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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

☐ TRANSITION REPORT PURSUANT TO Section 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number: 001-39120

US ECOLOGY, INC.

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)	84-2421185 (I.R.S. Employer Identification No.)
101 S. Capitol Blvd., Suite 1000 Boise, Idaho (Address of principal executive offices)	83702 (Zip Code)

Registrant’s telephone number, including area code: (208) 331-8400

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ECOL	Nasdaq Global Select Market
Warrants to Purchase Common Stock	ECOLW	Nasdaq Capital Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ⌧ No ◻

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ◻ No ⌧

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer ⌧	Accelerated Filer ◻	Non-Accelerated Filer ◻	Smaller Reporting Company ☐	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ⌧

The aggregate market value of the registrant’s voting stock held by non-affiliates on June 30, 2021 was approximately $1.17 billion based on the closing price of $37.52 per share as reported on the Nasdaq Global Select Market System.

At February 22, 2022, there were 31,512,324 shares of the registrant’s Common Stock outstanding.

Documents Incorporated by Reference

Listed hereunder are the documents, any portions of which are incorporated by reference and the Parts of this Form 10-K into which such portions are incorporated:


1.	The registrant’s definitive proxy statement for use in connection with the Annual Meeting of Stockholders to be held on or about May 23, 2022 to be filed within 120 days after the registrant’s fiscal year ended December 31, 2021, portions of which are incorporated by reference into Part III of this Form 10-K.

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US ECOLOGY, INC.

FORM 10-K

TABLE OF CONTENTS

Item		Page
PART I
	Cautionary Statement	3
1.	Business	4
1A.	Risk Factors	22
1B.	Unresolved Staff Comments	42
2.	Properties	43
3.	Legal Proceedings	45
4.	Mine Safety Disclosures	45
PART II
5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	46
6.	Reserved	48
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	48
7A.	Quantitative and Qualitative Disclosures About Market Risk	71
8.	Financial Statements and Supplementary Data	73
9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	124
9A.	Controls and Procedures	124
9B.	Other Information	125
PART III
10.	Directors, Executive Officers and Corporate Governance	126
11.	Executive Compensation	126
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	126
13.	Certain Relationships and Related Transactions, and Director Independence	127
14.	Principal Accounting Fees and Services	127
PART IV
15.	Exhibits, Financial Statement Schedules	127
16.	Form 10-K Summary	127
SIGNATURES		132

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PART I

Cautionary Statement for Purposes of Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995

This annual report on Form 10-K contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about the beliefs and expectations of US Ecology, Inc. (the “Company,” “US Ecology,” “we” or “us), are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project,” “intend” and similar expressions. These statements include, among others, statements regarding our financial and operating results, strategic objectives and means to achieve those objectives, the amount and timing of capital expenditures, repurchases of its stock under approved stock repurchase plans, the amount and timing of interest expense, the likelihood of our success in expanding our business, financing plans, budgets, working capital needs and sources of liquidity.

Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on management’s beliefs and assumptions, which in turn are based on currently available information. Important assumptions include, among others, those regarding demand for the Company’s services, the impact on our business of the proposed merger with Republic Services, Inc. and our ability to complete the proposed merger in a timely manner, expansion of service offerings geographically or through new or expanded service lines, the timing and cost of planned capital expenditures, competitive conditions, and general economic conditions. These assumptions could prove inaccurate. Forward-looking statements also involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Many of these factors are beyond our ability to control or predict. Such factors include developments related to the COVID-19 pandemic, fluctuations in commodity markets related to our business, the loss or failure to renew significant contracts, competition in our markets, adverse economic conditions, our compliance with applicable laws and regulations, potential liability in connection with providing oil spill response services and waste disposal services, the effect of existing or future laws and regulations related to greenhouse gases and climate change, the effect of our failure to comply with U.S. or foreign anti-bribery laws, the effect of compliance with laws and regulations, an accident at one of our facilities, incidents arising out of the handling of dangerous substances, our failure to maintain an acceptable safety record, our ability to perform under required contracts, limitations on our available cash flow as a result of our indebtedness, liabilities arising from our participation in multi-employer pension plans, the effect of changes in the method of determining the London Interbank Offered Rate (“LIBOR”) or the replacement thereto, risks associated with our international operations, the impact of changes to U.S. tariff and import and export regulations, a change in our classification as an Oil Spill Removal Organization, cyber security threats, unanticipated changes in tax rules and regulations, loss of key personnel, a deterioration in our labor relations or labor disputes, our reliance on contractors to provide emergency response services, our access to insurance, surety bonds and other financial assurances, our litigation risk not covered by insurance, the replacement of non-recurring event projects, our ability to permit and contract for timely construction of new or expanded disposal space, renewals of our operating permits or lease agreements with regulatory bodies, our access to cost-effective transportation services, lawsuits, our implementation of new technologies, fluctuations in foreign currency markets and foreign affairs, our integration of acquired businesses, our ability to pay dividends or repurchase stock, anti-takeover regulations, stock market volatility, the failure of the warrants to be in the money or their expiration worthless and risks related to our compliance with maritime regulations (including the Jones Act).

Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the Securities and Exchange Commission (the “SEC”), we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on our forward-looking statements. Although we believe that the expectations reflected in forward-looking statements are reasonable, we cannot guarantee future results or performance. Before you invest in our common stock, you should be aware that the occurrence of the events described in the “Risk Factors” section in this report could harm our business, prospects, operating results and financial condition.

Investors should also be aware that while we do, from time to time, communicate with securities analysts, it is against our policy to disclose to them any material non-public information or other confidential commercial information. Accordingly,

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stockholders should not assume that we agree with any statement or report issued by any analyst irrespective of the content of the statement or report. Furthermore, we have a policy against issuing or confirming financial forecasts or projections issued by others. Thus, to the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not the responsibility of US Ecology, Inc.

ITEM 1. BUSINESS

General

The table below contains definitions that are used throughout this Annual Report on Form 10-K.


Term		Meaning
US Ecology, the Company, “we,” “our,” “us”		US Ecology, Inc., and its subsidiaries
AEA		Atomic Energy Act of 1954, as amended
CEPA		Canadian Environmental Protection Act (1999)
CERCLA or “Superfund”		Comprehensive Environmental Response, Compensation and Liability Act of 1980
CWA		Clean Water Act of 1977
LARM		Low-activity radioactive material exempt from federal Atomic Energy Act regulation for disposal
LLRW		Low-level radioactive waste regulated under the federal Atomic Energy Act for disposal
NORM/NARM		Naturally occurring and accelerator produced radioactive material
NPDES		National Pollutant Discharge Elimination System
OPA-90		The Oil Pollution Act of 1990
OSRO		Oil Spill Removal Organization
PCBs		Polychlorinated biphenyls
Predecessor US Ecology		US Ecology Holdings, Inc. (f/k/a US Ecology, Inc.), the predecessor to US Ecology
QEQA		Québec Environmental Quality Act
RCRA		Resource Conservation and Recovery Act of 1976
Republic		Republic Services, Inc.
RRC		Railroad Commission of Texas
TSCA		Toxic Substances Control Act of 1976
TSDF		Treatment, Storage and Disposal Facility
USACE		U.S. Army Corps of Engineers
USCG		U.S. Coast Guard
USEPA		U.S. Environmental Protection Agency
USNRC		U.S. Nuclear Regulatory Commission
WUTC		Washington Utilities and Transportation Commission

US Ecology is a leading provider of environmental services to commercial and governmental entities. The Company addresses the complex waste management and response needs of its customers, offering treatment, disposal and recycling of hazardous, non-hazardous and radioactive waste, leading emergency response and standby services, and a wide range of complementary field services. US Ecology’s focus on safety, environmental compliance and best-in-class customer service enables us to effectively meet the needs of our customers and to build long-lasting relationships. US Ecology and its predecessor companies have been in business for more than 65 years. As of December 31, 2021, we employed approximately 3,600 people.

Predecessor US Ecology was incorporated as a Delaware corporation in March 1987 as American Ecology Corporation. On February 22, 2010, Predecessor US Ecology changed its name from American Ecology Corporation to US Ecology, Inc. On November 1, 2019, in connection with the Company’s acquisition of NRC (the “NRC Merger”) pursuant to that certain Agreement and Plan of Merger, dated June 23, 2019 (the “NRC Merger Agreement”), by and among the

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Company, NRC, Predecessor US Ecology, Rooster Merger Sub, Inc. and ECOL Merger Sub, Inc., a new parent entity of US Ecology completed a merger transaction with Predecessor US Ecology, became the successor to Predecessor US Ecology and changed its name to “US Ecology, Inc.” In connection with the closing of the NRC Merger, Predecessor US Ecology changed its name to “US Ecology Holdings, Inc.,” and remains a wholly-owned subsidiary of US Ecology. Our filings with the SEC are posted on our website at www.usecology.com or can be obtained by accessing the SEC’s website at www.sec.gov. The information found on our website is not part of this or any other report we file with or furnish to the SEC.

We have a network of fixed facilities and service centers operating primarily in the United States, Canada, the United Kingdom and Mexico. Our fixed facilities include five RCRA subtitle C hazardous waste landfills, three landfills serving waste streams regulated by the RRC and one LLRW landfill. We also have various other TSDF facilities located throughout the United States. These facilities generate revenue from fees charged to transport, recycle, treat and dispose of waste and to perform various field services for our customers.

Effective in the fourth quarter of 2020, we made changes to the manner in which we manage our business, make operating decisions and assess our performance. The energy waste business that was acquired through the NRC Merger now comprises our Energy Waste segment. Prior to this change, the energy waste business was included in the Waste Solutions segment (formerly “Environmental Services”). Throughout this Annual Report on Form 10-K, all periods presented have been recast to reflect these changes. Under our new structure our operations are managed in three reportable segments reflecting our internal management reporting structure and nature of services offered as follows:

Waste Solutions (formerly “Environmental Services”)—This segment provides safe and compliant specialty waste management services including treatment, disposal, beneficial re-use, and recycling of hazardous, non-hazardous, and other specialty waste at Company-owned treatment, storage, and disposal facilities, excluding the services within our Energy Waste segment.

Field Services (formerly “Field & Industrial Services”)—This segment provides safe and compliant logistics and response solutions focusing on “in-field’ service offerings through our network of 10-day transfer facilities. Our logistics solutions include specialty waste packaging, collection, transportation, and total waste management. Our response solutions include land and marine based emergency response, OSRO standby compliance, remediation, and industrial services. The Field Services segment completes our vertically integrated model and serves to increase waste volumes into our Waste Solutions segment.

Energy Waste—This segment provides safe and compliant energy waste management and critical support services to up-stream oil and gas customers in the Permian and Eagle Ford basins primarily operating in Texas. Services include spill containment and site remediation, equipment cleaning and maintenance services, specialty equipment rental, including tanks, pumps and containment, safety monitoring and management and transportation and disposal. This segment includes all of the energy waste business of the legacy NRC operations and none of the legacy US Ecology operations.

Effective in the first quarter of 2021, we changed our management structure resulting in the reclassification of certain overhead expenses from our Waste Solutions, Field Services and Energy Waste reportable segments to Corporate. As a result, certain regional overhead costs historically presented within our reportable segments as Direct operating costs were further reclassified to Corporate as Selling, general and administrative expenses to conform to the current period’s presentation. Throughout this Annual Report on Form 10-K, all periods presented have been recast to reflect these changes.

Waste Solutions Segment

Our Waste Solutions involve the transportation, treatment, recycling and disposal of hazardous, non-hazardous and radioactive wastes, and include physical treatment, recycling, landfill and deep-well injection disposal and wastewater treatment services.

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Waste Treatment & Disposal

We recycle, treat and dispose of hazardous and non-hazardous industrial wastes. The wastes handled include substances which are classified as “hazardous” because of their corrosive, ignitable, reactive or toxic properties, and other wastes subject to federal, state and provincial environmental regulation. The wastes we handle come in solid, liquid and sludge form and can be received in a variety of containerized and bulk forms and transported to our facilities by truck and rail.

We operate five permitted hazardous waste treatment, storage and disposal facilities with landfills in Beatty, Nevada; Robstown, Texas; Grand View, Idaho; Belleville, Michigan and Blainville, Québec, Canada. These facilities are used primarily for the disposal of wastes treated at Company-owned onsite and offsite treatment facilities. The United States landfills are regulated under RCRA by the respective states in which they are located and the USEPA. Our onsite treatment facilities specialize in the treatment and disposal of RCRA, TSCA, PCB remediation and certain USNRC-exempt (NORM/NARM, Technologically Enhanced NORM (TENORM)) radioactive waste. Our Canadian landfill is regulated by the Québec Ministry of Environment and authorized under the QEQA to treat and stabilize inorganic hazardous liquid and solid waste and contaminated soils to produce a non-leachable concrete-like material for disposal in the onsite landfill, specializing in processing hard to treat materials, such as cyanides, mercury compounds, strong acids, non-organic oxidizers, lab packs, contaminated debris and batteries.

We operate a commercial LLRW landfill in Richland, Washington that is licensed by the Washington Department of Health through delegated authority of the USNRC. The WUTC sets disposal rates for LLRW. Rates are set at an amount sufficient to cover operating costs and provide us with a reasonable profit. The current rate agreement with the WUTC was extended in 2019 and is effective until December 31, 2025.

As of December 31, 2021, the capacity used in the calculation of the useful economic lives of our six Waste Solutions landfills includes approximately 45.1 million cubic yards of remaining permitted airspace capacity and approximately 18.1 million cubic yards of additional unpermitted airspace capacity included in the footprints of these landfills. We believe it is probable that this unpermitted airspace capacity will be permitted in the future based on our analysis of site conditions, past regulatory approvals on adjacent property, and our interactions with regulators on applicable regulations, although there can be no assurance that any additional unpermitted airspace capacity will be permitted in the future.

We also operate a caprock injection well in Winnie, Texas with full Class 1 and 2 non-hazardous industrial waste disposal capabilities. Utilizing proprietary low-pressure injection technology, the deep-well asset provides the unique ability to efficiently dispose of difficult to treat non-hazardous industrial waste streams, including high metals, high ammonia, high solids, flammable exempt, and leachate. Based on an independent determination of the injection capacity of the caprock formation in which we inject waste and our own estimates of projected injection volumes, we believe the remaining disposal capacity of the formation will be sufficient to meet our disposal needs for the foreseeable future.

We operate seven wastewater treatment facilities located in Detroit, Michigan; Canton, Ohio; Harvey, Illinois; York, Pennsylvania; Tulsa, Oklahoma and Vernon, California that offer a range of wastewater treatment technologies. These facilities also have RCRA-permitted storage capabilities where waste may be stored prior to treatment onsite or transfer to another RCRA facility for treatment and disposal. We also operate a hazardous and non-hazardous industrial waste treatment, storage, and disposal facility in Tilbury, Ontario, Canada. The facility is permitted by the Ontario Ministry of Environment and specializes in the treatment of non- hazardous hydrocarbon contaminated solids to industrial re-use standards.

We break our Waste Solutions segment treatment and disposal (“T&D”) revenue into two categories, based on the underlying nature of the revenue source: “Base Business” and “Event Business.”

Base Business consists of waste streams from ongoing industrial activities and tends to be reoccurring in nature. Our strategy is to expand our Base Business while securing both short-term and extended-duration Event Business. We define Event Business as non-recurring projects that are expected to equal or exceed 1,000 tons, with Base Business defined as all other business not meeting the definition of Event Business. The duration of Event Business projects can last from a several-week cleanup of a contaminated site to a multiple year cleanup project.

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Base Business represented approximately 76% and 73% of disposal revenue (excluding transportation) for the years ended December 31, 2021 and 2020, respectively. Event Business contributed approximately 24% and 27% of disposal revenue (excluding transportation) for the years ended December 31, 2021 and 2020, respectively.

When Base Business covers our fixed overhead costs, a significant portion of disposal revenue generated from Event Business is generally realized as operating income and net income. This strategy takes advantage of the operating leverage inherent to the largely fixed-cost nature of the waste disposal business. Contribution margin is influenced by whether the waste is directly disposed (“direct disposal”) or requires the application of chemical reagents, absorbents or other additives (variable costs) to treat the waste prior to disposal.

A significant portion of our T&D revenue is attributable to discrete Event Business projects which vary widely in size, duration and unit pricing. For the year ended December 31, 2021, approximately 24% of our T&D revenue was derived from Event Business projects. The one-time nature of Event Business, diverse spectrum of waste types received and widely varying unit pricing necessarily creates variability in revenue and earnings. This variability may be influenced by general and industry-specific economic conditions, funding availability, changes in laws and regulations, government enforcement actions or court orders, public controversy, litigation, weather, commercial real estate, closed military bases and other project timing, government appropriation and funding cycles and other factors. The types and amounts of Base Business waste received also vary quarter to quarter, sometimes significantly, but are generally more predictable than Event Business.

The types of waste received, also referred to as “service mix,” can produce significant quarter-to-quarter and year-to-year variations in revenue, average selling price, gross profit, gross margin, operating profit and net income for both Base Business and Event Business.

Recycling Services

We operate recycling technologies designed to reclaim valuable commodities from hazardous waste, including oil-bearing waste, metal-bearing waste, batteries, electronics, airport deicing fluid and other solvent-based wastes for industrial clients. The recycling and reclamation process involves the treatment of wastes using various recovery methods to effectively remove contaminants from the original material to restore its usefulness and to reduce the volume of waste requiring disposal.

We offer full-service storm water management and propylene glycol recovery at major airports. Recovered fluids are transported to our RCRA Part B and CWT permitted chemical recycling facility where they are recycled into a greater than 99% pure material that is sold to industrial users.

We also operate a thermal desorption unit at our Robstown, Texas facility that recovers oil and metal bearing catalyst from refinery and other organic and oil-based waste. The recycled oil and recycled catalyst are sold to third parties.

Transportation

For waste transported by rail from locations distant from our facilities, transportation-related revenue can vary significantly and can account for as significant portion of total project revenue. While bundling transportation and disposal services may reduce overall gross profit as a percentage of total revenue (“gross margin”), this value-added service has allowed us to win multiple projects that we believe we could not have otherwise competed for successfully. Our Company-owned fleet of gondola railcars, which is periodically supplemented with railcars obtained under operating leases, has reduced our transportation expenses by largely eliminating reliance on more costly short-term rentals. These Company-owned railcars also help us to win business during times of demand-driven railcar scarcity. We also utilize a variety of specially designed and constructed Company-owned tanker trucks and trailers as well as various third-party transporters to support this activity. Further, to maximize utilization of our railcar fleet, we periodically deploy available railcars to transport waste from cleanup sites to disposal facilities operated by other companies. Such transportation services may also be bundled with logistics and field services support work.

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Field Services Segment

Our Field Services include a wide range of specialty and total waste management services provided to refineries, chemical plants, steel and automotive plants, and other government, commercial and industrial facilities either on-site or at our network of facilities located throughout the United States. Specialty services include industrial cleaning and maintenance, retail services, remediation, lab pack, transportation and emergency response. Our specialty and total waste management services are organized into service lines including Emergency Response, Standby Services, Small Quantity Generation, Remediation Services, Total Waste Management, Transfer and Processing, and Industrial Services.

Emergency Response

Our primary emergency response offerings include spill response, waste analysis and treatment and disposal planning. We also offer remediation, product transfers, spill contingency planning and yearly service agreements with first responder status. Trained, experienced professionals operate the Global Response Operations Center to coordinate the Company’s emergency response services 24 hours per day, seven days per week. The Company may self-perform or utilize its independent contractor network to provide emergency response services.

Standby Services

We provide government-mandated, commercial standby oil spill compliance solutions to companies that store, transport, produce or handle petroleum and certain nonpetroleum oils on or near U.S. waters. Our standby services customers pay annual retainer fees under long-term or evergreen contracts for access to our regulatory certifications, specialized assets and highly trained personnel, who are on call 24 hours per day, seven days per week to respond to marine-based oil spill and hazardous materials emergencies.

Small Quantity Generation

Our small quantity generation service offerings consist of retail services, laboratory packing, less than truckload (“LTL”), and household hazardous waste (“HHW”) collection. Retail services, laboratory packing, LTL and HHW are full-service waste characterization, packaging, collection and transportation programs. Services are provided to small, medium and large industrial and commercial customers. These programs are built on our network of service centers, employ highly trained staff and provide a high level of service to the customer. As an integral part of our services, we operate a network of service centers that characterize, package and collect hazardous and non-hazardous wastes from customers and transport such wastes to and between our facilities for treatment or bulking for shipment to final disposal locations. Customers typically accumulate wastes in containers, such as 55 gallon drums, bulk storage tanks or 20 cubic yard roll-off containers. We utilize a variety of specially designed and constructed tank trucks and semi-trailers as well as third-party transporters, including railroads. Depending on customer needs and competitive economics, transportation services may be offered at or near our cost to help secure new business.

Remediation Services

Our remediation service offerings include project management, RCRA and TSCA closures, excavations, wastewater management, building decontamination, demolition, landfill capping and site reclamation.

Total Waste Management (“TWM”)

Through our TWM programs, customers outsource a portion of their sustainability programs to us, allowing us to perform, organize and coordinate their field services activities, waste services needs and environmental compliance.

Transfer and Processing

Our transfer and processing stations stage and consolidate non-bulk loads of hazardous, non-hazardous and universal waste into full loads for more efficient shipment to Company-owned or third-party treatment and disposal facilities. This allows

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us to offer a broader geographic presence without having a dedicated, Company-owned treatment or disposal facility in the region.

Industrial Services

Our primary industrial service offerings include industrial cleaning and maintenance for refineries, chemical plants, steel and automotive plants, as well as tank cleaning and temporary storage.

Energy Waste Segment

We own and operate three landfills located in Karnes County, Texas; Pecos County, Texas and Reagan County, Texas that specialize in the disposal of drill cuttings, drilling muds and other oil field related waste streams regulated by the RRC. In addition, we own property in Andrews County, Texas, that is permitted for development as a waste disposal site for similar waste streams. These facilities are supported by a network of related oil field services capabilities including transportation, equipment rental, emergency response and other oil field services work.

As of December 31, 2021, the capacity used in the calculation of the useful economic lives of our three Energy Waste landfills includes approximately 27.2 million cubic yards of remaining permitted airspace capacity.

We also operate five additional domestic biosolid wastewater treatment facilities in Texas. These domestic wastewater treatment operations involve processing domestic wastewater through the use of physical, biological and chemical treatment methods. Our domestic wastewater treatment facilities treat a broad range of domestic wastewaters. Following treatment, the clean water is discharged under a NPDES permit while residual solids are transported to an offsite landfill.

Services include spill containment and site remediation, equipment cleaning & maintenance services, specialty equipment rental, including tanks, pumps and containment, safety monitoring and management and transportation and disposal.

Waste Services Industry

During the 1970s and 1980s, waste services industry growth in the United States was driven by new environmental laws and actions by federal and state agencies to regulate existing hazardous waste management facilities and direct the cleanup of contaminated sites under the federal Superfund law. By the early 1990s, excess hazardous waste management capacity had been constructed by the industry. Over this same period, in order to better manage risk and reduce expenses, many waste generators instituted industrial process changes and other methods to reduce waste production. These factors led to highly competitive market conditions that still apply today.

In the United States, hazardous waste is regulated under the RCRA, which created a cradle-to-grave system governing defined hazardous waste from the point of generation to ultimate disposal. RCRA requires waste generators to distinguish between “hazardous” and “non-hazardous” wastes, and to treat, store and dispose of hazardous waste in accordance with specific regulations. Generally, entities that treat, store, or dispose of hazardous waste must obtain a permit, either from the USEPA or from a state agency to which the USEPA has delegated such authority. Similar regulations and management methods apply to hazardous waste generation in Canada, which is regulated by the Canada Ministry of Environment and delegated to provincial agencies.

Disposal facilities are typically designed to permanently contain the waste and prevent the release of harmful pollutants into the environment. The most common hazardous waste disposal practice is placement in an engineered disposal unit such as a landfill, surface impoundment or deep-well injection. RCRA’s hazardous waste permitting program establishes specific requirements that must be followed when managing those wastes.

In the United States, waste intrinsically derived from primary field operations associated with the exploration, development, or production of crude oil and natural gas are exempt from regulation under RCRA Subtitle C. The RCRA Subtitle C exemption, however, does not preclude these wastes from control under state regulations, under the less stringent RCRA Subtitle D solid waste regulations, or under other federal regulations. Our landfills that support this industry are regulated by the RRC. Similar to RCRA-regulated landfills, our RRC-regulated landfills are engineered using state of the

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art design and constructed to permanently contain the waste and prevent the release of harmful pollutants into the environment.

OPA-90, a regulatory framework for the protection of the environment from oil spills following the 1989 Exxon Valdez spill, also imposes obligations on operators and owners of facilities, such as refineries, pipelines and E&P platforms and requires them to have a USCG compliant spill response plan.

We believe that a baseline demand for hazardous and non-hazardous waste services will continue into the future with fluctuations driven by general and industry-specific economic conditions, identification and prioritization of new cleanup needs, cleanup project schedules, funding availability, regulatory changes and other public policy decisions. We will also continue to advance plans and business lines that promote sustainable recycling technologies and expect the recycling portion of our business to displace some of our base disposal services over time. We further believe that the ability to deliver specialized niche services while aggressively competing for large volume cleanup projects and non-niche commodity business opportunities differentiates successful from less successful companies. We seek to control variable costs, expand service lines, increase waste throughput efficiency, employ innovative treatment techniques, provide complementary transportation and logistics services, build market share and increase profitability.

Our Richland, Washington disposal facility, serving the Northwest and Rocky Mountain LLRW Compacts, is one of three operating Compact disposal facilities in the United States. While our Washington disposal facility has substantial unused capacity, it can only accept LLRW from the 11 western states comprising the two Compacts served. The Barnwell, South Carolina site, operated by Energy Solutions, Inc. (“Energy Solutions”), exclusively serves the three-state Atlantic Compact. A third LLRW disposal facility, licensed by Waste Control Specialists, LLC and located near Andrews, Texas serves the two-state Texas Compact and approved out-of-compact waste generators. Class A LLRW from states outside the Northwest Compact region may also be disposed at the commercial disposal site in Clive, Utah, also operated by Energy Solutions.

Increases in pricing at AEA licensed LLRW disposal facilities heightened demand for more cost-effective disposal options for soil, debris, consumer products, industrial wastes and other materials containing LARM, including “mixed wastes,” exhibiting both hazardous and radioactive properties. In addition to commercial demand, a substantial amount of LARM is generated by government cleanup projects. The USNRC, USEPA and USACE have authorized the use of hazardous waste disposal facilities to dispose of certain LARM, encouraging expansion of this compliant, cost-effective alternative. We have been successful at expanding our permits at four of our RCRA hazardous waste facilities to allow acceptance of additional LARM wastes.

Industrial Services Industry

The industrial services industry is highly fragmented with thousands of small companies performing a variety of cleaning, maintenance and other services to industrial based companies such as refineries, chemical plants and steel and automotive plants. We believe customers increasingly desire to shift high fixed costs to lower variable costs by outsourcing waste management and industrial services. Some companies, such as power generation plants, petroleum refineries and chemical processors, are required to perform specialized “turnaround” maintenance only once or twice per year, making it impractical and cost-prohibitive to purchase expensive, specialized equipment, comply with complex permits and employ full-time specialized technicians required to perform those services. Similarly, the regulatory requirements of characterizing, manifesting, transporting and properly disposing of waste has led many companies to outsource this function to specialists. Our network of service centers and treatment, recycling and storage facilities provides a national footprint allowing us to serve these customers, while at the same time internalizing the waste to our own facilities.

Industrial services generally have low barriers to entry and customers are frequently won based on quality of service, reputation, health and safety record, logistics and price. This low barrier to entry has fostered a fragmented and competitive marketplace.

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Emergency Response and Standby Services Industry

We provide emergency spill response services and marine-based standby oil spill compliance (the “standby services”) in the United States, Mexico, the United Kingdom and other international locations.

Our emergency spill response services are designed to address both large-scale and small-scale response events. Large-scale response services typically result from natural disasters such as hurricanes, fires, floods and earthquakes as well as large industrial accidents such as pipeline spills, industrial fires, rail car derailments and marine vessel accidents. These large emergency response events are inherently difficult to predict, and when they occur can result in a significant revenue opportunity. Our small-scale emergency response services address smaller recurring industrial and transportation accidents or discharges. With the combination of our nationwide footprint, our vast service capabilities and specialized asset base, we believe the demand for these emergency response services will increase in line with overall industrial activity. We respond to multiple small-scale spill events per day, every day, across the United States.

Our standby services customers pay annual retainer fees under long-term or evergreen contracts for access to regulatory certifications, specialized assets and highly trained personnel, who are on call 24 hours per day, seven days per week to respond to an oil spill or other hazardous materials emergency response events.

OPA-90 mandates certain oil spill response coverage for companies that store, transport, produce or handle petroleum and certain non-petroleum oils on or near U.S. ports, harbors and other waters.

Our standby services business is the only national commercial OSRO in the United States and the only commercial provider of standby services that satisfies the requirements of both OPA-90 and other federal, state and municipal requirements. In addition, we hold the highest oil spill contractor classification offered by the USCG. We maintain an installed base of specialized oil spill response equipment and highly trained personnel around the United States to ensure rapid response capabilities. We provide government-mandated standby compliance solutions to more than 2,000 customers that cover approximately 20,000 assets, including tank and non-tank vessels, barges, petrochemical facilities, pipelines, refineries and other assets.

