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Item 7. Management’s Discussion and Analysis

2026-02-18 compared with 2025-02-19 · 197 added, 178 removed, 334 unchanged (53% of the section changed)

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Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-K, including information with respect to our plans, strategies, objectives, expectations and intentions for our business and related financing, includes forward-looking statements that involve risks and uncertainties.

As a result of many factors, including those factors set forth in the “Risk Factors” section of this Form 10-K, our actual results could differ materially from the results described in or implied by these forward-looking statements.

As a result of many factors, including those factors set forth in the “Risk Factors” section of this Annual Report on Form 10-K, our actual results could differ materially from the results described in or implied by these forward-looking statements.

Please also see the section titled “Disclosure Regarding Forward-Looking Statements.”

We are North America’s leading provider of environmental and industrial services supporting our customers in finding environmentally responsible solutions to further their sustainability goals in today’s world.

Everywhere industry meets the environment, we strive to provide eco-friendly services and products that protect and restore North America’s natural environment.

We believe we operate, in the aggregate, the largest number of hazardous waste incinerators, landfills and treatment, storage and disposal facilities (“TSDFs”) in North America.

Everywhere industry meets the environment, we strive to provide sustainable services and products that protect and restore North America’s natural environment.

We believe we operate, in the aggregate, the largest number of hazardous waste incinerators, landfills and treatment, storage and disposal facilities, or TSDFs, in North America.

We serve over 350,000 customers, including the majority of Fortune 500 companies, across various markets including chemical and manufacturing, as well as numerous government agencies.

These customers rely on us to safely deliver a broad range of services including but not limited to end-to-end hazardous waste management, emergency response, industrial cleaning and maintenance and recycling services.

We are also a leading provider of parts cleaning and related environmental services to general manufacturing, automotive and commercial customers in North America and largest re-refiner and recycler of used oil in North America.

Performance of our segments is evaluated on several factors of which the primary financial measure is Adjusted EBITDA, as reconciled to our net income and described more fully below.

The following is a discussion of how management evaluates its segments in regards to other factors including key performance indicators that management uses to assess the segments’ results, as well as certain macroeconomic trends and influences that impact each reportable segment:

• Environmental Services - The Environmental Services segment results are driven by the customer demand for our wide variety of services, the volume of waste managed and project work requiring responsible waste handling and disposal.

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

The Environmental Services segment results also include the Safety-Kleen branches’ core environmental service offerings of containerized waste disposal, parts washer and vacuum services.

We are also a leading provider of parts cleaning and related environmental services to general manufacturing, automotive and commercial customers in North America and the largest re-refiner and recycler of used oil in North America.

Performance of our segments is evaluated on several factors of which the primary financial measure is Adjusted EBITDA, a non-GAAP measure that is reconciled to our GAAP net income and described more fully below.

The following is a discussion of how management evaluates our segments in regards to other factors including key performance indicators that management uses to assess the segments’ results, as well as certain macroeconomic trends and influences that impact each reportable segment:

• Environmental Services - The Environmental Services segment results are driven by customer demand for our wide variety of services, the volume, pricing and mix of waste managed and project work requiring responsible waste handling and disposal.

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

The Environmental Services segment results include the Safety-Kleen branches’ core environmental service offerings of containerized waste disposal, parts washer and vacuum services.

These results are driven by the volumes of waste collected from these customers, the overall number of parts washers placed at customer sites, and the demand for and frequency of other offered services.

The results and integration of the acquired operations of HEPACO Blocker, Inc.

and its subsidiaries (collectively, “HEPACO”), which we acquired in March, 2024, also impact the overall segment results as we integrated this business into our Field Services operations.

In managing the business and evaluating performance, management tracks the volumes and mix of waste handled and disposed of or recycled, generally through our incinerators, TSDFs and landfills, the utilization rates of our incinerators, equipment and workforce, including billable hours, and the number of parts washer services performed, and pricing realized by our business and peer companies as well as other key metrics.

The results and integration of the acquired operations of HEPACO, which we acquired in March 2024, also impact the overall segment results as we integrated this business into our Field Services operations.

In managing the business and evaluating performance, management tracks the volumes and mix of waste handled and disposed of or recycled, generally through our incinerators, TSDFs and landfills;

the utilization rates of our incinerators, equipment and workforce, including billable hours and the number of parts washer services performed;

and pricing realized by our business and peer companies as well as other key metrics.

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

industrial production, economic conditions in the general manufacturing, chemical and automotive markets, including efforts and economic incentives to increase domestic operations, available capacity at waste disposal outlets, demand for industrial cleaning and related industrial services, weather conditions, efficiency of our operations, technology, changing regulations, competition, market pricing of our services, costs incurred to deliver our services and the management of our related operating costs.

• Safety-Kleen Sustainability Solutions - Safety-Kleen Sustainability Solutions (“SKSS”) segment results are impacted by our customers’ demand for high-quality, environmentally responsible recycled oil products and their demand for our related service and product offerings.

• Safety-Kleen Sustainability Solutions - The Safety-Kleen Sustainability Solutions, or SKSS, segment results are impacted by our customers’ demand for high-quality, environmentally responsible recycled oil products and their demand for our related service and product offerings.

SKSS provides collection services for used oil, used oil filters and other automotive related fluids, which allows customers to manage these wastes in a responsible and compliant way while also converting these waste streams into high-quality products for re-use.

SKSS offers high-quality recycled base and blended oil products and other automotive and industrial lubricants to end users, including fleet customers, distributors, manufacturers of oil products and industrial plants.

Segment results are impacted by market pricing, overall demand and the mix of our oil products sales.

Segment results are

impacted by market pricing, overall demand and the mix of our oil products sales.

Segment results are also predicated on the demand for other SKSS product and service offerings, including collection services for used oil, used oil filters and other automotive fluids.

The used oil collected is used as feedstock in our oil re-refining to produce our base and blended oil products and other hydraulic oils, lubricants and recycled fuel oil or are integrated into the Clean Harbors’ recycling and

disposal network.

The results and integration of the acquired operations of Noble Oil Services, Inc.

and its subsidiaries (collectively “Noble”) also impact the overall segment results.

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

The used oil collected is used as feedstock in our oil re-refining process to produce our base and blended oil products and other hydraulic oils, lubricants and recycled fuel oil or are integrated into our recycling and disposal network.

The results and integration of the acquired operations of Noble also impact the overall segment results.

In operating the business and evaluating performance, management tracks the volumes of used oil and other waste streams collected and relative percentages of base and blended oil sales along with various pricing metrics associated with the commodity driven margin between product pricing and the overall revenue generation along with related costs.

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

Overall product pricing and costs incurred in connection with the collection of used oil and other raw materials associated with the segment’s oil related products can also be volatile and can be impacted by global events and their relative impact on commodity products and pricing.

Overall product pricing as well as revenues generated and/or costs incurred in connection with the collection of used oil and other raw materials associated with the segment’s oil-related products can also be volatile and can be impacted by global events and their relative impact on commodity products and pricing.

The overall market price of oil and regulations that change the possible usage of used oil or burning of used oil as a fuel, impact the premium the segment can charge for used oil collections.

Total direct revenues for 2025 increased 2.4% or $140.9 million to $6,030.8 million, compared with $5,890.0 million in 2024.

Our Environmental Services segment direct revenues increased $493.3 million or 10.9% in 2024 compared with 2023 driven by growth in Field and Emergency Response Services, including the contributions from the acquisition of HEPACO, as well as growth in our Technical Services and Safety-Kleen branch core service offerings.

Direct revenues recorded by our SKSS segment decreased $12.5 million in 2024 compared to 2023 primarily due to lower market-based pricing on our base and blended oil product sales as well as reduced volumes of these products sold.

