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What changed in CLEAN HARBORS INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of CLEAN HARBORS INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+429 added−774 removedSource: 10-K (2024-02-21) vs 10-K (2023-03-01)

Top changes in CLEAN HARBORS INC's 2023 10-K

429 paragraphs added · 774 removed · 352 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

158 edited+32 added−21 removed100 unchanged
Biggest changeGDP, U.S. industrial production, economic conditions in the chemical, manufacturing and automotive markets including efforts and economic incentives to reshore operations to the U.S., available capacity at waste disposal outlets, weather conditions, efficiency of our operations, technology, changing regulations, competition, market pricing of our services, costs incurred to deliver our services and the management of our related operating costs. • Safety-Kleen Sustainability Solutions - Safety-Kleen Sustainability Solutions segment results are impacted by our customers' demand for high-quality, environmentally responsible recycled oil products and their demand for our related service and product offerings.
Biggest changeGDP, U.S. industrial production, economic conditions in the chemical, manufacturing and automotive markets including efforts and economic incentives to reshore operations to the U.S., available capacity at waste disposal outlets, complex laws and regulations over waste handling and disposal, 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. 5 Table Of Contents Technical Services We provide technical services through a network of service centers from which a fleet of vehicles are dispatched to pick up customers' waste either on a predetermined schedule or on demand, and to deliver the waste to permitted facilities, which are usually Company-owned.
In the United States and Canada, we operate seven commercial landfills, six of which are designed and permitted for disposal of hazardous waste and one which is operated for non-hazardous industrial waste disposal. Of our six hazardous waste commercial landfills, four are located in the United States and two are located in Canada.
In the United States and Canada, we operate seven commercial landfills, six of which are designed and permitted for disposal of hazardous waste and one which is operated for non-hazardous industrial waste disposal. Of our six commercial hazardous waste landfills, four are located in the United States and two are located in Canada.
Sustainability is not only about doing less to harm the earth or consuming fewer essential resources, it is also about doing more good and partnering with our customers to minimize their environmental impacts. Our core business is to provide industry, government and the public a wide range of sustainable solutions that protect and restore North America's natural environment.
Sustainability is not only about doing less to harm the earth or consuming fewer essential resources, it is also about doing more good and partnering with our customers to minimize their environmental impacts. Our core business is to provide industry, government and the public a wide range of sustainable solutions that protect and restore North America's natural environment and resources.
Our liability insurance coverage meets or exceeds all federal and state regulations. We maintain property insurance on our physical locations valued in excess of $10.0 million covering direct physical damage. We consolidated the insurance on these locations and this policy has a $10.0 million aggregate deductible. We are self-insured for locations not specifically listed on this policy.
Our liability insurance coverage meets or exceeds all federal and state regulations. We maintain property insurance for our physical locations valued in excess of $10.0 million covering direct physical damage. We consolidated the insurance on these locations and this policy has a $10.0 million aggregate deductible. We are self-insured for locations not specifically listed on this policy.
The most significant federal environmental laws affecting us are the RCRA, the Comprehensive Environmental Response, Compensation and Liability Act, also known as the "Superfund Act," the Clean Air Act, the Clean Water Act and the Toxic Substances Control Act ("TSCA"). RCRA. RCRA is the principal federal statute governing hazardous waste generation, treatment, transportation, storage and disposal.
The most significant federal environmental laws affecting us are RCRA, the Comprehensive Environmental Response, Compensation and Liability Act, also known as the "Superfund Act," the Clean Air Act, the Clean Water Act and the Toxic Substances Control Act ("TSCA"). RCRA. RCRA is the principal federal statute governing hazardous waste generation, treatment, transportation, storage and disposal.
We also look for opportunities to grow through opening new locations in strategic geographies, expanding to new waste streams and being responsive to shifting product and service needs in the marketplace. • Pursue Acquisitions and Divestitures - We have history of strategic acquisitions ranging from small, "tuck-ins" to large scale operations and we continue to actively pursue selective acquisitions we believe can enhance and expand our business.
We also look for opportunities to grow through opening new locations in strategic geographies, expanding to new waste streams and being responsive to shifting product and service needs in the marketplace. • Pursue Acquisitions and Divestitures - We have a history of strategic acquisitions ranging from small, "tuck-ins" to large scale operations and we continue to actively pursue selective acquisitions we believe can enhance and expand our business.
Our team is committed to identifying opportunities to cross-sell among and across our segments which we expect will drive additional revenue for our Company. • Expand Our Network and Suite of Offerings - We operate an extensive network of hazardous waste management facilities and oil re-refineries, which provides us with significant operating leverage as volumes increase.
Our team is committed to identifying opportunities to cross-sell among and across our segments which we expect will continue to drive additional revenue for our Company. • Expand Our Network and Suite of Offerings - We operate an extensive network of hazardous waste management facilities and oil re-refineries, which provides us with significant operating leverage as volumes increase.
In addition, there can be a financial burden that accompanies switching hazardous waste disposal providers due to customers' desire to audit disposal facilities prior to their qualification as approved sites and to limit the number of facilities to which their hazardous waste is shipped in order to reduce potential liability under United States and Canadian environmental laws and regulations.
Due to customers' desire to audit disposal facilities prior to their qualification as approved sites and to limit the number of facilities to which their hazardous waste is shipped in order to reduce potential liability under United States and Canadian environmental laws and regulations, there can be a financial burden that accompanies switching hazardous waste disposal providers.
Our Safety Starts with Me: Live It 3-6-5 mindset, is the foundation to our overall safety approach, and is organized around three Safety Philosophies, six Golden Rules of Safety and each employee’s five personal reasons why they choose to be safe at work, while operating a vehicle or at home.
Our Safety Starts with Me: Live It 3-6-5 mindset, is the foundation to our overall safety approach. This mindset is organized around three Safety Philosophies, six Golden Rules of Safety and each employee’s five personal reasons why they choose to be safe at work, while operating a vehicle or at home.
Targeted marketing opportunities allow us to expand market awareness of the breadth of our service offerings to current and future customers. We strive to be recognized as the premier supplier of a broad range of value-added environmental services based upon quality, responsiveness, customer service, information technologies, safety and cost effectiveness.
Targeted marketing opportunities allow us to expand market awareness of the breadth of our service offerings to current and future customers. We strive to be recognized as the premier supplier of a broad range of value-added environmental services based upon the breadth of those services, quality, responsiveness, customer service, information technologies, safety and cost effectiveness.
We collect, transport, treat and dispose of hazardous and non-hazardous waste, including resource recovery, physical treatment, fuel blending, incineration, landfill disposal, wastewater treatment, lab chemical disposal, explosives management and CleanPack ® services. Our CleanPack ® services include the collection, identification, categorization, specialized packaging, transportation and disposal of laboratory chemicals and household hazardous waste.
We safely collect, transport, treat and dispose of hazardous and non-hazardous waste, including resource recovery, physical treatment, fuel blending, incineration, landfill disposal, wastewater treatment, lab chemical disposal, explosives management and CleanPack ® services. Our CleanPack ® services include the collection, identification, categorization, specialized packaging, transportation and disposal of laboratory chemicals and household hazardous waste.
Competitive Markets Due to the variety of services and products offered, the Company faces significant competition from companies in various industries across all lines of business. The Company's breadth of service offerings however has resulted in no one competitor directly competing with our full suite of offerings.
Competitive Markets Due to the variety of services and products offered, the Company faces competition from companies in various industries across all lines of business. The Company's breadth of service offerings however has resulted in no one competitor directly competing with our full suite of offerings.
Our pollution liability policies provide an additional $85.0 million per occurrence and $85.0 million in the aggregate for a total of $90.0 million per occurrence and $95.0 million in the aggregate, respectively. A $2.0 million deductible per occurrence applies to this coverage in the United States and Canada.
Our pollution liability policies provide an additional $85.0 million per occurrence and $85.0 million in the aggregate for a total of $90.0 million per occurrence and $90.0 million in the aggregate, respectively. A $2.0 million deductible per occurrence applies to this coverage in the United States and Canada.
We provide multi-faceted, high-quality services to a broad mix of customers and our vast capabilities, valuable and unique assets, skilled workforce, safety profile and breadth of services as well as our overall size, scale and geographic locations help us attract customers and provide them with environmentally responsible solutions. • Integrated Network of Assets - We believe, in the aggregate, we operate the largest number of commercial hazardous waste incinerators, landfills, treatment facilities and TSDFs in North America.
We provide multi-faceted, high-quality services to a broad mix of customers and our vast capabilities, valuable and unique assets, skilled workforce, safety profile and breadth of services as well as our overall size, scale and geographic footprint help us attract customers and provide them with environmentally responsible solutions. • Integrated Network of Assets - We believe, in the aggregate, we operate the largest number of commercial hazardous waste incinerators, landfills, treatment facilities and TSDFs in North America.
These assets are very difficult to duplicate and maintain because, in addition to sizable required capital investments, there are significant permitting, regulatory approvals and ongoing compliance regulations necessary in order for new commercial waste disposal sites to come on-line. In addition, operating expertise gained through years of experience is paramount to safely operating such facilities.
These assets are very difficult to duplicate and maintain because, in addition to sizable required capital investments, there are significant permitting, regulatory approvals and ongoing compliance regulations necessary in order for new commercial waste disposal sites to come on-line and remain operational. In addition, expertise gained through years of experience is paramount to safely operating such facilities.
Companies relying on in-house disposal may find the current regulatory requirements to be too capital intensive or complex, and may choose to outsource many of their hazardous waste disposal needs. • Proven and Experienced Management Team - Our executive management team provides extensive depth of knowledge and continuity with years of experience and expertise in the environmental and industrial services industries.
Companies relying on in-house or captive disposal methods may find the current regulatory requirements to be too capital intensive or complex, and may choose to outsource many of their hazardous waste disposal needs. • Proven and Experienced Management Team - Our executive management team provides extensive depth of knowledge and continuity with years of experience and expertise in the environmental and industrial services industries.
We believe that geographic coverage, pricing and breadth of services and products, including our ability to produce high quality sustainable lubricants from the used motor oil we collected, are key competitive factors in this industry. With our Safety-Kleen Oil Plus ® closed loop offering, we are competing in certain markets with other North American lubricant distributors.
We believe that geographic coverage, pricing and breadth of services and products, including our ability to produce high quality sustainable lubricants from the used motor oil we collect, are key competitive factors in this industry. With our Safety-Kleen Oil Plus ® closed loop offering, we are competing in certain markets with other North American lubricant distributors.
The waste handled includes substances which are classified as "hazardous" because of their corrosive, ignitable, infectious, reactive or toxic properties and other substances subject to federal, state and provincial environmental regulation. We provide final treatment and disposal services designed to manage waste which cannot be otherwise safely and/or economically recycled or reused.
Certain waste handled includes substances which are classified as "hazardous" because of their corrosive, ignitable, infectious, reactive or toxic properties and other substances subject to federal, state and provincial environmental regulation. We provide final treatment and disposal services designed to manage waste which cannot be otherwise safely and/or economically recycled or reused.
As of December 31, 2022, the useful economic life of our non-hazardous industrial landfill included 3.3 million cubic yards of remaining permitted capacity. This facility is located in the United States and has been issued operating permits under Subtitle D of the Resource Conservation and Recovery Act ("RCRA").
As of December 31, 2023, the useful economic life of our non-hazardous industrial landfill included 3.3 million cubic yards of remaining permitted capacity. This facility is located in the United States and has been issued operating permits under Subtitle D of the Resource Conservation and Recovery Act ("RCRA").
We believe the following are our core competitive strengths developed over our 40+ years of operations which have and will continue to facilitate our leadership position in the marketplace: • Leading Provider of Environmental and Industrial Services - We are a leading provider of environmental and industrial services which provide sustainable solutions that help our customers protect the environment.
We believe the following are our core competitive strengths developed over our 40+ years of operations which have and will continue to facilitate our prominent position in the marketplace: • Leading Provider of Environmental and Industrial Services - We are a leading provider of environmental and industrial services which provide sustainable solutions that help our customers protect the environment.
Everywhere industry meets the environment, we aim to be a primary resource for our customers. The principal elements of our business strategy are: • Cross-Sell Our Solutions - The breadth of our service offerings allows us the opportunity to provide various services and products to meet our customers' environmental and sustainability objectives.
Everywhere industry meets the environment, we aim to be a primary resource for our customers. The principal elements of our business strategy are: • Cross-Sell Our Solutions - The breadth of our service offerings allow us the opportunity to provide various services and products to meet our customers' environmental and sustainability objectives.
We are constantly monitoring the regulatory environment which is often influenced by changes in leadership at the federal, state, provincial and local levels. We make a continuing effort to anticipate regulatory, political and legal developments that might affect operations, but are not always able to do so.
We are constantly monitoring the regulatory environment which is often influenced by leadership at the federal, state, provincial and local levels. We make a continuing effort to anticipate regulatory, political and legal developments that might affect operations, but are not always able to do so.
We have placed the required financial assurance primarily through qualified insurance companies. As described in Note 18, "Commitments and Contingencies," to our consolidated financial statements included in Item 8 of this report, we are involved in legal proceedings arising under environmental laws and regulations.
We have placed the required financial assurance primarily through qualified insurance companies. As described in Note 18, "Commitments and Contingencies," to our consolidated financial statements included in Item 8 of this report, from time to time we are involved in legal proceedings arising under environmental laws and regulations.
Eric has been a key member of the management team since he joined the Company in 2014. Our experienced management team has the depth of knowledge of both the industry and our operations to be able to quickly pivot in times of change and identify and respond to new market demands.
Eric has been a key member of the management team since he joined the Company in 2014. Our experienced management team has the depth of knowledge of both the industry and our operations to be able to quickly pivot in times of change and identify and respond to new market risks, opportunities and demands.
Our guidelines on corporate governance, the charters for our board committees, and our code of ethics for members of the board of directors, our chief executive officer and our other senior officers are available on our website. Should it be necessary, any waivers for such policies will also be posted on our website.
Our guidelines on corporate governance, the charters for our board committees, and our code of ethics for members of the board of directors, our Co-Chief Executive Officers and our other senior executive officers are available on our website. Should it be necessary, any waivers for such policies will also be posted on our website.
We are also a leader in providing response services for environmental emergencies of any scale from man-made disasters such as oil spills and from natural disasters such as hurricanes. Safety-Kleen Environmental Core Services Our Safety-Kleen Environmental branches' core service offerings focus on the small quantity waste generators predominately within the automotive, industrial and retail space.
We are also a leader in providing response services for environmental emergencies of any scale from man-made disasters such as oil spills and natural disasters such as hurricanes. Safety-Kleen Environmental Core Services Our Safety-Kleen Environmental branches' core service offerings focus on the small quantity waste generators predominately within the general manufacturing, automotive, and retail space.
These amendments also require the EPA to promulgate regulations which (i) control emissions of 188 hazardous air pollutants; (ii) create uniform operating permits for major industrial facilities similar to RCRA operating permits; (iii) mandate the phase-out of ozone depleting chemicals; and (iv) provide for enhanced enforcement. The Clean Water Act.
These amendments also require the EPA to promulgate regulations which (i) control emissions of 188 hazardous air pollutants; (ii) create uniform operating permits for major industrial facilities similar to RCRA operating permits; (iii) mandate the phase-out of ozone depleting chemicals; and (iv) provide for enhanced enforcement. 14 Table Of Contents The Clean Water Act.
We also believe that the depth of our recycling, treatment and disposal capabilities, and our ability to collect and transport waste materials efficiently are additional significant differentiating factors that create an advantage for us in the market for treatment and disposal services. Competition within our Environmental Services segment varies by locality and type of service rendered.
We also believe that the depth of our recycling, treatment and disposal capabilities, and our 11 Table Of Contents ability to collect and transport waste materials efficiently are additional significant differentiating factors that create an advantage for us in the market for treatment and disposal services. Competition within our Environmental Services segment varies by locality and type of service rendered.
Examples of this type of regulation are National Emission Standards for Benzene Waste Operations and National 14 Table Of Contents Emissions Standards for Pharmaceuticals Production. Each of our facilities addresses these regulations on a case-by-case basis determined by its requirement to comply with the pass-through regulations. In our transportation operations, we are regulated by the U.S.
Examples of this type of regulation are National Emission Standards for Benzene Waste Operations and National Emissions Standards for Pharmaceuticals Production. Each of our facilities addresses these regulations on a case-by-case basis determined by its requirement to comply with the pass-through regulations. In our transportation operations, we are regulated by the U.S.
Geographical Information For the year ended December 31, 2022, we generated $4,493.5 million or 87.0% of our direct revenues in the United States and $673.1 million or 13.0% of our direct revenues in Canada.
For the year ended December 31, 2022, we generated $4,493.5 million or 87.0% of our direct revenues in the United States and $673.1 million or 13.0% of our direct revenues in Canada.
As an integral part of our services, we collect industrial waste from customers and transport such waste to and between our facilities for treatment or bulking for shipment to final disposal locations. Customers typically accumulate waste in containers, such as 55-gallon drums, bulk storage tanks or 20-cubic-yard roll-off containers.
As an integral part of our services, we collect industrial waste from customers and transport such waste to and between our facilities for treatment or bulking for shipment to final disposal locations. Waste is typically accumulated in containers, such as 55-gallon drums, bulk storage tanks or 20-cubic-yard roll-off containers.
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 Environmental Services segment results include our Safety-Kleen branches' core environmental service offerings such as 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.
We seek to identify areas in our business where strategic investments in automation, process improvements and employees can serve to increase productivity, efficiency and safety compliance. We continuously focus on the operating leverage of our support functions, including expanding globally to achieve profitability and productivity benefits.
We seek to identify areas in 4 Table Of Contents our business where strategic investments in automation, process improvements and employees can serve to increase productivity, efficiency and safety compliance. We continuously focus on the operating leverage of our support functions, including expanding globally to achieve profitability and productivity benefits.
As the largest provider of parts cleaning services in North America, we offer a complete line of specially designed parts washers to customer locations and then deliver recurring service 7 Table Of Contents that includes machine cleaning and maintenance and disposal and replenishment of clean solvent or aqueous fluids.
As the largest provider of parts cleaning services in North America, we offer a complete line of specially designed parts washers to customer locations and then deliver recurring service that includes machine cleaning and maintenance and disposal and replenishment of clean solvent or aqueous fluids.
As such, these longstanding capabilities exhibited by us create a competitive advantage and provide substantial value for our network. • Comprehensive Service Capabilities Complementing our Customers' Sustainability Goals - Our comprehensive service offerings and product catalog allow us to act as a full service provider of sustainable options for our customers' needs.
As such, these longstanding capabilities exhibited by us create a competitive advantage and provide substantial value for our network. 2 Table Of Contents • Comprehensive Service Capabilities Complementing our Customers' Sustainability Goals - Our comprehensive service offerings and product catalog allow us to act as a full service provider of sustainable options for our customers' needs.
We perform a wide range of industrial maintenance and specialty industrial services and utilize specialty equipment and resources to perform services at any chosen location on a planned or emergency response basis. We also collect containerized waste and provide parts washer and vacuum services to small quantity generators of 5 Table Of Contents hazardous waste.
We perform a wide range of industrial maintenance and specialty industrial services and utilize specialty equipment and resources to perform services at any chosen location on a planned or emergency response basis. We also collect containerized waste and provide parts washer and vacuum services to small quantity generators of hazardous waste.
One of our primary goals as a company is supporting our customers in providing environmentally responsible solutions to further their sustainability goals in today's rapidly progressing world.
One of our primary goals as a company is supporting our customers in providing environmentally responsible solutions to further their sustainability goals in today's rapidly changing world.
Levels of activity and ultimate performance associated with this segment can be impacted by economic conditions in the automotive services and manufacturing markets, efficiency of our operations, technology, weather conditions, changing regulations, competition and the management of our related operating costs.
