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Table of Contents

Filed Pursuant to Rule 424(b)(2)
Registration No. 333-185141

CALCULATION OF REGISTRATION FEE

               
 
Title of Each Class of
Securities Offered

  Maximum Amount
of Shares to be
Registered

  Maximum Offering
Price Per Share

  Maximum
Aggregate
Offering Price

  Amount of
Registration
Fee(1)

 

Common Stock, $.01 par value per share

  6,900,000   $56.00   $386,400,000   $52,704.96

 

(1)
Calculated in accordance with Rule 457(r) of the Securities Act of 1933, as amended, and reflects the potential issuance of additional shares of common stock pursuant to an underwriters' option.

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Prospectus Supplement
(To Prospectus dated November 26, 2012)

6,000,000 Shares

GRAPHIC

Clean Harbors, Inc.

Common Stock



          Clean Harbors, Inc. is offering 6,000,000 shares of common stock to be sold in this offering.

          The common stock is quoted on the New York Stock Exchange under the symbol "CLH". The last reported sale price of the common stock on November 27, 2012 was $56.99 per share.

          See "Risk Factors" on page S-12 to read about factors you should consider before buying shares of common stock.



          Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy of this prospectus supplement. Any representation to the contrary is a criminal offense.



   
Per Share
   
Total
 

Initial price to public

  $ 56.00   $ 336,000,000  

Underwriting discount

  $ 2.38   $ 14,280,000  

Proceeds, before expenses, to Clean Harbors, Inc. 

  $ 53.62   $ 321,720,000  

          To the extent that the underwriters sell more than 6,000,000 shares of common stock, the underwriters have the option to purchase up to an additional 900,000 shares from Clean Harbors, Inc.



          The underwriters expect to deliver the shares against payment in New York, New York on December 3, 2012.



Sole Book-Running Manager

Goldman, Sachs & Co.



Co-Managers

BofA Merrill Lynch   Credit Suisse



   

Prospectus supplement dated November 27, 2012.


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TABLE OF CONTENTS

Prospectus Supplement

 
  Page

About This Prospectus Supplement

  S-ii

Summary

  S-1

Risk Factors

  S-12

Use of Proceeds

  S-28

Disclosure Regarding Forward-Looking Statements

  S-29

Price Range of Common Stock

  S-31

Dividend Policy

  S-31

Capitalization

  S-32

The Safety-Kleen Acquisition

  S-33

Unaudited Pro Forma Condensed Combined Financial Information

  S-37

Selected Historical Consolidated Financial Information

  S-50

Management's Discussion and Analysis of Financial Condition and Results of Operations

  S-53

Description of Outstanding Indebtedness

  S-80

Description of Capital Stock

  S-83

Certain United States Federal Income and Estate Tax Considerations To Non-U.S. Holders

  S-87

Underwriting

  S-91

Validity of Common Stock

  S-95

Experts

  S-95

Incorporation of Information by Reference

  S-96

Index to Consolidated Financial Statements

  F-1

Prospectus

 
  Page

About This Prospectus

 
1

Disclosure Regarding Forward-Looking Statements

  1

The Company

  2

Where You Can Find More Information

  3

Incorporation of Information by Reference

  3

Use of Proceeds

  4

Ratio of Earnings to Fixed Charges

  4

Description of Securities

  5

Selling Stockholders

  5

Validity of Securities

  5

Experts

  5



          No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus supplement or the accompanying prospectus. You must not rely on any unauthorized information or representations. This prospectus supplement is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus supplement and the accompanying prospectus is current only as of their respective dates.

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ABOUT THIS PROSPECTUS SUPPLEMENT

          This document consists of two parts. The first part is this prospectus supplement, which describes the specific terms of this offering. The second part, the accompanying prospectus, gives more general information, some of which may not apply to this offering. Generally, when we refer only to the "prospectus", we are referring to both parts combined.

          If information in this prospectus supplement is inconsistent with the accompanying prospectus, you should rely on the information in this prospectus supplement. This prospectus supplement, the accompanying prospectus and the documents incorporated by reference into each of them include important information about us, the shares being offered and other information you should know before investing in our common stock.

          You should rely only on the information included or incorporated by reference in this prospectus supplement and the accompanying prospectus. We have not, and the underwriters have not, authorized anyone to provide you with information that is in addition to or different from that contained or incorporated by reference in this prospectus supplement and the accompanying prospectus. We are not, and the underwriters are not, offering to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information contained or incorporated by reference in this prospectus supplement or the accompanying prospectus is accurate only as of the date of this prospectus supplement or the accompanying prospectus, as the case may be, or in the case of the documents incorporated by reference, the date of such documents regardless of the time of delivery of this prospectus supplement and the accompanying prospectus or any sales of our common stock. Our business, financial condition, results of operations and prospects may have changed since those dates.

          We obtained the market and certain other data used in this prospectus supplement from our own research, surveys or studies conducted by third parties and industry or general publications, such as EI Digest, and other publicly available sources. Industry and general publications and surveys generally state that they have obtained information from sources believed to be reliable, but do not guarantee the accuracy and completeness of such information. Although we have not independently verified the market data and related information contained in this prospectus supplement, we believe such data and information is accurate as of the date of this prospectus supplement or the respective earlier dates specified in this prospectus supplement.

          The underwriters are offering shares of our common stock subject to various conditions and may reject all or any part of any order.

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SUMMARY

          This summary highlights information contained elsewhere in this prospectus supplement or in the documents incorporated by reference into this prospectus supplement, is not complete and may not contain all of the information that may be important to you. You should read this entire prospectus supplement including the documents incorporated herein and the accompanying prospectus carefully, including the "Risk Factors" section of this prospectus supplement, before investing in our common stock. In this prospectus supplement, unless the context requires otherwise, "we", "our", "us", "Clean Harbors" or the "Company" refers collectively to Clean Harbors, Inc. and its subsidiaries, and "Safety-Kleen" refers to Safety-Kleen, Inc. and its subsidiaries.


Our Company

          We are a leading provider of environmental, energy and industrial services throughout North America. We serve over 60,000 customers, including a majority of Fortune 500 companies, thousands of smaller private entities and numerous federal, state, provincial and local governmental agencies. We have more than 200 locations, including over 50 waste management facilities, throughout North America in 37 U.S. states, seven Canadian provinces, Mexico and Puerto Rico.

          The wastes that we handle include materials that are classified as "hazardous" because of their unique properties, as well as other materials subject to federal and state environmental regulation. We provide final treatment and disposal services designed to manage hazardous and non-hazardous wastes which cannot be economically recycled or reused. We transport, treat and dispose of industrial wastes for commercial and industrial customers, health care providers, educational and research organizations, other environmental services companies and governmental entities. We also provide industrial maintenance and production, lodging, and exploration services to the oil and gas, pulp and paper, manufacturing and power generation industries throughout North America.

          During our twelve months ended September 30, 2012, we generated total revenues and Adjusted EBITDA of $2.2 billion and $387.5 million, respectively. See footnote (2) to "Summary Historical and Pro Forma Combined Financial Information" below in this summary for a description of how we calculate Adjusted EBITDA.


Our Services

          We report our business in four operating segments, consisting of:

 

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          Technical Services and Field Services are included as part of Clean Harbors Environmental Services, and Industrial Services and Oil and Gas Field Services are included as part of Clean Harbors Energy and Industrial Services.


The Environmental Services Industry

          According to 2009 industry data, the hazardous waste disposal market in North America generates total revenues in excess of $2.0 billion per year. We also service the much larger industrial maintenance and energy services markets. The $2.0 billion estimate does not include the industrial maintenance and energy services markets, except to the extent that the costs of disposal of hazardous wastes generated as a result of industrial maintenance are included. The largest generators of hazardous waste materials are companies in the chemical, petrochemical, primary metals, paper, furniture, aerospace and pharmaceutical industries.

          The hazardous waste management industry was "created" in 1976 with the passage of the Resource Conservation and Recovery Act, or "RCRA". 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. This new regulatory environment, combined with strong economic growth, increased corporate concern about environmental liabilities, and the early stage nature of the hazardous waste management industry contributed initially to rapid growth in the industry. However, by the mid to late 1990s, the hazardous waste management industry was characterized by overcapacity, minimal regulatory advances and pricing pressure. Since 2001, over one-third of all North American commercial incineration capacity has been eliminated, and we believe that competition has been reduced through consolidation and that new regulations have increased the overall barriers to entry.

          The collection and disposal of solid and hazardous wastes are subject to local, state, provincial and federal requirements and regulations, which regulate health, safety, the environment, zoning and land use. Among these regulations in the United States is the Comprehensive Environmental Response, Compensation and Liability Act of 1980, or "CERCLA", which holds generators and transporters of hazardous substances, as well as past and present owners and operators of sites where there has been a hazardous release, strictly, jointly and severally liable for environmental cleanup costs resulting from the release or threatened release of hazardous substances. Canadian companies are regulated under similar regulations, but the responsibility and liability associated with the waste passes from the generator to the transporter or receiver of the waste, in contrast to provisions of CERCLA.


Competitive Strengths

 

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Our Strategy

          Our strategy is to develop and maintain ongoing relationships with a diversified group of customers which have recurring needs for environmental, energy or industrial services. We strive to be recognized as the premier supplier of a broad range of value added services based upon quality, responsiveness, customer service, information technologies, breadth of service offerings and cost effectiveness.

          The principal elements of our business strategy are to:

 

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Corporate Information

          Clean Harbors, Inc. was incorporated in Massachusetts in 1980. Our corporate offices are located at 42 Longwater Drive, Norwell, MA 02161 (telephone (781) 792-5000). Shares of our common stock trade on the New York Stock Exchange under the symbol "CLH". Our website address is www.cleanharbors.com. The information contained or incorporated in our website is not part of this prospectus supplement or the accompanying prospectus.


Recent Developments

Proposed Acquisition of Safety-Kleen

          On October 26, 2012, we entered into an agreement and plan of merger with Safety-Kleen pursuant to which we will acquire Safety-Kleen for cash in an amount (subject to certain working capital and other closing adjustments) equal to $1.25 billion. See "The Safety-Kleen Acquisition" elsewhere in this prospectus supplement. The consummation of our acquisition of Safety-Kleen is subject to customary closing conditions including, without limitation, (i) approval by Safety-Kleen shareholders holding at least a majority of outstanding Safety-Kleen shares, (ii) expiration of applicable antitrust waiting periods, (iii) accuracy of representations and warranties of the parties, (iv) compliance by the parties with their respective obligations under the merger agreement, and (v) the absence of any material adverse effect relating to Safety-Kleen and its subsidiaries with respect to a specific time period.

          Safety-Kleen, headquartered in Richardson, Texas, is a leading provider of environmental services to commercial, industrial and automotive customers and the largest re-refiner of used oil and provider of parts cleaning services in North America. Additionally, we believe Safety-Kleen is North America's largest collector of used oil with North America's largest used oil collection network. Safety-Kleen offers a broad range of services through two complementary platforms: environmental services and oil re-refining. Safety-Kleen's Environmental Services segment provides environmental solutions, including parts cleaning, waste disposal and other environmental services for hazardous and non-hazardous waste. Safety-Kleen's Oil Re-refining segment produces and markets re-refined base and blended lubricating oils. With more than 200 locations throughout North America, Safety-Kleen services commercial and industrial customers in the U.S., Canada and Puerto Rico. Safety-Kleen currently employs approximately 4,200 employees and operates a sizeable service fleet of more than 2,000 vehicles and 1,000 rail cars. Safety-Kleen generated revenues of $1.3 billion in 2011.

          Safety-Kleen's Environmental Services segment offers customers a diverse range of environmental services through its overall network of more than 200 facilities, which includes 155 branch locations, 19 oil terminals and 19 recycling and accumulation centers across North America. During fiscal year 2011, Safety-Kleen serviced more than 200,000 customer locations in more than 20 end markets, including the commercial, industrial and automotive end markets, and provided more than one million parts cleaning services. Safety-Kleen customers in fiscal year 2011 included more than 400 of the Fortune 500. Due to the recurring requirements of its customers, Safety-Kleen provided more than two million customer service calls in 2011. As a result of these

 

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regular service and maintenance contacts, Safety-Kleen is well-positioned to cross-sell new and existing services and related products and to become the provider for many of its customers' varied environmental services needs. Industry estimates show that approximately 1.4 billion gallons of used oil is generated in the United States on a yearly basis, of which approximately one billion is recovered. In 2011, Safety-Kleen's Environmental Services segment collected approximately 200 million gallons of such used oil from sources including automobile and truck dealers, automotive garages, oil change outlets, fleet service locations and industrial plants.

          Safety-Kleen's Oil Re-refining segment processes the used oil collected by its Environmental Services segment at its two owned and operated oil re-refineries, which include the largest oil re-refinery in North America at its East Chicago, Indiana location, which processes approximately 120 million gallons of used oil annually into high quality base and blended lubricating oils, and the largest re-refinery in Canada at its Breslau, Ontario location, which processes approximately 40 million gallons of used oil annually into high quality base and blended lubricating oils and is scheduled to undergo a capacity expansion beginning in the fourth quarter of 2012 that will allow the location to process an additional 10 million gallons annually. The re-refined oil produced at these locations is then sold to third party distributors, retailers, government agencies, fleets, railroads and industrial customers. Safety-Kleen does not re-refine the remaining used oil that it collects due to current capacity limitations at Safety-Kleen's oil re-refineries. Instead, Safety-Kleen's Environmental Services segment processes and sells the remaining collected used oil as recycled fuel oil.

          Safety-Kleen utilizes a 53-week fiscal year comprised of twelve accounting periods consisting of four weeks and one accounting period consisting of five weeks. References to Safety-Kleen numbers throughout this prospectus supplement as of or for the period ended September 30, 2012, are as of October 6, 2012 or for the 40 weeks ended October 6, 2012.

          In connection with our acquisition of Safety-Kleen, we expect to achieve synergies and other cost savings of at least $20.0 million.

Proposed Acquisition of Catalyst Services

          On November 19, 2012, we executed a purchase agreement pursuant to which we will acquire from CEDA International Corporation the shares and assets of certain of its subsidiaries (the "CEDA Acquisition"). The acquired companies are engaged in the business of providing catalyst loading and unloading services in the United States and Canada. The purchase price for the acquisition will be approximately $27 million, payable in cash, subject to a working capital adjustment based on a targeted working capital of $8.5 million. The acquisition is expected to close prior to year end and be financed with available cash. The consummation of the CEDA Acquisition is subject to customary closing conditions including, without limitation, (i) accuracy of representations and warranties of the parties, and (ii) compliance by the parties with their respective obligations under the acquisition agreement. We did not include the CEDA Acquisition in our pro forma financial information included in this prospectus supplement because we deemed this acquisition not material.

Potential Amendment of Revolving Credit Facility

          Under the current terms of our revolving credit facility, we will be able to complete this offering of shares of our common stock, the offering of senior unsecured notes described below, and our proposed acquisition of Safety-Kleen without being required to obtain an amendment or waiver under such current terms. However, in light of the significantly increased size of our Company after giving effect to our proposed acquisition of Safety-Kleen, we are now discussing with Bank of America, N.A. ("BofA"), the agent for the lenders under our revolving credit facility, and an affiliate

 

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of such agent a proposed amendment of the current terms of the facility. As part of such discussions, we are seeking to, among other changes, (i) increase the maximum amount of borrowings and letters of credit which we and our subsidiaries may obtain under the facility from $250.0 million to $400.0 million (with a combined sub-limit of $325.0 million for letters of credit), (ii) provide that of such $400.0 million maximum amount, $300.0 million (with a $250.0 million sub-limit for letters of credit) will be available for Clean Harbors, Inc. and its domestic subsidiaries and $100.0 million (with a $75.0 million sub-limit for letters of credit) will be available for our Canadian subsidiaries, and (iii) extend the term of the facility from May 31, 2016 to the fifth anniversary of the effective date of the amended facility. However, there is no assurance that we will be able to make such proposed changes to the current terms of our revolving credit facility and any such changes will, among other conditions, be subject to (i) syndication of the increased commitments, (ii) preparation of mutually satisfactory loan documents, (iii) completion of our proposed acquisition of Safety-Kleen in accordance with the existing merger agreement (subject to such waivers, modifications and supplements to the current terms thereof as are deemed by BofA, in its reasonable discretion, not to be adverse to BofA's and the other lenders' interests), and (iv) other customary closing conditions. See "Description of Outstanding Indebtedness — Revolving Credit Facility" elsewhere in this prospectus supplement.

Offering of Senior Unsecured Notes

          On November 26, 2012, we announced that in order to fund a portion of the purchase price for our proposed acquisition of Safety-Kleen, we plan to offer in a Rule 144A private placement $550.0 million aggregate principal amount of senior unsecured notes. We launched such offering on November 27, 2012.

 

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The Offering

Common stock offered by us   6,000,000 shares

Approximate number of shares of common stock to be outstanding after the offering

 

59,386,280 shares

Use of proceeds

 

We estimate that the net proceeds to us from this offering, after deduction of underwriting discounts and expenses, will be approximately $320.2 million ($368.5 million if the underwriters exercise in full their option to purchase additional shares), based on the public offering price of $56.00 per share. We expect to use such net proceeds to pay a portion of the purchase price for our proposed acquisition of Safety-Kleen and our related transaction fees and expenses. See "Use of Proceeds" and "The Safety-Kleen Acquisition".

Risk factors

 

You should carefully read and consider the information under "Risk Factors" and all other information set forth or incorporated by reference in this prospectus supplement and the accompanying prospectus before investing in our common stock.

New York Stock Exchange symbol

 

"CLH"

          The approximate number of shares of our common stock to be outstanding after this offering stated above is based on the 53,386,280 shares outstanding as of September 30, 2012, and does not include:

          Unless otherwise stated, all information contained in this prospectus supplement assumes that the underwriters will not exercise their option to purchase additional shares.

 

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Historical and Pro Forma Combined Financial Information

          The following summary historical financial information has been derived from our audited balance sheets at December 31, 2011 and December 31, 2010 and statements of income for the three years ended December 31, 2011, and our unaudited balance sheet at September 30, 2012 and statements of income for the nine months ended September 30, 2012 and 2011, each as incorporated by reference into this prospectus supplement. This information should be reviewed in conjunction with "Selected Historical Consolidated Financial Information" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and the notes thereto incorporated by reference in this prospectus supplement and appearing elsewhere in this prospectus supplement. We have derived the September 30, 2011 balance sheet information from our financial statements not incorporated or included herein.