Contributions from the acquisition of Noble partially offset these decreases.

Foreign currency translation of our Canadian operations negatively impacted our consolidated direct revenues by $9.0 million in 2024 as compared to 2023.

Income from operations in 2024 was $670.2 million as compared with $612.4 million in 2023, an increase of 9.4%.

We reported net income in 2024 and 2023 of $402.3 million and $377.9 million, respectively.

Adjusted EBITDA, which is the primary financial measure by which we evaluate our operations, was $1,116.9 million in 2024 and $1,012.6 million in 2023, an increase of over 10%, driven by the results of our Environmental Services segment.

Our Environmental Services segment direct revenues increased $188.5 million or 3.8% in 2025, compared with 2024, driven by growth in our Technical Services, Safety-Kleen branch core service offerings and Field and Emergency Response services.

These increased revenues offset lower contributions from our Industrial Services organization.

Direct revenues recorded by our SKSS segment decreased $47.4 million in 2025 compared to 2024 due to lower market-based pricing for both base oil and blended oil products as well as reduced volumes sold.

These declines were partially offset by higher revenue from the collection of used oil as pricing for this service increased throughout the year.

Income from operations in 2025 was $673.4 million, compared with $670.2 million in 2024.

Depreciation and amortization expense for the year ended December 31, 2025, was $45.1 million higher than the comparable period in 2024, which impacted comparative operating income.

Net income for the year ended December 31, 2025, was $391.0 million, a decrease of $11.3 million or 2.8%, compared with net income of $402.3 million for the year ended December 31, 2024.

Adjusted EBITDA, which is the primary financial measure by which we evaluate our operations, was $1,169.9 million in 2025 and $1,116.9 million in 2024, an increase of 4.7% driven by the results of our Environmental Services segment.

Additional information regarding Adjusted EBITDA, which is a non-GAAP measure, including a reconciliation of net income to Adjusted EBITDA, appears below under “Adjusted EBITDA.”

Net cash from operating activities for 2024 was $777.8 million, an increase of $43.2 million from 2023.

Net cash from operating activities for 2025 was $866.7 million, an increase of $89.0 million from 2024 primarily due to improvement in working capital balances, lower cash paid for taxes and lower environmental expenditures as compared to the prior year.

Adjusted free cash flow, which management uses to measure our financial strength and ability to generate cash, was $509.3 million in 2025, which represented a $151.4 million increase over 2024.

This increase was due to incremental net cash generated by operating activities, partially offset by higher spend on property plant and equipment, net of proceeds from the sale and disposal of fixed assets.

This increase was due to the reasons noted above impacting cash flow from operating activities and lower spend on property plant and equipment, net of proceeds from the sale and disposal of fixed assets.

Additional information regarding adjusted free cash flow, which is a non-GAAP measure, including a reconciliation of net cash from operating activities to adjusted free cash flow, appears below under “Adjusted Free Cash Flow .

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N/M = not meaningful

(1) Direct revenue is revenue allocated to the segment performing the provided service.

(1) Direct revenue is revenue allocated to the segment performing the provided service or selling the product.

(2) Cost of revenues is shown exclusive of (i) accretion of environmental liabilities and (ii) depreciation and amortization which are presented separately on the Consolidated Statements of Operations.

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See Adjusted EBITDA section below for a reconciliation of net income to Adjusted EBITDA.

(3) Selling, general and administrative expenses is shown exclusive of stock-based compensation which is presented in Selling, general and administrative expenses on the Company’s Consolidated Statements of Operations but is not included in the Company’s measurement of Adjusted EBITDA.

(3) Selling, general and administrative or SG&A expenses is shown exclusive of stock-based compensation which is presented in SG&A expenses on our Consolidated Statements of Operations, but is not included in our measurement of Adjusted EBITDA.

Additionally, in 2025, SG&A expenses are shown exclusive of $3.5 million of third-party transaction related costs, which are presented in SG&A expenses on our Consolidated Statements of Operations but are not included in our measurement of Adjusted EBITDA.

See Adjusted EBITDA section below for a reconciliation of net income to Adjusted EBITDA.

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

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

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

Direct Revenues

There are many factors which can impact our revenues including, but not limited to:

overall levels of industrial activity and economic growth in North America, changes in the regulatory environment including those related to per- and polyfluoroalkyl substances (“PFAS”), impacts of acquisitions and divestitures, competitive industry pricing, overall market incineration capacity including the closure of captive incinerators, the level of emergency response services, government infrastructure investment, reshoring industrial production and manufacturing, existence or non-existence of large scale environmental waste and remediation projects, weather related events, the number of parts washers placed at customer sites, miles driven and related lubricant demand, base and blended oil pricing, market supply for base oil products, market changes relative to the collection of used oil, our ability to manage the spread between oil product prices, and prices for the collection of used oil and foreign currency translation.

In addition, customer efforts to minimize hazardous waste and changes in regulation can impact our revenues.

There are many factors that can impact our revenues including, but not limited to, overall levels of industrial activity and economic growth in North America;

competitive industry pricing;

overall market incineration capacity including captive incineration closures;

changes in the regulatory environment including those related to per- and polyfluoroalkyl substances, or PFAS;

impacts of acquisitions and divestitures;

the level of emergency response services;

government infrastructure investment;

reshoring of domestic manufacturing;

existence or non-existence of large scale environmental waste and remediation projects;

weather related events;

the number of parts washers placed at customer sites;

miles driven and related lubricant demand;

base and blended oil pricing;

market supply for base oil products;

market changes relative to the collection of used oil and foreign currency fluctuations.

In addition, customer efforts to minimize hazardous waste and regulatory changes in can impact our revenues.

Environmental Services

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Direct revenues $ 5,193,290 $ 5,004,747 $ 4,511,442 $ 188,543 3.8 % $ 493,305 10.9 %

Environmental Services direct revenues for the year ended December 31, 2025, increased $188.5 million from the comparable period in 2024.

Technical services revenue increased $126.2 million with contributions across our portfolio of waste disposal services, including stronger volumes at our incinerator and landfill facilities, higher revenues from waste and remediation projects and greater pricing of services provided.

On a comparative basis and excluding the impacts of the new incinerator in Kimball, Nebraska, which is not expected to be running at full utilization until the end of 2026, utilization at our incinerators was 89% for the year ended December 31, 2025, as compared to 88% in the same period in 2024.

Including the new Kimball incinerator, utilization at our incinerators was 85% for the year ended December 31, 2025.

Revenue from our Safety-Kleen branches' core service offerings increased $67.3 million, primarily driven by improved pricing, and to a lesser extent, volume, for our containerized waste, vacuum and parts washer services.

Field and emergency response services revenues increased $42.2 million from 2024 primarily driven by incremental revenue from the acquisition of HEPACO.

Revenue from our industrial services operations decreased $49.6 million due to lower turnaround activity and related high-value services compared to 2024.

Environmental Services direct revenues for the year ended December 31, 2024, increased $493.3 million from the comparable period in 2023 driven by incremental revenues from legacy operations combined with acquisitive growth.

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Technical services revenue increased $169.7 million with contributions across our portfolio of waste disposal services driven by favorable volumes of waste disposed, most notably in our incinerators and TSDFs, and favorable pricing.

Utilization at our incinerators for 2024 was 88% as compared to 84% in the prior year.

Utilization at our incinerators for 2024 was 88% as compared to 84% in 2023.

Revenue from our Safety-Kleen branches' core service offerings increased $76.9 million as both pricing and demand increased for our containerized waste, vacuum and parts washer services.

Revenue from our industrial services operations declined $41.4 million due to lower turnaround activity and related high-value services compared to 2023.

