liability. Liabilities associated with these losses are recorded based on the Company's estimates of the ultimate cost to settle incurred claims. These recorded liabilities are estimated based on independent 61 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) actuarial estimates and judgments which consider the frequency and settlement amount of historical claims data and are discounted to present value using a risk-free interest rate. Revenue Recognition The Company recognizes revenue when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The majority of the Company’s revenues are for services, which are recognized based on time and materials incurred at contractually agreed-upon rates. Product revenues are recognized when the products are delivered and control transfers to the customer. The Company’s payment terms vary by the type of customers and the products or services offered. The periods between invoicing and when payments are due are not significant. Amounts billed to customers related to shipping and handling are classified as revenue, and the Company's shipping and handling costs are included in costs of revenues. In the course of operations, the Company collects sales tax and other excise taxes from its customers and recognizes a current liability, which is then relieved when the taxes are remitted to the appropriate government authorities. The Company excludes sales and other excise taxes that it collects from customers from its revenues. Foreign Currency The Company has international operations in Canada and administrative support services located in India. The functional currencies of foreign operations are the local currency and therefore assets and liabilities of those foreign operations are translated to U.S. Dollars at the exchange rate in effect at the balance sheet date and revenue and expenses at the average exchange rate for the period. Gains and losses from the translation of the consolidated financial statements of foreign subsidiaries into U.S. Dollars are included in stockholders' equity as a component of accumulated other comprehensive loss. Gains and losses from transactions not denominated in the functional currency of an entity are recognized in the consolidated statements of operations. Recorded balances that are denominated in a currency other than the functional currency are remeasured to the functional currency using the exchange rate at the balance sheet date and gains or losses are recorded in the consolidated statements of operations. Defined Contribution Plan The Company has defined contribution plans under which eligible employees may contribute up to the maximum amount as provided by law. The Company matches a portion of these employee contributions and contributed $ 30.9 million, $ 28.8 million and $ 25.3 million in 2024, 2023 and 2022 respectively. Advertising Expense Advertising costs are expensed as incurred. Advertising expense was $ 11.4 million in 2024, $ 10.9 million in 2023 and $ 9.4 million in 2022. Stock-based Compensation Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which generally represents the vesting period. In addition, the Company issues awards with performance targets established prior to or at the grant date. The expense for these awards is recognized over the requisite service period when management believes it is probable those performance targets will be achieved. The fair value of the Company's grants under the 2020 Stock Incentive Plan are based on the closing price of the Company's common stock on the respective dates of grant. The fair value of shares issued under the Company’s 2024 Employee Stock Purchase plan are valued using the Black-Scholes option pricing model, which requires management to make assumptions with respect to the fair value of our common stock on the grant date, including the expected volatility of our stock, calculated based on a period of time generally commensurate with the expected term of the award and risk-free interest rates. Forfeitures are recognized as they occur. Stock-based compensation is recognized in selling, general and administrative expense. Interest Rate Derivatives The Company enters into interest rate derivative agreements as part of the overall strategy to hedge against fluctuations in variable interest rates. These interest rate derivatives swap a variable interest rate for a fixed interest rate and have been designated as cash flow hedges. The Company assesses the hedge’s effectiveness at the inception of the hedge and at regular intervals throughout the life of the derivative. To the extent that the interest rate swap is highly effective, changes in fair value are recorded in stockholders’ equity as a component of accumulated other comprehensive loss. Amounts are reclassified from accumulated other comprehensive loss into interest expense on the consolidated statement of operations in the same period or 62 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) periods during which the hedged transactions affect earnings. Although it was determined that the interest rate swaps will be a highly effective hedge, any portion of the interest rate swaps subsequently determined to be ineffective will be recognized in earnings. Further, if it becomes probable that a forecasted transaction designated as the hedged item will not occur, any gain or loss deferred is recognized in interest expense at that time. The fair value of the interest rate swaps is calculated using discounted cash flow valuation methodologies based upon the one-month variable rate yield curves that are observable at commonly quoted intervals for the full term of the interest rate swaps and as such is considered a Level 2 measure according to the fair value hierarchy. The Company recognizes the fair value of the derivative instruments by counterparty as either a net asset, included in Other long-term assets, or net liability, included in Accrued expenses and other current liabilities, on the consolidated balance sheets. Income Taxes Current income tax expense approximates cash to be paid or refunded for taxes for the applicable period. Deferred tax expense or benefit is the result of changes between deferred tax assets and liabilities. Deferred tax assets and liabilities are determined based upon the temporary differences between the financial statement basis and tax basis of assets and liabilities as well as from net operating loss and tax credit carryforwards as measured by the enacted tax rates which will be in effect when these differences reverse. The effect of a change in tax rates on deferred tax assets and liabilities is generally recognized in income in the period that includes the enactment date. The Company evaluates the recoverability of future tax deductions and credits and a valuation allowance is established by tax jurisdiction when, based on an evaluation of both positive and negative objective verifiable evidence, it is more likely than not that some portion or all of deferred tax assets will not be realized. The Company recognizes and measures a tax benefit from uncertain tax positions when it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the position. The Company recognizes a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company adjusts these liabilities when its judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate or future recognition of an unrecognized benefit. These differences will be reflected as increases or decreases to income tax expense in the period in which they are determined. Liabilities for unrecognized tax benefits are included within other long-term liabilities in the consolidated balance sheets. Earnings per Share ("EPS") Basic EPS is calculated using the treasury stock method by dividing net income by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all potentially dilutive common shares that were outstanding during the period. Leases The Company’s leases predominately relate to real estate, equipment, such as vehicles and industrial equipment utilized in operations, and rail cars utilized in connection with the Company’s transportation needs. Contracts are reviewed at inception to determine if the arrangement is a lease and, if so, whether it is an operating or finance lease. For all of its leases, the Company has elected not to separate lease and nonlease components, such as common area maintenance. The Company generally enters into long-term real estate leases with two to ten-year terms and long-term non-real estate leases with three to seven-year terms. In the normal course of business, the Company also enters into short-term operating leases having terms of one year or less. These leases are generally equipment leases entered into for short periods of time (e.g. daily, weekly or monthly) to satisfy immediate and/or short-term operational needs of the business which can arise based upon the nature of particular services performed. The Company has elected not to recognize right-of-use ("ROU") assets and lease liabilities for these short-term leases. Operating leases with terms exceeding one year and all finance leases are recognized as ROU assets and lease liabilities and measured at commencement date based on the present value of the future lease payments over the lease term. Certain of the Company's real estate leases contain escalating future lease payments. Escalating lease payments that are based upon explicit amounts contained in the lease or an index (e.g., consumer price index) are included in the Company's determination of future lease payments to determine the ROU asset and lease liability recognized at the commencement date. Any differences in the future lease payments from initial recognition are not anticipated to be material and will be recorded as variable lease cost in the period incurred. The variable lease cost will also include the Company’s portion of property tax, utilities and common area maintenance. A significant portion of the Company’s real estate lease agreements include renewal 63 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) periods at the Company’s option. The Company includes these renewal periods in the lease term only when renewal is reasonably certain based upon facts and circumstances specific to the lease and known by the Company. Certain of the equipment and rail car leases transfer ownership upon the conclusion of the lease term and as such, are classified as finance leases. Leases containing purchase options are classified as finance leases only when it is reasonably certain that the Company will execute such options. The Company uses its incremental borrowing rate on collateralized debt based on the information available at the lease commencement date in determining the present value of future lease payments as the implicit rate is typically not readily determinable. For operating leases, lease cost is recognized on a straight-line basis over the lease term and is included in cost of revenues or selling, general and administrative expenses depending on the use of the asset. For finance leases, ROU assets are amortized on a straight-line basis and interest expense is recognized based on the incremental borrowing rate. Finance lease amortization is recognized in depreciation and amortization and finance lease related interest expense is recognized in interest expense, net of interest income. Recent Accounting Pronouncements Accounting Pronouncements Adopted In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which requires an enhanced disclosure of significant segment expenses on an annual and interim basis. The Company adopted ASU No. 2023-07 for the year ended December 31, 2024. The only significant impact from the adoption of this standard relates to incremental disclosures now required. Accounting Pronouncements Not Yet Adopted In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which enhances income tax disclosures related to the tax rate reconciliation and income taxes paid. This guidance will be effective for the annual periods beginning the year ended December 31, 2025. Early adoption is permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. The Company is currently evaluating the impact of adopting this new pronouncement on its consolidated financial statements disclosures. In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) , which requires disaggregated disclosure of income statement expenses. This guidance will be effective for annual periods beginning the year ended December 31, 2027. Early adoption is permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. The Company is currently evaluating the impact of adopting this new pronouncement on its consolidated financial statements disclosures. (3) REVENUES The Company generates revenues through the following operating segments: Environmental Services and SKSS. The Company’s Environmental Services operating segment generally has four sources of revenue and the SKSS operating segment has two sources of revenue. The Company disaggregates third-party revenues by geographic location and source of revenue as management believes these categories depict how revenue and cash flows are affected by economic factors. The tables below present revenue billed to outside customers by a particular segment. Should it be necessary, there will be intercompany transactions to present the direct revenues in the appropriate segment results. The Company’s significant sources of revenue include: Technical Services —Technical Services contribute to the revenues of the Environmental Services operating segment. Revenues for these services are generated from fees charged for waste material management and disposal services including onsite environmental management services, collection and transportation, packaging, recycling, treatment and disposal of waste and remediation projects. These services handle hazardous and/or non-hazardous waste, including per- and polyfluoroalkyl substances (“PFAS”). Revenue is primarily generated by short-term projects, most of which are governed by master service agreements that are long-term in nature. These master service agreements are typically entered into with the Company’s larger customers and outline the pricing and legal frameworks for such arrangements. Services are provided based on purchase orders or agreements with the customer and include prices based upon units of volume of waste, material and personnel costs as well as transportation and other fees. Collection and transportation revenues are recognized over time, as the customer receives and consumes the benefits of the services as they are being performed and the Company has a right to payment for performance completed to date. The Company uses the input method to recognize revenue over time, based on time and materials incurred as 64 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) a basis for measuring the satisfaction of the performance obligation. Revenues for treatment and disposal of waste are recognized upon completion of treatment, final disposition, or when the waste is shipped to a third-party for processing and disposal. The Company periodically enters into bundled arrangements for the collection and transportation and disposal of waste. For such arrangements, transportation and disposal are considered distinct performance obligations and the Company allocates revenue to each based on the relative standalone selling price (i.e., the estimated price that a customer would pay for the services on a standalone basis). Revenues and the related costs from waste that is not yet completely processed and disposed of are deferred. The deferred revenues and costs are recognized when the services are completed. The period between collection and transportation and the final processing and disposal ranges depending on the location of the customer, but generally is measured in days. Industrial Services —Industrial Services contribute to the revenues of the Environmental Services operating segment. These revenues are primarily generated from industrial and specialty services provided to refineries, chemical plants, manufacturing facilities, power generation companies and other industrial customers throughout North America. Services include in-plant cleaning and maintenance services, plant outage and turnaround services, specialty cleaning services including chemical cleaning, pigging and high and ultra-high pressure water cleaning, leak detection and repair, daylighting, production services and upstream energy services. Services are provided based on purchase orders or agreements with the customer and include prices based upon daily, hourly or job rates for equipment, materials and personnel. The Company recognizes revenue for these services over time, as the customer receives and consumes the benefits of the services as they are being performed and the Company has a right to payment for performance completed to date. The Company uses the input method to recognize revenue over time, based on time and materials incurred. Field and Emergency Response Services —Field and Emergency Response Services, which includes contributions from the acquisition of HEPACO Blocker, Inc. and its subsidiaries (collectively, “HEPACO”) in 2024, contribute to the revenues of the Environmental Services operating segment. Field Services revenues are generated from cleanup services at customer sites, including those managed by municipalities and utility providers, or other locations on a scheduled or emergency response basis. Services include confined space entry for tank cleaning, site decontamination, environmental remediation, railcar cleaning, manhole/vault clean outs, product recovery and transfer and vacuum services. Additional services include filtration, water treatment services and wetland restoration. Response services for environmental emergencies of any scale range from man-made disasters such as oil spills to natural disasters like hurricanes. Emergency response services also include spill cleanup on land and water, as well as contagion disinfection, decontamination and disposal services. Field and emergency response services are provided based on purchase orders or agreements with customers and include prices generally based upon daily, hourly or job rates for equipment, materials and personnel. The Company recognizes revenue for these services over time, as the customer receives and consumes the benefits of the services as they are being performed and the Company has a right to payment for performance completed to date. The Company uses the input method to recognize revenue over time, based on time and materials incurred. The duration of such services can be over a number of hours, several days or even months for larger scale projects. Safety-Kleen Environmental Services —Safety-Kleen Environmental Services revenues contribute both to the Environmental Services operating segment and the SKSS operating segment. Revenues from providing containerized waste handling and disposal services, parts washer services and vacuum services, referred to collectively as the Safety-Kleen branches’ core service offerings, contribute to the revenues of the Environmental Services operating segment. In addition, sales of packaged blended oil products and other complementary product sales contribute to the revenues of the Environmental Services operating segment. Revenues generated from waste oil, anti-freeze and oil filter collection services, sales of bulk blended oil products and sales of automotive fluids contribute to the SKSS operating segment. Due to the complementary nature of these products and services and their customer base, there are some cross-overs of Safety-Kleen Environmental Services revenue streams between Environmental Services and SKSS operating segments. Generally, the revenue from services is recognized over time, as the customer receives and consumes the benefits of the services as they are being performed and the Company has a right to payment for performance completed to date. The duration of such services can be over a number of hours or several days. The Company uses the input method to recognize revenue over time, based on time and materials incurred. Product revenue is recognized upon the transfer of control whereby control transfers when the products are delivered to the customer. Containerized waste services consist of profiling, collecting, transporting and recycling or disposing of a wide variety of waste. Related collection and transportation revenues are recognized over time, as the customer receives and consumes the benefits of the services as they are being performed and the Company has a right to payment for performance completed to date. Parts washer services include customer use of the Company’s parts washer equipment, cleaning and maintenance of the parts washer equipment and removal and replacement of used cleaning fluids. Parts washer services are considered a single performance obligation due to the highly integrated and 65 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) interdependent nature of the arrangement. Revenue from parts washer services is recognized over the service interval as the customer receives the benefit of the services. Safety-Kleen Oil —Safety-Kleen Oil related sales contribute to the revenues of the SKSS segment. These revenues are generated from bulk sales of high-quality base and blended lubricating oils to many industries, including major oil brands, lubricant blenders and manufacturers, blended lubricant distributors and government agencies. The business also sells recycled fuel oil to asphalt plants, industrial plants and 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. By-products coming off the refinery are a mixture of light end distillates and asphalt flux that are sold into various markets. Revenue for oil products is recognized at a point in time, upon the transfer of control. Generally, control transfers when the products are delivered to the customer. The following tables present the Company’s third-party revenue disaggregated by source of revenue and geography (in thousands): For the year ended December 31, 2024 Environmental Services Safety-Kleen Sustainability Solutions Corporate Total Primary Geographical Markets United States $ 4,510,845 $ 841,171 $ 407 $ 5,352,423 Canada 449,480 88,049 — 537,529 Total third-party revenues $ 4,960,325 $ 929,220 $ 407 $ 5,889,952 Sources of Revenue Technical Services $ 1,733,550 $ — $ — $ 1,733,550 Industrial Services and Other 1,377,502 — 407 1,377,909 Field and Emergency Response Services 895,120 — — 895,120 Safety-Kleen Environmental Services 954,153 229,730 — 1,183,883 Safety-Kleen Oil — 699,490 — 699,490 Total third-party revenues $ 4,960,325 $ 929,220 $ 407 $ 5,889,952 For the year ended December 31, 2023 Environmental Services Safety-Kleen Sustainability Solutions Corporate Total Primary Geographical Markets United States $ 4,022,394 $ 846,339 $ 447 $ 4,869,180 Canada 447,515 92,457 — 539,972 Total third-party revenues $ 4,469,909 $ 938,796 $ 447 $ 5,409,152 Sources of Revenue Technical Services $ 1,563,847 $ — $ — $ 1,563,847 Industrial Services and Other 1,418,938 — 447 1,419,385 Field and Emergency Response Services 609,913 — — 609,913 Safety-Kleen Environmental Services 877,211 224,830 — 1,102,041 Safety-Kleen Oil — 713,966 — 713,966 Total third-party revenues $ 4,469,909 $ 938,796 $ 447 $ 5,409,152 66 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended December 31, 2022 Environmental Services Safety-Kleen Sustainability Solutions Corporate Total Primary Geographical Markets United States $ 3,675,880 $ 899,780 $ 507 $ 4,576,167 Canada 469,093 121,345 — 590,438 Total third-party revenues $ 4,144,973 $ 1,021,125 $ 507 $ 5,166,605 Sources of Revenue Technical Services $ 1,495,264 $ — $ — $ 1,495,264 Industrial Services and Other 1,311,072 — 507 1,311,579 Field and Emergency Response Services 575,300 — — 575,300 Safety-Kleen Environmental Services 763,337 199,360 — 962,697 Safety-Kleen Oil — 821,765 — 821,765 Total third-party revenues $ 4,144,973 $ 1,021,125 $ 507 $ 5,166,605 Contract Balances (in thousands) December 31, 2024 December 31, 2023 Receivables $ 1,015,357 $ 983,111 Contract assets (unbilled receivables) 162,215 107,859 Contract liabilities (deferred revenue) 88,545 95,230 The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets) and customer advances and deposits or deferred revenue (contract liabilities) on the consolidated balance sheet. Generally, billing occurs subsequent to revenue recognition, as a right to payment is not just subject to passage of time, resulting in contract assets, which are generally classified as current. The Company sometimes receives advances or deposits from its customers before revenue is recognized, resulting in contract liabilities. These assets and liabilities are reported on the consolidated balance sheet on a contract-by-contract basis at the end of each reporting period. The contract liability balances at the beginning of each period presented are generally fully recognized in the subsequent three-month period. Variable Consideration The nature of the Company's contracts give rise to certain types of variable consideration, including in limited cases volume discounts. Accordingly, management establishes a revenue allowance to cover the estimated amounts of revenue that may need to be credited to customers' accounts in future periods. The Company estimates the amount of variable consideration included in the estimated transaction price based on historical experience, anticipated performance and management's best judgment at the time. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. There have been no material changes in estimates of variable consideration in the periods presented. Contract Costs Contract costs include direct and incremental costs to obtain or fulfill a contract. Parts washer costs include costs of solvent, commissions paid relating to revenue generated from parts washer services, and transportation costs associated with transferring the product picked up from the service as it is brought to the Company’s facilities or third-party sites. Costs related to the treatment of waste include costs for waste receiving, drum movement and storage, waste consolidation and transportation between facilities. The Company’s contract costs that are subject to capitalization are comprised of costs associated with parts washer services and with the treatment and disposal of waste. As of December 31, 2024 and 2023, the Company's deferred contract costs totaled $ 28.2 million and $ 29.9 million, respectively. Deferred parts washer costs are recognized over the service interval as the customer receives the benefit of the services, and deferred costs related to treatment and disposal of waste are recognized when the corresponding waste is disposed. Deferred costs are included within prepaid expenses and other current assets in the 67 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Company’s consolidated balance sheets. The deferred contract cost balances at the beginning of each period presented were fully recognized in cost of revenue in the subsequent three-month period. (4) BUSINESS COMBINATIONS 2024 Acquisitions On March 22, 2024, the Company completed its acquisition of HEPACO for an all-cash purchase price of $ 392.2 million, net of cash acquired and after the settlement of working capital in the third quarter of 2024. The operations of HEPACO expand the Environmental Services segment’s field services business. The preliminary allocation of the purchase price is provisional and was based on estimates of the fair value of assets acquired and liabilities assumed as of March 22, 2024. The Company continues to obtain information to complete the valuation of these balances and the associated income tax accounting. Measurement period adjustments will reflect new information obtained about facts and circumstances that existed as of the acquisition date. The following table summarizes the preliminary determination and recognition of assets acquired and liabilities assumed (in thousands): At Acquisition Date As Reported December 31, 2024 Accounts receivable, including unbilled receivables $ 69,072 Inventories and supplies 384 Prepaid expenses and other current assets 4,383 Property, plant and equipment 47,125 Permits and other intangibles 130,500 Operating lease right-of-use assets 9,385 Other long-term assets 5,712 Accounts payable ( 30,602 ) Accrued expenses and other current liabilities ( 16,005 ) Current portion of operating lease liabilities ( 2,758 ) Operating lease liabilities, less current portion ( 6,627 ) Closure and post-closure liabilities ( 2,492 ) Remedial liabilities ( 2,435 ) Other long-term liabilities ( 374 ) Total identifiable net assets 205,268 Goodwill 186,911 Total purchase price $ 392,179 Other intangible assets acquired include customer relationships and trademarks/trade names and are anticipated to have estimated useful lives of between seven and 20 years with a weighted average useful life of approximately 19 years . The excess of the total purchase price, which includes the aggregate cash consideration paid in excess of the fair value of the tangible and intangible assets acquired and liabilities assumed, was recorded as goodwill. The goodwill recognized is attributable to the operating synergies, assembled workforce and growth potential that the Company expects to realize from the acquisition. Goodwill generated from the acquisition is not deductible for tax purposes. The operations included in the Company’s financial statements for the period ended December 31, 2024 , and pro forma revenue and earnings amounts on a combined basis as if this acquisition had been completed on January 1, 2023 are immaterial to the consolidated financial statements of the Company. On March 1, 2024, the Company acquired Noble Oil Services, Inc. and its subsidiaries (collectively “Noble”) for an all-cash purchase price of $ 68.7 million, net of cash acquired and after the settlement of working capital in the second quarter of 2024. The acquisition of Noble expands the SKSS segment’s oil collection operations in the southeastern region of the United States while also adding incremental production from the re-refinery owned and operated by the acquired company. The preliminary allocation of the purchase price is provisional and was based on estimates of the fair value of assets acquired and liabilities assumed as of March 1, 2024. The Company continues to obtain information to complete the valuation 68 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) of these balances and the associated income tax accounting. Measurement period adjustments will reflect new information obtained about facts and circumstances that existed as of the acquisition date. The following table summarizes the preliminary determination and recognition of assets acquired and liabilities assumed (in thousands): At Acquisition Date As Reported December 31, 2024 Accounts receivable, including unbilled receivables $ 5,855 Inventories and supplies 6,598 Prepaid expenses and other current assets 408 Property, plant and equipment 55,615 Permits and other intangibles 14,500 Operating lease right-of-use assets 3,615 Other long-term assets 92 Accounts payable ( 7,752 ) Accrued expenses and other current liabilities ( 1,145 ) Current portion of operating lease liabilities ( 1,823 ) Operating lease liabilities, less current portion ( 1,792 ) Closure and post-closure liabilities ( 8,929 ) Remedial liabilities ( 2,757 ) Total identifiable net assets 62,485 Goodwill 6,257 Total purchase price $ 68,742 Other intangible assets acquired include customer relationships and trademarks/trade names and are anticipated to have estimated useful lives of between seven and 15 years with a weighted average useful life of approximately 13 years . The excess of the total purchase price, which includes the aggregate cash consideration paid in excess of the fair value of the tangible and intangible assets acquired and liabilities assumed, was recorded as goodwill. The goodwill recognized is attributable to the operating synergies and assembled workforce that the Company expects to realize from the acquisition. Goodwill generated from the acquisition is deductible for tax purposes. The operations included in the Company’s financial statements for the period ended December 31, 2024 , and pro forma revenue and earnings amounts on a combined basis as if this acquisition had been completed on January 1, 2023 are immaterial to the consolidated financial statements of the Company. During 2024, the Company completed the acquisition of three additional privately-owned business for $ 17.1 million in total cash consideration. The operations were consolidated into the Environmental Services and SKSS segments. The acquisitions of the acquired businesses were not material in 2024 to the consolidated financial statements of the Company. 2023 Acquisition On March 31, 2023, the Company acquired Thompson Industrial Services, LLC (“Thompson Industrial”) for an all-cash purchase price of $ 110.9 million, net of cash acquired. The operations of Thompson Industrial expand the Environmental Services segment’s industrial service operations in the southeastern region of the United States. The Company finalized the purchase accounting for this acquisition in the first quarter of 2024. The preliminary allocation of the purchase price was based on estimates of the fair value and assets acquired and liabilities assumed as of 69 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) March 31, 2023. The following table summarizes the preliminary and final determination and recognition of assets acquired and liabilities assumed (in thousands): Preliminary Allocation As Reported December 31, 2023 Measurement Period Adjustments Final Allocation as Reported December, 31, 2024 Accounts receivable, including unbilled receivables $ 25,233 $ ( 73 ) $ 25,160 Inventories and supplies 228 — 228 Prepaid expenses and other current assets 1,302 — 1,302 Property, plant and equipment 26,719 — 26,719 Permits and other intangibles 28,900 — 28,900 Operating lease right-of-use assets 4,716 — 4,716 Other long-term assets 72 — 72 Accounts payable ( 7,185 ) ( 55 ) ( 7,240 ) Accrued expenses and other current liabilities ( 3,200 ) ( 90 ) ( 3,290 ) Current portion of operating lease liabilities ( 1,653 ) — ( 1,653 ) Operating lease liabilities, less current portion ( 3,063 ) — ( 3,063 ) Other long-term liabilities ( 560 ) — ( 560 ) Total identifiable net assets 71,509 ( 218 ) 71,291 Goodwill 39,346 218 39,564 Total purchase price $ 110,855 $ — $ 110,855 Permits and other intangible assets acquired include customer relationships, trademarks/trade names and non-compete agreements and are anticipated to have estimated useful lives of between five and 15 years with a weighted average useful life of approximately 13 years. The excess of the total purchase price, which includes the aggregate cash consideration paid in excess of the fair value of the tangible and intangible assets acquired and liabilities assumed, was recorded as goodwill. The goodwill recognized is attributable to the operating synergies, assembled workforce and growth potential that the Company expects to realize from the acquisition. Goodwill generated from the acquisition is deductible for tax purposes. The operations included in the Company’s financial statements for the period ended December 31, 2024 , and pro forma revenue and earnings amounts on a combined basis as if this acquisition had been completed on January 1, 2022 are immaterial to the consolidated financial statements of the Company. 2022 Acquisitions On June 17, 2022, the Company acquired a privately-owned company for an all-cash purchase price of approximately $ 78.9 million, net of cash acquired. The operations of the newly acquired company expand the SKSS segment’s waste oil collection capabilities and re-refining business throughout the southeastern region of the United States, including the addition of a re-refinery in Georgia. 70 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The Company finalized the purchase accounting for this acquisition in the second quarter of 2023. The allocation of the purchase price was based on estimates of the fair value and assets acquired and liabilities assumed as of June 17, 2022. The following table summarizes the final determination and recognition of assets acquired and liabilities assumed (in thousands): Final Allocation Accounts receivable $ 1,089 Inventories and supplies 5,745 Prepaid expenses and other current assets 144 Property, plant and equipment 22,231 Permits and other intangibles 23,500 Operating lease right-of-use assets 585 Other long-term assets 13 Accrued expenses and other current liabilities ( 3,375 ) Current portion of operating lease liabilities ( 186 ) Operating lease liabilities, less current portion ( 399 ) Other long-term liabilities ( 2,681 ) Total identifiable net assets 46,666 Goodwill 32,212 Total purchase price $ 78,878 Permits and other intangible assets acquired include supplier relationships, permits, customer relationships and trademarks/trade names and are anticipated to have estimated useful lives of between five and 20 years with a weighted average useful life of approximately 18 years. The excess of the total purchase price, which includes the aggregate cash consideration paid in excess of the fair value of the tangible and intangible assets acquired, was recorded as goodwill. The goodwill recognized is attributable to the expected operating synergies, assembled workforce and growth potential that the Company expects to realize from the acquisition. Goodwill generated from the acquisition is deductible for tax purposes. The operations included in the Company’s financial statements for the period ended December 31, 2022 and pro forma revenue and earnings amounts on a combined basis as if this acquisition had been completed on January 1, 2022 were not material to the consolidated financial statements of the Company. On December 9, 2022, the Company acquired a privately-owned business for $ 12.6 million cash consideration. The acquired company expands the SKSS segment’s oil collection operations in the southeastern United States. In connection with this acquisition, goodwill of $ 2.7 million was recognized. The results of operations for the acquired business were not material in 2022 to the consolidated financial statements of the Company. (5) DISPOSITION OF BUSINESS On June 30, 2022, the Company completed the sale of a line of business as part of its continuous focus on divesting certain non-core operations. The divested line of business was previously included within the Environmental Sales & Service reporting unit of the Environmental Services segment. The Company determined that the disposition did not constitute a strategic shift and that the impact on the Company's overall operations and financial results was not material. Accordingly, the operations associated with the disposal were not reported in discontinued operations. The final purchase price, after settling working capital, for the line of business was $ 18.8 million, of which $ 1.5 million was held in escrow and received by the Company in equal parts in 2023 and 2024. The gain on sale of $ 8.9 million, after accounting for the assets sold, liabilities transferred upon sale and transaction costs, was included in gain on sale of business in the Company's consolidated statement of operations for the year ended December 31, 2022. 