Levels of activity and ultimate performance associated with this segment can be impacted by economic conditions in the automotive services and manufacturing markets, including supply imbalances, efficiency of our operations, technology, weather conditions, changing regulations, competition and the management of our related operating costs.
Specifically the study demonstrated that the use of high-temperature 9 Table Of Contents combustion destroyed greater than 99.9999% of PFAS compounds, a level that meets the strict chemical destruction standards for many of the most dangerous and difficult to destroy hazardous wastes.
Specifically the study demonstrated that the use of high-temperature combustion destroyed greater than 99.9999% of PFAS compounds, a level that meets the strict chemical destruction standards for many of the most dangerous and difficult to destroy hazardous wastes.
Citizens groups have become increasingly active in challenging the grant or renewal of 16 Table Of Contents permits and licenses for hazardous waste facilities, and responding to such challenges has further increased the costs associated with establishing new facilities or expanding current facilities.
Citizens groups have become increasingly active in challenging the grant or renewal of permits and licenses for hazardous waste facilities, and responding to such challenges has further increased the costs associated with establishing new facilities or expanding current facilities.
In managing the business and evaluating performance, management tracks the volumes and mix of waste handled and disposed of or recycled, generally through our incinerators, treatment, storage and disposal facilities ("TSDFs") and landfills, the utilization rates of our incinerators, equipment and workforce, including billable hours, and number of parts washer services performed, pricing realized by our business and peer companies as well as other key metrics.
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.
Government Regulations While our business has benefited substantially from increased government regulation of hazardous waste transportation, storage and disposal, the environmental services industry itself is the subject of extensive and evolving regulation by federal, state, provincial and local authorities.
While our business has historically benefited from increased government regulation of hazardous waste transportation, storage and disposal, the environmental services industry itself is the subject of extensive and evolving regulation by federal, state, provincial and local authorities.
This signature program is built on safety, quality, efficiency and integrity, and has been offered by Clean Harbors for more than 25 years. By leveraging Clean Harbors' expertise and capabilities, our on-site staff are dedicated to developing the safest, most cost-effective and sustainable solutions to service customers’ needs.
This signature program is built on safety, quality, efficiency and integrity, and has been offered by Clean Harbors for more than 30 years. By leveraging Clean Harbors' expertise and capabilities, our on-site crews are dedicated to developing the safest, most cost-effective and sustainable solutions to service customers’ needs.
Levels of activity and ultimate performance associated with this segment can be impacted by several factors including overall U.S.
Levels of activity and ultimate performance associated with this segment can be impacted by many factors including overall U.S.
Our vacuum services remove solids, residual oily water and sludge and other fluids from customers' oil/water separators, sumps and collection tanks. We also remove and collect waste fluids found at large and small industrial locations, including metal fabricators, auto maintenance providers and general manufacturers.
Our vacuum services remove solids, residual oily water and sludge and other fluids from customers' oil/water separators, sumps and collection tanks. We also remove and collect waste fluids found at large and small industrial locations, including metal 7 Table Of Contents fabricators, auto maintenance providers and general manufacturers.
In addition to the capacity included in the useful economic life of these landfills, there are 6 Table Of Contents approximately 20.9 million cubic yards of additional unpermitted airspace capacity included in the footprints of these landfills that may ultimately be permitted, although there can be no assurance that this additional capacity will be permitted.
In addition to the capacity included in the useful economic life of these landfills, there are approximately 37.5 million cubic yards of additional unpermitted airspace capacity included in the footprints of these landfills 6 Table Of Contents that may ultimately be permitted, although there can be no assurance that this additional capacity will be permitted.
This diversification opens opportunities for cross-selling our large portfolio of services and limits 3 Table Of Contents our credit exposure to any single customer and potential cyclicality in any one industry.
This diversification opens opportunities for cross-selling our large portfolio of services and limits our credit exposure to any single customer and potential cyclicality in any one industry.
As our customers respond to the consumer and investor focus on environmental and socially responsible practices, including less reliance on foreign oil products, we expect that the use of KLEEN+ re-refined oil products will contribute to our customers' ESG efforts.
With the consumer and investor focus on environmental and socially responsible practices, including less reliance on foreign oil products, we expect that the use of KLEEN+ re-refined oil products will contribute to our customers' ESG efforts.
For the years ended December 31, 2022, 2021 and 2020, we spent $13.9 million, $15.5 million and $12.4 million, respectively, to address environmental liabilities. As discussed more fully above under the heading "Insurance and Financial Assurance," we are required to provide financial assurance with respect to certain statutorily required closure, post-closure and corrective action obligations at our facilities.
For the years ended December 31, 2023, 2022 and 2021, we spent $29.0 million, $13.9 million and $15.5 million, respectively, to address environmental liabilities. As discussed more fully above under the heading "Insurance and Financial Assurance," we are required to provide financial assurance with respect to certain statutorily required closure, post-closure and corrective action obligations at our facilities.
These fluid collections are used as feedstock in our oil re-refining to produce our base and blended 1 Table Of Contents oil products and our recycled automotive related fluid products or are integrated into the Clean Harbors' recycling and disposal network.
These fluid collections are used as feedstock in our oil re-refining to produce our base and blended oil products and our recycled automotive related fluid products or are integrated into the Clean Harbors' recycling and disposal network.
Strategy Our strategy involves leveraging our core competitive strengths to develop and maintain ongoing relationships with a diversified group of customers having recurring needs for our services and products while continuing to grow our service lines ensuring that we can meet our customers' changing environmental and sustainability needs.
Strategy Our strategy involves leveraging our core competitive strengths to develop and maintain ongoing relationships with a diversified group of customers while continuing to grow our service lines, ensuring that we can meet our customers' changing environmental and sustainability needs.
We cannot predict the extent to which any legislation or regulation that may be enacted or enforced in the future may affect our operations. 13 Table Of Contents United States Hazardous Waste Regulation Federal Regulations.
We cannot predict the extent to which any legislation or regulation that may be enacted or enforced in the future may affect our operations. United States Hazardous Waste Regulation Federal Regulations.
As noted above, we are required to obtain federal, state, provincial and local permits or approvals for each of our hazardous waste facilities.
We are required to obtain federal, state, provincial and local permits or approvals for each of our hazardous waste facilities.
This overall approach, along with other targeted safety programs, have enabled us to achieve continued improvement across our Company. For the year ended December 31, 2022, our safety metrics of Total Recordable Incident Rate ("TRIR") and Days Away, Restricted Activity and Transfer Rate ("DART"), were 0.73 and 0.41, respectively.
This overall approach, along with other targeted safety programs, have enabled us to achieve continued safety improvement across our Company. For the year ended December 31, 2023, our key safety metrics of Total Recordable Incident Rate ("TRIR") and Days Away, Restricted Activity and Transfer Rate ("DART"), were 0.63 and 0.35, respectively.
As further discussed 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, as of December 31, 2022 we have recognized environmental liabilities of $235.1 million.
As further discussed 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, as of December 31, 2023, we have recognized environmental liabilities of $229.8 million.
In addition, our proprietary and integrated technology platform utilized to deliver our services provides a competitive advantage for us and continuous investments provides incremental value to our customers' experience. • Used Motor Oil Collection and Re-refining Capabilities - As the largest re-refiner and recycler of used oil in North America, during 2022, we collected and processed 232 million gallons of used motor oil and returned approximately 196 million gallons of new re-refined oil, lubricants and byproducts back into the marketplace.
In addition, our proprietary and integrated technology platforms utilized to deliver our services provides a competitive advantage for us and continuous investments provide incremental value to our customers' experience. • Used Motor Oil Collection and Re-refining Capabilities - As the largest re-refiner and recycler of used oil in North America, during 2023, we collected and processed 235 million gallons of used oil and returned approximately 221 million gallons of new re-refined oil, lubricants and byproducts back into the marketplace.
We also operate our significant fleet across a transportation network spanning the U.S. and Canada. Our broad service network enables us to effectively handle a hazardous waste stream from its origin through disposal while internalizing transportation to reduce costs.
We also operate our significant fleet of more than 20,000 vehicles across a transportation network spanning the U.S. and Canada. Our broad service network enables us to effectively handle a hazardous waste stream from its origin through disposal while internalizing transportation to reduce costs.
We look for 4 Table Of Contents opportunities to expand waste handling capacity or oil processing at these facilities by modifying the terms of the existing permits, improving technology or, in certain instances, significantly expanding our facilities.
We also look for opportunities to expand waste handling capacity or oil processing at our facilities by modifying the terms of the existing permits, improving technology or, in certain instances, significantly expanding our facilities.
Heritage-Crystal Clean in the United States, and CEDA International Corporation and Secure Energy Services in Canada, are the principal national firms with which we compete for this work. There are also several regional and local firms with which we compete.
Heritage-Crystal Clean in the United States, and CEDA, GFL Environmental Inc. and Secure Energy Services in Canada, are the principal national firms with which we compete for this work. There are also several regional and local firms with which we compete.
As of December 31, 2022, we had nine active incinerators operating in five incinerator facilities that offer a wide range of technological capabilities to customers.
As of December 31, 2023, we had nine active incinerators operating in five incineration facilities that offer a wide range of technological capabilities to customers.
We also have requirements for periodic regulatory reporting to the Environmental Protection Agency ("EPA") and other agencies that are available to the public and we continue to monitor for emerging legislation which may influence sustainability-related disclosures.
We have requirements for periodic regulatory reporting to the EPA and other agencies that are available to the public and we continue to monitor for emerging legislation which may influence sustainability-related requirements and potential disclosures.
Our significant scale allows us to maintain low costs through standardized compliance procedures and significant purchasing power. Leveraging our investment in technology and our ability to efficiently utilize logistics and transportation, we can economically direct waste streams to the most efficient facility.
Our significant scale allows us to lower costs through standardized compliance procedures and significant purchasing power. Leveraging our investment in technology and our ability to efficiently utilize logistics and transportation, we strive to direct waste streams to the most efficient facility.
Those customers that have selected us as an approved vendor typically continue to use our services on a recurring basis. In our Safety-Kleen Sustainability Solutions segment, oil collections are the feed-stock into our oil product sales.
Those customers that have selected us as an approved vendor typically continue to use our services on a recurring basis. In our SKSS segment, used oil collections are the feed-stock into our oil product sales.
With 232 million gallons of used oil collected and processed in 2022, we were able to return approximately 196 million gallons of new re-refined oil, lubricants and byproducts back into the marketplace helping our customers meet the growing demand for the use of sustainable products in their operations.
With 235 million gallons of used oil collected in 2023, we were able to return approximately 221 million gallons of new re-refined oil, lubricants and byproducts back into the marketplace helping our customers meet the growing demand for the use of sustainable products in their operations.
These services include liquid and dry vacuum services, hydro-blasting, dewatering and materials processing, leak detection and repair, tank cleaning, specialty mechanical services, vapor control, water and chemical hauling and steam cleaning.
These services include liquid and dry vacuum services, hydro-blasting, dewatering and materials processing, leak detection and repair, tank cleaning, specialty mechanical services, vapor control, water and chemical hauling, foam cleaning, steam cleaning, ultrasonic cleaning technology and temporary housing services.
Industrial Services We perform industrial cleaning and maintenance services and specialty industrial services at refineries, mines, upgraders, chemical plants, pulp and paper mills, manufacturing facilities, power generation facilities and other industrial customers throughout North America. Our industrial services crews handle services to support ongoing in-plant cleaning and maintenance services on our customers' mission critical equipment and infrastructure.
Industrial Services We perform industrial cleaning, maintenance and support services and specialty industrial services at refineries, chemical plants, upgraders, power generation and other utilities facilities, manufacturing facilities and other industrial customers throughout North America. Our industrial services crews support ongoing in-plant cleaning and maintenance services on our customers' mission critical equipment and infrastructure.
For our Safety-Kleen Sustainability Solutions segment, competitors vary by locality and by type of services rendered, with competition coming from Heritage-Crystal Clean, along with many regional and local firms.
For our SKSS segment, competitors vary by locality and by type of services rendered, with competition coming from Heritage-Crystal Clean, along with many regional and local firms.
We also understand the value our customers place on our products and services in a global market continuously focusing on sustainability, environmental compliance and safety. • Foster Innovation through Technology - Technology has always been part of our core operations, influencing our strategy from increasing throughput at our facilities to increased automation for enhancing productivity.
We also understand the value our customers place on our products and services in a global market continuously focusing on sustainability, environmental compliance and safety. • Foster Innovation through Technology - Technology has always been part of our core operations, influencing our strategy from increasing throughput at our facilities to automation, including artificial intelligence and robotic process automation, to enhance productivity.
We have acquired all material operating permits and approvals now required for the current operation of our business and have applied for, or are in the process of applying for, all permits and approvals needed in connection with planned expansion or modifications of our operations.
We have acquired all material operating permits and approvals now required for the current operation of our business and have applied for, or are in the process of applying for, all permits and approvals needed in connection with planned expansion or modifications of our operations. We continue to monitor and comply with the requirements of our permits and these regulations.
Segment results are also predicated on the demand for Safety-Kleen Sustainability Solutions' other product and service offerings including collection services for used oil, used oil filters and other automotive fluids.
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.
Our non-hazardous landfill is located in the United States. In addition to our seven commercial landfills, we also own and operate two non-commercial landfills that only accept waste from our on-site incinerators, as described above. As of December 31, 2022, the useful economic lives of our six commercial hazardous waste landfills included approximately 24.8 million cubic yards of remaining capacity.
Our non-hazardous landfill is located in the United States. In addition to our seven commercial landfills, we also own and operate one non-commercial landfill that only accepts waste from our on-site incinerators, as described above. As of December 31, 2023, the useful economic lives of our six commercial hazardous waste landfills included approximately 23.9 million cubic yards of remaining capacity.
Seven of our U.S. sites have been recognized by the U.S. Occupational Safety & Health Administration’s Voluntary Protection Program ("VPP") for their effective safety management systems and low injury and illness rates. To put this accomplishment in context, less than 0.1% of the eight million U.S. workplaces have earned this elite VPP recognition.
Occupational Safety & Health Administration’s Voluntary Protection Program ("VPP") for their effective safety management systems and low injury and 9 Table Of Contents illness rates. To put this accomplishment in context, less than 0.1% of the eight million U.S. workplaces have earned this elite VPP recognition.
High temperature incineration efficiently eliminates organic waste such as herbicides, halogenated solvents, pesticides and pharmaceutical and refinery waste, regardless of form as gas, liquid, sludge or solid. Federal and state incineration regulations require a destruction and removal efficiency of 99.99% for most organic waste.
High temperature incineration safely and efficiently eliminates organic waste such as herbicides, halogenated solvents, pesticides and pharmaceutical and refinery waste, regardless of form as gas, liquid, sludge or solid. Federal and state incineration regulations require a destruction and removal efficiency of at least 99.99% for most organic waste and our incinerators meet or exceed these requirements.
We aim to price our services and products competitively, understanding the inherent value of our network of assets and operations and being quick to respond to market and macroeconomic changes.
We aim to price our services and products competitively, understanding the demands of our customers, inherent value of our network of assets and operations and our ability to quickly to respond to market and macroeconomic changes.
We continually strive to invest in our employees through training programs, including training specifically aimed at workplace safety and cyber-security. We provide the training and licensing necessary to maintain a skilled and experienced workforce. We also provide competitive compensation and benefit programs, including matching employee contributions towards retirement savings plans and covering annual healthcare cost increases.
We continually strive to invest in our employees through training programs, including training specifically aimed at workplace safety and cybersecurity. We provide the training and licensing necessary to maintain a skilled and experienced workforce. We also provide competitive compensation and benefit programs, including matching employee contributions towards certain retirement savings plans and health savings accounts.
Each of these competitors is able to provide one or more of the environmental services we offer. Under federal and state environmental laws in the United States, generators of hazardous waste remain liable and responsible for the proper disposal of such waste.
Lehman & Company, are the principal national firms with which we compete. Each of these competitors is able to provide one or more of the products and services we offer. Under federal and state environmental laws in the United States, generators of hazardous waste remain liable and responsible for the proper disposal of such waste.
Though our collection services customer base may fluctuate, we consistently collect over 200 million gallons of used motor oil annually. • Regulatory Compliance - We continue to make capital investments in our facilities to ensure that they are in compliance with current federal, state, provincial and local regulations.
Though our collection services customer base may fluctuate, we consistently collect over 220 million gallons of used oil annually with an average of 229.1 million gallons collected annually over the past three years. • Regulatory Compliance - We continue to make capital investments in our facilities to ensure that they are in compliance with current federal, state, provincial and local regulations.
We also use internal resources to transport and process the substantial majority of all hazardous waste that we manage for our customers. In addition, our Safety-Kleen Sustainability Solutions segment results are significantly impacted by the overall market pricing and product mix associated with base and blended oil products.
We also use internal resources to transport and process the substantial majority of all hazardous waste that we manage for our customers. Our SKSS segment results are significantly impacted by the overall market pricing associated with oil products.
Our support functions are also highly leverageable and have resulted in improved operating margins. • Large and Diversified Customer Base - Our customer portfolio ranges from small companies to Fortune 500 companies and include public and private entities that span multiple industries and business types, including some government entities.
Across the entire Company, our support functions are highly leverageable also driving improved operating margins. • Large and Diversified Customer Base - Our customer portfolio ranges from small companies to Fortune 500 companies and includes public and private entities that span multiple industries and business types, including government entities.
We voluntarily provide data to various external sustainability reporting and assessment organizations, many of which provide subscribers and the public with their rankings or scorecards of companies based on a combination of public and private information.
We voluntarily provide data to various external sustainability reporting and assessment organizations, many of which provide subscribers and the public with their rankings or scorecards of companies based on a combination of public and private information. We utilize these formal reporting platforms to inform customers and other stakeholders of our sustainability efforts.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeDollars at exchange rates in effect during or at the end of each reporting period. Therefore, increases or decreases in the value of the U.S. Dollar against other currencies in countries where we operate affect our results of operations and the value of balance sheet items denominated in foreign currencies.
Biggest changeDollars, we must translate revenues, expenses and income, as well as assets and liabilities, into U.S. Dollars at exchange rates in effect during or at the end of each reporting period. Therefore, increases or decreases in the value of the U.S.
Our ability to make scheduled payments of principal or interest with respect to our debt, including our outstanding senior unsecured notes, our senior secured term loans, any revolving loans and our finance leases, and to pay fee obligations with respect to our letters of credit, will depend on our ability to generate cash and our future financial results.
Our ability to make scheduled payments of principal or interest with respect to our debt, including our outstanding unsecured senior notes, our secured senior term loans, any revolving loans and our finance leases, and to pay fee obligations with respect to our letters of credit, will depend on our ability to generate cash and our future financial results.
These events could prevent or delay shipments to and collections from customers and those from suppliers. Residual and lingering macroeconomic effects from such events could continue to impact our supply chain, distribution network and/or workforce via longer disruptions or increased costs. These impacts could have a material effect on our business, financial condition, results of operations and cash flows.
These events could prevent or delay shipments to and collections from customers and those from suppliers. Residual and lingering macroeconomic effects from such events could impact our supply chain, distribution network and/or workforce via longer disruptions or increased costs. These impacts could have a material effect on our business, financial condition, results of operations and cash flows.
Malfunctions of these technologies, including disruptions due to natural or man-made disasters (e.g., terrorism or cyber intrusion), could interrupt operations, create incremental operational and safety risks such as those noted above or negatively impact our service to our customers and hurt our business reputation.
Malfunctions of these technologies, including disruptions due to natural or man-made disasters (e.g., terrorism or cyber intrusion), could interrupt operations, create incremental operational and safety risks such as those noted above or negatively impact our service to our customers and our business reputation.