          The following summary pro forma combined financial information for the year ended December 31, 2011 and as of and for the nine months ended September 30, 2012 has been prepared by our management and gives pro forma effect, in each case as if they occurred on January 1, 2011 for income statement purposes and September 30, 2012 for balance sheet purposes, to (i) our sale of 6.0 million shares of our common stock at the public offering price of $56.00 per share in this offering (the "Stock Offering"), (ii) our sale of $550.0 million aggregate principal amount of senior unsecured notes in a Rule 144A private placement (the "Notes Offering"), (iii) our proposed acquisition of Safety-Kleen for a purchase price of approximately $1,250.0 million, and (iv) payment of our related fees and expenses. If, however, we were not able to complete the Notes Offering before the closing of the acquisition, we anticipate borrowing $314.0 million under a senior secured term facility (the "Term Facility") and $200.0 million under a senior unsecured bridge facility (the "Bridge Facility") pursuant to the backup financing commitment we obtained from certain affiliates of the underwriters at the time we entered into the merger agreement, and the notes to the tables below describe the additional interest expense we anticipate we would incur if such financing under the Term Facility and the Bridge Facility were required. The following summary pro forma combined financial information should be read in conjunction with "Use of Proceeds", "The Safety-Kleen Acquisition", "Unaudited Pro Forma Condensed Combined Financial Information", "Selected Historical Consolidated Financial Information" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" appearing elsewhere in this prospectus supplement, and the consolidated financial statements and related notes of Clean Harbors incorporated by reference in this prospectus supplement and of Safety-Kleen included in this prospectus supplement.

 
  Nine Months Ended September 30,   Year Ended December 31,  
 
 
2011
 
2012
 
2012
 
2009
 
2010
 
2011
 
2011
 
 
  (historical)
  (historical)
  (pro forma)
  (historical)
  (historical)
  (historical)
  (pro forma)
 
 
  (dollars in thousands)
 

Income Statement Data:

                                           

Revenues:

                                           

Service revenues

  $ 1,438,250   $ 1,628,946   $ 2,089,562   $ 1,074,220   $ 1,731,244   $ 1,984,136   $ 2,547,206  

Product revenues

            601,897                 708,151  
                               

Total revenues

    1,438,250     1,628,946     2,691,459     1,074,220     1,731,244     1,984,136     3,255,357  

Cost of revenues (exclusive of items shown separately below)

    1,006,849     1,140,878     1,969,569     753,483     1,210,740     1,379,991     2,406,246  

Selling, general and administrative expenses

    178,752     197,892     303,629     163,157     205,812     254,137     377,589  

Accretion of environmental liabilities

    7,231     7,409     9,297     10,617     10,307     9,680     11,849  

Depreciation and amortization

    87,000     116,794     180,085     64,898     92,473     122,663     207,051  
                               

Income from operations

    158,418     165,973     228,879     82,065     211,912     217,665     252,622  

Other income (expense)

    5,931     (465 )   (5,368 )   259     2,795     6,402     477  

 

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  Nine Months Ended September 30,   Year Ended December 31,  
 
 
2011
 
2012
 
2012
 
2009
 
2010
 
2011
 
2011
 
 
  (historical)
  (historical)
  (pro forma)
  (historical)
  (historical)
  (historical)
  (pro forma)
 
 
  (dollars in thousands)
 

Loss on early extinguishment of debt

        (26,385 )   (26,385 )   (4,853 )   (2,294 )        

Interest expense, net

    (28,047 )   (33,836 )   (57,662 )   (15,999 )   (27,936 )   (39,389 )   (70,842 )
                               

Income from continuing operations before provision (benefit) for income taxes

    136,302     105,287     139,464     61,472     184,477     184,678     182,257  

Provision (benefit) for income taxes(1)

    47,283     37,487     47,176     26,225     56,756     57,426     (45,722 )
                               

Income from discontinued operations, net of tax

                1,439     2,794          
                               

Net income

  $ 89,019   $ 67,800   $ 92,288   $ 36,686   $ 130,515   $ 127,252   $ 227,979  
                               

Basic earnings per share(2)

  $ 1.68   $ 1.27   $ 1.56   $ 0.74   $ 2.48   $ 2.40   $ 3.87  
                               

Diluted earnings per share(2)

  $ 1.67   $ 1.27   $ 1.55   $ 0.74   $ 2.47   $ 2.39   $ 3.84  
                               

Other Financial Data:

                                           

Adjusted EBITDA(3)

  $ 252,649   $ 290,176   $ 418,261   $ 157,580   $ 314,692   $ 350,008   $ 471,522  

Adjusted EBITDA Margin(4)

    17.57 %   17.81 %   15.54 %   14.67 %   18.18 %   17.64 %   14.48 %

Net Debt (at end of period)(5)

              $ 1,231,348                          

 

 
  Nine Months
Ended September 30,
  Year Ended December 31,  
 
 
2011
 
2012
 
2009
 
2010
 
2011
 
 
  (historical, in thousands)
 

Cash Flow Data:

                               

Net cash from operating activities

  $ 151,336   $ 232,692   $ 93,270   $ 224,108   $ 179,531  

Net cash from investing activities

    (445,610 )   (226,417 )   (118,391 )   (125,687 )   (480,181 )

Net cash from financing activities

    247,856     256,089     3,584     (32,230 )   258,740  

 

 
  At September 30,   At December 31,  
 
 
2011
 
2012
 
2012
 
2009
 
2010
 
2011
 
 
  (historical)
  (historical)
  (pro forma)
  (historical)
  (historical)
  (historical)
 
 
  (in thousands)
 

Balance Sheet Data:

                                     

Cash and cash equivalents

  $ 257,159   $ 523,614   $ 128,066   $ 233,546   $ 302,210   $ 260,723  

Working capital

    432,702     743,725     413,966     386,930     446,253     510,126  

Goodwill

    134,696     157,724     470,264     56,085     60,252     122,392  

Total assets

    2,010,385     2,449,403     3,872,276     1,401,068     1,602,475     2,085,803  

Long-term obligations (including current portion)(5)

    540,691     809,414     1,359,414     301,271     278,800     538,888  

Stockholders' equity

    840,206     1,006,755     1,317,338     613,825     780,827     900,987  

(1)
For fiscal year 2011, the provision includes a decrease in unrecognized tax benefits of $6.5 million of which $5.7 million was due to expiring statute of limitation periods related to a historical Canadian business combination and the remaining $0.8 million was related to the conclusion of examinations by state taxing authorities, the expiration of various state statutes of limitation periods, and a change in estimate of a previous liability. For fiscal year 2010, the provision includes a reversal of $14.3 million (net of benefit) resulting from the release of interest and penalties related to Canadian and United States tax reserves for which the statutes of limitation periods have expired.

(2)
Basic and diluted earnings per share are based on income from continuing operations for 2010 were $2.43 and $2.41 per share, respectively, and for 2009, they were both $0.71 per share.

(3)
For all periods presented, "Adjusted EBITDA" consists of net income plus accretion of environmental liabilities, depreciation and amortization, net interest expense, and provision for income taxes. We also exclude loss on early extinguishment of debt, other (income) expense, and income from discontinued operations, net of tax as these amounts are not considered part of usual business operations. See below for a reconciliation of Adjusted EBITDA to both net income and net cash provided by operating activities for the specified periods. Our management considers

 

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  Nine Months Ended September 30,   Year Ended December 31,  
 
 
2011
 
2012
 
2012
 
2009
 
2010
 
2011
 
2011
 
 
  (historical)
  (historical)
  (pro forma)
  (historical)
  (historical)
  (historical)
  (pro forma)
 

Net income

  $ 89,019   $ 67,800   $ 92,288   $ 36,686   $ 130,515   $ 127,252   $ 227,979  

Accretion of environmental liabilities

    7,231     7,409     9,297     10,617     10,307     9,680     11,849  

Depreciation and amortization

    87,000     116,794     180,085     64,898     92,473     122,663     207,051  

Other (income) expense

    (5,931 )   465     5,368     (259 )   (2,795 )   (6,402 )   (477 )

Loss on early extinguishment of debt

        26,385     26,385     4,853     2,294          

Interest expense, net

    28,047     33,836     57,662     15,999     27,936     39,389     70,842  

Provision (benefit) for income taxes

    47,283     37,487     47,176     26,225     56,756     57,426     (45,722 )

Income from discontinued operations, net of tax

                (1,439 )   (2,794 )        
                               

Adjusted EBITDA

  $ 252,649   $ 290,176   $ 418,261   $ 157,580   $ 314,692   $ 350,008   $ 471,522  
                               

    The following reconciles Adjusted EBITDA to net cash provided by operating activities for the following periods (in thousands):

 
  Nine Months
Ended
September 30,
  Year Ended December 31,  
 
 
2011
 
2012
 
2009
 
2010
 
2011
 

Adjusted EBITDA

  $ 252,649   $ 290,176   $ 157,580   $ 314,692   $ 350,008  

Interest expense, net

    (28,047 )   (33,836 )   (15,999 )   (27,936 )   (39,389 )

Provision for income taxes

    (47,283 )   (37,487 )   (26,225 )   (56,756 )   (57,426 )

Income from discontinued operations, net of tax

            1,439     2,794      

Allowance for doubtful accounts

    623     809     1,006     1,043     759  

Amortization of deferred financing costs and debt discount

    1,230     1,173     1,997     2,921     1,572  

Change in environmental liability estimates

    (2,467 )   (3,553 )   (4,657 )   (8,328 )   (2,840 )

Deferred income taxes

    (197 )   (494 )   4,830     4,919     37,836  

Stock-based compensation

    5,329     5,235     968     7,219     8,164  

Excess tax benefit of stock-based compensation

    (1,949 )   (1,786 )   (481 )   (1,751 )   (3,352 )

Income tax benefits related to stock option exercises

    1,949     1,776     474     1,739     3,347  

Eminent domain compensation

    3,354                 3,354  

Gain on sale of businesses

                (2,678 )    

Prepayment penalty on early extinguishment of debt

        (21,044 )   (3,002 )   (900 )    

Environmental expenditures

    (8,551 )   (7,833 )   (8,617 )   (10,236 )   (11,319 )

Changes in assets and liabilities, net of acquisitions:

                               

Accounts receivable

    (32,670 )   59,881     (11,429 )   (49,411 )   (65,210 )

Other current assets

    (14,113 )   5,130     1,093     (10,550 )   (36,761 )

Accounts payable

    30,241     (18,969 )   5,050     38,553     (8,116 )

Other current liabilities

    (8,762 )   (6,486 )   (10,757 )   18,774     (1,096 )
                       

Net cash from operating activities

  $ 151,336   $ 232,692   $ 93,270   $ 224,108   $ 179,531  
                       
(4)
Adjusted EBITDA Margin represents Adjusted EBITDA expressed as a percentage of revenues.

(5)
Long-term obligations (including current portion) include borrowings under our current and former revolving credit facilities and capital lease obligations. Net Debt represents long-term obligations (including current portion) less cash and cash equivalents.

 

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RISK FACTORS

          An investment in our common stock involves certain risks, including those described below. You should consider carefully these risk factors, together with all of the information included or incorporated by reference in this prospectus supplement and the accompanying prospectus, before investing in our common stock.

Risks Affecting Both Our Environmental Services and Energy and Industrial Services Businesses

Our businesses are subject to operational and safety risks.

          Provision of both environmental services and energy and industrial services to our customers involves risks such as equipment defects, malfunctions and failures, and natural disasters, which could potentially result in releases of hazardous materials, injury or death of our employees, or a need to shut down or reduce operation of our facilities while remedial actions are undertaken. Our employees often work under potentially hazardous conditions. These risks expose us to potential liability for pollution and other environmental damages, personal injury, loss of life, business interruption, and property damage or destruction. We must also maintain a solid safety record in order to remain a preferred supplier to our major customers.

          While we seek to minimize our exposure to such risks through comprehensive training programs, vehicle and equipment maintenance programs and insurance, such programs and insurance may not be adequate to cover all of our potential liabilities and such insurance may not in the future be available at commercially reasonable rates. If we were to incur substantial liabilities in excess of policy limits or at a time when we were not able to obtain adequate liability insurance on commercially reasonable terms, our business, results of operations and financial condition could be adversely affected to a material extent. Furthermore, should our safety record deteriorate, we could be subject to a potential reduction of revenues from our major customers.

Our businesses are subject to significant competition.

          We compete with a large number of companies, which range from large public companies to small operators that provide most of the same or similar services to those we offer. The 2008-2010 downturn in economic conditions, particularly with respect to manufacturing and oil and gas exploration and production, caused increased competition for market share. This competition resulted during that period and could in the future result in lower prices and reduced gross margins for our services and negatively affect our ability to grow or sustain our current revenue and profit levels in the future.

Our businesses are subject to numerous statutory and regulatory requirements, which may increase in the future.

          Our businesses are subject to numerous statutory and regulatory requirements, and our ability to continue to hold licenses and permits required for our businesses is subject to maintaining satisfactory compliance with such requirements. These requirements may increase in the future as a result of statutory and regulatory changes. Although we are very committed to compliance and safety, we may not, either now or in the future, be in full compliance at all times with such statutory and regulatory requirements. Consequently, we could be required to incur significant costs to maintain or improve our compliance with such requirements.

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Future conditions might require us to make substantial write-downs in our assets, which would adversely affect our balance sheet and results of operations.

          We review our long-lived tangible and intangible assets other than goodwill for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. We also test our goodwill assets for impairment at least annually on December 31, or when events or changes in the business environment indicate that the carrying value of a reporting unit may exceed its fair value. During and as of the end of each of 2011, 2010 and 2009, we determined that no asset write-downs were required; however, if conditions in either the environmental services or energy and industrial services businesses were to deteriorate significantly, we could determine that certain of our assets were impaired and we would then be required to write-off all or a portion of our costs for such assets. Any such significant write-offs would adversely affect our balance sheet and results of operations.

Fluctuations in foreign currency exchange could affect our financial results.

          We earn revenues, pay expenses, own assets and incur liabilities in countries using currencies other than the U.S. dollar. In fiscal 2011, we recorded 42% of our revenues outside of the United States, primarily in Canada. Because our consolidated financial statements are presented in U.S. dollars, we must translate revenues, income and expenses as well as assets and liabilities into U.S. dollars at exchange rates in effect during or at the end of each reporting period. Therefore, increases or decreases in the value of the U.S. dollar against other currencies in countries where we operate will affect our results of operations and the value of balance sheet items denominated in foreign currencies. These risks are non-cash exposures. We manage these risks through normal operating and financing activities. We cannot be certain, however, that we will be successful in reducing the risks inherent in exposures to foreign currency fluctuations.

Risks Relating to Our Proposed Acquisition of Safety-Kleen

We cannot assure you that our proposed acquisition of Safety-Kleen will be completed.

          On October 26, 2012, we entered into an agreement and plan of merger with Safety-Kleen, Inc. ("Safety-Kleen") pursuant to which we will acquire Safety-Kleen for cash in an amount (subject to working capital and other closing adjustments) equal to $1.25 billion. We now anticipate the acquisition will be completed in the fourth quarter of 2012. However, consummation of the acquisition will be subject to certain conditions including, among others: (i) approval by Safety-Kleen shareholders holding at least a majority of outstanding Safety-Kleen shares (although shareholders holding approximately 81% of such shares have entered into voting and lock-up agreements pursuant to which they have generally agreed to vote such shares in favor of the acquisition); (ii) expiration or termination of the applicable Hart-Scott-Rodino and Canadian Competition Bureau antitrust waiting periods; (iii) accuracy of the representations and warranties of the parties, in each case subject to certain materiality exceptions; (iv) compliance by the parties with their respective obligations under the merger agreement, subject to certain materiality exceptions; (v) the parties having executed certain other documents and ancillary agreements at or prior to the closing of the acquisition; and (vi) the absence of any material adverse effect relating to Safety-Kleen and its subsidiaries, taken as a whole, with respect to a specific time period and subject to certain exceptions. Furthermore, we or Safety-Kleen may terminate the merger agreement if the merger is not consummated by April 26, 2013, except if the transaction date is extended. We cannot assure you that the required conditions will be met or that the proposed acquisition will be completed. If the proposed acquisition of Safety-Kleen is terminated and we do not apply the proceeds of this offering to fund the proposed acquisition, it may have a negative impact on the trading price of our common stock.

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This offering is not contingent on completion of our proposed acquisition of Safety-Kleen.

          Although we expect to use the net proceeds of this offering to pay a portion of the purchase price for our proposed acquisition of Safety-Kleen and our related fees and expenses, completion of this offering is not contingent on completion of our proposed acquisition of Safety-Kleen. If we were unable to complete such proposed acquisition for any reason, we anticipate that we would use such net proceeds for other future acquisitions, repayment of debt and working capital. In such event, our management would have broad discretion as to the application of the net offering proceeds. The failure of our management to use the net proceeds from this offering effectively could have a material adverse effect on our business and may have an adverse effect on our earnings per share.

We will incur significant transaction and acquisition-related costs in connection with our proposed acquisition of Safety-Kleen.

          We will incur significant costs in connection with our proposed acquisition of Safety-Kleen and may incur additional unanticipated costs to retain key employees. In addition, until the closing of the acquisition, we expect to incur certain non-recurring costs associated with financing the acquisition, including the costs of this offering.

If we are unable to raise sufficient funds through this offering and our offering of unsecured senior notes to pay a portion of the purchase price for Safety-Kleen, we would be required to finance the acquisition on potentially less favorable terms through the financing commitment we have obtained.

          We plan to pay the approximately $1.25 billion purchase price plus the working capital adjustment for Safety-Kleen and our related fees and expenses through a combination of approximately $410.5 million (assuming the net proceeds of this offering are $320.2 million) of our $523.6 million of cash and cash equivalents at September 30, 2012, this offering of common stock and our offering of $550.0 million principal amount of new senior unsecured notes (the "Notes Offering"). This offering is not conditioned on completion of the Notes Offering. In the event that we are unable to raise sufficient proceeds through this offering of common stock and the Notes Offering to pay the balance of purchase price for Safety-Kleen, we anticipate we would utilize the commitment letter for up to $850 million of debt financing which we obtained from certain affiliates of the underwriters at the time we executed the merger agreement for our proposed acquisition of Safety-Kleen. To the extent, if any, we finance a portion of the purchase price for Safety-Kleen and our related fees and expenses through loans contemplated by the commitment letter, the terms of such financing could potentially be less favorable to us than if we are able to finance such payments through this offering of common stock and the Notes Offering.

          In addition, if the acquisition of Safety-Kleen is not completed by April 16, 2013 or if the merger agreement related to the Safety-Kleen acquisition is terminated at any time prior to the acquisition of Safety-Kleen, we will be required to redeem all of the notes issues pursuant to the Notes Offering at a redemption price equal to 101% of the aggregate principal amount of the notes issues pursuant to the Notes Offering, plus accrued and unpaid interest to, but not including, the date of redemption.