71 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (6) INVENTORIES AND SUPPLIES Inventories and supplies consisted of the following (in thousands): December 31, 2024 December 31, 2023 Supplies $ 200,905 $ 177,217 Oil and oil related products 152,992 118,600 Solvent and solutions 12,458 11,795 Other 18,302 19,899 Total inventories and supplies $ 384,657 $ 327,511 Supplies inventories consist primarily of critical spare parts to support the Company’s incinerator and re-refinery operations and other general supplies used in our normal day-to-day operations. The balance of oil and oil related products has increased due to higher volumes of oil inventory on hand at December 31, 2024 when compared with December 31, 2023 and overall price increases for the oil inventory. Other inventories consist primarily of parts washer components, cleaning fluids, absorbents and automotive fluids, such as windshield washer fluid and antifreeze. (7) PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following (in thousands): December 31, 2024 December 31, 2023 Land $ 184,191 $ 174,891 Asset retirement costs (non-landfill) 38,705 27,167 Landfill assets 258,138 253,180 Buildings and improvements (1) 719,439 630,525 Vehicles (2) 1,455,530 1,276,567 Equipment (3) 2,600,085 2,388,370 Construction in progress 70,305 213,601 5,326,393 4,964,301 Less - accumulated depreciation and amortization 2,878,452 2,770,983 Total property, plant and equipment, net $ 2,447,941 $ 2,193,318 ___________________________________ (1) Balances inclusive of gross ROU assets classified as finance leases of $ 8.0 million in both periods. (2) Balances inclusive of gross ROU assets classified as finance leases of $ 230.5 million and $ 151.7 million, respectively. (3) Balances inclusive of gross ROU assets classified as finance leases of $ 9.2 million in both periods. Depreciation expense, inclusive of landfill and finance lease amortization was $ 346.5 million, $ 315.5 million and $ 297.4 million for the years ended December 31, 2024, 2023 and 2022, respectively. The Company recorded $ 11.2 million, $ 6.6 million and $ 3.4 million of capitalized interest in 2024, 2023 and 2022, respectively, mainly due to the construction of the new incinerator in Kimball, Nebraska . 72 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (8) GOODWILL AND OTHER INTANGIBLE ASSETS The changes in goodwill for the years ended December 31, 2024 and 2023 were as follows (in thousands): Environmental Services Safety-Kleen Sustainability Solutions Total Balance at January 1, 2023 $ 1,071,846 $ 175,032 $ 1,246,878 Increase from current period acquisitions 39,346 — 39,346 Measurement period adjustments from prior period acquisition — 360 360 Foreign currency translation 821 331 1,152 Balance at December 31, 2023 $ 1,112,013 $ 175,723 $ 1,287,736 Increase from current period acquisitions 186,911 6,457 193,368 Measurement period adjustments from prior period acquisitions 218 — 218 Foreign currency translation ( 2,938 ) ( 1,185 ) ( 4,123 ) Balance at December 31, 2024 $ 1,296,204 $ 180,995 $ 1,477,199 The Company assesses goodwill for impairment on an annual basis as of December 31 or at an interim date when it is more likely than not that events or changes in the business environment (“triggering events”) would reduce the fair value of a reporting unit below its carrying value. The Company did not identify any triggering events in the years presented. Goodwill is also tested for impairment annually. The Company conducted its annual impairment test of goodwill as of December 31, 2024 and determined that no adjustment to the carrying value of goodwill for any reporting unit was then necessary because the fair values of the reporting units exceeded their respective carrying values. The fair value of all reporting units was determined using an income approach based upon estimates of future discounted cash flows. The resulting estimates of fair value were validated through the consideration of other factors such as the fair value of comparable companies to the reporting units and a reconciliation of the sum of all estimated fair values of the reporting units to the Company’s overall market capitalization. In all cases, the estimated fair values of the reporting units significantly exceeded the respective carrying values. Significant judgments and unobservable inputs, categorized as Level 3 in the fair value hierarchy, are inherent in the impairment tests performed and include assumptions about the amount and timing of expected future cash flows, growth rates, and the determination of appropriate discount rates. Level 3 inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date. The Company believes that the assumptions used in its impairment tests are reasonable, but variations in any of the assumptions may result in different measurements of fair values. The impacts of any adverse business and market conditions which may impact the overall performance of the Company's reporting units will continue to be monitored. If the Company's reporting units do not achieve the financial performance that the Company expects, or if there is a significant prolonged change in demand for the Company's products and services, it is possible that goodwill impairment charges may result. Therefore, there can be no assurance that future events will not result in an impairment of goodwill. As of December 31, 2024 and 2023, the Company's intangible assets consisted of the following (in thousands): December 31, 2024 December 31, 2023 Cost Accumulated Amortization Net Cost Accumulated Amortization Net Permits $ 191,921 $ 123,939 $ 67,982 $ 191,747 $ 117,556 $ 74,191 Customer and supplier relationships 697,326 256,657 440,669 604,994 258,879 346,115 Other intangible assets 120,316 46,490 73,826 100,068 37,862 62,206 Total amortizable permits and other intangible assets 1,009,563 427,086 582,477 896,809 414,297 482,512 Trademarks and trade names 119,510 — 119,510 120,285 — 120,285 Total permits and other intangible assets $ 1,129,073 $ 427,086 $ 701,987 $ 1,017,094 $ 414,297 $ 602,797 73 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) During the periods presented, there were no events or changes in circumstances which would indicate that the carrying values of the Company's asset groups would not be recoverable and thus no impairment charges were recorded . If expectations of future cash flows were to decrease in the future as a result of worse than expected or prolonged periods of depressed activity, future impairments may become evident. Amortization expense of permits, customer and supplier relationships and other intangible assets for the years ended December 31, 2024, 2023 and 2022 were $ 54.4 million, $ 50.3 million and $ 50.2 million, respectively. The expected amortization of the net carrying amount of finite-lived intangible assets at December 31, 2024 was as follows (in thousands): Years ending December 31, Expected Amortization 2025 $ 53,335 2026 51,297 2027 49,221 2028 47,916 2029 46,763 Thereafter 333,945 $ 582,477 (9) ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2024 December 31, 2023 Accrued compensation and benefits $ 134,458 $ 113,236 Accrued insurance 112,367 107,658 Accrued interest 33,259 33,857 Accrued income, real estate, sales and other taxes 35,394 44,752 Accrued other 103,967 97,654 $ 419,445 $ 397,157 The increase in accrued compensation and benefits is due to both the timing of payments and an increase in accrued incentive compensation. As of December 31, 2024 and 2023, accrued insurance included employee medical insurance costs of $ 23.9 million and $ 22.8 million, respectively, and accruals for losses under workers' compensation, comprehensive general liability and vehicle liability self-insurance programs of $ 83.7 million and $ 82.7 million, respectively. 74 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (10) CLOSURE AND POST-CLOSURE LIABILITIES The changes to closure and post-closure liabilities (also referred to as "asset retirement obligations") from January 1, 2023 through December 31, 2024 were as follows (in thousands): Landfill Retirement Liability Non-Landfill Retirement Liability Total Balance at January 1, 2023 $ 62,251 $ 56,550 $ 118,801 Liabilities assumed in acquisitions — 574 574 Measurement period adjustments from prior period acquisitions — 3,015 3,015 New asset retirement obligations 3,092 — 3,092 Accretion 4,958 4,519 9,477 Changes in estimates recorded to consolidated statement of operations 1,147 53 1,200 Changes in estimates recorded to consolidated balance sheet ( 3,706 ) 1,600 ( 2,106 ) Environmental expenditures ( 8,478 ) ( 7,206 ) ( 15,684 ) Currency translation and other 179 52 231 Balance at December 31, 2023 59,443 59,157 118,600 Liabilities assumed in acquisitions — 11,421 11,421 New asset retirement obligations 2,118 — 2,118 Accretion 5,069 4,489 9,558 Changes in estimates recorded to consolidated statement of operations 70 ( 295 ) ( 225 ) Changes in estimates recorded to consolidated balance sheet 4,335 402 4,737 Environmental expenditures ( 11,210 ) ( 4,466 ) ( 15,676 ) Currency translation and other ( 425 ) ( 320 ) ( 745 ) Balance at December 31, 2024 $ 59,400 $ 70,388 $ 129,788 In the year ended December 31, 2024, there were no significant benefits or charges resulting from changes in estimates for closure and post-closure liabilities. In 2024 and 2023, the Company has been executing upon the planned closure activities at the Company’s non-commercial landfill at the Deer Park, Texas incinerator facility after the site reached its permitted capacity, in early 2023. There have been no changes to the estimated closure costs related to this location. Anticipated payments (based on current estimated costs and anticipated timing of necessary regulatory approvals to commence work on closure and post-closure activities) for each of the next five years and thereafter are as follows (in thousands): Years ending December 31, 2025 $ 10,304 2026 14,457 2027 12,485 2028 14,127 2029 3,224 Thereafter 278,762 Undiscounted closure and post-closure liabilities 333,359 Less: Discount at credit-adjusted risk-free rate ( 119,353 ) Less: Undiscounted estimated closure and post-closure liabilities relating to airspace not yet consumed ( 84,218 ) Present value of closure and post-closure liabilities $ 129,788 75 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (11) REMEDIAL LIABILITIES The changes to remedial liabilities from January 1, 2023 through December 31, 2024 were as follows (in thousands): Remedial Liabilities for Landfill Sites Remedial Liabilities for Inactive Sites Remedial Liabilities (Including Superfund) for Non-Landfill Operations Total Balance at January 1, 2023 $ 1,824 $ 59,749 $ 54,717 $ 116,290 Accretion 89 2,540 1,561 4,190 Changes in estimates recorded to consolidated statement of operations 19 1,713 1,896 3,628 Environmental expenditures ( 52 ) ( 3,840 ) ( 9,384 ) ( 13,276 ) Currency translation and other — 115 296 411 Balance at December 31, 2023 1,880 60,277 49,086 111,243 Liabilities assumed in acquisitions — — 5,192 5,192 Accretion 92 2,292 1,514 3,898 Changes in estimates recorded to consolidated statement of operations 29 573 3,762 4,364 Expenditures ( 53 ) ( 6,078 ) ( 5,715 ) ( 11,846 ) Currency translation and other — ( 28 ) ( 1,078 ) ( 1,106 ) Balance at December 31, 2024 $ 1,948 $ 57,036 $ 52,761 $ 111,745 In the year ended December 31, 2024, the Company increased its remedial liabilities for an existing Superfund site by $ 2.9 million related to new information on the ultimate remediation of this site. Anticipated payments at December 31, 2024 (based on current estimated costs and anticipated timing of necessary regulatory approvals to commence work on remedial activities) for each of the next five years and thereafter were as follows (in thousands): Years ending December 31, 2025 $ 10,321 2026 17,391 2027 11,259 2028 10,972 2029 8,745 Thereafter 70,610 Undiscounted remedial liabilities 129,298 Less: Discount at risk free rates ( 17,553 ) Total remedial liabilities $ 111,745 76 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table presents the Company's estimated remedial liabilities and reasonably possible additional liabilities as of December 31, 2024 disaggregated by facility/site type (in thousands, except percentages): Type of Facility or Site Remedial Liabilities % of Total Reasonably Possible Additional Liabilities (1) Inactive facilities not used in active conduct of the Company's business, most of which were assumed through prior period acquisitions ( 25 facilities) $ 56,976 51.0 % $ 10,765 Facilities now used in active conduct of the Company's business ( 62 facilities, including 24 acquired by the Company through acquisitions in 2024) 46,131 41.3 9,497 Superfund sites ( 12 sites) 8,638 7.7 1,296 Total $ 111,745 100.0 % $ 21,558 ___________________________________ (1) Amounts represent the high end of the range of management's best estimate of the reasonably possible additional liabilities. The following table presents the Company's estimated remedial liabilities and reasonably possible additional liabilities as of December 31, 2024 disaggregated by facilities/sites which represent at least 5 % of the total and with all other facilities/ sites combined (in thousands, except percentages): Location Type of Facility or Site Remedial Liabilities (1) % of Total Reasonably Possible Additional Liabilities (2) Baton Rouge, LA Closed incinerator and landfill $ 25,578 22.9 % $ 4,303 Bridgeport, NJ Closed incinerator 17,417 15.6 3,254 Mercier, Quebec Idled incinerator 10,826 9.7 1,631 Linden, NJ Operating solvent recycling center 9,434 8.4 2,148 Various All other incinerators, landfills, wastewater treatment facilities and service centers ( 83 facilities, including 24 acquired by the Company through acquisitions in 2024) 39,852 35.7 8,926 Various Superfund sites (each representing less than 5 % of total liabilities) ( 12 sites) 8,638 7.7 1,296 Total $ 111,745 100.0 % $ 21,558 _________________________________ (1) $ 23.3 million of the $ 111.7 million remedial liabilities include estimates related to the legal and administrative proceedings discussed in Note 18, "Commitments and Contingencies." (2) Amounts represent the high end of the range of management's best estimate of the reasonably possible additional liabilities. Revisions to remediation reserve requirements may result in upward or downward adjustments to income from operations in any given period. The Company believes that its extensive experience in the environmental services business, as well as its involvement with a large number of sites, provides a reasonable basis for estimating its aggregate liability. It is possible, however, that future changes in available technology, regulatory or enforcement developments, the results of environmental studies or other factors could necessitate the recording of additional liabilities or the revision of currently recorded liabilities that could be material. Since the Company's satisfaction of the liabilities will occur over many years, the Company cannot reasonably predict the nature or extent of possible future events or the impact that those events, if any, might have on the current estimates of remedial liabilities. 