The Canadian operations of the Environmental Services segment were negatively impacted by $7.4 million due to foreign currency translation.

Environmental Services direct revenues for the year ended December 31, 2023 increased $339.7 million from the comparable period in 2022 due to growth across our service offerings.

Revenue from our Safety-Kleen branches' core service offerings increased $113.9 million as both demand and pricing increased for our containerized waste, parts washer and vacuum services.

Revenue from our industrial services operations grew $107.9 million due to contributions from the acquisition of Thompson Industrial on March 31, 2023 coupled with growth of the legacy industrial service offerings.

Technical services revenue increased $68.6 million with contributions across our portfolio of waste disposal services more than offsetting slightly lower utilization at our incinerators.

Landfill volumes and pricing both increased in 2023 and pricing for our incineration benefitted 2023 as well.

Utilization at our incinerators for 2023 was 84% as compared to 86% in the prior year due to unplanned outages for required maintenance and significant weather events earlier in 2023.

Field and emergency response service revenues increased $34.6 million from 2022.

The Canadian operations of the Environmental Services segment were negatively impacted by $18.5 million due to foreign currency translation.

Safety-Kleen Sustainability Solutions

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Direct revenues $ 837,361 $ 884,798 $ 897,263 $ (47,437) (5.4) % $ (12,465) (1.4) %

SKSS direct revenues for the year ended December 31, 2025 decreased $47.4 million from the comparable period in 2024 largely due to revenues from base oil, which decreased $68.1 million driven by lower pricing and, to a lesser extent, lower volumes sold.

Blended oil sales decreased $34.8 million, driven by lower volumes sold and, to a lesser extent, lower pricing.

Revenues from contract packaging services decreased $13.2 million in the year ended December 31, 2025, compared to the prior year.

These decreases were partially offset by a $43.5 million increase in revenue from the collection of used oil as we increased pricing for these waste oil collection services throughout 2025.

Additionally, revenues from the sale of vacuum gas oil and specialty refinery products increased $18.1 million, primarily driven by the incremental contributions of the acquired Noble operations.

SKSS direct revenues for the year ended December 31, 2024, decreased $12.5 million from the comparable period in 2023 largely due to a reduction in revenues from base oil and blended oil sales of $33.5 million and $17.8 million, respectively, driven by lower pricing and, to a lesser extent, lower volumes sold.

Revenues from contract packaging services decreased $11.1 million and revenues generated from the sale of other products decreased $5.3 million when compared with the prior year.

Revenues from the sale of vacuum gas oil and specialty refinery products increased $46.8 million as the revenues generated from the Noble operations, acquired in March 2024, more than offset decreases in these product sales from the legacy business.

Revenues from contract packaging services decreased $11.1 million and revenues generated from the sale of other products decreased $5.3 million compared with the prior year.

from the sale of vacuum gas oil and specialty refinery products increased $46.8 million as the revenues generated from the Noble operations, acquired in March 2024, more than offset decreases in these product sales from the legacy business.

Overall, the operations of Noble added approximately $70 million of direct revenues to the SKSS segment in 2024, the majority coming from the sale of vacuum gas oil and specialty refinery products.

Revenues from the collection of used oil also increased $5.7 million.

The Canadian operations of the SKSS segment were negatively impacted by $1.6 million in 2024 due to foreign currency translation.

SKSS direct revenues for the year ended December 31, 2023 decreased $97.1 million from the comparable period in 2022.

Base oil sales revenues decreased $97.6 million due to lower pricing despite an 8% increase in the volume sold during 2023.

Revenues from contract packaging also decreased $18.0 million and revenues from recycled fuel oil and refinery byproducts decreased $12.2 million.

Blended oil sales revenues increased $19.5 million, a 23% increase in gallons sold, which offset the lower pricing of these products.

Revenues from the collection of used oil increased $14.1 million driven by higher pricing for these services.

The Canadian operations of the SKSS segment were negatively impacted by $4.8 million in 2023 due to foreign currency translation.

Cost of Revenues

We believe that management of operating costs is vital to our ability to remain price competitive.

We continue to experience inflationary pressures across several cost categories, but most notably related to transportation, energy related costs and internal and external labor costs.

We aim to manage these increases through constant cost monitoring and a focus on cost saving areas, including lowering employee turnover, as well as our overall customer pricing strategies designed to offset the negative inflationary impacts on our margins.

We continue to experience inflationary pressures across several cost categories, but most notably related to internal and external labor, healthcare, transportation, maintenance and energy-related costs.

We are also subject to uncertainties and cost increases due to the changing regulatory landscape, including trade restrictions and tariffs.

We aim to manage these increases through constant cost monitoring and a focus on cost savings areas, including lowering employee turnover, as well as our overall customer pricing strategies designed to offset the inflationary impacts on our margins.

We continue to upgrade the quality and efficiency of our services through the development of new technology and continued modifications and expansion at our facilities while also leveraging certain fixed costs of our operating infrastructure.

We invest in new business opportunities and aggressively implement strategic sourcing and logistics solutions, while also continuing to optimize our management and operating structure in an effort to manage our operating margins.

We invest in new business opportunities and aggressively implement strategic sourcing and logistics solutions, while also continuing to optimize our workforce and operating structure in an effort to manage our operating margins.

Environmental Services

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As a % of Direct revenues 66.7 % 67.3 % 67.9 % (0.6) % (0.6) %

Environmental Services cost of revenues for the year ended December 31, 2025 increased $96.0 million from the comparable period in 2024, while improving as a percentage of revenues due to better leverage of our costs and higher revenues.

Commensurate with the revenue growth in the business and the acquisition of HEPACO, labor and benefits costs increased $35.6 million, transportation, vehicle and fuel costs increased $27.0 million and equipment and supply costs increased $11.3 million in 2025 as compared to 2024.

The remaining cost increase was spread across various cost categories and was driven by the incremental operations of the HEPACO acquisition.

Overall, several cost categories decreased as a percentage of revenues, which reflected better cost leverage across the network and improving operating margins.

Environmental Services cost of revenues for the year ended December 31, 2024 increased $303.0 million from the comparable period in 2023, while improving as a percentage of revenues.

Overall, labor and benefit related costs increased $170.3 million, equipment and supply costs increased $95.2 million and external transportation, vehicle, and fuel costs increased $24.6 million.

Overall, labor and benefit related costs increased $170.3 million, equipment and supply costs increased $95.2 million and external transportation, vehicle, and fuel costs increased $24.6 million in 2024 as compared to 2023.

These cost increases were generally in line with the revenue growth in the business and the addition of the acquired operations in 2024.

However, better leverage of our costs and increases in revenues further improved our cost efficiency as a percentage of revenues.

Environmental Services cost of revenues for the year ended December 31, 2023 increased $160.1 million from the comparable period in 2022, but as a percentage of revenues, these costs improved 1.7%.

Overall, labor and benefit related costs increased $126.1 million, equipment and supply costs increased $23.4 million and external transportation, vehicle and fuel related costs increased $6.8 million.

These cost increases were generally commensurate with the revenue growth in the business, however better leverage of our costs drove the cost improvement as a percentage of revenues.

Safety-Kleen Sustainability Solutions

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As a % of Direct revenues 74.9 % 74.5 % 72.0 % 0.4 % 2.5 %

SKSS cost of revenues for the year ended December 31, 2025 decreased $32.3 million from 2024 and remained relatively consistent as a percentage of revenues.

The overall cost decrease was driven by the lower sales volumes, discussed above, lower acquisition costs of used oil feedstock and a $5.7 million decrease in labor costs due to strategic headcount management actions implemented in 2025.

These decreases were partially offset by incremental expenses from the Noble acquisition.