Safety-Kleen's revenues are relatively concentrated among a small number of its largest customers.

          In 2011, Safety-Kleen's ten largest customers accounted for approximately 25% of its total revenues and its largest customer accounted for approximately 8% of its total revenues. If one or more of Safety-Kleen's significant customers were to cease doing business with it or significantly

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reduce or delay the purchase of products or services from it, Safety-Kleen's business, financial condition and results of operations could be materially adversely affected and, as a result, assuming the Safety-Kleen acquisition is consummated our business, financial condition and results of operations could be materially and adversely affected. In addition, Safety-Kleen is subject to credit risk associated with the concentration of its accounts receivable from its customers. None of Safety-Kleen's accounts receivable are covered by collateral or credit insurance. If one or more of its significant customers or if any material portion of Safety-Kleen's other customers were to fail to pay Safety-Kleen on a timely basis, assuming the Safety-Kleen acquisition is consummated our business, financial condition and results of operations could be materially adversely affected. Additionally, future consolidation of Safety-Kleen's customers or additional concentration of market share among its customers may increase its credit risk. There are no assurances that Safety-Kleen will retain all of its customers after the consummation of the Safety-Kleen acquisition and as a result our business, financial condition and results of operations could be materially adversely affected.

Fluctuations in oil prices may have a negative effect on Safety-Kleen's future results of operations derived from its oil re-refining business.

          A significant portion of Safety-Kleen's business involves collecting used oil from certain of its customers, re-refining a portion of such used oil into base and blended lubricating oils, and then selling both such re-refined oil and the excess recycled oil which Safety-Kleen does not have the capacity to re-refine ("RFO") to other customers. The prices at which Safety-Kleen sells its re-refined oil and RFO are affected by changes in the reported spot market prices of oil. If applicable rates increase or decrease, Safety-Kleen typically will charge a higher or lower corresponding price for its re-refined oil and RFO. The price at which Safety-Kleen sells its re-refined oil and RFO is affected by changes in certain indices measuring changes in the price of heavy fuel oil, with increases and decreases in the indices typically translating into a higher or lower price for Safety-Kleen's RFO. The cost to collect used oil, including the amounts Safety-Kleen must pay to obtain used oil and the fuel costs of its oil collection fleet, typically also increases or decreases when the relevant indices increase or decrease. However, even though the prices Safety-Kleen can charge for its re-refined oil and RFO and the costs to collect and re-refine used oil and process RFO typically increase and decrease together, there is no assurance that when Safety-Kleen's costs to collect and re-refine used oil and process RFO increase it will be able to increase the prices it charges for its re-refined oil and RFO to cover such increased costs or that the costs to collect and re-refine used oil and process RFO will decline when the prices it can charge for re-refined oil and RFO decline. These risks are exacerbated when there are rapid fluctuations in these oil indices.

          The price at which Safety-Kleen purchases used oil from its large customers through its oil collection services is generally fixed for a period of time by contract, in some cases for up to 90 days. Because the price Safety-Kleen pays for a majority of its used oil is fixed for a period of time and it can take up to eight weeks to transport, re-refine and blend collected used oil into Safety-Kleen's finished blended lubricating oil products, Safety-Kleen typically experiences margin contraction during periods when the applicable index rates decline. If the index rates decline rapidly, Safety-Kleen may be locked into paying higher than market prices for used oil during these contracted periods while the prices it can charge for its finished oil products decline. If the prices Safety-Kleen charges for its finished oil products and the costs to collect and re-refine used oil and process RFO do not move together or in similar magnitudes, Safety-Kleen's profitability may be materially and negatively impacted.

          Safety-Kleen has entered into several commodity derivatives since 2011, which are comprised of cashless collar contracts related to crude oil, in each case, where Safety-Kleen sold a call option to a bank and then purchased a put option from the same bank, in order to manage against

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significant fluctuations in crude oil prices, which are closely correlated with indices discussed above. However, these commodity derivatives are designed to only mitigate Safety-Kleen's exposure to declines in these oil indices below a price floor, and Safety-Kleen will not be protected and its profitability may be materially and negatively impacted by declines above the price floor. In addition, these commodity derivatives will limit Safety-Kleen's potential benefit when these oil indices increase above a price cap because Safety-Kleen will be required to make payments in that circumstance. Furthermore, Safety-Kleen's current commodity derivatives expire at various intervals, and there is no assurance that we or Safety-Kleen will be able to enter into commodity derivatives in the future with acceptable terms.

If we are unable to successfully integrate the businesses and operations of Safety-Kleen and realize synergies in the expected time frame, our future results would be adversely affected.

          Much of the potential benefit of our proposed acquisition of Safety-Kleen will depend on our integration of the business and operations of Safety-Kleen into our business and operations through implementation of appropriate management and financial reporting systems and controls. We may experience difficulties in such integration, and the integration process may be costly and time-consuming. Such integration will require the focused attention of both Clean Harbors' and Safety-Kleen's management, including a significant commitment of their time and resources. The need for both Clean Harbors' and Safety-Kleen's managements to focus on integration matters could have a material impact on the revenues and operating results of the combined company. The success of the acquisition will depend, in part, on the combined company's ability to realize the anticipated benefits from combining the businesses of Clean Harbors and Safety-Kleen through cost reductions in overhead, greater efficiencies, increased utilization of support facilities and the adoption of mutual best practices. To realize these anticipated benefits, however, the businesses of Clean Harbors and Safety-Kleen must be successfully combined.

          If the combined company is not able to achieve these objectives, the anticipated benefits to us of the acquisition, including expected synergies and cost savings, may not be realized fully or at all or may take longer to realize than expected. It is possible that the integration processes could result in the loss of key employees, as well as the disruption of each company's ongoing business, failure to implement the business plan for the combined company, unanticipated issues in integrating operating, logistics, information, communications and other systems, unanticipated changes in applicable laws and regulations, operating risks inherent in our business or inconsistencies in standards, controls, procedures and policies or other unanticipated issues, expenses and liabilities, any or all of which could adversely affect our ability to maintain relationships with our and the acquired companies' customers and employees or to achieve the anticipated benefits of the acquisition.

Our proposed acquisition of Safety-Kleen will expose us to increased potential liabilities and other risks arising under environmental laws and regulations.

          As a provider of environmental services, Safety-Kleen is subject to the extensive federal, state, provincial and local laws and regulations relating to the protection of the environment, health and safety, and to potential liabilities arising therefrom, which apply to Clean Harbors' own environmental services as described below under "Risks Particularly Affecting Our Environmental Services Business". In the past, Safety-Kleen has been subject to fines and certain orders requiring it to take environmental remedial action. In fiscal year 2011, Safety-Kleen paid a total of approximately $190,000 for such fines, including fines arising in previous years. In 2009, Safety-Kleen recorded as an expense a $15.0 million settlement with the South Coast Air Quality Management District, or "SCAQMD", in southern California and other regulatory agencies for alleged civil violations of SCAQMD Rule 1171, which prohibits the use of solvent, except for certain

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exempt uses, in the district. Safety-Kleen has paid this settlement and is currently in compliance with SCAQMD Rule 1171. However, in the future, Safety-Kleen may be subject to monetary fines, civil or criminal penalties, remediation, cleanup or stop orders, injunctions, orders to cease or suspend certain practices or denial of permits required for the operation of its facilities. The outcome of any proceeding and associated costs and expenses could have a material adverse impact on Safety-Kleen's financial condition and results of operations.

          Environmental laws and regulations are subject to change and have historically become increasingly stringent. There has been a regulatory-driven shift away from solvents having higher volatile organic compounds, or "VOC", as evidenced by the recent move of the Ozone Transport Commission representing several states to reduce the VOC limits for various products, including solvent used for parts cleaning or with paint-gun cleaning equipment. Interpretation or enforcement of existing laws and regulations, or the adoption of new laws and regulations, may require Safety-Kleen to modify or curtail its operations or replace or upgrade its facilities or equipment at substantial costs, which we may not be able to pass on to our customers, and we may choose to indemnify our customers from any fines or penalties they may incur as a result of these new laws and regulations. On the other hand, in some cases if new laws and regulations are less stringent, Safety-Kleen's customers or competitors may be able to manage waste more effectively without reliance on its service, which could decrease the need for Safety-Kleen's services or increase competition, which could adversely affect Safety-Kleen's results of operations.

Our proposed acquisition of Safety-Kleen may expose us to unknown liabilities.

          Because we have agreed to acquire all the outstanding common shares of Safety-Kleen, our investment in Safety-Kleen will be subject to all of its liabilities other than its debt owed for borrowed money and capital lease obligations which will be paid off at the time of the acquisition. If there are unknown liabilities or other obligations, including contingent liabilities, our business could be materially affected. We may learn additional information about Safety-Kleen that adversely affects us, such as unknown liabilities (including liabilities under environmental laws) or other issues relating to internal controls over financial reporting, issues that could affect our ability to comply with the Sarbanes-Oxley Act or issues that could affect our ability to comply with other applicable laws.

          Safety-Kleen has been named as a defendant in various product liability lawsuits in various courts and jurisdictions throughout the United States from time to time. As of August 31, 2012, Safety-Kleen was involved in approximately 70 proceedings wherein persons claimed personal injury resulting from the use of its parts cleaning equipment or cleaning products. These proceedings typically involve allegations that the solvent used in Safety-Kleen's parts cleaning equipment contains contaminants or that Safety-Kleen's recycling process does not effectively remove the contaminants that become entrained in the solvent during their use. In addition, certain claimants assert that Safety-Kleen failed to warn adequately the product user of potential risks, including a historic failure to warn that solvent contains trace amounts of toxic or hazardous substances such as benzene. Although Safety-Kleen maintains insurance that we believe will provide coverage for these claims (over amounts accrued for self-insured retentions and deductibles in certain limited cases), this insurance may not provide coverage for potential awards of punitive damages against Safety-Kleen. Although Safety-Kleen vigorously defends itself and the safety of its products against all of these claims (and we intend to continue defending these claims), these matters are subject to many uncertainties and outcomes are not predictable with assurance. Safety-Kleen may also be named in similar, additional lawsuits in the future, including claims for which insurance coverage may not be available. If one or more of these claims is decided unfavorably against Safety-Kleen and the plaintiffs are awarded punitive damages, or if the claim is one for which insurance coverage may not be available, assuming the Safety-Kleen

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acquisition is consummated our financial condition and results of operations could be materially and adversely affected. Additionally, if one or more of these claims is decided unfavorably against Safety-Kleen, such outcome may encourage even more lawsuits against us.

Safety-Kleen is dependent on third parties for the manufacturing of the majority of its equipment.

          Safety-Kleen does not manufacture the majority of the equipment, including parts washers, that Safety-Kleen provides to its customers. Accordingly, Safety-Kleen relies on a limited number of third party suppliers for manufacturing this equipment. The supply of third party equipment could be interrupted or halted by a termination of Safety-Kleen's relationships, a failure of quality control or other operational problems at such suppliers or a significant decline in their financial condition. If Safety-Kleen is not able to retain these providers or obtain its requests from these providers, Safety-Kleen may not be able to obtain alternate providers in a timely manner or on economically attractive terms, and as a result, Safety-Kleen may not be able to compete successfully for new business, complete existing engagements profitably or retain its existing customers. Additionally, if Safety-Kleen's third party suppliers provide it with defective equipment, it may be subject to reputational damage or product liability claims which may negatively impact its reputation, financial condition and results of operations. Further, Safety-Kleen generally does not have long term contracts with its third party suppliers, and as a result these suppliers may increase the price of the equipment they provide to Safety-Kleen, which may hurt Safety-Kleen's results of operations.

Safety-Kleen is self-insured for certain claims, and a significant number of claims could negatively impact its financial condition and results of operations.

          Safety-Kleen is self-insured for certain general liability (including product liability), workers' compensation, automobile liability and general health insurance claims. For claims that are self-insured, Safety-Kleen maintains stop-loss insurance coverage for occurrences above certain amounts. Safety-Kleen's self-insurance and other insurance policies do not cover all of its potential losses, costs or liabilities. In August 2010, a Safety-Kleen vehicle being driven by an employee of a third party hired to transport the vehicle was involved in a serious accident, resulting in the death of the passenger and significant injuries to the driver, and in late August 2012, a Safety-Kleen driver was involved in an automobile accident resulting in the death of the other driver involved. These matters are covered under Safety-Kleen's insurance program, which has a $3.0 million self-insured retention for each respective automobile accident. Safety-Kleen has accrued self-insured retentions of $4.1 million as of October 6, 2012, related to these matters. Safety-Kleen could suffer losses within its deductibles or self-insured retentions or for uninsurable or uninsured risks, or for amounts in excess of its existing insurance coverage, all of which losses could significantly and adversely affect its financial condition and results of operations. Safety-Kleen's pollution legal liability insurance excludes costs related to fines, penalties or assessments and may not cover all of its environmental losses. Safety-Kleen's ability to obtain and maintain adequate insurance may be affected by conditions in the insurance market over which it has no control. Safety-Kleen's business requires that it maintain various types of insurance. If such insurance is not available or not available on economically acceptable terms, Safety-Kleen's business would be materially and adversely affected.

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Risks Particularly Affecting Our Environmental Services Business

We assumed significant environmental liabilities as part of our past acquisitions and will assume additional such liabilities as part of our proposed acquisition of Safety-Kleen and potentially other future acquisitions. Our financial condition and results of operations would be adversely affected if we were required to pay such liabilities more rapidly or in greater amounts than we now estimate or may estimate in connection with future acquisitions.

          We have accrued environmental liabilities valued as of September 30, 2012, at $167.2 million, substantially all of which we assumed in connection with our acquisitions of substantially all of the assets of the Chemical Services Division, or "CSD", of Safety-Kleen Corp. in 2002, Teris LLC in 2006, and one of two solvent recycling facilities we purchased from Safety-Kleen Systems, Inc. in 2008. If we complete our proposed acquisition of Safety-Kleen, we anticipate our environmental liabilities will increase by the approximately $58.3 million of such liabilities to which Safety-Kleen was subject at October 6, 2012. However, the anticipated environmental liabilities contemplated in connection with the Safety-Kleen acquisition could increase significantly based on currently unknown factors or newly discovered contamination or compliance concerns at any currently or formerly owned or operated Safety-Kleen facility for which Clean Harbors may be responsible for under environmental laws, by contract or otherwise. We calculate our environmental liabilities on a present value basis in accordance with generally accepted accounting principles, which take into consideration both the amount of such liabilities and the timing when it is projected that we will be required to pay such liabilities. We anticipate our environmental liabilities will be payable over many years and that cash flows generated from our operations will generally be sufficient to fund the payment of such liabilities when required. However, events not now anticipated (such as future changes in environmental laws and regulations or their enforcement) could require that such payments be made earlier or in greater amounts than now estimated, which could adversely affect our financial condition and results of operations.

          We may also assume additional environmental liabilities as part of further acquisitions. Although we will endeavor to accurately estimate and limit environmental liabilities presented by the businesses or facilities to be acquired, some liabilities, including ones that may exist only because of the past operations of an acquired business or facility, may prove to be more difficult or costly to address than we then estimate. It is also possible that government officials responsible for enforcing environmental laws may believe an environmental liability is more significant than we then estimate, or that we will fail to identify or fully appreciate an existing liability before we become legally responsible to address it.

If we are unable to obtain at reasonable cost the insurance, surety bonds, letters of credit, and other forms of financial assurance required for our facilities and operations, our business and results of operations would be adversely affected.

          We are required to provide substantial amounts of financial assurance to governmental agencies for closure and post-closure care of our licensed hazardous waste treatment facilities should those facilities cease operation, and we are also occasionally required to post surety, bid and performance bonds in connection with certain projects. As of September 30, 2012, our total estimated closure and post-closure costs requiring financial assurance by regulators were $343.1 million for our U.S. facilities and $22.9 million for our Canadian facilities. We have obtained all of the required financial assurance for our facilities from a qualified insurance company, Zurich Insurance N.A., and its affiliated companies. The closure and post-closure obligations of our U.S. facilities are insured by an insurance policy written by Steadfast Insurance Company (a unit of Zurich Insurance N.A.), which will expire in 2013. Our Canadian facilities utilize surety bonds provided through Zurich Insurance Company (Canada), which expire at various dates throughout 2012. In connection with obtaining such insurance and surety bonds, we have provided to Steadfast Insurance Company $73.5 million of letters of credit which we obtained from our lenders under our revolving credit agreement.

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          Safety-Kleen is required by environmental laws to provide financial assurance that guarantees funds will be available when needed for closure, post-closure and corrective action costs at certain of its facilities. As of October 6, 2012, Safety-Kleen's total estimated closure, post-closure costs and corrective action costs requiring financial assurance by regulators were $47.1 million for Safety-Kleen's U.S. facilities and $5.2 million for Safety-Kleen's Canadian facilities. Safety-Kleen has obtained all of the required U.S. financial assurance for its facilities from a qualified insurance company, XL Insurance Company, and its affiliated companies, which will expire in 2013, except Safety-Kleen's Pennsylvania facilities utilize letters of credit. In connection with obtaining such insurance for its U.S facilities, Safety-Kleen has provided to XL Insurance Company a $5.0 million letter of credit which Safety-Kleen obtained from its lenders under its revolving credit agreement. Safety-Kleen's Canadian facilities utilize surety bonds provided through Travelers Insurance Company (Canada), which will expire in 2013 and letters of credit.

          Our ability to continue operating our facilities and conducting our other operations would be adversely affected if we became unable to obtain sufficient insurance, surety bonds, letters of credit and other forms of financial assurance at reasonable cost to meet our regulatory and other business requirements. The availability of insurance, surety bonds, letters of credit and other forms of financial assurance is affected by our insurers', sureties' and lenders' assessment of our risk and by other factors outside of our control such as general conditions in the insurance and credit markets.

The environmental services industry in which we participate is subject to significant economic and business risks.

          The future operating results of our environmental services business may be affected by such factors as our ability to utilize our facilities and workforce profitably in the face of intense price competition, maintain or increase market share in an industry which has experienced significant downsizing and consolidation, realize benefits from cost reduction programs, generate incremental volumes of waste to be handled through our facilities from existing and acquired sales offices and service centers, obtain sufficient volumes of waste at prices which produce revenue sufficient to offset the operating costs of the facilities, minimize downtime and disruptions of operations, and develop our field services business. In particular, economic downturns or recessionary conditions in North America, and increased outsourcing by North American manufacturers to plants located in countries with lower wage costs and less stringent environmental regulations, have adversely affected and may in the future adversely affect the demand for our services. Our hazardous and industrial waste management business is also cyclical to the extent that it is dependent upon a stream of waste from cyclical industries such as the chemical and petrochemical, primary metals, paper, furniture and aerospace industries. If those cyclical industries slow significantly, the business that we receive from those industries is likely to slow.