77 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (12) FINANCING ARRANGEMENTS Long-term Debt The following table is a summary of the Company's long-term debt (in thousands): December 31, 2024 December 31, 2023 Current Portion of Long-Term Debt: Secured senior term loans $ 15,102 $ 10,000 Long-Term Debt: Secured senior term loans due October 8, 2028 1,449,796 970,000 Unsecured senior notes, at 4.875 %, due July 15, 2027 ("2027 Notes") 545,000 545,000 Unsecured senior notes, at 5.125 %, due July 15, 2029 ("2029 Notes") 300,000 300,000 Unsecured senior notes, at 6.375 %, due February 1, 2031 ("2031 Notes") 500,000 500,000 Long-term debt, at par 2,794,796 2,315,000 Unamortized debt issuance costs and discount, net ( 23,679 ) ( 23,283 ) Long-term debt, at carrying value $ 2,771,117 $ 2,291,717 As of December 31, 2024 and 2023, the estimated fair value of the Company’s outstanding long-term debt, including the current portion, was $ 2.8 billion and $ 2.3 billion, respectively. The Company’s estimates of fair value of its long-term debt, including the current portion, are based on quoted market prices or other available market data which are considered Level 2 measures according to the fair value hierarchy. Level 2 utilizes quoted market prices in markets that are not active, broker or dealer quotation or alternative pricing sources with reasonable levels of price transparency for similar assets and liabilities. The sections below will outline the key terms of the outstanding debt, including any changes occurring during the period: Secured Senior Term Loans As of December 31, 2024, the Company had an aggregate principal amount outstanding of $ 1,464.9 million under the Sixth Amendment to the Company's existing Credit Agreement dated as of June 30, 2017 (the "Term Loan Agreement"). As of December 31, 2023, the Company had an aggregate principal amount outstanding of $ 980.0 million under Fourth Amendment to the Term Loan Agreement. On March 22, 2024, the Term Loan Agreement was amended (the “Fifth Amendment”), to provide for the incurrence of additional term loans (the “2024 Incremental Term Loans”) under the Term Loan Agreement in the aggregate principal amount of $ 500.0 million. Proceeds from the issuance of the 2024 Incremental Term Loans were $ 491.1 million after debt discount and debt issuance costs, and were used to fund the acquisition of HEPACO, with the excess increasing the Company’s cash balances. The 2024 Incremental Term Loans are in addition to the aggregate of $ 980.0 million of term loans (the “Existing Term Loans”) which were outstanding prior to the issuance of the 2024 Incremental Term Loans. The total amount outstanding under the Term Loans as December 31, 2024 will mature on October 8, 2028, and may be prepaid at any time without premium or penalty other than customary breakage costs. Interest under the Term Loan Agreement is paid monthly. On October 8, 2024, the Company entered into the Sixth Amendment to the Term Loan Agreement (the “Sixth Amendment”). The Sixth Amendment (i) eliminated the Term SOFR adjustment of 0.11448 % per annum and (ii) reset the six month soft call period for a repricing of the 2028 Term Loans. Under the Sixth Amendment, the applicable interest rate margins for the Term Loans is either 1.75 % for Term SOFR borrowings or 0.75 % for base rate borrowings, at the Company’s election. The Term Loans may be prepaid at any time without premium or penalty other than customary breakage costs or if the Company engages in certain repricing transactions before April 8, 2025, in which event a 1.0 % prepayment premium would be due. The Term SOFR Rate is subject to a floor of 0.00 % and the Base Rate is subject to a floor of 1.00 %. The Term Loan Agreement provides for Term SOFR adjustments for other interest periods; however, the Company elects one-month Term SOFR for interest payments on that debt resulting in total interest on the 2028 Term Loans of one-month Term SOFR plus 1.75 %. Prior to the Sixth Amendment on October 8, 2024, the margin on the Term Loans also included a credit spread adjustment of 0.11448 % for all one-month Term SOFR payments. Additionally, prior to December 27, 2023, the interest rate 78 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) margins for the Term Loans were 0.25 % higher. The rates were lowered by 25 basis points through the Fourth Amendment of the Term Loans. Each of these amendments resulted in minimal amounts being recognized as a loss on the early extinguishment of debt in the Company’s Consolidated Statement of Operations. The Company's obligations under the Term Loan Agreement are guaranteed by all of the Company's domestic restricted subsidiaries and secured by the liens on substantially all of the assets of the Company and the guarantors. Unsecured Senior Notes On July 2, 2019, the Company completed a private placement of $ 545.0 million aggregate principal amount of 2027 Notes and $ 300.0 million aggregate principal amount of 2029 Notes. The 2027 Notes will mature on July 15, 2027 and the 2029 Notes will mature on July 15, 2029. Interest payments on the 2027 and 2029 Notes are paid semiannually on January 15 and July 15. On January 24, 2023, the Company completed a private placement of $ 500.0 million aggregate principal amount of 2031 Notes which will mature on February 1, 2031 (collectively referred to with the 2027 Notes and 2029 Notes as the "Notes"). The proceeds from this were used toward the repayment of the Term Loans outstanding at the time. The interest rate on the 2031 Notes is paid semiannually on February 1 and August 1 of each year and commenced on August 1, 2023. The tables below depict the redemption prices of the Notes if redeemed during the twelve-month period commencing on the dates below, plus accrued and unpaid interest, if any, to but not including the redemption date. 2027 Notes Percentage July 15, 2024 and thereafter 100.000 % 2029 Notes Percentage July 15, 2024 102.563 % July 15, 2025 101.281 % July 15, 2026 and thereafter 100.000 % 2031 Notes Percentage February 1, 2026 103.188 % February 1, 2027 101.594 % February 1, 2028 and thereafter 100.000 % The Company may also redeem all or any portion of the 2031 Notes prior to February 1, 2026, at a redemption price equal to 100 % of the principal amount redeemed plus a make whole premium as of the date of redemption including accrued and unpaid interest, if any, up to but not including the date of redemption. Additionally, subject to certain limitations, prior to February 1, 2026, the Company may use net cash proceeds of one or more equity offerings to redeem up to 40 % in aggregate principal of the 2031 Notes at a redemption price equal to 106.375 % of the principal amount thereof plus accrued and unpaid interest thereon, if any, up to but not including the date of redemption. The Notes and the related indentures contain various customary non-financial covenants and are guaranteed by substantially all of the Company’s current and future domestic subsidiaries. The Notes are effectively subordinated to the Company's Term Loans, revolving credit facility and finance lease obligations to the extent of the value of the assets securing such secured indebtedness. The Notes are also effectively subordinated to all indebtedness and other liabilities of the Company's subsidiaries that are not guarantors of the Notes. Revolving Credit Facility. On June 28, 2024, the Company and one of the Company’s Canadian subsidiaries (the “Canadian Borrower”) entered into a seventh amended and restated credit agreement (the “Amended Credit Agreement”) with Bank of America, N.A., as administrative agent, and the lenders party to the Amended Credit Agreement. The Amended Credit Agreement amended and restated the sixth amended and restated credit agreement dated October 28, 2020 (the “Prior Credit Agreement”). Under the Amended Credit Agreement, the Company has the right to obtain revolving loans and letters of credit for a combined maximum of up to $ 550.0 million (with a sub-limit of $ 250.0 million for letters of credit) and the Canadian Borrower has the right to obtain revolving loans and letters of credit for a combined maximum of up to $ 50.0 million. The maximum borrowing amount of $ 600.0 million under the Amended Credit Agreement is increased from $ 400.0 million under the Prior Credit Agreement. 79 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Borrowings by the Company under the Amended Credit Agreement will bear interest at the Company’s option, at either (i) the sum of Term SOFR plus a SOFR Adjustment of 0.1 % plus 1.5 % per annum, or (ii) the U.S. Base Rate, plus 0.5 % per annum, and borrowings by the Canadian Borrower will bear interest, at the Company’s option, at either (i) the sum of Term CORRA plus a Term CORRA adjustment of either 0.29547 % or 0.32138 % for the one or three month interest period respectively, plus 1.5 % per annum, (ii) the Canadian Prime Rate, plus 0.5 % per annum, or (iii) the Canadian Base Rate, plus 0.5 % per annum, as those terms are defined in the Amended Credit Agreement. Other terms under the Amended Credit Agreement are substantially the same as under the Prior Credit Agreement. Subject to certain customary conditions, the facility will expire on June 28, 2029. On April 28, 2023, the Company entered into an amendment to the credit agreement for the revolving credit facility. As amended, the terms of the agreement are substantially the same as prior to the amendment except for certain updates required to transition the agreement to include a defined LIBOR successor rate. Under the amended agreement, borrowings under the revolving credit facility will bear interest at a rate, at the Company’s option, of either (i) “Term SOFR” (as defined in the amended agreement) plus an applicable margin ranging from 1.50 % to 1.75 % per annum based primarily on the level of the Company’s average liquidity for the most recent 30 day period or (ii) BofA’s base rate plus an applicable margin ranging from 0.50 % to 0.75 % per annum based primarily on such average liquidity. The amended agreement also continues to provide (i) for an unused line fee payable to the lenders, calculated on the then unused portion of the lenders’ $ 400.0 million maximum commitments, ranging from 0.25 % to 0.375 % per annum of the unused commitment, and (ii) for outstanding letters of credit, a fee payable to the lenders equal to the then applicable margin for Term SOFR borrowings described above, and to the issuing banks a standard fronting fee and customary fees and charges in connection with all amendments, extensions, draws and other actions with respect to letters of credit. Letters of credit issued under the revolving credit facility are utilized primarily as security for the Company's insurance program that includes casualty and financial assurance. The Company’s obligations under the revolving credit facility (including revolving loans and reimbursement obligations for outstanding letters of credit) are guaranteed by substantially all of the Company’s U.S. subsidiaries and secured by a first lien on the Company’s and its U.S. subsidiaries’ accounts receivable. The Canadian Borrower’s obligations under the facility are guaranteed by substantially all of the Company’s Canadian subsidiaries and secured by a first lien on the accounts receivable of the Canadian subsidiaries. As of December 31, 2024, the revolving credit facility had no outstanding loan balances, $ 470.0 million available to borrow and outstanding letters of credit of $ 130.0 million. The Company also had no outstanding loan balances as of December 31, 2023. Cash Flow Hedges The Company's strategy to hedge against fluctuations in variable interest rates involves entering into interest rate derivative agreements. 