Our operations, predominately within the Safety-Kleen Sustainability Solutions segment, involve collecting used oil, re-refining a portion of such used oil into base and blended lubricating oils and then selling both base and blended oil products to customers.
Our operations, predominately within the Safety-Kleen Sustainability Solutions ("SKSS") segment, involve collecting used oil, re-refining a portion of such used oil into base and blended lubricating oils and then selling both base and blended oil products to customers.
Although we have vigorously defended and will continue to vigorously defend the Company and the safety of its products against all of these claims, these lawsuits are subject to many uncertainties and outcomes cannot be predicted with assurance.
Although we have vigorously defended and will continue to vigorously defend the Company and the safety of its products against all of these claims, these lawsuits are subject to many uncertainties and outcomes that cannot be predicted with assurance.
We also test our goodwill and indefinite-lived intangible assets for impairment at least annually on December 31, or when events or changes in the business environment indicate that the carrying value of a reporting unit or indefinite lived intangible may exceed its fair value. During each of 2022, 2021 and 2020, we determined that no asset write-downs were required.
We also test our goodwill and indefinite-lived intangible assets for impairment at least annually on December 31, or when events or changes in the business environment indicate that the carrying value of a reporting unit or indefinite lived intangible may exceed its fair value. During each of 2023, 2022 and 2021, we determined that no asset write-downs were required.
However, events not now anticipated (including future changes in environmental laws and regulations or their enforcement) could require that such payments be made earlier or in greater amounts than we now estimate, which could adversely affect our financial condition, results of operations and cash flows. We may also assume additional environmental liabilities as part of future acquisitions.
However, events not now anticipated (including future changes in environmental laws and regulations) could require that such payments be made earlier or in greater amounts than we now estimate, which could adversely affect our financial condition, results of operations and cash flows. We may also assume additional environmental liabilities as part of future acquisitions.
Further, if our assumptions concerning expansion airspace should prove inaccurate, certain of our cash expenditures for closure of landfills could be accelerated and adversely affect our results of operations and cash flow. Reductions in the demand for oil products and automotive services in the markets we serve may negatively affect certain of our businesses.
Further, if our assumptions concerning expansion airspace should prove inaccurate, certain of our cash expenditures for closure of landfills could be accelerated and adversely affect our results of operations and cash flow. Reductions in the demand for oil products and automotive services and volatility in oil prices in the markets we serve may negatively affect certain of our businesses.
The theft, destruction, loss, misappropriation or release of sensitive and/or confidential information or 17 Table Of Contents intellectual property, or interference with our operational technology, information technology systems or the technology systems of third parties on which we rely, could result in business disruption, negative publicity, damage to our assets, brand reputational damage, violation of privacy laws, loss of customers, potential liability and competitive disadvantage, which could have a material adverse effect on our financial position, results of operations or cash flows.
The theft, destruction, loss, misappropriation or release of sensitive and/or confidential information or intellectual property, or interference with our operational technology, information technology systems or the technology systems of third parties on which we rely, could result in business disruption, negative publicity, damage to our assets, brand reputational damage, violation of privacy laws, loss of customers, potential liability and competitive disadvantage, which could have a material adverse effect on our financial position, results of operations or cash flows.
In accordance with these provisions, our By-Laws provide for a staggered board of directors which consists of three classes of directors of which one class is elected each year for a three-year term, and require that written application by holders of at least 25% (which is less than the 40% which would otherwise be applicable without such a specific provision in our By-Laws) of our outstanding shares of common stock is required for stockholders to call a special meeting.
In accordance with these provisions, our By- 24 Table Of Contents Laws provide for a staggered board of directors which consists of three classes of directors of which one class is elected each year for a three-year term, and require that written application by holders of at least 25% (which is less than the 40% which would otherwise be applicable without such a specific provision in our By-Laws) of our outstanding shares of common stock is required for stockholders to call a special meeting.
We have obtained all of the required financial assurance for our facilities through a combination of surety bonds and insurance from qualified insurance companies. The financial assurance related to closure and post-closure obligations of our U.S. and Canadian facilities will renew at various dates throughout 2023.
We have obtained all of the required financial assurance for our facilities through a combination of surety bonds and insurance from qualified insurance companies. The financial assurance related to closure and post-closure obligations of our U.S. and Canadian facilities will renew at various dates throughout 2024.
We are subject to income taxes in the United States, Canada, India, Mexico, Puerto Rico and various state and local jurisdictions. Tax interpretations, regulations and legislation in the various jurisdictions in which we operate are subject to change and uncertainty and may impact our results of operations and cash flows.
We are subject to various taxes in the United States, Canada, India, Mexico, Puerto Rico and certain state and local jurisdictions. Tax interpretations, regulations and legislation in the various jurisdictions in which we operate are subject to change and uncertainty and may impact our results of operations and cash flows.
We also continually review 21 Table Of Contents our portfolio of assets to determine the extent to which assets or groups of assets are contributing to our objectives and growth strategy. When we decide to sell a business or specific asset group, we may be unable to do so on satisfactory terms and within our anticipated time frame.
We also continually review our portfolio of assets to determine the extent to which assets or groups of assets are contributing to our objectives and growth strategy. When we decide to sell a business or specific asset group, we may be unable to do so on satisfactory terms and within our anticipated time frame.
Research and development of new technologies may require significant spending which may negatively impact our operating results and cash flows. Failure to innovate and focus on new technologies that provide superior alternatives to traditional environmental services, waste disposal or oil collection and re-refining service offerings may negatively impact our financial results.
Research and development of new technologies may require significant spending which may negatively impact our operating results and cash flows. Failure to innovate and focus on new 17 Table Of Contents technologies that provide superior alternatives to traditional environmental services, waste disposal or oil collection and re-refining service offerings may negatively impact our financial results.
Such uses give rise to cyber-security risks, including security breach, espionage, system disruption, theft, disruption of our business operations, remediation costs for repairs of system damage and inadvertent release of information.
Such uses give rise to cybersecurity risks, including security breach, espionage, system disruption, theft, disruption of our business operations, remediation costs for repairs of system damage and inadvertent release of information.
While we endeavor to purchase insurance coverage appropriate to our risk assessment, we are unable to predict with certainty the frequency, nature or magnitude of claims for direct or consequential damages, and as a result our insurance program may not fully cover us for losses we may incur.
While we endeavor to purchase insurance coverage 22 Table Of Contents appropriate to our risk assessment, we are unable to predict with certainty the frequency, nature or magnitude of claims for direct or consequential damages, and as a result our insurance program may not fully cover us for losses we may incur.
Although we believe our assumptions, judgments and estimates are reasonable, changes in tax laws or our interpretation of tax laws and the resolution of any tax audits could significantly impact the amounts provided for income taxes in our consolidated financial statements. 22 Table Of Contents Fluctuations in foreign currency exchange could affect our financial results.
Although we believe our assumptions, judgments and estimates are reasonable, changes in tax laws or our interpretation of tax laws and the resolution of any tax audits could significantly impact the amounts provided for income taxes in our consolidated financial statements. Fluctuations in foreign currency exchange could affect our financial results.
Furthermore, while we maintain what we believe is sufficient insurance coverage that may (subject to certain policy terms and conditions, including deductibles) cover certain aspects of third-party security and cyber-security risks and business interruption, our insurance coverage may not always cover all our costs or losses.
Furthermore, while we maintain what we believe is sufficient insurance coverage that may (subject to certain policy terms and conditions, including deductibles) cover certain aspects of third-party security and cybersecurity risks and business interruption, our insurance coverage may not always cover all related costs or losses.
Past practices have resulted in releases of regulated materials at and from certain of our facilities, or the disposal of regulated materials at third-party sites, which may require investigation and remediation, and potentially result in claims of 20 Table Of Contents personal injury, property damage and damages to natural resources.
Past practices have resulted in releases of regulated materials at and from certain of our facilities, or the disposal of regulated materials at third-party sites, which may require investigation and remediation, and potentially result in claims of personal injury, property damage and damages to natural resources.
Furthermore, as we pursue our strategy to grow through acquisitions and new initiatives that improve our operations and cost structure, we are also expanding and improving our information technologies, resulting in a larger technological presence and corresponding exposure to cyber-security risk.
Furthermore, as we pursue our strategy to grow through acquisitions and new initiatives that improve our operations and cost structure, we are also expanding and improving our information technologies, resulting in a larger technological presence and corresponding exposure to cybersecurity risk.
It is also possible that government officials responsible for enforcing environmental laws may believe an environmental liability is more significant than we then estimate, or that we will fail to identify or fully appreciate an existing liability before we become legally responsible to address it. 18 Table Of Contents The hazardous waste management industry is subject to significant economic and business risks.
It is also possible that government officials responsible for enforcing environmental laws may believe an environmental liability is more significant than we then estimate, or that we will fail to identify or fully appreciate an existing liability before we become legally responsible to address it. The hazardous waste management industry is subject to significant economic and business risks.
Providing our suite of services to our customers and operating our facilities involves risks such as equipment defects, malfunctions and failures and natural or man-made disasters, which could potentially result in releases of hazardous materials, damage to or total loss of our property or assets, injury or death of our employees, subcontractors or others or a need to shut down or reduce operation of our facilities while remedial actions are undertaken.
Providing our suite of services to our customers and operating our facilities involves risks such as equipment defects, malfunctions and failures and natural or man-made disasters, which could potentially result in releases of hazardous materials, damage to or total loss of our property or assets, injury or death of our employees, subcontractors or others, reduced perceived value of our brand or damage to our reputation, or a need to shut down or reduce operation of our facilities while remedial actions are undertaken.
Furthermore, lower prospective profitability may result due to increased interest accretion and depreciation or asset impairment charges related to the removal of previously included expansion airspace, in addition to the loss of future revenue related to the loss of probable airspace.
Furthermore, lower prospective 19 Table Of Contents profitability may result due to increased interest accretion and depreciation or asset impairment charges related to the removal of previously included expansion airspace, in addition to the loss of future revenue related to the loss of probable airspace.
In particular, if we fail to comply with government regulations governing the transport, handling and disposal of hazardous materials, such failure could negatively impact our ability to collect, process and ultimately dispose of hazardous waste generated by our customers.
If we fail to comply with regulations governing the transport, handling and disposal of hazardous materials, such failure could negatively impact our ability to collect, process and ultimately dispose of hazardous waste generated by our customers.
Efforts to conduct our operations in compliance with all applicable laws and regulations, including environmental rules and regulations, require programs to promote compliance, such as training employees and customers, purchasing health and safety equipment and in some cases hiring outside consultants and lawyers.
Efforts to conduct our operations in compliance with all applicable laws and regulations, require programs to promote compliance, such as training employees and customers, purchasing health and safety equipment and in some cases hiring outside consultants and lawyers.
We are subject to existing and potential product liability lawsuits relating to parts washer services. Clean Harbors, through its Safety-Kleen branded operations within the Environmental Services segment, from time to time has been named as a defendant in product liability lawsuits in various courts and jurisdictions throughout the United States.
We are subject to existing and potential product liability lawsuits relating to parts washer services. Clean Harbors, through its Safety-Kleen branded operations within the Environmental Services segment, from time to time has been named as a defendant in product liability lawsuits in various courts and jurisdictions throughout the United 21 Table Of Contents States.
Declines in this industry, whether temporary or a lasting trend, may reduce the demand for these core service offerings which may adversely impact our financial results. 19 Table Of Contents LEGAL, ENVIRONMENTAL AND REGULATORY COMPLIANCE RISKS Our businesses are subject to numerous statutory and regulatory requirements, which may increase in the future.
Declines in this industry, whether temporary or a lasting trend, may reduce the demand for these core service offerings which may adversely impact our financial results. LEGAL, ENVIRONMENTAL AND REGULATORY COMPLIANCE RISKS Our businesses are subject to numerous statutory and regulatory requirements, which may increase in the future. Our businesses are subject to numerous statutory and regulatory requirements.
A cyber-security incident could negatively impact our business and our relationships with customers. We use technology in substantially all aspects of our business operations. Mobile devices and other online technologies connect our employees to our customers and our networks.
A cybersecurity incident could negatively impact our business, operations and relationships with customers. We use technology in substantially all aspects of our business operations. Mobile devices and other online technologies connect our employees to our customers and our networks.
The direct and indirect impact of such events could include physical damage to one or more of our facilities, equipment or locations in which we operate, the temporary lack of an adequate workforce in a market and the temporary disruption in rail or truck transportation services upon which we rely.
The direct and indirect impact of such events could include physical damage to one or more of our facilities, equipment or locations in which we operate, the temporary lack of an adequate workforce in a market and the temporary disruption in rail or other modes of transportation upon which we rely.
Even with these programs, we and other companies in the environmental services industry are routinely faced with government enforcement proceedings, which can result in fines or other sanctions and require expenditures for remedial work on waste management facilities and contaminated sites.
Even with these programs, we and other companies in the environmental services industry are routinely faced with government enforcement proceedings, which can result in fines or other sanctions and require expenditures for remedial work on waste management facilities and contaminated 20 Table Of Contents sites.
As of December 31, 2022, the Company was involved in 54 such proceedings (including cases which have been settled but not formally dismissed) wherein persons claim personal injury resulting from the use of its parts cleaning equipment or cleaning products.
As of December 31, 2023, the Company was involved in 70 such proceedings (including cases which have been settled but not formally dismissed) wherein persons claim personal injury resulting from the use of its parts cleaning equipment or cleaning products.
If we fail to assess and identify current cyber-security risks and those associated with acquisitions and new initiatives, we may become increasingly vulnerable to such risks. We have implemented measures to prevent security breaches and cyber incidents, including the establishment of processes, procedures and systems focused on response readiness, planning, disaster recovery and business continuity.
If we fail to assess and identify current cybersecurity risks and those associated with acquisitions and new initiatives, we may become increasingly vulnerable to such risks. We have implemented measures aimed at preventing security breaches and cyber incidents, including the establishment of processes, procedures and systems focused on response readiness, planning, disaster recovery and business continuity.
A takeover transaction would frequently afford stockholders an opportunity to sell their shares at a premium over then market prices. ITEM 1B. UNRESOLVED STAFF COMMENTS Not applicable. 24 Table Of Contents
A takeover transaction would frequently afford stockholders an opportunity to sell their shares at a premium over then market prices. ITEM 1B. UNRESOLVED STAFF COMMENTS Not applicable.
We actively assess our cyber-security and technology risks and modify our operational response to such risks as circumstances and technology change. For example, to avoid the collection and housing of customer payment records, we partner with a Payment Card Industry compliant third party to handle our business customers’ credit card transactions in a secure a manner.
We actively assess our cybersecurity and technology risks and modify our operational response to such risks as circumstances and technology change. To avoid the collection and housing of customer payment records, we partner with a Payment Card Industry compliant third party to handle our customers’ credit card transactions in a secure a manner.
Future statutory and regulatory requirements, including any legislation focused on combating climate change, may require significant cost to comply or may require changes to our products or services. Regulators, in addition to investors, customers and the public in general, have been increasingly focused on ESG and cyber-security practices of companies.
Future statutory and regulatory requirements, including any legislation focused on combating climate change, may require significant cost to comply or may require changes to our products or services. Regulators, in addition to investors, customers and the public in general, have been increasingly focused on environmental, social and cybersecurity practices of companies.
Our businesses are subject to numerous statutory and regulatory requirements. Our ability to continue to hold licenses and permits required for our businesses is subject to maintaining satisfactory compliance with such requirements. We may incur significant costs to maintain compliance.
Our ability to continue to hold licenses and permits required for our businesses is subject to maintaining satisfactory compliance with such requirements. We may incur significant costs to maintain compliance.
Our levels of outstanding debt and letters of credit may: • adversely impact our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions or other general corporate purposes or to repurchase our senior unsecured notes from holders upon any change of control; • require us to dedicate a substantial portion of our cash flow to payment of interest on our debt and fees on our letters of credit, which reduces the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes; • subject us to variable interest rate risk on $654.0 million of our $1,604.0 million senior secured term loans for which, as of December 31, 2022, we do not have interest rate hedges and borrowings (if any) under our revolving credit facility; • increase the possibility of an event of default under the financial and operating covenants contained in our debt instruments; and • limit our ability to adjust to rapidly changing market conditions, reduce our ability to withstand competitive pressures and make us more vulnerable to a downturn in general economic conditions of our business than our competitors with less debt.
Our levels of outstanding debt and letters of credit may: • adversely impact our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions or other general corporate purposes or to repurchase our unsecured senior notes from holders upon any change of control; • require us to dedicate a substantial portion of our cash flow to payment of interest on our debt and fees on our letters of credit, which reduces the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes; 23 Table Of Contents • subject us to variable interest rate risk on $380.0 million of our $980.0 million secured senior term loans for which the variable rate had not been fixed via an interest rate swap as of December 31, 2023 and borrowings (if any) under our revolving credit facility; • increase the possibility of an event of default under the financial and operating covenants contained in our debt instruments; and • limit our ability to adjust to rapidly changing market conditions, reduce our ability to withstand competitive pressures and make us more vulnerable to a downturn in general economic conditions of our business than our competitors with less debt.
In connection with its parts cleaning and other solvent related services, we have been subject to fines and certain orders requiring us to take environmental remedial action. Recent and potential changes in environmental laws and regulations may also adversely affect future parts cleaning and other solvent related services.
Environmental laws and regulations have adversely affected and may adversely affect parts cleaning and other solvent related services. In connection with our parts cleaning and other solvent related services, we have been subject to fines and certain orders requiring us to take environmental remedial action.
Like many companies, we have experienced third-party attacks on our computer systems which resulted in some business disruption while we responded, but we believe that no such attack has resulted in any material disruptions or had any of the other material adverse consequences described above in this paragraph.
Like many companies, we have experienced third-party attacks on our computer systems which resulted in some business disruption while we responded. We believe that no such attack has resulted in any material adverse consequences.
Such fines typically have related to our waste treatment, storage and disposal operations. Although none of these fines or penalties that we have paid in the past have had a material adverse effect upon us, future fines and penalties may be more substantial.
Although none of these fines or penalties that we have paid in the past have had a material adverse effect upon us, future fines and penalties may be more substantial.
As of December 31, 2022, our long-term debt consisted of $845.0 million of senior unsecured notes and $1,604.0 million of senior secured term loans, with letters of credit of $111.4 million drawn against our revolving credit facility.
As of December 31, 2023, our long-term debt consisted of $1,345.0 million of unsecured senior notes and $980.0 million of secured senior term loans, with letters of credit of $134.3 million drawn against our revolving credit facility.
Our employees and subcontractors, when necessary, often work under potentially hazardous conditions. These risks expose us to potential liability for pollution and other environmental damages, personal injury, loss of life, business interruption and property damage or destruction. We must also maintain a solid safety record in order to remain a preferred supplier to our major customers.
Our employees and subcontractors, when necessary, often work under potentially hazardous conditions. These risks expose us to potential liability for pollution and other environmental damages, personal injury, loss of life, business interruption and property damage or destruction.
Certain adverse conditions have required, and future conditions might require, us to make substantial write-downs in our assets, which have adversely affected or would adversely affect our balance sheet and results of operations.
Dollar against other currencies in countries where we operate affect our results of operations and the value of balance sheet items denominated in foreign currencies. Certain adverse conditions have required, and future conditions might require, us to make substantial write-downs in our assets, which have adversely affected or would adversely affect our balance sheet and results of operations.
As of December 31, 2022, we have recorded environmental liabilities valued at $235.1 million, substantially all of which we assumed in connection with certain acquisitions.
As of December 31, 2023, we have recorded closure, post-closure and remedial liabilities valued at $229.8 million, substantially all of which we assumed in connection with certain acquisitions.