Additionally, our internal standby services business is augmented by our network of over 200 independent contractors throughout the United States to ensure expedient response times in any location. These independent contractors provide both personnel and, if required, equipment, to meet the immediate needs of our customers. Contractors must meet stringent requirements to become part of our network. Our contractors are paid when an event occurs for work that is actually completed and, as such, do not receive any of our annual standby retainer payments.

Our standby services business is a recurring, retainer-based business model that provides opportunity for incremental marine spill response revenue. To the extent a standby services retainer customer has a spill incident, we coordinate and manage the spill response by leveraging both internal resources and our independent contractor network. We generate incremental revenue with respect to services provided through internal resources and independent contractors on all response events, in addition to the annual retainer payments we collect each year.

Our standby services contribution margin is very high in light of the expansive infrastructure that is already in place. These services are government-mandated for our customers and serve as a low-cost yet invaluable “insurance policy” in the event of an incident. High barriers to entry, driven by the high cost of infrastructure necessary to achieve economies of scale, the high cost of failure, and regulatory certification requirements, have resulted in minimal new market competitors since market inception.

Mexico represents a growth opportunity for us. The recently privatized Mexican oil and gas market has resulted in the Mexican government actively auctioning off blocks for offshore exploration to leading global oil companies. Although OPA-90 only applies to United States territories, the Mexican government and many leading global and U.S.-based companies seek OSRO-type coverage similar to that required in the United States and other countries. Our primary standby services competitor is currently unable to operate outside of U.S. waters, which leaves us well-positioned to be the provider of choice for these services internationally. This advantage has helped us become a leading OSRO in Mexico.

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Strategy

Our strategy is to capitalize on our difficult-to-replicate combination of treatment, recycling and disposal assets and complementary service lines to provide a full service offering to customers and increase market share in the diverse markets we serve. We believe our focus on sustainability, workforce safety and protecting the environment, as well as our passionate commitment to customer service, provides for a long-term sustainable business model. In addition to organic growth initiatives, we may from time to time pursue acquisition opportunities to expand our geographic reach, service lines and customer base. The principal elements of our business strategy are to:

Execute Best-in-Class Sustainability and Environmental Compliance Programs.

The cornerstone of our business is providing solutions that help us and our customers protect human health and the environment. In doing so, we pursue best-in-class safety and environmental compliance at US Ecology. Our customers and regulators rely on our expertise when they select us as a vendor or grant us permits and licenses. We deploy significant resources in terms of human capital, information technology, programs and facility investments to achieve safe and compliant operations that protect the environment and all stakeholders. The Company has dedicated professionals who oversee and manage safety and environmental programs including, but not limited to, employee training, internal and independent external audits, incentive programs and the Safety & Health Achievement Recognition Program. Various US Ecology facilities have obtained third-party verification of Environmental Health and Safety programs through the Occupational Safety and Health Administration’s (“OSHA”) Voluntary Protection Program (“VPP”) or ISO 45001 and ISO 14001 accreditation. Senior managers regularly review and discuss environmental and safety results and performance with operational staff, management and the Company’s Board of Directors to improve our safety results and focus on regulatory compliance. Sustainability targets are also an important component of our company-wide incentive programs.

Leverage Regulatory Expertise to Expand Permit Capabilities and Broaden Cost-Effective Service Offerings. We have a proven track record of leveraging more than six decades of regulatory experience to broaden our service offerings. Working with customers, we assess market opportunities in relation to existing laws, regulations and permit conditions. Our engineering, operational and regulatory affairs personnel then seek authority to implement innovative processes and technologies and accept additional types of waste by modifying our existing permits or obtaining new permits.

Continue to Build on Our Robust Waste Handling Infrastructure to Increase Revenue from Existing Assets. We believe we have a difficult to replicate set of treatment, recycling and disposal assets in the highly regulated hazardous, non-hazardous and radioactive waste industry. We aim to enhance treatment capabilities at our existing facilities to handle additional waste streams and increase throughput. We also continue to invest in equipment and infrastructure to ensure that we have ample throughput capacity to expand our Event Business while continuing to support our Base Business customers.

Execute on Marketing Initiatives to Grow Organically. Our sales team is focused on high margin, niche wastes that our competitors may not be able to obtain the necessary regulatory authorizations for or handle cost-effectively. We seek to expand into new markets and offer new services allowing us to cross-sell or bundle services and ultimately drive incremental volume into our existing disposal facilities. In our Waste Solutions segment, our strategy is to achieve Base Business at a level that covers our fixed overhead costs and delivers a reasonable profit, which allows the majority of our Event Business revenue to be realized as operating profit. We aim to continue building our Base Business while remaining flexible enough to handle large cleanup events. In our Field Services segment, our strategy is to provide value-added services that generate downstream waste treatment and disposal opportunities for our Waste Solutions segment while expanding service offerings to existing customers.

Deliver Innovative Technological Solutions. We challenge ourselves to identify innovative and technology-driven solutions to solve our customers’ waste management challenges. Past examples include leveraging our expertise in developing waste treatment recipes for organic and metals-bearing wastes, utilizing waste as a reagent to treat other wastes, beneficial reuse of select wastes, partnering with an innovative technology provider to deploy thermal desorption technology to recover and recycle oil and metal catalyst from refinery waste, and stabilizing mercury laden waste and other wastes using a patented treatment process.

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Pursue a Disciplined Acquisition Strategy to Add Complementary Capabilities. We pursue selective acquisitions to expand our disposal network, customer base and geographic footprint. We have had success achieving this in recent years through our targeted acquisition strategy, acquiring EQ Holdings, Inc. (“EQ”) in 2014, Environmental Services Inc. (“ESI”) and the Vernon, California based RCRA Part B, liquids and solids waste treatment and storage facility of Evoqua Water Technologies LLC in 2016, ES&H of Dallas, LLC (“ES&H Dallas”) and Ecoserv Industrial Disposal, LLC (“Winnie”) in 2018, NRC and W.I.S.E. Environmental Solutions Inc. (“US Ecology Sarnia”) in 2019 and Impact Environmental Services, Inc. in 2020. The acquisition of NRC allowed us to expand our operations as a leading provider of emergency response and standby services while also providing a network of over 50 locations to leverage our field service capabilities, industrial services and total waste management programs. In addition, the NRC Merger provided us an entry into specialty landfill and waste services supporting upstream oil and gas exploration. We may from time to time seek acquisition opportunities to further expand our service offerings across the environmental services value chain while maintaining our commitment to compliance, safety and customer service excellence.

Competitive Strengths

Difficult-to-Replicate Infrastructure. We consider our disposal facilities to be difficult to replicate due to the longstanding regulatory and public policy environment for hazardous waste processing facilities, which includes the generally high cost of obtaining permits, multi-year permitting timeframes, uncertainty of outcome, high initial capital expenditures and the potential for both broad-based and local community opposition to the development of new facilities. We operate five of 20 landfills in the United States and Canada that are permitted to accept RCRA wastes. Our Richland, Washington LLRW facility is one of only three full-service Class A, B, and C disposal facilities in the United States. We also operate three landfills in Texas supporting the oil and gas exploration industry that are constructed to specifications set forth under Subtitle D of RCRA and the RRC, with a fourth location also owned by us and permitted by the RRC, but not yet constructed. Additionally, our marine resource network provides us with priority access to an extensive network of marine assets, and our aerial resource network enables us to coordinate cargo logistics and dispersant services, with priority access to a significant number of helicopters and fixed-wing planes. Our rapid response capabilities and strategically-located facilities enable us to rapidly deploy assets and personnel within 24 hours depending on the proximity of necessary equipment. Replacing or replicating our fleet of vessels and barges utilized by our standby services business would be difficult and costly for potential competitors because our vessels are customized with oil spill recovery equipment and other vessel modifications specifically designed to enhance our effectiveness.

Specialized Asset Base and Essential Regulatory Certifications. We maintain a specialized asset base and essential regulatory certifications to respond to environmental events throughout the globe whenever such events occur. We have a broad fleet of vessels, marine equipment, vehicles, rolling stock and other equipment that requires extensive training and expertise to operate. Replacing or replicating our fleet of vessels and barges utilized by our Field Services segment would be difficult and costly for potential competitors because our vessels are customized with oil spill recovery equipment and other vessel modifications specifically designed to enhance our effectiveness. Federal, state and local legislation and other environmental agencies require numerous certifications and accreditations. These certifications are often cost and time prohibitive to obtain and require expensive multi-step, complex permitting processes. We have decades of experience successfully permitting and maintaining regulatory compliance. Certain of our barges have also been grandfathered into certain regulatory requirements. Certain of our vessels, because they are used exclusively as oil spill response vessels, are exempt from certain regulatory requirements. For example, regulations requiring barges carrying oil to have double hulls generally do not impact our current fleet. Our specialized asset base, essential regulatory certifications and entrenched market position pose a barrier to entry for potential competitors.

Significant Regulatory and Operating Expertise. We operate in a highly regulated marketplace. The permitting process for operating disposal assets in our industry is lengthy and complex, requiring a deep understanding of federal and state hazardous and radioactive waste laws and regulations. We maintain a regulatory compliance and permitting program at our disposal facilities that has allowed us to obtain approvals to expand our service offering in terms of the types, amounts and concentrations of wastes that we are authorized to accept. Our track record of successfully navigating government regulatory and permitting processes has been a consistent competitive advantage.

A Market Leader in Hazardous & Non-Hazardous Waste Treatment and Disposal. We are a leader in the hazardous waste services sector with more than six decades of experience. Our collection of disposal assets and proprietary treatment

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technologies, combined with our transportation network, provides us with coast-to-coast treatment and disposal capabilities, allowing us to serve a diverse mix of customers and industries.

Comprehensive Waste Services. Our comprehensive waste service offerings allow us to act as a full-service provider to our customers. Our full-service orientation creates incremental revenue growth as customers seek to minimize the number of outside vendors through “one-stop” service providers.

Diverse Markets and Customer Base. In 2021, we serviced more than 8,000 commercial and governmental entities, such as refineries, chemical production facilities, heavy manufacturers, steel mills, oil and gas exploration companies, waste brokers and medical and academic institutions. Our broad range of end-markets gives us exposure to a variety of industrial cycles, lessening the impact of market volatility.

Solid Safety and Compliance Record. Safety and environmental compliance is a cornerstone of US Ecology’s business. The Company has dedicated professionals who oversee and manage safety and environmental programs including, but not limited to, employee training, internal and independent external audits, incentive programs and the Safety & Health Achievement Recognition Program. Various US Ecology facilities have obtained third-party verification of Environmental Health and Safety programs through OSHA’s VPP or ISO 45001 and ISO 14001 accreditation. Senior managers regularly review and discuss environmental and safety results and performance with operational staff, management and the Company’s Board of Directors to improve our safety results and focus on regulatory compliance.

Competition

Our Waste Solutions segment competes with large and small companies in each of the commercial markets we serve. While niche services apply, the radioactive, hazardous and non-hazardous industrial waste management industry is generally very competitive. We believe that our primary hazardous waste and PCB disposal competitors are Clean Harbors, Inc., Heritage Environmental Services and Waste Management, Inc. Other hazardous waste disposal competitors include, but are not limited to, Tradebe, Ross Environmental, Harsco Corporation and Veolia Environmental Services. Our waste disposal competitors serving the Permian and Eagle Ford oil fields include Waste Management, Waste Connections, Milestone Environmental, Republic Services and Buchanan Disposal Solutions. In addition, we face competition from reserve pit disposal, slurry wells, thermal recycling, saltwater caverns and land farming. We believe that our primary radioactive material disposal competitors are Energy Solutions, Inc. and Waste Control Specialists, Inc. We believe the principal competitive factors applicable to these businesses are:

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price;

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specialized permits and “niche” service offerings;

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customer service;

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operational efficiency and technical expertise;

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comprehensive and bundled services;

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regulatory compliance and worker safety;

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industry reputation and brand name recognition;

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transportation distance; and

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state or province and local community support.

Competition within our Field Services segment varies by locality and type of service rendered, with competition coming from large national and regional service providers and hundreds of privately-owned firms that offer field or industrial services. We believe that our primary field services competitors are Clean Harbors, Inc., Harsco Corporation, Heritage Environmental Services, Tradebe, Veolia Environmental Services and Waste Management, Inc. Each of these competitors is able to provide most if not all of the field services we offer. We believe that our primary standby services competitor is Marine Spill Response Corporation, a not-for-profit USCG-classified OSRO.

We believe that we are competitive in all markets we serve and that we offer a unique mix of services, including niche technologies and services that favorably distinguish us from competitors. We also believe that our strong brand name recognition from six decades of experience, compliance and safety record, customer service reputation and positive relations with regulators and local communities enhance our competitive position. Advantages exist for competitors that

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(1) are larger in scale, (2) have technology, permits or equipment to handle a broader range of waste, (3) operate in jurisdictions imposing lower disposal fees and/or (4) are located closer to where wastes are generated.

Permits, Licenses and Regulatory Requirements

Obtaining authorization to construct and operate new waste disposal facilities is a lengthy and complex process. We believe we have demonstrated significant expertise in this area over multiple decades. We also believe we possess all permits, licenses and regulatory approvals required to maintain regulatory compliance and operate our facilities and have the specialized expertise required to obtain additional approvals to continue growing our business in the future.

We incur costs and make capital investments to comply with environmental regulations. These regulations require that we operate our facilities in accordance with permit-specific requirements. Most of our facilities are also required to provide financial assurance for closure and post-closure obligations should our facilities cease operations. Both human resource and capital investments are required to maintain compliance with these requirements.

United States Hazardous Waste Regulation

Our hazardous, industrial, non-hazardous and radioactive waste treatment, disposal and handling business is subject to extensive federal and state environmental, health, safety, and transportation laws, regulations, permits and licenses. Local government controls and regulations may also apply. The applicable government regulatory agencies regularly inspect our operations to monitor compliance. Such agencies have authority to enforce compliance through the suspension or revocation of operating licenses and permits and the imposition of civil or criminal penalties in case of violations. We believe that these laws and regulations, as well as the specialized services we provide, contribute to demand and create barriers to new competitors seeking to enter the markets we serve.

RCRA provides a comprehensive framework for regulating hazardous waste transportation, treatment, storage and disposal. RCRA regulation is the responsibility of the USEPA, which may delegate authority to state agencies. Chemical compounds and residues derived from USEPA-listed industrial processes are subject to RCRA standards unless they are delisted through rulemaking. RCRA liability may be imposed for improper waste management or failure to take corrective action for releases of hazardous substances. To the extent wastes are recycled or beneficially reused, regulatory controls and permitting requirements under RCRA diminish. LARM and NORM/NARM may also be managed to varying degrees under RCRA permits, as is authorized for our facilities in Grand View, Idaho, Beatty, Nevada, Belleville, Michigan and Robstown, Texas.

CWA legislation prohibits discharge of pollutants into the waters of the United States without governmental authorization and regulates the discharge of pollutants into surface waters and sewers from a variety of sources, including disposal sites and treatment facilities. The USEPA has promulgated “pretreatment” regulations under the CWA, which establish pretreatment standards for introduction of pollutants into publicly-owned treatment works. In the course of the treatment process, our wastewater treatment facilities generate wastewater that we discharge to publicly-owned treatment works pursuant to permits issued by the appropriate governmental authority. We are required to obtain discharge permits and conduct sampling and monitoring programs.

CERCLA and its amendments impose strict, joint and several liability on owners or operators of facilities where a release of hazardous substances has occurred, on parties who generated hazardous substances released at such facilities and on parties who arranged for the transportation of hazardous substances. Liability under CERCLA may be imposed if improper releases of hazardous substances occur at treatment, storage or disposal sites. Since waste generators, transporters and those who arrange transportation are subject to the same liabilities, we believe these parties are motivated to minimize the number of disposal sites used. In addition, hazardous waste generated during the remediation of CERCLA cleanup projects and transferred offsite must be managed by a treatment and disposal facility authorized by the USEPA to manage CERCLA waste.

TSCA regulates the treatment, storage and disposal of PCBs. U.S. regulation and licensing of PCB wastes is the responsibility of the USEPA. Our Grand View, Idaho and Beatty, Nevada facilities have TSCA treatment, storage and disposal permits. Our Belleville, Michigan facility has a TSCA disposal permit. Our Robstown, Texas facility has a TSCA

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storage permit and may dispose of PCB-contaminated waste in limited concentrations not requiring a TSCA disposal permit.

The AEA assigns the USNRC regulatory authority over receipt, possession, use and transfer of certain radioactive materials, including disposal. The USNRC has adopted regulations for licensing commercial LLRW disposal and has delegated regulatory authority to certain states including Washington, where our Richland facility is located. The USNRC and U.S. Department of Transportation regulate the transport of radioactive materials. Shippers must comply with both the general requirements for hazardous materials transportation and specific requirements for transporting radioactive materials.

Waste intrinsically derived from primary field operations associated with the exploration, development, or production of crude oil and natural gas is exempt from regulation under RCRA Subtitle C. The RCRA Subtitle C exemption, however, does not preclude these wastes from control under state regulations, under the less stringent RCRA Subtitle D solid waste regulations, or under other federal regulations. Our landfills that support this industry are regulated by the RRC. Similar to RCRA-regulated landfills, our RRC-regulated landfills are engineered using state of the art design and constructed to permanently contain the waste and prevent the release of harmful pollutants into the environment.

The Energy Policy Act of 2005 amended the AEA to classify discrete (i.e. concentrated versus diffuse) NORM/NARM as byproduct material. The law does not apply to interstate Compacts ratified by Congress pursuant to the LLRW Policy Act.

Our transportation operations are regulated by the U.S. Department of Transportation, the Federal Railroad Administration, the Federal Aviation Administration and the USCG, as well as by the regulatory agencies of each state in which we operate or through which our vehicles pass, including but not limited to the RRC.

OPA-90 establishes a regulatory and liability regime for the protection of the environment from oil spills. Enacted by Congress in 1990 after the Exxon Valdez tanker oil spill in Alaska, OPA-90 (1) consolidated the existing federal oil spill laws under one program, (2) expanded the existing liability provisions within the CWA and (3) established new freestanding requirements regarding marine oil spill prevention and response. Under its provisions, all U.S. tank vessels, offshore facilities and certain onshore facilities (including pipelines, refineries and terminals) are required to prepare and submit oil spill response plans to the relevant federal agency. In general, these vessels and facilities are prohibited from handling, storing and transporting oil if they do not have a plan approved by (or submitted to) the appropriate agency. The plans must provide, among other things, details of how the owner or operator of a vessel or facility would respond to a “worst case” scenario spill. While every vessel or facility is not required to have all of the personnel and equipment needed to respond to a “worst case” spill, they each must have a plan and procedures to call upon (typically through a contractual relationship with an OSRO), the necessary equipment and personnel for responding to such a spill within a prescribed timeframe.

In 2004, Congress amended OPA-90 to require that all vessels over 400 gross tons (not just tankers) prepare and submit a vessel response plan, as many non-tank vessels pose the same oil spill risk as small tank vessels due to the comparable volume of oil they have onboard for fuel. In 2013, regulations for non-tank vessels were further tightened, and OPA-90 compliance now requires that non-tank vessel operators contract directly with an OSRO.

The OSRO classification process was developed to facilitate the preparation and review of facility and vessel response plans. The OSRO classification process represents standard guidelines by which the USCG and plan developers can evaluate an OSRO’s potential to respond to and recover oil spills of various sizes. OSROs are classified based on the location of response resources and an assessment of the ability to mobilize those resources to the Captain of the Port (“COTP”) city or alternate classification city. There are equipment standards and response times specific to each operating area within a COTP zone. Customers that arrange for the services of a USCG-classified OSRO do not have to list their response resources in their response plans. In addition to potential liability under the federal OPA-90, vessel owners may in some instances incur liability on an even more stringent basis under state law in the particular state where the spillage occurred.

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Canadian Hazardous Waste Regulation

The Canadian federal government regulates issues of national scope where activities cross provincial boundaries and affect Canada’s relations with other nations. The Canadian provinces retain control over environmental matters within their respective boundaries, including primary responsibility for regulation and management of hazardous waste.

The main federal laws governing hazardous waste management are CEPA and the Transportation of Dangerous Goods Act. Environment and Climate Change Canada is the federal agency with responsibility for environmental matters. CEPA charges Environment and Climate Change Canada and Health Canada with the protection of human health and the environment and seeks to control the production, importation and use of substances in Canada and their impact on the environment. The Export and Import of Hazardous Waste Regulations under CEPA govern trans-border movement of hazardous waste and hazardous recyclable materials. These regulations require that anyone proposing to export or import hazardous waste or hazardous recyclable materials or transport them through Canada notify the Minister of the Environment and obtain a permit to do so.

Our Stablex facility is located in Blainville, Québec, Canada and is subject to QEQA. This Act, independently developed by the Province, regulates the generation, characterization, transport, treatment and disposal of hazardous wastes. QEQA also provides for the establishment of waste management facilities which are controlled by the provincial statutes and regulations governing releases to air, groundwater and surface water.

Our Tilbury, Ontario, Canada facility is subject to Regulation 347 of the Ontario Environmental Protection Act (“Regulation 347”). Regulation 347, independently developed by the Province, regulates the collection, storage, transportation, treatment, recovery and disposal of hazardous wastes.

Waste transporters are required to hold a permit to operate under the provincial regulations and are also subject to the requirements of the Federal Transportation of Dangerous Goods law, which requires reporting of quantities and disposition of materials shipped.

A major difference between the United States regulatory regime and that of Canada relates to ownership and liability. Under Canadian federal regulation, ownership changes when waste is transferred to a properly permitted third-party carrier and subsequently to an approved treatment and disposal facility. As a result, the generator is no longer liable for proper handling, treatment or disposal once the waste is transferred. In the United States, joint and several liability is retained by the waste generator as well as the transporter and the treatment and disposal facility.

Maritime Regulations

We own and use in our operations 37 vessels registered under the U.S. flag. Accordingly, we are subject to various U.S. federal, state and local statutes and regulations governing the ownership, operation and maintenance of our vessels. Our U.S.-flag vessels are subject to the jurisdiction of the USCG, the United States Customs and Border Protection and the United States Maritime Administration. We are also subject to international laws and conventions and the local laws of foreign jurisdictions where we operate.

A portion of the operations of our standby services business is conducted in the U.S. coastwise trade. This is a protected market that is subject to U.S. cabotage laws that impose certain restrictions on the ownership and operation of vessels in the U.S. coastwise trade. These laws are principally contained in 46 U.S.C. Chapters 121, 505 and 551 and the related regulations, which are commonly referred to collectively as the “Jones Act.” The Jones Act restricts transportation of merchandise by water or by land and water, either directly or via a foreign port, between points in the United States and certain of its island territories. Subject to limited exceptions, the Jones Act requires that vessels engaged in U.S. coastwise trade be owned and operated by U.S. citizens within the meaning of the Jones Act (“U.S. Citizens”), be built in and registered under the laws of the United States and manned by predominantly U.S. Citizen crews.

Under the citizenship provisions of the Jones Act, we would not be permitted to engage in U.S. coastwise trade if more than 25% of any class or series of our outstanding equity was owned by non-U.S. Citizens (within the meaning of the Jones Act). For a corporation engaged in the U.S. coastwise trade to be deemed a U.S. Citizen: (1) the corporation must

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be organized under the laws of the United States or of a state, territory or possession thereof, (2) each of the chief executive officer, by whatever title, and the chairman of the board of directors of such corporation must be a U.S. Citizen, (3) no more than a minority of the number of directors of such corporation necessary to constitute a quorum for the transaction of business can be non-U.S. Citizens, (4) at least 75% of the ownership and voting power of each class or series of the shares of the capital stock of such corporation must be owned and controlled by U.S. Citizens, free from any trust or fiduciary obligations in favor of non-U.S. Citizens and (5) there must be no contract or understanding or other means by which more than 25% of the voting power or control of such corporation may be exercised directly or indirectly by or on behalf of non-U.S. Citizens.

Our charter includes provisions (1) limiting the ownership of any class or series of our capital stock by non-U.S. Citizens to 24% (so as to allow a margin of safety under the statutory maximum of 25%), (2) prohibiting the transfer of shares of our capital stock if doing so would cause us to exceed the 24% non-U.S. Citizen ownership threshold (any such shares, the “Excess Shares”), (3) authorizing the redemption of Excess Shares by the Company, (4) suspending the right to vote and to receive dividends and distributions for such Excess Shares, (5) establishing procedures for the redemption of Excess Shares including providing notice and setting the redemption price, (6) authorizing us to make citizenship determinations with respect to the holders of our capital stock, (7) requiring holders (including beneficial holders) of our capital stock to submit information to establish the citizenship of such holder and (8) generally authorizing our Board of Directors to take appropriate action to monitor and maintain compliance with the ownership requirements of the Jones Act.

All of our offshore vessels are subject to either U.S. or international safety and classification standards, and sometimes both. U.S.-flag vessels, barges and crew boats are required to undergo periodic inspections pursuant to USCG regulations.

We are in compliance with the International Ship and Port Facility Security Code (the “ISPFS Code”), an amendment to the International Convention for the Safety of Life at Sea (“SOLAS”) as implemented in the Maritime Transportation and Security Act of 2002 to align United States regulations with those of SOLAS and the ISPS Code. The ISPS Code provides that owners or operators of certain vessels and facilities must provide security and security plans for their vessels and facilities and obtain appropriate certification of compliance. Under the ISPS Code, we perform worldwide security assessments, risk analyses and develop vessel and required port facility security plans to enhance safe and secure vessel and facility operations. Additionally, we have developed security annexes for those U.S.-flag vessels that transit or work in waters designated as high risk by the USCG pursuant to the latest revision of Marsec Directive 104-6.

Insurance, Financial Assurance and Risk Management

We are required by law, license, permit and prudence to maintain various insurance instruments and financial assurances. We carry a broad range of insurance coverage including general liability, automobile liability, real and personal property, business interruption, workers compensation, directors and officers liability, environmental impairment liability, international and marine coverages in addition to other coverage customary for a company of our size in our industry. We purchase primary property, casualty and excess liability policies through traditional third-party insurance carriers. We are self-insured for employee healthcare coverage with stop-loss insurance covering excess liabilities.

Our domestic casualty insurance program provides coverage for commercial general liability, employer’s liability and automobile liability in the aggregate amount of $35.0 million each, per year, subject to a $250,000 retention per occurrence for our commercial general liability; a $350,000 deductible per occurrence for workers’ compensation and employer’s liability and a $500,000 deductible per occurrence for our automobile liability. Our workers compensation insurance limits are established by state statutes. Our Canadian casualty insurance program provides primary coverage for commercial general liability and automobile liability in the aggregate amount of $35.0 million each, per year, subject to a 50,000 Canadian dollars retention for general liability and deductibles starting from 500 Canadian dollars for automobile liability depending on applicable policy.

Our domestic property program provides coverage for real and personal property, business interruption and contractors’ equipment with a loss limit of $35.0 million, subject to a $2.5 million deductible per occurrence for property and business interruption and a $500,000 deductible per occurrence for contractors’ equipment. The program also includes flood, earthquake and wind coverage within the loss limit subject to applicable deductibles. For our Vernon, California facility, we maintain an additional $10.0 million of coverage for earthquakes subject to a $25,000 deductible per occurrence. A

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separate boiler and machinery program with a loss limit of $100.0 million for property damage and business interruption is also maintained. Our Canadian property program provides coverage for real and personal property, business interruption and contractors’ equipment with a loss limit of 93.0 million Canadian dollars, subject to applicable per-occurrence deductibles. This program includes flood, wind and earth-movement coverage within the stated loss limits. A separate Canadian boiler and machinery program with a loss limit of 93.0 million Canadian dollars is also maintained.

Federal, state and provincial regulations require financial assurance to cover the cost of final closure and post closure obligations at certain operating and non-operating disposal facilities. Acceptable forms of financial assurance include third-party standby letters of credit, surety bonds and insurance. Alternatively, we may be required to collect fees from waste generators to fund dedicated, state-controlled escrow or trust accounts during the operating life of the facility. Through December 31, 2021, we have met our financial assurance requirements through insurance, surety bonds, standby letters of credit and self-funded restricted trusts. As of December 31, 2021, we have provided collateral of $721,000 in funded trust agreements, $13.8 million in surety bonds, issued $2.8 million in letters of credit for financial assurance and have insurance policies of approximately $120.5 million for closure and post closure obligations (dedicated state-controlled closure and post closure funds provide financial assurance for our Washington and Nevada facilities). We use commercial surety bonds for our Canadian operations and for our Texas Energy Waste landfills. Our lease agreement with the Province of Québec requires that the surety bond be maintained for 25 years after the lease expires. As of December 31, 2021, we had $873,000 in commercial surety bonds dedicated for closure obligations at our Blainville, Québec, Canada facility.