SKSS cost of revenues for the year ended December 31, 2024, increased $12.9 million from 2023 and as a percentage of revenues, these costs increased 2.5%.

The cost increase is due to additional expenses from the Noble operations, which were partially offset by reduced costs resulting from the lower revenue volumes noted above.

Total cost of revenues as a percentage of direct revenues increased primarily due to the market related pricing decreases discussed in the revenue section, higher cost per gallon of base oil products sold and the overall mix of products and services sold during 2024 as compared to the prior year.

SKSS cost of revenues for the year ended December 31, 2023 increased $31.0 million from the comparable period in 2022 and as a percentage of revenues, these costs increased 10.1%, mainly driven by the reduced revenue discussed above.

Overall, external transportation, rail, vehicle and fuel costs increased $23.5 million, labor and benefit related costs increased $11.8 million and equipment and supply costs increased $5.5 million.

Cost of materials, including oil additives and other raw materials decreased by $16.2 million mainly driven by a lower cost of obtaining used oil through our oil collection services.

The remaining cost spread across various cost categories.

The cost increase was due to additional expenses from the Noble operations, which were partially offset by reduced costs resulting from the lower revenue volumes noted above.

Total cost of revenues as a percentage of direct revenues increased primarily due to the market related pricing decreases discussed in “ Direct Revenue” above, higher cost per gallon of base oil products sold and the overall mix of products and services sold during 2024 as compared to the prior year.

Selling, General and Administrative Expenses

We aim to manage our selling, general and administrative ("SG&A") expenses in line with the overall performance of our segments and corresponding revenue levels.

We aim to manage our SG&A expenses in line with the overall performance of our segments and corresponding revenue levels.

This is achieved through enhanced technology, process improvements and strategic expense management.

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We believe our ability to properly align these costs with business performance is reflective of our strong management of the businesses and further promotes our ability to remain competitive in the marketplace.

The SG&A balances in this section exclude stock-based compensation expense which is presented in SG&A on the Company’s Consolidated Statement of Operations but is not included in the Company’s measurement of Adjusted EBITDA.

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

For a discussion on significant changes in consolidated stock-based compensation expense, please refer to the separate section below.

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As a % of Direct revenues 7.5 % 7.4 % 7.7 % 0.1 % (0.3) %

Environmental Services SG&A expenses for the year ended December 31, 2025, increased $16.3 million from the comparable period in 2024 and remained relatively consistent as a percentage of revenues.

Overall, labor and benefits related costs, including higher employee healthcare costs and incremental costs from the acquired HEPACO operations, increased $27.1 million compared to the same period in 2024.

The results of the year ended December 31, 2025, include the impact of reducing the estimated costs to remediate a site by approximately $10 million in the first quarter of 2025 to reflect our conclusion that loss was no longer probable based on the evaluation of available evidence.

Environmental Services SG&A expenses for the year ended December 31, 2024, increased $24.5 million from the comparable period in 2023, and slightly improved as a percentage of revenues by maintaining leverage of our SG&A base in the midst of the revenue growth discussed above.

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The remaining increases were spread across various cost categories and were driven by overall growth in the segment results.

Environmental Services SG&A expenses for the year ended December 31, 2023 increased $31.1 million from the comparable period in 2022, but remained relatively consistent as a percentage of revenues by maintaining leverage of our SG&A base in the midst of the revenue growth discussed above.

Overall, labor and benefit related costs, including travel, increased $32.0 million primarily driven by incremental headcount, including the acquisitions occurring during the periods, and higher incentive compensation.

Safety-Kleen Sustainability Solutions

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As a % of Direct revenues 8.7 % 8.9 % 8.7 % (0.2) % 0.2 %

SKSS SG&A expenses for the year ended December 31, 2025, decreased $5.6 million and remained relatively consistent as a percentage of revenues.

The overall reduction was driven primarily by cost reduction initiatives that were executed late in 2024 and strategic headcount management actions implemented in 2025.

These actions resulted in a reduction of labor and benefits related costs of $3.7 million.

SKSS SG&A expenses for the year ended December 31, 2024, remained relatively consistent with the comparable period in 2023 both in dollar amount and as a percentage of revenues.

SKSS SG&A expenses for the year ended December 31, 2023 increased $5.3 million from the comparable period in 2022 and as a percentage of revenues these costs increased mainly due to the revenue reductions discussed above.

Higher labor and benefit costs of $3.5 million and a $1.1 million increase in a remedial liability estimate in 2023 drove the overall cost increase.

The higher labor and benefit costs were primarily driven by the expanded sales team established in late 2022 which remained relatively consistent through 2023.

For the years ended December 31, 2025 over 2024 2024 over 2023

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We manage our Corporate SG&A expenses commensurate with the overall total company performance and direct revenue levels.

As a percentage of total Company revenues these costs remained relatively consistent in 2024, 2023 and 2022.

In total, Corporate SG&A expenses increased by $36.2 million in 2024;

As a percentage of our total revenues, these costs remained relatively consistent in 2025, 2024 and 2023.

In total, Corporate SG&A expenses decreased by $6.0 million in 2025.

Throughout 2025 we executed several cost management actions in order to reduce the impact of inflation on Corporate SG&A expenses including strategic headcount management actions and expanding the leverage of our Global Capability Center in India.

The overall reduction in Corporate SG&A costs was largely attributable to a $8.2 million decrease in environmental and legal reserve costs, as the prior year

included elevated costs from revised estimates to remediate a Superfund site.

Also, severance and integration related expenses for the year ended December 31, 2025 were $4.1 million, a decrease of $7.3 million year-over-year.

These reductions were partially offset by a $1.7 million increase in IT costs.

Corporate SG&A expenses increased by $36.2 million in 2024;

however, as noted above, these costs remained relatively consistent as a percentage of revenues.

In general, the overall cost increase included a $29.4 million increase in labor and benefit related expenses predominately driven by incremental headcount from the operations acquired during 2024.

Additionally, information technology costs increased by $5.1 million.

Additionally, IT costs increased by $5.1 million.

Severance and integration related costs increased $4.9 million to a total of $14.3 million in 2024.

Corporate SG&A expenses increased by $13.5 million in 2023;

however, as noted above, these costs remained relatively consistent as a percentage of revenues.

In general, the overall cost increase was driven by higher labor and benefit related expenses, professional fees and cybersecurity/ information technology costs of $5.6 million, $3.9 million and $3.2 million, respectively.

Adjusted EBITDA

Management considers Adjusted EBITDA to be a measurement of performance which provides useful information to both management and investors.

Adjusted EBITDA should not be considered an alternative to net income or other measurements under generally accepted accounting principles ("GAAP").

Management considers Adjusted EBITDA to be a measurement of performance that provides useful information to both management and investors.

Adjusted EBITDA should not be considered an alternative to net income or other measurements under GAAP.

As reflected in the reconciliation below, we define Adjusted EBITDA as net income plus accretion of environmental liabilities, stock-based compensation, depreciation and amortization, net other expense, net interest expense and provision for income taxes.

Adjusted EBITDA also excludes impacts from certain transactions that are not deemed representative of fundamental segment results.

Adjusted EBITDA is not calculated identically by all companies, and therefore our measurements of Adjusted EBITDA, while defined consistently and in accordance with our existing credit agreement, may not be comparable to similarly titled measures reported by other companies.

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Depreciation and amortization 446,006 400,922 365,761

Third-party transaction related costs 3,533 — —

Kimball startup costs — 4,343 —

Other expense (income), net

1,454 (2,315) (2,472)

Other (income) expense, net (5,200) 1,454 (2,315)

Loss on early extinguishment of debt 8,277 371 2,880

Gain on sale of business — — (8,864)

Gain on sale of businesses

Interest expense, net of interest income 143,104 134,964 108,595

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Stock-based compensation for the year ended December 31, 2025 increased $4.7 million from the comparable period in 2024.