We calculate our environmental liabilities on a present value basis in accordance with generally accepted accounting principles, which take into consideration both the amount of such liabilities and the timing when we project that we will be required to pay them.
We calculate these environmental liabilities on a present value basis in accordance with generally accepted accounting principles, which take into consideration both the estimated cost to remediate such liabilities and the estimated timing of the remediation.
Our ability to retain key personnel and/or attract new qualified personnel may have an impact on our business, financial position, results of operations and cash flows. We put the safety of our employees at the heart of what we do and believe we have a positive relationship with our workforce.
Our ability to retain key personnel and/or attract new qualified personnel may have an impact on our business and financial results and competition for experienced personnel in the labor market may result in increased costs for wages, overtime and employee recruitment. 18 Table Of Contents We put the safety of our employees at the heart of what we do and believe we have a positive relationship with our workforce.
We constantly monitor the landscape of environmental regulation; however, our ability to navigate through any changes to such regulations may result in a material effect on our operations, cash flows or financial condition. From time to time, fines and/or penalties have been levied upon the Company in government environmental enforcement proceedings.
We constantly monitor the landscape of environmental regulation; however, our ability to navigate through any changes to such regulations may result in a material effect on our operations, cash flows or financial condition. Environmental and land use laws also impact our ability to expand our facilities.
We earn revenues, pay expenses, own assets and incur liabilities in countries using currencies other than the U.S. Dollar. In particular, we recorded approximately 13.0% of our fiscal 2022 direct revenues in Canada. Because our consolidated financial statements are presented in U.S. Dollars, we must translate revenues, income and expenses as well as assets and liabilities into U.S.
We earn revenues, pay expenses, own assets and incur liabilities in countries using currencies other than the U.S. Dollar. In particular, we recorded approximately 11.5% of our fiscal 2023 direct revenues in Canada and employ approximately 7.0% of our full time active employees at our Global Capabilities Center in India. Because our consolidated financial statements are presented in U.S.
Miles driven and routine automotive maintenance, along with other automotive industry trends, impact demand for parts-washer services, containerized waste collections and vacuum services.
Other businesses, including our Safety-Kleen branches' core service offerings of containerized waste collection services, parts washer services and vacuum services, are inextricably connected to the automotive industry. Miles driven and routine automotive maintenance, along with other automotive industry trends, impact demand for parts-washer services, containerized waste collections and vacuum services.
Even if we comply with all applicable environmental laws, we might not be able to obtain requisite permits from applicable government authorities to extend or modify such permits to fit our business needs. Environmental laws and regulations have adversely affected and may adversely affect parts cleaning and other solvent related services.
In addition, we are required to obtain government permits to operate our facilities, including all of our landfills. Even if we comply with all applicable environmental laws, we might not be able to obtain requisite permits from applicable government authorities to extend or modify such permits to fit our business needs.
However, we might not be able to obtain any such new or additional facilities on favorable terms or at all. Should the need arise, we could incur substantially more debt and letter of credit obligations in the future.
However, we might not be able to obtain any such new or additional facilities on favorable terms or at all. The covenants in our debt agreements may restrict our ability to operate our business and might lead to a default under our debt agreements.
Our operations and those of others in the environmental services industry are subject to extensive federal, state, provincial and local environmental requirements in both the United States and Canada, including those relating to emissions to air, discharged wastewater, storage, treatment, transport and disposal of regulated materials and cleanup of soil and groundwater contamination.
Our operations and those of others in the environmental services industry are subject to extensive federal, state, provincial and local environmental requirements in both the United States and Canada, including those outlined in the "Government Regulations" section in Item 1 of this report on Form 10-K.
We may be subject to additional regulations and disclosure requirements in the future arising from the increased focus on ESG and cyber-security responsibility, including the SEC's recent disclosure proposals on climate change and cyber-security reporting.
We may be subject to additional regulations and disclosure requirements in the future arising from the increased focus these areas, including the SEC's recent disclosure proposal on climate change. In addition, customers, including the U.S. government, may require us to implement or report on certain ESG data, procedures or standards to continue doing business with us.
In addition, customers, including the U.S. government, may require us to implement or report on certain ESG data, procedures or standards to continue doing business with us. The occurrence of any of the foregoing could have a material impact on our financial condition or results of operations.
The occurrence of any of the foregoing could have a material impact on our financial condition or results of operations.
There are significant fixed costs associated with operating our re-refinery facilities and should production volumes at these facilities decrease, our results of operations and profitability may be materially impacted. Other businesses, including the Safety-Kleen branches' core service offerings of containerized waste collection services, parts washer services and vacuum services, are inextricably connected to the automotive industry.
There are significant fixed costs associated with operating our re-refinery facilities and should production volumes at these facilities decrease, our results of operations and profitability may be materially impacted. Factors such as geopolitical developments, supply and demand imbalances and macroeconomic shifts may contribute to heightened oil price volatility in global oil markets.
Removed
Environmental and land use laws also impact our ability to expand our facilities. In addition, we are required to obtain government permits to operate our facilities, including all of our landfills.
Added
Failure to limit our exposure to such risks could have an adverse impact on our results.
Removed
Although our revolving credit agreement and the indenture and loan agreement governing our other outstanding debt contain restrictions on the incurrence of additional debt (including, for this purpose, reimbursement obligations under outstanding letters of credit), these restrictions are subject to a number of qualifications and exceptions and the additional debt which we might incur in the future in compliance with these restrictions could be substantial.
Added
We must also maintain a solid safety record in order to remain a preferred supplier to our major customers and protect the value of our brand in the marketplace.
Removed
In particular, as of December 31, 2022, we had up to approximately $288.6 million available for additional borrowings and letters of credit under our revolving credit facility. Our revolving credit agreement and the indenture and loan agreement governing our other outstanding debt also allow us to borrow significant amounts of money from other sources.
Added
This volatility may lead to reduced profitability and increased operating costs in our oil operations and also may impact the cost of fuels throughout our transportation network and facilities. These volatility impacts may affect the Company's financial condition, results of operations and cash flows.
Removed
These restrictions also do not prevent us from incurring 23 Table Of Contents obligations (such as operating leases) that do not constitute “debt” or “indebtedness” as defined in the relevant agreements. To the extent we incur in the future additional debt and letter of credit or other obligations, the related risks would increase.
Added
From time to time, fines and/or penalties have been levied upon the Company in government environmental enforcement proceedings. Such fines typically have related to our waste treatment, storage and disposal operations.
Removed
The covenants in our debt agreements restrict our ability to operate our business and might lead to a default under our debt agreements.
Added
Recent and potential changes in environmental laws and regulations may also adversely affect future parts cleaning and other solvent related services.

Item 2. Properties

Properties — owned and leased real estate

16 edited+1 added−1 removed3 unchanged
Biggest changeWe have regional administrative offices in Texas, Florida and South Carolina, as well as Alberta, Canada and Hyderabad, India. Our properties are sufficient and suitable for our current needs. We have over 750 operating locations housed at approximately 570 properties covering all 50 states, nine Canadian provinces, Puerto Rico and Mexico.
Biggest changeOur properties are sufficient and suitable for our current needs. We have nearly 800 operating locations housed at approximately 580 properties covering all 50 states, nine Canadian provinces, Puerto Rico and Mexico. These operating locations include service centers, branches, satellite locations, active hazardous waste management properties and oil processing, blending and packaging facilities. Many of our properties offer multiple capabilities.
Specially designed containment systems, vehicles and other equipment permitted for waste transport, together with drivers trained in transportation and waste handling procedures, provide for the movement of customer waste streams. Other Hazardous Waste Management Properties. We own eight facilities specializing in solvent recovery management. We also own two autoclave facilities specifically designed to treat medical waste.
Specially designed containment systems, vehicles and other equipment permitted for waste transport, together with drivers trained in transportation and waste handling procedures, provide for the movement of customer waste streams. Other Hazardous Waste Management Properties. We also own eight facilities specializing in solvent recovery, and two autoclave facilities specifically designed to treat medical waste.
These serve as principal sales and service centers from which we provide our environmental, industrial and Safety-Kleen branch core services for our Environmental Services business as well as oil collection and product sales locations for our Safety-Kleen Sustainability Solutions business. Active Hazardous Waste Management Properties Incinerator Facilities.
These serve as principal sales and service centers from which we provide our environmental, industrial and Safety-Kleen branch core services for our Environmental Services business as well as oil collection and product sales locations for our Safety-Kleen Sustainability Solutions ("SKSS") business. Active Hazardous Waste Management Properties Incinerator Facilities.
Our TSDFs facilitate the movement of materials among our network of service centers and treatment and disposal facilities. Transportation may be accomplished by truck, rail, barge or a combination of modes, with our 25 Table Of Contents own assets or in conjunction with third-party transporters.
Our TSDFs facilitate the movement of materials among our network of service centers and treatment and disposal facilities. Transportation may be accomplished by truck, rail, barge or a combination of modes, with our own assets or in conjunction with third-party transporters.
Oil Processing, Blending and Packaging Facilities Oil Terminals. We operate a total of 78 oil terminals, of which 51 are owned and 27 are leased, which collect or process used oil prior to delivery to our re-refineries or distribution as recycled fuel oil. Oil Recycling and Re-refining Facilities.
Oil Processing, Blending and Packaging Facilities Oil Terminals. We operate a total of 78 oil terminals, of which 52 are owned and 26 are leased, which collect or process used oil prior to delivery to our re-refineries or distribution as recycled fuel oil. Oil Recycling and Re-refining Facilities.
Six of our commercial landfills are designed and permitted for the disposal of hazardous waste and one landfill is operated for non-hazardous industrial waste disposal and, to a lesser extent, municipal solid waste. In addition to our commercial landfills, we also own and operate two non-commercial landfills that only accept waste from our on-site incinerators.
Six of our commercial landfills are designed and permitted for the disposal of hazardous waste and one landfill is operated for non-hazardous industrial waste disposal and, to a lesser extent, municipal solid waste. In addition to our commercial landfills, we also own and operate one non-commercial landfill that only accepts waste from our on-site incinerator.
We operate a total of five oil packaging and blending facilities, of which three are owned and two are leased. ITEM 3. LEGAL PROCEEDINGS See Note 18, "Commitments and Contingencies," to our consolidated financial statements included in Item 8 of this report for a description of legal proceedings. ITEM 4.
We operate a total of four oil packaging and blending facilities, of which three are owned and one is leased. ITEM 3. LEGAL PROCEEDINGS See Note 18, "Commitments and Contingencies," to our consolidated financial statements included in Item 8 of this report for a description of legal proceedings. ITEM 4.
Wastewater treatment consists primarily of three types of services: hazardous wastewater treatment, sludge dewatering or drying and non-hazardous wastewater treatment. Treatment, Storage and Disposal Facilities. We operate 33 TSDFs in the United States and Canada, of which 29 are owned and four are leased.
Wastewater treatment consists primarily of three types of services: hazardous wastewater treatment, sludge dewatering or drying and non-hazardous wastewater treatment. 26 Table Of Contents Treatment, Storage and Disposal Facilities. We operate 32 TSDFs in the United States and Canada, of which 29 are owned and three are leased.
The following table summarizes the practical capacity and utilization for each incinerator for the year ended December 31, 2022: # of Incinerators Practical Capacity (Tons) Utilization Rate Year Ended December 31, 2022 Arkansas 3 145,072 100.1% Nebraska 1 58,808 88.2% Utah 1 66,815 79.1% Texas 3 165,500 83.1% Ontario, Canada 1 125,526 77.2% 9 561,721 86.2% Our incinerators offer a wide range of technological capabilities to customers through this network.
The following table summarizes the practical capacity and utilization for each incinerator for the year ended December 31, 2023: # of Incinerators Practical Capacity (Tons) Utilization Rate Year Ended December 31, 2023 Arkansas 3 145,072 93.8% Nebraska 1 58,808 86.1% Utah 1 66,815 83.2% Texas 3 165,500 82.3% Ontario, Canada 1 125,526 73.1% 9 561,721 83.7% Our incinerators offer a wide range of technological capabilities to customers through this network.
MINE SAFETY DISCLOSURES Not applicable. 26 Table Of Contents PART II
MINE SAFETY DISCLOSURES Not applicable. 27 Table Of Contents PART II
We own eight oil re-refineries, seven in the United States and one in Canada. With nearly 232.5 million gallons of used oil collected this year, we were able to return 196 million gallons of new re-refined oil, lubricants and byproducts back into the marketplace in 2022. Oil Packaging and Blending Facilities.
We own eight oil re-refineries, seven in the United States and one in Canada. With nearly 234.9 million gallons of used oil collected this year, we were able to return 221 million gallons of new re-refined oil, lubricants and byproducts back into the marketplace in 2023. Oil Packaging and Blending Facilities.
We own and operate five incinerator facilities that have a total of nine incinerators with 561,721 tons of total practical capacity and an overall average utilization rate for 2022 of 86.2%.
We own and operate five incinerator facilities that have a total of nine incinerators with 561,721 tons of total practical capacity and an overall average utilization rate for 2023 of 83.7%.
ITEM 2. PROPERTIES Our principal executive offices are in Norwell, Massachusetts. We own our primary executive office building in Massachusetts which occupies 104,000 square feet. We also currently lease 59,300 square feet of additional office space in Norwell, Massachusetts under arrangements which may not expire until 2042.
ITEM 2. PROPERTIES Our principal executive offices are in Norwell, Massachusetts. We own our primary executive office building in Massachusetts which occupies 104,000 square feet. We also currently lease 59,300 square feet of additional office space in Norwell, Massachusetts under arrangements which do not expire until 2042. We have regional administrative offices in Texas, Canada and India.
One of these non-commercial landfills is expected to reach its permitted capacity in early 2023 at which point we will begin closures activities. Additionally, we are in the process of closing two commercial landfills, Altair and Westmorland. The two commercial landfills that are already in closure, are excluded from the landfill counts above.
Additionally, we are in the process of closing two commercial landfills, Altair and Westmorland, which began closure procedures in 2020, and one on-site non-commercial landfill that reached capacity in early 2023. The three landfills that are already in closure, are excluded from the landfill counts above.
Service Centers, Branches and Satellite Locations We have more than 500 service centers, branches and satellite locations, across approximately 410 locations throughout the United States and Canada.
The following sets forth certain information regarding our key properties as of December 31, 2023. Service Centers, Branches and Satellite Locations We have more than 520 service centers, branches and satellite locations, across approximately 425 locations throughout the United States and Canada.
In the United States, we provide incineration through one fluidized bed thermal oxidation unit and three solids and liquids-capable incinerator facilities and we operate one active hazardous waste liquid injection incinerator in Canada. Commercial and Non-Commercial Landfills. In the United States and Canada, we operate seven commercial landfills with approximately 28.2 million cubic yards of remaining highly probable airspace.
In the United States, we provide incineration through one fluidized bed thermal oxidation unit and three solids and liquids-capable incinerator facilities and we operate one active hazardous waste liquid injection incinerator in Canada. We are currently constructing a second incinerator at our Kimball Nebraska facility that will increase our permitted capacity by approximately 70,000 tons.
Removed
These operating locations include service centers, branches, satellite locations, active hazardous waste management properties and oil processing, blending and packaging facilities. Some of our properties offer multiple capabilities. The following sets forth certain information regarding our key properties as of December 31, 2022.
Added
This incinerator will be the sister site to our El Dorado, Arkansas facility housing a solids and liquids-capable incinerator and is set to open in late 2024. Commercial and Non-Commercial Landfills. In the United States and Canada, we operate seven commercial landfills with approximately 27.2 million cubic yards of remaining highly probable airspace.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

10 edited+2 added−3 removed4 unchanged
Biggest changeIn this instance, the starting date was December 29, 2017, when our common stock closed at $54.20 per share. The graph is presented pursuant to SEC rules and is not meant to be an indication of our future performance. NOTE: Index Data: Copyright Standard and Poor’s, Inc. Used with permission. All rights reserved. 28 Table Of Contents ITEM 6. RESERVED
Biggest changeThe values illustrated assume reinvestment of dividends on the ex-dividend date and compares relative performance since a particular starting date. In this instance, the starting date was December 31, 2018, when our common stock closed at $49.35 per share. The graph is presented pursuant to SEC rules and is not meant to be an indication of our future performance.
We have never declared nor paid any cash dividends on our common stock, and we do not intend to pay any dividends on our common stock in the foreseeable future. We intend to retain our future earnings, if any, for use in the operation and expansion of our business, payment of our outstanding debt and for our stock repurchase program.
We have never declared nor paid any cash dividends on our common stock, and we do not intend to pay any dividends on our common stock in the foreseeable future. We intend to retain our future earnings, if any, for use in the operation and expansion of our business, payment of our outstanding debt and our stock repurchase program.
We have no obligation to repurchase stock under this program and may suspend or terminate the repurchase program at any time. 27 Table Of Contents COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN AMONG CLEAN HARBORS, INC., NYSE COMPOSITE INDEX, S&P MIDCAP 400 INDEX, REFUSE SYSTEMS AND CUSTOM PEER GROUPS Performance Graph The following graph compares the five-year return from investing $100 in each of our common stock, the NYSE Composite Index, the S&P Midcap 400 Index, and two custom peer groups.
We have no obligation to repurchase stock under this program and may suspend or terminate the repurchase program at any time. 28 Table Of Contents COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN AMONG CLEAN HARBORS, INC., NYSE COMPOSITE INDEX, S&P MIDCAP 400 INDEX AND A CUSTOM PEER GROUP Performance Graph The following graph compares the five-year return from investing $100 in each of our common stock, the NYSE Composite Index, the S&P Midcap 400 Index and a custom peer group.
During the three months ended December 31, 2022, no shares were repurchased under the Rule 10b5-1 plan. Future repurchases may be made as open market or privately negotiated transactions as described above.
During the three months ended December 31, 2023, 54,574 shares were repurchased under the Rule 10b5-1 plan. Future repurchases may be made as open market or privately negotiated transactions as described above.
On February 22, 2023, there were 252 stockholders of record of our common stock, excluding stockholders whose shares were held in nominee, or "street name" accounts through brokers or banks. On our last record date, approximately 55,000 additional stockholders beneficially held shares in street name accounts.
On February 14, 2024, there were 244 stockholders of record of our common stock, excluding stockholders whose shares were held in nominee, or "street name" accounts through brokers or banks. On our last record date, approximately 90,000 additional stockholders beneficially held shares in street name accounts.
The stock repurchase program authorizes us to purchase our common stock on the open market or in privately negotiated transactions periodically in a manner that complies with applicable U.S. securities laws.
We have funded and intend to fund repurchases through available cash resources. The stock repurchase program authorizes us to purchase our common stock on the open market or in privately negotiated transactions periodically in a manner that complies with applicable U.S. securities laws.
As a result of this assessment, we established the following group as Peer Group (New): ABM Industries Incorporated, Advanced Drainage Systems, Inc., Chemed Corporation, Darling Ingredients, Inc., Emcor Group, Inc., GFL Environmental, Inc., Harsco Corporation, Healthcare Services Group, Inc., Heritage-Crystal Clean, Inc., Huntsman Corporation, Iron Mountain Incorporated, KBR, Inc, Quanta Services, Inc., Republic Services, Inc., Rollins, Inc., Stericycle, Inc., Tetra Tech, Inc., Waste Connections, Inc., and Waste Management, Inc.
This peer group is comprised of ABM Industries Incorporated, Advanced Drainage Systems, Inc., Chemed Corporation, Emcor Group, Inc., Enviri Corporation, GFL Environmental, Inc., Healthcare Services Group, Inc., Huntsman Corporation, Iron Mountain Incorporated, KBR, Inc, Quanta Services, Inc., Republic Services, Inc., Rollins, Inc., Stanley Black & Decker, Inc., Stericycle, Inc., Tetra Tech, Inc., Waste Connections, Inc., and Waste Management, Inc.