Primary casualty insurance programs generally do not cover accidental environmental contamination losses. Our domestic and Canadian pollution liability programs provide coverage for these types of losses in the aggregate amount of $50.0 million and 25.0 million Canadian dollars per year, respectively, each subject to a $250,000 retention per occurrence. We also carry domestic and Canadian contractors professional environmental liability insurance in the aggregate amount of $25.0 million and 5.0 million Canadian dollars per year, respectively. The domestic program is subject to a $250,000 retention per occurrence and the Canadian program is subject to a 25,000 Canadian dollars deductible per incident. We also have a combination of standalone RCRA site specific policies with total aggregate limit of $68.0 million subject to a $250,000 retention.

For nuclear liability coverage, we maintain Facility Form and Workers’ Form nuclear liability insurance provided under the federal Price Anderson Act. This insurance covers the operations of our facilities, suppliers and transporters.

Duplicative NRC insurance policies and/or programs were absorbed or combined throughout 2020, except for a separate and standalone property insurance program insuring the legacy NRC properties. This separate property policy provides blanket coverage limits of approximately $53.0 million for real and personal property, business interruption and equipment, up to $5.0 million annual aggregate for earthquake, flood, windstorm or hail and deductibles from $10,000 to $500,000 depending on peril and location.

Marine exposures are addressed through a robust marine insurance package including hull and machinery, protection and indemnity, vessel pollution and other liability and excess insurance coverages with total loss limits of $150.0 million.

International operations exposures are addressed under locally placed insurance policies compulsory in the specific countries of operation and benefit from excess and difference in condition coverages with total loss limits of $35.0 million.

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Significant Customers

No customer accounted for more than 10% of total revenue for the years ended December 31, 2021, 2020, or 2019.

Seasonal Effects

Seasonal fluctuations due to weather and budgetary cycles can influence the timing of customer spending for our services. Typically, in the first quarter of each calendar year there is less demand for our services due to weather-related reduced construction activities. While large, multi-year cleanup projects may continue in winter months, the pace of waste shipments may be slower, or stop temporarily, due to weather. Market conditions and federal funding decisions generally have a greater influence on the business than seasonality.

Human Capital Resources

On December 31, 2021, we had approximately 3,600 employees, of which approximately 300 in the United States and 200 outside of the United States were represented by various labor unions.

Our employees are our most valued asset at US Ecology. We believe that inclusion, equity, and diversity is essential to providing the best service to our customers. Through our Diversity and Inclusion Program, our team is focused on identifying our greatest opportunities to attract and develop diverse and high-performing talent. US Ecology pays our employees what we believe are market competitive wages, which include company-wide incentive programs and generous benefits to enable us to retain and develop employees into the future leaders of our industry.

We care about our employees’ experience and continuously measure and improve employment practices. Through annual surveys, town-hall meetings, and an open-door policy, employees influence and affect change in our policies, programs, and practices. Our annual engagement survey measures our progress while collecting anonymous feedback to provide perspective on what matters most to our people. This leads to better decisions about resource deployment, benefit programs, leader effectiveness, and the overall employment experience. These continuous improvements attempt to ensure we provide best-in-class services to our customers while enabling our business units to achieve their goals.

During 2021, the COVID-19 pandemic continued to impact our operations. To protect our employees, subcontractors and customers, we maintained our safety protocols and COVID-19 prevention procedures. These protocols include complying with social distancing and other health and safety standards as required by federal, state and local government agencies, taking into consideration guidelines of the Centers for Disease Control and Prevention and other public health authorities. In addition, we continued our 80 hours of incremental COVID-19 paid time off in 2021, which allowed each team member to take time off to take care of themselves or their family when COVID-19 impacted their health, daycare or schooling. Finally, we formalized long-term remote and hybrid work programs.

Executive Officers of Registrant

The following table sets forth the names, ages and titles, as well as a brief account of the business experience of each person who was an executive officer of US Ecology as of December 31, 2021:

Name	Age	Title
Jeffrey R. Feeler	52	President and Chief Executive Officer
Simon G. Bell	51	Executive Vice President and Chief Operating Officer
Eric L. Gerratt	51	Executive Vice President, Chief Financial Officer and Treasurer
Steven D. Welling	63	Executive Vice President of Sales and Marketing
Andrew P. Marshall	55	Executive Vice President of Regulatory Compliance & Safety

Jeffrey R. Feeler was appointed President and Chief Executive Officer in May 2013. Mr. Feeler was previously the Company’s senior executive as President and Chief Operating Officer from October 2012 to May 2013 and as the Company’s Vice President and Chief Financial Officer from May 2007 to October 2012. He joined US Ecology in 2006 as Vice President, Controller, Chief Accounting Officer, Treasurer and Secretary. He previously held financial and

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accounting management positions with MWI Veterinary Supply, Inc., Albertson’s, Inc. and Hewlett-Packard Company. From 1993 to 2002, he held various accounting and auditing positions for PricewaterhouseCoopers LLP. Mr. Feeler is a Certified Public Accountant and holds a BBA of Accounting and a BBA of Finance from Boise State University.

Simon G. Bell was appointed Executive Vice President and Chief Operating Officer in November 2016. Mr. Bell previously served as the Company’s Executive Vice President of Operations, Environmental Services from June 2014 to November 2016. From May 2013 to June 2014, he was Executive Vice President of Operations and Technology Development. From August 2007 to May 2013, he was Vice President of Operations. From 2005 to August 2007, he was Vice President of Hazardous Waste Operations. From 2002 to 2005, he was our Idaho facility General Manager and Environmental Manager. His 20 years of industry experience includes service as general manager of a competitor disposal facility and mining industry experience in Idaho, Nevada and South Dakota. He holds a BS in Geology from Colorado State University.

Eric L. Gerratt was appointed Executive Vice President, Chief Financial Officer and Treasurer in May 2013. Mr. Gerratt previously served as the Company’s Vice President, Chief Financial Officer, Treasurer and Chief Accounting Officer from October 2012 to May 2013. He joined US Ecology in August 2007 as Vice President and Controller. He previously held various financial and accounting management positions at SUPERVALU, Inc. and Albertson’s, Inc. From 1997 to 2003, he held various accounting and auditing positions for PricewaterhouseCoopers LLP. Mr. Gerratt is a Certified Public Accountant and holds a BS in Accounting from the University of Idaho.

Steven D. Welling was appointed Executive Vice President of Sales and Marketing in May 2013. Mr. Welling previously served as the Company’s Senior Vice President, Sales and Marketing from January 2010 to May 2013. He joined US Ecology in 2001 through the Envirosafe Services of Idaho acquisition. He previously served as National Accounts Manager for Envirosource Technologies and Western Sales Manager for Envirosafe Services of Idaho and before that managed new market development and sales for a national bulk chemical transportation company. Mr. Welling holds a BS from California State University-Stanislaus.

Andrew P. Marshall was appointed Executive Vice President of Regulatory Compliance and Safety in May 2017. Mr. Marshall previously served as the Company’s Senior Vice President, Regulatory Compliance and Safety from December 2014 to May 2017. He joined US Ecology in 2010 as Director of Environmental Compliance. He is a Professional Engineer with over 30 years of experience assisting companies comply with environmental regulations, including past positions with Kleinfelder, a national environmental consulting firm, and Boise Cascade Corporation. Mr. Marshall holds a BS in Civil Engineering from Seattle University, an MS in Environmental Engineering from Oregon State University, and an MBA from Northwest Nazarene University.

Recent Developments

On February 8, 2022, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Republic and Bronco Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Republic (“Merger Sub”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), with the Company continuing as the surviving corporation and as a wholly-owned subsidiary of Republic.

At the effective time of the Merger, each share of our common stock issued and outstanding immediately prior to the effective time (other than shares of our common stock owned by Republic or the Company (as treasury stock or otherwise) or any of their respective direct or indirect wholly-owned subsidiaries as of immediately prior to the effective time or for which appraisal rights have been demanded properly in accordance with Section 262 of the General Corporation Law of the State of Delaware), will be converted into the right to receive $48.00 per share in cash, without interest.

The consummation of the Merger is subject to certain conditions, including (i) the affirmative vote of the holders of a majority of the outstanding shares of our common stock, (ii) (a) the expiration or termination of any waiting period (or any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder, (b) receipt of other required regulatory approvals, and (iii) the absence of any law or order restraining, enjoining or otherwise prohibiting the Merger. Each of Republic’s, Merger Sub’s, and our obligation to

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consummate the Merger is also subject to additional customary conditions, including (x) subject to specific standards, the accuracy of the representations and warranties of the other party, and (y) performance in all material respects by the other party of its obligations under the Merger Agreement.

The Merger Agreement also includes customary termination provisions for both the Company and Republic and provides that, in connection with the termination of the Merger Agreement, under specified circumstances, we will be required to pay Republic a termination fee of $46.3 million, including if (i) Republic terminates the Merger Agreement because the Company’s Board of Directors changes its recommendation regarding the Merger Agreement, (ii) the Company terminates the Merger Agreement prior to the receipt of the Company stockholder approval to enter into an acquisition agreement with a third-party with respect to a superior proposal or (iii) Republic or the Company terminates the Merger Agreement in certain circumstances and, in any such case, prior to such termination, a takeover proposal by a third-party shall have been publicly disclosed and not publicly withdrawn and within 12 months following the date of termination, the Company shall have entered into an alternative transaction agreement (whether or not relating to a takeover proposal made, communication or publicly disclosed prior to the termination of the Merger Agreement).

The Merger Agreement also provides that if the Merger Agreement is terminated because (i) of the issuance of a nonappealable court order or legal restraint prohibiting the transaction for antitrust reasons or (ii) the transactions have not been consummated by August 8, 2023, and at such time, antitrust approval for the transaction has not been obtained but the other conditions to Closing have been satisfied, then Republic will be required to reimburse the Company for 50% of its reasonable and documented out-of-pocket expenses incurred in connection with the Merger up to $5.0 million (i.e., Republic’s reimbursement shall not exceed $2.5 million).

The foregoing description of the Merger Agreement is a summary only and is qualified in its entirety by reference to the complete text of the Merger Agreement filed herewith as Exhibit 2.1

ITEM 1A. RISK FACTORS

Summary of Risk Factors

Below is a summary of the principal factors that could adversely affect our business, operations and financial results. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this summary, and other risks that we face (including general risk factors), can be found below following this summary.

Risks Affecting All of Our Business

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The COVID-19 pandemic and resulting adverse economic conditions has had and may continue to have a negative impact on our business, financial condition and results of operations.

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The impact on our business of the proposed Merger and our ability to complete the proposed Merger in a timely manner.

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We may be unable to renew key contracts or perform under our contracts which could impact our profitability.

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Adverse economic conditions, as well as fluctuations in the commodity market related to the demand and production of energy-related commodities, may harm our business.

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Failure to comply with applicable U.S. or foreign laws, including environmental laws and regulations, could negatively impact our business and result in us incurring material liability.

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Existing and future regulations related to climate change could negatively impact our business and impose additional compliance requirements on us and our customers.

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Any accident at one of our facilities may result in significant litigation or the imposition of significant fines.

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We handle dangerous substances and failure to handle such substances properly or maintain an acceptable safety record may have an adverse impact on our business.

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Our participation in multi-employer pension plans may subject us to liabilities that could materially adversely affect our results of operations.

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We may experience risks from our international operations, including the risk that we may not be able to enforce contracts in non-U.S. countries, we may be subject to restrictive activities by U.S. or foreign governments which could limit our business activities and foreign exchange rates may fluctuate.

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Changes to U.S. tariff and import/export regulations may negatively affect the markets we serve and ultimately harm us.

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A change in, or revocation of, our classification as an OSRO could result in a loss of business.

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A cybersecurity incident could negatively impact our business and our relationships with customers.

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Loss of key employees, as well as a change or deterioration in our labor relations, could harm our business.

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We may be unable to enter into arrangements with independent contractors who provide important emergency response services to our customers on financially acceptable terms.

Additional Risks of Our Waste Solutions and Energy Waste Businesses

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Our energy waste business could be adversely affected by changes in laws regulating energy waste.

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Lower crude oil prices may adversely affect the level of development and production activity of energy companies, which could decrease the demand for our energy waste business.

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If we are unable to obtain the necessary levels of insurance and financial assurances required for our operations, our business would be adversely affected.

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We are subject to operating and litigation risks that may not be covered by insurance.

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A significant portion of our business depends upon non-recurring event cleanup projects over which we have no control.

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If we are unable to obtain regulatory approvals and contracts for construction of additional disposal space by the time our current disposal capacity is exhausted, our business would be adversely affected.

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If we are unable to renew our operating permits or lease agreements with regulatory bodies, our business would be adversely affected.

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We may not be able to obtain timely or cost-effective transportation services which could adversely affect our profitability, and an increase in transportation costs may reduce our earnings.

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The hazardous and radioactive waste industries in which we operate are subject to litigation risk, which could result in significant liability.

Additional Risks of Our Field Services Business

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A significant portion of our Field Services segment depends upon the demand for cleanup of spills and other remedial projects and regulatory developments over which we have no control.

Additional Risks of Completed and Potential Acquisitions

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Acquisitions that we undertake could be difficult to integrate or disrupt our business, which would ultimately disrupt our results of operations.

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In the event that we undertake future acquisitions, we may not be able to successfully execute our acquisition strategy, and the timing and number of acquisitions we pursue may cause volatility in our financial results.

Risks Relating to Our Capital Structure

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We may not be able or willing to pay future dividends.

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Future stock issuances may adversely affect common stock ownership interest and rights in comparison with those of other security holders.

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The price of our common stock has fluctuated in the past and this may make it difficult for stockholders to resell shares of common stock at times or may make it difficult for stockholders to sell shares of common stock at prices they find attractive.

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Anti-takeover provisions in our organizational documents and under Delaware law may impede or discourage a takeover, which could cause the market price of our common stock to decline.

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The sale of a substantial number of shares of our common stock into the public market by certain stockholders may result in significant downward pressure on the price of our common stock and could affect your ability to realize the current trading price of our common stock.

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Fluctuations in price of our common stock may make it difficult for stockholders to resell shares of common stock or may make it difficult for stockholders to sell shares of common stock at prices they find attractive.

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There is no guarantee that our warrants will ever be in the money and they may expire worthless.

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Our indebtedness may limit the amount of cash flow available to invest in the ongoing needs of our business, and our credit agreement restricts our ability to engage in certain corporate and financial transactions.

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Changes in the method of determining LIBOR, or the replacement of LIBOR with an alternative reference rate, may adversely affect interest expense related to our debt.

Risks Related to the Jones Act

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Our business would be adversely affected if we failed to comply with the Jones Act.

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Repeal, amendment, suspension or non-enforcement of the Jones Act would result in additional competition for a substantial portion of our services and could have a material adverse effect on our business.

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Our common stock is subject to restrictions on ownership by non-U.S. Citizens, which could require divestiture by non-U.S. Citizen stockholders and could have a negative impact on its value.

Risks Affecting All of Our Businesses

The COVID-19 pandemic and resulting adverse economic conditions has had and may continue to have a negative impact on our business, financial condition and results of operations.

The COVID-19 pandemic has created significant uncertainties. These uncertainties include, but are not limited to, the potential adverse effect of the pandemic on the economy, our customers, our suppliers and our employees. As a result of the COVID-19 pandemic, we have experienced cost and inflationary pressures in areas such as labor, transportation and supplies. We have also experienced delays and deferments of some of our waste solutions and field services business based on our customers’ own responses to the pandemic including, but not limited to, delaying services they deem noncritical and limiting on-site visitation. Despite our efforts to manage the effects of the COVID-19 pandemic, their ultimate impact is highly uncertain and subject to change, and also depends on factors beyond our knowledge or control, including the duration and severity of any future outbreaks as well as actions taken by governments and private parties to contain the spread and mitigate the public health effects of COVID-19 and its variants. Depending on the extent and duration of all of the above-described effects on our business and operations and the business and operations of our suppliers, our costs could continue to increase, including our costs to address the health and safety of personnel, and our ability to obtain certain supplies or services could be curtailed. The impact of the COVID-19 pandemic may also aggravate other risks described herein, which could materially adversely affect our business, financial condition, results of operations (including revenues and profitability). In addition, the COVID-19 pandemic may also affect our operating or financial results in a manner that is not presently known to us or that we do not consider to present significant risks to operations.

The pendency of the proposed Merger may cause disruption in our business.

On February 8, 2022, we entered into the Merger Agreement with Republic and Merger Sub, pursuant to which and subject to the terms and conditions therein, Merger Sub will merge with and into the Company, with the Company continuing as the surviving entity.

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The Merger Agreement restricts us from taking specified actions without Republic’s consent until the Merger is completed or the Merger Agreement is terminated, including (subject to certain exceptions) amending our governing documents, adjusting, splitting, combining, subdividing or reclassifying of our common stock, issuing shares of our common stock, increasing executive compensation or adopting new employee benefit plans, incurring certain capital expenditures and engaging in mergers and acquisitions. These restrictions and others more fully described in the Merger Agreement may affect our ability to execute our business strategies and attain our financial and other goals and may impact our business, results of operations and financial condition.

The pendency of the proposed Merger could also cause disruptions to our business or business relationships, which could have an adverse impact on our results of operations. Parties with which we have business relationships may be uncertain as to the future of such relationships and may delay or defer certain business decisions, seek alternative relationships with third parties or seek to alter their present business relationships with us. Parties with whom we otherwise may have sought to establish business relationships may seek alternative relationships with third parties.

The pursuit of the Merger and the preparation for our integration with Republic’s business is expected to place a significant burden on our management and internal resources. The diversion of management’s attention away from day-to-day business concerns and any difficulties encountered in the transition and integration process could adversely affect our business, results of operations and financial condition.

We have incurred and will continue to incur significant costs, expenses and fees for professional services and other transaction costs in connection with the Merger. We may also incur unanticipated costs in connection with our integration with Republic’s business. The substantial majority of these costs will be non-recurring expenses relating to the Merger, and many of these costs are payable regardless of whether or not the Merger is consummated. We also could be subject to litigation related to the proposed Merger, which could prevent or delay the consummation of the Merger and result in significant costs and expenses.

Failure to complete the Merger in a timely manner or at all could negatively impact the market price of our common stock, as well as our future business and our results of operations and financial condition.

The Merger cannot be completed until conditions to closing are satisfied or (if permissible under applicable law) waived. The Merger is subject to numerous closing conditions, including among other things, (i) the affirmative vote of the holders of a majority of the outstanding shares of our common stock, (ii) (a) the expiration or termination of any waiting period (or any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder, (b) receipt of other required regulatory approvals, and (iii) the absence of any law or order restraining, enjoining or otherwise prohibiting the Merger. Each of Republic’s, Merger Sub’s, and our obligation to consummate the Merger is also subject to additional customary conditions, including (x) subject to specific standards, the accuracy of the representations and warranties of the other party, and (y) performance in all material respects by the other party of its obligations under the Merger Agreement.

The satisfaction of the required conditions could delay the completion of the Merger for a significant period of time or prevent it from occurring. Further, there can be no assurance that the conditions to the closing of the Merger will be satisfied or waived or that the Merger will be completed.

If the Merger is not completed in a timely manner or at all, our ongoing business may be adversely affected as follows:

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We may experience negative reactions from the financial markets, and our stock price could decline to the extent that the current market price reflects an assumption that the Merger will be completed, we may experience negative reactions from customers, suppliers, employees or other third parties;

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we may be subject to litigation relating to the Merger, which could result in significant costs and expenses;

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management’s focus may have been diverted from day-to-day business operations and pursuing other opportunities that could have been beneficial to the Company; and

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our costs of pursuing the Merger may be higher than anticipated.

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In addition to the above risks, we may be required, under certain circumstances, to pay Republic a termination fee equal to $46.3 million. If the proposed Merger is not consummated, there can be no assurance that these risks will not materialize and will not materially adversely affect our stock price, business, results of operations and financial condition.

In order to complete the Merger, the Company and Republic must obtain certain governmental approvals, and if such approvals are not granted or are granted with conditions, completion of the Merger may be jeopardized or the anticipated benefits of the Merger could be reduced.

Although the Company and Republic have agreed to use reasonable best efforts, subject to certain limitations, to make certain governmental filings and obtain the required governmental approvals, or expiration or earlier termination of relevant waiting periods, as the case may be, there can be no assurance that the relevant waiting periods will expire or be terminated or that the relevant approvals will be obtained. As a condition to approving the Merger, these governmental authorities may impose conditions, terms, obligations or restrictions or require divestitures or place restrictions on the conduct of our business after completion of the Merger. There can be no assurance that regulators will not impose conditions, terms, obligations or restrictions and that such conditions, terms, obligations or restrictions will not have the effect of delaying or preventing completion of the Merger or imposing additional material costs on or materially limiting the revenues of the combined company following the Merger, or otherwise adversely affecting, including to a material extent, our business, results of operations and financial condition after completion of the Merger. In addition, the Merger Agreement provides that Republic is not required to propose, negotiate, commit to or effect (i) any sale, divestiture or disposal of all or any part of any Subtitle C (Hazardous Waste) landfill or any landfill regulated by the Quebec Ministry of Environment or the Providence of Quebec of Republic or the Company or (ii) actions that would reasonably be expected to, individually or in the aggregate, reduce the aggregate annual revenue of Republic and its subsidiaries after giving effect to closing by more than $60 million in total sales (based on total sales for the year ended December 31, 2021) (a “Burdensome Condition”). If Republic is required to divest assets or businesses, there can be no assurance that Republic will be able to negotiate such divestitures expeditiously or on favorable terms or that the governmental authorities will approve the terms of such divestitures. In addition, if a governmental authority conditions its approval of the Merger on a Burdensome Condition, there is a risk the Merger will not close. We can provide no assurance that these conditions, terms, obligations or restrictions will not result in the abandonment of the Merger.

The completion of, loss of or failure to renew one or more significant contracts could adversely affect our profitability.

We provide disposal and transportation services to customers on discrete Event Business projects (non-recurring project-based work) which vary widely in size, duration and unit pricing. Some of these multi-year projects can account for a significant portion of our revenue and profit. The replacement of Event Business revenue and earnings depends on multiple factors, many of which are outside of our control including, but not limited to, general and industry-specific economic conditions, capital in the commercial credit markets, general level of government funding on environmental matters, real estate development and other industrial investment opportunities. Our inability to replace the revenue from Event Business projects with new business could result in a material adverse effect on our financial condition and results of operations.

Failure to perform under our contracts may adversely harm our business.

Certain contracts require us to meet specified performance criteria. Our ability to meet these criteria requires that we expend significant resources. If we or our subcontractors are unable to perform as required, we could be subject to substantial monetary penalties and/or loss of the affected contracts which may adversely affect our business.

Fluctuations in the commodity market related to the demand and production of oil, gas and other energy-related commodities may affect our business, financial position, results of operations and cash flows.

Declines in the production level of oil, gas and other energy-related commodities could have significant adverse effects on us. Commodity demand fluctuates for several reasons, including, but not limited to, changes in market and economic conditions, the impact of weather, levels of domestic and international production, domestic and foreign governmental regulation, national protectionism policies and trade disputes. Volatility of commodity demand, which may lead to a reduction in production or supply of the commodity, may negatively impact the demand for our services. A decline in the

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demand for these services may have a material adverse effect on our business, financial position, results of operations and cash flows.

We could incur liability, including under environmental laws, rules and regulations, in connection with providing spill response services.

We may incur increased legal fees and costs in connection with providing spill response services. Although the services provided by us are generally exempt in the United States from liability under the CWA, this exemption might not apply to our own actions and omissions in providing spill response services if we are found to have been grossly negligent or to have engaged in willful misconduct, or if we have failed to provide these services consistent with applicable regulations and directives under the CWA. In addition, the exemption under the federal CWA would not protect a company against liability for personal injury or wrongful death, or against prosecution under other federal or state laws. Although most of the states within the United States in which we provide services have adopted similar exemptions, several states have not. If a court or other applicable authority were to determine that we do not benefit from federal or state exemptions from liability in providing emergency response services, we could be liable, together with the local contractor and the responsible party, for any resulting damages, including damages caused by others. In the international market, we do not benefit from the spill response liability protection provided by the CWA and therefore are subject to the liability terms and conditions negotiated with our international clients.

If Congress repeals the exemption to liability for responders that is discussed above, or otherwise scales back the protections afforded to contractors thereunder, there may be increased exposure for remediation work and the cost for securing insurance for such work may become prohibitively expensive. In addition, more generally Congress could increase or remove the limits of liability currently in place under OPA 90 for facilities and vessels. Without affordable insurance and appropriate legislative regulation limiting liability, drilling, exploration, remediation and further investment in oil and gas exploration in the U.S. Gulf of Mexico may be discouraged and thus reduce the demand for our services.

We could incur liability under environmental laws, rules and regulations in connection with providing waste disposal services.

Environmental laws and regulations impose liability and responsibility on present and former owners, operators or users of facilities and sites for contamination at such facilities and sites without regard to fault or knowledge of contamination. In the 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 require investigation and remediation and may potentially result in claims of personal injury, property damage and damages to natural resources. In addition, we occasionally evaluate various alternatives with respect to our facilities, including possible dispositions or closures. Investigations undertaken in connection with these activities may lead to discoveries of contamination that must be remediated, and closures of facilities might trigger compliance requirements that are not applicable to operating facilities. We are currently conducting remedial activities at certain of our facilities and paying a portion of the remediation costs at certain sites owned by third parties. Based on available information, we believe these remedial activities will not result in a material adverse effect on our business, financial position, result of operations and cash flows. However, these activities or the discovery of previously unknown conditions could result in material costs.

In addition, we are required to obtain governmental permits to provide our services, operate our facilities, including all of our landfills, and expand our operations. Although we are committed to compliance and safety, we may not, either now or in the future, be in full compliance at all times with such laws, rules and regulatory requirements or be able to renew or procure governmental permits. As a result, we could be required to incur significant costs to maintain or improve our compliance with such requirements. Moreover, failure to comply with applicable laws, rules and regulations may also result in administrative and civil penalties, criminal sanctions or the suspension or termination of our operations.

From time to time, we have paid fines or penalties in governmental environmental enforcement proceedings, usually involving our waste treatment, storage and disposal facilities. Although none of these fines or penalties has had a material adverse effect upon us, we might in the future be required to make substantial expenditures as a result of governmental proceedings which would have a negative impact on our earnings. Furthermore, regulators have the power to suspend or revoke permits or licenses needed for operation of our plants, equipment and vehicles based on, among other factors, our

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compliance record. Suspension or revocation of permits or licenses would impact our operations and could have a material impact on our financial results.

Existing or future laws and regulations related to greenhouse gases and climate change could have an impact on our business and may result in additional compliance obligations on us and our customers.

Changes in environmental requirements related to greenhouse gases and climate change may impact demand for our services. For example, oil and natural gas exploration and production may decline as a result of environmental requirements, including land use policies responsive to environmental concerns. However, increased environmental requirements could also increase demand for our services. Local, state and federal agencies have been evaluating climate-related legislation and other regulatory initiatives that would restrict emissions of greenhouse gases in areas in which we conduct business. To a certain extent our business depends on the level of activity in the oil and natural gas industry, existing or future laws and regulations related to greenhouse gases and climate change, including incentives to conserve energy or use alternative energy sources, could have an impact on our business if such laws or regulations reduce demand for oil and natural gas.

An accident at any one of our facilities may result in significant litigation or the imposition of fines as a result of regulatory investigations, as well as the loss of business, profits or customers, which may not be fully covered by our insurance policies.

On November 17, 2018, an explosion occurred at our Grand View, Idaho facility. The incident severely damaged the facility’s primary waste-treatment building as well as surrounding waste handling, waste storage, maintenance and administrative support structures, resulting in the closure of the entire facility that remained in effect through January 2019. We completed the construction of a new treatment building and supporting infrastructure with resumption of full capabilities in 2021. On January 10, 2020, we entered into a settlement agreement with OSHA settling a complaint made by OSHA relating to the incident for $50,000. On January 28, 2020, the Occupational Safety and Health Review Commission issued an order terminating the proceeding relating to such OSHA complaint. We have not otherwise been named as a defendant in any third-party action relating to the incident. We maintain workers’ compensation insurance, business interruption insurance and liability insurance for personal injury, property and casualty damage. We believe that any potential third-party claims associated with the explosion, in excess of our deductibles, are expected to be resolved primarily through our insurance policies. Although we carry business interruption insurance, a disruption of our business caused by a casualty event, including the full and partial closure of our Grand View, Idaho facility, may result in the loss of business, profits or customers during the time of such closure. Accordingly, our insurance policies may not fully compensate us for these losses. In November 2020, we commenced a lawsuit against the generator and broker of the waste, the treatment of which we believe contributed to the Grand View explosion, seeking damages in connection with the losses suffered as a result of the incident.

Our business requires the handling of dangerous substances. Improper handling of such substances could result in an adverse impact on our financial condition and results of operations.

We are subject to unexpected occurrences related, or unrelated, to the routine handling of dangerous substances. A fire or other incident could impair the ability of one or more facilities to continue to perform normal operations, which could have a material adverse impact on our financial condition and results of operations. Improper handling of these substances could also violate laws and regulations resulting in fines and/or suspension of operations.

Failure to maintain an acceptable safety record may have an adverse impact on our ability to retain and acquire customers.

Our current and prospective customers consider safety and reliability a primary concern in selecting a service provider. We must maintain a record of safety and reliability that is acceptable to our customers. Should this not be achieved, our ability to retain current customers and attract new customers may be adversely affected.