This increase was driven by recent stock price appreciation and higher expenses related to the achievement of performance metrics in 2024.

Stock-based compensation for the year ended December 31, 2023 decreased $6.1 million from the comparable period in 2022.

This reduction was due to certain performance targets not being met in 2023, leading to lower share-based compensation costs compared with 2022.

This increase was driven by higher expenses related to the probable future achievement of performance metrics as well as incremental expense related to our Employee Stock Purchase Plan, or ESPP.

Stock-based compensation for the year ended December 31, 2024, increased $7.3 million from the comparable period in 2023.

This increase was driven by stock price appreciation and higher expenses related to the achievement of performance metrics in 2024.

Depreciation and Amortization

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Total depreciation and amortization $ 446,006 $ 400,922 $ 365,761 $ 45,084 11.2 % $ 35,161 9.6 %

Depreciation and amortization for the year ended December 31, 2024 increased $35.2 million from the comparable period in 2023 due to incremental depreciation and amortization associated with the HEPACO and Noble acquisitions completed in March 2024 as well as incremental finance lease amortization.

Depreciation and amortization for the year ended December 31, 2023 increased $18.2 million from the comparable period in 2022 due to incremental depreciation and amortization associated with the Thompson Industrial assets acquired on March 31, 2023 and increased finance lease and landfill amortization in the period.

Other (Expense) Income, net

Depreciation and amortization for the year ended December 31, 2025 increased $45.1 million from the comparable period in 2024 due to depreciation of fixed assets and amortization of intangible assets acquired from the March 2024 HEPACO and Noble acquisitions;

depreciation for the new Kimball incinerator, which was placed in service in December 2024;

incremental assets placed in service to support the growth of the business and higher finance lease amortization.

Depreciation and amortization for the year ended December 31, 2024, increased $35.2 million from the comparable period in 2023 due to incremental depreciation and amortization associated with the March 2024 HEPACO and Noble acquisitions, as well as incremental finance lease amortization.

Other Income (Expense), net

For the years ended December 31, 2025 over 2024 2024 over 2023

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Change Change %

Other (expense) income, net

$ (1,454) $ 2,315 $ 2,472 $ (3,769) (162.8) % $ (157) (6.4) %

For the year ended December 31, 2024, other expense, net was $1.5 million due to recognized losses on the sale or disposal of fixed assets.

In contrast, for the years ended December 31, 2023 and December 31, 2022, the other income, net amounts were $2.3 million and $2.5 million, respectively, largely driven by gains on similar disposals.

Other income (expense), net $ 5,200 $ (1,454) $ 2,315 $ 6,654 (457.6) % $ (3,769) (162.8) %

The change in other income (expense) over the periods is due to recognized gains and losses on the sale or disposal of fixed assets driven by the sales price and net book value of assets sold in each period.

Loss on Early Extinguishment of Debt

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Loss on early extinguishment of debt $ (8,277) $ (371) $ (2,880) $ (7,906) 2,131.0 % $ 2,509 (87.1) %

The increase in the loss on early extinguishment of debt for the year ended December 31, 2023 was due to the loss recognized for the repayment of certain Term Loans.

In all of the periods presented, we also recognized small losses driven by the repricing of certain of our debt in 2024 and 2023 and the repayment of a portion of our outstanding debt in late 2022.

For additional information regarding our current portfolio of long-term debt and related significant activity, see Note 12, “Financing Arrangements,” to our consolidated financial statements included in Item 8 of this report.

Gain on Sale of Business

For the years ended December 31, 2024 over 2023 2023 over 2022

(in thousands, except percentages) 2024 2023 2022 Change %

Change Change %

Gain on sale of business $ — $ — $ 8,864 $ — — % $ (8,864) (100.0) %

During the year ended December 31, 2022, we recognized an $8.9 million gain on the sale of a non-core line of business within our Environmental Services segment.

For additional information regarding the gain on sale of business in 2022, see Note 5, “Disposition of Business,” to our consolidated financial statements included in Item 8 of this report.

The increase in the loss on early extinguishment of debt for the year ended December 31, 2025 was due to the loss recognized for the refinancing of our Term Loan debt due in 2028 and our Senior Notes due in 2027, which occurred in the fourth quarter of 2025.

We also recognized small losses driven by the repricing of certain of our debt in 2024 and a $2.9 million loss on the repayment of a portion of our outstanding debt in 2023.

For additional information regarding our current portfolio of long-term debt and related significant activity, see Note 11, “Financing Arrangements,” to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

Interest Expense, Net of Interest Income

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Interest expense, net of interest income for the year ended December 31, 2025 increased by $8.1 million from the comparable period in 2024.

During the year ended December 31, 2023 interest expense, net of interest income included a $8.3 million benefit from settling certain interest rate swaps in January 2023.

Absent this benefit, interest expense, net of interest income increased $18.1 million due to higher levels of outstanding debt as a result of the 2024 Incremental Term Loans entered into on March 22, 2024 in connection with completed acquisitions, partially offset by a $7.5 million increase in interest income, generally on our cash investments, for the year ended December 31, 2024.

This increase was primarily driven by lower capitalized interest in the year ended December 31, 2025 compared to 2024 as we finished our long term construction of the new Kimball incinerator in late 2024.

Interest expense on our outstanding debt instruments was relatively consistent for the year ended December 31, 2025 compared to 2024.

The effective interest rates on our long-term debt for the years ended December 31, 2025 and December 31, 2024 were 5.24% and 5.40%, respectively.

Interest expense, net of interest income for the year ended December 31, 2023 remained relatively consistent with the comparable period in 2022 as higher interest rates on our portfolio of debt obligations were partially offset by the $8.3 million benefit noted above and higher interest income realized.

Overall, interest expense was partially offset by a $6.3 million increase in interest income, generally on our cash balances, in the year ended December 31, 2025 compared to the year ended December 31, 2024.

Interest expense, net of interest income for the year ended December 31, 2024 increased by $26.4 million from the comparable period in 2023.

During the year ended December 31, 2023, interest expense, net of interest income included a benefit from settling certain interest rate swaps in January 2023.

The effective interest rates on our long-term debt for the years ended December 31, 2024 and December 31, 2023 were 5.40% and 5.19%, respectively.

As we exit 2024, the effective rate on our debt is approximately 5.38% given the current interest rate environment and our portfolio of long-term debt and related interest rate swaps.

For additional information regarding our current portfolio of long-term debt, see Note 12, "Financing Arrangements," to our consolidated financial statements included in Item 8 of this report.

As of December 31, 2025, the effective rate on our debt was approximately 5.32% given the current interest rate environment and our portfolio of long-term debt and related interest rate swaps.

For additional information regarding our current portfolio of long-term debt, see Note 11, “Financing Arrangements,” to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

Provision for Income Taxes

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Effective tax rate 25.9 % 24.6 % 24.9 % 1.3 % (0.3) %

For the year ended December 31, 2025, the provision for income taxes increased $5.8 million from the comparable period in 2024.

The effective tax rate for 2025 was 25.9%, which was higher than the 2024 effective tax rate of 24.6%.

The increase in the effective tax rate is primarily attributable to the benefit associated with the revaluation of state deferred taxes recorded in the prior year.

For the year ended December 31, 2024, the provision for income taxes increased $5.7 million from the comparable period in 2023 driven by the increase in pre-tax income.

The effective tax rate remained relatively consistent.

For the year ended December 31, 2023, the provision for income taxes was relatively consistent with the comparable period in 2022 despite a decrease in pre-tax earnings.