A significant portion of our environmental services business depends upon the demand for cleanup of major spills and other remedial projects and regulatory developments over which we have no control.

          Our operations are significantly 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, secular changes in the waste processing industry towards waste minimization and the propensity for delays in the demand for remedial services, and changes in the myriad of governmental regulations governing our diverse operations. We do not control such factors and, as a result, our revenue and income

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can vary significantly from quarter to quarter, and past financial performance for certain quarters may not be a reliable indicator of future performance for comparable quarters in subsequent years. In particular, our participation in oil spill response efforts in Yellowstone, Montana generated third party revenues for the year ended December 31, 2011 of $43.6 million, which accounted for approximately 2% of total revenues, and our participation in oil spill response efforts in both the Gulf of Mexico and Michigan generated third party revenues for the year ended December 31, 2010 of $253.0 million, which accounted for approximately 15% of total revenues. We cannot expect such event revenue to reoccur in 2012 or 2013.

The extensive environmental regulations to which we are subject may increase our costs and potential liabilities and limit our ability to expand our facilities.

          Our operations and those of others in the environmental services industry are subject to extensive federal, state, provincial and local environmental requirements in both the United States and Canada, including those relating to emissions to air, discharged wastewater, storage, treatment, transport and disposal of regulated materials and cleanup of soil and groundwater contamination. For example, any failure to comply with governmental regulations governing the transport of hazardous materials could negatively impact our ability to collect, process and ultimately dispose of hazardous wastes generated by our customers. While increasing environmental regulation often presents new business opportunities for us, it often also results in increased operating and compliance costs. Efforts to conduct our operations in compliance with all applicable laws and regulations, including environmental rules and regulations, require programs to promote compliance, such as training employees and customers, purchasing health and safety equipment, and in some cases hiring outside consultants and lawyers. Even with these programs, we and other companies in the environmental services industry are routinely faced with governmental enforcement proceedings, which can result in fines or other sanctions and require expenditures for remedial work on waste management facilities and contaminated sites. Certain of these laws impose strict and, under certain circumstances, joint and several liability on current and former owners and operators of facilities that release regulated materials or that generate those materials and arrange for their disposal or treatment at contaminated sites. Such liabilities can relate to required cleanup of releases of regulated materials and related natural resource damages.

          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 that we have paid in the past 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 compliance record, and customers may decide not to use a particular disposal facility or do business with us because of concerns about our compliance record. Suspension or revocation of permits or licenses would impact our operations and could have a material adverse impact on our financial results. Although we have never had any of our facilities' operating permits revoked, suspended or non-renewed involuntarily, it is possible that such an event could occur in the future.

          Some 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 causation 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 may require investigation and remediation, and 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

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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. While, based on available information, we do not believe these remedial activities will result in a material adverse effect upon our operations or financial condition, these activities or the discovery of previously unknown conditions could result in material costs.

          In addition to the costs of complying with environmental laws and regulations, we incur costs defending against environmental litigation brought by governmental agencies and private parties. We are now, and may in the future be, a defendant in lawsuits brought by parties alleging environmental damage, personal injury, and/or property damage, which may result in our payment of significant amounts of liabilities.

          Environmental and land use laws also impact our ability to expand our facilities. In addition, we are required to obtain governmental permits to operate our facilities, including all of our landfills. Even if we were to comply with all applicable environmental laws, there is no guarantee that we would be able to obtain the requisite permits from the applicable governmental authorities, and, even if we could, that any permit (and any existing permits we currently hold) will be extended or modified as needed to fit out business needs.

Future changes in environmental regulations may require us to make significant capital expenditures.

          Changes in environmental regulations can require us to make significant capital expenditures for our facilities. For example, in 2002, the United States Environmental Protection Agency, or "EPA", promulgated Interim Standards of the Hazardous Waste Combustor Maximum Achievable Control Technology, or "MACT", under the Federal Clean Air Act Amendments. These standards established new emissions limits and operational controls on all new and existing incinerators, cement kilns and light-weight aggregate kilns that burn hazardous waste-derived fuels. We have spent approximately $29.6 million since September 7, 2002 in order to bring our Deer Park, Texas and Aragonite, Utah incineration facilities, which we then acquired as part of the CSD assets, and our Kimball, Nebraska facility into compliance with the MACT regulations. Prior to our acquisition in August 2006 of our additional incineration facility in El Dorado, Arkansas, as part of our purchase of all the membership interests in Teris LLC, Teris had spent in excess of $30.0 million in order to bring that facility into compliance with the MACT standards. Future environmental regulations could cause us to make significant additional capital expenditures and adversely affect our results of operations and cash flow.

If our assumptions relating to expansion of our landfills should prove inaccurate, our results of operations and cash flow could be adversely affected.

          When we include expansion airspace in our calculation of available airspace, we adjust our landfill liabilities to the present value of projected costs for cell closure and landfill closure and post-closure. It is possible that any of our estimates or assumptions could ultimately turn out to be significantly different from actual results. In some cases we may be unsuccessful in obtaining an expansion permit or we may determine that an expansion permit that we previously thought was probable has become unlikely. To the extent that such estimates, or the assumptions used to make those estimates, prove to be significantly different than actual results, or our belief that we will receive an expansion permit changes adversely in a significant manner, the landfill assets, including the assets incurred in the pursuit of the expansion, may be subject to impairment testing and lower prospective profitability may result due to increased interest accretion and depreciation or asset impairments related to the removal of previously included expansion airspace. In addition, if our

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assumptions concerning the expansion airspace should prove inaccurate, certain of our cash expenditures for closure of landfills could be accelerated and adversely affect our results of operations and cash flow.

Risks Particularly Affecting Our Energy and Industrial Services Business

A large portion of our energy and industrial services business is dependent on the oil and gas industry in Western Canada, and declines in oil and gas exploration and production in that region could adversely affect our business.

          Our energy and industrial services business generates well over 50% of its total revenues from customers in the oil and gas industry operating in Western Canada, although a majority of the services we provide to such customers relate to industrial maintenance and oil and gas production and refining which are less volatile than oil and gas exploration. We also provide significant services to customers in the oil and gas industry operating in the United States or internationally and to customers in other industries such as forestry, mining and manufacturing. However, a major portion of the total revenues of our energy and industrial services business remains dependent on customers in the oil and gas industry operating in Western Canada.

          Accordingly, declines in the general level of oil and gas exploration, production and refining in Western Canada could potentially have significant adverse effects on our total revenues and profitability. Such declines occurred in 2008-2009 and could potentially occur in the future if reductions in the commodity prices of oil and gas result in reduced oil and gas exploration, production and refining. Such future declines could also be triggered by technological and regulatory changes, such as those affecting the availability and cost of alternative energy sources, and other changes in industry and worldwide economic and political conditions.

          Many of our major customers in the oil and gas industry conduct a significant portion of their operations in the Alberta oil sands. The Alberta oil sands contain large oil deposits, but extraction may involve significantly greater cost and environmental concerns than conventional drilling. While we believe our major involvement in the oil sands region will provide significant future growth opportunities, such involvement also increases the risk that our business will be adversely affected if future economic activity in the Alberta oil sands were to decline considerably. Major factors that could cause such a decline might include a prolonged reduction in the commodity price of oil, future changes in environmental restrictions and regulations, and technological and regulatory changes relating to production of oil from the oil sands. Due to the downturn in worldwide economic conditions and in the commodity price of oil and gas which occurred in 2008-2009, certain of our customers delayed a number of large projects in the planning and early development phases within the oil sands region. In addition, customers are revisiting their operating budgets and challenging their suppliers to reduce costs and achieve better efficiencies in their work programs.

Our energy and industrial services business is subject to workforce availability.

          Our ability to provide high quality services to our customers is dependent upon our ability to attract and retain well-trained, experienced employees. Prior to 2008, the oil and gas services industry in Western Canada experienced for several years high demand for, and a corresponding shortage of, quality employees resulting, in particular, in employment of a significant number of employees from Eastern Canada on a temporary basis. Although the 2008-2009 downturn in the oil and gas industry increased the pool of quality employees available to meet our customer commitments, the subsequent improvement during 2010-2011 of conditions in the oil and gas industry has increased, and any such improvement which may occur in the future would likely increase, competition for experienced employees.

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Risks Relating to Our Level of Debt and Letters of Credit

Our substantial levels of outstanding debt and letters of credit could adversely affect our financial condition and ability to fulfill our obligations.

          As of September 30, 2012, on an as adjusted basis after giving effect to (i) this offering, (ii) our offering of $550 million of new senior unsecured notes (the "Notes Offering"), and (iii) our proposed acquisition of Safety-Kleen, we and our guarantor subsidiaries would have had outstanding $550.0 million of notes issued in the Notes Offering, $800.0 million of our 5.25% senior unsecured notes due 2020 (the "5.25% notes"), $9.4 million of capital lease obligations, no revolving loans, and $131.8 million of letters of credit ($86.6 million applicable to Clean Harbors and $45.2 million applicable to Safety-Kleen). Our substantial levels of outstanding debt and letters of credit may:

          Our ability to make scheduled payments of principal or interest with respect to our debt, including the notes issued in the Notes Offering, our outstanding 5.25% notes, any revolving loans and our capital leases, and to pay fee obligations with respect to our letters of credit, will depend on our ability to generate cash and on our future financial results. Our ability to generate cash depends on, among other things, the demand for our services, which is subject to market conditions in the environmental and energy and industrial services industries, the occurrence of events requiring major remedial projects, changes in government environmental regulation, general economic conditions, and financial, competitive, regulatory and other factors affecting our operations, many of which are beyond our control. Our operations may not generate sufficient cash flow, and future borrowings may not be available under our revolving credit facility or otherwise, in an amount sufficient to enable us to pay our debt and the fee obligations respecting our letters of credit, or to fund our other liquidity needs. If we are unable to generate sufficient cash flow from operations in the future to service our debt and letter of credit fee obligations, we might be required to refinance all or a portion of our existing debt and letter of credit facilities or to obtain new or additional such facilities. However, we might not be able to obtain any such new or additional facilities on favorable terms or at all.

Despite our substantial levels of outstanding debt and letters of credit, we could incur substantially more debt and letter of credit obligations in the future.

          Although our revolving credit agreement and the indenture governing our outstanding 5.25% notes contain, and the indenture governing the notes issued in the Notes Offering will contain,

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restrictions on the incurrence of additional indebtedness (including, for this purpose, reimbursement obligations under outstanding letters of credit), these restrictions are subject to a number of qualifications and exceptions and the additional amount of indebtedness which we might incur in the future in compliance with these restrictions could be substantial. In particular, on an as adjusted basis after giving effect to our proposed acquisition of Safety-Kleen, we would have had available at September 30, 2012 under our revolving credit facility up to an additional $118.2 million for purposes of future borrowings and letters of credit. Based upon our current discussions with the agent for the lenders under our revolving credit facility and an affiliate of such agent, we also now anticipate we may be able to amend the current terms of such facility to increase the maximum amount of borrowings and letters of credit which we and our domestic and Canadian subsidiaries can obtain from $250.0 million to $400.0 million (with a combined sub-limit of $325.0 million for letters of credit) and therefore the pro forma amount of our availability at September 30, 2012 from $118.2 million to approximately $268.2 million. There is no assurance that the current terms of our revolving credit facility will be amended. Furthermore, our revolving credit facility and the indenture governing our outstanding 5.25% notes allow, and the indenture governing the notes issued in the Notes Offering will allow, us to borrow significant amounts of money from other sources. These restrictions would also not prevent us from incurring obligations (such as operating leases) that do not constitute "indebtedness" as defined in the relevant agreements. To the extent we incur in the future additional debt and letter of credit obligations, the related risks will increase.

The covenants in our debt agreements restrict our ability to operate our business and might lead to a default under our debt agreements.

          Our revolving credit facility and the indenture governing our outstanding 5.25% notes limit, and the indenture governing the notes issued in the Notes Offering will limit, among other things, our ability and the ability of our restricted subsidiaries to:

          As a result of these covenants, we may not be able to respond to changes in business and economic conditions and to obtain additional financing, if needed, and we may be prevented from engaging in transactions that might otherwise be beneficial to us. Our revolving credit facility requires, and our future credit facilities may require, us to maintain specified financial ratios and satisfy certain financial condition tests. Our ability to meet these financial ratios and tests can be affected by events beyond our control, and we may not be able to meet those tests. The breach of any of these covenants could result in a default under our revolving credit facility or future credit facilities. Upon the occurrence of an event of default, the lenders could elect to declare all amounts

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outstanding under such credit facilities, including accrued interest or other obligations, to be immediately due and payable. If amounts outstanding under such credit facilities were to be accelerated, our assets might not be sufficient to repay in full that indebtedness and our other indebtedness, including the notes.

          Our revolving credit facility and the indenture for our outstanding 5.25% notes contain, and the indenture governing the notes issued in the Notes Offering will contain, cross-default and cross-acceleration provisions. Under these provisions, a default or acceleration under one instrument governing our debt may constitute a default under our other debt instruments that contain cross- default or cross-acceleration provisions, which could result in the related debt and the debt issued under such other instruments becoming immediately due and payable. In such event, we would need to raise funds from alternative sources, which funds might not be available to us on favorable terms, on a timely basis or at all. Alternatively, such a default could require us to sell assets and otherwise curtail operations to pay our creditors. The proceeds of such a sale of assets, or curtailment of operations, might not enable us to pay all of our liabilities.

Risks Relating to Our Common Stock

We have not paid, and do not anticipate paying for the foreseeable future, dividends on our common stock.

          We have not paid, and do not anticipate paying for the foreseeable future, any cash dividends on our common stock. Furthermore, our current credit agreement and the indenture governing our outstanding 5.25% notes restrict, and the indenture governing the notes issued in the Notes Offering will restrict, the payment by us of dividends on our common stock. We intend to retain future earnings, if any, for use in the operation and expansion of our business and payment of our outstanding debt.

Our founder and other directors and executive officers, as a group, may be able to exercise substantial influence over matters submitted to our stockholders for approval.

          As of the September 30, 2012, Alan S. McKim, our founder and chief executive officer, together with other directors and executive officers, beneficially held approximately 10.4% of our outstanding common stock. As a result, our directors and executive officers may likely be able to exercise significant influence over matters submitted to our stockholders for approval, including the election of directors, any merger, consolidation or sale of all or substantially all of our assets or any other significant corporate transactions. These stockholders may also delay or prevent a change of control even if such a change of control would benefit our other stockholders. This concentration of stock ownership might cause the trading price of our common stock to decline if investors were to perceive that conflicts of interest may exist or arise over any such potential transactions. Potential future sales of common stock by our directors and executive officers, and our other principal stockholders, may cause our stock price to fall.

Future sales, or the availability for future sales, of substantial amounts of our common stock could adversely affect the market price of our common stock.

          As of September 30, 2012, Alan S. McKim, our founder and chief executive officer, beneficially held 8.9% of our then outstanding common stock, and the one other holder which has reported to us that it beneficially owned in excess of 5% of our outstanding common stock has reported that it beneficially owned approximately 11.5% of our outstanding common stock as of September 30, 2012. A decision by one or both of these major stockholders to sell a substantial number of his or its shares could adversely affect the market price of our common stock. All of the 53.5 million shares of our common stock which were outstanding or subject to then exercisable options as of

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September 30, 2012, were or, upon issuance, will be freely tradable without restriction or further registration under the Securities Act, except for the approximately 5.5 million of such shares beneficially held by our "affiliates" as that term is defined in Rule 144 under the Securities Act. The shares held by our "affiliates" include the shares beneficially held by our founder and other directors and executive officers described above. Shares beneficially owned by our affiliates may not be sold except in compliance with the registration requirements of the Securities Act or pursuant to an exemption from registration, such as Rule 144. Furthermore, approximately 4.9 million shares of common stock beneficially held by certain of our directors and executive officers are subject to lock-up agreements for a period of 90 days after the date of final prospectus relating to this offering.

The Massachusetts Business Corporation Act and our by-laws contain certain anti-takeover provisions.

          Section 8.06 and 7.02 of the Massachusetts Business Corporation Act provide that Massachusetts corporations which are publicly-held must have a staggered board of directors and that written demand by holders of at least 40% of the outstanding shares of each relevant voting group of stockholders is required for stockholders to call a special meeting unless such corporations take certain actions to affirmatively "opt-out" of such requirements. In accordance with these provisions, our by-laws provide for a staggered board of directors which consists of three classes of directors of which one class is elected each year for a three-year term, and require that written application by holders of at least 25% (which is less than the 40% which would otherwise be applicable without such a specific provision in our by-laws) of our outstanding shares of common stock is required for stockholders to call a special meeting. In addition, our by-laws prohibit the removal by the stockholders of a director except for cause. These provisions could inhibit a takeover of our company by restricting stockholders action to replace the existing directors or approve other actions which a party seeking to acquire us might propose. A takeover transaction would frequently afford stockholders an opportunity to sell their shares at a premium over then market prices.

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USE OF PROCEEDS

          We estimate that the net proceeds to us from this offering, after deduction of underwriting discounts and expenses, will be approximately $320.2 million ($368.5 million if the underwriters exercise in full their option to purchase an additional 900,000 shares), based on the public offering price of $56.00 per share. We expect to use such net proceeds to pay a portion of the purchase price for our proposed acquisition of Safety-Kleen and our related fees and expenses. However, if we are unable for any reason to complete such proposed acquisition, we anticipate that we would use such net proceeds for other future acquisitions, repayment of debt and working capital. In such event, our management would have broad discretion as to the application of the offering proceeds.

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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

          This prospectus supplement and the documents incorporated herein by reference to our filings under the Securities Exchange Act of 1934 include "forward-looking statements," as defined by federal securities laws, with respect to our financial condition, results of operations and business and our expectations or beliefs concerning future events. Words such as, but not limited to, "believe", "expect", "anticipate", "estimate", "intend", "plan", "targets", "likely", "will", "would", "could" and similar expressions or phrases identify forward-looking statements.

          All forward-looking statements involve risks and uncertainties. Many risks and uncertainties are inherent in the environmental services industry. Others are more specific to our operations. The occurrence of the events described, and the achievement of the expected results, depend on many events, some or all of which are not predictable or within our control. Actual results may differ materially from expected results.