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We may experience risks from our international operations.

Our ability to compete in the international market may be adversely affected by foreign government regulations that favor or require the awarding of contracts to local competitors, or that require non-U.S. Citizens to employ citizens of, or purchase supplies from, a particular jurisdiction. Further, our foreign subsidiaries may face governmentally imposed restrictions on their ability to transfer funds to their parent company. Activity outside the United States involves additional risks, including the possibility of:

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United States embargoes or restrictive actions by U.S. and foreign governments that could limit our ability to provide services in foreign countries;

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a change in, or the imposition of, withholding or other taxes on foreign income, tariffs or restrictions on foreign trade and investment;

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limitations on the repatriation of earnings or currency exchange controls and import/export quotas;

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local cabotage and local ownership laws and requirements;

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nationalization, expropriation, asset seizure, blockades and blacklisting;

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limitations in the availability, amount or terms of insurance coverage;

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loss of contract rights and inability to enforce contracts;

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political instability, war and civil disturbances or other risks that may limit or disrupt markets, such as terrorist attacks, piracy and kidnapping;

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the impact of public health epidemics like the coronavirus which originated in the Wuhan region of China;

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fluctuations in currency exchange rates, hard currency shortages and controls on currency exchange that affect demand for our services and profitability;

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potential noncompliance with a wide variety of laws and regulations, such as the FCPA, and similar non-U.S. laws and regulations, including the U.K. Bribery Act 2010;

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labor strikes and volatility in labor costs;

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changes in general economic and political conditions; and

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difficulty in staffing and managing widespread operations.

In addition, to the extent that we use a non-U.S. currency as a functional currency in a particular territory, we are exposed to fluctuations in the value of such currency. In addition, risks related to our activities outside of the United States include the repatriation of cash to the United States and the imposition of additional taxes on our foreign income.

Moreover, our business is also impacted by the negotiation and implementation of free trade agreements between the United States and other countries. Such agreements can reduce barriers to international trade and thus the cost of conducting business overseas. For instance, the United States reached a new trilateral trade agreement with the governments of Canada and Mexico – the United States-Mexico-Canada Agreement (“USMCA”) – to replace the North American Free Trade Agreement (“NAFTA”). The USMCA came into effect on July 1, 2020. If any of the countries withdraws from USMCA, our cost of doing business within the three countries could increase.

Any of the foregoing or other factors associated with doing business abroad could adversely affect our business, financial condition and results of operations.

Our financial results could be adversely affected by foreign exchange fluctuations.

We operate in the United States, Canada, the United Kingdom, Mexico, Europe, the Middle East, and Africa but report revenue, costs and earnings in U.S. dollars. In fiscal 2021, we recorded approximately 13% of our revenues outside of the United States. Exchange rates between the U.S. dollar and local currencies are likely to fluctuate from period to period. Because our financial results are reported in U.S. dollars, we are subject to the risk of non-cash translation losses for reporting purposes. If we continue to expand our international operations, we will conduct more transactions in currencies other than the U.S. dollar. To the extent that foreign revenue and expense transactions are not denominated in the local currency, we are further subject to the risk of transaction losses. We have not entered into derivative instruments to offset the impact of foreign exchange fluctuations. Fluctuations in foreign currency exchange rates could have a material adverse effect on our financial condition and results of operations.

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Changes to U.S. tariff and import/export regulations may have a negative effect on the markets and industries we serve and, in turn, harm us.

Recently, there have been significant changes to U.S. trade policies, treaties and tariffs, which have resulted in uncertain economic and political conditions that have made it difficult for us and our customers to accurately forecast and plan future business activities. For example, the U.S. has imposed tariffs on certain products imported into the U.S. from China, the European Union and other countries, and could impose additional tariffs or trade restrictions. Such changes to U.S. policies related to global trade and tariffs have resulted in uncertainty surrounding the future of the global economy and have resulted in certain retaliatory trade measures and tariffs implemented by other countries. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States. Any of these factors could depress economic activity and have a material adverse effect on the business and financial condition of our customers, which in turn could negatively impact us.

A change in, or revocation of, our classification as an OSRO could result in a loss of business.

NRC, a wholly owned subsidiary of the Company, is classified by the USCG as an OSRO. The USCG classifies OSROs based on their overall ability to respond to various types and sizes of oil spills. USCG-classified OSROs have a competitive advantage over non-classified service providers because customers of a classified OSRO may cite classified OSROs in their response plans in lieu of listing their oil spill response resources in filings with the USCG. A loss of our classification or changes in the requirements for classification could eliminate or diminish our ability to provide customers with this exemption. If this happens, our Field Services segment could lose customers.

A change or deterioration in labor relations could disrupt our business or increase costs, which could have a material adverse effect on our business, financial condition and results of operations.

The Company is a party to collective bargaining agreements covering approximately 500, or approximately 13%, of our employees. While we believe the Company will maintain good working relations with its employees on acceptable terms, there can be no assurance that we will be able to negotiate the terms of future agreements in a manner acceptable to the Company. Potential work disruptions from labor disputes may disrupt our businesses and adversely affect our financial condition and results of operations.

We rely on third-party contractors to provide important emergency response services to our customers.

We rely on independent contractors to provide services and support to our customers. While the use of independent contractors expands the reach and customer base for our services, the maintenance and administration of these relationships is costly and time consuming. If we do not enter into arrangements with these independent contractors on financially acceptable terms, these relationships may have a material adverse effect on our business, financial position, results of operations and cash flows.

Additional Risks of Our Waste Solutions and Energy Waste Business

Our energy waste business could be adversely affected by changes in laws regulating energy waste.

We believe that the demand for our energy waste services is directly related to the regulation of energy waste. In particular, RCRA, which governs the disposal of solid and hazardous waste, currently exempts certain energy wastes from classification as hazardous wastes. In recent years, proposals have been made to rescind this exemption from RCRA. If the exemption covering energy wastes is repealed or modified, or if the regulations interpreting the rules regarding the treatment or disposal of this type of waste were changed, our operations could face significantly more stringent regulations, permitting requirements, and other restrictions, which could have a material adverse effect on our business.

In addition, if new federal, state, provincial or local laws or regulations that significantly restrict hydraulic fracturing are adopted, such legal requirements could result in delays, eliminate certain drilling and injection activities and make it more difficult or costly for our customers to perform fracturing. Any such regulations limiting or prohibiting hydraulic fracturing could reduce our customers’ oil and natural gas exploration and production activities and, therefore, adversely affect our business. Such laws or regulations could also materially increase our costs of compliance and doing business by more

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strictly regulating how hydraulic fracturing wastes are handled or disposed. Conversely, any loosening of existing federal, state, provincial or local laws or regulations regarding how such wastes are handled or disposed could adversely impact demand for our services.

Lower crude oil prices may adversely affect the level of exploration, development and production activity of energy companies and the demand for our energy waste services.

Lower crude oil prices and the volatility of such prices may affect the level of investment and the amount of linear feet drilled in the basins where we operate, as it may impact the ability of energy companies to access capital on economically advantageous terms or at all. In addition, energy companies may elect to decrease investment in basins where the returns on investment are inadequate or uncertain due to lower crude oil prices or volatility in crude oil prices. Such reductions in capital spending would negatively impact energy waste generation and therefore the demand for our services. Further, we cannot provide assurances that higher crude oil prices will result in increased capital spending and linear feet drilled by our customers in the basins where we operate.

If we are unable to obtain at a reasonable cost or under reasonable terms and conditions the necessary levels of insurance and financial assurances required for operations, our business and results of operations would be adversely affected.

We are required by law, license, permit and prudence to maintain various insurance instruments and financial assurances. We carry a broad range of insurance coverage, including general liability, automobile liability, real and personal property, workers compensation, directors and officers liability, environmental impairment liability, business interruption and other coverage customary for a company of our size in our business. We purchase primary property, casualty and excess liability policies through traditional third-party insurance carriers to mitigate risk of loss. We are self-insured for employee healthcare coverage. Stop loss insurance is carried covering liability on claims in excess of $300,000 per individual. Accrued costs related to the self-insured healthcare coverage were $3.4 million and $3.3 million at December 31, 2021 and 2020, respectively. If our insurers were unable to meet their obligations, or our own obligations for claims were more than expected, there could be a material adverse effect to our financial condition and results of operation.

Through December 31, 2021, we have met our financial assurance requirements through a combination of insurance policies, commercial surety bonds and trust funds. We continue to use self-funded trust accounts for our post closure obligations at our U.S. non-operating sites and utilize closure and post-closure insurance to address any balance deficits in these accounts. We use commercial surety bonds for our Canadian operations and for our Texas energy waste landfills. We currently have in place all financial assurance instruments necessary for our operations. While we expect to continue renewing these policies and surety bonds, if we were unable to obtain adequate closure, post closure or environmental insurance, bonds or other instruments in the future, any partially or completely uninsured claim against us, if successful and of sufficient magnitude, could have a material adverse effect on our results of operations and cash flows. Additionally, continued access to casualty and pollution legal liability insurance with sufficient limits, at acceptable terms, is important to obtaining new business. Failure to maintain adequate financial assurance could also result in regulatory action including early closure of facilities. As of December 31, 2021, we had provided collateral of $721,000 in funded trust agreements, $13.8 million in surety bonds, issued $2.8 million in letters of credit for financial assurance and have insurance policies of approximately $120.5 million for closure and post closure obligations at covered U.S. operating facilities. As of December 31, 2021, we have $873,000 in commercial surety bonds dedicated for closure obligations at our Blainville, Québec, Canada facility.

While we believe we will be able to renew and maintain all our insurance and requisite financial assurance policies at a reasonable cost, premium and collateral requirements may materially increase. Such increases could have a material adverse effect on our financial condition and results of operations.

We are subject to operating and litigation risks that may not be covered by insurance.

Our business operations are subject to all of the operating hazards and risks normally incidental to the handling, storage and disposal of combustible and other hazardous products. These risks could result in substantial losses due to personal injury and/or loss of life, and severe damage and destruction of property and equipment arising from explosions or other

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catastrophic events. As a result, we may become a defendant in legal proceedings and litigation arising in the ordinary course of business. Additionally, environmental contamination could result in future legal proceedings. There can be no assurance that our insurance coverage will be adequate to protect us from all material expenses related to pending and future claims or that such levels of insurance would be available in the future at economical prices, as described above.

Although we carry business interruption insurance, a disruption of our business caused by a casualty event, including the full and partial closure of our Grand View, Idaho facility (as described herein), may result in the loss of business, profits or customers during the time of such closure. As such, our insurance policies may not fully compensate us for these losses.

A significant portion of our business depends upon non-recurring event cleanup projects over which we have no control.

A significant portion of our disposal revenue is attributable to discrete Event Business which varies widely in size, duration and unit pricing. For the year ended December 31, 2021, approximately 24% of our T&D revenue was derived from Event Business projects. The one-time nature of Event Business, diverse spectrum of waste types received and widely varying unit pricing necessarily creates variability in revenue and earnings. This variability may be influenced by general and industry-specific economic conditions, funding availability, changes in laws and regulations, government enforcement actions or court orders, public controversy, litigation, weather, commercial real estate, closed military bases and other project timing, government appropriation and funding cycles and other factors. This variability can cause significant quarter-to-quarter and year-to-year differences in revenue, gross profit, gross margin, operating income and net income. Also, while we pursue many large projects months or years in advance of work performance, both large and small cleanup project opportunities routinely arise with little or no prior notice. These market dynamics are inherent to the waste disposal business and are factored into our projections and externally communicated business outlook statements. Our projections combine historical experience with identified sales pipeline opportunities, new or expanded service line projections and prevailing market conditions. A reduction in the number and size of new cleanup projects won to replace completed work could have a material adverse effect on our financial condition and results of operations.

Construction of new disposal capacity at our operating disposal facilities beyond currently permitted capacity requires state and provincial regulatory agency approvals. Administrative processes for such approval reviews vary. There can be no assurance that we will be successful in obtaining future expansion approvals in a timely manner or at all. If we are not successful in receiving these approvals, our disposal capacity could eventually be exhausted, preventing us from accepting additional waste at an affected facility. This would have a material adverse effect on our business.

If we are unable to renew our operating permits or lease agreements with regulatory bodies, our business would be adversely affected.

Our facilities operate using permits and licenses issued by various regulatory bodies at various state, provincial and federal government levels. In addition, three of our facilities operate on land that is leased from government agencies. Failure to renew our permits and licenses necessary to operate our facilities or failure to renew or maintain compliance with our site lease agreements would have a material adverse effect on our business. There can be no assurance we will continue to be successful in obtaining timely permit applications approval, maintaining compliance with our lease agreements and obtaining timely lease renewals.

We may not be able to obtain timely or cost-effective transportation services which could adversely affect our profitability.

Revenue at each of our facilities is subject to potential risks from disruptions in rail or truck transportation services relied upon to deliver waste to our facilities. Increases in fuel or labor costs, shortages of qualified drivers and unforeseen events such as labor disputes, public health pandemics, severe weather, natural disasters and other acts of God, war or terror could prevent or delay shipments and reduce both volumes and revenue. Our rail transportation service agreements with our customers generally allow us to pass on fuel surcharges assessed by the railroads to such customers. This may decrease or

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eliminate our exposure to fuel cost increases. Transportation services may be limited by economic conditions, including increased demand for rail or trucking services, resulting in periods of slower service to the point that individual customer needs cannot be met. No assurance can be given that we can procure transportation services in a timely manner at competitive rates or pass through fuel cost increases in all cases. Such factors could also limit our ability to achieve revenue and earnings objectives.

The hazardous and radioactive waste industries in which we operate are subject to litigation risk.

The handling of radioactive, PCBs and hazardous material subjects us to potential liability claims by employees, contractors, property owners, neighbors and others. There can be no assurance that our existing liability insurance is adequate to cover claims asserted against us or that we will be able to maintain adequate insurance in the future. Adverse rulings in judicial or administrative proceedings could also have a material adverse effect on our financial condition and results of operations.

Additional Risks of Our Field Services Business

A significant portion of our Field Services segment depends upon the demand for cleanup of spills and other remedial projects and regulatory developments over which we have no control.

A significant portion of our Field Services segment consists of remediation, recycling, industrial cleaning and maintenance, transportation, total waste management, technical services, and emergency response services. Demand for these services can be affected by the commencement and completion of cleanup of major spills and other events, customers’ decisions to undertake remedial projects, seasonal fluctuations due to weather and budgetary cycles influencing the timing of customers’ spending for remedial activities, the timing of regulatory decisions relating to hazardous waste management projects, changes in regulations governing the management of hazardous waste, changes in the waste processing industry towards waste minimization and the propensity for delays in the demand for remedial services, and changes in governmental regulations relevant to our diverse operations. We do not control such factors and, as a result, our revenue and income can vary from quarter to quarter or year to year, and past financial performance may not be a reliable indicator of future performance.

Additional Risks of Completed and Potential Acquisitions

Acquisitions that we undertake could be difficult to integrate, disrupt our business, dilute stockholder value and adversely affect our results of operations.

Acquisitions involve multiple risks. Our inability to successfully integrate an acquired business could have a material adverse effect on our financial condition and results of operations. These risks include but are not limited to:

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failure of the acquired company to achieve anticipated revenues, earnings or cash flows;

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assumption of liabilities, including those related to environmental matters, that were not disclosed to us or that exceed our estimates;

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problems integrating the purchased operations with our own, which could result in substantial costs and delays or other operational, technical or financial problems;

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potential compliance issues relating to the protection of health and the environment, compliance with securities laws and regulations, adequacy of internal controls and other matters;

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diversion of management’s attention or other resources from our existing business;

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risks associated with entering markets or product/service areas in which we have limited prior experience;

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increases in working capital investment to fund the growth of acquired operations;

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unexpected capital expenditures to upgrade waste handling or other infrastructure or replace equipment to operate safely and efficiently;

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potential loss of key employees and customers of the acquired company; and

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future write-offs of intangible and other assets, including goodwill, if the acquired operations fail to generate sufficient cash flows.

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If we are not able to achieve these objectives, the anticipated benefits of an acquisition may not be realized fully, if at all, or may take longer to realize than expected. It is possible that the integration process could result in the loss of key employees, the disruption of our ongoing business, failure to implement the business plan for the combined businesses, unanticipated issues in integrating service offerings, logistics information, communications and other systems or other unanticipated issues, expenses and liabilities, any or all of which could adversely affect our ability to maintain relationships with customers and employees or to achieve the anticipated benefits of the acquisition.

In the event that we undertake future acquisitions, we may not be able to successfully execute our acquisition strategy.

We may experience delays in making acquisitions or be unable to make the acquisitions we desire for a number of reasons. Suitable acquisition candidates may not be available at purchase prices that are attractive to us or on terms that are acceptable to us. In pursuing acquisition opportunities, we typically compete with other companies, some of which have greater financial and other resources than we do. We may not have available funds or common stock with a sufficient market price to complete an acquisition. If we are unable to secure sufficient funding for potential acquisitions, we may not be able to complete acquisitions that we otherwise find advantageous.

The timing and number of acquisitions we pursue may cause volatility in our financial results.

We are unable to predict the size, timing and number of acquisitions we may complete, if any. In addition, we may incur expenses associated with sourcing, evaluating and negotiating acquisitions (including those that are not completed), and we also may pay fees and expenses associated with financing acquisitions to investment banks and others. Any of these amounts may be substantial, and together with the size, timing and number of acquisitions we pursue, may negatively impact and cause significant volatility in our financial results and the price of our common stock.

Failure to realize the anticipated benefits and operational performance from previously acquired operations could lead to an impairment of goodwill or other intangible assets.

As a result of acquisitions since 2010, including our acquisition of NRC in 2019, we have goodwill of $413.1 million, non-amortizing intangible assets of $82.9 million and amortizing intangible assets of $406.7 million at December 31, 2021. We are required to test goodwill and non-amortizing intangible assets at least annually to determine if impairment has occurred. We are also required to test goodwill and intangible assets if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit or intangible asset below its carrying amount. The testing of goodwill and other intangible assets for impairment requires us to make significant estimates about future performance and cash flows, as well as other assumptions. These estimates can be affected by numerous factors, including potential changes in economic, industry or market conditions, changes in laws or regulations, changes in business operations, changes in competition or changes in our stock price and market capitalization. Changes in these factors, or changes in actual performance compared with estimates of our future performance, may affect the fair value of goodwill or other intangible assets, which may result in an impairment charge.

Estimates of the future performance of our reporting units assume a certain level of revenue and earnings growth over the projection period. The projected revenue and earnings growth is based on various factors and assumptions that we consider to be reasonable, including, but not limited to, growth in the industries served by the Field Services reporting unit, successful implementation of our business and marketing strategies for this reporting unit and continuing favorable market conditions for the customers we serve. Should any of these assumptions turn out to be false and the projected growth not occur for these or other reasons, the reporting units otherwise fail to meet their current financial plans or there are changes to any other key assumptions used in the estimates, the financial performance of these reporting units could result in a future goodwill impairment.

We cannot accurately predict the amount and timing of any impairment of assets. Should the value of goodwill or other intangible assets become impaired as a result of a failure to realize the anticipated benefits and operational performance of acquired operations, our financial condition and results of operations could be adversely impacted.

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Risks Relating to our Capital Structure

We may not be able or willing to pay future dividends.

The Company suspended its quarterly dividend, commencing with the second quarter of 2020, to preserve free cash flow and enhance liquidity in response to the COVID-19 pandemic. Our ability to pay dividends is subject to our future financial condition and certain conditions such as continued compliance with covenants contained in the Credit Agreement. Our Board of Directors must also approve any dividends at their sole discretion. Pursuant to the Credit Agreement, we may only declare quarterly or annual dividends if on the date of declaration, no event of default has occurred and no other event or condition has occurred that would constitute an event of default due to the payment of the dividend. Unforeseen events or situations could cause non-compliance with these covenants, or cause the Board of Directors to discontinue or reduce the amount of any future dividend payment.

Future stock issuances could adversely affect common stock ownership interest and rights in comparison with those of other security holders.

Our Board of Directors has the authority to issue additional shares of common stock or preferred stock without stockholder approval. If additional funds are raised through the issuance of equity or securities convertible into common stock, or we use shares of our common stock to pay a portion of the purchase price in any future acquisition, the percentage of ownership of our existing stockholders would be reduced, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders. If we issue additional common stock or securities convertible into common stock, such issuance would reduce the proportionate ownership and voting power of each other stockholder. In addition, such stock issuances might result in a reduction of the book value of our common stock.

Anti-takeover provisions in our organizational documents and under Delaware law may impede or discourage a takeover, which could cause the market price of our common stock to decline.

We are a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the ability of a third-party to acquire control of us, even if a change in control would be beneficial to our existing stockholders, which, under certain circumstances, could reduce the market price of our common stock. In addition, protective provisions in our Amended and Restated Certificate of Incorporation (the “charter”) and Amended and Restated Bylaws or the implementation by our Board of Directors of a stockholder rights plan could prevent a takeover, which could harm our stockholders.

The trading price of our common stock may fluctuate widely as a result of a number of factors, many of which are outside our control. In addition, the stock market is subject to fluctuations in share prices and trading volumes that affect the market prices of the shares of many companies. These broad market fluctuations have adversely affected, and may in the future adversely affect, the market price of our common stock. Among the factors that could affect our stock price are:

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changes in financial estimates and buy/sell recommendations by securities analysts or our failure to meet analysts’ revenue or earnings estimates;

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actual or anticipated variations in our operating results;

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our earnings releases and financial performance;

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market conditions in our industry and the general state of the securities markets;

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fluctuations in the stock price and operating results of our competitors;

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actions by institutional stockholders;

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investor perception of us and the industry and markets in which we operate;

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general economic conditions in the United States and Canada;

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international disorder and instability in foreign financial markets, including but not limited to potential sovereign defaults; and

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other factors described in “Risk Factors.”

There is no guarantee that our warrants will ever be in the money and they may expire worthless.

The exercise price for our warrants is $58.67 per share of common stock, subject to certain restrictions set forth in the Warrant Agreement (as defined below). There is no guarantee that the warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless. In addition, our warrants were issued to holders of warrants of NRC prior to the NRC Merger in registered form under that certain Assignment, Assumption and Amendment to the Warrant Agreement, dated as of November 1, 2019, by and between US Ecology, Inc., American Stock Transfer & Trust Company, LLC, NRC and Continental Stock Transfer & Trust Company (the “Warrant Agreement”). The Warrant Agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then-outstanding warrants to make any change that adversely affects the interests of the registered holders.

Following the Merger, holders of warrants will have the right to exercise their warrants for cash. If a holder exercises such warrant within 30 days following the Company’s public disclosure of the consummation of the Merger, the exercise price of the warrant will be reduced by an amount equal to the exercise price then in effect minus the difference of $48 per share (or the price per share being paid in the Merger) and the Black-Scholes Warrant Value. Under the Warrant Agreement, the Black-Scholes Warrant Value of a warrant immediately prior to the closing of the Merger is based on the Black-Scholes Warrant Model for a Capped American Call on Bloomberg.

On April 18, 2017, Predecessor US Ecology entered into a new senior secured credit agreement (as amended, restated, supplemented or otherwise modified through the date hereof, the “Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent for the lenders, swingline lender and issuing lender, and Bank of America, N.A., as an issuing lender, that provides for a $500.0 million revolving credit facility (the “Revolving Credit Facility”), including a $75.0 million sublimit for the issuance of standby letters of credit and a $40.0 million sublimit for the issuance of swingline loans used to fund short-term working capital requirements. The Credit Agreement also contains an accordion feature whereby Predecessor US Ecology may request up to $200.0 million of additional funds through an increase to the Revolving Credit Facility, through incremental term loans, or some combination thereof. On August 6, 2019 and November 1, 2019, the Credit Agreement was amended to permit and provide for Wells Fargo to lend $450.0 million in incremental terms loans to pay off the existing debt of NRC in connection with the NRC Merger, to pay the fees, costs and expenses in connection with the NRC Merger and to pay down outstanding revolving credit loans under the Revolving Credit Facility. As of December 31, 2021, we had total indebtedness of $744.0 million, comprised of $441.0 million of term loans and $303.0 million of revolving credit loans out of a $500.0 million revolving credit commitment under the Revolving Credit Facility. On June 29, 2021, the Credit Agreement was amended to extend the maturity date of these revolving credit loans to June 29, 2026 (or such earlier date as the revolving credit facility may otherwise terminate pursuant to the terms of the Credit Agreement). The maturity date of the term loan is the earliest to occur of (i) November 1, 2026 (or, with respect to any lender, such later date as requested by us and accepted by such lender) and (ii) termination of the Credit Agreement. The Credit Agreement makes us vulnerable to adverse general economic or industry conditions and increases in interest rates, as borrowings under our senior secured credit facilities are at variable-rates, and limits our ability to obtain additional financing in the future for working capital or other purposes.

In addition, the Credit Agreement and related ancillary agreements with our lenders contain certain covenants that, among other things, restrict our ability to incur additional indebtedness, pay dividends and make other restricted payments, repurchase shares of outstanding stock, create certain liens and engage in certain types of transactions. Our ability to borrow under the Credit Agreement depends upon our compliance with the restrictions contained in the Credit Agreement and events beyond our control could affect our ability to comply with these covenants.

The Credit Agreement also contains certain financial covenants requiring us to maintain a minimum consolidated interest coverage ratio of 3.00 to 1.00 and a maximum consolidated total net leverage ratio. On June 26, 2020, Predecessor US Ecology entered into the third amendment (the “Third Amendment”) to the Credit Agreement, and on June 29, 2021,

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Predecessor US Ecology entered into the fourth amendment (the “Fourth Amendment”) to the Credit Agreement. Among other things, taken together, the Third Amendment and the Fourth Amendment amended the Credit Agreement (i) to create and extend a covenant relief period to end on the earlier of December 31, 2022 and the date Predecessor US Ecology elects to end such covenant relief period pursuant to the terms therein and (ii) to permanently increase Predecessor US Ecology’s consolidated total net leverage ratio requirement as of the end of each fiscal quarter ending on and after December 31, 2022 to 4.50 to 1.00. During the covenant relief period until the fiscal quarter ending December 31, 2022, the Third Amendment and the Fourth Amendment taken together increased Predecessor US Ecology’s consolidated total net leverage ratio requirement as of the end of each fiscal quarter to certain ratios above the 4.50 to 1.00 ratio otherwise in effect, subject to compliance with certain restrictions on restricted payments and permitted acquisitions during such covenant relief period. At December 31, 2021, we were in compliance with all of the financial covenants in the Credit Agreement, taking account of the covenant relief provided by the Fourth Amendment.

As of December 31, 2021, we would not have been in compliance with the total net leverage ratio financial covenant in the Credit Agreement had the covenant relief period under the Third and Fourth Amendment not been in effect. A breach of either of the financial covenants would constitute an event of default as defined in the Credit Agreement and, if we are unable to obtain or extend a waiver from our lenders, could result in the acceleration of all borrowings then outstanding. An amendment to the Credit Agreement to decrease the consolidated interest coverage ratio, increase the total net leverage ratio, or both, may result in higher interest rates on outstanding borrowings and therefore higher interest expense, and may not be achievable on terms acceptable to us or at all. We may be unable to satisfy our obligations upon an event of default and we may not be able to refinance our borrowings under the Credit Facility on commercially reasonable terms or at all.

Changes in the method of determining LIBOR, or the replacement of LIBOR with an alternative reference rate, may adversely affect interest expense related to our debt.

Amounts drawn under our credit facilities bear interest rates at the election of the borrower, in relation to LIBOR or an alternate base rate. On July 27, 2017, the Financial Conduct Authority in the United Kingdom announced that it would phase out LIBOR as a benchmark by the end of 2021. The U.S. Federal Reserve is considering replacing U.S. dollar LIBOR with a newly created index called the Secured Overnight Financing Rate, calculated with a broad set of short-term repurchase agreements backed by treasury securities. Our credit facilities contain certain provisions concerning the possibility that LIBOR may cease to exist, and that an alternative reference rate may be chosen. However, if LIBOR in fact ceases to exist, and no alternative rate is acceptable to the Company or its lenders, amounts drawn under our credit facilities would be subject to the alternate base rate, which may be a higher interest rate than LIBOR which would increase our interest expense. As a result, we may need to renegotiate our credit facilities and may not be able to do so with terms that are favorable to us. The overall financial market may be disrupted as a result of the phase-out or replacement of LIBOR. Disruption in the financial market or the inability to renegotiate the credit facility with favorable terms could have a material adverse effect on our business, financial position, and operating results. We currently do not expect to be required to transition from LIBOR as the benchmark for interest rates under the Credit Agreement to an alternative reference rate before 2023.

Risks Related to the Jones Act

Our business would be adversely affected if we failed to comply with the Jones Act’s restrictions on ownership of our capital stock by non-U.S. Citizens.