2022 Swap Arrangement In 2022, the Company entered into interest rate swap agreements with a notional amount of $ 600.0 million ("2022 Swaps") to effectively fix the interest rate on $ 600.0 million principal of the outstanding 2028 Term Loans. Under the terms of the 2022 Swaps' agreements, the Company receives interest based upon the variable rates on the 2028 Term Loans and pays a fixed amount of interest. The fixed rate on these instruments was 0.931 % through June 30, 2023 which, together with the original 2.00 % interest rate margin for the 2028 Term Loans, resulted in an effective annual interest rate of approximately 2.931 %. The fixed rate on these instruments increased to 1.965 % on July 1, 2023 and the variable rate became linked to Term SOFR to mirror the variable interest payments for the 2028 Term Loans. Including the 2.00 % interest rate margin for borrowings on the 2028 Term Loans and the 0.11448 % SOFR adjustment per the 2028 Term Loans, in effect at the time of this change, beginning July 1, 2023, the effective annual interest rate of this $ 600.0 million increased to 4.07898 %. With the Fourth Amendment on December 27, 2023 the margin on the 2028 Term Loans decreased from 2.00 % to 1.75 %, and the effective annual interest rate on the swapped portion of 2028 Term Loans outstanding decreased to 3.82898 %. With the Sixth Amendment on October 8, 2024 the SOFR adjustment was eliminated, and the effective annual interest rate on the swapped portion of 2028 Term Loans outstanding decreased to 3.71450 %. The changes to the 2028 term loans described herein are discussed in the Secured Senior Term Loans section above. The 2022 Swaps expire September 30, 2027. 80 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 2018 Swap Arrangement In 2018, the Company effectively fixed the interest rate on $ 350.0 million principal of the previously outstanding 2024 Term Loans by entering into interest rate swap agreements with a notional amount of $ 350.0 million ("2018 Swaps"). On January 24, 2023, concurrently with the repayment of the 2024 Term Loans, the Company received a settlement payment of $ 8.3 million from the 2018 Swap counterparties. As a result of the settlement, the Company also reclassified the amounts previously deferred in accumulated other comprehensive loss and recognized a settlement gain of $ 8.3 million in interest expense in 2023. At the inception of these instruments, the Company designated both the 2018 Swaps and the 2022 Swaps (collectively referred to as the “Swaps”) as cash flow hedges. As of December 31, 2024 the Company recorded a derivative asset with a fair value of $ 32.4 million. The balance in the derivative asset as of December 31, 2023 was $ 35.5 million, which included both of the Swaps. The balance in both periods is comprised only of the 2022 Swaps, given that the 2018 Swaps were settled in early 2023, as noted above. No ineffectiveness has been identified on the Swaps and, therefore the change in fair value is recorded in stockholders' equity as a component of accumulated other comprehensive loss. Amounts are reclassified from accumulated other comprehensive loss into interest expense on the consolidated statement of operations in the same period or periods during which the hedged transactions affect earnings. (13) INCOME TAXES The domestic and foreign components of income before provision for income taxes were as follows (in thousands): For the years ended December 31, 2024 2023 2022 Domestic $ 444,118 $ 401,912 $ 406,206 Foreign 89,325 101,367 131,792 Total $ 533,443 $ 503,279 $ 537,998 The provision for income taxes consisted of the following (in thousands, except percentages): For the years ended December 31, 2024 2023 2022 Current: Federal $ 68,321 $ 64,164 $ 52,237 State 27,649 25,496 26,980 Foreign 16,737 23,078 29,488 112,707 112,738 108,705 Deferred Federal 20,669 18,251 32,199 State ( 4,415 ) ( 9,049 ) ( 2,432 ) Foreign 2,183 3,483 ( 12,218 ) 18,437 12,685 17,549 Provision for income taxes $ 131,144 $ 125,423 $ 126,254 Effective tax rate 24.6 % 24.9 % 23.5 % 81 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The Company's effective income tax rate varied from the amount computed using the statutory federal income tax rate of 21% as follows (in thousands): For the years ended December 31, 2024 2023 2022 Tax expense at U.S. statutory rate $ 112,023 $ 105,689 $ 112,980 State income taxes, net of federal benefit 18,555 18,067 19,831 Foreign rate differential 3,965 4,213 6,196 Valuation allowance ( 6,485 ) ( 7,699 ) ( 18,769 ) Uncertain tax position interest and penalties ( 1,773 ) ( 7 ) ( 2,454 ) Tax credits 2,694 1,653 2,768 Non-deductible compensation 2,211 2,898 2,754 Other ( 46 ) 609 2,948 Provision for income taxes $ 131,144 $ 125,423 $ 126,254 In 2024, $ 4.1 million in fully reserved for foreign tax credits expired. In the table above, the expiration is included in the tax credits line and the write off of the valuation allowance is contributing to the valuation allowance benefit, however the foreign tax credit expiration and associated valuation allowance write-off had no net impact to the provision for income tax. The remaining valuation allowance benefit in 2024 is the result of profitable earnings at certain Canadian entities which utilized previously reserved for operating losses. The valuation allowance benefits recognized in 2023 are predominately the result of cumulative profitable earnings at certain US entities with historical state operating losses. As of December 31, 2023, management determined that there is sufficient positive evidence to conclude that it is more likely than not that additional deferred taxes associated with these State net operating losses are realizable. Therefore the valuation allowance was reduced accordingly. The valuation allowance benefits recognized in 2022 were the result of cumulative profitable earnings at certain Canadian entities with historic operating losses. The 2022 earnings were sufficient to utilize substantially all of the net operating losses, and as of December 31, 2022, the Company released any remaining valuation allowances associated with these entities, which were nominal. 82 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The components of the total net deferred tax assets and liabilities as of December 31, 2024 and 2023 were as follows (in thousands): 2024 2023 Deferred tax assets: Provision for doubtful accounts $ 14,808 $ 10,882 Closure, post-closure and remedial liabilities 32,189 31,944 Operating lease liabilities 60,929 46,784 Accrued expenses 14,749 14,963 Accrued compensation and benefits 16,876 15,058 Net operating loss carryforwards (1) 48,331 39,042 Excess business interest (2) 22,078 — Tax credit carryforwards 2,619 6,531 Stock-based compensation 4,877 3,516 Other 2,565 4,843 Total deferred tax assets 220,021 173,563 Deferred tax liabilities: Property, plant and equipment ( 311,546 ) ( 284,997 ) Operating lease right-of-use assets ( 59,999 ) ( 46,584 ) Interest rate swap asset ( 8,748 ) ( 9,576 ) Permits and other intangible assets ( 158,905 ) ( 130,391 ) Prepaid expenses ( 10,881 ) ( 12,372 ) Total deferred tax liabilities ( 550,079 ) ( 483,920 ) Total net deferred tax liability before valuation allowance ( 330,058 ) ( 310,357 ) Less valuation allowance ( 27,232 ) ( 35,272 ) Net deferred tax liabilities $ ( 357,290 ) $ ( 345,629 ) ___________________________________ (1) As of December 31, 2024, the net operating loss carryforwards included (i) gross state net operating loss carryforwards of $ 290.7 million which will begin to expire in 2025, (ii) gross federal net operating loss carryforwards of $ 79.3 million which will begin to expire in 2025 and (iii) gross foreign net operating loss carryforwards of $ 64.3 million which will begin to expire in 2025. The increase in the state and federal net operating loss carryforward from the prior year is predominately due to assets acquired in the HEPACO transaction. See Note 4, "Business Combinations" for more information on the related transaction. (2) Deferred tax asset acquired in the HEPACO transaction. See Note 4, "Business Combinations" for more information on the related transaction. The Company previously recognized the U.S. federal income taxes related to the operations in Canada and has not accrued for any remaining undistributed foreign earnings. These amounts continue to be indefinitely reinvested. The amount of tax associated with those unrepatriated earnings is not expected to be material. 83 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) A valuation allowance is required to be established when, based on an evaluation of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The components of the total valuation allowance as of December 31, 2024 and 2023 were as follows (in thousands): 2024 2023 Allowance related to: Foreign tax credits $ 346 $ 4,422 Federal net operating losses 3,783 3,783 State net operating loss carryforwards 4,734 4,809 Foreign net operating loss carryforwards 14,543 17,464 Deferred tax assets of a Canadian subsidiary 3,521 4,489 Realized and unrealized capital losses 305 305 Total valuation allowance $ 27,232 $ 35,272 The Company files U.S. federal income tax returns as well as income tax returns in various states and foreign jurisdictions. The Company may be subject to examination by the Internal Revenue Service for calendar years 2018 through 2022. The Company may be subject to examination by Canadian federal and provincial authorities for calendar years 2016 through 2022 and by state and local revenue authorities for calendar years 2017 through 2022. The Company has ongoing U.S., state and local jurisdictional audits, as well as Canadian federal and provincial audits, all of which the Company believes will not result in material liabilities. The Company has not identified any material uncertain tax positions in the periods presented. (14) EARNINGS PER SHARE The computation of basic earnings per share (EPS) is based on the weighted-average number of our common shares outstanding. The computation of diluted EPS is based on the weighted-average number of our common shares outstanding and potential dilutive common shares during the period as determined by using the treasury stock method. The following are computations of basic and diluted earnings per share (in thousands, except for per share amounts): For the years ended December 31, 2024 2023 2022 Numerator for basic and diluted earnings per share: Net income $ 402,299 $ 377,856 $ 411,744 Denominator: Weighted-average shares outstanding, basic 53,902 54,071 54,223 Dilutive impact of equity awards 297 311 264 Weighted-average shares outstanding, diluted 54,199 54,382 54,487 Basic earnings per share $ 7.46 $ 6.99 $ 7.59 Diluted earnings per share $ 7.42 $ 6.95 $ 7.56 In the table above, potentially dilutive shares outstanding include the dilutive effect of unvested restricted stock awards. Shares under the Employee Stock Purchase Plan (“ESPP”) which commenced in 2024 were issued on the last day of the year and therefore are included in the weighted-average shares outstanding when issued. Potentially dilutive shares whose effect would have been antidilutive have been excluded from the computation of diluted earnings per share. The Company included all outstanding performance awards and restricted stock awards in the calculation of diluted earnings per share except as shown in the table below (in thousands): For the years ended December 31, 2024 2023 2022 Antidilutive restricted stock awards 10 12 10 Performance stock awards for which performance criteria was not attained at reporting date 39 89 — 84 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (15) STOCKHOLDERS' EQUITY The Company’s Board of Directors has authorized the repurchase of up to $ 1.1 billion of the Company’s common stock. The repurchase program authorizes the Company to purchase the Company's common stock on the open market or in privately negotiated transactions periodically in a manner that complies with applicable U.S. securities laws. The number of shares purchased and the timing of the purchases have depended and will depend on a number of factors including share price, cash required for future business plans, trading volume and other conditions. The Company has no obligation to repurchase stock under this program and may suspend or terminate the repurchase program at any time. During the years ended December 31, 2024, 2023 and 2022, the Company repurchased and retired a total of 0.2 million, 0.3 million and 0.5 million shares, respectively, of the Company's common stock for total costs of $ 55.0 million, $ 51.2 million and $ 50.2 million, respectively. As of December 31, 2024, an additional $ 499.1 million remained available to repurchase shares under this program. (16) ACCUMULATED OTHER COMPREHENSIVE LOSS The changes in accumulated other comprehensive loss by component and related tax impacts for the years ended December 31, 2024, 2023 and 2022 were as follows (in thousands): Foreign Currency Translation Adjustments Unrealized (Loss) Gain on Available-For-Sale Securities Unrealized (Loss) Gain on Fair Value of Interest Rate Hedges Unrealized Loss on Pension Total Balance at January 1, 2022 $ ( 177,824 ) $ ( 150 ) $ ( 17,383 ) $ ( 655 ) $ ( 196,012 ) Other comprehensive (loss) income before reclassifications ( 31,515 ) ( 523 ) 78,711 415 47,088 Amounts reclassified out of accumulated other comprehensive loss — — ( 683 ) — ( 683 ) Tax benefit (provision) — 110 ( 17,587 ) ( 97 ) ( 17,574 ) Other comprehensive (loss) income ( 31,515 ) ( 413 ) 60,441 318 28,831 Balance at December 31, 2022 ( 209,339 ) ( 563 ) 43,058 ( 337 ) ( 167,181 ) Other comprehensive income (loss) before reclassifications 9,000 708 5,094 ( 741 ) 14,061 Amounts reclassified out of accumulated other comprehensive loss — — ( 30,273 ) — ( 30,273 ) Tax (provision) benefit — ( 149 ) 8,012 191 8,054 Other comprehensive income (loss) 9,000 559 ( 17,167 ) ( 550 ) ( 8,158 ) Balance at December 31, 2023 ( 200,339 ) ( 4 ) 25,891 ( 887 ) ( 175,339 ) Other comprehensive (loss) income before reclassifications ( 36,363 ) 47 16,515 339 ( 19,462 ) Amounts reclassified out of accumulated other comprehensive loss — — ( 19,582 ) — ( 19,582 ) Tax (provision) benefit — ( 10 ) 828 ( 70 ) 748 Other comprehensive (loss) income ( 36,363 ) 37 ( 2,239 ) 269 ( 38,296 ) Balance at December 31, 2024 $ ( 236,702 ) $ 33 $ 23,652 $ ( 618 ) $ ( 213,635 ) The amounts realized in the consolidated statements of operations during the years ended December 31, 2024, 2023 and 2022 which were reclassified out of accumulated other comprehensive loss were as follows (in thousands): For the years ended December 31, Other Comprehensive Loss Component 2024 2023 2022 Location Unrealized (Loss) Gain on Fair Value of Interest Rate Hedges (1) $ 19,582 $ 30,273 $ 683 Interest expense, net of interest income ___________________________________ (1) For the year ended December 31, 2023, the balance is inclusive of an $ 8.3 million gain realized in connection with the settlement of certain interest rate swaps. For more information on this transaction, see Note 12, "Financing Arrangements." 