CLEAN HARBORS INC

(1)BASIS OF PRESENTATION

The accompanying condensed consolidated interim financial statements are unaudited and include the accounts of Clean Harbors, Inc. and its subsidiaries (collectively, “Clean Harbors” or the “Company”) and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), and in the opinion of management, include all adjustments which are of a normal recurring nature and are necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. Management has made estimates and assumptions affecting the amounts reported in the Company’s consolidated interim financial statements and accompanying footnotes; actual results could differ from those estimates and judgments. The results for interim periods are not necessarily indicative of results for the entire year or any other interim periods. The financial statements presented herein should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

(2)SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies are described in Note 2, “Significant Accounting Policies,” in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to these policies or their application during the periods presented.

(3)REVENUES

The Company generates revenues through the following operating segments: Environmental Services and Safety-Kleen Sustainability Solutions (“SKSS”). The Company’s Environmental Services operating segment generally hasfour sources of revenue and the SKSS operating segment hastwo 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 revenues from external customers by segment. When necessary, the Company records intercompany transactions to present the direct revenue in the appropriate segment results. The Company’s significant sources of revenues 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, remediation projects, collection and transportation, packaging, recycling, treatment and disposal of waste. These services include both hazardous and non-hazardous waste, including per- and polyfluoroalkyl substances, or PFAS. Revenues are primarily generated by short-term projects, most of which are governed by master service agreements that are long-term in nature 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, and 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 revenues over time based on time and materials incurred as 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 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 revenues 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 varies 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, mechanical flushing 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 revenues 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 revenues over time, based on time and materials incurred.

Field and Emergency Response Services—Field and Emergency Response Services 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. Emergency Response Services, for environmental emergencies of any scale, range from man-made disasters such as oil spills and industrial fires to natural disasters like hurricanes. These services include land- and water-based spill remediation, as well as disaster cleanup, 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 revenues 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 revenues 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 bulk 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 the Environmental Services and SKSS operating segments.

Generally, revenues from services 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 duration of such services can be over a number of hours or several days. The Company uses the input method to recognize revenues over time, based on time and materials incurred. Product revenues are 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 interdependent nature of the arrangement. Revenues from parts washer services are 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 and customers, including major oil brands, lubricant blenders and manufacturers, blended lubricant distributors and government agencies. The Company also processes used oil into vacuum gas oil, which can be further re-refined into lubricant base oils or sold directly into the marine diesel oil fuel market and sells recycled fuel oil to asphalt and industrial plants. By-products coming off the refinery are a mixture of light-end distillates and asphalt flux that are sold into various markets. The Company recognizes revenues for oil products 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 revenues disaggregated by source of revenues and geography in total and for the Environmental Services and SKSS operating segments and Corporate (in thousands):

Contract Balances

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 solely 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 revenues are 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.

(4)BUSINESS COMBINATIONS

EnviroServe Acquisition

On October 2, 2026, the Company acquired EnviroServe for an all-cash purchase price of approximately $470 million, net of cash acquired and subject to final settlement of working capital balances. The operations of the acquired business will expand the Environmental Services segment’s Technical and Field Services businesses.

ES&H Acquisition

On September 18, 2026, the Company acquired ES&H for an all-cash purchase price of $300.7 million, net of cash acquired and subject to final settlement of working capital balances. The operations of the acquired business will expand the Environmental Services segment’s Field Services business.

The preliminary allocation of the purchase price is provisional and was based on estimates of fair value of assets acquired and liabilities assumed as of September 18, 2026. 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 determinations and recognition of assets acquired and liabilities assumed (in thousands):

Other intangible assets acquired are trade names and customer relationships anticipated to have average estimated useful lives of 15 years. The Company recorded 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, 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.

Pro forma revenues and earnings amounts on a combined basis as if this acquisition had been completed on January 1, 2025 are immaterial to the consolidated financial statements of the Company. The results of operations of the acquired business from the acquisition date through the end of the reporting period were not material to the Company’s unaudited consolidated financial statements.