A substantial portion of our operations is conducted in the U.S. coastwise trade and is subject to the requirements of the Jones Act. The Jones Act restricts waterborne transportation of merchandise and passengers for hire by water or by land and water, either directly or via a foreign port, between points in the United States and certain of its island territories and possessions to U.S.-flag vessels meeting certain requirements, including ownership and control by U.S. Citizens (within the meaning of the Jones Act). We are responsible for monitoring the non-U.S. Citizen ownership of our common stock and other equity interests to ensure compliance with the Jones Act. We could lose the privilege of owning and operating vessels in the U.S. coastwise trade if non-U.S. Citizens were to own or control, in the aggregate, more than 25% of our common stock or other equity interests in us. Such a loss would have a material adverse effect on our business and results of operations. Violations of the Jones Act would result in us losing eligibility to engage in the U.S. coastwise trade, the imposition of substantial penalties against us, including fines and seizure and forfeiture of our vessels, and/or the temporary

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or permanent inability to document our vessels in the United States with coastwise endorsements, any of which could have a material adverse effect on our financial condition and results of operations. Although we currently believe we meet the requirements to engage in the U.S. coastwise trade, and there are provisions in the charter that were designed to assist us in complying with these requirements, there can be no assurance that we will be in compliance with the Jones Act in the future.

We are subject to the Jones Act, which restricts the transportation of merchandise and passengers for hire by water or by land and water, either directly or via a foreign port, between points in the United States and certain of its island territories and possessions to U.S.-flag vessels that meet certain requirements, including that they are built in the United States and owned by U.S. Citizens (within the meaning of the Jones Act), and manned by predominantly U.S. citizen crews. During the past several years, interest groups have lobbied the U.S. Congress, and legislation has been introduced, to repeal certain provisions of the Jones Act to facilitate foreign-flag vessel competition for trades and cargoes currently reserved for U.S.-flag vessels under the Jones Act. We expect that continued efforts will be made to modify or repeal the Jones Act. In addition, the Secretary of the Department of Homeland Security may waive the requirement for using U.S.-flag vessels with coastwise endorsements in the U.S. coastwise trade in the interest of national defense. In addition, our advantage as a U.S. Citizen operator of Jones Act vessels could be eroded by periodic efforts and attempts by foreign interests to circumvent certain aspects of the Jones Act. In addition, maritime transportation services are currently excluded from the General Agreement on Trade in Services (“GATS”) and are the subject of reservations by the United States in NAFTA, the United States-Mexico-Canada Agreement (“USMCA”) and other international free trade agreements. If maritime cabotage services were included in the GATS, NAFTA, USMCA or other international trade agreements, or if the restrictions contained in the Jones Act were otherwise repealed, altered or waived, the transportation of cargo and passengers between U.S. ports could be opened to foreign-flag, foreign-built vessels or foreign-owned vessels. To the extent such foreign competition is permitted from vessels built in lower-cost shipyards with promotional foreign tax incentives or favorable tax regimes and crewed by non-U.S. Citizens with lower wages and benefits than U.S. citizens, such competition could have a material adverse effect on our business, financial position, results of operations and cash flows.

Our common stock is subject to restrictions on ownership by non-U.S. Citizens, which could require divestiture by non-U.S. Citizen stockholders and could have a negative impact on the transferability of our common stock, its liquidity and market value, and upon a change of control of the Company.

Certain of our operations are conducted in the U.S. coastwise trade and are governed by U.S. federal laws commonly known as the Jones Act. The Jones Act restricts the transportation of merchandise and passengers for hire by water or by land and water, either directly or via a foreign port, between points in the United States and certain of its island territories and possessions, to U.S.-flag vessels that meet certain requirements, including that they are built in the United States, owned and operated by U.S. Citizens (within the meaning of the Jones Act), and manned by predominantly U.S. Citizen crews. We could lose the privilege of owning and operating vessels in the U.S. coastwise trade and may become subject to penalties and risk seizure and forfeiture of our U.S.-flag vessels if non-U.S. Citizens were to own or control, in the aggregate, more than 25% of any class or series of our capital stock. Such loss would have a material adverse effect on our results of operations.

Our charter authorizes, with respect to any class or series of our capital stock, certain rules, policies and procedures, including procedures with respect to transfer of shares, to assist in monitoring and maintaining compliance with the Jones Act’s U.S. citizenship requirements, which may have an adverse effect on holders of shares of our common stock.

In order to provide a reasonable margin for compliance with the Jones Act, the charter contains provisions that limit the aggregate percentage beneficial ownership by non-U.S. Citizens of any class or series of our capital stock (including the common stock) to 24% of the outstanding shares of each such class or series to ensure that ownership by non-U.S. Citizens will not exceed the maximum percentage permitted by the Jones Act (presently 25%).

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The aggregate percentage of non-U.S. Citizen ownership of our outstanding common stock is expected to fluctuate based on daily trading and may increase above the 24% maximum permitted percentage. At and during such times that the 24% permitted percentage of shares of common stock held by non-U.S. Citizens is reached, we will be unable to issue any further shares of common stock to non-U.S. Citizens (including any shares issuable upon exercise of the warrants) or permit transfers of common stock to non-U.S. Citizens. Any issuance or transfer of shares in excess of such permitted percentage shall be ineffective against us, and neither we nor our transfer agent are required to register such purported issuance or transfer of shares or be required to recognize the purported transferee or owner as our stockholder for any purpose whatsoever except to exercise our remedies. Any such excess shares in the hands of a non-U.S. Citizen shall not have any voting or dividend rights. In addition, we, in our discretion, are entitled to redeem all or any portion of such shares most recently acquired (as determined by our Board of Directors in accordance with guidelines that are set forth in the charter), by non-U.S. Citizens, in excess of such maximum permitted percentage for such class or series at a redemption price based on a fair market value formula that is set forth in the charter, which is to be paid by the issuance of redemption warrants (the “Redemption Warrants”) permitting the holders to receive shares of common stock in the future when the receipt thereof would not violate the charter at an exercise price of $0.01 per share. In the event that we determine that Redemption Warrants would be treated by the USCG as capital stock, or if we are unable to issue the Redemption Warrants for any other reason, we may redeem the excess shares with cash, promissory notes or a combination of both at the discretion of our board of directors.

As a result of these provisions, a purported stockholder who is a non-U.S. Citizen may not receive any return on its investment in any such excess shares it purportedly purchases or owns, as the case may be, and it may sustain a loss. Further, we may have to incur additional indebtedness, or use available cash (if any), to fund all or a portion of such redemption, in which case our financial condition may be materially weakened. The existence and enforcement of these requirements could have an adverse impact on the liquidity or market value of our equity securities in the event that U.S. Citizens were unable to transfer shares in the Company to non-U.S. Citizens. Furthermore, under certain circumstances, this ownership restriction could discourage, delay or prevent a change of control of the Company. So that we may monitor and maintain our compliance with the Jones Act, provisions in the charter permit us to require that owners of any shares of our capital stock provide confirmation of their citizenship. In the event that a person does not submit such documentation to us, those provisions provide us with certain remedies, including the suspension of voting, dividend and distribution rights and treatment of such person as a non-U.S. Citizen unless and until we receive the requested documentation confirming that such person is a U.S. Citizen. As a result of non-compliance with these provisions, an owner of the shares of our common stock may lose significant rights associated with those shares.

If, for any reason, we are unable to effect such a redemption when such ownership of shares by non-U.S. Citizens is in excess of 25% of the common stock, or otherwise prevent non-U.S. Citizens in the aggregate from owning shares in excess of 25% of any class or series of our capital stock, or we fail to exercise our redemption rights because we are unaware that such ownership exceeds such percentage, we will likely be unable to comply with the Jones Act and will likely be required by the applicable governmental authorities to suspend our operations in the U.S. coastwise trade. Any such actions by governmental authorities would have a material adverse effect on our business, financial position, results of operations and cash flows.

General Risk Factors

Our market is highly competitive. Failure to compete successfully could have a material adverse effect on our business, financial condition and results of operations.

We face competition from companies with greater resources than us, companies with closer geographic proximity to waste sites, service offerings we do not provide and that can provide lower pricing than we can in certain instances. An increase in the number or location of commercial treatment or disposal facilities for hazardous or radioactive waste, significant expansion of existing competitor permitted capabilities, acquisitions by competitors or a decrease in the treatment or disposal fees charged by competitors could materially and adversely affect our results of operations. Our business is also heavily affected by waste disposal fees imposed by government agencies. These fees, which vary from state to state and are periodically adjusted, may adversely impact the competitive environment in which we operate.

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Adverse economic conditions, government funding or competitive pressures affecting our customers could harm our business.

We serve oil refineries, chemical production plants, steel mills, real estate developers, waste brokers/aggregators serving small manufacturers and other industrial customers that are, or may be, affected by changing economic conditions and competition. These customers may be significantly impacted by deterioration in the general economy and may curtail waste production and/or delay spending on plant maintenance, waste cleanup projects and other discretionary work. Spending by government customers may also be reduced or temporarily suspended due to declining tax revenues that may result from a general deterioration in economic conditions or other federal or state fiscal policy. Factors that can impact general economic conditions and the level of spending by customers include the general level of consumer and industrial spending, increases in fuel and energy costs, residential and commercial real estate and mortgage market conditions, labor and healthcare costs, access to credit, consumer confidence and other macroeconomic factors affecting spending behavior. Market forces may also compel customers to cease or reduce operations, declare bankruptcy, liquidate or relocate to other countries, any of which could adversely affect our business.

Our operations are significantly affected by the commencement and completion of large and small cleanup projects, potential seasonal fluctuations due to weather, budgetary decisions and cash flow limitations influencing the timing of customer spending for remedial activities, the timing of regulatory agency decisions and judicial proceedings, changes in government regulations and enforcement policies and other factors that may delay or cause the cancellation of cleanup projects. We do not control such factors, which can cause our revenue and income to vary significantly from quarter to quarter and year to year.

If we fail to comply with applicable laws and regulations our business could be adversely affected.

The changing regulatory framework governing our business creates significant risks. We could be held liable if our operations cause contamination of air, groundwater or soil or expose our employees or the public to contamination. Under current law, we may be held liable for damage caused by conditions that existed before we acquired the assets or operations involved. Also, we may be liable if we arrange for the transportation, disposal or treatment of hazardous substances that cause environmental contamination at facilities operated by others, or if a predecessor made such arrangements and we are a successor. Liability for environmental damage could have a material adverse effect on our financial condition, results of operations and cash flows.

Stringent regulations of federal, state or provincial governments have a substantial impact on our business. Local government controls may also apply. Many complex laws, rules, orders and regulatory interpretations govern environmental protection, health, safety, noise, visual impact, odor, land use, zoning, transportation and related matters. Failure to obtain on a timely basis or comply with applicable federal, state, provincial and local governmental regulations, licenses, permits or approvals for our waste treatment and disposal facilities could prevent or restrict our ability to provide certain services, resulting in a potentially significant loss of revenue and earnings. Changes in environmental regulations may require us to make significant capital or other expenditures, or limit operations. Changes in laws or regulations or changes in the enforcement or interpretation of existing laws, regulations or permitted activities may require us to modify existing operating licenses or permits, or obtain additional approvals or limit operations. New governmental requirements that raise compliance standards or require changes in operating practices or technology may impose significant costs and/or limit operations.

Our revenue is primarily generated as a result of requirements imposed on our customers under federal, state, and provincial laws and regulations to protect public health and the environment. If requirements to comply with laws and regulations governing management of PCB, hazardous or radioactive waste were relaxed or less vigorously enforced, demand for our services could materially decrease and our revenues and earnings could be significantly reduced.

We could be subject to significant fines and penalties, and our reputation could be adversely affected, if our businesses, or third parties with whom we have a relationship, were to fail to comply with U.S. or foreign laws or regulations.

Some of our projects and business may be conducted in countries where corruption has historically been prevalent. It is our policy to comply with all applicable anti-bribery laws, such as the U.S. Foreign Corrupt Practices Act (the “FCPA”),

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and with applicable local laws of the foreign countries in which we operate, and we monitor our local partners’ compliance with such laws as well. Our reputation may be adversely affected if we were reported to be associated with corrupt practices or if we failed to comply with such laws. Such damage to our reputation could adversely affect our ability to grow our business. Additionally, violations of such laws could subject us to significant fines and penalties.

Our participation in multi-employer pension plans may subject us to liabilities that could materially adversely affect our liquidity, cash flows and results of operations.

Certain of the Company’s wholly-owned subsidiaries participate in multi-employer defined benefit pension plans under the terms of collective bargaining agreements covering most of the subsidiaries’ union employees. To the extent that those plans are underfunded, the Employee Retirement Income Security Act of 1974, as amended by the Multi-Employer Pension Plan Amendments Act of 1980 (“ERISA”), may subject us to substantial liabilities if we withdraw from such multi-employer plans or if they are terminated. Under current law regarding multi-employer defined benefit plans, a plan’s termination, an employer’s voluntary partial or complete withdrawal from or the mass withdrawal of all contributing employers from, an underfunded multi-employer defined benefit plan requires participating employers to make payments to the plan for their proportionate share of the multi-employer plan’s unfunded vested liabilities. Furthermore, the Pension Protection Act of 2006 added new funding rules generally applicable to plan years beginning after 2007 for multi-employer plans that are classified as “endangered,” “seriously endangered,” or “critical” status. If plans in which we participate are in critical status, benefit reductions may apply and/or we could be required to make additional contributions. Contributions to these funds could also increase as a result of future collective bargaining with the unions, a shrinking contribution base as a result of the insolvency of other companies who currently contribute to these funds, failure of the plan to meet ERISA’s minimum funding requirements, lower than expected returns on pension fund assets, or other funding deficiencies. Any of the foregoing events could materially adversely affect our liquidity, cash flows and results of operations.

Based upon the information available to us from plan administrators as of April 30, 2021, certain of the multi-employer pension plans in which we participate are underfunded. The Pension Protection Act requires that underfunded pension plans improve their funding ratios within prescribed intervals based on the level of their underfunding. In addition, if a multi-employer defined benefit plan fails to satisfy certain minimum funding requirements, the Internal Revenue Service may impose a nondeductible excise tax of 5% on the amount of the accumulated funding deficiency for those employers contributing to the fund. We have been notified that certain plans to which our subsidiaries contribute are in “critical” status and these plans may require additional contributions in the form of a surcharge on future benefit contributions required for future work performed by union employees covered by these plans. As a result, we expect our required contributions to these plans to increase in the future. The amount of additional funds we may be obligated to contribute in the future cannot be estimated, as such amounts will be based on future levels of work that require the specific use of the union employees covered by these plans, investment returns and the level of underfunding of such plans.

A cybersecurity incident could negatively impact our business and our relationships with customers.

We use computers in substantially all aspects of our business operations. We also use mobile devices and other online activities to connect with our employees and our customers. Such uses of technology give rise to cybersecurity risks, including security breach, espionage, system disruption, theft and inadvertent release of information. Our business involves the storage and transmission of numerous classes of sensitive and/or confidential information and intellectual property, including customers’ personal information, private information about employees, and financial and strategic information about the Company and its business partners. Further, if the Company in the future pursues acquisitions or new initiatives that require expanding or improving our information technologies, this may result in a larger technological presence and corresponding exposure to cybersecurity risk. If we fail to assess and identify cybersecurity risks associated with acquisitions and new initiatives, we may become increasingly vulnerable to such risks. Further, despite these security measures, the Company’s computer systems and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance, or other disruptions. Additionally, while we have implemented measures to prevent security breaches and cyber incidents, our preventative measures and incident response efforts may not be entirely effective, and our implementation of various procedures and controls to monitor and mitigate security threats and to increase security for our information, facilities and infrastructure may result in increased capital and operating costs. Costs for insurance may also increase as a result of security threats, and some insurance coverage may become more difficult to obtain, if available at all.

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Cybersecurity attacks in particular are becoming more sophisticated. We rely extensively on information technology systems, including internet sites, computer software, data hosting facilities and other hardware and platforms, some of which are hosted by third parties, to assist in conducting our business. Our technologies systems may become the target of cybersecurity attacks, including without limitation malicious software, attempts to gain unauthorized access to data and systems, and other electronic security breaches that could lead to disruptions in critical systems and materially and adversely affect us in a variety of ways: the theft, destruction, loss, misappropriation or release of sensitive and/or confidential information or intellectual property, or interference with our information technology systems or the technology systems of third parties on which we rely, could result in business disruption, negative publicity, brand damage, violation of privacy laws, loss of customers, potential liability and competitive disadvantage.

Unanticipated changes in our tax provisions or adverse outcomes resulting from examination of our income tax returns could adversely affect our results of operations.

We are subject to income taxes in the United States and various foreign jurisdictions. Our effective income tax rate could be adversely affected by changes in tax laws or interpretations of those tax laws, or by changes in the valuation of our deferred tax assets and liabilities. Additionally, our effective tax rate may be affected by the tax effects of acquisitions or restructuring activities we may undertake, changes in share-based compensation, newly enacted tax legislation and uncertain tax positions we may take in the short term in response to such legislation. Finally, we are subject to the examination of our income tax returns by the Internal Revenue Service in the United States and other tax authorities in the various countries in which we operate, which may result in the assessment of additional income taxes. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. However, unanticipated outcomes from examinations could have a material adverse effect on our business, financial condition and results of operations.

Tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied. The U.S. recently enacted significant tax reform, and certain provisions of the new law may adversely affect us. In addition, governmental tax authorities are increasingly scrutinizing the tax positions of companies. If the U.S. or foreign tax authorities of jurisdictions within which we operate change applicable tax laws, our overall taxes could increase, and our business, financial condition or results of operations may be adversely impacted.

Loss of key management or sales personnel could harm our business.

We have an experienced management team including general managers at our operating facilities and rely on the continued service of these senior managers to achieve our objectives. Our objective is to retain our present management and sales teams and identify, hire, train, motivate and retain other highly skilled personnel. The loss of any key management employee or sales personnel could adversely affect our business and results of operations.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

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ITEM 2. PROPERTIES

The following table describes our principal physical properties and facilities at December 31, 2021 owned or leased by us. We believe that our existing properties are in good condition and suitable for conducting our business.


Location	Segment	Function	Own/Lease
Beatty, Nevada	Waste Solutions	Waste treatment and landfill disposal	Lease
Robstown, Texas	Waste Solutions	Waste treatment, landfill disposal and recycling	Own
Grand View, Idaho	Waste Solutions	Waste treatment and landfill disposal	Own
Belleville, Michigan	Waste Solutions	Waste treatment and landfill disposal	Own
Blainville, Québec, Canada	Waste Solutions	Waste treatment and landfill disposal	Own/Lease
Richland, Washington	Waste Solutions	Landfill disposal	Sublease
Winnie, Texas	Waste Solutions	Waste processing and deep-well disposal	Own
Detroit, Michigan	Waste Solutions	Waste treatment	Own
Canton, Ohio	Waste Solutions	Waste treatment and recycling	Own
Harvey, Illinois	Waste Solutions	Waste treatment	Own
York, Pennsylvania	Waste Solutions	Waste treatment	Own
Tulsa, Oklahoma	Waste Solutions	Waste treatment	Own
Romulus, Michigan	Waste Solutions	Recycling	Own
Mt. Airy, North Carolina	Waste Solutions	Waste treatment	Own
Tilbury, Ontario, Canada	Waste Solutions	Waste treatment	Own
Vernon, California	Waste Solutions	Waste treatment	Own
Sulligent, Alabama	Field Services	Field and industrial waste management	Own
Tampa, Florida	Field Services	Field and industrial waste management	Own
Taylor, Michigan	Field Services	Field and industrial waste management	Own
Bayonne, New Jersey	Field Services	Field and industrial waste management	Lease
Atlanta, Georgia	Field Services	Field and industrial waste management	Lease
Wrentham, Massachusetts	Field Services	Field and industrial waste management	Own
Dallas, Texas	Field Services	Field and industrial waste management	Own
Midland, Texas	Field Services	Field and industrial waste management	Own
Kenai, Alaska	Field Services	Field and industrial waste management	Lease
Anchorage, Alaska	Field Services	Field and industrial waste management	Lease
Williston, Vermont	Field Services	Field and industrial waste management	Lease
Portland, Maine	Field Services	Field and industrial waste management	Lease
Kennedy, Texas	Energy Waste	Landfill disposal	Own
Pecos County, Texas	Energy Waste	Landfill disposal	Own
Reagan County, Texas	Energy Waste	Landfill disposal	Own
Boise, Idaho	Corporate	Corporate Headquarters	Lease

In addition to the principal physical properties detailed in the table above, the Company owns or leases a number of smaller (less than 20,000 sq. ft.) properties supporting our Field Services segment.

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The following table provides additional information for our facilities with onsite landfills including total acreage owned or controlled by us at each facility, estimated amount of permitted airspace available at each facility, the estimated amount of non-permitted airspace and the estimated life at each facility. All estimates are as of December 31, 2021.


			Permitted	Non‑Permitted	Estimated
		Total	Airspace	Airspace	Life
Location	Segment	Acreage	(Cubic Yards)	(Cubic Yards)	(Years)
Beatty, Nevada (1)	Waste Solutions	480	7,499,391	—	36
Robstown, Texas (2)	Waste Solutions	1,425	9,671,107	—	43
Grand View, Idaho (3)	Waste Solutions	1,411	9,914,010	18,100,000	224
Belleville, Michigan (4)	Waste Solutions	455	13,032,718	—	35
Blainville, Québec, Canada (5)	Waste Solutions	350	4,987,483	—	17
Richland, Washington (6)	Waste Solutions	100	18,375	—	34
Karnes County, Texas (7)	Energy Waste	382	4,371,154	—	25
Reagan County, Texas (8)	Energy Waste	645	11,649,923	—	151
Pecos County, Texas (9)	Energy Waste	207	11,142,085	—	198
Total			72,286,246	18,100,000

(1)

Our Beatty, Nevada facility, which began receiving hazardous waste in 1970, is located in the Amargosa Desert approximately 120 miles northwest of Las Vegas, Nevada and approximately 30 miles east of Death Valley, California. The facility operates on 480 acres owned by the state of Nevada. Our operations are governed by an operating agreement with the state of Nevada, executed in April 2016, with an initial term of 20 years (and an optional 20-year extension), and a year-to-year periodic tenancy lease with the State, last amended in April 2007. In 2016, the facility secured permit modifications from the Nevada Division of Environmental Protection and the USEPA authorizing the construction of a new landfill unit at the facility. The first phase of this new landfill was completed in 2017. The state of Nevada assesses disposal fees to fund a dedicated trust account to pay for future closure and post-closure costs.

(2)

Our Robstown, Texas facility began operations in 1973. It is located on 240 acres owned by the Company approximately 10 miles west of Corpus Christi, Texas. We own an additional 1,185 acres of adjacent land for future expansion. We also own 240 acres of land five miles west of the facility adjacent to a rail line where we have operated a rail transfer station since 2006. In January 2018, the Texas Commission of Environmental Quality approved our permit for landfill expansion onto 180 acres of our adjacent land, adding approximately 10 million cubic yards, or 30 years, of future airspace.

(3)

Our Grand View, Idaho facility, purchased in 2001, is located on 1,252 acres of Company-owned land approximately 60 miles southeast of Boise, Idaho in the Owyhee Desert. We own an additional 159 acres approximately two miles east of the facility that provides a clay source for site operations (liner construction and waste treatment). We also own 189 acres where our rail transfer station is located approximately 30 miles northeast of the disposal facility. This site has two enclosed rail-to-truck waste transfer facilities located adjacent to the main line of the Union Pacific Railroad.

(4)

Our Belleville, Michigan facility began operations in 1957 and began disposing of waste in the onsite landfill in 1969. The facility is located on 455 acres owned by the Company approximately 30 miles from Detroit, Michigan. We also own 12 acres of land nine miles from the facility adjacent to a rail line where we have operated a rail transfer station since 1998.

(5)

Our Blainville, Québec, Canada facility has been in operation since 1983 and is located approximately 30 miles northwest of Montreal, Québec, Canada. The facility includes an indoor hazardous and industrial waste treatment and storage facility and a rail transfer station located on 25 acres adjacent to a 325 acre disposal site. The treatment processing facility is on land owned by the Company. The disposal site which is adjacent to the owned treatment processing facility is leased from the Province of Québec with a term through 2023. The site is permitted to accept up to 1,125,000 metric tons (1,237,500 U.S. tons) over the five-year permit period ending in May 2023. Of this amount, up to 350,000 metric tons (385,000 U.S. tons) can be accepted as soil. While there are no specific restrictions on waste

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soils received from the U.S., waste received from the U.S. is limited to 506,250 metric tons (556,875 U.S. tons) over the five-year permit period. The Province assesses fees to fund a dedicated government trust account to pay for post-closure costs at the disposal site.

(6)

Our Richland, Washington LLRW facility has been in operation since 1965 and is located on 100 acres of land leased by the State of Washington from the federal government on the U.S. Department of Energy Hanford Reservation approximately 35 miles west of Richland, Washington. We sublease this property from the State of Washington. The lease between the State of Washington and the federal government expires in 2063. We renewed our sublease with the State in 2005 for ten years with four ten-year renewal options, giving us control of the property until the year 2055 provided that we meet our obligations and operate in a compliant manner. The facility’s intended operating life is equal to the period of the sublease. The State assesses user fees for local economic development, state regulatory agency expenses and a dedicated trust account to pay for long-term care after the facility closes. The State maintains separate, dedicated trust funds for future closure and post-closure costs.

(7)

Our Karnes County, Texas facility, located in the Permian Basin on 135 acres owned by the Company approximately six miles southwest of Kennedy, Texas, began operations in February 2016. We own an additional 247 acres of adjacent land for future expansion if needed. The commercial disposal facility accepts energy-related waste only and is regulated by the RRC under a five-year permit cycle with renewal issued upon request provided no outstanding operational issues.

(8)

Our Reagan County, Texas facility, located in the Permian Basin on 645 acres owned by the Company approximately 30 miles northwest of Big Lake, Texas, began operations in July 2019. The commercial disposal facility accepts energy-related waste only and is regulated by the RRC under a five-year permit cycle with renewal issued upon request provided no outstanding operational issues.

(9)

Our Pecos County, Texas facility, located in the Permian Basin on 207 acres owned by the Company approximately 28 miles north of Fort Stockton, Texas, began operations in June 2019. The commercial disposal facility accepts energy-related waste only and is regulated by the RRC under a five-year permit cycle with renewal issued upon request provided no outstanding operational issues.

We also own 640 acres in Andrews County, Texas, located in the Permian Basin approximately 25 miles west of Andrews, Texas. The site is permitted for approximately 11.5 million cubic yards of energy-related waste disposal, however, we have not constructed any landfill capacity at the site as of December 31, 2021. The site is regulated by the RRC under a five-year permit cycle with renewal issued upon request provided no outstanding operational issues.

ITEM 3. LEGAL PROCEEDINGS

Information with respect to this item may be found in Note 18 to the Consolidated Financial Statements included in “Part II, Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K, under the caption “Litigation and Regulatory Proceedings” which information is incorporated herein by reference.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Common Stock

Our common stock is listed on the Nasdaq Global Select Market under the symbol ECOL and our warrants are listed on the Nasdaq Capital Market under the symbol ECOLW. As of February 14, 2022, there were approximately 22,094 beneficial owners of our common stock and one holder of record of our warrants.

Stock Performance Graph

The following graph compares the five-year cumulative total return on our common stock with the comparable five-year cumulative total returns of the Nasdaq Composite Index and Dow Jones Waste & Disposal Services Index for the period from the end of fiscal 2016 to the end of fiscal 2021. The stock price performance shown below is not necessarily indicative of future performance.

Comparison of Cumulative Total Stockholder Return(1) Among

US Ecology, Inc., Nasdaq Composite Index and

Dow Jones Waste & Disposal Services Index

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					Dow Jones
					US Waste &
			Nasdaq		Disposal
Date	US Ecology, Inc.		Composite		Services Index
December 31, 2016	$	100.00	$	100.00	$	100.00
December 31, 2017	$	105.25	$	129.64	$	117.08
December 31, 2018	$	131.54	$	125.96	$	117.21
December 31, 2019	$	122.36	$	172.17	$	158.35
December 31, 2020	$	77.01	$	249.51	$	168.74
December 31, 2021	$	67.71	$	304.85	$	235.89

(1)	Total return assuming $100 invested on December 31, 2016 and reinvestment of dividends on the day they were paid.

The performance graph above is being furnished solely to accompany this Annual Report on Form 10-K pursuant to Item 201(e) of Regulation S-K, is not being filed for purposes of Section 18 of the Exchange Act, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Securities Authorized for Issuance under Equity Compensation Plans

Information with respect to compensation plans under which our equity securities are authorized for issuance is discussed in Item 12 of Part III of this Annual Report on Form 10-K.

Issuer Purchases of Equity Securities

On June 6, 2020, the Company’s Board of Directors’ authorization to repurchase the Company’s outstanding shares of common stock and warrants under the share repurchase program expired. In the future, the Board of Directors may consider reauthorizing the repurchase program at any time, and the timing of any future repurchases of common stock or warrants will be based upon prevailing market conditions and other factors. The Company may from time to time also consider other options for repurchasing some or all of its warrants, including but not limited to a tender offer for all of the outstanding warrants. The Company repurchased 397,600 shares of common stock in an aggregate amount of $17.3 million under the repurchase program during the year ended December 31, 2020.