          Factors that may cause actual results to differ from expected results include, among others:

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          All future written and verbal forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We undertake no obligation, and specifically decline any obligation, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus supplement might not occur.

          See "Risk Factors" elsewhere in this prospectus supplement for a more complete discussion of these risks and uncertainties and for other risks and uncertainties. These factors and the other risk factors described in this prospectus supplement are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements and other unknown or unpredictable factors also could harm our results. Consequently, actual results or developments anticipated by us may not be realized and, even if substantially realized, they may not have the expected consequences to, or effects on, us. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements.

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PRICE RANGE OF COMMON STOCK

          Our common stock trades on the New York Stock Exchange (the "NYSE") under the symbol "CLH". The following table sets forth the high and low sales prices of our common stock for the indicated periods as reported by the NYSE:

2012
 
High
 
Low
 

First Quarter

  $ 71.63   $ 60.18  

Second Quarter

    69.25     54.03  

Third Quarter

    61.99     47.61  

Fourth Quarter (through November 23, 2012)

    61.72     46.94  

 

2011
 
High
 
Low
 

First Quarter

  $ 50.94   $ 40.28  

Second Quarter

    53.05     46.80  

Third Quarter

    59.35     46.00  

Fourth Quarter

    64.68     45.05  

 

2010
 
High
 
Low
 

First Quarter

  $ 32.90   $ 26.00  

Second Quarter

    36.07     27.16  

Third Quarter

    34.85     29.15  

Fourth Quarter

    43.14     33.38  

          On June 8, 2011, our board of directors authorized a two-for-one stock split of our common stock in the form of a stock dividend of one share for each outstanding share. The stock dividend was paid on July 26, 2011 to holders of record at the close of business on July 6, 2011. The stock split did not change the proportionate interest that a stockholder maintained in our Company. The data included in the table above reflects the retroactive effect of the two-for-one stock split.

          On November 27, 2012, the closing price of our common stock on the NYSE was $56.99. On November 21, 2012, there were 374 stockholders of record of our common stock, excluding stockholders whose shares were held in nominee, or "street", name. We estimate that approximately 41,000 additional stockholders held shares in street name at that date.


DIVIDEND POLICY

          We have never declared nor paid any cash dividends on our common stock, and we do not intend to pay any cash dividends on our common stock in the foreseeable future. We currently intend to retain our future earnings, if any, for use in the operation and expansion of our business and payment of our outstanding debt. In addition, our current credit agreement and the indenture governing our outstanding 5.25% notes restrict, and the indenture governing the notes to be issued in the Notes Offering will restrict, us from paying cash dividends on our common stock. To the extent permitted by our debt agreements then in effect, our board of directors will determine our future payment of dividends, if any, on our common stock.

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CAPITALIZATION

          The following table sets forth our consolidated cash and cash equivalents, long-term debt (including current portion), and stockholders' equity as of September 30, 2012, on an actual basis and on an as adjusted basis to reflect (i) our sale in this offering of 6.0 million shares of our common stock at the public offering price of $56.00, (ii) our sale of $550.0 million of senior unsecured notes in the Notes Offering, (iii) our proposed acquisition of Safety-Kleen, and (iv) payment of our related fees and expenses. The table does not give pro forma effect to our proposed acquisition from CEDA International Corporation of the shares and assets of certain of its subsidiaries which we have agreed to acquire, subject to certain conditions, for a purchase price of approximately $27 million, payable in cash. This table should be read in conjunction with "Use of Proceeds", "Selected Historical Consolidated Financial Information", "Management's Discussion and Analysis of Financial Condition and Results of Operations", and "Description of Outstanding Indebtedness" appearing elsewhere in this prospectus supplement, and our historical financial statements and the notes thereto incorporated by reference in this prospectus supplement.

 
  September 30, 2012  
 
 
Actual
 
As Adjusted
 
 
  (in thousands)
 

Cash and cash equivalents

  $ 523,614   $ 128,066  
           

Long-term debt, including current portion:

             

Revolving credit facility(1)

  $   $  

Capital lease obligations

    9,414     9,414  

5.25% senior unsecured notes due 2020

    800,000     800,000  

New senior unsecured notes(2)

        550,000  
           

Total long-term debt, including current portion(3)

    809,414     1,359,414  
           

Stockholders' equity:

             

Common stock, $.01 par value;

             

Authorized 80,000,000 shares; issued and outstanding 53,386,280 shares (actual) and 59,386,280 (as adjusted)

    534     594  

Shares held under employee participation plan

    (469 )   (469 )

Additional paid-in capital

    508,182     828,342  

Accumulated other comprehensive income

    59,056     59,056  

Accumulated earnings

    439,452     429,815  
           

Total stockholders' equity

    1,006,755     1,317,338  
           

Total capitalization

  $ 1,816,169   $ 2,676,752  
           

(1)
See "Description of Outstanding Indebtedness — Revolving Credit Facility" elsewhere in this prospectus supplement for a description of the current terms of our revolving credit facility and the discussions we are having with the agent for the lenders thereunder and an affiliate of such agent relating to a potential amendment to such terms which would, among other matters, increase the maximum amount of borrowings and letters of credit which we and our domestic and Canadian subsidiaries can obtain from $250.0 million to $400.0 million (with a combined sub-limit of $325.0 million for letters of credit). However, as described in such section, there is no assurance that the current terms of our revolving credit facility will be amended.

(2)
On November 27, 2012 we launched a Rule 144A private offering of $550.0 million aggregate principal amount of senior unsecured notes.

(3)
Actual and as adjusted long-term debt excludes $86.6 million ($131.8 million as adjusted assuming completion of our acquisition of Safety-Kleen) of letters of credit outstanding on September 30, 2012 under our revolving credit facility.

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THE SAFETY-KLEEN ACQUISITION

          On October 26, 2012, we entered into an Agreement and Plan of Merger (the "Merger Agreement") with Safety-Kleen, Inc. ("Safety-Kleen") pursuant to which we will acquire Safety-Kleen by means of a merger of one of our wholly-owned subsidiaries with and into Safety-Kleen with Safety-Kleen being the surviving corporation (the "Merger"). Under the terms of the Merger Agreement, we will pay to the Safety-Kleen shareholders and option holders cash consideration in an amount equal to $1.25 billion plus the amount of cash and cash equivalents held by Safety-Kleen on the closing date less the amount of debt held by Safety-Kleen on the closing date, plus or minus, as applicable, the amount by which Safety-Kleen's working capital (excluding cash) on the closing date exceeds or is less than $50.0 million. The amount of Safety-Kleen's working capital on the closing date will be reduced by the amount of Safety-Kleen's legal and other expenses in connection with the Merger and related transactions except to the extent that Safety-Kleen has previously paid such expenses.

Safety-Kleen's Business

          Safety-Kleen, headquartered in Richardson, Texas, is a leading provider of environmental services to commercial, industrial and automotive customers and the largest re-refiner of used oil and provider of parts cleaning services in North America. Additionally, we believe Safety-Kleen is North America's largest collector of used oil with North America's largest used oil collection network. Safety-Kleen offers a broad range of services through two complementary platforms: environmental services and oil re-refining. Safety-Kleen's Environmental Services segment provides comprehensive environmental solutions, including parts cleaning, waste disposal and other high-touch environmental services for hazardous and non-hazardous waste. Safety-Kleen's Oil Re-refining segment produces and markets re-refined base and blended lubricating oils. Safety-Kleen has leading market share positions in its core target markets and has an extensive infrastructure network in North America. Safety-Kleen's network includes more than 200 facilities, 2,000 vehicles and 1,000 rail cars to support its route-based customer service model. Safety-Kleen currently employs approximately 4,200 employees, of which approximately 3,300 work in the Environmental Services segment and approximately 300 work in the Oil Re-refining segment. Safety-Kleen generated revenues of $1.3 billion in 2011.

          Safety-Kleen's Environmental Services segment generated 56% of Safety-Kleen's total revenues in 2011 and offers customers a diverse range of environmental services through its overall network of more than 200 facilities, which includes 155 branch locations, 19 oil terminals and 19 recycling and accumulation centers across North America. During fiscal year 2011, Safety-Kleen serviced more than 200,000 customer locations in more than 20 end markets, including the commercial, industrial and automotive end markets, and provided more than one million parts cleaning services, which we believe makes Safety-Kleen the largest provider of such services to the small quantity generator market in North America. Safety-Kleen customers in fiscal year 2011 included more than 400 of the Fortune 500. Due to the recurring requirements of its customers, Safety-Kleen provided more than two million customer service calls in 2011. As a result of these regular service and maintenance contacts, Safety-Kleen is well-positioned to cross-sell new and existing services and related products and to become the provider for many of its customers' varied environmental services needs. Industry estimates show that approximately 1.4 billion gallons of used oil is generated in the United States on a yearly basis, of which approximately one billion is recovered. In 2011, Safety-Kleen's Environmental Services segment collected approximately 200 million gallons of such used oil from sources including automobile and truck dealers, automotive garages, oil change outlets, fleet service locations and industrial plants.

          Safety-Kleen's Oil Re-refining segment generated 44% of Safety-Kleen's total revenues in 2011 and processes the used oil collected by its Environmental Services segment at its two owned and

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operated oil re-refineries. These include the largest oil re-refinery in North America at its East Chicago, Indiana location, which processes approximately 120 million gallons of used oil annually into high quality base and blended lubricating oils, and the largest re-refinery in Canada at its Breslau, Ontario location, which processes approximately 40 million gallons of used oil annually into high quality base and blended lubricating oils and is scheduled to undergo a capacity expansion beginning in the fourth quarter of 2012 that will allow the location to process an additional 10 million gallons annually. The re-refined oil produced at these locations is then sold to third party distributors, retailers, government agencies, fleets, railroads and industrial customers. Safety-Kleen does not re-refine the remaining used oil that it collects due to current capacity limitations at Safety-Kleen's oil re-refineries. Instead, Safety-Kleen's Environmental Services segment processes and sells the remaining collected used oil as recycled fuel oil.

          In connection with our acquisition of Safety-Kleen, we expect to achieve synergies and other cost savings of at least $20.0 million.

Reasons for the Acquisition

          Our principal reasons for acquiring Safety-Kleen include:

The Merger Agreement

          As described above, the Merger Agreement provides that we will acquire Safety-Kleen for a purchase price of approximately $1.25 billion. Each of the parties to the Merger Agreement has made customary representations and warranties in the agreement. The representations and warranties made by Safety-Kleen generally survive for 15 months following the closing. Following the closing, we will be indemnified by Safety-Kleen's former shareholders for damages relating to breaches of Safety-Kleen's representations and warranties for up to $75 million. An indemnification escrow account for a corresponding amount, and surviving for a corresponding time period, will be established at the closing. A separate working capital escrow account in an amount equal to one half of the sum of $25 million plus Safety-Kleen's cash at closing will be established at the closing and will be available to us if the amount of Safety-Kleen's closing working capital (excluding cash), determined based on procedures specified in the Merger Agreement, is less than a target of $50 million. The amounts we can potentially recover from Safety-Kleen's former shareholders based on their indemnification obligations and working capital reconciliation are limited, respectively, to the amounts of the indemnification escrow and the working capital escrow.

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          We now anticipate the acquisition will be completed in the fourth quarter of 2012. However, consummation of the acquisition will be subject to certain conditions including, among others: (i) approval by Safety-Kleen shareholders holding at least a majority of outstanding Safety-Kleen shares (although shareholders holding approximately 81% of such shares have entered into voting and lock-up agreements pursuant to which they have generally agreed to vote such shares in favor of the acquisition); (ii) expiration or termination of the applicable Hart-Scott-Rodino and Canadian Competition Bureau antitrust waiting periods; (iii) accuracy of the representations and warranties of the parties, in each case subject to certain materiality exceptions; (iv) compliance by the parties with their respective obligations under the Merger Agreement, subject to certain materiality exceptions; (v) the parties having executed certain other documents and ancillary agreements at or prior to the closing of the acquisition; and (vi) the absence of any material adverse effect relating to Safety-Kleen and its subsidiaries, taken as a whole, with respect to a specific time period and subject to certain exceptions. Furthermore, we or Safety-Kleen may terminate the merger agreement if the merger is not consummated by April 26, 2013, except if the transaction date is extended.

          Under the Merger Agreement, Safety-Kleen has agreed to conduct its business in the ordinary course until the closing. We and Safety-Kleen have agreed to other customary covenants, including to use commercially reasonable efforts to cause the conditions precedent in the Merger Agreement to be satisfied. If either party terminates the Merger Agreement because of failure to obtain the required Safety-Kleen shareholder vote or if the Safety-Kleen board changes its recommendation to shareholders after receipt of a "superior proposal", Safety-Kleen will be obligated to pay us a termination fee of $37.5 million. The Merger Agreement defines "superior proposal" as a proposal to acquire at least a majority interest in Safety-Kleen or substantially all of its assets which the Safety-Kleen board, in the exercise of its fiduciary duties, has determined to be more favorable to Safety-Kleen's shareholders than the transactions contemplated under the Merger Agreement and which must either not contain a financing condition or involve financing that is committed at least to the same extent as is required under the Merger Agreement with respect to us. If we terminate the Merger Agreement based on a breach of Safety-Kleen's representations, warranties or covenants (including the occurrence of a material adverse effect), or Safety-Kleen's failure to provide us with materials necessary for our required financings, subject to certain exceptions, Safety-Kleen will be required to pay us an expense reimbursement fee in an agreed upon amount of $18.75 million.

          The foregoing summary of the Merger Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, which is filed as an exhibit to our Current Report on Form 8-K filed with the SEC on October 31, 2012. See "Incorporation of Information by Reference" in this prospectus supplement. The Merger Agreement provides information regarding its terms only. It is not intended to provide any other factual information about Safety-Kleen or us. The Merger Agreement contains representations and warranties of the parties thereto made to and solely for the benefit of each other. Moreover, certain representations and warranties in the Merger Agreement were used for the purpose of allocating risk rather than establishing matters of fact. Accordingly, you should not rely on the representations or warranties in the Merger Agreement as characterizations of the actual state of facts.

Commitment Letter and Financing for the Acquisition

          The Merger Agreement is not subject to a financing contingency. We have received a backup debt financing commitment from certain affiliates of the underwriters in an amount of $850 million which, together with approximately $410.5 million (assuming the net proceeds of this offering are $320.2 million) of our $523.6 million of cash and cash equivalents at September 30, 2012, would be sufficient to pay the full consideration required under the Merger Agreement. Despite the availability of the backup commitment, as described below, we do not intend to make use of such commitment

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but rather to finance the acquisition through a combination of a portion of our available cash, the net proceeds from this offering of our common stock, and the net proceeds of our offering of $550.0 million principal amount of unsecured senior notes in the Notes Offering. We only intend to partially finance the acquisition through the commitment if, and to the extent that, we cannot raise sufficient funds on more favorable terms through this offering and the Notes Offering.

          The $850 million commitment is comprised of a $475 million senior secured term loan facility (the "Term Facility") and an unsecured senior increasing rate bridge loan facility of up to $375 million (the "Bridge Facility"). The amount of the Term Facility commitment and Bridge Facility commitment will each be reduced by the total public offering price of the shares of our common stock sold in this offering and the principal amount of the notes sold in the Notes Offering (assuming the aggregate principal amount of notes offered in the Notes Offering is at least $550.0 million). Accordingly, we anticipate neither the Term Facility nor the Bridge Facility will be used assuming this offering of our common stock and the Notes Offering are completed.

          Any amounts borrowed under the Term Facility would bear interest at an annual rate equal to, at our option, either (a) the "base rate" (which will be defined in a manner customary and appropriate for financings of this type but which will in no event be less than 2%) plus an interest margin or (b) the "reserve adjusted Eurodollar rate" (which will be defined in a manner customary and appropriate for financings of this type but which will in no event be less than 1%) plus an interest margin. Any amounts borrowed under the Bridge Facility would bear interest at a floating rate, reset quarterly, based on the "reserve adjusted Eurodollar rate" (which will be defined in a manner customary and appropriate for financings of this type but which will in no event be less than 1%) plus an interest margin. Subject to certain other provisions, any loans to us under the Term Facility would mature seven years from the closing date of our acquisition of Safety-Kleen and any loans to us under the Bridge Facility would mature eight years after such closing date.

          The foregoing summary of the terms of the commitment letter does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the commitment letter, which is furnished as an exhibit to Amendment No. 1 our Current Report on Form 8-K filed with the SEC on November 5, 2012. See "Incorporation of Information by Reference" in this prospectus supplement.

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

          On October 26, 2012, we signed an agreement and plan of merger to acquire Safety-Kleen, Inc. ("Safety-Kleen") for a purchase price (subject to certain working capital and other adjustments) of $1,250.0 million. Under the terms of the merger agreement, we will pay to the Safety-Kleen shareholders and option holders cash consideration in an amount equal to $1,250.0 million plus the amount of cash and cash equivalents held by Safety-Kleen on the closing date less the amount of debt held by Safety-Kleen on the closing date, plus or minus, as applicable, the amount by which Safety-Kleen's working capital (excluding cash) on the closing date exceeds or is less than $50.0 million. The amount of Safety-Kleen's working capital on the closing date will be reduced by the amount of Safety-Kleen's legal and other expenses in connection with the merger and related transactions except to the extent that Safety-Kleen has previously paid such expenses. See "The Safety-Kleen Acquisition".

          We plan to fund the purchase price for Safety-Kleen and pay our related fees and expenses through (i) our available cash, (ii) our sale of 6.0 million shares of our common stock in this offering at the public offering price of $56.00 per share (the "Stock Offering"), and (iii) our offering of $550.0 million aggregate principal amount of senior unsecured notes in a Rule 144A private placement (the "Notes Offering"). If, however, we are not able to complete the Notes Offering before the closing of the acquisition, we anticipate borrowing $314.0 million under a senior secured term facility (the "Term Facility") and $200.0 million under a senior unsecured bridge facility (the "Bridge Facility") pursuant to the backup financing commitment we obtained from certain affiliates of the underwriters at the time we entered into the merger agreement. The following unaudited pro forma condensed combined financial information for Clean Harbors and Safety-Kleen as a combined company gives effect to (i) the Stock Offering, (ii) the Notes Offering, (iii) the acquisition method of accounting for our acquisition of Safety-Kleen, and (iv) payment of our related fees and expenses (collectively, the "Transactions"). In addition, the notes to such financial information describe the additional interest we would be required to pay for the relevant periods if, instead of completing the Notes Offering, we borrow a total of $514.0 million under the Term Facility and the Bridge Facility. The unaudited pro forma condensed combined balance sheet as at September 30, 2012 is presented as if the Transactions had been completed on September 30, 2012. The unaudited pro forma condensed combined statements of income for the year ended December 31, 2011 and for the nine months ended September 30, 2012 are presented as if the Transactions had been completed on January 1, 2011, the first day of our fiscal 2011.