Western Oil Acquisition

On July 17, 2026, the Company acquired Western Oil, Inc., a waste oil collection business, for $29.4 million, net of cash acquired and subject to final settlement of working capital balances. The operations of the acquired business are incorporated into the SKSS segment and the Environmental Services segment’s Field Services business. The impact of this acquisition is not material to the Company’s unaudited consolidated financial statements.

Terra Nova Solutions Acquisition

On May 13, 2026, the Company acquired Terra Nova Solutions for an all-cash purchase price of $225.4 million, net of cash acquired. The operations of the acquired business expanded the Environmental Services segment’s Technical and Field Services businesses and included four permitted waste treatment facilities.

The preliminary allocation of the purchase price is provisional and was based on estimates of fair value of assets acquired and liabilities assumed as of May 13, 2026. 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 determinations and recognition of assets acquired and liabilities assumed (in thousands):

Other intangible assets acquired are customer relationships anticipated to have estimated useful lives of 16 years. The Company recorded 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, 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.

Pro forma revenues and earnings amounts on a combined basis as if this acquisition had been completed on January 1, 2025 are immaterial to the consolidated financial statements of the Company. The results of operations of the acquired business from the acquisition date through the end of the reporting period were not material to the Company’s unaudited consolidated financial statements.

Depot Connect International Acquisition

On March 20, 2026, the Company acquired certain environmental businesses of Depot Connect International for an all-cash purchase price of $132.5 million. The operations of the acquired businesses expanded the Environmental Services segment’s Technical and Field Services businesses and includedtwo permitted waste treatment facilities. The acquisition did not include working capital balances held by the seller other than those shown in the table below.

The preliminary allocation of the purchase price is provisional and was based on estimates of fair value of assets acquired and liabilities assumed as of March 20, 2026. 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 determinations and recognition of assets acquired and liabilities assumed (in thousands):

Other intangible assets acquired are customer relationships anticipated to have estimated useful lives of 12 years. The Company recorded 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, 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.

Pro forma revenues and earnings amounts on a combined basis as if this acquisition had been completed on January 1, 2025 are immaterial to the consolidated financial statements of the Company. The results of operations of the acquired business from the acquisition date through the end of the reporting period were not material to the Company’s unaudited consolidated financial statements.

(5)INVENTORIES AND SUPPLIES

Inventories and supplies consisted of the following (in thousands):

Supplies inventories consist primarily of critical spare parts to support the Company’s incinerator, refurbishment center and re-refinery operations and other general supplies used in normal day-to-day operations. Stocking crucial spare parts, largely for the sustained functioning of the Company’s incinerator facilities, has resulted in significant supplies inventory balances. Other inventories consist primarily of parts washer components, cleaning fluids, absorbents and automotive fluids, such as windshield washer fluid and antifreeze.

(6)PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following (in thousands):

(1) Balances inclusive of gross right-of-use (“ROU”) assets classified as finance leases of $8.0 million in each period.

(2) Balances inclusive of gross ROU assets classified as finance leases of $343.8 million and $294.2 million, respectively.

(3) Balances inclusive of gross ROU assets classified as finance leases of $20.8 million and $17.4 million, respectively.

Depreciation expense, inclusive of landfill and finance lease amortization, was $106.0 million and $314.5 million for the three and nine months ended September 30, 2026, respectively. Depreciation expense, inclusive of landfill and finance lease amortization, was $101.3 million and $302.5 million for the three and nine months ended September 30, 2025, respectively.

(7)GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in goodwill by segment for the nine months ended September 30, 2026 were as follows (in thousands):

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. During the period ended September 30, 2026, no such triggering events were identified.