The following table summarizes the purchases of shares of our common stock during the year ended December 31, 2021:


				Total Number of	Approximate Dollar
				Shares Purchased as	Value of Shares that
				Part of Publicly	May Yet be Purchased
	Total Number of	Average Price		Announced Plan or	Under the Plans or
Period	Shares Purchased	Paid per Share		Program	Programs
January 1 to 31, 2021 (1)	12,788	$	36.33	—	$	—
February 1 to 28, 2021	—		—	—		—
March 1 to 31, 2021	—		—	—		—
April 1 to 30, 2021	—		—	—		—
May 1 to 31, 2021	—		—	—		—
June 1 to 30, 2021	—		—	—		—
July 1 to 31, 2021	—		—	—		—
August 1 to 31, 2021	—		—	—		—
September 1 to 30, 2021	—		—	—		—
October 1 to 31, 2021	—		—	—		—
November 1 to 30, 2021	—		—	—		—
December 1 to 31, 2021	—		—	—		—
Total	12,788	$	36.33	—	$	—

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(1)	Represents shares surrendered or forfeited in connection with certain employees’ tax withholding obligations related to the vesting of shares of restricted stock.

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

We did not engage in any unregistered sales of our securities during the years ended December 31, 2021, 2020 and 2019.

ITEM 6. SELECTED FINANCIAL DATA

Reserved

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

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The operations not managed through our three reportable segments are recorded as “Corporate.” Corporate selling, general and administrative expenses include typical corporate items of a general nature such as certain labor, information technology, legal, accounting and other expenses not associated with a specific reportable segment. Income taxes are assigned to Corporate, but all other items are included in the segment where they originated. Inter-company transactions have been eliminated from the segment information and are not significant between segments.

In order to provide insight into the underlying drivers of our waste volumes and related T&D revenues, we evaluate period-to-period changes in our T&D revenue for our Waste Solutions segment based on the industry of the waste generator, based on North American Industry Classification System codes.

The composition of the Waste Solutions segment T&D revenues by waste generator industry for the years ended December 31, 2021 and 2020 were as follows:


	% of Treatment and Disposal Revenue (1) for the
	Years Ended December 31,
Generator Industry	2021	2020
Chemical Manufacturing	17%	19%
Metal Manufacturing	16%	16%
Broker / TSDF	12%	12%
General Manufacturing	12%	11%
Government	8%	8%
Refining	6%	6%
Waste Management & Remediation	5%	3%
Utilities	4%	6%
Transportation	3%	4%
Mining, Exploration and Production	3%	2%
Other (2)	14%	13%

(1)	Excludes all transportation service revenue.

(2)	Includes retail and wholesale trade, rate regulated, construction and other industries.

We also categorize our Waste Solutions T&D revenue as either “Base Business” or “Event Business” based on the underlying nature of the revenue source.

Base Business consists of waste streams from ongoing industrial activities and tends to be reoccurring in nature. We define Event Business as non-recurring projects that are expected to equal or exceed 1,000 tons, with Base Business defined as all other business not meeting the definition of Event Business. The duration of Event Business projects can last from a several-week cleanup of a contaminated site to a multiple year cleanup project.

During 2021, Base Business revenue increased 6% compared to 2020. Base Business revenue was approximately 76% of total 2021 T&D revenue, up from 73% in 2020. Our business is highly competitive and no assurance can be given that we will maintain these revenue levels or increase our market share.

A significant portion of our disposal revenue is attributable to discrete Event Business projects which vary widely in size, duration and unit pricing. For the year ended December 31, 2021, approximately 24% of our T&D revenue was derived from Event Business projects. The one-time nature of Event Business, diverse spectrum of waste types received and widely varying unit pricing necessarily creates variability in revenue and earnings. This variability may be influenced by general

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and industry-specific economic conditions, funding availability, changes in laws and regulations, government enforcement actions or court orders, public controversy, litigation, weather, commercial real estate, closed military bases and other project timing, government appropriation and funding cycles and other factors. The types and amounts of waste received from Base Business also vary from quarter to quarter.

This variability can also cause significant quarter-to-quarter and year-to-year differences in revenue, gross profit, gross margin, operating income and net income. While we pursue many projects months or years in advance of work performance, cleanup project opportunities routinely arise with little or no prior notice. These market dynamics are inherent to the waste disposal business and are factored into our projections and externally communicated business outlook statements. Our projections combine historical experience with identified sales pipeline opportunities, new or expanded service line projections and prevailing market conditions.

We serve oil refineries, chemical production plants, steel mills, waste brokers/aggregators serving small manufacturers and other industrial customers that are generally affected by the prevailing economic conditions and credit environment. Adverse conditions may cause our customers as well as those they serve to curtail operations, resulting in lower waste production and/or delayed spending on off-site waste shipments, maintenance, waste cleanup projects and other work. Factors that can impact general economic conditions and the level of spending by customers include, but are not limited to, consumer and industrial spending, increases in fuel and energy costs, conditions in the real estate and mortgage markets, labor and healthcare costs, access to credit, consumer confidence and other global economic factors affecting spending behavior. Market forces may also induce customers to reduce or cease operations, declare bankruptcy, liquidate or relocate to other countries, any of which could adversely affect our business. To the extent business is either government funded or driven by government regulations or enforcement actions, we believe it is less susceptible to general economic conditions. Spending by government agencies may be reduced due to declining tax revenues resulting from a weak economy or changes in policy. Disbursement of funds appropriated by Congress may also be delayed for various reasons.

Geographical Information

For the year ended December 31, 2021, we derived $861.3 million, or 87%, of our revenue in the United States, $80.6 million, or 8%, of our revenue in Canada, $41.2 million, or 4%, of our revenue in the Europe, Middle East and Africa (“EMEA”) region, and less than 1% of our revenue from other international regions. For the year ended December 31, 2020, we derived $835.3 million, or 89%, of our revenue in the United States, $73.3 million, or 8%, of our revenue in Canada, $19.9 million, or 2%, of our revenue in the EMEA region, and less than 1% of our revenue from other international regions.

Additional information about the geographical areas in which our revenues are derived and in which our assets are located is presented in Note 4 and Note 21 to the Consolidated Financial Statements in “Part II, Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

Significant Events

Our results of operations have been affected by certain significant events during the past two fiscal years including, but not limited to:

2021 Events

COVID-19 Pandemic Update: The COVID-19 pandemic continued to affect our business in 2021. The impact of temporary closures and staff reductions by industrial facilities has resulted in delays in mobilization and in regulatory approvals at our customers’ sites. Although we have seen evidence of volume recovery in 2021 as the economy continues to rebound and industrial facilities return to pre-pandemic levels of production, we have experienced cost and inflationary pressures in areas such as labor and supplies. We have also experienced delays and deferments of some of our waste solutions and field services business based on our customers’ own responses to the pandemic including, but not limited to, delaying services they deem noncritical and limiting on-site visitation. While uncertainty caused by the COVID-19 pandemic remains, including the spread of new variants of the virus and government and private sector responses to prevent

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and manage the disease, we expect to continue to see improvements in our business as vaccines become more widely available and vaccination rates increase.

The impact of the COVID-19 pandemic will continue to affect our results of operations for the foreseeable future. See “Part I, Item 1A – Risk Factors” in this Annual Report on Form 10-K.

2020 Events

Impact of the COVID-19 Pandemic: The COVID-19 pandemic affected our business through the fourth quarter of 2020. We experienced lower waste volumes resulting from temporary closures and staff reductions by industrial facilities. We also experienced delays and deferments of industrial cleaning services and some of our field services as our customers limited on site visitation and delayed noncritical services based on business conditions. However, the Company’s services-based business remained stable as we experienced growth in our small quantity generation services and our emergency response business saw an increase in COVID-19 decontamination projects.

Our Energy Waste segment was adversely impacted as energy companies reduce capital expenditures as a result of downward pressure on oil, natural gas and natural gas liquid (“NGL”) prices, which were exacerbated during the COVID-19 pandemic. In the first half of 2020, oil prices moved downward to historic lows due in part to concerns about the COVID-19 pandemic and its impact on near-term worldwide oil demand and due to the increase in oil production by certain members of the Organization of Petroleum Exporting Countries (“OPEC”). As a result, customers in the upstream oil and gas exploration industry and some downstream refineries in the energy sector have reduced capital expenditures, which has adversely affected the demand for our energy waste services.

The Company’s ability to weather the negative impacts of the COVID-19 pandemic was bolstered by the Company’s cost-saving measures implemented during the 2020 fiscal year, including cost control initiatives, a reduction to planned 2020 capital spending of approximately 35% compared to the budgeted capital spending levels and suspension of the Company’s quarterly dividend, commencing with the second quarter of 2020 to preserve free cash flow and enhance liquidity. The Company has also taken advantage of the provision of the Coronavirus Aid, Relief and Economic Security Act, which was signed into law on March 27, 2020, to defer of the payment of the employer portion of payroll tax withholdings, which yielded approximately $7.5 million of additional cash savings in 2020.

Goodwill and Intangible Asset Impairment Charges: During the year ended December 31, 2020 the Company recorded goodwill impairment charges of $363.9 million related to its Energy Waste reporting unit, $14.4 million related to its Field Services reporting unit, $5.5 million related to its International reporting unit and intangible asset impairment charges of $21.1 million on certain Field Services segment operating permit intangible assets. See Note 13 to the Consolidated Financial Statements in “Part II, Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for additional information.

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Results of Operations

This section of this Form 10-K generally discusses 2021 and 2020 items and year-to-year comparisons between 2021 and 2020. Discussions of 2019 items and year-to-year comparisons between 2020 and 2019 that are not included in this Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

Our operating results and percentage of revenues for the years ended December 31, 2021 and 2020 were as follows:


	Year Ended December 31,								2021 vs. 2020
$s in thousands	2021		%		2020		%		$ Change		% Change
Revenue
Waste Solutions	$	451,249	46	%	$	425,413	46	%	$	25,836	6	%
Field Services		500,187	50	%		473,754	50	%		26,433	6	%
Energy Waste		36,565	4	%		34,687	4	%		1,878	5	%
Total	$	988,001	100	%	$	933,854	100	%	$	54,147	6	%
Gross Profit
Waste Solutions	$	154,223	34	%	$	161,341	38	%	$	(7,118)	(4)	%
Field Services		74,087	15	%		87,151	18	%		(13,064)	(15)	%
Energy Waste		4,768	13	%		1,659	5	%		3,109	187	%
Total	$	233,078	24	%	$	250,151	27	%	$	(17,073)	(7)	%
Selling, General & Administrative Expenses
Waste Solutions	$	27,262	6	%	$	26,475	6	%	$	787	3	%
Field Services		48,210	10	%		50,572	11	%		(2,362)	(5)	%
Energy Waste		13,040	36	%		19,722	57	%		(6,682)	(34)	%
Corporate		111,220	n/m			109,400	n/m			1,820	2	%
Total	$	199,732	20	%	$	206,169	22	%	$	(6,437)	(3)	%
Adjusted EBITDA
Waste Solutions	$	170,953	38	%	$	176,702	42	%	$	(5,749)	(3)	%
Field Services		70,578	14	%		81,770	17	%		(11,192)	(14)	%
Energy Waste		11,321	31	%		4,982	14	%		6,339	127	%
Corporate		(97,978)	n/m			(93,295)	n/m			(4,683)	5	%
Total	$	154,874	16	%	$	170,159	18	%	$	(15,285)	(9)	%

Management uses Adjusted EBITDA as a financial measure to assess segment performance. Adjusted EBITDA is defined as net income (loss) before interest expense, interest income, income tax expense, depreciation, amortization, share-based compensation, accretion of closure and post-closure liabilities, foreign currency gain/loss, non-cash goodwill and intangible asset impairment charges, business development and integration expenses and other income/expense. The reconciliation of Net income (loss) to Adjusted EBITDA for the years ended December 31, 2021 and 2020 is as follows:


	Year Ended December 31,				2021 vs. 2020
$s in thousands	2021		2020		$ Change		% Change
Net income (loss)	$	5,337	$	(389,359)	$	394,696	(101)	%
Income tax expense (benefit)		4,765		(4,242)		9,007	(212)	%
Interest expense		28,966		32,595		(3,629)	(11)	%
Interest income		(1,417)		(258)		(1,159)	449	%
Foreign currency loss		171		1,134		(963)	(85)	%
Other income		(4,476)		(788)		(3,688)	468	%
Goodwill and intangible asset impairment charges		—		404,900		(404,900)	(100)	%
Depreciation and amortization of plant and equipment		70,799		66,561		4,238	6	%
Amortization of intangible assets		34,614		37,344		(2,730)	(7)	%
Share-based compensation		7,478		6,651		827	12	%
Accretion and non-cash adjustment of closure & post-closure liabilities		5,363		4,000		1,363	34	%
Business development and integration expenses		3,274		11,621		(8,347)	(72)	%
Adjusted EBITDA	$	154,874	$	170,159	$	(15,285)	(9)	%

Adjusted EBITDA is a complement to results provided in accordance with accounting principles generally accepted in the United States (“GAAP”) and we believe that such information provides additional useful information to analysts, stockholders and other users to understand the Company’s operating performance. Since Adjusted EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying calculations, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies. Items excluded from Adjusted

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EBITDA are significant components in understanding and assessing our financial performance. Adjusted EBITDA should not be considered in isolation or as an alternative to, or substitute for, net income (loss), cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity.

Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or a substitute for analyzing our results as reported under GAAP. Some of the limitations are:

●

Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

●

Adjusted EBITDA does not reflect our interest expense, or the requirements necessary to service interest or principal payments on our debt;

●

Adjusted EBITDA does not reflect our income tax expenses or the cash requirements to pay our taxes;

●

Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

●

Although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; and

●

Adjusted EBITDA does not reflect our business development and integration expenses.

2021 Compared to 2020

Revenue

Total revenue increased 6% to $988.0 million in 2021, compared with $933.9 million in 2020.

Waste Solutions

Waste Solutions segment revenue increased 6% to $451.2 million in 2021, compared to $425.4 million in 2020. T&D revenue increased 5% in 2021 compared to 2020, primarily as a result of a 6% increase in Base Business revenue, partially offset by an 8% decrease in project-based Event Business revenue. Transportation and logistics service revenue increased 11% in 2021 compared to 2020, reflecting Event Business projects utilizing more of the Company’s transportation and logistics services. Total tons of waste disposed of or processed across all of our facilities decreased 1% in 2021 compared to 2020. Total tons of waste disposed of or processed at our landfills increased 5% in 2021 compared to 2020.

T&D revenue from recurring Base Business waste generators increased 6% in 2021 compared to 2020 and comprised 76% of total T&D revenue. The increase in Base Business T&D revenue compared to the prior year primarily reflects higher T&D revenue from the metal manufacturing, chemical manufacturing, mining, exploration & production, general manufacturing and Other industry groups, partially offset by a decrease in Base Business T&D revenue from the utilities industry group.

T&D revenue from Event Business waste generators decreased 8% in 2021 compared to 2020 and comprised 24% of total T&D revenue. The decrease in Event Business T&D revenue compared to the prior year primarily reflects lower T&D revenue from the chemical manufacturing, utilities, metal manufacturing and transportation industry groups, partially offset by increases in Event Business T&D revenue from the waste management & remediation, Other and general manufacturing industry groups.

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The following table summarizes combined Base Business and Event Business T&D revenue growth, within the Waste Solutions segment, by waste generator industry for 2021 compared to 2020:


		T&D Revenue Growth
		2021 vs. 2020
Waste Management & Remediation		71%
Mining, Exploration & Production		51%
Other		14%
General Manufacturing		10%
Refining		8%
Broker / TSDF		3%
Metal Manufacturing		1%
Government		-3%
Chemical Manufacturing		-9%
Transportation		-22%
Utilities		-33%

Field Services

Field Services segment revenue increased 6% to $500.2 million in 2021 compared with $473.8 million in 2020. The increase in Field Services segment revenue is primarily attributable to higher revenues from our Remediation, Small Quantity Generation, Total Waste Management and Treatment & Disposal business lines, partially offset by lower revenues from our Transportation and Logistics, Emergency Response and Other business lines.

Energy Waste

Energy Waste segment revenue increased 5% to $36.6 million in 2021 compared with $34.7 million in 2020, primarily attributable to a partial recovery in energy markets and increases in energy-related exploration and production activities in the markets we serve.

Gross Profit

Total gross profit decreased 7% to $233.1 million in 2021, down from $250.2 million in 2020. Total gross margin was 24% in 2021 compared with 27% in 2020.

Waste Solutions

Waste Solutions segment gross profit decreased 4% to $154.2 million in 2021, down from $161.3 million in 2020. Total segment gross margin was 34% in 2021 compared with 38% in 2020. The decrease in segment gross margin was primarily attributable to a less favorable service mix and higher transportation, supplies and waste handling expenses in 2021 compared to 2020. T&D gross margin was 39% for 2021 compared with 42% for 2020.

Field Services

Field Services segment gross profit decreased 15% to $74.1 million in 2021, down from $87.2 million in 2020. Total segment gross margin was 15% in 2021 compared with 18% in 2020. The decrease in segment gross margin was primarily attributable to a less favorable service mix and higher subcontracted services and supplies expenses in 2021 compared to 2020.

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Energy Waste

Energy Waste segment gross profit increased 187% to $4.8 million in 2021, up from $1.7 million in 2020. Total segment gross margin was 13% in 2021 compared with 5% in 2020. The increase in segment gross margin was primarily attributable to improved operating leverage due to our restructuring activities undertaken in 2020 in response to reduced energy-related exploration and production investments in the markets we serve.

Selling, General and Administrative Expenses (“SG&A”)

Total SG&A decreased 3% to $199.7 million, or 20% of total revenue, in 2021, down from $206.2 million, or 22% of total revenue, in 2020.

Waste Solutions

Waste Solutions segment SG&A increased 3% to $27.3 million, or 6% of segment revenue, in 2021, compared with $26.5 million, or 6% of segment revenue, in 2020.

Field Services

Field Services segment SG&A decreased 5% to $48.2 million, or 10% of segment revenue, in 2021, down from $50.6 million, or 11% of segment revenue, in 2020. Field Services segment SG&A in 2020 includes $3.7 million of gains associated with the settlement and changes in fair value of contingent consideration liabilities. Excluding the impact of these gains, segment SG&A decreased 11% in 2021 compared with 2020, primarily attributable to lower intangible asset amortization expense, lower insurance costs, lower business development and integration expenses and lower employee labor and benefits costs.

Energy Waste

Energy Waste segment SG&A decreased 34% to $13.0 million, or 36% of segment revenue, in 2021, down from $19.7 million, or 57% of segment revenue, in 2020. The decrease in segment SG&A was primarily attributable to lower costs in 2021 due to our restructuring activities undertaken in 2020 in response to reduced energy-related exploration and production investments in the markets we serve.

Corporate

Corporate SG&A increased 2% to $111.2 million, or 11% of total revenue, in 2021, compared with $109.4 million, or 12% of total revenue, in 2020. Corporate SG&A in 2020 includes the recognition of a favorable legal settlement of $2.5 million for the reimbursement of health insurance related overcharges in prior years. Excluding the impact of this settlement, Corporate SG&A decreased 1% in 2021 compared with 2020, primarily attributable lower business development and integration expenses, lower insurance costs and lower equipment and supplies expenses, partially offset by lower bad debt recoveries, higher consulting and professional services expenses, higher information technology and software expenses and higher employee labor and benefit costs in 2021 compared to 2020.

Components of Adjusted EBITDA

Income tax expense

Income tax expense in 2021 was $4.8 million, resulting in a consolidated effective income tax rate of 47.2%. Income tax benefit in 2020 was $4.2 million, resulting in a consolidated effective income tax rate of 1.1%. The increase in our effective tax rate in 2021 compared to 2020 was primarily attributable to foreign rate differential from a higher portion of total earnings from our Canadian operations which are taxed at a higher rate and enhanced impacts on our effective tax rate of state taxes, share-based compensation, and other permanent items as a result of lower pre-tax earnings excluding impairments, partially offset by higher tax credits as a percentage of pre-tax earnings.

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Interest expense

Interest expense was $29.0 million in 2021 compared with $32.6 million in 2020. The decrease is primarily the result of the impact of lower interest rates on the variable portion of our outstanding debt, lower outstanding debt levels and lower interest expense amortization related to terminated swap agreements in 2021 compared to 2020.

Interest income

Interest income was $1.4 million in 2021 compared with $258,000 in 2020, primarily reflecting higher interest charged to customers with extended payment terms.

Foreign currency loss

We recognized a $171,000 non-cash foreign currency loss in 2021 compared with a $1.1 million non-cash foreign currency loss in 2020. Foreign currency gains and losses reflect changes in business activity conducted in a currency other than the USD, our functional currency. Additionally, we established intercompany loans with certain of our Canadian subsidiaries, whose functional currency is the Canadian dollar (“CAD”) as part of a tax and treasury management strategy allowing for repayment of third-party bank debt. These intercompany loans are payable by our Canadian subsidiaries to US Ecology in CAD requiring us to revalue the outstanding loan balance through our statements of operations based on USD/CAD currency movements from period to period. At December 31, 2021, we had $7.6 million of intercompany loans subject to currency revaluation.

Other income

Other income was $4.5 million in 2021 compared with other income of $788,000 in 2020. In the first quarter of 2021, the company recognized a gain of $3.5 million related to the change in the fair value of a minority interest investment.

Goodwill and intangible asset impairment charges

In 2020, the Company recorded goodwill impairment charges of $363.9 million related to its Energy Waste reporting unit, $14.4 million related to its Field Services reporting unit, $5.5 million related to its International reporting unit and intangible asset impairment charges of $21.1 million on certain operating permit intangible assets. See Note 13 to the Consolidated Financial Statements in “Part II, Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for additional information.

Depreciation and amortization of plant and equipment

Depreciation and amortization expense increased 6% to $70.8 million in 2021 compared with $66.6 million in 2020, primarily reflecting incremental depreciation expense on plant and equipment assets placed in service in 2021.

Amortization of intangibles

Intangible assets amortization expense decreased 7% to $34.6 million in 2021 compared with $37.3 million in 2020, primarily reflecting the full amortization of certain intangible asset in 2021.

Share-based compensation

Share-based compensation expense increased 12% to $7.5 million in 2021, compared with $6.7 million 2020, primarily reflecting an increase in equity-based awards granted to employees.

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Accretion and non-cash adjustment of closure and post-closure liabilities

Accretion and non-cash adjustment of closure and post-closure liabilities increased 34% to $5.4 million in 2021 compared with $4.0 million in 2020, primarily reflecting unfavorable non-cash adjustments to post-closure liabilities recorded in 2021 due to changes in cost estimates.

Business development and integration expenses

Business development and integration expenses decreased 72% to $3.3 million in 2021, compared to $11.6 million in 2020, primarily reflecting lower NRC Merger integration expenses incurred in 2021 compared to 2020.

Liquidity and Capital Resources

We are continually evaluating the impact of the COVID-19 pandemic on our financial condition and liquidity. Although the situation remains uncertain, we believe that we have sufficient cash flow from operations and available borrowings under the Revolving Credit Facility to execute our business strategy in the short and longer term. While management continues to closely monitor the impact of the COVID-19 pandemic, including the spread of new variants of the virus and government and private sector responses to it in each of the locations and sectors in which the Company does business, we believe that the Company’s strategy during the pandemic has increased the Company’s resiliency and positioned the Company to take advantage of any post-pandemic recovery.

Our primary sources of liquidity are cash and cash equivalents, cash generated from operations and borrowings under the Credit Agreement. At December 31, 2021, we had $67.5 million in unrestricted cash and cash equivalents immediately available and $71.2 million of borrowing capacity, subject to our leverage covenant limitation, available under our Revolving Credit Facility. 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 are funding operations, capital expenditures, paying principal and interest on our long-term debt, and paying declared dividends pursuant to our dividend policy. We believe future operating cash flows will be sufficient to meet our future operating, investing and dividend cash needs for the foreseeable future. Furthermore, existing cash balances and availability of additional borrowings under the Credit Agreement provide additional sources of liquidity should they be required. On June 29, 2021, Predecessor US Ecology amended the Credit Agreement to extend the maturity date for the existing revolving credit facility to June 29, 2026. The Credit Agreement was also amended to extend the existing covenant relief period to end on the earlier of December 31, 2022 and the date Predecessor US Ecology elects to end such covenant relief period pursuant to the terms therein and to permanently increase Predecessor US Ecology’s consolidated total net leverage ratio requirement as of the end of each fiscal quarter ending on and after December 31, 2022 to 4.50 to 1.00. See additional information on the Fourth Amendment under “Amendments to the Credit Agreement,” below.

Operating Activities. In 2021, net cash provided by operating activities was $116.3 million. This primarily reflects net income of $5.3 million, non-cash depreciation, amortization and accretion of $110.8 million, an increase in accounts payable and accrued liabilities of $16.0 million, share-based compensation expense of $7.5 million, and a decrease in income taxes receivable of $3.8 million, partially offset by an increase in accounts receivable of $14.7 million, an increase in other assets of $5.3 million, a gain of $3.5 million related to a change in the fair value of a minority interest investment and a decrease in closure and post-closure obligations of $3.3 million. Impacts on net income are due to the factors discussed above under “Results of Operations.” Changes in accounts receivable and accounts payable and accrued liabilities are attributable to the timing of payments from customers and payments to vendors for products and services. The decrease in income taxes receivable is primarily attributable to the timing of prior year income tax refund claims received and current year income tax payments. The increase in other assets is primarily attributable to prepaid insurance costs and refundable deposits associated with our annual renewal process. The decrease in closure and post-closure obligations is primarily attributable to payments for planned landfill cell closure activities primarily at our Karnes County, Texas and Belleville, Michigan facilities.

We calculate days sales outstanding (“DSO”) as a rolling four quarter average of our net accounts receivable divided by our quarterly revenue. Our net accounts receivable balance for the DSO calculation includes trade accounts receivable, net

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of allowance for doubtful accounts and unbilled accounts receivable, adjusted for changes in deferred revenue. DSO was 84 days as of December 31, 2021 and 2020.

In 2020, net cash provided by operating activities was $107.1 million. This primarily reflects net loss of $389.4 million, non-cash goodwill and intangible asset impairment charges of $404.9 million, non-cash depreciation, amortization and accretion of $107.9 million, a decrease in accounts receivable of $8.4 million and share-based compensation and business development and integration expenses of $7.8 million, partially offset by a decrease in accounts payable and accrued liabilities of $13.6 million, an increase in income taxes receivable of $7.0 million and an increase in other assets of $5.4 million. Impacts on net loss are due to the factors discussed above under “Results of Operations.” Changes in accounts receivable and accounts payable and accrued liabilities are attributable to the timing of payments from customers and payments to vendors for products and services. The increase in other assets is primarily attributable to prepaid insurance costs and refundable deposits associated with our annual renewal process. The increase in income taxes receivable is primarily attributable to net operating losses in 2020 that will be carried back to prior years with taxable income for a refund of taxes paid in those prior tax years, which were at higher tax rates.

Investing Activities. In 2021, net cash used in investing activities was $64.6 million, primarily related to capital expenditures of $68.7 million, and a $712,000 investment in the preferred stock of a privately held company, partially offset by $2.4 million in proceeds from the sale of property and equipment and $2.1 million in proceeds from the sale of short-term investments. Capital projects consisted primarily of landfill cell development and infrastructure upgrades at our operating facilities.

In 2020, net cash used in investing activities was $57.6 million, primarily related to capital expenditures of $57.4 million and the acquisition of Impact Environmental, Inc. for $3.3 million in January 2020. Capital projects consisted primarily of equipment purchases and infrastructure upgrades at our corporate and operating facilities.

Financing Activities. During 2021, net cash used in financing activities was $58.1 million, consisting primarily of $44.0 million in payments on our revolving credit facility, $5.6 million in payments on our equipment financing obligations, $4.5 million in quarterly payments on our term loan and $2.6 million in payments to settle acquired contingent consideration liabilities.

During 2020, net cash used in financing activities was $18.5 million, consisting primarily of $90.0 million in borrowings on our revolving credit facility, partially offset by $74.5 million in payments on our revolving credit facility and term loan, repurchases of our common stock of $18.3 million, $6.3 million in payments on our equipment financing obligations and dividend payments to our stockholders of $5.7 million. Quarterly cash dividends were suspended commencing with the second quarter of 2020 and no dividends have been paid since the first quarter 2020.

Credit Agreement

On April 18, 2017, US Ecology Holdings, Inc. (f/k/a US Ecology, Inc.) (“Predecessor US Ecology”), now a wholly-owned subsidiary of the Company, entered into the Credit Agreement that provides for a $500.0 million revolving credit facility (the “Revolving Credit Facility”), including a $75.0 million sublimit for the issuance of standby letters of credit and a $40.0 million sublimit for the issuance of swingline loans used to fund short-term working capital requirements. The Credit Agreement also contains an accordion feature whereby Predecessor US Ecology may request up to $200.0 million of additional funds through an increase to the Revolving Credit Facility, through incremental term loans, or some combination thereof. As described herein, the Credit Agreement was amended in August and November 2019 in connection with the NRC Merger; and further amended on June 26, 2020 and June 29, 2021 pursuant to the Third Amendment and Fourth Amendment (each as defined herein), respectively.

During the year ended December 31, 2021, the effective interest rate on the Revolving Credit Facility, after giving effect to the impact of our interest rate swap and the amortization of the loan discount and debt issuance costs, was 4.00%. Interest only payments are due either quarterly or on the last day of any interest period, as applicable. In March 2020, the Company entered into an interest rate swap agreement, effectively fixing the interest rate on $440.0 million, or approximately 59%, of the Revolving Credit Facility and term loan borrowings outstanding as of December 31, 2021.