          The following unaudited pro forma condensed combined financial information is based on the historical financial statements of Clean Harbors incorporated by reference in this prospectus supplement and of Safety-Kleen included in this prospectus supplement. Both Safety-Kleen's and our consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. Our fiscal year is different than Safety-Kleen's historical fiscal year. Our fiscal year ends on December 31, while Safety-Kleen has utilized a 53-week fiscal year comprised of 12 periods consisting of four weeks with the exception of period 13 which consisted of five weeks, each ending on a Saturday. The unaudited pro forma condensed combined balance sheet combines our historical condensed combined balance sheet as at September 30, 2012 with Safety-Kleen's historical consolidated balance sheet as at October 6, 2012. The unaudited pro forma combined statement of income for the nine months ended September 30, 2012 combines our historic consolidated statement of income for the nine months ended September 30, 2012 with Safety-Kleen's historical consolidated statement of income for the 40 weeks ended October 6, 2012. Safety-Kleen's fiscal year end did not differ from ours for the year ended December 31, 2011.

          The following unaudited pro forma condensed combined financial information does not purport to represent what our results of operations or financial position would actually have been

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had the Transactions occurred on the dates described above or to project our results of operations or financial position for any future date or period. The information does not reflect cost savings, operating synergies or revenue enhancements expected to result from our acquisition of Safety-Kleen or the costs to achieve any such cost savings, operating synergies or revenue enhancements. The information reflects our preliminary estimates of the allocation of the purchase price for Safety-Kleen based upon available information and certain assumptions that we believe are reasonable under the circumstances, and actual results could differ materially from these anticipated results. The final allocation of the purchase price will be determined after completion of the merger and will be based on the final purchase price, as it may be adjusted in accordance with the merger agreement, and Safety-Kleen's tangible and identifiable intangible assets acquired and liabilities assumed.

          The following unaudited pro forma condensed combined financial information should be read in conjunction with "Use of Proceeds", "The Safety-Kleen Acquisition", "Selected Historical Consolidated Financial Information" and "Management's Discussion and Analysis of Financial Condition and Results of Operations", appearing elsewhere in this prospectus supplement, and the consolidated financial statements and related notes of Clean Harbors incorporated by reference in this prospectus supplement and of Safety-Kleen included in this prospectus supplement.

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CLEAN HARBORS, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

ASSETS

AS AT SEPTEMBER 30, 2012

(dollars in thousands)

 
 
Clean
Harbors
 
Safety-Kleen
 
Pro Forma
Adjustments
 
Notes
 
Pro Forma
 

Current assets:

                             

Cash and cash equivalents

  $ 523,614   $ 48,253   $ (443,801 ) (a)   $ 128,066  

Marketable securities

    11,113                 11,113  

Accounts receivable, net

    399,362     171,643     (5,064 ) (b),(h)     565,941  

Unbilled accounts receivable

    34,401         3,061   (b)     37,462  

Deferred costs

    6,995         10,733   (b)     17,728  

Prepaid expenses and other current assets

    53,252     25,363     (24,068 ) (a),(b),(c)     54,547  

Supplies inventories

    63,934     89,544     14,736   (d)     168,214  

Deferred tax assets

    16,617     11,054             27,671  
                       

Total current assets

    1,109,288     345,857     (444,403 )       1,010,742  
                       

Property, plant and equipment, net

    1,003,414     317,004     364,660   (b),(e)     1,685,078  
                       

Other assets:

                             

Long-term investments

    4,326                 4,326  

Deferred financing costs

    12,530         9,809   (g)     22,339  

Goodwill

    157,724     36,787     275,753   (i)     470,264  

Permits and other intangibles, net

    151,810     83,369     373,531   (b),(f)     608,710  

Deferred tax assets

        57,756     (57,756 ) (b)      

Other

    10,311     7,515     52,991   (b),(c)     70,817  
                       

Total other assets

    336,701     185,427     654,328         1,176,456  
                       

Total assets

  $ 2,449,403   $ 848,288   $ 574,585       $ 3,872,276  
                       

   

See accompanying notes to unaudited pro forma condensed combined financial statements.

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CLEAN HARBORS, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

LIABILITIES AND STOCKHOLDERS' EQUITY

AS AT SEPTEMBER 30, 2012

(dollars in thousands)

 
 
Clean Harbors
 
Safety-Kleen
 
Pro Forma
Adjustments
 
Notes
 
Pro Forma
 

Current liabilities:

                             

Current portion of long-term debt

  $   $ 2,500   $ (2,500 ) (k)   $  

Current portion of capital lease obligations

    5,937                 5,937  

Accounts payable

    174,327     88,191     (2,003 ) (h)     260,515  

Deferred revenue

    29,060     32,009             61,069  

Accrued expenses

    136,687     87,006     18,964   (b),(c),(d),(j)     242,657  

Accrued salaries and benefits

        30,574     (30,574 ) (b)      

Current portion of closure, post-closure and remedial liabilities

    19,552     7,046             26,598  

Income taxes payable

        1,763     (1,763 ) (b)      
                       

Total current liabilities

    365,563     249,089     (17,876 )       596,776  
                       

Other liabilities:

                             

Closure and post-closure liabilities, less current portion

    29,712         16,808   (b)     46,520  

Remedial liabilities, less current portion

    117,981         34,445   (b)     152,426  

Environmental liabilities

        51,253     (51,253 ) (b)      

Long-term obligations, less current maturities

    800,000     220,625     329,375   (k)     1,350,000  

Capital lease obligations, less current portion

    3,477                 3,477  

Deferred income taxes

                     

Unrecognized tax benefits and other long-term liabilities

    125,915     21,458     258,366   (e),(f)     405,739  
                       

Total other liabilities

    1,077,085     293,336     587,741         1,958,162  
                       

Stockholders' equity:

                             

Common stock, $.01 par value:

                             

Clean Harbors authorized 80,000,000; pro forma shares issued and outstanding 59,386,280

    534     509     (449 ) (l)     594  

Shares held under employee participation plan

    (469 )               (469 )

Additional paid-in capital

    508,182     390,560     (70,400 ) (l)     828,342  

Accumulated other comprehensive income

    59,056     4,675     (4,675 ) (l)     59,056  

Accumulated earnings (deficit)

    439,452     (89,881 )   80,244   (l)     429,815  
                       

Total Clean Harbors and Safety-Kleen stockholders' equity            

    1,006,755     305,863     4,720         1,317,338  
                       

Total liabilities and stockholders' equity

  $ 2,449,403   $ 848,288   $ 574,585       $ 3,872,276  
                       

   

See accompanying notes to unaudited pro forma condensed combined financial statements.

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CLEAN HARBORS, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 2011

(in thousands, except per share data)

 
 
Clean Harbors
 
Safety-Kleen
 
Pro Forma
Adjustments
 
Notes
 
Pro Forma
 

Revenues:

                             

Service revenues

  $ 1,984,136   $ 576,120   $ (13,050 ) (m)   $ 2,547,206  

Product revenues

        708,151             708,151  
                       

Total revenues

    1,984,136     1,284,271     (13,050 )     $ 3,255,357  

Costs of revenues (exclusive of items shown separately below)

    1,379,991     1,076,348     (50,093 ) (m),(n),(p)     2,406,246  

Selling, general and administrative expenses

    254,137     73,842     49,610   (n)     377,589  

Accretion of environmental liabilities

    9,680         2,169   (n)     11,849  

Depreciation and amortization

    122,663     66,808     17,580   (o)     207,051  
                       

Income from operations

    217,665     67,273     (32,316 )       252,622  

Other income(expense)

    6,402     (5,925 )           477  

Interest expense, net

    (39,389 )   (10,321 )   (21,132 ) (q)     (70,842 )
                       

Income (loss) before provision (benefit) for income taxes

    184,678     51,027     (53,448 )       182,257  

Provision (benefit) for income taxes

    57,426     (84,441 )   (18,707 ) (r)     (45,722 )
                       

Net income (loss) attributable to Clean Harbors and Safety-Kleen

  $ 127,252   $ 135,468   $ (34,741 )     $ 227,979  
                       

Earnings per share:

                             

Basic income attributable to common stockholders

  $ 2.40   $ 2.61           $ 3.87  
                       

Diluted income attributable to common stockholders

  $ 2.39   $ 2.55           $ 3.84  
                       

Weighted average common shares outstanding

    52,961     51,876     (45,876 ) (s)     58,961  
                       

Weighted average common shares outstanding plus potentially dilutive common shares

    53,324     53,064     (47,064 ) (s)     59,324  
                       

   

See accompanying notes to unaudited pro forma condensed combined financial statements.

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CLEAN HARBORS, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012

(in thousands, except per share data)

 
 
Clean Harbors
 
Safety-Kleen
 
Pro Forma
Adjustments
 
Notes
 
Pro Forma
 

Revenues

                             

Service revenues

  $ 1,628,946   $ 469,087   $ (8,471 ) (m)   $ 2,089,562  

Product revenues

        601,897             601,897  
                       

Total revenues

    1,628,946     1,070,984     (8,471 )       2,691,459  

Costs of revenues (exclusive of items shown separately below)

    1,140,878     877,677     (48,986 ) (m),(n)     1,969,569  

Selling, general and administrative expenses

    197,892     67,109     38,628   (n)     303,629  

Accretion of environmental liabilities

    7,409         1,888   (n)     9,297  

Depreciation and amortization

    116,794     49,436     13,855   (o)     180,085  
                       

Income from operations

    165,973     76,762     (13,856 )       228,879  

Other expense

    (465 )   (4,903 )           (5,368 )

Loss on early extinguishment of debt

    (26,385 )               (26,385 )

Interest expense, net

    (33,836 )   (10,284 )   (13,542 ) (q)     (57,662 )
                       

Income (loss) before provision for income taxes

    105,287     61,575     (27,398 )       139,464  

Provision for income taxes

    37,487     19,278     (9,589 ) (r)     47,176  
                       

Net income (loss) attributable to Clean Harbors and Safety-Kleen

  $ 67,800   $ 42,297   $ (17,809 )     $ 92,288  
                       

Earnings per share:

                             

Basic income attributable to common stockholders

  $ 1.27   $ 0.82           $ 1.56  
                       

Diluted income attributable to common stockholders

  $ 1.27   $ 0.80           $ 1.55  
                       

Weighted average common shares outstanding

    53,303     51,622     (45,622 ) (s)     59,303  
                       

Weighted average common shares outstanding plus potentially dilutive common shares

    53,519     52,880     (46,880 ) (s)     59,519  
                       

   

See accompanying notes to unaudited pro forma condensed combined financial statements.

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

1. The Merger

          On October 26, 2012, Clean Harbors and Safety-Kleen signed an Agreement and Plan of Merger dated as of that date (the "Merger Agreement") which provides that, subject to the terms and conditions contained in the Merger Agreement, Clean Harbors will acquire Safety-Kleen (the "Merger"). Safety-Kleen, a Delaware corporation headquartered in Richardson, Texas, is the largest re-refiner and recycler of used oil in North America and a leading provider of parts cleaning and environmental services.

          Under the terms of the Merger Agreement, which we anticipate will be closed in the fourth quarter of 2012, Clean Harbors will pay to Safety-Kleen's shareholders and option holders cash consideration in an amount equal to $1,250.0 million plus the amount of cash and cash equivalents held by Safety-Kleen on the closing date, less the amount of debt owed by Safety-Kleen on the closing date for borrowed money and capital lease obligations, plus or minus, as applicable, the amount by which Safety-Kleen's working capital on the closing date exceeds or is less than $50.0 million.

          The following table summarizes the components of the estimated total consideration included in the pro forma condensed combined financial statements as if the Merger had been completed on September 30, 2012 (in thousands):

Estimated cash consideration

  $ 1,250,000  

Plus estimated working capital adjustment exceeding $50,000

    11,271  
       

Estimated total purchase price

  $ 1,261,271  
       

          The following summarizes the preliminary purchase price allocation, as if the Merger had occurred on September 30, 2012 (in thousands):

Assets to be acquired:

       

Accounts receivable

  $ 168,582  

Unbilled accounts receivable

    3,061  

Prepaid expenses and other current assets

    11,795  

Deferred costs

    10,733  

Inventory

    104,280  

Current deferred tax assets

    11,054  

Goodwill

    312,540  

Property, plant and equipment

    681,664  

Permits and other intangible assets

    456,900  

Other assets

    60,505  
       

    1,821,114  

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

1. The Merger (Continued)

Liabilities to be assumed:

       

Accounts payable

    88,191  

Deferred revenue

    32,009  

Accrued expenses

    101,520  

Current portion of closure, post-closure and remedial liabilities

    7,046  

Closure and post-closure liabilities, less current portion

    51,253  

Unrecognized tax benefits and other long-term liabilities

    279,824  
       

    559,843  
       

Net assets to be acquired(1)

  $ 1,261,271  
       

(1)
Net assets exclude Safety-Kleen's cash and cash equivalents, debt and associated costs, other costs related to its proposed initial public offering, stock option liabilities and Safety-Kleen's goodwill.

          Clean Harbors has determined preliminary allocation estimates based on limited access to information and will not have sufficient information to make final allocations until after completion of the Merger. Clean Harbors anticipates that the valuations of the acquired assets and liabilities will include, but not be limited to inventory, property, plant and equipment, customer relationships, trademarks, other potential intangible assets, and the determination of the effect of the revenue transactions on deferred revenue and the corresponding deferred costs. The valuations will consist of physical appraisals, discounted cash flow analysis or other appropriate valuation techniques to determine the fair value of the assets acquired and liabilities assumed. Clean Harbors has determined this to be a tax-free business combination from Clean Harbors' standpoint and has recorded the corresponding deferred tax liabilities related to the preliminary fair value adjustments. Clean Harbors has recorded no other adjustments to deferred income taxes.

          The amounts allocated to assets to be acquired and liabilities to be assumed in the Merger could differ materially from the preliminary allocation estimates. Decreases or increases in the fair value of assets to be acquired or liabilities to be assumed in the Merger from those preliminary valuations presented would result in a corresponding increase or decrease in the amount of goodwill that will result from the Merger. In addition, if the value of the assets to be acquired is higher than the preliminary indication, it may result in higher amortization and/or depreciation expense than is presented in these pro forma statements.

2. Financing

          In connection with the Merger, we propose to sell 6.0 million shares of our common stock in the Stock Offering and $550.0 million of notes in the Notes Offering. If, however, the Notes Offering is not completed prior to the completion of the Merger, we anticipate borrowing $314.0 million under the Term Facility and $200.0 million under the Bridge Facility pursuant to the backup financing commitment we have obtained from certain affiliates of the underwriters.

          We estimate that the completion of the Merger and the Notes Offering will result in an estimated net increase of $9.8 million of deferred financing costs. A successful completion of the Notes Offering at an assumed interest rate of 5.25% would increase interest expense by

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

2. Financing (Continued)

$30.0 million and $22.5 million for the year ended December 31, 2011 and the nine months ended September 30, 2012, respectively.

          If instead of completing the Notes Offering, we borrow $314.0 million under the Term Facility at an assumed annual interest rate of 4.0% and $200.0 million under the Bridge Facility at an assumed floating interest rate, reset quarterly starting at 5.5%, interest expense (including amortization of funding expenses) would increase by $28.1 million for the year ended December 31, 2011 and $27.4 million for the nine months ended September 30, 2012, respectively.

3. Pro Forma Balance Sheet Adjustments

          The pro forma adjustments included in the unaudited condensed combined balance sheet are as follows:

 
 
Increase
(Decrease)
 

Gross Stock Offering proceeds

  $ 336,000  

Gross Notes Offering proceeds

    550,000  

Safety-Kleen share payment(1)

    10,500  

Cash paid for Safety-Kleen

    (1,250,000 )

Safety-Kleen cash and cash equivalents(2)

    (48,253 )

Transaction fees and expenses for the offerings

    (30,777 )

Payment of working capital adjustment

    (11,271 )
       

  $ (443,801 )
       

(1)
Clean Harbors received and is now holding $10.5 million of cash as a result of Safety-Kleen's 2010 call of shares which Clean Harbors had acquired in Safety-Kleen. This amount was previously recorded in prepaid expenses and other current assets.

(2)
Existing cash and cash equivalents held by Safety-Kleen on the balance sheet date.

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

3. Pro Forma Balance Sheet Adjustments (Continued)

 
 
Increase
(Decrease)
 

Accounts receivable, net

  $ (3,061 )

Unbilled accounts receivable

    3,061  

Deferred costs

 
$

10,733
 

Prepaid expenses and other current assets

    (10,733 )

Property, plant and equipment

 
$

15,734
 

Permits and other intangible assets, net

    (15,734 )

Deferred tax assets

 
$

(57,756

)

Other assets

    57,756  

Accrued expenses

 
$

30,574
 

Accrued salaries and benefits

    (30,574 )

Accrued expenses

 
$

1,763
 

Income taxes payable

    (1,763 )

Closure and post-closure liabilities

 
$

16,808
 

Remedial liabilities

    34,445  

Environmental liabilities

    (51,253 )

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

3. Pro Forma Balance Sheet Adjustments (Continued)

 
 
Increase
(Decrease)
 

Record acquisition goodwill

  $ 312,540  

Eliminate existing Safety-Kleen goodwill

    (36,787 )
       

  $ 275,753  
       

4. Pro Forma Statement of Income Adjustments

          The unaudited pro forma condensed combined statements of income do not include any non-recurring charges that will arise as a result of the Merger described above.

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

4. Pro Forma Statement of Income Adjustments (Continued)

 
 
Increase
(Decrease)
 

Year ended December 31, 2011

       

Costs of revenue

  $ (2,169 )

Accretion of environmental liabilities

    2,169  

Costs of revenue

 
$

(49,610

)

Selling, general and administrative expenses

    49,610  

Nine months ended September 30, 2012

       

Costs of revenue

  $ (1,888 )

Accretion of environmental liabilities

    1,888  

Costs of revenue

 
$

(38,628

)

Selling, general and administrative expenses

    38,628  

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

4. Pro Forma Statement of Income Adjustments (Continued)

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION

          The following selected historical consolidated financial information has been derived from our audited consolidated balance sheets at December 31, 2011 and 2010 and statements of income for the five years ended December 31, 2011, and our unaudited balance sheet at September 30, 2012 and statements of income for the nine months then ended. This data should be reviewed in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our historical financial statements and the notes thereto included elsewhere or incorporated by reference in this prospectus supplement. We have derived the December 31, 2009, 2008 and 2007 as well as the September 30, 2011 balance sheet information from our financial statements not incorporated or included herein.