As of September 30, 2026 and December 31, 2025, the Company’s intangible assets consisted of the following (in thousands):

Amortization expense of permits, customer and supplier relationships, and other intangible assets was $16.7 million and $45.8 million in the three and nine months ended September 30, 2026, respectively. Amortization expense of permits, customer and supplier relationships, and other intangible assets was $13.4 million and $40.5 million in the three and nine months ended September 30, 2025, respectively.

The expected amortization of the net carrying amount of finite-lived intangible assets at September 30, 2026 was as follows (in thousands):

(8)ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following (in thousands):

The increase in Accrued income, real estate, sales and other taxes is due to higher accrued federal taxes as a result of increased taxable income in the nine months ended September 30, 2026.

(9)CLOSURE AND POST-CLOSURE LIABILITIES

The changes to closure and post-closure liabilities (also referred to as “asset retirement obligations”) from January 1, 2026 through September 30, 2026 were as follows (in thousands):

In the nine months ended September 30, 2026, there were no significant benefits or charges resulting from changes in estimates for closure and post-closure liabilities.

(10)REMEDIAL LIABILITIES

The changes to remedial liabilities from January 1, 2026 through September 30, 2026 were as follows (in thousands):

(11)FINANCING ARRANGEMENTS

Long-term Debt

The following table is a summary of the Company’s long-term debt (in thousands):

Financing Activities

The Company’s significant financing arrangements are described in Note 11, “Financing Arrangements,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to the arrangements described therein as of September 30, 2026. See section “Issuance of 6.250% Unsecured Senior Notes due 2034” below for changes occurring after the balance sheet date.

As of September 30, 2026 and December 31, 2025, the estimated fair value of the Company's outstanding long-term debt, including the current portion, was $2.9 billion and $2.8 billion as of September 30, 2026 and December 31, 2025, 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 that 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 quotations, or alternative pricing sources with reasonable levels of price transparency for similar assets and liabilities.

The Company maintains a $600.0 million revolving credit facility. On September 16, 2026, the Company borrowed $120.0 million under its revolving credit facility to partially fund the acquisition of ES&H, with the remainder of the purchase price funded from cash on hand. As of September 30, 2026 and after accounting for the $120.0 million borrowing which remained outstanding, the Company had $335.5 million available to borrow under the revolving credit facility, and outstanding letters of credit were $144.5 million. The Company repaid the outstanding borrowing on October 16, 2026. At December 31, 2025, the revolving credit facility hadno outstanding loan balance.

Issuance of 6.250% Unsecured Senior Notes due 2034

On October 1, 2026, the Company issued $600.0 million aggregate principal amount of unsecured senior notes due 2034 (the “2034 Notes”). The 2034 Notes will mature on September 30, 2034. Interest payments on the 2034 Notes will be paid semiannually in arrears, on March 31 and September 30 of each year, commencing on March 31, 2027, at a rate of 6.250% per annum.

The 2034 Notes were issued under an Indenture, dated October 1, 2026 (the “Indenture”) with terms substantially consistent with the Company’s other unsecured senior notes. The Indenture contains various customary non-financial covenants, and the 2034 Notes are guaranteed by substantially all of the Company’s current and future domestic subsidiaries. If a change of control triggering event (as defined in the Indenture) occurs, the Company may be required to offer the holders of the 2034 Notes an opportunity to sell all or part of their 2034 Notes at a purchase price of 101% of the principal amount of the 2034 Notes, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase. In addition, if the Company sells assets under certain circumstances, the Company may be required to make an offer to purchase a portion of the 2034 Notes.

At any time prior to September 30, 2029, the Company may on one or more occasions redeem the 2034 Notes, in whole or in part, at a price equal to 100% of the principal amount of the 2034 Notes redeemed, plus a “make-whole” premium, as set forth in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. On or after September 30, 2029, the Company may on one or more occasions redeem the 2034 Notes, in whole or in part, at the applicable redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, at any time prior to September 30, 2029, the Company may on one or more occasions redeem up to 40% of the aggregate principal amount of the 2034 Notes with an amount equal to or less than the net cash proceeds received by the Company from certain equity offerings at a redemption price equal to 106.250% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

The Indenture provides for customary events of default, which include (subject in certain cases to customary grace and cure periods) nonpayment of principal or interest; breach of other agreements in the Indenture; defaults in failure to pay certain other indebtedness; certain events of bankruptcy or insolvency; the failure to pay final judgments in excess of certain amounts of money against the Company and its significant subsidiaries; and the failure of certain guarantees to be enforceable (other than in accordance with the terms of the Indenture).