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As modified by the Fourth Amendment as described herein, Predecessor US Ecology is required to pay a commitment fee ranging from 0.175% to 0.40% on the average daily unused portion of the Revolving Credit Facility, with such commitment fee to be based upon Predecessor US Ecology’s total net leverage ratio (as defined in the Credit Agreement). The maximum letter of credit capacity under the Revolving Credit Facility is $75.0 million and the Credit Agreement provides for a letter of credit fee equal to the applicable margin for LIBOR loans under the Revolving Credit Facility. At December 31, 2021, there were $303.0 million of revolving credit loans outstanding on the Revolving Credit Facility. These revolving credit loans are due on June 29, 2026 (or such earlier date as the revolving credit facility may otherwise terminate pursuant to the terms of the Credit Agreement) and are presented as long-term debt in the consolidated balance sheets.

Predecessor US Ecology has entered into a sweep arrangement whereby day-to-day cash requirements in excess of available cash balances are advanced to the Company on an as-needed basis with repayments of these advances automatically made from subsequent deposits to our cash operating accounts (the “Sweep Arrangement”). Total advances outstanding under the Sweep Arrangement are subject to the $40.0 million swingline loan sublimit under the Revolving Credit Facility. Predecessor US Ecology’s revolving credit loans outstanding under the Revolving Credit Facility are not subject to repayment through the Sweep Arrangement. As of December 31, 2021, there were no borrowings outstanding subject to the Sweep Arrangement.

As of December 31, 2021, the availability under the Revolving Credit Facility was $71.2 million, subject to our leverage covenant limitation, with $12.2 million of the Revolving Credit Facility issued in the form of standby letters of credit utilized as collateral for closure and post-closure financial assurance and other assurance obligations.

Amendments to the Credit Agreement

On August 6, 2019, Predecessor US Ecology entered into the First Amendment (as defined herein). Effective November 1, 2019, the First Amendment, among other things, extended the expiration of the Revolving Credit Facility to November 1, 2024, permitted the issuance of a $400.0 million incremental term loan to be used to refinance the indebtedness of NRC and pay related transaction expenses in connection with the NRC Merger, modified the accordion feature allowing Predecessor US Ecology to request up to the greater of (x) $250.0 million and (y) 100% of Consolidated EBITDA (as defined in the credit agreement) plus certain additional amounts, increased the sublimit for the issuance of swingline loans to $40.0 million and increased the maximum consolidated total net leverage ratio to 4.00 to 1.00.

On November 1, 2019, Predecessor US Ecology entered into the Second Amendment (as defined herein). Effective November 1, 2019, the Second Amendment, among other things, amended the Credit Agreement to increase the capacity for incremental term loans by $50.0 million and provided for Wells Fargo lending $450.0 million in incremental term loans to Predecessor US Ecology to pay off the existing debt of NRC in connection with the NRC Merger, to pay certain fees, costs and expenses incurred in connection with the NRC Merger and to repay outstanding borrowings under the Revolving Credit Facility. The seven-year incremental term loan matures November 1, 2026, requires principal repayment of 1% annually, and bears interest at LIBOR plus 2.25% or a base rate plus 1.25% (with a step-up to LIBOR plus 2.50% or a base rate plus 1.50% in the event that US Ecology credit ratings are not BB (with a stable or better outlook) or better from S&P and Ba2 (with a stable or better outlook) or better from Moody’s). During the year ended December 31, 2021, the effective interest rate on the term loan, including the impact of the amortization of debt issuance costs, was 2.86%.

On June 26, 2020, Predecessor US Ecology entered into the Third Amendment. Among other things, the Third Amendment amended the Credit Agreement to provide a covenant relief period through the earlier of March 31, 2022 and the date Predecessor US Ecology elects to end such covenant relief period pursuant to the terms therein. During the covenant relief period, the Third Amendment increased Predecessor US Ecology’s consolidated total net leverage ratio requirement as of the end of each fiscal quarter to certain ratios above the 4.00 to 1.00 ratio in effect immediately before giving effect to the Third Amendment, subject to compliance with certain restrictions on restricted payments and permitted acquisitions during such covenant relief period. Furthermore, during the covenant relief period, under the Revolving Credit Facility, revolving credit loans are available based on a base rate (as defined in the Credit Agreement) or LIBOR, at the Company’s option, plus an applicable margin, which is determined according to a pricing grid under which the interest rate decreases or increases based on our ratio of funded debt to Consolidated EBITDA (as defined in the Credit Agreement).

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On June 29, 2021, Predecessor US Ecology entered into the Fourth Amendment. Among other things, the Fourth Amendment amends the Credit Agreement to extend the maturity date for the existing revolving credit facility to June 29, 2026 (or such earlier date as the revolving credit facility may otherwise terminate pursuant to the terms of the Credit Agreement). The Fourth Amendment also amends the Credit Agreement (i) to extend the existing covenant relief period to end on the earlier of December 31, 2022 and the date Predecessor US Ecology elects to end such covenant relief period pursuant to the terms therein and (ii) to permanently increase Predecessor US Ecology’s consolidated total net leverage ratio requirement as of the end of each fiscal quarter ending on and after December 31, 2022 to 4.50 to 1.00. During the covenant relief period until the fiscal quarter ending December 31, 2022, the Fourth Amendment increases Predecessor US Ecology’s consolidated total net leverage ratio requirement as of the end of each fiscal quarter to certain ratios above the 4.50 to 1.00 ratio otherwise in effect after giving effect to the Fourth Amendment, subject to compliance with certain restrictions on restricted payments and permitted acquisitions during such covenant relief period. Furthermore, after giving effect to the Fourth Amendment and whether or not the covenant relief period is in effect, (i) if the Borrower’s consolidated total net leverage ratio is equal to or greater than 4.00 to 1.00 but less than 4.50 to 1.00, the interest rate on all outstanding borrowings of revolving credit loans under the Credit Agreement will step-up to the LIBOR plus 2.25% or a base rate plus 1.25% and the commitment fee will step-up to 0.375% and (ii) if Predecessor US Ecology’s consolidated total net leverage ratio is greater than 4.50 to 1.00, the interest rate on all outstanding borrowings of revolving credit loans under the Credit Agreement will step-up to LIBOR plus 2.50% or a base rate plus 1.50% and the commitment fee will step-up to 0.40%, in each case, pursuant to the terms of the Credit Agreement. The Fourth Amendment also reset any outstanding usage of certain negative covenant baskets, including baskets in connection with the indebtedness, liens, investments, asset dispositions, restricted payments and affiliate transactions negative covenants.

See Note 16 to the Consolidated Financial Statements in “Part II, Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for additional information on the Company’s debt.

Contractual Obligations and Guarantees

Contractual Obligations

US Ecology’s contractual obligations at December 31, 2021 become due as follows:


	Payments Due by Period
$s in thousands	Total		2022		2023-2024		2025-2026		Thereafter
Closure and post-closure obligations (1)	$	393,660	$	6,004	$	21,183	$	19,061	$	347,412
Credit agreement obligations (2)		744,000		4,500		9,000		730,500		—
Interest expense (3)		99,405		22,306		43,373		33,726		—
Total contractual obligations (4)	$	1,237,065	$	32,810	$	73,556	$	783,287	$	347,412

(1)	For the purposes of the table above, closure and post-closure obligations are shown on an undiscounted basis and inflated using an estimated annual inflation rate of 2.6%. Cash payments for closure and post-closure obligation extend to the year 2130.

(2)

At December 31, 2021, there were $303.0 million of revolving credit loans outstanding on the Revolving Credit Facility. These revolving credit loans are due on June 29, 2026 (or such earlier date as the revolving credit facility may otherwise terminate pursuant to the terms of the Credit Agreement). At December 31, 2021 there were $441.0 million of term loan borrowings outstanding. The term loan matures on November 1, 2026 and requires principal repayment of 1% annually.

(3)

Interest expense has been calculated using the interest rate of 2.59% in effect at December 31, 2021 on the unhedged variable-rate portion of the Revolving Credit Facility borrowings and 3.33% on the fixed rate hedged portion of the Revolving Credit Facility borrowings. Interest expense has been calculated using the interest rate of 2.59% in effect at December 31, 2021 on the unhedged variable-rate portion of the term loan borrowings and 3.33% on the fixed rate hedged portion of the term loan borrowings. The interest expense calculation reflects assumed payments on the Revolving Credit Facility and the term loan borrowings consistent with the disclosures in footnote (2) above.

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(4)	As we are not able to reasonably estimate when we would make any cash payments to settle unrecognized tax benefits of $256,000, such amounts have not been included in the table above.

Guarantees

We enter into a wide range of indemnification arrangements, guarantees and assurances in the ordinary course of business and have evaluated agreements that contain guarantees and indemnification clauses. These include tort indemnities, tax indemnities, indemnities against third-party claims arising out of arrangements to provide services to us and indemnities related to the sale of our securities. We also indemnify individuals made party to any suit or proceeding if that individual was acting as an officer or director of US Ecology or was serving at the request of US Ecology or any of its subsidiaries during their tenure as a director or officer. We also provide guarantees and indemnifications for the benefit of our wholly-owned subsidiaries to satisfy performance obligations, including closure and post-closure financial assurances. It is difficult to quantify the maximum potential liability under these indemnification arrangements; however, we are not currently aware of any material liabilities to the Company or any of its subsidiaries arising from these arrangements.

Environmental Matters

We maintain funded trust agreements, surety bonds and insurance policies for future closure and post-closure obligations at both current and formerly operated disposal facilities. These funded trust agreements, surety bonds and insurance policies are based on management estimates of future closure and post-closure monitoring using engineering evaluations and interpretations of regulatory requirements which are periodically updated. Accounting for closure and post-closure costs includes final disposal cell capping and revegetation, soil and groundwater monitoring and routine maintenance and surveillance required after a site is closed.

We estimate that our undiscounted future closure and post-closure costs for all facilities was approximately $393.7 million at December 31, 2021, with a median payment year of 2076. Our future closure and post-closure estimates are our best estimate of current costs and are updated periodically to reflect current technology, cost of materials and services, applicable laws, regulations, permit conditions or orders and other factors. These current costs are adjusted for anticipated annual inflation, which we assumed to be 2.6% as of December 31, 2021. These future closure and post-closure estimates are discounted to their present value for financial reporting purposes using our credit-adjusted risk-free interest rate, which approximates our incremental long-term borrowing rate in effect at the time the obligation is established or when there are upward revisions to our estimated closure and post-closure costs. At December 31, 2021, our weighted-average credit-adjusted risk-free interest rate was 5.3%. For financial reporting purposes, our recorded closure and post-closure obligations were $98.9 million and $95.9 million as of December 31, 2021 and 2020, respectively.

Through December 31, 2021, we have met our financial assurance requirements through insurance, surety bonds, standby letters of credit and self-funded restricted trusts.

U.S. Operating and Non-Operating Facilities

We cover our closure and post-closure obligations for our U.S. operating facilities through the use of third-party insurance policies, surety bonds and standby letters of credit. As of December 31, 2021, we had provided collateral of $721,000 in funded trust agreements, $13.8 million in surety bonds, issued $2.8 million in letters of credit for financial assurance and have insurance policies of approximately $120.5 million for closure and post-closure obligations at covered U.S. operating and non-operating facilities. Cash held in funded trust agreements for our closure and post-closure obligations is identified as Restricted cash and investments on our consolidated balance sheets.

All closure and post-closure funding obligations for our Beatty, Nevada and Richland, Washington facilities revert to the respective state. Volume based fees are collected from our customers and remitted to state-controlled trust funds to cover the estimated cost of closure and post-closure obligations.

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Stablex

We use commercial surety bonds to cover our closure obligations for our Stablex facility located in Blainville, Québec, Canada. Our lease agreement with the Province of Québec requires that the surety bond be maintained for 25 years after the lease expires in 2023. At December 31, 2021 we had $873,000 in commercial surety bonds dedicated for closure obligations. These bonds were renewed in November and December 2021 and expire in November and December 2022. Post-closure funding obligations for the Stablex landfill revert back to the Province of Québec through a dedicated trust account that is funded based on a per-metric-ton disposed fee by Stablex.

We expect to renew insurance policies and commercial surety bonds in the future. If we are unable to obtain adequate closure, post-closure or environmental liability insurance and/or commercial surety bonds in future years, any partial or completely uninsured claim against us, if successful and of sufficient magnitude, could have a material adverse effect on our financial condition, results of operations or cash flows. Additionally, continued access to casualty and pollution legal liability insurance with sufficient limits, at acceptable terms, is important to obtaining new business. Failure to maintain adequate financial assurance could also result in regulatory action including early closure of facilities. While we believe we will be able to maintain the requisite financial assurance policies at a reasonable cost, premium and collateral requirements may materially increase.

Operation of disposal facilities creates operational, closure and post-closure obligations that could result in unplanned monitoring and corrective action costs. We cannot predict the likelihood or effect of all such costs, new laws or regulations, litigation or other future events affecting our facilities. We do not believe that continuing to satisfy our environmental obligations will have a material adverse effect on our financial condition or results of operations.

Seasonal Effects

Seasonal fluctuations due to weather and budgetary cycles can influence the timing of customer spending for our services. Typically, in the first quarter of each calendar year there is less demand for our services due to weather-related reduced construction and business activities while we experience improvement in our second and third quarters of each calendar year as weather conditions and other business activity improves.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements require us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates included in our critical accounting policies discussed below and those accounting policies and use of estimates discussed in Notes 2 and 3 to the Consolidated Financial Statements located in “Part II, Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. We base our estimates on historical experience and on various assumptions and other factors we believe to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We make adjustments to judgments and estimates based on current facts and circumstances on an ongoing basis. Historically, actual results have not deviated significantly from those determined using the estimates described below or in Notes 2 and 3 to the Consolidated Financial Statements located in “Part II, Item 8. Financial Statements and Supplementary Data” to this Annual Report on Form 10-K. However, actual amounts could differ materially from those estimated at the time the consolidated financial statements are prepared.

We believe the following critical accounting policies are important to understand our financial condition and results of operations and require management’s most difficult, subjective or complex judgments, often as a result of the need to estimate the effect of matters that are inherently uncertain.

Revenue Recognition

Revenues are recognized when control of the promised services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.

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We recognize revenue from three primary sources: (1) waste treatment, recycling and disposal services, (2) field and industrial waste management services and (3) waste transportation services.

Our waste treatment and disposal customers are legally obligated to properly treat and dispose of their waste in accordance with local, state and federal laws and regulations. As our customers do not possess the resources to properly treat and dispose of their waste independently, they contract with the Company to perform the services. Waste treatment, recycling, and disposal revenue results primarily from fixed fees charged to customers for treatment and/or disposal or recycling of specified wastes. Waste treatment, recycling, and disposal revenue is generally charged on a per-ton or per-yard basis at contracted prices and is recognized over time as the services are performed. Our treatment and disposal services are generally performed as the waste is received and considered complete upon final disposal.

Field and industrial waste management services revenue results primarily from specialty onsite services such as high-pressure cleaning, tank cleaning, decontamination, remediation, transportation, spill cleanup and emergency response at refineries, chemical plants, steel and automotive plants, and other government, commercial and industrial facilities. We also provide hazardous waste packaging and collection services and total waste management solutions at customer sites and through our 10-day transfer facilities. These services are provided based on purchase orders or agreements with the customer and include prices based upon daily, hourly or job rates for equipment, materials and personnel. Generally, the pricing in these types of contracts is fixed, but the quantity of services to be provided during the contract term is variable and revenues are recognized over the term of the agreements or as services are performed. As we have a right to consideration from our customers in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date, we have applied the practical expedient to recognize revenue in the amount to which we have the right to invoice. Additionally, we have customers that pay annual retainer fees, primarily for our standby services, under long-term or evergreen contracts. Such retainer fees are recognized over time as the services are performed and it is probable that a significant reversal in the amount of cumulative revenue recognized on the contracts will not occur.

Transportation and logistics revenue results from delivering customer waste to a disposal facility for treatment and/or disposal or recycling. Transportation services are generally not provided on a stand-alone basis and instead are bundled with other Company services. However, in some instances we provide transportation and logistics services for shipment of waste from cleanup sites to disposal facilities operated by other companies. For such arrangements, we allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customer or using expected cost-plus margin. Transportation revenue is recognized over time as the waste is transported.

Taxes and fees collected from customers concurrent with revenue-producing transactions to be remitted to governmental authorities are excluded from revenue.

Our Richland, Washington disposal facility is regulated by the WUTC, which approves our rates for disposal of LLRW. Annual revenue levels are established based on a rate agreement with the WUTC at amounts sufficient to cover our costs of operation, including facility maintenance, equipment replacement and related costs, and provide us with a reasonable profit. Per-unit rates charged to LLRW customers during the year are based on our evaluation of disposal volume and radioactivity projections submitted to us by waste generators. Our proposed rates are then reviewed and approved by the WUTC. If annual revenue exceeds the approved levels set by the WUTC, we are required to refund excess collections to facility users on a pro-rata basis. Refundable excess collections, if any, are recorded in Accrued liabilities in the consolidated balance sheets. The current rate agreement with the WUTC was extended in 2019 and is effective until December 31, 2025.

Disposal Facility Accounting

We amortize landfill and disposal assets and certain related permits over their estimated useful lives. The units-of-consumption method is used to amortize landfill cell construction and development costs and asset retirement costs. Under the units-of-consumption method, we include costs incurred to date as well as future estimated construction costs in the amortization base of the landfill assets. Additionally, where appropriate, as discussed below, we also include probable expansion airspace that has yet to be permitted in the calculation of the total remaining useful life of the landfill asset. If we determine that expansion capacity should no longer be considered in calculating the total remaining useful life

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of a landfill asset, we may be required to recognize an asset impairment or incur significantly higher amortization expense over the remaining estimated useful life of the landfill asset. If at any time we make the decision to abandon the expansion effort, the capitalized costs related to the expansion effort would be expensed in the period of abandonment.

Our landfill assets and liabilities fall into the following two categories, each of which require accounting judgments and estimates:

●

Landfill assets comprised of capitalized landfill development costs.

●

Disposal facility retirement obligations relating to our capping, closure and post-closure liabilities that result in corresponding retirement assets.

Landfill Assets

Landfill assets include the costs of landfill site acquisition, permits and cell design and construction incurred to date. Landfill cells represent individual disposal areas within the overall treatment and disposal site and may be subject to specific permit requirements in addition to the general permit requirements associated with the overall site.

To develop, construct and operate a landfill cell, we must obtain permits from various regulatory agencies at the local, state and federal levels. The permitting process requires an initial site study to determine whether the location is feasible for landfill operations. The initial studies are reviewed by our environmental management group and then submitted to the regulatory agencies for approval. During the development stage we capitalize certain costs that we incur after site selection but before the receipt of all required permits if we believe that it is probable that the landfill cell will be permitted.

Upon receipt of regulatory approval, technical landfill cell designs are prepared. The technical designs, which include the detailed specifications to develop and construct all components of the landfill cell including the types and quantities of materials that will be required, are reviewed by our environmental management group. The technical designs are submitted to the regulatory agencies for approval. Upon approval of the technical designs, the regulatory agencies issue permits to develop and operate the landfill cell.

The types of costs that are detailed in the technical design specifications generally include excavation, natural and synthetic liners, construction of leachate collection systems, installation of groundwater monitoring wells, construction of leachate management facilities and other costs associated with the development of the site. We review the adequacy of our cost estimates at least annually. These development costs, together with any costs incurred to acquire, design and permit the landfill cell, including personnel costs of employees directly associated with the landfill cell design, are recorded to the landfill asset on the balance sheet as incurred.

To match the expense related to the landfill asset with the revenue generated by the landfill operations, we amortize the landfill asset on a units-of-consumption basis over its operating life, typically on a cubic yard or cubic meter of disposal space consumed. The landfill asset is fully amortized at the end of a landfill cell’s operating life. The per-unit amortization rate is calculated by dividing the sum of the landfill asset net book value plus estimated future development costs (as described above) for the landfill cell, by the landfill cell’s estimated remaining disposal capacity. Amortization rates are influenced by the original cost basis of the landfill cell, including acquisition costs, which in turn is determined by geographic location and market values. We have secured significant landfill assets through business acquisitions and valued them at the time of acquisition based on fair value.

Included in the technical designs are factors that determine the ultimate disposal capacity of the landfill cell. These factors include the area over which the landfill cell will be developed, such as the depth of excavation, the height of the landfill cell elevation and the angle of the side-slope construction. Landfill cell capacity used in the determination of amortization rates of our landfill assets includes both permitted and unpermitted disposal capacity. Unpermitted disposal capacity is included when management believes achieving final regulatory approval is probable based on our analysis of site conditions and interactions with applicable regulatory agencies.

We review the estimates of future development costs and remaining disposal capacity for each landfill cell at least annually. These costs and disposal capacity estimates are developed using input from independent engineers and internal technical

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and accounting managers and are reviewed and approved by our environmental management group. Any changes in future estimated costs or estimated disposal capacity are reflected prospectively in the landfill cell amortization rates.

We assess our long-lived landfill assets for impairment when an event occurs or circumstances change that indicate the carrying amount may not be recoverable. Examples of events or circumstances that may indicate impairment of any of our landfill assets include, but are not limited to, the following:

●

Changes in legislative or regulatory requirements impacting the landfill site permitting process making it more difficult and costly to obtain and/or maintain a landfill permit;

●

Actions by neighboring parties, private citizen groups or others to oppose our efforts to obtain, maintain or expand permits, which could result in denial, revocation or suspension of a permit and adversely impact the economic viability of the landfill. As a result of opposition to our obtaining a permit, improved technical information as a project progresses, or changes in the anticipated economics associated with a project, we may decide to reduce the scope of, or abandon, a project, which could result in an asset impairment; and

●

Unexpected significant increases in estimated costs, significant reductions in prices we are able to charge our customers or reductions in disposal capacity that affect the ongoing economic viability of the landfill.

Disposal Facility Retirement Obligations

Disposal facility retirement obligations include the cost to close, maintain and monitor landfill cells and support facilities. As individual landfill cells reach capacity, we must cap and close the cells in accordance with the landfill cell permits. These capping and closure requirements are detailed in the technical design of each landfill cell and included as part of our approved regulatory permit. After the entire landfill cell has reached capacity and is certified closed, we must continue to maintain and monitor the landfill cell for a post-closure period, which generally extends for 30 years. Costs associated with closure and post-closure requirements generally include maintenance of the landfill cell and groundwater systems, and other activities that occur after the landfill cell has ceased accepting waste. Costs associated with post-closure monitoring generally include groundwater sampling, analysis and statistical reports, transportation and disposal of landfill leachate and erosion control costs related to the final cap.

We have a legally enforceable obligation to operate our landfill cells in accordance with the specific requirements, regulations and criteria set forth in our permits. This includes executing the approved closure/post-closure plan and closing/capping the entire landfill cell in accordance with the established requirements, design and criteria contained in the permit. As a result, we record the fair value of our disposal facility retirement obligations as a liability in the period in which the regulatory obligation to retire a specific asset is triggered. For our individual landfill cells, the required closure and post-closure obligations under the terms of our permits and our intended operation of the landfill cell are triggered and recorded when the cell is placed into service and waste is initially disposed in the landfill cell. The fair value is based on the total estimated costs to close the landfill cell and perform post-closure activities once the landfill cell has reached capacity and is no longer accepting waste, discounted using a credit-adjusted risk-free rate. Retirement obligations are increased each year to reflect the passage of time by accreting the balance at the weighted average credit-adjusted risk-free rate that is used to calculate the recorded liability, with accretion charged to direct operating costs. Actual cash expenditures to perform closure and post-closure activities reduce the retirement obligation liabilities as incurred. After initial measurement, asset retirement obligations are adjusted at the end of each period to reflect changes, if any, in the estimated future cash flows underlying the obligation. Disposal facility retirement assets are capitalized as the related disposal facility retirement obligations are incurred. Disposal facility retirement assets are amortized on a units-of-consumption basis as the disposal capacity is consumed.

Our disposal facility retirement obligations represent the present value of current cost estimates to close, maintain and monitor landfills and support facilities as described above. Cost estimates are developed using input from independent engineers, internal technical and accounting managers, as well as our environmental management group’s interpretation of current legal and regulatory requirements, and are intended to approximate fair value. We estimate the timing of future payments based on expected annual disposal airspace consumption and then inflate the current cost estimate by an inflation rate, estimated at December 31, 2021 to be 2.6%. Inflated current costs are then discounted using our credit-adjusted risk-free interest rate, which approximates our incremental borrowing rate in effect at the time the obligation is established or when there are upward revisions to our estimated closure and post-closure costs. Our weighted-average credit-adjusted

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risk-free interest rate at December 31, 2021 was approximately 5.3%. Final closure and post-closure obligations are currently estimated as being paid through the year 2130. During 2021 we updated several assumptions, including estimated costs and timing of closing our disposal cells. These updates resulted in a net increase to our post-closure obligations of $732,000 in 2021.

We update our estimates of future capping, closure and post-closure costs and of future disposal capacity for each landfill cell on an annual basis. Changes in inflation rates or the estimated costs, timing or extent of the required future activities to close, maintain and monitor landfills and facilities result in both: (i) a current adjustment to the recorded liability and related asset and (ii) a change in accretion and amortization rates which are applied prospectively over the remaining life of the asset. A hypothetical 1% increase in the inflation rate would increase our closure/post-closure obligation by $24.4 million. A hypothetical 10% increase in our cost estimates would increase our closure/post-closure obligation by $10.5 million.

Goodwill and Intangible Assets

Goodwill

As of December 31, 2021, the Company’s goodwill balance was $413.1 million. We assess goodwill for impairment during the fourth quarter as of October 1 of each year, and also if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The assessment consists of comparing the fair value of the reporting unit to the carrying value of the net assets assigned to the reporting unit, including goodwill. Some of the factors that could indicate impairment include a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, or failure to generate sufficient cash flows at the reporting unit. For example, field services represents an emerging business for the Company and has been the focus of a shift in strategy since the acquisition of NRC and EQ. Failure to execute on planned growth initiatives within this business could lead to the impairment of goodwill and intangible assets in future periods.

We determine our reporting units by identifying the components of each operating segment, and then aggregate components having similar economic characteristics based on quantitative and/or qualitative factors. At December 31, 2021, we had seven reporting units, six of which had allocated goodwill.

Fair values are generally determined by an income approach, discounting projected future cash flows based on our expectations of the current and future operating environment, using a market approach, applying a multiple of earnings based on guideline for publicly traded companies, or a combination thereof. Estimating future cash flows requires significant judgment about factors such as general economic conditions and projected growth rates, and our estimates often vary from the cash flows eventually realized. The rates used to discount projected future cash flows reflect a weighted average cost of capital based on our industry, capital structure and risk premiums including those reflected in the current market capitalization. In the event the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount of a reporting unit exceeds its fair value, goodwill of the reporting unit is considered impaired, and an impairment charge would be recognized during the period in which the determination has been made for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized will not exceed the total amount of goodwill allocated to that reporting unit.

Assessing impairment inherently involves management judgments as to the assumptions used to calculate fair value of the reporting units and the impact of market conditions on those assumptions. The key inputs that management uses in its assumptions to estimate the fair value of our reporting units under the income-based approach are as follows:

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Projected cash flows of the reporting unit, with consideration given to projected revenues, operating margins and the levels of capital investment required to generate the corresponding revenues; and

●

Weighted average cost of capital (“WACC”), the risk-adjusted rate used to discount the projected cash flows.

To develop the projected cash flows of our reporting units, management considers factors that may impact the revenue streams within each reporting unit. These factors include, but are not limited to, economic conditions on both a global scale and specifically in the regions in which the reporting units operate, customer relationships, strategic plans and

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opportunities, required returns on invested capital and competition from other service providers. With regard to operating margins, management considers its historical reporting unit operating margins on the revenue streams within each reporting unit, adjusting historical margins for the projected impact of current market trends on both fixed and variable costs.

Expected future after-tax operating cash flows of each reporting unit are discounted to a present value using a risk-adjusted discount rate. Estimates of future cash flows require management to make significant assumptions regarding future operating performance including the projected mix of revenue streams within each reporting unit, projected operating margins, the amount and timing of capital investments and the overall probability of achieving the projected cash flows, as well as future economic conditions, which may result in actual future cash flows that are different than management’s estimates. The discount rate, which is intended to reflect the risks inherent in future cash flow projections, used in estimating the present value of future cash flows, is based on estimates of the WACC of market participants relative to the reporting units. Financial and credit market volatility can directly impact certain inputs and assumptions used to develop the WACC.

The result of the annual assessment of goodwill undertaken in the fourth quarter of 2021 indicated that the fair value of each of our reporting units was in excess of its respective carrying value.