85 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (17) STOCK-BASED COMPENSATION Stock-based Compensation In 2020, the Company's shareholders approved the Clean Harbors, Inc. 2020 Stock Incentive Plan (the "2020 Plan"). The 2020 Plan provides for future awards of up to 2.5 million shares of the Company’s common stock (subject to certain anti-dilution adjustments) in the form of stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards. The 2020 Plan is administered by the Compensation and Human Capital Committee of the Company’s Board of Directors. The Company grants restricted stock awards and performance stock awards. The restricted stock awards generally vest over three to five years subject to continued employment. Performance stock awards are subject to performance criteria established by the Compensation and Human Capital Committee of the Company's Board of Directors prior to or at the date of grant. The vesting of the performance stock awards dependent upon the satisfaction of certain performance conditions currently based on revenue, Adjusted EBITDA margin, return on invested capital and a measure of workplace safety. In addition, performance stock awards include continued service conditions subsequent to the attainment of any performance conditions. Total stock-based compensation cost recognized for the years ended December 31, 2024, 2023 and 2022 was $ 28.0 million, $ 20.7 million and $ 26.8 million, respectively. The total income tax benefit recognized in the consolidated statements of operations from stock-based compensation expense was $ 5.1 million, $ 3.5 million and $ 5.0 million for the years ended December 31, 2024, 2023 and 2022, respectively. Restricted Stock Awards The following table summarizes information about restricted stock awards for the year ended December 31, 2024: Restricted Stock Number of Shares Weighted Average Grant-Date Fair Value Balance at January 1, 2024 414,623 $ 114.02 Granted 148,941 189.39 Vested ( 150,097 ) 107.23 Forfeited ( 25,507 ) 142.80 Balance at December 31, 2024 387,960 $ 143.69 As of December 31, 2024, there was $ 39.5 million of total unrecognized compensation cost arising from restricted stock awards. This cost is expected to be recognized over a weighted average period of 2.7 years. The total fair value of restricted stock vested during 2024, 2023 and 2022 was $ 31.9 million, $ 26.5 million and $ 16.4 million, respectively. Performance Stock Awards The following table summarizes information about performance stock awards for the year ended December 31, 2024: Performance Stock Number of Shares Weighted Average Grant-Date Fair Value Balance at January 1, 2024 181,284 $ 114.10 Granted 79,738 173.45 Vested ( 38,882 ) 104.69 Forfeited ( 62,944 ) 128.99 Balance at December 31, 2024 159,196 $ 102.09 As of December 31, 2024, there was $ 5.7 million of total unrecognized compensation cost arising from unvested performance stock awards deemed probable of vesting. This cost is expected to be recognized over a weighted average period of 2.4 years. The total fair value of performance awards vested during 2024, 2023 and 2022 was $ 8.6 million, $ 17.0 million and $ 11.1 million, respectively. 86 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Employee Stock Purchase Plan On May 22, 2024, the Company’s shareholders approved the Clean Harbors Employee Stock Purchase Plan (the “ESPP”). The ESPP provides a means for eligible employees of the Company to authorize after-tax payroll deductions on a voluntary basis to be used for the periodic purchase of the Company's common stock at a 10 % discount to its fair market value. The purchase price paid by the employees will be 90 % of the lower of the closing price of the Company's common stock on (i) the first trading day of the offering period or (ii) the last trading day of the offering period. A total of 500,000 shares of common stock are reserved for issuance under the ESPP. As of December 31, 2024, 15,435 shares have been issued under the plan. For the year ended December 31, 2024 total stock-based compensation cost recognized for the ESPP was $ 0.7 million. (18) COMMITMENTS AND CONTINGENCIES The Company and its subsidiaries are subject to legal proceedings and claims arising in the ordinary course of business. Actions filed against the Company arise from commercial and employment-related claims including alleged class actions related to sales practices and wage and hour claims. The plaintiffs in these actions may be seeking damages or injunctive relief or both. These actions are in various jurisdictions and stages of proceedings, and some are covered in part by insurance. In addition, the Company’s waste management services operations are regulated by federal, state, provincial and local laws enacted to regulate discharge of materials into the environment, remediation of contaminated soil and groundwater or otherwise protect the environment. This ongoing regulation results in the Company frequently becoming a party to legal or administrative proceedings involving all levels of government authorities and other interested parties. The issues involved in such proceedings generally relate to alleged violations of existing permits and licenses or alleged responsibility under federal or state Superfund laws to remediate contamination at properties owned either by the Company or by other parties (“third-party sites”) to which either the Company or the prior owners of certain of the Company’s facilities shipped waste. At December 31, 2024 and 2023, the Company had recorded reserves of $ 29.8 million and $ 32.4 million, respectively, for actual or probable liabilities related to the legal and administrative proceedings in which the Company was then involved, the principal of which are described below. As of December 31, 2024 and 2023, the $ 29.8 million and $ 32.4 million, respectively, of reserves consisted of (i) $ 23.3 million and $ 25.0 million, respectively, related to pending legal or administrative proceedings, including Superfund liabilities, which were included in remedial liabilities on the consolidated balance sheets, and (ii) $ 6.5 million and $ 7.4 million, respectively, related to federal, state and provincial enforcement actions as well as legal claims, which were included in accrued expenses on the consolidated balance sheets. In management's opinion, it is not reasonably possible that the potential liability beyond what has been recorded, if any, that may result from these actions, either individually or collectively, will have a material effect on the Company's financial position, results of operations or cash flows. The Company periodically adjusts the aggregate amount of these reserves when actual or probable liabilities are paid or otherwise discharged, new claims arise, or additional relevant information about existing or probable claims becomes available. Legal or Administrative Proceedings As of December 31, 2024, the principal legal and administrative proceedings in which the Company was involved, or which had been terminated during 2024, relate to Safety-Kleen product liability cases and Superfund proceedings. Safety-Kleen Product Liability Cases: Safety-Kleen, Inc. ("Safety-Kleen"), which is a legal entity acquired by the Company in 2012, has been named as a defendant in certain product liability cases that are currently pending in various courts and jurisdictions throughout the United States. As of December 31, 2024, there were approximately 68 proceedings (excluding cases which have been settled but not formally dismissed) wherein persons claim personal injury resulting from the use of Safety-Kleen's parts cleaning equipment or cleaning products. These proceedings typically involve allegations that the solvent used in Safety-Kleen's parts cleaning equipment contains contaminants and/or that Safety-Kleen's recycling process does not effectively remove the contaminants that become entrained in the solvent during their use. In addition, certain claimants assert that Safety-Kleen failed to warn adequately the product user of potential risks, including a historic failure to warn that solvent contains trace amounts of toxic or hazardous substances such as benzene. The Company maintains insurance that it believes will provide coverage for these product liability claims (over amounts accrued for self-insured retentions and deductibles in certain limited cases), except for punitive damages to the extent not insurable under state law or excluded from insurance coverage. The Company historically has vigorously defended, and intends to continue to vigorously defend, itself and the safety of its products against all of these claims. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. Consequently, the Company is unable to ascertain the ultimate aggregate amount of monetary liability or financial impact with respect to these matters as of December 31, 2024. 87 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) From January 1, 2024 to December 31, 2024, 18 product liability claims were settled or dismissed. Due to the nature of these claims and the related insurance, the Company did not incur any expense as insurance provided coverage in full for all such claims. Safety-Kleen may be named in similar, additional lawsuits in the future, including claims for which insurance coverage may not be available. Superfund Proceedings: The Company has been notified that either the Company (which, since December 28, 2012, has included Safety-Kleen) or the prior owners of certain of the Company's facilities for which the Company may have certain indemnification obligations have been identified as PRPs or potential PRPs in connection with 131 sites which are subject to or are proposed to become subject to proceedings under federal or state Superfund laws. Of the 131 Superfund related sites, six involve facilities that are now owned or leased by the Company and 125 involve third-party sites to which either the Company or the prior owners of certain of the Company’s facilities shipped waste. Of the 125 third-party sites, 30 are now settled, 12 are currently requiring expenditures on remediation and 83 are not currently requiring expenditures on remediation. In connection with each site, the Company has estimated the extent, if any, to which it may be subject, either directly or as a result of any indemnification obligations, for cleanup and remediation costs, related legal and consulting costs associated with PRP investigations, settlements and related legal and administrative proceedings. The amount of such actual and potential liability is inherently difficult to estimate because of, among other relevant factors, uncertainties as to the legal liability (if any) of the Company or the prior owners of certain of the Company's facilities to contribute a portion of the cleanup costs, the assumptions that must be made in calculating the estimated cost and timing of remediation, the identification of other PRPs and their respective capability and obligation to contribute to remediation efforts and the existence and legal standing of indemnification agreements (if any) with prior owners, which may either benefit the Company or subject the Company to potential indemnification obligations. The Company believes its potential monetary liability could exceed $1.0 million at three of the 131 Superfund related sites. Of the 125 third-party sites at which the Company has been notified it is a PRP or potential PRP or may have indemnification obligations, the Company has indemnification agreements at a total of 17 sites. These agreements indemnify the Company (which now includes Safety-Kleen) with respect to any liability at the 17 sites for waste disposed prior to the Company's (or Safety-Kleen's) acquisition of the former subsidiaries of Waste Management and McKesson which had shipped waste to those sites. Accordingly, the indemnifying parties are paying all costs of defending those subsidiaries in those 17 cases, including legal fees and settlement costs. However, there can be no guarantee that the Company's ultimate liabilities for those sites will not exceed the amount recorded or that indemnities applicable to any of these sites will be available to pay all or a portion of related costs. Except for those indemnification agreements discussed, the Company does not have an indemnity agreement with respect to any of the 125 third-party sites discussed above. Federal, State and Provincial Enforcement Actions From time to time, the Company pays fines or penalties in regulatory proceedings relating primarily to waste treatment, storage or disposal facilities. As of December 31, 2024, there were two proceedings for which the Company believes it is possible that the sanctions could equal or exceed $1.0 million. The Company believes that the fines or other penalties in this or any of the other regulatory proceedings will, individually or in the aggregate, not have a material effect on its financial condition, results of operations or cash flows. Self-Insurance Liabilities Under the Company's insurance programs, coverage is obtained for catastrophic exposures, as well as those risks required to be insured by law or contract. The Company's policy is to retain a significant portion of certain expected losses related to workers' compensation, employee medical, comprehensive general liability and vehicle liability. A portion of these self-insured liabilities are managed through its wholly-owned captive insurance subsidiary. Provisions for losses expected under these programs are recorded based upon the Company's estimates of the aggregate liability for claims. The current deductible per participant per year for the employee medical insurance policy is $ 2.0 million. The current deductible per occurrence for workers' compensation is $ 1.0 million, general liability is $ 2.0 million and vehicle liability is $ 2.0 million. The retention per claim for the environmental impairment policy is $ 1.0 million. At December 31, 2024 and 2023, the Company had accrued $ 83.7 million and $ 82.7 million, respectively, for its self-insurance liabilities (exclusive of employee medical insurance) using a risk-free discount rate of 4.14 % and 4.86 %, respectively. 