The effective tax rate for 2023 was 24.9% which is higher than the 2022 effective tax rate of 23.5% primarily due to the utilization of unbenefited losses in 2022, which reduced the effective tax rate in that period.

The 2022 effective tax rates benefited from the utilization of previously unbenefited losses in certain of our Canadian entities for which we had previously recognized valuation allowances.

As of December 31, 2022, these net operating losses were fully utilized and any remaining valuation allowance, which was nominal, was released.

Liquidity and Capital Resources

We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities.

Our primary ongoing cash requirements will be to fund operations, capital expenditures, interest payments and investments in line with our business strategy.

Our primary ongoing cash requirements will be to fund operations, capital expenditures, interest payments and investments in line with our business strategy as of the date of this Annual Report on Form 10-K.

We believe our future operating cash flows will be sufficient to meet our future operating and internal investing cash needs.

We monitor our actual needs and forecasted cash flows, our liquidity and our capital resources,

enabling us to plan our present needs and fund items that may arise during the year as a result of changing business conditions or opportunities.

We monitor our actual needs and forecasted cash flows, our liquidity and our capital resources, enabling us to plan our present needs and fund items that may arise during the year as a result of changing business conditions or opportunities.

Furthermore, our existing cash balance and the availability of additional borrowings under our revolving credit facility provide additional potential sources of liquidity should they be required.

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Net cash used in investing activities (425,786) (903,674) (575,050)

Net cash from (used in) financing activities 377,032 (208,891) (187,315)

Net cash (used in) from financing activities (309,342) 377,032 (208,891)

Net cash from operating activities

Net cash from operating activities for the year ended December 31, 2025 was $866.7 million as compared to $777.8 million for year ended December 31, 2024.

This $43.2 million increase in operating cash flows was attributable to higher operating income and lower cash paid for environmental expenditures which was partially offset by higher cash paid for interest and working capital balances.

This $89.0 million increase in operating cash flows was primarily due to improvement in working capital balances, specifically higher collections of accounts receivable, as compared to the prior year period, lower cash paid for taxes and lower environmental expenditures.

Net cash from operating activities for the year ended December 31, 2024 was $777.8 million, as compared to $734.6 million for the year ended December 31, 2023.

This $108.3 million increase in operating cash flows was attributable to improvement in working capital balances, partially offset by higher cash paid for income taxes, environmental expenditures and interest.

Net cash used in investing activities

Net cash used in investing activities for the year ended December 31, 2025 was $425.8 million, a decrease of $477.9 million compared to the year ended December 31, 2024.

In the year ended December 31, 2024 we paid $478.0 million for acquisitions, primarily the acquisition of HEPACO and Noble.

Amounts spent on additions to property, plant and equipment, net of proceeds from the sale and disposal of fixed assets decreased $19.8 million, mainly due to the completion of our new Kimball incinerator in 2024.

A $23.1 million net purchase of marketable securities in 2025 as compared to a $6.3 million net sale of marketable securities in 2024 partially offset the changes discussed above.

Net cash used in investing activities for the year ended December 31, 2024, was $903.7 million, an increase of $328.6 million compared to the year ended December 31, 2023.

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Construction on the Kimball incinerator began in 2021 and the project was completed in the fourth quarter of 2024 .

Net cash used in investing activities for the year ended December 31, 2023 was $575.1 million, an increase of $186.1 million compared to the year ended December 31, 2022.

Amounts spent on additions to property, plant and equipment, net of proceeds from the sale and disposal of fixed assets increased $76.4 million, primarily driven by incremental spend to build the incinerator in Kimball, Nebraska.

Total spending in 2023 related to the construction of the Kimball incinerator was $82.6 million compared to $44.9 million spent on the project in 2022.

Also contributing to the overall increase in cash used in investing activities was a $40.9 million cash outflow from the net purchase of marketable securities in 2023 compared to a $18.8 million cash inflow from the net sale of marketable securities in 2022.

Cash paid for acquisitions, net of cash acquired reflected an increase of $33.3 million due to the acquisition of Thompson Industrial in 2023 for $110.9 million compared to $86.3 million paid for acquisitions in 2022.

The cash flows in 2022 also include $16.8 million of proceeds from the sale of a business which didn't recur in 2023.

Net cash from (used in) financing activities

Net cash from financing activities for the year ended December 31, 2024 was $377.0 million as compared net cash used in financing activities of $208.9 million for the year ended December 31, 2023.

Net cash (used in) from financing activities

Net cash used in financing activities for the year ended December 31, 2025, was $309.3 million as compared to net cash from financing activities of $377.0 million for the year ended December 31, 2024.

For the year ended December 31, 2025 we repurchased $250.0 million of common stock as compared to $55.2 million in 2024, an increase of $194.8 million.

Debt transactions, including deferred financing costs paid and principal payments, resulted in a net cash outflow of $21.1 million in 2025 related to the refinancing of certain of our debt facilities.

In 2024, debt transactions resulted in net debt proceeds of $475.3 million, reflecting the $500.0 million of incremental debt we raised to fund acquisitions completed during the period.

For more information on the debt transactions during 2025 and 2024 refer to Note 11, “Financing Arrangements” to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

Additionally, we received $4.1 million of incremental proceeds from the issuance of shares under our ESPP in 2025, compared to 2024.

Net cash from financing activities for the year ended December 31, 2024, was $377.0 million, compared to net cash used in financing activities of $208.9 million for the year ended December 31, 2023.

The primary driver of this change was the incurrence of additional term loans, net of discount, of $499.4 million in 2024.

This debt issuance, along with the principal repayments during 2024, resulted in a net cash inflow of $484.3 million in 2024 as compared to a net debt repayment of $124.0 million in 2023.

For more information on the debt transactions during 2024 and 2023 refer to Note 12, "Financing Arrangements" to our consolidated financial statements included in Item 8 of this report.

Additionally, the company paid $14.9 million more in principal payments on finance leases in 2024 as compared to 2023.

Net cash used in financing activities for the year ended December 31, 2023 was $208.9 million as compared to $187.3 million for the year ended December 31, 2022.

The total increase of $21.6 million during 2023 is due to $8.3 million of incremental debt repayments, $6.3 million of incremental deferred financing costs paid and a $5.0 million increase in

withholdings paid for taxes on vested restricted stock.

The increase in the withholdings paid on vested restricted stock is due to the higher share prices at vesting during 2023.

For more information on the debt transactions during 2024 and 2023 refer to Note 11, “Financing Arrangements” to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

Additionally, we paid $14.9 million more in principal payments on finance leases in 2024 as compared to 2023.

Adjusted Free Cash Flow

Management considers adjusted free cash flow to be a measure of liquidity which provides useful information to both management, creditors and investors about our financial strength and our ability to generate cash.

Management considers adjusted free cash flow, a non-GAAP measure, to be a measure of liquidity that provides useful information to management, creditors and investors about our financial strength and our ability to generate cash.

Additionally, adjusted free cash flow is a metric on which a portion of management incentive compensation is based.

We define adjusted free cash flow as net cash from operating activities, less additions to property, plant and equipment, plus proceeds from sales or disposals of fixed assets.

When necessary, management adjusts for the cash impact of items derived from non-operating activities.

When necessary, management adjusts for the cash impact of items derived from transactions not deemed representative of operating results.

Additionally, adjusted free cash flow excludes significant strategic growth investments, as they are not indicative of free cash flow generation for the current period.

For 2025, these significant strategic growth investments include the early stages of construction of the SDA unit adjacent to our East Chicago, Indiana re-refinery and the build out of a hub facility in Phoenix, Arizona, which we refer to as our Phoenix Hub.

The amounts spent on these projects in 2025 are described below, from which we expect to realize future long-term benefits.

Adjusted free cash flow should not be considered an alternative to net cash from operating activities or other measurements under GAAP.