 
  Nine Months Ended September 30,   Year Ended December 31,  
 
 
2012
 
2011
 
2011
 
2010
 
2009
 
2008
 
2007
 
 
  (in thousands)
 

Income Statement Data:

                                           

Revenues

  $ 1,628,946   $ 1,438,250   $ 1,984,136   $ 1,731,244   $ 1,074,220   $ 1,030,713   $ 946,917  

Cost of revenues (exclusive of items shown separately below)

    1,140,878     1,006,849     1,379,991     1,210,740     753,483     707,820     664,440  

Selling, general and administrative expenses

    197,892     178,752     254,137     205,812     163,157     159,674     149,180  

Accretion of environmental liabilities

    7,409     7,231     9,680     10,307     10,617     10,776     10,447  

Depreciation and amortization

    116,794     87,000     122,663     92,473     64,898     44,471     37,590  
                               

Income from operations

    165,973     158,418     217,665     211,912     82,065     107,972     85,260  

Other income (expense)

    (465 )   5,931     6,402     2,795     259     (119 )   135  

Loss on early extinguishment of debt

    (26,385 )           (2,294 )   (4,853 )   (5,473 )    

Interest expense, net

    (33,836 )   (28,047 )   (39,389 )   (27,936 )   (15,999 )   (8,403 )   (13,157 )
                               

Income from continuing operations before provision for income taxes

    105,287     136,302     184,678     184,477     61,472     93,977     72,238  

Provision for income taxes(1)

    37,487     47,283     57,426     56,756     26,225     36,491     28,040  
                               

Income from continuing operations

    67,800     89,019     127,252     127,721     35,247     57,486     44,198  

Income from discontinued operations, net of tax

                2,794     1,439          
                               

Net income

  $ 67,800   $ 89,019   $ 127,252   $ 130,515   $ 36,686   $ 57,486   $ 44,198  
                               

Dividends on Series B preferred stock

                            206  
                               

Net income attributable to common stockholders

  $ 67,800   $ 89,019   $ 127,252   $ 130,515   $ 36,686   $ 57,486   $ 43,992  
                               

Basic earnings attributable to common stockholders(2)

  $ 1.68   $ 1.27   $ 2.40   $ 2.48   $ 0.74   $ 1.28   $ 1.11  
                               

Diluted earnings attributable to common stockholders(2)

  $ 1.67   $ 1.27   $ 2.39   $ 2.47   $ 0.74   $ 1.26   $ 1.07  
                               

Cash Flow Data:

                                           

Net cash from operating activities

  $ 232,692   $ 151,336   $ 179,531   $ 224,108   $ 93,270   $ 109,590   $ 79,995  

Net cash from investing activities

    (226,417 )   (445,610 )   (480,181 )   (125,687 )   (118,391 )   (84,515 )   (42,791 )

Net cash from financing activities

    256,089     247,856     258,740     (32,230 )   3,584     116,795     2,724  

Other Financial Data:

                                           

Adjusted EBITDA(3)

  $ 290,176   $ 252,649   $ 350,008   $ 314,692   $ 157,580   $ 163,219   $ 133,297  

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  At September 30,   At December 31,  
 
 
2012
 
2011
 
2011
 
2010
 
2009
 
2008
 
2007
 
 
  (in thousands)
 

Balance Sheet Data:

                                           

Working capital

  $ 743,725   $ 432,702   $ 510,126   $ 446,253   $ 386,930   $ 307,679   $ 169,585  

Goodwill

    157,724     134,696     122,392     60,252     56,085     24,578     21,572  

Total assets

    2,449,403     2,010,385     2,085,803     1,602,475     1,401,068     898,336     769,888  

Long-term obligations (including current portion)(3)

    809,414     540,691     538,888     278,800     301,271     53,630     123,483  

Stockholders' equity

    1,006,755     840,206     900,987     780,827     613,825     429,045     202,897  

(1)
For fiscal year 2011, the provisions includes a decrease in unrecognized tax benefits of $6.5 million of which $5.7 million was due to expiring statute of limitation periods related to a historical Canadian business combination and the remaining $0.8 million was related to the conclusion of examinations by state taxing authorities, the expiration of various state statutes of limitation periods, and a change in estimate of a previous liability. For fiscal year 2010, the provision includes a reversal of $14.3 million (net of benefit) resulting from the release of interest and penalties related to Canadian and United States tax reserves for which the statutes of limitation periods have expired.

(2)
Basic and diluted earnings per share are based on income from continuing operations for 2010 were $2.43 and $2.41 per share, respectively, and for 2009 they were both $0.71 per share.

(3)
For all periods presented, "Adjusted EBITDA" consists of net income plus accretion of environmental liabilities, depreciation and amortization, net interest expense, and provision for income taxes. We also exclude loss on early extinguishment of debt, other expense (income), and income from discontinued operations, net of tax as these amounts are not considered part of usual business operations. See below for a reconciliation of Adjusted EBITDA to both net income and net cash provided by operating activities for the specified periods. Our management considers Adjusted EBITDA to be a measurement of performance which provides useful information to both management and investors. Adjusted EBITDA should not be considered an alternative to net income or other measurements under generally accepted accounting principles ("GAAP"). Because Adjusted EBITDA is not calculated identically by all companies, our measurements of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

We use Adjusted EBITDA to enhance our understanding of our operating performance, which represents our views concerning our performance in the ordinary, ongoing and customary course of our operations. We historically have found it helpful, and believe that investors have found it helpful, to consider an operating measure that excludes expenses such as debt extinguishment and related costs relating to transactions not reflective of our core operations.

The information about our operating performance provided by this financial measure is used by our management for a variety of purposes. We regularly communicate Adjusted EBITDA results to our board of directors and discuss with the board our interpretation of such results. We also compare our Adjusted EBITDA performance against internal targets as a key factor in determining cash bonus compensation for executives and other employees, largely because we believe that this measure is indicative of how the fundamental business is performing and is being managed.

We also provide information relating to our Adjusted EBITDA so that analysts, investors and other interested persons have the same data that we use to assess our core operating performance. We believe that Adjusted EBITDA should be viewed only as a supplement to the GAAP financial information. We also believe, however, that providing this information in addition to, and together with, GAAP financial information permits the foregoing persons to obtain a better understanding of our core operating performance and to evaluate the efficacy of the methodology and information used by management to evaluate and measure such performance on a standalone and a comparative basis.

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          The following is a reconciliation of net income to Adjusted EBITDA for the following periods (in thousands):

 
  Nine Months Ended
September 30,
  Year Ended December 31,  
 
 
2012
 
2011
 
2011
 
2010
 
2009
 
2008
 
2007
 
 
  (in thousands)
 

Net income

  $ 67,800   $ 89,019   $ 127,252   $ 130,515   $ 36,686   $ 57,486   $ 44,198  

Accretion of environmental liabilities

    7,409     7,231     9,680     10,307     10,617     10,776     10,447  

Depreciation and amortization

    116,794     87,000     122,663     92,473     64,898     44,471     37,590  

Other (income) expense

    465     (5,931 )   (6,402 )   (2,795 )   (259 )   119     (135 )

Loss on early extinguishment of debt

    26,385             2,294     4,853     5,473      

Interest expense, net

    33,836     28,047     39,389     27,936     15,999     8,403     13,157  

Provision for income taxes

    37,487     47,283     57,426     56,756     26,225     36,491     28,040  

Income from discontinued operations, net of tax

                (2,794 )   (1,439 )        
                               

Adjusted EBITDA

  $ 290,176   $ 252,649   $ 350,008   $ 314,692   $ 157,580   $ 163,219   $ 133,297  
                               

          The following reconciles Adjusted EBITDA to net cash provided by operating activities for the following years (in thousands):

 
  Nine Months Ended
September 30,
  Year Ended December 31,  
 
 
2012
 
2011
 
2011
 
2010
 
2009
 
2008
 
2007
 

Adjusted EBITDA

  $ 290,176   $ 252,649   $ 350,008   $ 314,692   $ 157,580   $ 163,219   $ 133,297  

Interest expense, net

    (33,836 )   (28,047 )   (39,389 )   (27,936 )   (15,999 )   (8,403 )   (13,157 )

Provision for income taxes

    (37,487 )   (47,283 )   (57,426 )   (56,756 )   (26,225 )   (36,491 )   (28,040 )

Income from discontinued operations, net of tax

                2,794     1,439          

Allowance for doubtful accounts

    809     623     759     1,043     1,006     267     (418 )

Amortization of deferred financing costs and debt discount

    1,173     1,230     1,572     2,921     1,997     1,915     1,940  

Change in environmental liability estimates

    (3,553 )   (2,467 )   (2,840 )   (8,328 )   (4,657 )   (2,047 )   597  

Deferred income taxes

    (494 )   (197 )   37,836     4,919     4,830     3,197     (7,492 )

Stock-based compensation

    5,235     5,329     8,164     7,219     968     3,565     4,799  

Excess tax benefit of stock-based compensation

    (1,786 )   (1,949 )   (3,352 )   (1,751 )   (481 )   (3,504 )   (6,386 )

Income tax benefits related to stock option exercises

    1,776     1,949     3,347     1,739     474     3,534     6,427  

Eminent domain compensation

        3,354     3,354                  

Gain on sale of businesses

                (2,678 )            

Prepayment penalty on early extinguishment of debt

    (21,044 )           (900 )   (3,002 )   (3,552 )    

Environmental expenditures

    (7,833 )   (8,551 )   (11,319 )   (10,236 )   (8,617 )   (14,268 )   (6,511 )

Changes in assets and liabilities, net of acquisitions:

                                           

Accounts receivable

    59,881     (32,670 )   (65,210 )   (49,411 )   (11,429 )   17,221     (19,142 )

Other current assets

    5,130     (14,113 )   (36,761 )   (10,550 )   1,093     5,529     (2,693 )

Accounts payable

    (18,969 )   30,241     (8,116 )   38,553     5,050     (17,763 )   (4,603 )

Other current liabilities

    (6,486 )   (8,752 )   (1,096 )   18,774     (10,757 )   (2,829 )   21,377  
                               

Net cash from operating activities

  $ 232,692   $ 151,336   $ 179,531   $ 224,108   $ 93,270   $ 109,590   $ 79,995  
                               
(3)
Long-term obligations (including current portion) include borrowings under our current and former revolving credit facilities and capital lease obligations.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

          You should read the following discussion and analysis of our financial condition and results of operations together with "Selected Historical Consolidated Financial Information" appearing elsewhere in this prospectus supplement and our consolidated financial statements and related notes incorporated by reference in this prospective supplement. This discussion contains forward-looking statements and involves numerous risks and uncertainties including, but not limited to, those described in the "Risk Factors" section of this prospectus supplement. Our actual results may differ materially from those contained in any forward-looking statements. See "Disclosure Regarding Forward-Looking Statements" in this prospectus supplement.

General

          We are a leading provider of environmental, energy and industrial services throughout North America. We serve over 60,000 customers, including a majority of Fortune 500 companies, thousands of smaller private entities and numerous federal, state, provincial and local governmental agencies. Based upon 2009 industry reports, we service approximately 69% of North America's commercial hazardous incineration volume and 21% of North America's hazardous landfill volume. Based on our marketing data, we also believe we are the industry leader in treatment, storage and disposal facilities ("TSDFs") and now process approximately 29% of the total volume of wastes processed through such facilities in North America. We have more than 200 locations, including over 50 waste management facilities, throughout North America in 37 U.S. states, seven Canadian provinces, Mexico and Puerto Rico.

          We report the business in four operating segments, consisting of:

          During the quarter ended March 31, 2011, we re-aligned our management reporting structure. Under the new structure, our operations are managed in four reportable segments: Technical Services, Field Services, Industrial Services and Oil and Gas Field Services. The new segment, Oil and Gas Field Services, consists of the previous Exploration Services segment, as well as certain oil and gas related field services departments that were re-assigned from the Industrial Services segment. In addition, certain departments from the Field Services segment were re-assigned to the Industrial Services segment. Accordingly, we re-aligned and re-allocated departmental costs being allocated among the segments to support these management reporting changes. During the quarter ended March 31, 2012, we further re-aligned certain departments among the segments to support management reporting changes. We have recast the 2011, 2010 and 2009 segment information presented below to conform to the 2012 segmentation reporting of the Company.

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Summary of Operations

          During the year ended December 31, 2011, our revenues increased 15% to $1.98 billion compared with $1.73 billion during the year ended December 31, 2010. During the nine months ended September 30, 2012, our revenues increased 13.3% to $1.6 billion compared to $1.4 billion during the nine months ended September 30, 2011. These increases resulted both from internal growth and our acquisition of Peak Energy Services Ltd. in June 2011 and six private companies during 2010, 2011 and 2012.

          Revenues for the year ended December 31, 2011 included our emergency response efforts related to the Yellowstone River oil spill in Montana of $43.6 million. Revenues for the year ended December 31, 2010 included revenue associated with our oil spill response efforts in the Gulf of Mexico and Michigan of $253.0 million. We also achieved year-over-year revenue growth, exclusive of the oil spill project work, driven by broad-based growth across all of our segments. Our 2011 full year revenues were also favorably impacted by $23.8 million due to the strengthening of the Canadian dollar.

          Our Technical Services revenues accounted for 44% of our total revenues for the year ended December 31, 2011 and 43% of our total revenues for the nine months ended September 30, 2012. Our Technical Services segment achieved full year-over-year revenue growth of 16% and nine months-over-nine months revenue growth of 8%. Incinerator utilization was 89% for the year ended December 31, 2011 compared to 90% for the year ended December 31, 2010, and 90% for the nine months ended September 30, 2012 and for the nine months ended September 30, 2011. Landfill volumes were essentially flat year-over-year for the years ended December 31, 2011 and 2010, but increased more than 55% for the nine months ended September 30, 2012 over the nine months ended September 30, 2011.

          Our Field Services revenues accounted for 13% of our total revenues for the year ended December 31, 2011 and 10% of our total revenues for the nine months ended September 30, 2012. Revenues of our Field Services segment decreased 37.2% for the full year-over-year 2011 and 2010 periods and 19% for the nine months-over-nine months periods of 2012 and 2011. These decreases reflected primarily the large revenues we generated during the year ended December 31, 2010 from the Gulf of Mexico and Michigan oil spills and, to a significantly lesser extent, from the Yellowstone, Montana oil spill project in 2011.

          Our Industrial Services revenues accounted for 24% of our total revenues for the year ended December 31, 2011 and 27% of our total revenues for the nine months ended September, 2012. Our Industrial Services segment achieved year-over-year and nine months-over-nine months increases in revenue of 30% and 27%, primarily due to work performed for an unplanned shutdown at one of our customer's sites in 2011, continued investment in the oil sands region of Canada, incremental revenues from refinery turnaround work, revenues associated with our acquisitions, and high utilization rates at the camps in our lodging business.

          Our Oil and Gas Field Services revenues accounted for 19% of our total revenues for the year ended December 31, 2011 and 20% of our total revenues for the nine months ended September 30, 2012. Our Oil and Gas Field Services segment achieved a year-over-year increase of 92% and a nine months-over-nine months increase of 36% primarily due to contributions from our acquisitions, increased activity in Western Canada due to increased oil prices, and continued investments in U.S. gas and oil production resulting in increased demand for our services.

          Our costs of revenues increased from $1.21 billion for the year ended December 31, 2010 to $1.38 billion for the year ended December 31, 2011 and from $1.01 billion in the first nine months of 2011 to $1.14 billion in the first nine months of 2012. Costs for the year ended December 31, 2011 included $30.0 million associated with the Yellowstone oil spill project and costs for the year

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ended December 31, 2010 included $149.3 million associated with the Gulf of Mexico and Michigan oil spill projects. Exclusive of those oil spill costs, our cost of revenues increased primarily due to costs associated with our recent acquisitions and because of our increased revenues. Our gross profit margin was 30.4% for the year ended December 31, 2011, which was up slightly from 30.1% for the year ended December 31, 2010, and 30.0% for the nine months ended September 30, 2012 and 2011.

Critical Accounting Policies and Estimates

          The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of our assets, liabilities, revenues and expenses, and related disclosures of contingent liabilities. The following are the areas that we believe require a substantial amount of judgments or estimates in the preparation of the financial statements: revenue allowance, deferred revenue, allowance for doubtful accounts, accounting for landfills, non-landfill closure and post-closure liabilities, remedial liabilities, goodwill, permits and other intangible assets, insurance accruals, legal matters, and provision for income taxes. Our management reviews critical accounting estimates with the Audit Committee of our Board of Directors on an ongoing basis and as needed prior to the release of our annual financial statements. See also Note 2, "Significant Accounting Policies", to our consolidated financial statements for the three years ended December 31, 2011, which discusses the significant assumptions used in applying our accounting policies.

          Revenue Allowance.    Due to the nature of our business and the complex invoices that result from the services we provide, customers may withhold payments and attempt to renegotiate amounts invoiced. In addition, for some of the services we provide, our invoices are based on quotes that can either generate credits or debits when the actual revenue amount is known. Based on our industry knowledge and historical trends, we record a revenue allowance accordingly. Increases in overall sales volumes and the expansion of our customer base in recent years have also increased the volume of additions and deductions to the allowance during the year, as well as increased the amount of the allowance at the end of the year.

          Our revenue allowance is intended to cover the net amount of revenue adjustments that may need to be credited to customers' accounts in future periods. We determine the appropriate total revenue allowance by evaluating the following factors on a customer-by-customer basis as well as on a consolidated level: historical collection trends, age of outstanding receivables, existing economic conditions and other information as deemed applicable. Revenue allowance estimates can differ materially from the actual adjustments, but historically our revenue allowance has been sufficient to cover the net amount of the reserve adjustments issued in subsequent reporting periods.

          Allowance for Doubtful Accounts.    We establish an allowance for doubtful accounts to cover accounts receivable that may not be collectible. In establishing the allowance for doubtful accounts, we analyze the collectability of accounts that are large or past due. In addition, we consider historical bad debts and current economic trends in evaluating the allowance for doubtful accounts. Accounts receivable written off in subsequent periods can differ materially from the allowance for doubtful accounts provided, but historically our provision has been adequate.

          Accounting for Landfills.    We amortize landfill improvements and certain landfill-related permits over their estimated useful lives. The units-of- consumption method is used to amortize land, landfill cell construction, asset retirement costs and remaining landfill cells and sites. We also utilize the units-of-consumption method to record closure and post-closure obligations for landfill cells and sites. Under the units-of-consumption method, we include future estimated construction and asset retirement costs, as well as costs incurred to date, in the amortization base of the landfill assets.