In connection with our financial review and forecasting procedures performed during the first quarter of 2020, management determined that the projected future cash flows of our Energy Waste (“EW”) reporting unit and our International reporting unit (described below) indicated that the fair value of such reporting units may be below their respective carrying amounts. Accordingly, we performed an interim assessment of each reporting unit’s fair value as of March 31, 2020 (the “Interim Assessment”). Based on the results of the Interim Assessment, we recognized goodwill impairment charges of $283.6 million related to our EW reporting unit and $16.7 million related to our International reporting unit in the first quarter of 2020. During the fourth quarter of 2020, the Company finalized the purchase price allocation related to the NRC Merger. The finalization of fair value estimates during the fourth quarter of 2020, and resulting final determination of goodwill by reporting unit, resulted in an increase in the amount of goodwill assigned to the EW reporting unit and a decrease in the amount of goodwill assigned to the International reporting unit. $80.3 million of additional goodwill assigned to the EW reporting unit was immediately impaired in the fourth quarter of 2020 based on the fair value of the reporting unit determined in the Interim Assessment. The decrease in goodwill assigned to the International reporting unit resulted in the reversal in the fourth quarter of 2020 of $11.2 million of International reporting unit goodwill impairment charges recorded in the first quarter of 2020.

Our EW reporting unit, the sole component of our Energy Waste segment, provides energy-related services including solid and liquid waste treatment and disposal, equipment cleaning and maintenance, specialty equipment rental, spill containment and site remediation for a full complement of oil and gas waste streams, predominately to upstream energy customers currently concentrated in the Eagle Ford and Permian Basins in Texas. Our International reporting unit, a component of our Field Services segment, provides industrial and emergency response services to the offshore oil and gas sector in the North Sea and land-based industries across the EMEA region. Both our EW and International reporting units are dependent on energy-related exploration and production investments and expenditures by our energy industry customers. Lower crude oil prices and the volatility of such prices affect the level of investment as it impacts the ability of energy companies to access capital on economically advantageous terms or at all. In addition, energy companies decrease investments when the projected profits are inadequate or uncertain due to lower crude oil prices or volatility in crude oil prices. Such reductions in capital spending negatively impact energy waste generation and therefore the demand for our services.

The principal factors contributing to the goodwill impairment charges for both the EW and International reporting units related to historically-low energy commodity prices reducing anticipated energy-related exploration and production investments and expenditures by our energy industry customers, which negatively impacted each reporting unit’s prospective cash flows and each reporting unit's estimated fair value. A longer-than-expected recovery in crude oil pricing and energy-related exploration and production investments became evident during the first quarter of 2020 as we assessed the projected impact of the COVID-19 pandemic and foreign oil production increases on the global demand for oil and updated the long-term projections for each reporting unit which, as a result, decreased each reporting unit’s anticipated future cash flows as compared to those estimated previously.

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Consistent with our annual impairment testing methodology, we utilized a weighted average of (1) an income approach and (2) a market approach to determine the fair value of each of the reporting units for the Interim Assessment. The income approach is based on the estimated present value of future cash flows for each reporting unit. The market approach is based on assumptions about how market data relates to each reporting unit.

The rapid and sustained decline in the energy markets served by our EW and International reporting units, exacerbated by the uncertainty surrounding the impact of the COVID-19 pandemic and foreign oil production increases, has inherently increased the risk associated with the future cash flows of these reporting units. Accordingly, when performing the Interim Assessment, we increased the discount rates and decreased the projected capital investment for each reporting unit compared to the assumptions used in the initial fair value assessment in connection with the NRC Merger on November 1, 2019.

We also considered the estimated fair value of our EW and International reporting units under a market-based approach by applying industry-comparable multiples of revenues and operating earnings to reporting unit revenues and operating earnings. The lack of a broad base of publicly available market data specific to the industry in which we operate, combined with the general market volatility attributable to the COVID-19 pandemic, results in a wide range of currently observable market multiples. Accordingly, we applied less weight to the estimated fair value of our reporting units calculated under the market-based approach (10%) compared to the income approach (90%) described above.

The result of the annual assessment of goodwill undertaken in the fourth quarter of 2020 indicated that the fair value of each of our reporting units was in excess of its respective carrying value, with the exception of our Field Services reporting unit.

Our Field Services reporting unit, a component of our Field Services segment, offers specialty field services and total waste management solutions to commercial and industrial facilities and to government entities through our 10-day transfer facilities and at customer sites. Consistent with prior assessments, we utilized a weighted average of (1) an income approach and (2) a market approach to determine the fair value of each of the Field Services reporting unit. The income approach is based on the estimated present value of future cash flows for the reporting unit. The market approach is based on assumptions about how market data relates to the reporting unit. The estimated fair value of the Field Services reporting unit was then compared to the reporting unit’s carrying amount as of October 1, 2020. Based on the results of that comparison, the carrying amount of the Field Services reporting unit exceeded the estimated fair value of the reporting unit by $14.4 million and, as a result, we recognized a corresponding goodwill impairment charge in the fourth quarter of 2020. The factors contributing to the $14.4 million goodwill impairment charge principally related to an increase in the risk-adjusted rate used to discount the projected cash flows of the reporting unit as a result of the decline in our share price since the last annual assessment as well as a slower than expected recovery to cash flow levels forecasted prior to the COVID-19 pandemic, which negatively impacted the reporting unit’s prospective financial information in its discounted cash flow model and the reporting unit’s estimated fair value as compared to previous estimates.

The result of the annual assessment of goodwill undertaken in the fourth quarter of 2019 indicated that the fair value of each of our reporting units was in excess of its respective carrying value.

Non-amortizing Intangible Assets

We review non-amortizing intangible assets for impairment during the fourth quarter as of October 1 of each year. Fair value is generally determined by considering an internally developed discounted projected cash flow analysis. Estimating future cash flows requires significant judgment about factors such as general economic conditions and projected growth rates, and our estimates often vary from the cash flows eventually realized. If the fair value of an asset is determined to be less than the carrying amount of the intangible asset, an impairment in the amount of the difference is recorded in the period in which the annual assessment occurs.

The results of the annual assessment of non-amortizing intangible assets undertaken in the fourth quarter of 2021 indicated no impairment charges were required.

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The results of the annual assessment of non-amortizing intangible assets undertaken in the fourth quarter of 2020 indicated no impairment charges were required, with the exception of certain non-amortizing permit intangibles within our Field Services segment.

Our Field Services segment provides government-mandated, commercial standby oil spill compliance solutions to companies that store, transport, produce or handle petroleum and certain nonpetroleum oils on or near U.S. waters. A company’s ability to provide these standby services is subject to significant regulatory certification requirements and other high barriers to entry. As such, the Company assigned $57.1 million of fair value to non-amortizing standby services permit intangible assets upon finalization of the purchase accounting allocation related to the NRC Merger. In performing the annual indefinite-lived intangible assets impairment tests, the estimated fair value of the standby services permits was determined under an income approach using discounted projected future cash flows associated with the permits and then compared to the $57.1 million carrying amount of the permits as of October 1, 2020. Based on the results of that evaluation, the carrying amount of the permits exceeded the estimated fair value of the permits and, as a result, we recognized a $21.1 million impairment charge in the fourth quarter of 2020. The factors contributing to the impairment charge principally related to a less favorable outlook on the potential for both significant oil spill events and growth opportunities, which negatively impacted the discounted projected cash flows associated with the standby services permits and their estimated fair value as compared to previous estimates.

The results of the annual assessment of non-amortizing intangible assets undertaken in the fourth quarter of 2019 indicated no impairment charges were required.

Amortizing Tangible and Intangible Assets

We also review amortizing tangible and intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In order to assess whether a potential impairment exists, the assets’ carrying values are compared with their undiscounted expected future cash flows. Estimating future cash flows requires significant judgment about factors such as general economic conditions and projected growth rates, and our estimates often vary from the cash flows eventually realized. Impairments are measured by comparing the fair value of the asset to its carrying value. Fair value is generally determined by considering: (i) the internally developed discounted projected cash flow analysis; (ii) a third-party valuation; and/or (iii) information available regarding the current market environment for similar assets. If the fair value of an asset is determined to be less than the carrying amount of the asset, an impairment in the amount of the difference is recorded in the period in which the events or changes in circumstances that indicated the carrying value of the asset may not be recoverable occurred.

In connection with the interim goodwill impairment assessment of the EW and International reporting units in the first quarter of 2020, and the annual goodwill impairment assessment of the EW and Field Services reporting units in the fourth quarter of 2020, we also assessed the reporting units’ amortizing tangible and intangible assets for impairment. Based on the results of the assessment, the carrying amounts of the amortizing tangible and intangible assets did not exceed the estimated undiscounted cash flows of the asset groups and, as a result, no additional impairment charges were recorded in 2020.

Our acquired permits and licenses generally have renewal terms of approximately 5-10 years. We have a history of renewing these permits and licenses as demonstrated by the fact that each of the sites’ treatment permits and licenses have been renewed regularly since the facility began operations. We intend to continue to renew our permits and licenses as they come up for renewal for the foreseeable future. Costs incurred to renew or extend the term of our permits and licenses are recorded in Selling, general and administrative expenses in our consolidated statements of operations.

Share-Based Payments

On May 27, 2015, the stockholders of Predecessor US Ecology approved the Omnibus Incentive Plan (as amended, “Pre-Merger Omnibus Plan”), which was approved by Predecessor US Ecology’s Board of Directors on April 7, 2015. In connection with the closing of the NRC Merger, the Company assumed the Pre-Merger Omnibus Plan, amended and restated such plan and renamed it the Amended and Restated US Ecology, Inc. Omnibus Incentive Plan (the “Omnibus

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Plan”) for the purpose of issuing replacement awards to award recipients under the Omnibus Plan pursuant to the NRC Merger Agreement and for the issuance of additional awards in the future.

The Omnibus Plan was developed to provide additional incentives through equity ownership in US Ecology and, as a result, encourage employees, consultants and non-employee directors to contribute to our success. The Omnibus Plan provides, among other things, the ability for the Company to grant restricted stock, performance stock, options, stock appreciation rights, restricted stock units, performance stock units and other share-based awards or cash awards to employees, consultants and non-employee directors.

The Omnibus Plan expires on March 31, 2031 and authorizes 3,272,000 shares of common stock for grant over the life of the Omnibus Plan. As of December 31, 2021, 2,088,750 shares of common stock remain available for grant under the Omnibus Plan.

Subsequent to the approval of the Pre-Merger Omnibus Plan by Predecessor US Ecology in May 2015, we stopped granting equity awards under the American Ecology Corporation 2008 Stock Option Incentive Plan (“Pre-Merger 2008 Stock Option Plan”). However, in connection with the closing of the NRC Merger, the Company assumed the Pre-Merger 2008 Stock Option Plan, amended and restated such plan and renamed it in the Amended and Restated US Ecology, Inc. 2008 Stock Option Incentive Plan (the “2008 Stock Option Plan”) solely for the purpose of issuing replacement awards to award recipients thereunder and remains in effect solely for the settlement of awards granted under such plan and no future grants may be made under such plan. No shares that are reserved but unissued under the 2008 Stock Option Plan or that are outstanding under the 2008 Stock Option Plan and reacquired by the Company for any reason will be available for issuance under the Omnibus Plan.

In addition, in connection with the closing of the NRC Merger, the Company assumed the NRC Group Holdings Corp. 2018 Equity Incentive Plan previously maintained by NRC by adopting the Amended and Restated US Ecology, Inc. 2018 Equity and Incentive Compensation Plan solely for the purpose of issuing replacement awards to award recipients thereunder pursuant to the NRC Merger Agreement, and no future grants may be made under such plan.

As of December 31, 2021, we have PSU awards outstanding under the Omnibus Plan. Each PSU represents the right to receive, on the settlement date, one share of the Company’s common stock. The total number of PSUs each participant is eligible to earn ranges from 0% to 200% of the target number of PSUs granted. The actual number of PSUs that will vest and be settled in shares is determined based on total stockholder return relative to a set of peer companies, over a 2.5-year performance period. Refer to Note 19 to the Consolidated Financial Statements in “Part II, Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for a summary of the assumptions utilized in the Monte Carlo valuation of PSU awards at the date of grant.

As of December 31, 2021, we have stock option awards outstanding under the 2008 Stock Option Plan and the Omnibus Plan.

The determination of fair value of stock option awards on the date of grant using the Black-Scholes model is affected by our stock price and subjective assumptions. These assumptions include, but are not limited to, the expected term of stock options and expected stock price volatility over the term of the awards. Refer to Note 19 to the Consolidated Financial Statements in “Part II, Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for a summary of the assumptions utilized in 2021, 2020 and 2019. Our stock options have characteristics significantly different from those of traded options, and changes in the assumptions can materially affect the fair value estimates.

The Company has elected to account for forfeitures as they occur, rather than estimate expected forfeitures.

Income Taxes

Our income tax expense, deferred tax assets “DTAs” and deferred tax liabilities “DTLs”, and liabilities for uncertain tax benefits “UTBs” reflect management’s best estimate of current and future taxes to be paid. We are subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgments and estimates are required in the determination of the consolidated income tax expense.

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We account for income taxes using an asset and liability method, which requires the recognition of taxes payable or refundable for the current year and deferred tax assets and liabilities for the expected future tax consequences of temporary differences that currently exist between the tax basis and the financial reporting basis of our subsidiaries’ assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax laws and tax rates on deferred tax assets and liabilities are recognized in operations in the period that includes the enactment date.

We regularly assess the need for a valuation allowance against our deferred tax assets. In making that assessment, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets on a jurisdictional basis to determine, based on the weight of available evidence, whether it is more-likely-than-not that some or all of the deferred tax assets will not be realized. Examples of positive and negative evidence include future growth, forecasted earnings, future taxable income, the mix of earnings in the jurisdictions in which we operate, historical earnings, taxable income in prior years, if carryback is permitted under the law and prudent, and feasible tax planning strategies.

We apply the provisions of ASC 740 related to income tax uncertainties which clarifies the accounting for income taxes by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the consolidated financial statements. We account for unrecognized tax benefits using a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. We record an income tax liability, if any, for the difference between the benefit recognized and measured and the tax position taken or expected to be taken on our tax returns.

As of December 31, 2021, the Company had accumulated undistributed earnings generated by our foreign subsidiaries of approximately $79.1 million. Any additional taxes due with respect to such earnings or the excess of the amount for financial reporting over the tax basis of our foreign investments would generally be limited to foreign withholding taxes and state income taxes. We intend, however, to indefinitely reinvest these earnings and expect future U.S. cash generation to be sufficient to meet future U.S. cash needs.

See Note 17 to the Consolidated Financial Statements in “Part II, Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for additional information regarding income taxes.

Litigation

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements or interests in variable interest entities that would require consolidation. US Ecology operates through its direct and indirect subsidiaries.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We do not maintain equities, commodities, derivatives, or any other similar instruments for trading purposes. We have minimal interest rate risk on investments or other assets due to our preservation of capital approach to investments. At December 31, 2021, $3.8 million in restricted cash and investments, cash and cash equivalents and other short-term investments were invested in fixed-income U.S. Treasury and U.S. government agency securities and money market accounts.

We are exposed to changes in interest rates as a result of our Revolving Credit Facility and term loan borrowings under the Credit Agreement. Our Revolving Credit Facility borrowings incur interest at a base rate (as defined in the Credit

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Agreement) or LIBOR, at the Company’s option, plus an applicable margin which is determined according to a pricing grid under which the interest rate decreases or increases based on our ratio of funded debt to Consolidated EBITDA (as defined in the Credit Agreement). Our term loan bears interest at LIBOR plus 2.25% or a base rate plus 1.25% (with a step-up to LIBOR plus 2.50% or a base rate plus 1.50% in the event that US Ecology credit ratings are not BB (with a stable or better outlook) or better from S&P and Ba2 (with a stable or better outlook) or better from Moody’s).

In March 2020, the Company entered into an interest rate swap agreement with the intention of hedging the Company’s interest rate exposure on a portion of the Company’s outstanding LIBOR-based variable-rate debt. Under the terms of the swap, the Company pays interest at the fixed effective rate of 0.83% and receives interest at the variable one-month LIBOR rate on an initial notional amount of $500.0 million.

As of December 31, 2021, there were $303.0 million of Revolving Credit Facility loans and $441.0 million of term loans outstanding under the Credit Agreement. If interest rates were to rise and outstanding balances remain unchanged, we would be subject to higher interest payments on our outstanding debt. Subsequent to the effective date of the interest rate swap on March 31, 2020, we are subject to higher interest payments on only the unhedged borrowings under the Credit Agreement and the term loan.

Based on the outstanding indebtedness under the Credit Agreement on December 31, 2021 and the impact of our interest rate hedge, if market rates used to calculate interest expense were to average 1% higher in the next twelve months, our interest expense would increase by approximately $1.3 million for the corresponding period.

Foreign Currency Risk

We are subject to foreign currency exchange risk through our international operations. We operate primarily in the United States and, accordingly, most of our consolidated revenue and associated expenses are denominated in USD. During 2021 we recorded approximately $80.6 million, or 8%, of our revenue in Canada, $41.2 million, or 4%, of our revenue in the EMEA region, and less than 1% of our revenue from other international regions. Revenue and expenses denominated in foreign currencies may be affected by movements in foreign currency exchange rates.

Our exposure to foreign currency exchange risk in our Consolidated Balance Sheets relates primarily to cash, trade payables and receivables, and intercompany loans that are denominated in foreign currencies, primarily CAD. Contracts for services that our foreign subsidiaries provide to customers are often denominated in currencies other than their local functional currency. The resulting cash, receivable and payable accounts are subject to non-cash foreign currency translation gains or losses.

We established intercompany loans with certain of our Canadian subsidiaries, as part of a tax and treasury management strategy allowing for repayment of third-party bank debt. These intercompany loans are payable using CAD and are subject to mark-to-market adjustments with movements in the CAD. At December 31, 2021, we had $7.6 million of intercompany loans outstanding between our Canadian subsidiaries and US Ecology. During 2021, the CAD strengthened as compared to the USD resulting in a $153,000 non-cash foreign currency translation gain being recognized in the Company’s consolidated statements of operations related to the intercompany loans. Based on intercompany balances as of December 31, 2021, a $0.01 CAD increase or decrease in currency rate compared to the USD at December 31, 2021 would have generated a gain or loss of approximately $76,000 for the year ended December 31, 2021.

We had a total pre-tax foreign currency loss of $171,000 for the year ended December 31, 2021. We currently have no foreign exchange contracts, option contracts or other foreign currency hedging arrangements. Management evaluates our risk position on an ongoing basis to determine whether foreign exchange hedging strategies should be employed.

Commodity Price Risk

We have exposure to commodity pricing for oil and gas. Fluctuations in oil and gas commodity prices may impact business activity in the industries that we serve, affecting demand for our services and our future earnings and cash flows. We have not entered into any derivative contracts to hedge our exposure to commodity price risk.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


	Page Number
Report of Independent Registered Public Accounting Firm (PCAOB ID 34)	74
Consolidated Balance Sheets as of December 31, 2021 and 2020	77
Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019	78
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2021, 2020 and 2019	79
Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019	80
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2021, 2020 and 2019	81
Notes to Consolidated Financial Statements	82

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of US Ecology, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of US Ecology, Inc. and subsidiaries (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America (“generally accepted accounting principles”). Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Controls over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of

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unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of 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.

Impairment Assessment – Goodwill in the Energy Waste Reporting Unit - Refer to Notes 2, 3, and 13 to the consolidated financial statements

Critical Audit Matter Description

The Company’s evaluation of goodwill for impairment involves the comparison of the estimated fair value of each of the Company’s reporting units to their respective carrying value. Determination of the estimated fair value of a reporting unit requires judgement as to the future operating results of the reporting unit as well as the level of risks inherent in the projections. The Company estimates the fair value of its reporting units using a weighting of fair values derived from the income and market approaches.

The determination of fair value using the income approach is based on the present value of estimated future cash flows, which requires management to make significant estimates and assumptions of revenue growth rates and operating margins, and selection of the discount rates.

The determination of the fair value using the market approach requires management to make significant assumptions related to market multiples of revenue and earnings derived from comparable publicly-traded companies with similar operating and investment characteristics as the reporting unit.

Changes in these estimates and assumptions could have a significant impact on the determination of the estimated fair value, and any related goodwill asset impairment charge.

The Company evaluates goodwill assets for impairment annually, and more frequently if circumstances indicate the possibility of impairment.

We identified the evaluation of the Energy Waste reporting unit’s goodwill impairment assessment as a critical audit matter because small changes to valuation assumptions, specifically the forecasted revenues and the discount rate, could have a significant impact on the reporting unit fair value.

Auditing these assumptions involved extensive audit effort, including the need to involve our fair value specialists due to the complexity of these assumptions and a high degree of auditor judgment when performing audit procedures and evaluating the results of those procedures.

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How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the forecasted revenue and the selection of the discount rate for the impairment test included the following:

●

We tested the effectiveness of controls over the management’s goodwill impairment evaluation, including the controls related to management’s forecasted revenues and the selection of the discount rate.

●

We evaluated management’s ability to accurately forecast by comparing actual results to management’s historical forecasts.

●

We performed a sensitivity analysis to evaluate the risk of material misstatement of key business and valuation assumptions used in the fair value model.

●

We evaluated the reasonableness of management’s revenue forecasts by comparing the forecasts to:

­

Historical forecasts and results of operations.

­

Information included in Company press releases as well as in analyst and industry reports for the Company and certain of its peer companies.

●

With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology used and evaluated the reasonableness of the discount rate applied by:

­

Testing the source information underlying the determination of the discount rate and the mathematical accuracy of the calculation.

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Developing a range of independent estimates and comparing those to the discount rate selected by management.

/s/ DELOITTE & TOUCHE LLP

Boise, Idaho

February 28, 2022

We have served as the Company’s auditor since 2009.

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US ECOLOGY, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)


	As of December 31,
	2021		2020
Assets
Current Assets:
Cash and cash equivalents	$	67,487	$	73,848
Receivables, net		250,154		241,978
Prepaid expenses and other current assets		32,136		28,379
Income taxes receivable		14,441		18,279
Total current assets		364,218		362,484

Property and equipment, net		456,384		456,637
Operating lease assets		43,607		51,474
Restricted cash and investments		1,567		5,598
Intangible assets, net		489,573		523,988
Goodwill		413,126		413,037
Other assets		36,923		18,065
Total assets	$	1,805,398	$	1,831,283

Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	64,793	$	35,881
Deferred revenue		15,950		15,267
Accrued liabilities		51,265		59,296
Accrued salaries and benefits		29,438		30,918
Income taxes payable		559		977
Current portion of long-term debt		3,359		3,359
Current portion of closure and post-closure obligations		5,771		6,471
Current portion of operating lease liabilities		15,799		17,048
Total current liabilities		186,934		169,217

Long-term debt		735,125		782,484
Long-term closure and post-closure obligations		93,149		89,398
Long-term operating lease liabilities		28,477		35,069
Other long-term liabilities		13,907		32,201
Deferred income taxes, net		123,482		120,983
Total liabilities		1,181,074		1,229,352

Commitments and contingencies (See Note 18)

Stockholders’ Equity:
Common stock $0.01 par value per share, 50,000 authorized; 31,512 shares issued and outstanding		315		315
Additional paid-in capital		821,970		820,567
Retained deficit		(183,115)		(188,452)
Treasury stock, at cost, 242 and 358 shares, respectively		(10,652)		(15,841)
Accumulated other comprehensive loss		(4,194)		(14,658)
Total stockholders’ equity		624,324		601,931
Total liabilities and stockholders’ equity	$	1,805,398	$	1,831,283

The accompanying notes are an integral part of these consolidated financial statements.

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US ECOLOGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)


	For the Year Ended December 31,
	2021		2020		2019
Revenue	$	988,001	$	933,854	$	685,509
Direct operating costs		754,923		683,703		475,675
Gross profit		233,078		250,151		209,834
Selling, general and administrative expenses		199,732		206,169		141,123
Goodwill and intangible asset impairment charges		—		404,900		—
Operating income (loss)		33,346		(360,918)		68,711
Other income (expense):
Interest income		1,417		258		605
Interest expense		(28,966)		(32,595)		(19,239)
Foreign currency loss		(171)		(1,134)		(733)
Other		4,476		788		455
Total other expense		(23,244)		(32,683)		(18,912)

Income (loss) before income taxes		10,102		(393,601)		49,799
Income tax expense (benefit)		4,765		(4,242)		16,659
Net income (loss)	$	5,337	$	(389,359)	$	33,140

Earnings (loss) per share:
Basic	$	0.17	$	(12.51)	$	1.41
Diluted	$	0.17	$	(12.51)	$	1.40

Shares used in earnings (loss) per share calculation:
Basic		31,138		31,126		23,521
Diluted		31,373		31,126		23,749

The accompanying notes are an integral part of these consolidated financial statements.

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US ECOLOGY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)


	For the Year Ended December 31,
	2021		2020		2019
Net income (loss)	$	5,337	$	(389,359)	$	33,140
Other comprehensive income (loss):
Foreign currency translation (loss) gain		(1,505)		3,055		3,772
Net changes in interest rate hedge, net of taxes of $3,182, $(1,557) and $(488), respectively		11,969		(5,859)		(1,835)
Comprehensive income (loss), net of tax	$	15,801	$	(392,163)	$	35,077

The accompanying notes are an integral part of these consolidated financial statements.

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US ECOLOGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


	For the Year Ended December 31,
	2021		2020		2019
Cash flows from operating activities:
Net income (loss)	$	5,337	$	(389,359)	$	33,140
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of property and equipment		70,799		66,561		41,423
Amortization of intangible assets		34,614		37,344		15,491
Accretion of closure and post-closure obligations		5,363		4,000		4,388
Goodwill and intangible asset impairment charges		—		404,900		—
Integration-related property and equipment charges		—		3,067		—
Property and equipment impairment charges		—		—		25
Unrealized foreign currency gain		(1,647)		(1,472)		(666)
Deferred income taxes		(635)		(4,148)		6,601
Share-based compensation expense		7,478		6,651		5,544
Share-based payments of business development and integration expenses		411		1,182		3,717
Unrecognized tax benefits		16		(8)		(238)
Net (gain) loss on disposition of assets		(116)		1,504		426
Gain on insurance proceeds from damaged property and equipment		—		—		(12,366)
Amortization and write-off of debt issuance costs		2,440		2,217		1,007
Amortization and write-off of debt discount		161		161		27
Change in fair value of contingent consideration		282		(3,682)		349
Change in fair value of minority interest investment		(3,509)		—		—
Changes in assets and liabilities (net of effects of business acquisitions):
Receivables		(14,685)		8,381		(9,357)
Income taxes receivable		3,830		(7,049)		(4,163)
Other assets		(5,271)		(5,443)		(2,163)
Accounts payable and accrued liabilities		15,985		(13,628)		(10,706)
Deferred revenue		658		(1,619)		967
Accrued salaries and benefits		(1,483)		(121)		8,326
Income taxes payable		(430)		(549)		(244)
Closure and post-closure obligations		(3,279)		(1,744)		(1,912)
Net cash provided by operating activities		116,319		107,146		79,616
Cash flows from investing activities:
Purchases of property and equipment		(68,666)		(57,399)		(58,100)
Proceeds from sale of property and equipment		2,431		1,897		1,182
Minority interest investment		(712)		—		(7,870)
Proceeds from sale of short-term investments		2,142		—		—
Purchases of restricted investments		(1,017)		(1,615)		(1,197)
Proceeds from sale of restricted investments		1,267		1,483		1,145
Business acquisitions (net of cash acquired)		—		(3,309)		(399,599)
Insurance proceeds from damaged property and equipment		—		1,305		12,714
Payment of acquired contingent consideration liabilities		—		—		(4,000)
Net cash used in investing activities		(64,555)		(57,638)		(455,725)
Cash flows from financing activities:
Proceeds from short-term borrowings		61,326		72,353		77,997
Payments on short-term borrowings		(61,326)		(72,353)		(77,997)
Payments on long-term debt		(48,500)		(74,500)		(80,000)
Payment of equipment financing obligations		(5,616)		(6,327)		(1,539)
Payment of acquired contingent consideration liabilities		(2,553)		(2,517)		—
Deferred financing costs paid		(957)		(1,144)		(9,416)
Repurchase of common stock		(465)		(18,332)		(915)
Proceeds from long-term debt		—		90,000		491,875
Dividends paid		—		(5,667)		(15,890)
Other		—		28		319
Net cash (used in) provided by financing activities		(58,091)		(18,459)		384,434

Effect of foreign exchange rate changes on cash		277		1,915		1,062

(Decrease) increase in Cash and cash equivalents and restricted cash		(6,050)		32,964		9,387
Cash and cash equivalents and restricted cash at beginning of year		75,104		42,140		32,753
Cash and cash equivalents and restricted cash at end of year	$	69,054	$	75,104	$	42,140

Reconciliation of Cash and cash equivalents and restricted cash:
Cash and cash equivalents at beginning of year		73,848		41,281		31,969
Restricted cash at beginning of year		1,256		859		784
Cash and cash equivalents and restricted cash at beginning of year	$	75,104	$	42,140	$	32,753
Cash and cash equivalents at end of year		67,487		73,848		41,281
Restricted cash at end of year		1,567		1,256		859
Cash and cash equivalents and restricted cash at end of year	$	69,054	$	75,104	$	42,140

The accompanying notes are an integral part of these consolidated financial statements.

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US ECOLOGY, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share amounts)

Accumulated

Common

Additional

Retained

Other

Shares

Common

Paid-In

Earnings

Treasury

Comprehensive

US Ecology, Inc. 10-K