Issuer Purchases of Equity Securities Period Total Number of Shares Purchased (1) Average Price Paid Per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3) (in thousands) October 1, 2022 through October 31, 2022 1,567 $ 109.98 — $ 111,265 November 1, 2022 through November 30, 2022 54,918 115.49 52,098 105,265 December 1, 2022 through December 31, 2022 17,790 116.52 — 105,265 Total 74,275 52,098 _____________________ (1) Includes 22,177 shares withheld by us from employees to satisfy employee tax obligations upon vesting of restricted shares granted under our long-term equity incentive programs.
Issuer Purchases of Equity Securities Period Total Number of Shares Purchased (1) Average Price Paid Per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3) (in thousands) October 1, 2023 through October 31, 2023 30,678 $ 153.29 29,994 $ 82,677 November 1, 2023 through November 30, 2023 184,126 157.92 180,724 54,101 December 1, 2023 through December 31, 2023 13,385 174.58 — 554,101 Total 228,189 $ 158.27 210,718 _____________________ (1) Includes 17,471 shares withheld by us from employees to satisfy employee tax obligations upon vesting of restricted shares granted under our long-term equity incentive programs.
In 2022, we reassessed our peers to maintain a group that closely aligns with the breadth and size of our current operations.
We established a custom peer group that closely aligns with the breadth and size of our business.
(2) The average price paid per share of common stock repurchased under our stock repurchase program includes commissions paid to the brokers. (3) Our Board of Directors has authorized the repurchase of up to $600.0 million of our common stock. We have funded and intend to fund the repurchases through available cash resources.
(2) The average price paid per share of common stock repurchased under our stock repurchase program includes commissions paid to the brokers. (3) On December 5, 2023, our Board of Directors authorized a $500.0 million expansion of the Company’s current share repurchase program. As of December 31, 2023, the amount available for repurchase under the expanded plan is $554.1 million.
Removed
We had previously established our Peer Group in 2018 which comprised of the following group, included in the graph below as Peer Group (Old): American Water Works Company, Inc., Casella Waste Systems, Inc., Civeo Corporation, Covanta Holding Corporation, Heritage-Crystal Clean, Inc., Iron Mountain Incorporated, Newpark Resources, Inc., Oil States International, Inc., Republic Services, Inc., Stericycle, Inc., Superior Energy Services, Inc. and Waste Management, Inc.
Added
In 2022, we reassessed our peers to maintain a group that closely aligns with the breath and size of our current operations. Further, Heritage-Crystal Clean, Inc. had previously been in the Peer Group but is no longer listed since being acquired by a private company in 2023.
Removed
US Ecology had previously been in Peer Group Old, however was acquired by Republic Services in 2022 so is no longer listed. In accordance with the rules of the SEC, the performance graph presents both peer group indices in the year of the change.
Added
NOTE: Index Data: Copyright Standard and Poor’s, Inc. Used with permission. All rights reserved. ITEM 6. RESERVED 29 Table Of Contents
Removed
In future Annual Reports of Form 10-K, we expect to report only on Peer Group (New), and not the Peer Group (Old), in the performance graph, which we believe best illustrates a relevant peer index to the Company's current operations. The values illustrated assume reinvestment of dividends on the ex-dividend date and compares relative performance since a particular starting date.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

95 edited+35 added−37 removed86 unchanged
Biggest changeThe following is a reconciliation of net income to Adjusted EBITDA for the following years (in thousands, except percentages): For the years ended December 31, 2022 2021 2020 Net income $ 411,744 $ 203,247 $ 134,837 Accretion of environmental liabilities 12,943 11,745 11,051 Stock-based compensation 26,844 18,839 18,502 Depreciation and amortization 347,594 298,135 292,915 Other (income) expense, net (2,472) 515 290 Loss on early extinguishment of debt 422 — — (Gain) loss on sale of businesses (8,864) — 3,376 Interest expense, net of interest income 107,663 77,657 73,120 Provision for income taxes 126,254 66,468 39,713 Adjusted EBITDA $ 1,022,128 $ 676,606 $ 573,804 As a % of Direct revenues 19.8 % 17.8 % 18.3 % Depreciation and Amortization For the years ended December 31, 2022 over 2021 2021 over 2020 (in thousands, except percentages) 2022 2021 2020 Change % Change Change % Change Depreciation of fixed assets and amortization of landfills and finance leases $ 297,357 $ 263,387 $ 257,131 $ 33,970 12.9 % $ 6,256 2.4 % Permits and other intangibles amortization 50,237 34,748 35,784 15,489 44.6 (1,036) (2.9) Total depreciation and amortization $ 347,594 $ 298,135 $ 292,915 $ 49,459 16.6 % $ 5,220 1.8 % Depreciation and amortization for the year ended December 31, 2022 increased $49.5 million from the comparable period in 2021 predominately due to the depreciation and amortization of the HydroChemPSC tangible and intangible assets which were acquired in the fourth quarter of 2021 as well as increased depreciation and amortization associated with the acquisition completed in the second quarter of 2022.
Biggest changeWe also believe, however, that providing this information in addition to, and together with, GAAP financial information provides a better understanding of our core operating performance and how management evaluates and measures our performance. 36 Table Of Contents The following is a reconciliation of net income to Adjusted EBITDA for the following years (in thousands, except percentages): For the years ended December 31, 2023 2022 2021 Net income $ 377,856 $ 411,744 $ 203,247 Accretion of environmental liabilities 13,667 12,943 11,745 Stock-based compensation 20,703 26,844 18,839 Depreciation and amortization 365,761 347,594 298,135 Other (income) expense, net (2,315) (2,472) 515 Loss on early extinguishment of debt 2,880 422 — Gain on sale of business — (8,864) — Interest expense, net of interest income 108,595 107,663 77,657 Provision for income taxes 125,423 126,254 66,468 Adjusted EBITDA $ 1,012,570 $ 1,022,128 $ 676,606 As a % of Direct revenues 18.7 % 19.8 % 17.8 % Depreciation and Amortization For the years ended December 31, 2023 over 2022 2022 over 2021 (in thousands, except percentages) 2023 2022 2021 Change % Change Change % Change Depreciation of fixed assets and amortization of landfills and finance leases $ 315,499 $ 297,357 $ 263,387 $ 18,142 6.1 % $ 33,970 12.9 % Permits and other intangibles amortization 50,262 50,237 34,748 25 — 15,489 44.6 Total depreciation and amortization $ 365,761 $ 347,594 $ 298,135 $ 18,167 5.2 % $ 49,459 16.6 % 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.
Levels of activity and ultimate performance associated with this segment can be impacted by economic conditions in the automotive services and manufacturing markets, efficiency of our operations, technology, weather conditions, changing regulations, competition and the management of our related operating costs.
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.
We serve over 300,000 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 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 serve over 300,000 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.
Everywhere industry meets the environment, we strive to provide eco-friendly products and services 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 in North America.
Everywhere industry meets the environment, we strive to provide eco-friendly products and services 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.
With approximately 30% of our debt being subject to variable interest rates during 2022, the LIBOR rate increases during the year, as well as a full year of interest payments for the incremental debt issued in October of 2021, have resulted in the increase in interest payments when compared to the prior year.
With approximately 30% of our debt being subject to variable interest rates during 2022, the LIBOR rate increases during the year, as well as a full year of interest payments for the incremental debt issued in October of 2021, resulted in the increase in interest payments when compared to the prior year.
The higher spend on property, plant and equipment was driven by incremental spend on the new incinerator being built in Kimball, Nebraska as well as for the HydroChemPSC operations. Total spend in 2022 related to the construction of the new incinerator in Kimball, Nebraska was $44.9 million.
The higher spending on property, plant and equipment was driven by incremental spend on the new incinerator being built in Kimball, Nebraska as well as for the HydroChemPSC operations. Total spend in 2022 related to the construction of the new incinerator in Kimball, Nebraska was $44.9 million.
Landfill capacity, which is the basis for the amortization of landfill assets and for the accrual of final closure and post-closure obligations, represents total permitted airspace plus unpermitted airspace that management believes is probable of ultimately being permitted based on established criteria. As of December 31, 2022, there were no unpermitted expansions included in management's landfill calculation.
Landfill capacity, which is the basis for the amortization of landfill assets and for the accrual of final closure and post-closure obligations, represents total permitted airspace plus unpermitted airspace that management believes is probable of ultimately being permitted based on established criteria. As of December 31, 2023, there were no unpermitted expansions included in management's landfill calculation.
In management's opinion, it is not reasonably possible that the potential liability in excess of what is recorded, if any, that may result from these actions, either individually or collectively, will have a material effect on our financial position, results of operations or cash flows. 44 Table Of Contents
In management's opinion, it is not reasonably possible that the potential liability in excess of what is recorded, if any, that may result from these actions, either individually or collectively, will have a material effect on our financial position, results of operations or cash flows. 45 Table Of Contents
Additional information regarding adjusted free cash flow, which is a non-GAAP measure, including a reconciliation of adjusted free cash flow to net cash from operating activities, appears below under " Adjusted Free Cash Flow ." 30 Table Of Contents Segment Performance The primary financial measure by which we evaluate the performance of our segments is Adjusted EBITDA.
Additional information regarding adjusted free cash flow, which is a non-GAAP measure, including a reconciliation of adjusted free cash flow to net cash from operating activities, appears below under " Adjusted Free Cash Flow ." 31 Table Of Contents Segment Performance The primary financial measure by which we evaluate the performance of our segments is Adjusted EBITDA.
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, 2022 and 2021. The changes in our estimates have not been material. Acquisitions.
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, 2023 and 2022. The changes in our estimates have not been material. Acquisitions.
We have included a schedule of our expected payments as of December 31, 2022, 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, 2023, 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.
Changes in the determination of when the landfill will cease accepting waste, either through a business decision by management, determination that expansion capacity should no longer be considered probable or changes in estimates on annual airspace consumption, will accelerate accrual of these costs. Non-Landfill Closure and Post-Closure Liabilities.
Changes in the determination of when the landfill will cease accepting waste, either through a business decision by management, determination that expansion 42 Table Of Contents capacity should no longer be considered probable or changes in estimates on annual airspace consumption, will accelerate accrual of these costs. Non-Landfill Closure and Post-Closure Liabilities.
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. The estimated fair values of our indefinite-lived intangibles exceeded their carrying values at December 31, 2022.
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. The estimated fair values of our indefinite-lived intangibles exceeded their carrying values at December 31, 2023.
We historically have found it helpful, and believe that investors have found it helpful, to consider an operating measure that excludes certain expenses relating to transactions not reflective of our core operations. 35 Table Of Contents The information about our operating performance provided by Adjusted EBITDA is used by our management for a variety of purposes.
We historically have found it helpful, and believe that investors have found it helpful, to consider an operating measure that excludes certain expenses relating to transactions not reflective of our core operations. The information about our operating performance provided by Adjusted EBITDA is used by our management for a variety of purposes.
The changes in estimates are reflected as adjustments in the ordinary course of business in the period when we determine that an adjustment is appropriate as new information becomes available. Upon demonstration of the effectiveness of the alternative technology and applicable regulatory approval, we update our estimated cost of remediating the affected sites.
The changes in 43 Table Of Contents estimates are reflected as adjustments in the ordinary course of business in the period when we determine that an adjustment is appropriate as new information becomes available. Upon demonstration of the effectiveness of the alternative technology and applicable regulatory approval, we update our estimated cost of remediating the affected sites.
GDP, U.S. industrial production, economic conditions in the chemical, manufacturing and automotive markets including efforts and economic incentives to reshore operations to the U.S., available capacity at waste disposal outlets, weather conditions, efficiency of our operations, technology, changing regulations, competition, market pricing of our services, costs incurred to deliver our services and the management of our related operating costs. • Safety-Kleen Sustainability Solutions - Safety-Kleen Sustainability Solutions segment results are impacted by our customers' demand for high-quality, environmentally responsible recycled oil products and their demand for our related service and product offerings.
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, 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.
The effective tax rate for 2022 was 23.5% which is relatively consistent with the 2021 effective tax rate of 24.6%. For the year ended December 31, 2021, provision for income taxes increased $26.8 million from the comparable period in 2020, largely due to the increase in pre-tax earnings.
For the year ended December 31, 2022, provision for income taxes increased $59.8 million from the comparable period in 2021, largely due to the increase in pre-tax earnings. The effective tax rate for 2022 was 23.5% which is relatively consistent with the 2021 effective tax rate of 24.6%.
These factors, among others, could significantly impact the impairment analysis and may result in future goodwill or asset impairment charges that, if incurred, could have a material adverse effect on our financial condition and results of operations. Legal Matters.
These factors, among others, could significantly impact the impairment analysis and may result in future goodwill or asset impairment charges that, if incurred, could have a material adverse effect on our financial condition and results of operations. 44 Table Of Contents Legal Matters.
Net cash (used in) from financing activities Net cash used in financing activities for the year ended December 31, 2022 was $187.3 million as compared to net cash from financing activities of $898.2 million for the year ended December 31, 2021.
Net cash from financing activities for the year ended December 31, 2022 was $187.3 million, as compared to net cash from financing activities of $898.2 million for the year ended December 31, 2021.
In managing the business and evaluating performance, management tracks the volumes and mix of waste handled and disposed of or recycled, generally through our incinerators, treatment, storage and disposal facilities ("TSDFs") and landfills, the utilization rates of our incinerators, equipment and workforce, including billable hours, and number of parts washer services performed, pricing realized by our business and peer companies as well as other key metrics.
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.
We estimate when future operations will cease and inflate the current cost of closing the non-landfill facility using the 41 Table Of Contents appropriate inflation rate and then discounting the future value to arrive at an estimated present value of closure and post-closure costs.
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.
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 42 Table Of Contents the purchase price over the net assets acquired recorded as goodwill.
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.
Overall cost increases include a $23.3 million increase in labor, benefits and travel related expenses, including incentive compensation, driven by investments in our workforce, and an $8.0 million increase from higher stock-based compensation costs. The increase in stock-based compensation expense is driven by the timing of grants issued in 2022 and higher expense associated with the achievement of performance metrics.
Overall cost increases included a $23.3 million increase in labor, benefits and travel related expenses, including incentive compensation, driven by investments in our workforce, and an $8.0 million increase from higher stock-based compensation costs. The increase in stock-based compensation expense was driven by the timing of grants issued in 2022 and higher expense associated with the achievement of performance metrics.
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 29 Table Of Contents impact on commodity products and pricing.
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 primary drivers of this change were the $995.0 million of cash received in 2021 from the issuance of debt, net of discount, which did not recur in 2022, and the $108.1 million of higher principal payments of long term debt in 2022.
The primary drivers of this change were the 39 Table Of Contents $995.0 million of cash received in 2021 from the issuance of debt, net of discount, which did not recur in 2022, and the $108.1 million of higher principal payments of long term debt in 2022.
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, 2022 and 2021. Remedial Liabilities. Remedial liabilities recorded at December 31, 2022 and 2021 were $116.3 million and $111.9 million, respectively.
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, 2023 and 2022. Remedial Liabilities. Remedial liabilities recorded at December 31, 2023 and 2022 were $111.2 million and $116.3 million, respectively.
Landfill final closure and post-closure liabilities recorded at December 31, 2022 and 2021 were $62.3 million and $53.4 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.
Landfill final closure and post-closure liabilities recorded at December 31, 2023 and 2022 were $59.4 million and $62.3 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.
These entities had historically generated operating losses but began to generate profits due to discrete events, including government subsidies and the gain on sale of a business, but more recently due to operational profits. As of December 31, 2022, these net operating losses have been nearly fully utilized and the remaining valuation allowance, which was nominal, was released.
These entities had historically generated operating losses but began to generate profits due to discrete events, including government subsidies and the gain on sale of a business, but more recently due to operational profits. As of December 31, 2022, these net operating losses were fully utilized and any remaining valuation allowance, which was nominal, was released.
Overall grants for 2022 were slightly lower than 2021. Additional drivers of the overall increase in Corporate Items SG&A include a $6.7 million increase in cyber security information technology related costs and a $2.2 million closure reserve estimate increase for an inactive non-landfill site.
Overall grants for 2022 were slightly lower than for 2021. Additional drivers of the overall increase in Corporate Items SG&A included a $6.7 million increase in cybersecurity information technology related costs and a $2.2 million closure reserve estimate increase for an inactive non-landfill site.
Non-landfill closure and post-closure liabilities recorded at December 31, 2022 and 2021 were $56.6 million and $45.7 million, respectively. We base estimates for non-landfill closure and post-closure liabilities on our interpretations of existing permit and regulatory requirements for closure and post-closure maintenance and monitoring. Our cost estimates are calculated using internal sources as well as input from third-party experts.
Non-landfill closure and post-closure liabilities recorded at December 31, 2023 and 2022 were $59.2 million and $56.6 million, respectively. We base estimates for non-landfill closure and post-closure liabilities on our interpretations of existing permit and regulatory requirements for closure and post-closure maintenance and monitoring. Our cost estimates are calculated using internal sources as well as input from third-party experts.
The overall growth was largely driven by a $154.1 million increase in base oil revenue predominately due to higher pricing across slightly lower volumes sold. Revenues from recycled fuel oil and refinery byproducts increased $53.1 million and revenues from blended oil sales increased $30.0 million due to higher pricing which more than offset lower volumes sold relative to these products.
The overall growth was largely driven by a $154.1 million increase in base oil revenue predominately due to higher pricing across slightly lower volumes sold. Revenues from recycled fuel oil and refinery byproducts increased $53.1 million and revenues from blended oil sales increased $30.0 million due to higher pricing which more than offset a 22% decrease of gallons sold.
We compared the fair value of the reporting units to their respective carrying values and determined that no adjustments to the carrying value of goodwill were necessary. In all cases, the estimated fair value of each reporting unit significantly exceeded its carrying value.
For each reporting unit, we compared the reporting unit's fair value to its respective carrying value and determined that no adjustments to the carrying value of goodwill were necessary. In all cases, the estimated fair value of each reporting unit significantly exceeded its carrying value.
The cost of raw materials used in production of our oil products increased $74.5 million, more than half of which was due to increased costs to obtain used oil through our used oil collection services. The increase in base oil pricing has resulted in a correlating increase in the cost we now pay for used oil feedstock.
The cost of raw materials used in production of our oil products 34 Table Of Contents increased $74.5 million, more than half of which was due to increased costs to obtain used oil through our used oil collection services. The increase in base oil pricing resulted in a correlating increase in the cost we paid for used oil feedstock.
Segment results are also predicated on the demand for Safety-Kleen Sustainability Solutions' other product and service offerings including collection services for used oil, used oil filters and other automotive fluids.
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.
We are also the largest re-refiner and recycler of used oil in North America and the largest provider of parts cleaning and related environmental services to commercial, industrial and automotive customers in North America.
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.
As of December 31, 2022, there were $111.4 million outstanding letters of credit. See Note 12, "Financing Arrangements," to our consolidated financial statements included in Item 8 of this report for further discussion of our standby letters of credit and other financing arrangements.
As of December 31, 2023, there were $134.3 million 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.
Additional information regarding Adjusted EBITDA, which is a non-GAAP measure, including a reconciliation of Adjusted EBITDA to net income, appears below under "Adjusted EBITDA." Net cash from operating activities for 2022 was $626.2 million, an increase of $80.2 million from 2021.
Additional information regarding Adjusted EBITDA, which is a non-GAAP measure, including a reconciliation of Adjusted EBITDA to net income, appears below under "Adjusted EBITDA." Net cash from operating activities for 2023 was $734.6 million, an increase of $108.3 million from 2022.