The Company utilized approximately $470 million of the net proceeds from the offering of the 2034 Notes to finance the purchase price of the Company’s acquisition of EnviroServe and the remainder of the net proceeds were used to repay the $120.0 million borrowing from the revolving credit facility noted above.

Cash Flow Hedges

The Company’s strategy to hedge against fluctuations in variable interest rates involves entering into interest rate derivative agreements.

In 2022, the Company entered into interest rate swap agreements with a notional amount of $600.0 million (the “2022 Swaps”) to effectively fix the interest rate on $600.0 million principal of variable debt (initially term loans due in 2028 and now the 2032 Term Loans, both of which had SOFR based variable interest payments). Under the terms of the 2022 Swaps, the Company receives interest based upon the variable rates and pays a fixed amount of interest. The 2022 Swaps expire on September 30, 2027. As of September 30, 2026, the effective annual interest rate of the fixed portion of the Term Loan Agreement for the 2032 Term Loans as a result of the 2022 Swaps was 3.46%.

The Company designated the 2022 Swaps as a cash flow hedge at the inception of the agreements. As of September 30, 2026 and December 31, 2025, the Company has recorded a derivative asset with a fair value of $14.8 million and $13.6 million, respectively.

No ineffectiveness has been identified on the 2022 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 unaudited consolidated statement of operations in the same period or periods during which the hedged transactions affect earnings.

(12)EARNINGS PER SHARE

The computation of basic earnings per share (“EPS”) is based on the weighted average number of the Company’s common shares outstanding. The computation of diluted EPS is based on the weighted average number of the Company’s 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 per share amounts):

In the table above, potentially dilutive shares include the dilutive effect of unvested restricted stock awards and employee stock purchase plan (“ESPP”) rights (collectively referred to as “equity awards”). Potentially dilutive shares whose effect would have been antidilutive are excluded from the computation of diluted earnings per share. The Company included all outstanding performance awards, restricted stock awards and ESPP rights in the calculation of diluted earnings per share except as shown in the table below (in thousands):

(13)ACCUMULATED OTHER COMPREHENSIVE LOSS

The changes in accumulated other comprehensive loss by component and related tax impacts for the nine months ended September 30, 2026 were as follows (in thousands):

The amount realized in the unaudited cons olidated statement of operations during the three and nine months ended September 30, 2026, which was reclassified out of accumu lated other comprehensive loss, was as follows (in thousands):

(14)STOCK-BASED COMPENSATION

Total stock-based compensation cost recognized for the three and nine months ended September 30, 2026 was $11.7 million and $36.1 million, respectively. Total stock-based compensation cost recognized for the three and nine months ended September 30, 2025 was $8.9 million and $22.6 million, respectively. The total income tax benefit recognized in the unaudited consolidated statements of operations from stock-based compensation expense for the three and nine months ended September 30, 2026 was $1.8 million and $5.6 million, respectively. The total income tax benefit recognized in the unaudited consolidated statements of operations from stock-based compensation expense for the three and nine months ended September 30, 2025 was $1.5 million and $3.8 million, respectively.

Restricted Stock Awards

The following table summarizes information about restricted stock awards for the nine months ended September 30, 2026:

As of September 30, 2026, there was $40.4 million of total unrecognized compensation cost arising from restricted stock awards. This cost is expected to be recognized over a weighted average period of 2.4 years. The total fair value of restricted stock vested during the nine months ended September 30, 2026 and September 30, 2025 was $34.0 million and $29.1 million, respectively.