88 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Anticipated payments for contingencies related to workers' compensation, comprehensive general liability and vehicle liability related claims at December 31, 2024 for each of the next five years and thereafter were as follows (in thousands): Years ending December 31, 2025 $ 25,855 2026 21,083 2027 16,622 2028 11,720 2029 4,692 Thereafter 14,074 Undiscounted self-insurance liabilities 94,046 Less: Discount ( 10,374 ) Total self-insurance liabilities (included in accrued expenses and other current liabilities) $ 83,672 (19) LEASES The Company’s lease portfolio is predominately operating leases for real estate, vehicles and industrial equipment utilized in operations and rail cars. The Company presents operating lease balances separately on the consolidated balance sheets. The Company's finance leases relate to vehicles, rail cars and certain real estate. The following table presents the Company's finance lease balances and their classification on the consolidated balance sheets (in thousands): Finance Lease Balances (Classification) December 31, 2024 December 31, 2023 ROU assets (Property, plant and equipment, net) $ 182,532 $ 126,292 Current portion of lease liabilities (Accrued expenses and other current liabilities) 25,330 16,975 Long-term portion of lease liabilities (Other long-term liabilities) 161,375 113,486 The Company’s lease expense was as follows (in thousands): For the years ended December 31, 2024 2023 2022 Operating lease cost $ 81,688 $ 69,156 $ 59,041 Finance lease cost: Amortization of ROU assets 25,985 17,183 13,239 Interest on lease liabilities 7,066 4,051 3,011 Total finance lease cost 33,051 21,234 16,250 Short-term lease cost 199,516 167,379 158,736 Variable lease cost 5,187 4,887 4,353 Total lease cost $ 319,442 $ 262,656 $ 238,380 Other information related to leases was as follows: Weighted Average Remaining Lease Term (years) December 31, 2024 December 31, 2023 Operating leases 4.3 3.8 Finance leases 6.8 7.1 Weighted Average Discount Rate December 31, 2024 December 31, 2023 Operating leases 5.20 % 4.68 % Finance leases 4.84 % 3.96 % 89 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the years ended December 31, Supplemental Cash Flow Related Disclosures (in thousands) 2024 2023 2022 Cash paid for amounts related to lease liabilities: Operating cash flows from operating leases $ 84,932 $ 71,185 $ 61,014 Operating cash flows from finance leases 7,066 4,051 3,011 Financing cash flows from finance leases 30,886 15,937 12,821 ROU assets obtained in exchange for operating lease liabilities 123,938 82,392 58,230 ROU assets obtained in exchange for finance lease liabilities 78,455 47,238 29,205 At December 31, 2024, the Company's future lease payments under non-cancelable leases that have lease terms in excess of one year were as follows (in thousands): Years ending December 31, December 31, 2024 Operating Leases Finance Leases 2025 $ 82,873 $ 36,230 2026 66,702 35,228 2027 54,242 35,217 2028 37,291 31,244 2029 20,357 27,084 Thereafter 25,064 58,522 Total future lease payments 286,529 223,525 Amount representing interest ( 31,983 ) ( 36,820 ) Total lease liabilities $ 254,546 $ 186,705 At December 31, 2024, none of the Company's executed leases that had not yet commenced will create significant rights or obligations in the future and sublease transactions are not material. Additionally, the Company does not have any related party leases, and there were no restrictions or covenants imposed by its leases. (20) SEGMENT REPORTING Segment reporting is prepared on the same basis that the Company's chief operating decision maker ("CODM"), which is a committee comprised of the Company's Co-Chief Executive Officers, manages the business, makes operating decisions and assesses performance. The Company is managed and reports as two operating segments; (i) the Environmental Services segment and (ii) the Safety-Kleen Sustainability Solutions segment. Third-party revenue is revenue billed to outside customers by a particular segment. Direct revenue is revenue allocated to the segment providing the product or service. Intersegment revenues represent the sharing of third-party revenues among the segments based on products and services provided by each segment as if the products and services were sold directly to the third-party. The intersegment revenues are shown net. The operations not managed through the Company’s operating segments described above are recorded as “Corporate.” Although such transactions are excluded from the business segment results, they are included in reported consolidated earnings. The following tables reconcile third-party revenues to direct revenues by Reportable Segment (in thousands): For the year ended December 31, 2024 Environmental Services Safety-Kleen Sustainability Solutions Total Segment Revenues Corporate Total Consolidated Revenues Third-party revenues $ 4,960,325 $ 929,220 $ 5,889,545 $ 407 $ 5,889,952 Intersegment revenues (expense), net 44,422 ( 44,422 ) — — — Direct revenues $ 5,004,747 $ 884,798 $ 5,889,545 $ 407 $ 5,889,952 90 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the year ended December 31, 2023 Environmental Services Safety-Kleen Sustainability Solutions Total Segment Revenues Corporate Total Consolidated Revenues Third-party revenues $ 4,469,909 $ 938,796 $ 5,408,705 $ 447 $ 5,409,152 Intersegment revenues (expense), net 41,533 ( 41,533 ) — — — Direct revenues $ 4,511,442 $ 897,263 $ 5,408,705 $ 447 $ 5,409,152 For the year ended December 31, 2022 Environmental Services Safety-Kleen Sustainability Solutions Total Segment Revenues Corporate Total Consolidated Revenues Third-party revenues $ 4,144,973 $ 1,021,125 $ 5,166,098 $ 507 $ 5,166,605 Intersegment revenues (expense), net 26,733 ( 26,733 ) — — — Direct revenues $ 4,171,706 $ 994,392 $ 5,166,098 $ 507 $ 5,166,605 The primary financial measure by which the CODM evaluates the performance of its segments is Adjusted EBITDA, which consists of net income plus accretion of environmental liabilities, stock-based compensation, depreciation and amortization, net interest expense, loss on early extinguishment of debt and provision for income taxes and excludes other transactions not deemed representative of fundamental segment results and other (income) expense, net. Transactions between the segments are accounted for at the Company’s best estimate based on similar transactions with outside customers. The CODM uses Adjusted EBITDA to enhance their understanding of segment operating performance, which represents the Company’s performance in the ordinary, ongoing and customary course of operations. The reportable segment operating performance Adjusted EBITDA is used by the CODM to make key operating decisions such as the allocation of resources. Total assets by segment are not used by the CODM to assess the performance of, or allocate resources to, the Company’s segments, therefore total assets by segment are not disclosed. The tables below present total Reportable Segment Adjusted EBITDA and the relevant significant segment expenses provided to the CODM by reported segment (in thousands): For the year ended December 31, 2024 Environmental Services Safety-Kleen Sustainability Solutions Total Reportable Segments Direct Revenues $ 5,004,747 $ 884,798 $ 5,889,545 Cost of Revenues 3,366,022 659,217 4,025,239 Selling, General and Administrative Expenses 371,263 78,575 449,838 Total Reportable Segment Adjusted EBITDA $ 1,267,462 $ 147,006 $ 1,414,468 For the year ended December 31, 2023 Environmental Services Safety-Kleen Sustainability Solutions Total Reportable Segments Direct Revenues $ 4,511,442 $ 897,263 $ 5,408,705 Cost of Revenues 3,063,043 646,301 3,709,344 Selling, General and Administrative Expenses 346,791 78,089 424,880 Total Reportable Segment Adjusted EBITDA $ 1,101,608 $ 172,873 $ 1,274,481 For the year ended December 31, 2022 Environmental Services Safety-Kleen Sustainability Solutions Total Reportable Segments Direct Revenues $ 4,171,706 $ 994,392 $ 5,166,098 Cost of Revenues 2,902,979 615,303 3,518,282 Selling, General and Administrative Expenses 315,674 72,762 388,436 Total Reportable Segment Adjusted EBITDA $ 953,053 $ 306,327 $ 1,259,380 91 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table presents Total Reportable Segment Adjusted EBITDA reconciled to income from operations before provision for income taxes (in thousands): For the years ended December 31, 2024 2023 2022 Adjusted EBITDA: Environmental Services $ 1,267,462 $ 1,101,608 $ 953,053 Safety-Kleen Sustainability Solutions 147,006 172,873 306,327 Total Reportable Segment Adjusted EBITDA 1,414,468 1,274,481 1,259,380 Reconciliation to Consolidated Statements of Operations: Corporate Costs (1) 297,534 261,911 237,252 Accretion of environmental liabilities 13,456 13,667 12,943 Stock-based compensation 27,981 20,703 26,844 Depreciation and amortization 400,922 365,761 347,594 Kimball startup costs 4,343 — — Income from operations 670,232 612,439 634,747 Other expense (income), net 1,454 ( 2,315 ) ( 2,472 ) Loss on early extinguishment of debt 371 2,880 422 Gain on sale of business — — ( 8,864 ) Interest expense, net of interest income 134,964 108,595 107,663 Income from operations before provision for income taxes $ 533,443 $ 503,279 $ 537,998 ___________________________________ (1) Corporate Costs include the revenue, cost of revenues and selling, general and administrative expenses not managed through the Company’s operating segments. These costs are not captured within the Company’s Reportable Segment Adjusted EBITDA but are included in the Company’s total Adjusted EBITDA balances. The following table presents assets by reported segment and in the aggregate (in thousands): December 31, 2024 December 31, 2023 Property, plant and equipment, net Environmental Services $ 1,865,611 $ 1,651,026 Safety-Kleen Sustainability Solutions 463,538 411,415 Corporate 118,792 130,877 Total property, plant and equipment, net $ 2,447,941 $ 2,193,318 Goodwill and Permits and other intangibles, net Environmental Services Goodwill $ 1,296,204 $ 1,112,013 Permits and other intangibles, net 549,482 454,919 Total Environmental Services 1,845,686 1,566,932 Safety-Kleen Sustainability Solutions Goodwill $ 180,995 $ 175,723 Permits and other intangibles, net 152,505 147,878 Total Safety-Kleen Sustainability Solutions 333,500 323,601 Total $ 2,179,186 $ 1,890,533 92 Table of Contents CLEAN HARBORS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Geographic Information As of December 31, 2024 and 2023, the Company had property, plant and equipment, net of depreciation and amortization and permits and other intangible assets, net of amortization in the following geographic locations (in thousands): December 31, 2024 December 31, 2023 Total % of Total Total % of Total Property, plant and equipment, net United States $ 2,249,155 91.9 % $ 1,972,221 89.9 % Canada and other foreign 198,786 8.1 221,097 10.1 Total property, plant and equipment, net $ 2,447,941 100.0 % $ 2,193,318 100.0 % Permits and other intangibles, net United States $ 674,246 96.0 % $ 570,049 94.6 % Canada 27,741 4.0 32,748 5.4 Total permits and other intangibles, net $ 701,987 100.0 % $ 602,797 100.0 % The following table presents the total assets by geographical area (in thousands): December 31, 2024 December 31, 2023 United States $ 6,756,813 $ 5,786,937 Canada and other foreign 620,465 595,932 Total $ 7,377,278 $ 6,382,869 93 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.