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Additionally, where appropriate, as discussed below, we include probable expansion airspace that has yet to be permitted in the calculation of the total remaining useful life of the landfill.

          Landfill Assets.    Landfill assets include the costs of landfill site acquisition, permits and cell construction incurred to date. These amounts are amortized under the units-of-consumption method such that the asset is completely amortized when the landfill ceases accepting waste.

          Landfill Capacity.    Landfill capacity, which is the basis for the amortization of landfill assets and for the accrual of final closure and post-closure obligations, represents total permitted airspace plus unpermitted airspace that management believes is probable of ultimately being permitted based on established criteria. Our management applies the following criteria for evaluating the probability of obtaining a permit for future expansion airspace at existing sites, which provides management a basis to evaluate the likelihood of success of unpermitted expansions:

          Exceptions to the criteria set forth above are approved through a landfill-specific approval process that includes approval from our Chief Financial Officer and review by the Audit Committee of our Board of Directors. As of September 30, 2012, there was one unpermitted expansion at one location included in management's landfill calculation, which represented 23.0% of our remaining airspace at that date. As of December 31, 2011, there was one unpermitted expansion at one location included in management's landfill calculation, which represented 22.5% of our remaining airspace at that date. As of September 30, 2012, December 31, 2011 and December 31, 2010, none of the unpermitted expansions were considered exceptions to management's established criteria described above. If actual expansion airspace is significantly different from management's estimate of expansion airspace, the amortization rates used for the units-of-consumption method would change, therefore impacting our profitability. If we determine that there is less actual expansion airspace at a landfill, this would increase amortization expense recorded and decrease profitability, while if we determine a landfill has more actual expansion airspace, amortization expense would decrease and profitability would increase.

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          Landfill Final Closure and Post-Closure Liabilities.    The balance of landfill final closure and post-closure liabilities at December 31, 2011 and 2010 was $25.8 million and $29.8 million, respectively, and at September 30, 2012 and 2011 was $26.8 million and $22.9 million, respectively. We have material financial commitments for the costs associated with requirements of the EPA and the comparable regulatory agency in Canada for landfill final closure and post-closure activities. In the United States, the landfill final closure and post-closure requirements are established under the standards of the EPA, and are implemented and applied on a state-by-state basis. We develop estimates for the cost of these activities based on our evaluation of site-specific facts and circumstances, such as the existence of structures and other landfill improvements that would need to be dismantled, the amount of groundwater monitoring and leachate management expected to be performed, and the length of the post-closure period as determined by the applicable regulatory agency. Included in our cost estimates are our interpretation of current regulatory requirements and proposed regulatory changes. Such estimates may change in the future due to various circumstances including, but not limited to, permit modifications, changes in legislation or regulations, technological changes and results of environmental studies. We perform zero-based reviews of these estimated liabilities at least every five years or sooner if the occurrence of a significant event is likely to change the timing or amount of the currently estimated expenditures. We consider a significant event to be a new regulation or an amendment to an existing regulation, a new permit or modification to an existing permit, or a change in the market price of a significant cost item. Our cost estimates are calculated using internal sources as well as input from third party experts. These costs are measured at estimated fair value using present value techniques, and therefore changes in the estimated timing of closure and post-closure activities would affect the liability, the value of the related asset, and our results of operations.

          Final closure costs are the costs incurred after the site ceases to accept waste, but before the landfill is certified as closed by the applicable state or provincial regulatory agency. These costs generally include the costs required to cap the final cell of the landfill (if not included in cell closure), to dismantle certain structures for landfills and other landfill improvements and regulation-mandated groundwater monitoring, and for leachate management. Post-closure costs involve the maintenance and monitoring of a landfill site that has been certified closed by the applicable regulatory agency. These costs generally include groundwater monitoring and leachate management. Regulatory post-closure periods are generally 30 years after landfill closure. Final closure and post-closure obligations are accrued on a units-of-consumption basis, such that the present value of the final closure and post-closure obligations are fully accrued at the date the landfill discontinues accepting waste.

          Non-Landfill Closure and Post-Closure Liabilities.    The balance of our non-landfill closure and post-closure liabilities at December 31, 2011 and 2010 was $9.1 million and $8.9 million, respectively, and at September 30, 2012 and 2011 was $9.9 million and $9.6 million, respectively. We base estimates for non-landfill closure and post-closure liabilities on our interpretations of existing permit and regulatory requirements for closure and post-closure maintenance and monitoring. Our cost estimates are calculated using internal sources as well as input from third party experts. We use probability scenarios to estimate when future operations will cease and inflate the current cost of closing the non-landfill facility on a probability weighted basis using the appropriate inflation rate and then discounting the future value to arrive at an estimated present value of closure and post-closure costs. The estimates for non-landfill closure and post-closure liabilities are inherently uncertain due to the possibility that permit and regulatory requirements will change in the future, impacting the estimation of total costs and the timing of the expenditures. We review non-landfill closure and post-closure liabilities for changes to key assumptions that would impact the amount of the recorded liabilities. Changes that would prompt us to revise a liability estimate include changes in legal requirements that impact our expected closure plan, in the market price of a significant cost item, in the probability scenarios as to when future operations at a

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location might cease, or in the expected timing of the cost expenditures. Changes in estimates for non-landfill closure and post-closure events immediately impact the required liability and the value of the corresponding asset. If a change is made to a fully-consumed asset, the adjustment is charged immediately to expense. When a change in estimate relates to an asset that has not been fully consumed, the adjustment to the asset is recognized in income prospectively as a component of amortization. Historically, material changes to non-landfill closure and post-closure estimates have been infrequent.

          Remedial Liabilities.    The balance of our remedial liabilities at December 31, 2011 and 2010 was $135.3 million and $137.6 million, respectively, and at September 30, 2012 and 2011 was $130.6 million and $135.0 million, respectively. See Note 8, "Remedial Liabilities", to our consolidated financial statements for the three years ended December 31, 2011, and Note 8, "Remedial Liabilities", to our consolidated financial statements for the nine months ended September 30, 2012, for the changes to the remedial liabilities during those periods. Remedial liabilities are obligations to investigate, alleviate and/or eliminate the effects of a release (or threat of a release) of hazardous substances into the environment and may also include corrective action under RCRA. Our remediation obligations can be further characterized as Long-term Maintenance, One-Time Projects, Legal and Superfund. Legal liabilities are typically comprised of litigation matters that involve potential liability for certain aspects of environmental cleanup and can include third party claims for property damage or bodily injury allegedly arising from or caused by exposure to hazardous substances originating from our activities or operations, or in certain cases, from the actions or inactions of other persons or companies. Superfund liabilities are typically claims alleging that we are a potentially responsible party ("PRP") and/or are potentially liable for environmental response, removal, remediation and cleanup costs at/or from either a facility we own or a site owned by a third party. As described in Note 14, "Commitments and Contingencies", to our consolidated financial statements for the three years ended December 31, 2011, and Note 13, "Commitments and Contingencies", to our consolidated financial statements for the nine months ended September 30, 2012, Superfund liabilities also include certain liabilities payable to governmental entities for which we are potentially liable to reimburse the sellers in connection with our 2002 acquisition of substantially all of the assets of the Chemical Services Division (the "CSD assets") of Safety-Kleen Corp. Long-term Maintenance liabilities include the costs of groundwater monitoring, treatment system operations, permit fees and facility maintenance for inactive operations. One-Time Projects liabilities include the costs necessary to comply with regulatory requirements for the removal or treatment of contaminated materials.

          Amounts recorded related to the costs required to remediate a location are determined by internal engineers and operational personnel and incorporate input from external third parties. The estimates consider such factors as the nature and extent of environmental contamination (if any); the terms of applicable permits and agreements with regulatory authorities as to cleanup procedures and whether modifications to such permits and agreements will likely need to be negotiated; the cost of performing anticipated cleanup activities based upon current technology; and in the case of Superfund and other sites where other parties will also be responsible for a portion of the clean up costs, the likely allocation of such costs and the ability of such other parties to pay their share. Each quarter, our management discusses if any events have occurred or milestones have been met that would warrant the creation of a new remedial liability or the revision of an existing remedial liability. Such events or milestones include identification and verification as a PRP, receipt of a unilateral administrative order under Superfund or requirement for RCRA interim corrective measures, completion of the feasibility study under Superfund or the corrective measures study under RCRA, new or modifications to existing permits, changes in property use, or a change in the market price of a significant cost item. Remedial liabilities are inherently difficult to estimate and there is a risk that the actual quantities of contaminants could differ from the results of the site investigation, which could materially impact the amount of our liability. It is also possible that

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chosen methods of remedial solutions will not be successful and funds will be required for alternative solutions.

          Remedial liabilities are discounted only when the timing of the payments is estimable and the amounts are determinable. With the exception of remedial liabilities assumed as part of an acquisition that are measured at fair value, our experience has been that the timing of payments for remedial liabilities is usually not estimable and therefore the amounts of remedial liabilities are generally not discounted.

          Goodwill.    Goodwill is assessed for impairment at least annually and as triggering events occur. Such triggering events include, but are not limited to:

          Our management tests for impairment by comparing the fair value of each reporting unit to the carrying value of the net assets assigned to each reporting unit, including goodwill. 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, the second step of the goodwill test would be performed to measure the amount of impairment loss.

          During fiscal year 2010, we had four operating segments consisting of the Technical Services, Field Services, Industrial Services and Exploration Services segments. Starting in 2011, the Exploration Services segment and certain departments in the Industrial Services segment were merged into the new Oil and Gas Field Services segment.

          As of December 31, 2011, the fair value of all our reporting units was determined using an income approach (a discounted cash flow analysis). We utilized only the income approach in the current year as the fair value for all reporting units significantly exceeded the carrying value. As of December 31, 2010, for the Industrial Services and Exploration Services segments, we utilized a weighted average of the income approach (a discounted cash flow analysis) and the market approach (a comparison to guideline companies). For the Technical Services and Field Services segments, as of December 31, 2010, we utilized only the income approach to determine the fair value as the fair value for Technical Services and Field Services has historically significantly exceeded the carrying value and there were no changes or events in the current year to indicate otherwise. Significant judgments are inherent in these analyses and include assumptions about the amount and timing of expected future cash flows, growth rates, and the determination of appropriate discount rates. We believe that the assumptions used in our impairment analyses are reasonable, but variations in any of the assumptions may result in different calculations of fair values that could result in a material impairment charge.

          The impairment analysis performed during the year ended December 31, 2011, utilized final 2012 annual budgeted amounts. The discount rate assumptions were based on an assessment of our weighted average cost of capital ("WACC"). As part of the analysis, we compared the aggregate implied fair value of our reporting units to our market capitalization at December 31, 2011 and assessed for reasonableness. We did not record an impairment charge as a result of our goodwill impairment tests in 2011 for our reporting units. The fair value of our Technical Services, Field Services, Industrial Services and Oil and Gas Field Services segments significantly exceeded their respective carrying values. We will continue to monitor the performance of our reporting units and if the business experiences adverse changes in these key assumptions, we will perform an interim goodwill impairment analysis.

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          As of September 30, 2012, the Company assessed the performance of its Oil and Gas Field Services reporting unit due to its lower than anticipated financial results and concluded the fair value of the reporting unit more likely than not exceeds the carrying value. The Company will continue to assess this reporting unit's performance.

          Permits and Other Intangible Assets.    Our long-lived assets, including permits, are carried on our financial statements based on their cost less accumulated depreciation or amortization. We review the carrying value of our long-lived 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) internally developed discounted projected cash flow analysis of the asset; (ii) actual third-party valuations; 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 that the events or changes in circumstances that indicated the carrying value of the assets may not be recoverable occurred.

          Insurance Accruals.    It is our policy to retain a significant portion of certain expected losses related primarily to workers' compensation, health insurance, comprehensive general and vehicle liability. The insurance accruals are based on claims filed and estimates of claims not reported and are developed by management with assistance from our third-party actuary and third-party claims administrator. The insurance accruals are driven by historical claims data and industry information. Significant changes in the frequency or amount of claims as compared to our historical information could materially affect our self-insurance liabilities. Actual expenditures required in future periods can differ materially from accruals established based on estimates.

          Legal Matters.    As described in Note 13, "Commitments and Contingencies", to our consolidated financial statements as of September 30, 2012, we are subject to legal proceedings which relate to our past acquisitions or which have arisen in the ordinary course of business. Accruals are established for legal matters when, in our opinion, it is probable that a liability exists and the liability can be reasonably estimated. As of December 31, 2011 and September 30, 2012, we had reserves of $30.3 million and $30.2 million, respectively, substantially all of which we had established as part of the purchase price for the CSD assets. As of September 30, 2012, the $30.2 million of reserves consisted of (i) $27.4 million related to pending legal or administrative proceedings, including Superfund liabilities, which were included in remedial liabilities on the consolidated balance sheets, and (ii) $2.8 million primarily related to federal and state enforcement actions, which were included in accrued expenses on the consolidated balance sheets. We also estimate that it is "reasonably possible", as that term is defined, that the amount of such total liabilities could be as much as $2.7 million more. Actual expenses incurred in future periods could differ materially from accruals established.

          Provision for Income Taxes.    Our income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management's best estimate of future taxes to be paid. We are subject to income taxes in both the United States and in foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense.

          Deferred income taxes arise from temporary differences between the tax and financial statement recognition of revenue and expense. In evaluating our ability to recover our deferred tax assets within the jurisdiction from which they arise, we consider all available positive and negative

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evidence. We have established a valuation allowance when, based on an evaluation of objective verifiable evidence, we believe it is more likely than not that some portion or all of deferred tax assets will not be realized.

          A liability for uncertain tax positions is recorded to the extent a tax position taken or expected to be taken in a tax return does not meet certain recognition or measurement criteria. We record interest and penalties on these uncertain tax positions as applicable as a component of income tax expense.

Results of Operations

          The following table sets forth for the periods indicated certain operating data associated with our results of operations. This table and subsequent discussions should be read in conjunction with "Selected Historical Consolidated Financial Information" appearing elsewhere in this prospectus supplement and our consolidated financial statements incorporated by reference in this prospectus supplement.

 
  Percentage of Total Revenues  
 
  Nine Months
Ended
September 30,
  Year Ended December 31,  
 
 
2012
 
2011
 
2011
 
2010
 
2009
 
2008
 
2007
 

Revenues

    100.0 %   100.0 %   100.0 %   100.0 %   100.0 %   100.0 %   100.0 %

Cost of revenues (exclusive of items shown separately below)

    70.0     70.0     69.5     69.9     70.2     68.7     70.1  

Selling, general and administrative expenses

    12.1     12.4     12.8     11.9     15.2     15.5     15.8  

Accretion of environmental liabilities

    0.5     0.5     0.5     0.6     1.0     1.0     1.1  

Depreciation and amortization

    7.2     6.0     6.2     5.4     6.0     4.3     4.0  
                               

Income from operations

    10.2     11.1     11.0     12.2     7.6     10.5     9.0  

Other income (expense)

        0.4     0.3     0.2              

Loss on early extinguishment of debt

    (1.6 )           (0.1 )   (0.4 )   (0.5 )    

Interest expense, net

    (2.1 )   (2.0 )   (2.0 )   (1.6 )   (1.5 )   (0.8 )   (1.4 )
                               

Income from continuing operations before provision for income taxes

    6.5     9.5     9.3     10.7     5.7     9.2     7.6  

Provision for income taxes

    2.3     3.3     2.9     3.3     2.4     3.6     2.9  
                               

Income from continuing operations

    4.2     6.2     6.4     7.4     3.3     5.6     4.7  

Income from discontinued operations, net of tax

                0.1     0.1          
                               

Net income

    4.2 %   6.2 %   6.4 %   7.5 %   3.4 %   5.6 %   4.7 %
                               

Segment data

          Performance of our segments is evaluated on several factors of which the primary financial measure is Adjusted EBITDA. The following tables set forth certain operating data associated with our results of operations and compare Adjusted EBITDA contribution by operating segment for the nine months ended September 30, 2012 and 2011 and the three years ended December 31, 2011. See footnote 2 under "Selected Historical Consolidated Financial Information" for a description of the calculation of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income and net cash provided by operating activities. We consider the Adjusted EBITDA contribution from each operating segment to include revenue attributable to that segment less operating expenses, which include cost of revenues and selling, general and administrative expenses. Revenue attributable to each segment is generally external or direct revenue from third party customers. Direct revenue is the revenue allocated to the segment performing the provided service. Certain income or expenses of a non-recurring or unusual nature are not included in the operating segment's Adjusted EBITDA contribution.

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          During the quarter ended March 31, 2011, we re-aligned our management reporting structure. Under the new structure, our operations are managed in four reportable segments: Technical Services, Field Services, Industrial Services and Oil and Gas Field Services. The new segment, Oil and Gas Field Services, consists of the previous Exploration Services segment, as well as certain oil and gas related field services departments that were re-assigned from the Industrial Services segment. In addition, certain departments from the Field Services segment were re-assigned to the Industrial Services segment. During the quarter ended March 31, 2012, we further re-aligned certain departments among the segments to support management reporting changes. Accordingly, we re-aligned and re-allocated departmental costs being allocated among the segments to support these management reporting changes. We have recast the 2011, 2010 and 2009 segment information presented in the tables below to conform to the 2012 segmentation reporting of the Company. These tables and subsequent discussions should be read in conjunction with our consolidated financial statements and, in particular Note 15, "Segment Reporting", to such financial statements for the three years ended December 31, 2011 and Note 14, "Segment Reporting", to such financial statements for the nine months ended September 31, 2012 and 2011, each as incorporated by reference into this prospectus supplement.

 
  Summary of Operations  
 
  Nine Months Ended
September 30,
  Year Ended December 31,  
 
 
2012
 
2011
 
2011
 
2010
 
2009
 
 
  (in thousands)
 

Direct Revenues:

                               

Technical Services

    698,853     650,368   $ 885,374   $ 763,345   $ 713,453  

Field Services

    164,248     203,098     260,312     414,786     144,573  

Industrial Services

    438,888     344,317     469,950     362,259     147,470  

Oil and Gas Field Services

    327,120     241,412     369,190     192,694     70,436  

Corporate Items

    (163 )   (945 )   (690 )   (1,840 )   (1,712 )
                       

Total

    1,628,946     1,438,250     1,984,136     1,731,244     1,074,220  
                       

Cost of Revenues (exclusive of certain items shown separately)(1):

                               

Technical Services

    457,242     422,435     572,496     504,678     461,776  

Field Services