Performance Stock Awards

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 performance stock awards are earned based on achieving certain Adjusted EBITDA and Adjusted EBITDA Margin targets set forth in the applicable award agreements. Performance stock granted in 2025 and 2026 can yield 0% to 200% achievement. The activity in the table below is shown at the target performance of 100% achievement for all awards. Performance stock awards include continued service conditions through the vesting date.

The following table summarizes information about performance stock awards for the nine months ended September 30, 2026:

(1) Includes the forfeiture on March 13, 2026 of 32,918 shares related to the 2024 performance share awards that were not achieved at the threshold level of achievement.

As of September 30, 2026, there was $25.5 million of total unrecognized compensation cost arising from performance stock awards achieved or deemed probable of vesting. This cost is expected to be recognized over a weighted average period of 2.1 years. The total fair value of performance awards vested during the nine months ended September 30, 2026 and September 30, 2025 was $8.0 million and $8.7 million, respectively.

(15)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 and 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 September 30, 2026 and December 31, 2025, the Company had recorded reserves of $24.6 million and $16.2 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 September 30, 2026 and December 31, 2025, the $24.6 million and $16.2 million, respectively, of reserves consisted of (i) $10.4 million and $11.4 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) $14.2 million and $4.8 million, respectively, primarily related to federal, state and provincial enforcement actions, 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 September 30, 2026, the principal legal and administrative proceedings in which the Company was involved, or which had been terminated during 2026, relate to Safety-Kleen, Inc. (“Safety-Kleen”) product liability cases and Superfund proceedings.

Safety-Kleen Product Liability Cases: 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 September 30, 2026, there were approximately 90 proceedings (excluding cases that 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 September 30, 2026. From January 1, 2026 to September 30, 2026,22 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 or the prior owners of certain facilities the Company has since acquired have been identified as potentially responsible parties (“PRPs”) or potential PRPs, of indemnification obligations in connection with 133 sites that are subject to or are proposed to become subject to proceedings under federal or state Superfund laws. Of the 133 Superfund-related sites, six involve facilities that are now owned or leased by the Company and 127 involve third-party sites that received waste potentially shipped by the Company or the prior owners of certain facilities the Company has since acquired. Of the 127 third-party sites,30 are now settled,12 are currently requiring Company expenditures for remediation and 85 are not currently requiring Company expenditures for 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, and 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 atthree of the 133 Superfund-related sites.

Of the 127 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 18 sites. These agreements indemnify the Company with respect to any liability at the 18 sites for waste disposed prior to the Company’s acquisition of the former subsidiaries of Waste Management, Inc. and McKesson Corporation, which had shipped waste to those sites. Accordingly, the indemnifying parties are paying all costs of defending those subsidiaries in those 18 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 these indemnification agreements described above, the Company does not have an indemnity agreement with respect to any of the 127 third-party sites.

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 September 30, 2026, there weretwo proceedings for which the Company believed it was possible that the fines or penalties could equal or exceed $1.0 million. As of the date of these financial statements, the Company believes that the fines or other penalties in these 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.

(16)SEGMENT REPORTING

Segment reporting is prepared on the same basis that the Company’s chief operating decision maker (the “CODM”), which is a committee composed of the Company’s Co-Chief Executive Officers, manages the business, makes operating decisions and assesses performance. The Company is managed and reports astwo operating segments: (i) the Environmental Services segment and (ii) the SKSS segment.

Third-party revenues are revenues billed to outside customers by a particular segment. Direct revenues are revenues 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):

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 and provision for income taxes and excludes other transactions not deemed representative of fundamental segment results and other income, 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 measure, 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 reportable segment (in thousands):

The following table presents Total Reportable Segment Adjusted EBITDA reconciled to income from operations before provision for income taxes (in thousands):

(1) Corporate Costs include certain revenues, 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.