As of December 31, 2022, we had reserves of $37.1 million consisting of (i) $24.1 million related to pending legal or administrative proceedings, including Superfund liabilities, which were included in remedial 43 Table Of Contents liabilities on the consolidated balance sheets and (ii) $13.0 million primarily related to legal claims as well as federal, state and provincial enforcement actions, which were included in accrued expenses on the consolidated balance sheets.
As of December 31, 2023, we had reserves of $32.4 million consisting of (i) $25.0 million related to pending legal or administrative proceedings, including Superfund liabilities, which were included in remedial liabilities on the consolidated balance sheets and (ii) $7.4 million primarily related to legal claims as well as federal, state and provincial enforcement actions, which were included in accrued expenses on the consolidated balance sheets.
The units-of-consumption method is used to amortize land, landfill cell construction, asset retirement costs and remaining landfill cells and sites. We also utilize the units-of-consumption method to record closure and post-closure obligations for landfill cells and sites.
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. We also utilize the units-of-consumption method to record closure and post-closure obligations for landfill cells and sites.
As such, the effective tax rate for 2023 is expected to increase. 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.
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.
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 38 Table Of Contents or opportunities.
Expenditures of $13.9 million made during 2022 partially offset these increases in the environmental liabilities. 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 be sufficient to fund the payment of such liabilities when required.
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 aim to manage these increases through constant cost monitoring as well as our overall customer pricing strategies designed to offset the negative inflationary impacts on our margins.
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.
No businesses were sold during the year ended December 31, 2021. 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.
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 following is a reconciliation from net cash from operating activities to adjusted free cash flow for the following periods (in thousands): For the years ended December 31, 2022 2021 2020 Net cash from operating activities $ 626,214 $ 545,997 $ 430,597 Additions to property, plant and equipment (345,056) (241,856) (196,256) Purchase and capital improvements of corporate headquarters — — 21,080 Proceeds from sale and disposal of fixed assets 8,779 22,156 9,623 Adjusted free cash flow $ 289,937 $ 326,297 $ 265,044 Summary of Capital Resources At December 31, 2022, cash and cash equivalents and marketable securities totaled $554.6 million, compared to $534.3 million at December 31, 2021.
The following is a reconciliation from net cash from operating activities to adjusted free cash flow for the following periods (in thousands): For the years ended December 31, 2023 2022 2021 Net cash from operating activities $ 734,552 $ 626,214 $ 545,997 Additions to property, plant and equipment (422,300) (345,056) (241,856) Proceeds from sale and disposal of fixed assets 9,650 8,779 22,156 Adjusted free cash flow $ 321,902 $ 289,937 $ 326,297 Summary of Capital Resources At December 31, 2023, cash and cash equivalents and marketable securities totaled $550.8 million, compared to $554.6 million at December 31, 2022.
The effective tax rate for 2021 was 24.6% as compared to 22.8% in 2020. The 2022 and 2021 effective tax rates have benefited from the utilization of previously unbenefited losses in certain of our Canadian entities for which we had previously recognized valuation allowances.
The 2022 and 2021 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.
We have a significant amount of goodwill associated with previous acquisitions. We conducted our annual impairment test of goodwill as of December 31, 2022 in which we assessed the recoverability of the goodwill associated with our Environmental Sales and Service, Environmental Facilities and Safety-Kleen Sustainability Solutions reporting units.
We have a significant amount of goodwill associated with previous acquisitions. We conducted our annual impairment test of goodwill as of December 31, 2023 in which we assessed the recoverability of the goodwill associated with our reporting units.
Adjusted free cash flow, which management uses to measure our financial strength and ability to generate cash, was $289.9 million in 2022, which represented a $36.4 million decrease over 2021.
Adjusted free cash flow, which management uses to measure our financial strength and ability to generate cash, was $321.9 million in 2023, which represented a $32.0 million increase over 2022.
(2) Cost of revenue is shown exclusive of items presented separately on the consolidated statements of operations, which consist of (i) accretion of environmental liabilities and (ii) depreciation and amortization. 31 Table Of Contents Direct Revenues There are many factors which have impacted and continue to impact our revenues including, but not limited to: overall levels of industrial activity and economic growth in North America, existence or non-existence of large scale environmental waste and remediation projects, competitive industry pricing, miles driven and related lubricant demand, impacts of acquisitions and divestitures, the level of emergency response services, captive incinerator closures, government infrastructure investment, weather related events, base and blended oil pricing, 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, the number of parts washers placed at customer sites and foreign currency translation.
(4) Calculated as a percentage of total Company revenue. 32 Table Of Contents 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, competitive industry pricing, overall market incineration capacity including captive incineration closures, impacts of acquisitions and divestitures, the level of emergency response services, government infrastructure investment, 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.
Environmental Services For the years ended December 31, 2022 over 2021 2021 over 2020 (in thousands, except percentages) 2022 2021 2020 Change % Change Change % Change SG&A expenses $ 315,674 $ 265,946 $ 230,868 $ 49,728 18.7 % $ 35,078 15.2 % As a % of Direct revenues 7.6 % 8.8 % 8.8 % (1.2) % — % Environmental Services SG&A expenses for the year ended December 31, 2022 increased $49.7 million from the comparable period in 2021, however improved 1.2% as a percentage of revenues driven by leveraging our SG&A base in the midst of the revenue growth discussed above.
Environmental Services For the years ended December 31, 2023 over 2022 2022 over 2021 (in thousands, except percentages) 2023 2022 2021 Change % Change Change % Change SG&A expenses $ 346,791 $ 315,674 $ 265,946 $ 31,117 9.9 % $ 49,728 18.7 % As a % of Direct revenues 7.7 % 7.6 % 8.8 % 0.1 % (1.2) % 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.
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, invest in new business opportunities and aggressively implement strategic sourcing and logistics solutions in the face of these inflationary pressures, 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 in the face of inflationary pressures, while also continuing to optimize our management and operating structure in an effort to manage our operating margins.
Cash paid for acquisitions, net reflected a decrease of $1,167.0 million due to the acquisition of HydroChemPSC in 2021 for $1.23 billion compared to $86.3 million paid for acquisitions in 2022.
Net cash used in investing activities for the year ended December 31, 2022 was $388.9 million, a decrease of $1,118.7 million compared to the year ended December 31, 2021. Cash paid for acquisitions, net reflected a decrease of $1,167.0 million due to the acquisition of HydroChemPSC in 2021 for $1.23 billion compared to $86.3 million paid for acquisitions in 2022.
These fluid collections are used as feedstock in our oil re-refining to produce our base and blended oil products and our recycled automotive related fluid products or are integrated into the Clean Harbors' recycling and disposal network.
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.
Safety-Kleen Sustainability Solutions offers high quality recycled base and blended oil products, including our KLEEN+ brand of Group II+ base oils, to end users including fleet customers, distributors and manufacturers of oil products. Segment results are impacted by overall demand, market pricing and the mix of our oil product sales.
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.
Cost of Revenues We believe that management of operating costs is vital to our ability to remain price competitive. We continue to experience the current macroeconomic inflationary pressures across several cost categories, but most notably related to internal and external labor, transportation, general supplies and energy related costs.
We continue to experience the current macroeconomic inflationary pressures across several cost categories, but most notably related to internal and external labor, transportation, general supplies and energy related costs.
We also maintain our $400.0 million revolving credit facility, of which nothing was owed as of December 31, 2022. 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 January 2023, we issued $500.0 million principal amount of 6.375% senior notes due 2031.
As noted above, we also maintain our $400.0 million revolving credit facility with no amounts owed as of December 31, 2023. 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.
Depreciation and amortization for the year ended December 31, 2021 increased $5.2 million from the comparable period in 2020 due to the incremental depreciation and amortization of $12.3 million associated with the HydroChemPSC tangible and intangible assets.
Depreciation and amortization for the year ended December 31, 2022 increased $49.5 million from the comparable period in 2021 predominately due to the depreciation and amortization of the HydroChemPSC tangible and intangible assets as well as increased depreciation and amortization associated with the acquisition completed in the second quarter of 2022.
The following table sets forth certain financial information associated with our results of operations for the years ended December 31, 2022, 2021 and 2020 (in thousands, except percentages): Summary of Operations For the years ended December 31, 2022 over 2021 2021 over 2020 2022 2021 2020 Change % Change Change % Change Direct Revenues (1) : Environmental Services $ 4,171,706 $ 3,032,454 $ 2,635,901 $ 1,139,252 37.6% $ 396,553 15.0% Safety-Kleen Sustainability Solutions 994,392 772,813 507,906 221,579 28.7 264,907 52.2 Corporate Items 507 299 290 208 N/M 9 N/M Total 5,166,605 3,805,566 3,144,097 1,361,039 35.8 661,469 21.0 Cost of Revenues (2) : Environmental Services 2,902,979 2,106,790 1,739,115 796,189 37.8 367,675 21.1 Safety-Kleen Sustainability Solutions 615,303 484,662 374,872 130,641 27.0 109,790 29.3 Corporate Items 25,648 18,385 23,764 7,263 N/M (5,379) N/M Total 3,543,930 2,609,837 2,137,751 934,093 35.8 472,086 22.1 Selling, General and Administrative Expenses: Environmental Services 315,674 265,946 230,868 49,728 18.7 35,078 15.2 Safety-Kleen Sustainability Solutions 72,762 60,797 49,820 11,965 19.7 10,977 22.0 Corporate Items 238,955 211,219 170,356 27,736 13.1 40,863 24.0 Total 627,391 537,962 451,044 89,429 16.6 86,918 19.3 Adjusted EBITDA: Environmental Services 953,053 659,718 665,918 293,335 44.5 (6,200) (0.9) Safety-Kleen Sustainability Solutions 306,327 227,354 83,214 78,973 34.7 144,140 173.2 Corporate Items (237,252) (210,466) (175,328) (26,786) (12.7) (35,138) (20.0) Total $ 1,022,128 $ 676,606 $ 573,804 $ 345,522 51.1% $ 102,802 17.9% Adjusted EBITDA as a % of Direct Revenues: Environmental Services 22.8 % 21.8 % 25.3 % 1.0 % (3.5) % Safety-Kleen Sustainability Solutions 30.8 % 29.4 % 16.4 % 1.4 % 13.0 % Corporate Items N/M N/M N/M N/M N/M Total 19.8 % 17.8 % 18.3 % 2.0 % (0.5) % ___________________________________ N/M = not meaningful (1) Direct revenue is revenue allocated to the segment performing the provided service.
The following table sets forth certain financial information associated with our results of operations for the years ended December 31, 2023, 2022 and 2021 (in thousands, except percentages): Summary of Operations For the years ended December 31, 2023 over 2022 2022 over 2021 2023 2022 2021 Change % Change Change % Change Direct Revenues (1) : Environmental Services $ 4,511,442 $ 4,171,706 $ 3,032,454 $ 339,736 8.1% $ 1,139,252 37.6% Safety-Kleen Sustainability Solutions 897,263 994,392 772,813 (97,129) (9.8) 221,579 28.7 Corporate Items 447 507 299 (60) N/M 208 N/M Total 5,409,152 5,166,605 3,805,566 242,547 4.7 1,361,039 35.8 Cost of Revenues (2) : Environmental Services 3,063,043 2,902,979 2,106,790 160,064 5.5 796,189 37.8 Safety-Kleen Sustainability Solutions 646,301 615,303 484,662 30,998 5.0 130,641 27.0 Corporate Items 36,780 25,648 18,385 11,132 N/M 7,263 N/M Total 3,746,124 3,543,930 2,609,837 202,194 5.7 934,093 35.8 Selling, General and Administrative Expenses: Environmental Services 346,791 315,674 265,946 31,117 9.9 49,728 18.7 Safety-Kleen Sustainability Solutions 78,089 72,762 60,797 5,327 7.3 11,965 19.7 Corporate Items 246,281 238,955 211,219 7,326 3.1 27,736 13.1 Total 671,161 627,391 537,962 43,770 7.0 89,429 16.6 Adjusted EBITDA: Environmental Services 1,101,608 953,053 659,718 148,555 15.6 293,335 44.5 Safety-Kleen Sustainability Solutions 172,873 306,327 227,354 (133,454) (43.6) 78,973 34.7 Corporate Items (261,911) (237,252) (210,466) (24,659) (10.4) (26,786) (12.7) Total $ 1,012,570 $ 1,022,128 $ 676,606 $ (9,558) (0.9)% $ 345,522 51.1% Adjusted EBITDA as a % of Direct Revenues: Environmental Services (3) 24.4 % 22.8 % 21.8 % 1.6 % 1.0 % Safety-Kleen Sustainability Solutions (3) 19.3 % 30.8 % 29.4 % (11.5) % 1.4 % Corporate Items (4) (4.8) % (4.6) % (5.5) % (0.2) % 0.9 % Total 18.7 % 19.8 % 17.8 % (1.1) % 2.0 % ___________________________________ N/M = not meaningful (1) Direct revenue is revenue allocated to the segment performing the provided service.
Corporate Items For the years ended December 31, 2022 over 2021 2021 over 2020 (in thousands, except percentages) 2022 2021 2020 Change % Change Change % Change SG&A expenses $ 238,955 $ 211,219 $ 170,356 $ 27,736 13.1 % $ 40,863 24.0 % As a % of Total Company Direct revenues 4.6 % 5.6 % 5.4 % (1.0) % 0.2 % We manage our Corporate SG&A expenses commensurate with the overall total Company performance and direct revenue levels.
As a percentage of revenue, these costs improved slightly when compared to the same period in the prior year. 35 Table Of Contents Corporate Items For the years ended December 31, 2023 over 2022 2022 over 2021 (in thousands, except percentages) 2023 2022 2021 Change % Change Change % Change SG&A expenses $ 246,281 $ 238,955 $ 211,219 $ 7,326 3.1 % $ 27,736 13.1 % As a % of Total Company Direct revenues 4.6 % 4.6 % 5.6 % — % (1.0) % We manage our Corporate SG&A expenses commensurate with the overall total Company performance and direct revenue levels.
At December 31, 2022, cash and cash equivalents held by our Canadian subsidiaries totaled $37.4 million. At December 31, 2022, the cash and cash equivalents and marketable securities balance for our U.S. operations was $517.2 million, and our U.S. operations had net cash from operating activities of $455.3 million for the year ended December 31, 2022.
At December 31, 2023, cash and cash equivalents held by our Canadian subsidiaries totaled $75.9 million. The cash and cash equivalents and marketable securities balance for our U.S. operations was $368.8 million at December 31, 2023. Our U.S. operations had net operating cash inflows of $657.1 million for the year ended December 31, 2023.
Environmental Services For the years ended December 31, 2022 over 2021 2021 over 2020 (in thousands, except percentages) 2022 2021 2020 Change % Change Change % Change Cost of revenues $ 2,902,979 $2,106,790 $1,739,115 $ 796,189 37.8 % $ 367,675 21.1 % As a % of Direct revenues 69.6 % 69.5 % 66.0 % 0.1 % 3.5 % Environmental Services cost of revenues for the year ended December 31, 2022 increased $796.2 million from the comparable period in 2021 primarily due to the increase in direct revenues noted above, including additional costs from the HydroChemPSC operations.
Environmental Services For the years ended December 31, 2023 over 2022 2022 over 2021 (in thousands, except percentages) 2023 2022 2021 Change % Change Change % Change Cost of revenues $ 3,063,043 $2,902,979 $2,106,790 $ 160,064 5.5 % $ 796,189 37.8 % As a % of Direct revenues 67.9 % 69.6 % 69.5 % (1.7) % 0.1 % 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%.
Safety-Kleen Sustainability Solutions For the years ended December 31, 2022 over 2021 2021 over 2020 (in thousands, except percentages) 2022 2021 2020 Change % Change Change % Change Cost of revenues $ 615,303 $ 484,662 $ 374,872 $ 130,641 27.0 % $ 109,790 29.3 % As a % of Direct revenues 61.9 % 62.7 % 73.8 % (0.8) % (11.1) % Safety-Kleen Sustainability Solutions cost of revenues for the year ended December 31, 2022 increased $130.6 million from 2021 and as a percentage of revenue continued to improve.
Safety-Kleen Sustainability Solutions For the years ended December 31, 2023 over 2022 2022 over 2021 (in thousands, except percentages) 2023 2022 2021 Change % Change Change % Change Cost of revenues $ 646,301 $ 615,303 $ 484,662 $ 30,998 5.0 % $ 130,641 27.0 % As a % of Direct revenues 72.0 % 61.9 % 62.7 % 10.1 % (0.8) % SKSS cost of revenues for the year ended December 31, 2023 increased $31.0 million from 2022 and as a percentage of revenues, these costs increased 10.1%, mainly driven by the reduced revenue discussed above.
We also maintain a $400.0 million revolving credit facility, of which approximately $288.6 million was available to borrow at December 31, 2022. Material Capital Requirements Capital Expenditures In 2022, our capital expenditures, net of disposals, were $336.3 million.
We also maintain a $400.0 million revolving credit facility, of which, as of December 31, 2023, approximately $265.7 million was available to borrow under the facility, with letters of credit of $134.3 million outstanding. Material Capital Requirements Capital Expenditures In 2023, our capital expenditures were $412.7 million.
We will continue to monitor our debt instruments and evaluate opportunities where it may be beneficial to refinance or reallocate the portfolio. As of December 31, 2022, we were in compliance with the covenants of all of our debt agreements, and we believe we will continue to meet such covenants.
As of December 31, 2023, we were in compliance with the covenants of all of our debt agreements, and we believe we will continue to meet such covenants.
Other Income (Expense), net For the years ended December 31, 2022 over 2021 2021 over 2020 (in thousands, except percentages) 2022 2021 2020 Change % Change Change % Change Other income (expense), net $ 2,472 $ (515) $ (290) $ 2,987 (580.0) % $ (225) 77.6 % For the year ended December 31, 2022, other income (expense), net increased $3.0 million from 2021 primarily due to gains recognized on the sale of fixed assets.
For the year ended December 31, 2022, other income (expense), net increased $3.0 million primarily due to gains recognized on the sale of fixed assets in 2022.
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. In 2022, we continued with the construction of our new incinerator at our Kimball, Nebraska facility, which we intend to complete in early 2025.
We anticipate that the capital spending 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. In 2023, capital spending on the construction of our new incinerator at our Kimball, Nebraska facility was approximately $82.6 million.
This decrease is due to $116.6 million of additional spend on property, plant and equipment net of proceeds from sale and disposal of fixed assets in 2022 driven by increased spend on the new incinerator being built in Kimball, Nebraska as well as the HydroChemPSC operations.
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 on the new incinerator being built in Kimball, Nebraska.
Provision for Income Taxes For the years ended December 31, 2022 over 2021 2021 over 2020 (in thousands, except percentages) 2022 2021 2020 Change % Change Change % Change Provision for income taxes $ 126,254 $ 66,468 $ 39,713 $ 59,786 89.9 % $ 26,755 67.4% Effective tax rate 23.5 % 24.6 % 22.8 % (1.1) % 1.8 % For the year ended December 31, 2022, the provision for income taxes increased $59.8 million from the comparable period in 2021, largely due to the increase in pre-tax earnings.
Provision for Income Taxes For the years ended December 31, 2023 over 2022 2022 over 2021 (in thousands, except percentages) 2023 2022 2021 Change % Change Change % Change Provision for income taxes $ 125,423 $ 126,254 $ 66,468 $ (831) (0.7) % $ 59,786 89.9% Effective tax rate 24.9 % 23.5 % 24.6 % 1.4 % (1.1) % 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 increased tax payments were attributable to increased profits. Net cash from operating activities for the year ended December 31, 2021 was $546.0 million, an increase of $115.4 million compared to the year ended December 31, 2020.
The increased tax payments were attributable to increased profits. Net cash used in investing activities 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.