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Additions to property, plant and equipment (424,918) (432,241) (422,300)

Proceeds from sale and disposal of fixed assets 9,099 9,650 8,779

Cash investment in strategic growth projects (1)

Third-party transaction related costs 2,614 — —

Kimball startup costs — 3,253 —

Proceeds from sale and disposal of fixed assets 21,568 9,099 9,650

Adjusted free cash flow $ 509,315 $ 357,882 $ 321,902

The increases in Additions to property, plant and equipment in 2024 and 2023 in the table above were primarily driven by the incremental spend on strategic growth initiatives including the Kimball incinerator and, in 2024, the expansion of our Baltimore facility.

Total spending on the Kimball, Nebraska incinerator construction through December 31, 2024 was $210.9 million with $76.2 million spent in 2024, $82.6 million spent in 2023 and $44.9 million spent in 2022.

In 2024, we spent $15.9 million on the Baltimore, Maryland facility.

_____________________

(1) Includes $30.4 million capital investment in the SDA unit and $13.0 million capital investment in the Phoenix Hub.

Summary of Capital Resources

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operations had net operating cash inflows of $728.8 million for the year ended December 31, 2025.

We also maintain a $600.0 million revolving credit facility, of which, as of December 31, 2024, approximately $470.0 million was available to borrow under the facility, with letters of credit of $130.0 million outstanding.

We also maintain a $600.0 million revolving credit facility, of which, as of December 31, 2025, $453.5 million was available to borrow under the facility, with letters of credit of $146.5 million outstanding.

Material Capital Requirements

Capital Expenditures

In 2024, our net capital expenditures were $423.1 million inclusive of $76.2 million in capital spending on the construction of the Kimball, Nebraska incinerator and $15.9 million spent on the Baltimore, Maryland facility.

In 2025, our capital expenditures, net of disposals, were $403.4 million including the strategic growth investments outlined in the table below.

We anticipate that 2026 capital spending, net of disposals, will be in the range of $450.0 million to $510.0 million.

This includes a long term growth investment of $15 million that we plan to invest in a Phoenix facility.

We anticipate that the capital spending will be funded by cash from our operations.

This range also includes the strategic growth investment spend in 2026 outlined in the table below.

The following table summarizes our key strategic growth investments (amounts in millions):

2025 Expenditures 2026 Expected Expenditures Expected Full Project Cost Expected Completion Date

Phoenix Hub $13.0 $— $13 2025

SDA unit 30.4 85 210 - 220 2028

Fleet growth project — 25 50 2026/2027

The three strategic growth investments outlined in the table above are considered projects from which we expect to realize future long-term benefits once placed in service.

These are incremental to the capital expenditures needed to maintain current operations.

We anticipate that this 2026 capital spending and future spending for key strategic growth investments will be funded by cash from our operations.

Unanticipated changes in environmental regulations could require us to make significant capital expenditures for our facilities and adversely affect our results of operations and cash flow.

Proposed Acquisition

On February 17, 2026, we signed a purchase agreement to acquire certain environmental businesses of Depot Connect International for an all-cash purchase price of approximately $130.0 million, subject to customary closing adjustments.

We intend to fund this acquisition with available cash.

Financing Arrangements

As of December 31, 2024, our financing arrangements included (i) $545.0 million of 4.875% unsecured senior notes due 2027, (ii) $1,464.9 million of secured senior term loans due 2028, (iii) $300.0 million of 5.125% unsecured senior notes due 2029 and (iv) $500.0 million of 6.375% unsecured senior notes due 2031.

As of December 31, 2025, our financing arrangements included (i) $1,260.0 million of secured senior term loans due 2032, (ii) $300.0 million of 5.125% unsecured senior notes due 2029, (iii) $500.0 million of 6.375% unsecured senior notes due 2031 and (iv) $745.0 million of 5.750% unsecured senior notes due 2033.

As noted above, we also maintain our $600.0 million revolving credit facility with no amounts owed as of December 31, 2025.

The material terms of these arrangements are discussed further in Note 12, “Financing Arrangements,” to our consolidated financial statements included in Item 8 of this report.

In 2025, we expect to pay $15.1 million in principal payments on the secured senior term loans and approximately $150 million in interest payments on the entire portfolio of financing arrangements, assuming the variable rate remains consistent throughout 2025.

The material terms of these arrangements are discussed further in Note 11, “Financing Arrangements,” to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

In 2026, we expect to pay $12.6 million in principal payments on the secured senior term loans and approximately $146 million in interest payments on the entire portfolio of financing arrangements, assuming the current variable rate remains consistent throughout 2026.

We expect that future payments of interest will continue to be funded through cash flows from operations and any principal payments will either be funded through available cash from operations or through available financing alternatives.

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Total environmental liabilities $ 230,697 $ 241,533 $ (10,836) (4.5) %

Total environmental liabilities as of December 31, 2024 were $241.5 million, an increase of $11.7 million compared to December 31, 2023.

This increase was primarily due to new environmental liabilities, including those recognized as a result of recent acquisitions of $18.7 million, annual accretion of $13.5 million and an $8.9 million increase in environmental liability estimates.

These increases were partially offset by expenditures of $27.5 million made during 2024.

Total environmental liabilities as of December 31, 2025, were $230.7 million, a decrease of $10.8 million compared to December 31, 2024.

This decrease was primarily due to expenditures of $16.1 million made during 2025 and a $13.6 million decrease in environmental liability estimates.

The reductions in environmental liability estimates were primarily driven by a decrease of approximately $10 million in the remedial liability for a site where we concluded that loss was no longer probable based on evaluation of available evidence.

These decreases were partially offset by annual accretion of $14.3 million and new environmental liabilities of $4.2 million, including measurement period adjustments from prior acquisitions.

We anticipate our environmental liabilities, substantially all of which we assumed in connection with our acquisitions, will be payable over many years and that cash flow from operations will generally be sufficient to fund the payment of such liabilities when required.

We have included a schedule of our expected payments as of December 31, 2024, in Note 10, “Closure and Post-closure Liabilities" and Note 11, "Remedial Liabilities,” to our consolidated financial statements included in Item 8 of this report.

We have included a schedule of our expected payments as of December 31, 2025, in Note 9, “Closure and Post-closure Liabilities” and Note 10, “Remedial Liabilities,” to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

Events not anticipated (such as future changes in environmental laws and regulations) could require that payments to satisfy our environmental liabilities be made earlier or in greater amounts than currently anticipated, which could adversely affect our results of operations, cash flow and financial condition.

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As of December 31, 2025, there were $146.5 million of outstanding letters of credit.

See Note 12, "Financing Arrangements," to the accompanying financial statements included in Item 8 of this report for further discussion of our standby letters of credit and other financing arrangements.

See Note 11, “Financing Arrangements,” to the accompanying financial statements included in Item 8 of this Annual Report on Form 10-K for further discussion of our standby letters of credit and other financing arrangements.

Critical Accounting Estimates

Our consolidated financial statements are based on the application of GAAP, which requires us to make estimates and judgments that affect the reported amounts of our assets, liabilities, revenues and expenses and related disclosures of contingent liabilities.

These estimates and judgements cannot be determined with certainty.

These estimates and judgments cannot be determined with certainty.

Actual results could differ from those estimates, and any such differences may be material to our consolidated financial statements.

We believe the estimates set forth below may involve a higher degree of judgment and complexity in their application than our other accounting estimates and represent the critical accounting estimates used in the preparation of our consolidated financial statements.

Our accounting policies related to these estimates are discussed in Note 2, "Significant Accounting Policies," to our consolidated financial statements included in Item 8 of this report.