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. We believe our judgments related to these accounting estimates are appropriate. However, if different assumptions or conditions were to prevail, the results could be materially different from the amounts recorded.
Our accounting 41 Table Of Contents 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. We believe our judgments related to these accounting estimates are appropriate.
Generally, as revenues increase, we would expect some increase in these costs, however as a percentage of revenue these costs have remained relatively consistent in 2022, 2021 and 2020. In total, Corporate Items SG&A expenses increased by $27.7 million in 2022.
As a percentage of revenue these costs remained relatively consistent in 2023 after a decrease from 2021 to 2022. In total, Corporate Items SG&A expenses increased by $7.3 million in 2023; however, as noted above, these costs remained relatively consistent as a percentage of revenues.
Environmental Services For the years ended December 31, 2022 over 2021 2021 over 2020 (in thousands, except percentages) 2022 2021 2020 Change % Change Change % Change Direct revenues $ 4,171,706 $ 3,032,454 $ 2,635,901 $ 1,139,252 37.6 % $ 396,553 15.0 % Environmental Services direct revenues for the year ended December 31, 2022 increased $1,139.3 million from the comparable period in 2021, split almost equally between organic growth of the legacy operations and incremental revenues from the HydroChemPSC operations.
Environmental Services direct revenues for the year ended December 31, 2022 increased $1,139.3 million from the comparable period in 2021, split almost equally between growth of the legacy operations and incremental revenues from the HydroChemPSC operations acquired on October 8, 2021.
Financing Arrangements As of December 31, 2022, our financing arrangements included (i) $614.0 million of senior secured term loans due 2024 ("2024 Term Loans"), (ii) $545.0 million of 4.875% senior unsecured notes due 2027, (iii) $990.0 million of senior secured term loans due 2028 ("2028 Term Loans") and (iv) $300.0 million of 5.125% senior unsecured notes due 2029.
The Company intends to fund the acquisition with a combination of available cash and incremental borrowings under our term loan facility. 40 Table Of Contents Financing Arrangements As of December 31, 2023, our financing arrangements included (i) $545.0 million of 4.875% unsecured senior notes due 2027, (ii) $980.0 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.
This estimate assumes that variable rates remain consistent with the rates as of December 31, 2022. 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.
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. We will continue to monitor our debt instruments and evaluate opportunities where it may be beneficial to refinance or reallocate the portfolio.
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. 37 Table Of Contents Summary of Cash Flow Activity For the years ended December 31, (in thousands) 2022 2021 2020 Net cash from operating activities $ 626,214 $ 545,997 $ 430,597 Net cash used in investing activities (388,944) (1,507,602) (199,460) Net cash (used in) from financing activities (187,315) 898,249 (88,946) Net cash from operating activities Net cash from operating activities for the year ended December 31, 2022 was $626.2 million, an increase of $80.2 million compared to the year ended December 31, 2021.
Summary of Cash Flow Activity For the years ended December 31, (in thousands) 2023 2022 2021 Net cash from operating activities $ 734,552 $ 626,214 $ 545,997 Net cash used in investing activities (575,050) (388,944) (1,507,602) Net cash (used in) from financing activities (208,891) (187,315) 898,249 Net cash from operating activities Net cash from operating activities for the year ended December 31, 2023 was $734.6 million as compared to $626.2 million for year ended December 31, 2022.
Environmental Liabilities As of December 31, 2022 over 2021 (in thousands) 2022 2021 Change % Change Closure and post-closure liabilities $ 118,801 $ 99,103 $ 19,698 19.9 % Remedial liabilities 116,290 111,873 4,417 3.9 % Total environmental liabilities $ 235,091 $ 210,976 $ 24,115 11.4 % Total environmental liabilities as of December 31, 2022 were $235.1 million, an increase of $24.1 million compared to December 31, 2021.
Environmental Liabilities As of December 31, 2023 over 2022 (in thousands) 2023 2022 Change % Change Closure and post-closure liabilities $ 118,600 $ 118,801 $ (201) (0.2) % Remedial liabilities 111,243 116,290 (5,047) (4.3) % Total environmental liabilities $ 229,843 $ 235,091 $ (5,248) (2.2) % Total environmental liabilities as of December 31, 2023 were $229.8 million, a decrease of $5.2 million compared to December 31, 2022.
Our management reviews critical accounting estimates with the Audit Committee of our Board of Directors on an ongoing basis and as needed prior to the release of our annual financial statements. 40 Table Of Contents Landfill Accounting. We amortize landfill improvements and certain landfill-related permits over their estimated useful lives.
However, if different assumptions or conditions were to prevail, the results could be materially different from the amounts recorded. Our management reviews critical accounting estimates with the Audit Committee of our Board of Directors on an ongoing basis and as needed prior to the release of our annual financial statements. Landfill Accounting.
Excluding HydroChemPSC and the reduction in the benefits from the Government Programs in both periods, SG&A expenses as a percentage of revenues were relatively consistent at 8.9% in 2021 as compared to 9.1% in 2020. 34 Table Of Contents Safety-Kleen Sustainability Solutions For the years ended December 31, 2022 over 2021 2021 over 2020 (in thousands, except percentages) 2022 2021 2020 Change % Change Change % Change SG&A expenses $ 72,762 $ 60,797 $ 49,820 $ 11,965 19.7 % $ 10,977 22.0 % As a % of Direct revenues 7.3 % 7.9 % 9.8 % (0.6) % (1.9) % Safety-Kleen Sustainability Solutions SG&A expenses for the year ended December 31, 2022 increased $12.0 million from the comparable period in 2021 primarily due to a $9.9 million increase in labor and benefit costs, including travel, as we expanded our sales team for the segment and made other incremental workforce investments to support its growth.
SKSS SG&A expenses for the year ended December 31, 2022 increased $12.0 million from the comparable period in 2021 primarily due to a $9.9 million increase in labor and benefit costs, including travel, as we expanded our sales team for the segment and made other incremental workforce investments to support its growth.
The Canadian operations of the Environmental Services segment were positively impacted by $27.6 million due to foreign currency translation. 32 Table Of Contents Safety-Kleen Sustainability Solutions For the years ended December 31, 2022 over 2021 2021 over 2020 (in thousands, except percentages) 2022 2021 2020 Change % Change Change % Change Direct revenues $ 994,392 $ 772,813 $ 507,906 $ 221,579 28.7 % $ 264,907 52.2 % Safety-Kleen Sustainability Solutions direct revenues for the year ended December 31, 2022 increased $221.6 million from the comparable period in 2021.
The Canadian operations of the SKSS segment were negatively impacted by $4.8 million in 2023 due to foreign currency translation. 33 Table Of Contents SKSS direct revenues for the year ended December 31, 2022 increased $221.6 million from the comparable period in 2021.
Net cash from financing activities for the year ended December 31, 2021 was $898.2 million, as compared to net cash used in financing activities of $88.9 million for the year ended December 31, 2020. The primary driver of this change was the $995.0 million of cash received from the issuance of debt, net of discount.
Net cash (used in) from financing activities 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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

17 edited+2 added−355 removed5 unchanged
Biggest changeUnder the Term Loan Agreement, the 2028 Term Loans bear interest, at the Company’s election, at either of the following rates: (a) the sum of the Eurodollar Rate (as defined in the Term Loan Agreement) plus 2.00%, or (b) the sum of the Base Rate (as defined in the Term Loan Agreement) plus 1.00%, with the Eurodollar Rate being subject to a floor of 0.00% and the Base Rate being subject to a floor of 1.00%.
Biggest changeThe secured senior term loans due 2028 ("2028 Term Loans") pay interest at the Term SOFR rate plus the Term SOFR adjustment (as defined by the Term Loan Agreement) of 0.11448% plus a margin of 1.75% (reduced from 2.00% in December 2023).
Interest payments on this debt are due semiannually on January 15 and July 15 in the amount of $13.3 million upon each date. The interest rate on the $300.0 million senior unsecured notes due July 15, 2029 is fixed at 5.125%.
Interest payments on this debt are due semiannually on January 15 and July 15 in the amount of $13.3 million upon each date. The interest rate on the $300.0 million unsecured senior notes due July 15, 2029 is fixed at 5.125%.
Interest payments on these $300.0 million senior unsecured notes are also due semiannually on January 15 and July 15 in the amount of $7.7 million upon each date. In January 2023, we issued $500.0 million principal amount of 6.375% unsecured senior notes due February 1, 2031 ("2031 Notes").
Interest payments on these $300.0 million unsecured senior notes are also due semiannually on January 15 and July 15 in the amount of $7.7 million upon each date. In January 2023, we issued $500.0 million principal amount of 6.375% unsecured senior notes due February 1, 2031.
We designated our interest rate swap agreements as effective cash flow hedges at inception, and therefore the change in fair value is recorded in stockholders' equity as a component of accumulated other comprehensive loss and included in interest expense at the same time as interest expense is affected by the hedged transactions.
We designated our interest rate swap instruments as effective cash flow hedges at inception, and therefore the change in fair value is recorded in stockholders' equity as a component of accumulated other comprehensive loss and included in interest expense at the same time as interest expense is affected by the hedged transactions.
Interest payments on this debt are due semiannually on February 1 and August 1 in the amount of $15.9 million upon each date starting in August of 2023.
Interest payments on this debt are due semiannually on February 1 and August 1 in the amount of $15.9 million upon each date, and the payments commenced on August 1, 2023.
The following table provides information regarding our total borrowings at December 31, 2022 (in thousands): Scheduled Maturity Dates 2023 2024 2025 2026 2027 Thereafter Total Senior secured term loans due 2024 $ — $ 613,975 $ — $ — $ — $ — $ 613,975 Senior secured term loans due 2028 10,000 10,000 10,000 10,000 10,000 940,000 990,000 Unsecured senior notes due 2027 — — — — 545,000 — 545,000 Unsecured senior notes due 2029 — — — — — 300,000 300,000 Long term debt, at par $ 10,000 $ 623,975 $ 10,000 $ 10,000 $ 555,000 $ 1,240,000 $ 2,448,975 The interest rate on the $545.0 million senior unsecured notes due July 15, 2027 is fixed at 4.875%.
The following table provides information regarding our total borrowings at December 31, 2023 (in thousands): Scheduled Maturity Dates 2024 2025 2026 2027 2028 Thereafter Total Secured senior term loans due 2028 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 940,000 $ — $ 980,000 Unsecured senior notes due 2027 — — — 545,000 — — 545,000 Unsecured senior notes due 2029 — — — — — 300,000 300,000 Unsecured senior notes due 2031 — — — — — 500,000 500,000 Long term debt, at par $ 10,000 $ 10,000 $ 10,000 $ 555,000 $ 940,000 $ 800,000 $ 2,325,000 The interest rate on the $545.0 million unsecured senior notes due July 15, 2027 is fixed at 4.875%.
As of December 31, 2022, the Company received interest based on the one-month LIBOR index and paid interest at a weighted average rate of approximately 0.931% on a notional amount of $600.0 million.
As of December 31, 2023, under the terms of the 2022 Swaps, the Company received interest based on the one-month Term SOFR index and paid interest at the fixed rate of 1.9645% on a notional amount of $600.0 million.
Foreign Currency Risk We view our investment in our foreign subsidiaries as long-term; thus, we have not entered into any hedging transactions between any two foreign currencies or between any of the foreign currencies in which we transact business and the U.S. Dollar. Given our significant investment in Canada and the fluctuations that have and can occur between the U.S.
Borrowings under this facility would be subject to interest rate variability. 46 Table Of Contents Foreign Currency Risk We view our investment in our foreign subsidiaries as long-term; thus, we have not entered into any hedging transactions between any two foreign currencies or between any of the foreign currencies in which we transact business and the U.S. Dollar.
As of December 31, 2022, before taking into account any interest rate swap agreements then in place, we held $1.6 billion of variable rate debt under our senior secured term loans due 2024 and 2028. The senior secured term loans due 2024 ("2024 Term Loans") paid interest at Eurodollar rate (one-month LIBOR at December 31, 2022) plus 1.75%.
As of December 31, 2023, before taking into account any interest rate swap agreements then in place, we held $980.0 million of variable rate debt under our secured senior term loans due 2028.
Should the average interest rate on our total variable rate debt of $504.0 million change by 100 basis points, we estimate that our average annual interest expense would change by up to approximately $5.8 million.
Should the average interest rate on the remaining variable portion of our long-term debt change by 100 basis points, we estimate that our annual interest expense would change by up to approximately $4.8 million. In addition to the fixed and variable borrowings described above, we have a revolving credit agreement with a maximum borrowing of up to $400.0 million.
When combined with the 2.00% interest rate margin for Eurocurrency borrowings under the 2028 Term Loans, the effective annual interest rate on such $600.0 million aggregate principal amount of the 2028 Term Loans was 2.931%. The remaining balance of the 2028 Term Loans subject to interest rate risk as of December 31, 2022 was $390.0 million.
When combined with the 1.75% interest rate margin for Term SOFR borrowings and the Term SOFR adjustment of 0.11448% under the 2028 Term Loans, the effective annual interest rate on such $600.0 million aggregate principal amount of the 2028 Term Loans was approximately 3.83%.
Dollar and Canadian Dollar exchange rates, significant movements in cumulative translation adjustment amounts recorded as a component of other comprehensive loss can occur in any given period. During 2022, our Canadian subsidiaries transacted a portion of their business in U.S. Dollars and at any period end had cash on deposit in U.S. Dollars and outstanding U.S.
Given our significant investment in Canada and operations in India and the fluctuations that have and can occur between the U.S. Dollar and Canadian Dollar or Indian Rupee exchange rates, significant movements in cumulative translation adjustment amounts recorded as a component of other comprehensive loss can occur in any given period.
The senior secured term loans due 2028 ("2028 Term Loans") also paid interest at the Eurodollar rate (currently one-month LIBOR) plus 2.00%. To hedge interest rate exposure on a portion of this outstanding variable debt, we entered into interest rate swap agreements.
To hedge interest rate exposure on a portion of this outstanding variable debt, we entered into interest rate swap agreements.
Dollar accounts receivable and payable balances related to their operations. Those U.S. denominated balances are subject to foreign currency gains or losses. Exchange rate movements also affect the translation of Canadian generated profits and losses into U.S. Dollars. Had the Canadian Dollar been 10.0% stronger or weaker against the U.S.
During 2023, our Canadian subsidiaries transacted a portion of their business in U.S. Dollars and at any period end had cash on deposit in U.S. Dollars and outstanding U.S. Dollar accounts receivable and payable balances related to their operations. Those U.S. denominated balances are subject to foreign currency gains or losses.
Dollar, we would have reported increased or decreased net income of $12.8 million for the year ended December 31, 2022. 46 Table Of Contents TEM 8.
Exchange rate movements also affect the translation of Canadian generated profits and losses into U.S. Dollars. Had the Canadian Dollar been 10.0% stronger or weaker against the U.S. Dollar, we would have reported increased or decreased net income of $11.9 million for the year ended December 31, 2023. 47 Table Of Contents
When combined with the 1.75% interest rate margin for Eurocurrency borrowings under the 2024 Term Loans, the effective annual interest rate on such $350.0 million aggregate principal amount of 2024 Term Loans is 4.67%. The remaining balance of the 2024 Term Loans subject to interest rate risk as of December 31, 2022 was $264.0 million.
The remaining balance of the 2028 Term Loans subject to interest rate risk as of December 31, 2023 was $380.0 million.
The revolving credit facility had no outstanding loan balances at December 31, 2022 and 2021 and had availability of $288.6 million and outstanding letters of credit of $111.4 million at December 31, 2022. As noted above, on January 24, 2023, the Company borrowed $114.0 million under the revolving credit facility.
As of December 31, 2023, the Company had no borrowings outstanding under the facility, letters of credit of $134.3 million issued under the facility and $265.7 million available to borrow.
Removed
Under the terms of the interest rate swaps entered into in 2018 ("2018 Swaps"), which hedge the interest rate exposure of the 2024 Term Loans we receive interest based on the one-month LIBOR index and we pay interest at a weighted average rate of approximately 2.92% on a notional amount of $350.0 million.
Added
As of December 31, 2023, interest payments on the $600.0 million of our secured senior term loan, that is effectively fixed by the 2022 Swaps, are approximately $1.9 million per month, inclusive of the margin, Term SOFR Adjustment and fixed swap rate, discussed above.
Removed
After taking into account the 2018 Swaps and the 2022 Swaps, as of December 31, 2022, we fixed our interest rate exposure on $950.0 million of our debt, leaving $654.0 million of debt subject to interest rate risk.
Added
We continue to have variable interest rate risk relative to the portion of our secured senior term loans which exceeds the $600.0 million of principal which is subject to the 2022 Swaps.
Removed
The net proceeds of issuing the 2031 Notes, along with a $114.0 million borrowing under our existing revolving credit facility and cash on hand, were used to repay the aggregate principal balance of our 2024 Term Loans.
Removed
In connection with this, 45 Table Of Contents we also terminated our 2018 Swaps and received a cash payment of $8.7 million from the counterparties to the 2018 Swaps relating to such termination.
Removed
Subsequent to these events in January 2023, which are also detailed in Note 12, "Financing Arrangements," to our consolidated financial statements included in Item 8 of this report, our outstanding debt subject to interest rate risk was limited to $390.0 million of the 2028 Term Loans and the $114.0 million borrowing under our existing revolving credit facility, the latter of which bears interest at a rate of LIBOR plus 1.50% and is payable monthly.
Removed
After that borrowing of $114.0 million, we now have approximately $174.6 million of additional capacity available under our revolving credit facility when taking into account the $400.0 million limit and the $111.4 million of letters of credit outstanding. This additional capacity would be subject to interest rate variability should we decide to borrow additional funds under our revolving credit facility.
Removed
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Page No Report of Independent Registered Public Accounting Firm (PCA OB ID No. 34 ) 48 Consolidated Balance Sheets 50 Consolidated Statements of Operations 51 Consolidated Statements of Comprehensive Income 52 Consolidated Statements of Cash Flows 53 Consolidated Statements of Stockholders' Equity 54 Notes to Consolidated Financial Statements 55 (1) Operations 55 (2) Significant Accounting Policies 55 (3) Revenues 63 (4) Business Combinations 67 ( 5 ) Disposition o f Business 69 ( 6 ) Inventories and Supplies 70 ( 7 ) Property, Plant and Equipment 70 ( 8 ) Goodwill and Other Intangible Assets 71 ( 9 ) Accrued Expenses 72 ( 10 ) Closure and Post-Closure Liabilities 73 (1 1 ) Remedial Liabilities 74 (1 2 ) Financing Arrangements 76 (1 3 ) Income Taxes 79 (1 4 ) Earnings Per Share 81 (1 5 ) Stockholders' Equity 81 (16) Accumulated Other Comprehensive Loss 82 (1 7 ) Stock Based Compensation 82 (1 8 ) Commitments and Contingencies 83 (1 9 ) Leases 85 ( 20 ) Segment Reporting 87 47 Table Of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Clean Harbors, Inc.
Removed
Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Clean Harbors, Inc. and subsidiaries (the "Company") as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, cash flows and stockholders’ equity, for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the "financial statements").
Removed
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.
Removed
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 1, 2023, expressed an unqualified opinion on the Company's internal control over financial reporting.
Removed
Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits.
Removed
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB.
Removed
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Removed
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Removed
Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
Removed
The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Removed
Remedial Liabilities - Refer to Note 2 and Note 11 to the financial statements Critical Audit Matter Description Remedial liabilities include the costs of removal or containment of contaminated material, the treatment of potentially contaminated groundwater and maintenance and monitoring costs necessary to comply with regulatory requirements.
Removed
The estimate of remedial liabilities involves an analysis of numerous factors that are inherently difficult to estimate and involve a significant amount of judgment. The Company routinely reviews and evaluates the sites for which remedial liabilities have been recognized to determine if there should be changes in the cost estimates.
Removed
As a result, the valuation of liabilities is subject to material changes as additional information becomes available, particularly as it relates to changes in technologies and changes in laws and regulations that govern the remediation efforts. Total remedial liabilities recorded as of December 31, 2022 were $116.3 million.
Removed
Given the subjectivity and judgment involved in measuring remedial liabilities, auditing remedial liabilities involved especially subjective judgment and an increased extent of effort, including the need to involve our specialists who have expertise in environmental remediation. 48 Table Of Contents How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to remedial liabilities included the following, among others: • We tested the effectiveness of controls related to the recognition and measurement of remedial liabilities, including those controls over changes in estimates. • We evaluated management’s ability to accurately forecast future cash flows by comparing actual results to management’s historical forecasts through retrospective reviews. • We evaluated the methods and assumptions used by management to estimate the remedial liabilities by confirming specific facts and circumstances related to a selection of sites with project managers and other Company personnel responsible for monitoring these sites, including legal counsel. • With the assistance of auditor specialists who have expertise in environmental matters and specialized skills and training, we evaluated the reasonableness of the Company’s estimates by: – Searching for information in the public domain for completeness of sites identified for remediation. – Assessing the completeness of the Company’s costs estimates for a selection of sites, specifically, comparing the costs estimates to relevant regulatory guidelines and specifications. – Testing the accuracy of the amounts recorded for a selection of sites, specifically, verifying the mathematical accuracy of the calculation, agreeing cost components to supporting documents, and/or developing an independent range of cost estimates. /s/ Deloitte & Touche LLP Boston, Massachusetts March 1, 2023 We have served as the Company's auditor since 2005. 49 Table Of Contents CLEAN HARBORS, INC.
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AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollars in thousands) As of December 31, 2022 2021 ASSETS Current assets: Cash and cash equivalents $ 492,603 $ 452,575 Short-term marketable securities 62,033 81,724 Accounts receivable, net of allowances aggregating $45,253 and $40,140, respectively 964,603 792,734 Unbilled accounts receivable 107,010 94,963 Inventories and supplies 324,994 250,692 Prepaid expenses and other current assets 82,518 68,483 Total current assets 2,033,761 1,741,171 Property, plant and equipment, net 1,980,302 1,863,175 Other assets: Operating lease right-of-use assets 166,181 161,797 Goodwill 1,246,878 1,227,042 Permits and other intangibles, net 620,782 644,912 Other 81,803 15,602 Total other assets 2,115,644 2,049,353 Total assets $ 6,129,707 $ 5,653,699 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 10,000 $ 17,535 Accounts payable 446,629 359,866 Deferred revenue 94,094 83,749 Accrued expenses and other current liabilities 396,716 391,414 Current portion of closure, post-closure and remedial liabilities 23,123 25,136 Current portion of operating lease liabilities 49,532 47,614 Total current liabilities 1,020,094 925,314 Other liabilities: Closure and post-closure liabilities, less current portion of $13,205 and $12,015, respectively 105,596 87,088 Remedial liabilities, less current portion of $9,918 and $13,121, respectively 106,372 98,752 Long-term debt, less current portion 2,414,828 2,517,024 Operating lease liabilities, less current portion 119,259 117,991 Deferred tax liabilities 350,389 314,853 Other long-term liabilities 90,847 78,790 Total other liabilities 3,187,291 3,214,498 Commitments and contingent liabilities (See Note 18) Stockholders' equity: Common stock, $0.01 par value: Authorized 80,000,000 shares; issued and outstanding 54,064,797 and 54,419,321 shares, respectively 541 544 Additional paid-in capital 504,240 536,377 Accumulated other comprehensive loss (167,181) (196,012) Accumulated earnings 1,584,722 1,172,978 Total stockholders' equity 1,922,322 1,513,887 Total liabilities and stockholders' equity $ 6,129,707 $ 5,653,699 The accompanying notes are an integral part of these consolidated financial statements. 50 Table Of Contents CLEAN HARBORS, INC.
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AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands except per share amounts) For the years ended December 31, 2022 2021 2020 Revenues: Service revenues $ 4,133,184 $ 3,048,019 $ 2,724,584 Product revenues 1,033,421 757,547 419,513 Total revenues 5,166,605 3,805,566 3,144,097 Cost of revenues: (exclusive of items shown separately below) Service revenues 2,892,726 2,105,043 1,786,718 Product revenues 651,204 504,794 351,033 Total cost of revenues 3,543,930 2,609,837 2,137,751 Selling, general and administrative expenses 627,391 537,962 451,044 Accretion of environmental liabilities 12,943 11,745 11,051 Depreciation and amortization 347,594 298,135 292,915 Income from operations 634,747 347,887 251,336 Other income (expense), net 2,472 (515) (290) Loss on early extinguishment of debt (422) — — Gain (loss) on sale of businesses 8,864 — (3,376) Interest expense, net of interest income of $4,607, $2,218 and $3,462, respectively (107,663) (77,657) (73,120) Income before provision for income taxes 537,998 269,715 174,550 Provision for income taxes 126,254 66,468 39,713 Net income $ 411,744 $ 203,247 $ 134,837 Earnings per share: Basic $ 7.59 $ 3.73 $ 2.43 Diluted $ 7.56 $ 3.71 $ 2.42 Shares used to compute earnings per share — Basic 54,223 54,514 55,479 Shares used to compute earnings per share — Diluted 54,487 54,761 55,690 The accompanying notes are an integral part of these consolidated financial statements. 51 Table Of Contents CLEAN HARBORS, INC.
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AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) For the years ended December 31, 2022 2021 2020 Net income $ 411,744 $ 203,247 $ 134,837 Other comprehensive income (loss), net of tax: Unrealized loss on available-for-sale securities (413) (285) (8) Unrealized gain (loss) on fair value of interest rate hedge 61,124 6,235 (20,970) Reclassification adjustment for interest rate hedge amounts realized in net income (683) 10,011 8,180 Unfunded pension liability 318 1,094 (189) Foreign currency translation adjustments (31,515) (1,590) 11,561 Other comprehensive income (loss), net of tax 28,831 15,465 (1,426) Comprehensive income $ 440,575 $ 218,712 $ 133,411 The accompanying notes are an integral part of these consolidated financial statements. 52 Table Of Contents CLEAN HARBORS, INC.
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AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) For the years ended December 31, 2022 2021 2020 Cash flows from operating activities: Net income $ 411,744 $ 203,247 $ 134,837 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 347,594 298,135 292,915 Allowance for doubtful accounts 7,783 8,018 10,133 Amortization of deferred financing costs and debt discount 6,301 4,245 3,666 Accretion of environmental liabilities 12,943 11,745 11,051 Changes in environmental liability estimates 8,272 2,979 10,698 Deferred income taxes 17,549 1,482 (9,748) Other (income) expense, net (2,472) 515 290 Stock-based compensation 26,844 18,839 18,502 (Gain) loss on sale of businesses (8,864) — 3,376 Loss on early extinguishment of debt 422 — — Environmental expenditures (13,946) (15,506) (12,401) Changes in assets and liabilities, net of acquisitions: Accounts receivable and unbilled accounts receivable (201,087) (96,551) 22,422 Inventories and supplies (74,547) (31,689) (7,933) Other current and non-current assets (17,303) 9,268 (12,602) Accounts payable 74,460 108,398 (80,328) Other current and long-term liabilities 30,521 22,872 45,719 Net cash from operating activities 626,214 545,997 430,597 Cash flows used in investing activities: Additions to property, plant and equipment (345,056) (241,856) (196,256) Proceeds from sale and disposal of fixed assets 8,779 22,156 9,623 Acquisitions, net of cash acquired (86,278) (1,253,232) (8,839) Additions to intangible assets including costs to obtain or renew permits (1,966) (3,848) (2,029) Purchases of available-for-sale securities (49,845) (129,234) (70,891) Proceeds from sale of available-for-sale securities 68,611 98,412 61,220 Proceeds from sale of businesses, net of transactional costs 16,811 — 7,712 Net cash used in investing activities (388,944) (1,507,602) (199,460) Cash flows (used in) from financing activities: Change in uncashed checks 552 (1,806) 5,404 Tax payments related to withholdings on vested restricted stock (8,801) (10,805) (5,331) Repurchases of common stock (50,183) (54,410) (74,844) Deferred financing costs paid (410) (13,737) (2,171) Payments on finance leases (12,821) (8,458) (4,469) Principal payments on debt (115,652) (7,535) (7,535) Proceeds from issuance of debt, net of discount — 995,000 — Borrowings from revolving credit facility — — 150,000 Payments on revolving credit facility — — (150,000) Net cash (used in) from financing activities (187,315) 898,249 (88,946) Effect of exchange rate change on cash (9,927) (3,170) 4,919 Increase (decrease) in cash and cash equivalents 40,028 (66,526) 147,110 Cash and cash equivalents, beginning of year 452,575 519,101 371,991 Cash and cash equivalents, end of year $ 492,603 $ 452,575 $ 519,101 Supplemental information: Cash payments for interest and income taxes: Interest paid $ 105,643 $ 73,440 $ 72,535 Income taxes paid, net of refunds 78,526 65,192 53,123 Non-cash investing activities: Property, plant and equipment accrued 30,950 19,264 3,536 Remedial liability assumed in acquisition of property, plant and equipment 8,092 — — The accompanying notes are an integral part of these consolidated financial statements. 53 Table Of Contents CLEAN HARBORS, INC.
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AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in thousands) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Total Stockholders' Equity Number of Shares $0.01 Par Value Accumulated Earnings Balance at January 1, 2020 55,798 $ 558 $ 644,412 $ (210,051) $ 834,894 $ 1,269,813 Net income — — — — 134,837 134,837 Other comprehensive loss — — — (1,426) — (1,426) Stock-based compensation — — 18,502 — — 18,502 Issuance of common stock for restricted share vesting, net of employee tax withholdings 179 2 (5,333) — — (5,331) Repurchases of common stock (1,204) (12) (74,832) — — (74,844) Balance at December 31, 2020 54,773 548 582,749 (211,477) 969,731 1,341,551 Net income — — — — 203,247 203,247 Other comprehensive income — — — 15,465 — 15,465 Stock-based compensation — — 18,839 — — 18,839 Issuance of common stock for restricted share vesting, net of employee tax withholdings 235 2 (10,807) — — (10,805) Repurchases of common stock (589) (6) (54,404) — — (54,410) Balance at December 31, 2021 54,419 544 536,377 (196,012) 1,172,978 1,513,887 Net income — — — — 411,744 411,744 Other comprehensive income — — — 28,831 — 28,831 Stock-based compensation — — 26,844 — — 26,844 Issuance of common stock for restricted share vesting, net of employee tax withholdings 183 2 (8,803) — — (8,801) Repurchases of common stock (537) (5) (50,178) — — (50,183) Balance at December 31, 2022 54,065 $ 541 $ 504,240 $ (167,181) $ 1,584,722 $ 1,922,322 The accompanying notes are an integral part of these consolidated financial statements. 54 Table Of Contents CLEAN HARBORS, INC.
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AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) OPERATIONS Clean Harbors, Inc., through its subsidiaries (collectively, the "Company"), is a leading provider of sustainable environmental and industrial services throughout North America.
Removed
The Company is also the largest re-refiner and recycler of used oil and the premier provider of parts cleaning and related environmental services to commercial, industrial and automotive customers in North America.
Removed
(2) SIGNIFICANT ACCOUNTING POLICIES The accompanying consolidated financial statements of the Company reflect the application of certain significant accounting policies as described below: Principles of Consolidation The accompanying consolidated financial statements include the accounts of Clean Harbors, Inc. and its majority-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Removed
Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions, which are evaluated on an ongoing basis, that affect the amounts reported in the Company's consolidated financial statements and accompanying notes.
Removed
Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable at the time under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and disclosure, if any, of contingent assets and liabilities and reported amounts of revenues and expenses.
Removed
Actual results could differ from those estimates and judgments. Cash, Cash Equivalents, Marketable Securities and Uncashed Checks Cash consists primarily of cash on deposit and money market accounts. The Company, through its wholly-owned captive insurance subsidiary, invests in marketable securities. Marketable securities with maturities of three months or less from the date of purchase are classified as cash equivalents.
Removed
As of December 31, 2022 and 2021, the Company had total marketable securities as follows (in thousands): December 31, 2022 December 31, 2021 Commercial paper $ 5,035 $ — U.S. Treasury securities 28,973 — Total cash equivalents 34,008 — U.S.
Removed
Treasury securities — 901 Municipal bonds 1,930 1,978 Commercial paper 24,075 21,160 Corporate notes and bonds 36,028 57,685 Total marketable securities 62,033 81,724 Total $ 96,041 $ 81,724 Realized gains and losses on sales of available-for-sale marketable securities in the years presented were immaterial.
Removed
The majority of the marketable securities have a remaining maturity of less than one year and fair value approximates cost. The Company's cash management program with its revolving credit lender allows for the maintenance of a zero balance in the U.S. bank disbursement accounts that are used to issue vendor and payroll checks.
Removed
When checks are presented to the bank for payment, cash deposits in amounts sufficient to fund the checks are made, at the Company's discretion, either from funds provided by other accounts or under the terms of the Company's revolving credit facility.
Removed
Checks that have been written to vendors or employees but have not yet been presented for payment at the Company's bank are classified as uncashed checks as 55 Table of Contents CLEAN HARBORS, INC.
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AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) part of accounts payable and changes in the balance are reported as a financing activity in the consolidated statements of cash flows.
Removed
Allowance for Doubtful Accounts and Revenue Allowance On a regular basis, the Company evaluates its accounts receivable and establishes the allowance for doubtful accounts based on an evaluation of certain criteria and evidence of collection uncertainty including historical collection trends, reasonable expectations of future collections, current economic trends and changes in customer payment patterns.
Removed
Past-due receivable balances are written off when the Company's collection efforts have been deemed unsuccessful in collecting the outstanding balance due. Due to the nature of the Company's businesses and the invoices that result from the services provided, customers may withhold payments and attempt to renegotiate amounts invoiced.
Removed
In addition, for some of the services provided, the Company's invoices are based on quotes that, in limited instances can result in adjustments to revenue subsequent to billing. Based on industry knowledge and historical trends, the Company records a revenue allowance in anticipation of these expected adjustments.
Removed
This practice causes the volume of activity flowing through the revenue allowance during the year to be higher than the balance at the end of the year. The revenue allowance is intended to cover the net amount of revenue adjustments that may need to be credited to customers' accounts in future periods.
Removed
Management determines the appropriate total revenue allowance by evaluating the following factors on an invoice-by-invoice basis as well as on a consolidated level: trends in adjustments to previously billed amounts, existing economic conditions, communications with customers and other information as deemed applicable.
Removed
Revenue allowance estimates can differ from the actual adjustments, but historically the revenue allowance has been sufficient to cover the net amount of the reserve adjustments issued in subsequent reporting periods.
Removed
The following table reflects the activity in the allowance for doubtful accounts and revenue allowance (in thousands): Allowance for Doubtful Accounts Revenue Allowance 2022 2021 2020 2022 2021 2020 Balance at January 1, $ 24,136 $ 24,634 $ 22,493 $ 16,004 $ 20,115 $ 16,218 Additions charged to earnings 7,783 8,018 10,133 54,836 34,319 45,784 Deductions from reserves, net of recoveries (7,260) (8,516) (7,992) (50,246) (38,430) (41,887) Balance at December 31, $ 24,659 $ 24,136 $ 24,634 $ 20,594 $ 16,004 $ 20,115 Credit Concentration Concentration of credit risks in accounts receivable is limited due to the large number of customers comprising the Company's customer base throughout North America.
Removed
The Company maintains policies over credit extension that include credit evaluations, credit limits and collection monitoring procedures on a customer-by-customer basis. However, the Company generally does not require collateral before services are performed. No individual customer accounted for more than 10% of accounts receivable or more than 10% of total direct revenues in the periods presented.
Removed
Inventories and Supplies Inventories are stated at the lower of cost or market. The cost of oil and oil products as well as the cost of supplies and drums, solvent and solution and other inventories is principally determined on a first-in, first-out ("FIFO") basis.
Removed
The Company continually reviews its inventories for obsolete or unsalable items and adjusts its carrying value to reflect estimated realizable values. Property, Plant and Equipment, net (excluding landfill assets and finance lease right-of-use assets) Property, plant and equipment, net is stated at cost less accumulated depreciation.
Removed
Expenditures for major renewals and improvements which extend the life or usefulness of the asset are capitalized. Items of an ordinary repair or maintenance nature are charged directly to operating expense as incurred. During the construction and development period of an asset, the costs incurred, including interest expense, are classified as construction-in-progress.
Removed
When the asset is ready for its intended use, the asset is reclassified to an appropriate asset classification and depreciation or amortization commences. The Company 56 Table of Contents CLEAN HARBORS, INC.
Removed
AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) depreciates and amortizes the capitalized cost of these assets, using the straight-line method as follows: Asset Classification Estimated Useful Life Buildings and building improvements Buildings 20-42 years Leasehold and building improvements 2-45 years Camp and lodging equipment 8-15 years Vehicles 2-15 years Equipment Capitalized software and computer equipment 3-5 years Containers and railcars 8-16 years All other equipment 4-30 years Furniture and fixtures 5-8 years Gains and losses on the sale of property, plant and equipment are included in Other income (expense), net.
Removed
Fully depreciated assets are retained in property, plant and equipment and accumulated depreciation until they are removed from service. The Company tests asset groups for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
Removed
An impairment in the carrying value of long-lived assets is recognized if the expected future undiscounted cash flows derived from the assets, or group of assets, are less than their carrying value. The Company did not record any impairment charges related to long-lived assets in the periods presented.
Removed
Business Combinations In accordance with the acquisition method of accounting, the purchase price paid for an acquisition is allocated to the assets and liabilities acquired based upon their estimated fair values as of the acquisition date, with the excess of the purchase price over the net assets acquired recorded as goodwill.
Removed
As required, a preliminary fair value is determined once a business is acquired, with the final determination of the fair value being completed no later than one year from the date of acquisition. Goodwill Goodwill is comprised of the purchase price of business acquisitions in excess of the fair value of the net assets acquired.
Removed
Goodwill is reviewed for impairment annually as of December 31 or when events or changes in the business environment indicate the carrying value of a reporting unit may exceed its fair value. This review is performed by comparing the fair value of each reporting unit to its carrying value, including goodwill.
Removed
If the fair value is less than the carrying amount, a loss is recorded for the excess of the carrying value over the fair value up to the carrying amount of goodwill. The Company determines its reporting units by identifying the components of each operating segment.
Removed
As of December 31, 2022, the Company had three reporting units consisting of, Environmental Sales and Service, Environmental Facilities and Safety-Kleen Sustainability Solutions. See Note 8, "Goodwill and Other Intangible Assets," for additional information related to the Company's goodwill impairment tests.
Removed
Permits and Other Intangibles Costs related to acquiring licenses, permits and intangible assets, such as legal fees, site surveys, engineering costs and other expenditures are capitalized. Other intangible assets consist primarily of customer and supplier relationships, trademarks and trade names and developed technology. Permits relating to landfills are amortized on a units-of-consumption basis.
Removed
All other permits are amortized over periods ranging from five to 30 years on a straight-line basis. Finite-lived other intangible assets are amortized on a straight-line basis over their respective useful lives, which range from two to 25 years.
Removed
All finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. When such factors and circumstances exist, management compares the projected undiscounted future cash flows associated with the related asset or group of assets to the carrying amount.
Removed
The impairment loss, if any, is measured as the excess of the carrying amount over the fair value of the asset or group of assets. 57 Table of Contents CLEAN HARBORS, INC.

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