Our accounting policies related to these estimates are discussed in Note 2, “Significant Accounting Policies,” to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

We believe our judgments related to these accounting estimates are appropriate.

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We amortize landfill improvements and certain landfill-related permits over their 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 units-of-consumption method is used to amortize land, landfill cell construction costs and asset retirement costs for landfill cells and sites.

We also utilize the units-of-consumption method to record closure and post-closure obligations for landfill cells and sites.

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If at any time we decide to abandon the expansion effort, the capitalized costs related to the expansion effort are expensed immediately.

If we obtain permit expansions that increase available airspace at a landfill facility, we may be required to make adjustments which may impact the amortization expense recorded for our landfill assets.

Landfill Assets.

Landfill assets include the costs of landfill site acquisition, permits and cell construction incurred to date.

Landfill assets include the costs of landfill site acquisition and cell construction incurred to date.

These amounts are amortized under the units-of-consumption method such that the asset is completely amortized when the landfill ceases accepting waste.

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Landfill Final Closure and Post-Closure Liabilities.

Landfill final closure and post-closure liabilities recorded at December 31, 2024 and 2023 were $59.4 million in both periods.

Landfill final closure and post-closure liabilities recorded at December 31, 2025 and 2024, were $59.8 million and $59.4 million, respectively.

We have material financial commitments for the costs associated with requirements of the EPA and the comparable regulatory agency in Canada for landfill final closure and post-closure activities.

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We estimate when future operations will cease and inflate the current cost of closing the non-landfill facility using the appropriate inflation rate and then discounting the future value to arrive at an estimated present value of closure and post-closure costs.

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.

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, which impacts the estimation of total costs and the timing of the expenditures.

We review 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 us to revise a liability estimate include changes in legal requirements that impact our expected closure plan or scope of work, in the market price of a significant cost item, in estimates as to when future operations may cease or in the expected timing of the cost expenditures.

Changes that would prompt us to revise a liability estimate include changes in legal requirements that impact our expected closure plan or scope of work, the market price of a significant cost item, estimates as to when future operations may cease or the expected timing of the cost expenditures.

Changes in estimates for non-landfill closure and post-closure events immediately impact the required liability and the value of the corresponding asset.

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Changes to non-landfill closure and post-closure estimates have not been material.

See Note 10, "Closure and Post-Closure Liabilities," to our consolidated financial statements included in Item 8 of this report for the changes to these Landfill and Non-Landfill Closure and Post-Closure liabilities during the years ended December 31, 2024 and 2023.

See Note 9, “Closure and Post-Closure Liabilities,” to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for the changes to these Landfill and Non-Landfill Closure and Post-Closure liabilities during the years ended December 31, 2025 and 2024.

Remedial Liabilities.

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Our remediation obligations can be further characterized as legal, Superfund, long-term maintenance and one-time projects.

Legal liabilities are typically comprised of litigation matters that involve potential liability for certain aspects of environmental cleanup and can include third-party claims for property damage or bodily injury allegedly arising from or caused by exposure to hazardous substances originating from our activities or operations or, in certain cases, from the action or inaction of other persons or companies.

Superfund liabilities are typically claims alleging that we are a potentially responsible party ("PRP") and/or are potentially liable for environmental response, removal, remediation and cleanup costs at/or from either a facility we own or a site owned by a third-party.

Legal liabilities typically comprise litigation matters that involve potential liability for certain aspects of environmental cleanup and can include third-party claims for property damage or bodily injury allegedly arising from or caused by exposure to hazardous substances originating from our activities or operations or, in certain cases, from the action or inaction of other persons or companies.

Superfund liabilities are typically claims alleging that we are a potentially responsible party, or PRP, and/or are potentially liable for environmental response, removal, remediation and cleanup costs at/or from either a facility we own or a site owned by a third-party.

Long-term maintenance liabilities include the costs of groundwater monitoring, treatment system operations, permit fees and facility maintenance for inactive operations.

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Changes in our estimates for remedial liabilities have not been material.

See Note 11, "Remedial Liabilities," to our consolidated financial statements included in Item 8 of this report for the changes to the remedial liabilities during the years ended December 31, 2024 and 2023.

Acquisitions.

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.

Intangible assets acquired in a business combination may consist of patents, trademarks and trade names, developed technology, customer relationships and other intangibles.

The fair value for acquired customer relationship intangibles is determined as of the acquisition date based on estimates and judgments regarding expectations for the future after-tax cash flows arising from the follow-on revenue from customer relationships that existed on the acquisition date over their estimated lives, including the probability of expected future revenue from these customers, less a contributory assets charge, all of which is discounted to present value.

The fair value of the trademark and trade name intangible assets as well as the developed technology intangible assets are determined utilizing the relief from royalty method which is a form of the income approach.

Under this method, a royalty rate based on observed market royalties is applied to projected revenue supporting the trade name or technology and discounted to present value using an appropriate discount rate.

Tangible assets acquired in a business combination include real estate and personal property.

When determining the fair value of tangible personal property acquired, we must estimate the cost to replace the asset with a new asset taking into consideration such factors as age, condition and the economic useful life of the asset.

Valuations are performed by management or third-party valuation specialists under management's supervision, where appropriate.

See Note 10, “Remedial Liabilities,” to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for the changes to the remedial liabilities during the years ended December 31, 2025 and 2024.

Goodwill and Other Long-Lived Assets.

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In all cases, the estimated fair value of each reporting unit significantly exceeded its carrying value.

We measure fair value for all of our reporting units using an income approach (a discounted cash flow analysis) which incorporates several estimates and assumptions with varying degrees of uncertainty, including estimated revenue growth and operational performance.

We measure fair value for all of our reporting units using an income approach (a discounted cash flow analysis) that incorporates several estimates and assumptions with varying degrees of uncertainty, including estimated revenue growth and operational performance.

Such assumptions are subject to variability from year to year and are directly impacted by, among other things, macroeconomic conditions.

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This review is performed by comparing the fair value of an indefinite lived intangible asset to its carrying value.

We measure fair value for our indefinite lived intangible assets using an income approach (a discounted cash flow analysis) which incorporates several estimates and assumptions with varying degrees of uncertainty, including estimates of future cash flows associated with the intangible assets.

We measure fair value for our indefinite lived intangible assets using an income approach (a discounted cash flow analysis) that incorporates several estimates and assumptions with varying degrees of uncertainty, including estimates of future cash flows associated with the intangible assets.

If the fair value is less than the carrying value, the impairment loss is measured as the excess of the carrying value of the asset over its fair value.

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Legal Matters.

As described in Note 18, "Commitments and Contingencies," to our consolidated financial statements included in Item 8 of this report, we are subject to legal proceedings which relate to our past acquisitions or which have arisen in the ordinary course of business.

As described in Note 17, “Commitments and Contingencies,” to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K, we are subject to legal proceedings that relate to our past acquisitions or that have arisen in the ordinary course of business.

We accrue for liabilities associated with these matters when it is probable that a liability has been incurred and the amount can be reasonably estimated.

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When no amount within a range of estimates is more likely, the minimum is accrued.

As of December 31, 2024, we had reserves of $29.8 million consisting of (i) $23.3 million 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 related to federal, state and provincial enforcement actions as well as legal claims, which were included in accrued expenses on the consolidated balance sheets.

As of December 31, 2025, we had reserves of $16.2 million consisting of (i) $11.4 million related to pending legal or administrative proceedings, including Superfund liabilities, which were included in

remedial liabilities on the consolidated balance sheets, and (ii) $4.8 million related to federal, state and provincial enforcement actions as well as legal claims, which were included in accrued expenses on the consolidated balance sheets.

The inherent uncertainty related to the outcome of these matters can result in amounts materially different from any provisions made with respect to their resolution.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis