UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~March 31,~~September 30, 2021

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

For the transition period from to .

Commission file number: 001-39120

US ECOLOGY, INC.

(Exact name of registrant as specified in its charter)


Delaware		84-2421185
(State or other jurisdiction of incorporation or		(I.R.S. Employer Identification No.)
organization)

101 S. Capitol Blvd., Suite 1000
Boise, Idaho		83702
(Address of principal executive offices)		(Zip Code)

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

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


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

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

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

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


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

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

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

At ~~April 27,~~November 2, 2021, there were 31,512,324 shares of the registrant’s Common Stock outstanding.

Table of Contents

US ECOLOGY, INC.

FORM 10-Q

TABLE OF CONTENTS


Item		Page		Page

	PART I — FINANCIAL INFORMATION		PART I — FINANCIAL INFORMATION

1.	Financial Statements (Unaudited)	3	Financial Statements (Unaudited)	3

	Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020	3	Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020	3

	Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020	4	Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020	4

	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2021 and 2020	5	Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2021 and 2020	5

	Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020	6	Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020	6

	Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2021 and 2020	7	Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2021 and 2020	7

	Notes to Consolidated Financial Statements	8	Notes to Consolidated Financial Statements	8

	Report of Independent Registered Public Accounting Firm	30	Report of Independent Registered Public Accounting Firm	31

2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
3.	Quantitative and Qualitative Disclosures About Market Risk	42	Quantitative and Qualitative Disclosures About Market Risk	50
4.	Controls and Procedures	43	Controls and Procedures	51

	PART II — OTHER INFORMATION		PART II — OTHER INFORMATION

	Cautionary Statement	44	Cautionary Statement	52
1.	Legal Proceedings	45	Legal Proceedings	53
1A.	Risk Factors	46	Risk Factors	54
2.	Unregistered Sales of Equity Securities and Use of Proceeds	46	Unregistered Sales of Equity Securities and Use of Proceeds	54
3.	Defaults Upon Senior Securities	46	Defaults Upon Senior Securities	55
4.	Mine Safety Disclosures	46	Mine Safety Disclosures	55
5.	Other Information	46	Other Information	55
6.	Exhibits	47	Exhibits	55
	SIGNATURE	48	SIGNATURE	56

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

US ECOLOGY, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except par value amount)


	March 31, 2021		December 31, 2020		September 30, 2021		December 31, 2020
Assets
Current Assets:
Cash and cash equivalents	$	82,354	$	73,848	$	71,432	$	73,848
Receivables, net		242,854		241,978		261,128		241,978
Prepaid expenses and other current assets		25,709		28,379		31,799		28,379
Income taxes receivable		17,006		18,279		18,340		18,279
Total current assets		367,923		362,484		382,699		362,484

Property and equipment, net		448,248		456,637		450,720		456,637
Operating lease assets		48,824		51,474		44,947		51,474
Restricted cash and investments		5,784		5,598		3,758		5,598
Intangible assets, net		515,208		523,988		497,636		523,988
Goodwill		413,346		413,037		413,101		413,037
Other assets		23,819		18,065		26,062		18,065
Total assets	$	1,823,152	$	1,831,283	$	1,818,923	$	1,831,283

Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	44,773	$	35,881	$	66,402	$	35,881
Deferred revenue		17,524		15,267		17,475		15,267
Accrued liabilities		47,300		59,296		51,750		59,296
Accrued salaries and benefits		27,913		30,918		27,681		30,918
Income taxes payable		888		977		48		977
Short-term borrowings		277		—
Current portion of long-term debt		3,358		3,359		3,359		3,359
Current portion of closure and post-closure obligations		7,119		6,471		8,234		6,471
Current portion of operating lease liabilities		16,208		17,048		15,114		17,048
Total current liabilities		165,360		169,217		190,063		169,217

Long-term debt		781,644		782,484		753,965		782,484
Long-term closure and post-closure obligations		89,615		89,398		90,107		89,398
Long-term operating lease liabilities		33,362		35,069		30,739		35,069
Other long-term liabilities		20,767		32,201		18,718		32,201
Deferred income taxes, net		119,701		120,983		119,358		120,983
Total liabilities		1,210,449		1,229,352		1,202,950		1,229,352

Commitments and contingencies (See Note 16)

Stockholders’ Equity:
Common stock $0.01 par value per share, 50,000 authorized; 31,512 shares issued and outstanding		315		315		315		315
Additional paid-in capital		817,818		820,567		820,600		820,567
Retained deficit		(189,249)		(188,452)		(186,679)		(188,452)
Treasury stock, at cost, 277 and 358 shares, respectively		(12,179)		(15,841)
Treasury stock, at cost, 249 and 358 shares, respectively						(10,919)		(15,841)
Accumulated other comprehensive loss		(4,002)		(14,658)		(7,344)		(14,658)
Total stockholders’ equity		612,703		601,931		615,973		601,931
Total liabilities and stockholders’ equity	$	1,823,152	$	1,831,283	$	1,818,923	$	1,831,283

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

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US ECOLOGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended March 31,

2021

2020
Revenue

$
228,619

$
240,720
Direct operating costs

175,746

178,279
Gross profit

52,873

62,441
Selling, general and administrative expenses

51,368

52,377
Goodwill impairment charges

—

300,300
Operating income (loss)

1,505

(290,236)
Other income (expense):

Interest income

273

89
Interest expense

(7,357)

(9,310)
Foreign currency (loss) gain

(371)

937
Other

3,710

171
Total other expense

(3,745)

(8,113)

Loss before income taxes

(2,240)

(298,349)
Income tax benefit

(1,444)

(263)
Net loss

$
(796)

$
(298,086)

Loss per share:

Basic

$
(0.03)

$
(9.52)
Diluted

$
(0.03)

$
(9.52)

Shares used in loss per share calculation:

Basic

31,104

31,305
Diluted

31,104

31,305


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revenue	$	257,182	$	238,142	$	726,574	$	692,780
Direct operating costs		194,028		173,849		555,994		511,028
Gross profit		63,154		64,293		170,580		181,752
Selling, general and administrative expenses		47,683		51,140		150,220		153,211
Goodwill impairment charges		—		—		—		300,300
Operating income (loss)		15,471		13,153		20,360		(271,759)
Other income (expense):
Interest income		485		9		1,148		251
Interest expense		(7,144)		(7,964)		(22,022)		(25,127)
Foreign currency gain (loss)		341		(421)		(385)		(155)
Other		114		86		4,020		382
Total other expense		(6,204)		(8,290)		(17,239)		(24,649)

Income (loss) before income taxes		9,267		4,863		3,121		(296,408)
Income tax expense (benefit)		2,535		(1,456)		1,348		542
Net income (loss)	$	6,732	$	6,319	$	1,773	$	(296,950)

Earnings (loss) per share:
Basic	$	0.22	$	0.20	$	0.06	$	(9.54)
Diluted	$	0.21	$	0.20	$	0.06	$	(9.54)

Shares used in earnings (loss) per share calculation:
Basic		31,151		31,069		31,131		31,142
Diluted		31,400		31,324		31,377		31,142

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

Table of Contents

US ECOLOGY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(In thousands)

Three Months Ended March 31,

2021

2020
Net loss

$
(796)
��
$
(298,086)
Other comprehensive income (loss):

Foreign currency translation gain (loss)

1,439

(8,259)
Net changes in interest rate hedge, net of taxes of $2,450 and $(1,621), respectively

9,217

(6,098)
Comprehensive income (loss), net of tax

$
9,860

$
(312,443)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net income (loss)	$	6,732	$	6,319	$	1,773	$	(296,950)
Other comprehensive income (loss):
Foreign currency translation (loss) gain		(3,219)		1,923		(1,248)		(3,328)
Net changes in interest rate hedge, net of taxes of $286, $196, $2,276 and $(2,220) respectively		1,076		739		8,562		(8,353)
Comprehensive income (loss), net of tax	$	4,589	$	8,981	$	9,087	$	(308,631)

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

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US ECOLOGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

Three Months Ended March 31,

2021

2020
Cash flows from operating activities:

Net loss

$
(796)

$
(298,086)

Depreciation and amortization of property and equipment

18,234

17,978
Amortization of intangible assets

9,135

9,441
Accretion of closure and post-closure obligations

1,182

1,266
Goodwill impairment charges

—

300,300
Unrealized foreign currency (gain) loss

(315)

2,703
Deferred income taxes

(3,781)

(3,320)
Share-based compensation expense

1,928

1,564
Share-based payments of business development and integration expenses

163

181
Unrecognized tax benefits

12

52
Net (gain) loss on disposition of assets

(221)

184
Amortization and write-off of debt issuance costs

577

298
Amortization and write-off of debt discount

40

245
Change in fair value of contingent consideration

—

(1,127)
Change in fair value of minority interest investment

(3,509)

—
Changes in assets and liabilities (net of effects of business acquisition):

Receivables

(680)

13,467
Income taxes receivable

1,276

893
Other assets

1,114

(2,957)
Accounts payable and accrued liabilities

(3,647)

(13,618)
Deferred revenue

2,214

7,083
Accrued salaries and benefits

(3,028)

(7,446)
Income taxes payable

(98)

662
Closure and post-closure obligations

(337)

(417)
Net cash provided by operating activities

19,463

29,346
Cash flows from investing activities:

Business acquisitions (net of cash acquired)

—

(3,309)
Purchases of property and equipment

(9,614)

(19,131)
Minority interest investment

(712)

—
Proceeds from sale of property and equipment

1,623

781
Purchases of restricted investments

(913)

(56)
Proceeds from sale of restricted investments

934

—
Net cash used in investing activities

(8,682)

(21,715)
Cash flows from financing activities:

Proceeds from long-term debt

—

90,000
Payments on long-term debt

(1,125)

(1,125)
Payments on short-term borrowings

(2,950)

(49,871)
Proceeds from short-term borrowings

3,227

50,267
Repurchase of common stock

(465)

(18,332)
Dividends paid

—

(5,667)
Payment of equipment financing obligations

(1,461)

(1,525)
Net cash (used in) provided by financing activities

(2,774)

63,747

Effect of foreign exchange rate changes on cash

708

(2,825)

Increase in Cash and cash equivalents and restricted cash

8,715

68,553
Cash and cash equivalents and restricted cash at beginning of period

75,104

42,140
Cash and cash equivalents and restricted cash at end of period

$
83,819

$
110,693

Reconciliation of Cash and cash equivalents and restricted cash

Cash and cash equivalents at beginning of period

73,848

41,281
Restricted cash at beginning of period

1,256

859
Cash and cash equivalents and restricted cash at beginning of period

$
75,104

$
42,140
Cash and cash equivalents at end of period

82,354

109,790
Restricted cash at end of period

1,465

903
Cash and cash equivalents and restricted cash at end of period

$
83,819

$
110,693
Supplemental Disclosures:

Income taxes paid, net of receipts

$
1,270

$
1,241
Interest paid

$
6,404

$
7,642
Non-cash investing and financing activities:

Capital expenditures in accounts payable

$
4,569

$
3,531
Restricted stock issued from treasury shares

$
4,127

$
—


	Nine Months Ended September 30,
	2021		2020
Cash flows from operating activities:
Net income (loss)	$	1,773	$	(296,950)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of property and equipment		54,095		54,831
Amortization of intangible assets		26,501		27,812
Accretion of closure and post-closure obligations		3,571		3,812
Goodwill impairment charges		—		300,300
Unrealized foreign currency (gain) loss		(1,028)		87
Deferred income taxes		(3,822)		79
Share-based compensation expense		5,748		4,861
Share-based payments of business development and integration expenses		417		1,142
Unrecognized tax benefits		37		(8)
Net (gain) loss on disposition of assets		(337)		1,817
Amortization and write-off of debt issuance costs		1,851		1,640
Amortization and write-off of debt discount		121		121
Change in fair value of contingent consideration		282		(3,207)
Change in fair value of minority interest investment		(3,509)		—
Changes in assets and liabilities (net of effects of business acquisition):
Receivables		(19,064)		25,297
Income taxes receivable		(70)		(6,250)
Other assets		(7,093)		(8,345)
Accounts payable and accrued liabilities		20,666		(19,177)
Deferred revenue		2,185		930
Accrued salaries and benefits		(3,239)		(4,494)
Income taxes payable		(943)		287
Closure and post-closure obligations		(1,101)		(1,341)
Net cash provided by operating activities		77,041		83,244
Cash flows from investing activities:
Purchases of property and equipment		(45,347)		(45,124)
Proceeds from sale of property and equipment		2,431		1,079
Minority interest investment		(712)		—
Purchases of restricted investments		(1,014)		(1,113)
Proceeds from sale of restricted investments		3,192		970
Business acquisitions (net of cash acquired)		—		(3,309)
Insurance proceeds from damaged property and equipment		—		1,131
Net cash used in investing activities		(41,450)		(46,366)
Cash flows from financing activities:
Proceeds from short-term borrowings		61,326		72,353
Payments on short-term borrowings		(61,326)		(72,353)
Payments on long-term debt		(29,375)		(33,375)
Payment of equipment financing obligations		(4,344)		(4,827)
Payment of acquired contingent consideration liabilities		(2,553)		(2,085)
Deferred financing costs paid		(957)		(1,144)
Repurchase of common stock		(465)		(18,332)
Proceeds from long-term debt		—		90,000
Dividends paid		—		(5,667)
Other		—		28
Net cash (used in) provided by financing activities		(37,694)		24,598

Effect of foreign exchange rate changes on cash		26		(480)

(Decrease) increase in Cash and cash equivalents and restricted cash		(2,077)		60,996
Cash and cash equivalents and restricted cash at beginning of period		75,104		42,140
Cash and cash equivalents and restricted cash at end of period	$	73,027	$	103,136

Reconciliation of Cash and cash equivalents and restricted cash
Cash and cash equivalents at beginning of period		73,848		41,281
Restricted cash at beginning of period		1,256		859
Cash and cash equivalents and restricted cash at beginning of period	$	75,104	$	42,140
Cash and cash equivalents at end of period		71,432		102,038
Restricted cash at end of period		1,595		1,098
Cash and cash equivalents and restricted cash at end of period	$	73,027	$	103,136
Supplemental Disclosures:
Income taxes paid, net of receipts	$	6,307	$	6,385
Interest paid	$	19,404	$	21,773
Non-cash investing and financing activities:
Capital expenditures in accounts payable	$	7,276	$	883
Restricted stock issued from treasury shares	$	5,387	$	2,041

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

Table of Contents

US ECOLOGY, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(In thousands)

Three Months Ended March 31,

2021

2020
Total stockholders' equity, beginning balances

$
601,931

$
1,011,380

Common stock:

Beginning balances

$
315

$
315
Ending balances

$
315

$
315

Additional paid-in capital:

Beginning balances

$
820,567

$
816,345
Share-based compensation

1,928

1,564
Share-based payments of business development and integration expenses

161

181
Stock option exercises and issuance of common stock and restricted common stock

—

(360)
Issuance of restricted common stock and common stock from treasury shares

(4,838)

—
Ending balances

$
817,818

$
817,730

Retained (deficit) earnings:

Beginning balances

$
(188,452)

$
206,574
Net loss

(796)

(298,086)
Dividends paid

—

(5,667)
Other

(1)

—
Ending balances

$
(189,249)

$
(97,179)

Treasury stock:

Beginning balances

$
(15,841)

$
—
Repurchase of common stock

(465)

(18,332)
Issuance of restricted common stock and common stock from treasury shares

4,127

—
Ending balances

$
(12,179)

$
(18,332)

Accumulated other comprehensive loss:

Beginning balances

$
(14,658)

$
(11,854)
Other comprehensive income (loss)

10,656

(14,357)
Ending balances

$
(4,002)

$
(26,211)

Total stockholders' equity, ending balances

$
612,703

$
676,323


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Total stockholders' equity, beginning balances	$	609,583	$	672,947	$	601,931	$	1,011,380

Common stock:
Beginning balances	$	315	$	315	$	315	$	315
Ending balances	$	315	$	315	$	315	$	315

Additional paid-in capital:
Beginning balances	$	818,913	$	817,557	$	820,567	$	816,345
Share-based compensation		1,713		1,773		5,748		4,861
Share-based payments of business development and integration expenses		119		170		417		1,142
Stock option exercises and issuance of common stock and restricted common stock		—		(31)		—		(468)
Issuance of restricted common stock and common stock from treasury shares		(145)		(125)		(6,132)		(2,536)
Ending balances	$	820,600	$	819,344	$	820,600	$	819,344

Retained deficit:
Beginning balances	$	(193,411)	$	(102,362)	$	(188,452)	$	206,574
Net income (loss)		6,732		6,319		1,773		(296,950)
Dividends paid		—		—		—		(5,667)
Other		—		(1)		—		(1)
Ending balances	$	(186,679)	$	(96,044)	$	(186,679)	$	(96,044)

Treasury stock:
Beginning balances	$	(11,033)	$	(16,366)	$	(15,841)	$	—
Repurchase of common stock		—		—		(465)		(18,332)
Issuance of restricted common stock and common stock from treasury shares		114		75		5,387		2,041
Ending balances	$	(10,919)	$	(16,291)	$	(10,919)	$	(16,291)

Accumulated other comprehensive loss:
Beginning balances	$	(5,201)	$	(26,197)	$	(14,658)	$	(11,854)
Other comprehensive (loss) income		(2,143)		2,662		7,314		(11,681)
Ending balances	$	(7,344)	$	(23,535)	$	(7,344)	$	(23,535)

Total stockholders' equity, ending balances	$	615,973	$	683,789	$	615,973	$	683,789

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

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US ECOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. GENERAL

Basis of Presentation

The accompanying unaudited consolidated financial statements include the results of operations, financial position and cash flows of US Ecology, Inc. and its wholly-owned subsidiaries. All inter-company balances have been eliminated. Throughout these consolidated financial statements words such as “we,” “us,” “our,” “US Ecology” and “the Company” refer to US Ecology, Inc. and its subsidiaries.

In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) necessary to present fairly, in all material respects, the results of the Company for the periods presented. These consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted pursuant to the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020. The results of operations for the three and nine months ended ~~March 31,~~September 30, 2021 are not necessarily indicative of the results to be expected for the entire year ending December 31, 2021.

The Company’s consolidated balance sheet as of December 31, 2020 has been derived from the Company’s audited consolidated balance sheet as of that date.

Reclassifications

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

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from the estimates and assumptions that we use in the preparation of our consolidated financial statements. As it relates to estimates and assumptions in amortization rates and environmental obligations, significant engineering, operations and accounting judgments are required. We review these estimates and assumptions no less than annually. In many circumstances, the ultimate outcome of these estimates and assumptions will not be known for decades into the future. Actual results could differ materially from these estimates and assumptions due to changes in applicable regulations, changes in future operational plans and inherent imprecision associated with estimating environmental impacts far into the future.

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Recently Issued Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, ~~Facilitation~~“Facilitation of the Effects of Reference Rate Reform on Financial ~~Reporting~~Reporting” (Topic 848). The ASU provides optional expedients and exceptions for applying GAAP to transactions affected by reference rate (e.g., LIBOR) reform if certain criteria are met, for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The ASU is effective as of March 12, 2020 through December 31, 2022. We will evaluate transactions or contract modifications occurring as a result of reference rate reform and determine whether to apply the optional guidance on an ongoing basis. The ASU is currently not expected to have a material impact on our consolidated financial statements.

Effective January 1, 2021, the Company adopted ASU No. 2019-12, “Income Taxes - Simplifying the Accounting for Income Taxes.” This ASU is intended to simplify various aspects of accounting for income taxes by eliminating certain exceptions within Accounting Standards Codification Topic 740, “Income Taxes” and to clarify certain aspects of the current accounting guidance. Adoption of this standard did not materially impact our consolidated statements of financial position, results of operations, or cash flows.

NOTE 2. REVENUES

Effective in the fourth quarter of 2020, we ~~have~~ made changes to the manner in which we manage our business, make operating decisions and assess our performance. Throughout this Quarterly Report on Form 10-Q, all periods presented have been recast to reflect these changes. Our operations are now managed in 3 reportable segments, Waste Solutions, Field Services and Energy Waste, reflecting our internal reporting structure and nature of services offered. See Note 17 for additional information on our operating segments.

Effective in the second quarter of 2021, we made changes to the manner in which we evaluate revenues associated with our various response-based services, including emergency response, standby services and remediation. As a result, revenues from Emergency Response and Domestic Standby Services, which were formerly presented as discrete service lines, are now combined and presented as a single “Emergency Response” service line and certain revenues formerly classified as Domestic Standby Services are now classified as Remediation. Throughout this Quarterly Report on Form 10-Q, our disaggregated revenues for all periods presented have been recast to reflect these changes.

The following table presents our revenue disaggregated by our reportable segments and service lines:


	Three Months Ended March 31, 2021								Three Months Ended September 30, 2021
	Waste		Field		Energy				Waste		Field		Energy
$s in thousands	Solutions		Services		Waste		Total		Solutions		Services		Waste		Total
Treatment & Disposal Revenue (1)	$	88,060	$	9,977	$	3,783	$	101,820	$	92,867	$	15,940	$	6,263	$	115,070
Services Revenue:
Transportation and Logistics (2)		16,082		6,329		1,401		23,812		22,334		6,483		2,317		31,134
Industrial Services (3)		—		26,256		409		26,665		—		29,597		730		30,327
Small Quantity Generation (4)		—		13,052		—		13,052		—		14,629		—		14,629
Total Waste Management (5)		—		9,882		—		9,882		—		9,597		—		9,597
Remediation (6)		—		9,827		—		9,827		—		16,310		—		16,310
Emergency Response (7)		—		31,623		—		31,623		—		34,532		—		34,532
Domestic Standby Services (8)		—		7,880		—		7,880
Other (9)		—		3,423		635		4,058
Other (8)										—		4,494		1,089		5,583
Revenue	$	104,142	$	118,249	$	6,228	$	228,619	$	115,201	$	131,582	$	10,399	$	257,182

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Three Months Ended March 31, 2020

Waste

Field

Energy

$s in thousands

Solutions

Services

Waste

Total
Treatment & Disposal Revenue (1)

$
90,717

$
9,918

$
9,332

$
109,967
Services Revenue:

Transportation and Logistics (2)

18,675

6,127

3,266

28,068
Industrial Services (3)

—

28,498

1,966

30,464
Small Quantity Generation (4)

—

11,077

—

11,077
Total Waste Management (5)

—

8,469

—

8,469
Remediation (6)

—

10,441

—

10,441
Emergency Response (7)

—

25,026

—

25,026
Domestic Standby Services (8)

—

9,467

—

9,467
Other (9)

—

4,971

2,770

7,741
Revenue

$
109,392

$
113,994

$
17,334

$
240,720


	Three Months Ended September 30, 2020
	Waste		Field		Energy
$s in thousands	Solutions		Services		Waste		Total
Treatment & Disposal Revenue (1)	$	88,601	$	13,861	$	2,625	$	105,087
Services Revenue:
Transportation and Logistics (2)		18,648		11,162		1,257		31,067
Industrial Services (3)		—		28,464		705		29,169
Small Quantity Generation (4)		—		13,056		—		13,056
Total Waste Management (5)		—		9,998		—		9,998
Remediation (6)		—		6,733		—		6,733
Emergency Response (7)		—		37,993		—		37,993
Other (8)		—		4,448		591		5,039
Revenue	$	107,249	$	125,715	$	5,178	$	238,142


	Nine Months Ended September 30, 2021
	Waste		Field		Energy
$s in thousands	Solutions		Services		Waste		Total
Treatment & Disposal Revenue (1)	$	270,906	$	39,143	$	14,648	$	324,697
Services Revenue:
Transportation and Logistics (2)		56,802		21,169		5,412		83,383
Industrial Services (3)		—		88,193		1,841		90,034
Small Quantity Generation (4)		—		41,311		—		41,311
Total Waste Management (5)		—		29,840		—		29,840
Remediation (6)		—		40,055		—		40,055
Emergency Response (7)		—		102,444		—		102,444
Other (8)		—		12,336		2,474		14,810
Revenue	$	327,708	$	374,491	$	24,375	$	726,574


	Nine Months Ended September 30, 2020
	Waste		Field		Energy
$s in thousands	Solutions		Services		Waste		Total
Treatment & Disposal Revenue (1)	$	266,129	$	33,744	$	16,102	$	315,975
Services Revenue:
Transportation and Logistics (2)		53,555		22,577		6,206		82,338
Industrial Services (3)		—		85,529		3,568		89,097
Small Quantity Generation (4)		—		35,292		—		35,292
Total Waste Management (5)		—		25,315		—		25,315
Remediation (6)		—		21,911		—		21,911
Emergency Response (7)		—		103,756		—		103,756
Other (8)		—		15,093		4,003		19,096
Revenue	$	319,684	$	343,217	$	29,879	$	692,780

(1)

We categorize our treatment and disposal revenue as either “Base Business” or “Event Business” based on the underlying nature of the revenue source. We define Event Business as non-recurring projects that are expected to equal or exceed 1,000 tons, with Base Business defined as all other business not meeting the definition of Event Business. For the three months ended ~~March 31,~~September 30, 2021 and 2020, 24% and ~~25%~~30%, respectively, of our treatment and disposal revenue was derived from Event Business projects. Base Business revenue accounted for 76% and ~~75%~~70% of our treatment and disposal revenue for the three months ended ~~March 31,~~September 30, 2021 and 2020, respectively. For the nine months ended September 30, 2021 and 2020, 24% and 28%, respectively, of our treatment and disposal revenue was derived from Event Business projects. Base Business revenue accounted for 76% and 72% of our treatment and disposal revenue for the nine months ended September 30, 2021 and 2020, respectively.

(2)	Includes collection and transportation of non-hazardous and hazardous waste.

(3)	Includes industrial cleaning and maintenance for refineries, chemical plants, steel and automotive plants, marine terminals and refinery services such as tank cleaning and temporary storage.

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(4)	Includes retail services, laboratory packing, less-than-truck-load service and household hazardous waste collection. Contracts for Small Quantity Generation may extend beyond one year and a portion of the transaction price can be fixed.

(5)

Through our total waste management (“TWM”) program, customers outsource the management of their waste compliance program to us, allowing us to organize and coordinate their waste management disposal activities and environmental compliance. TWM contracts may extend beyond one year and a portion of the transaction price can be fixed.

(6)	Includes site assessment, onsite treatment, project management and remedial action planning and execution. Contracts for Remediation may extend beyond one year and a portion of the transaction price can be fixed.

(7)	Includes services such as spill response, waste analysis and treatment and disposal ~~planning.~~

~~(8)~~

~~We provide~~planning as well as government-mandated, commercial standby oil spill compliance solutions and services that we provide to companies that store, transport, produce or handle petroleum and certain nonpetroleum oils on or near U.S. waters. Our standby services customers pay annual retainer fees under long-term or evergreen contracts for access to our regulatory certifications, specialized assets and highly trained personnel. When a customer with a retainer contract experiences a spill incident, we coordinate and manage the spill response, which results in incremental revenue for the services provided, in addition to the retainer fees.

~~(9)~~(8)

Includes equipment rental and other miscellaneous services.

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We provide services primarily in the United States, Canada and the Europe, Middle East, and Africa (“EMEA”) region. The following table presents our revenue disaggregated by our reportable segments and geographic location where the underlying services were performed:


	Three Months Ended March 31, 2021								Three Months Ended March 31, 2020								Three Months Ended September 30, 2021								Three Months Ended September 30, 2020
	Waste		Field		Energy				Waste		Field		Energy				Waste		Field		Energy				Waste		Field		Energy
$s in thousands	Solutions		Services		Waste		Total		Solutions		Services		Waste		Total		Solutions		Services		Waste		Total		Solutions		Services		Waste		Total
United States	$	84,474	$	106,051	$	6,228	$	196,753	$	90,473	$	105,565	$	17,334	$	213,372	$	96,200	$	117,762	$	10,399	$	224,361	$	89,481	$	119,611	$	5,178	$	214,270
Canada		19,668		579		—		20,247		18,919		1,077		—		19,996		19,001		1,453		—		20,454		17,768		990		—		18,758
EMEA		—		10,018		—		10,018		—		5,239		—		5,239		—		11,123		—		11,123		—		4,195		—		4,195
Other (1)		—		1,601		—		1,601		—		2,113		—		2,113		—		1,244		—		1,244		—		919		—		919
Total revenue	$	104,142	$	118,249	$	6,228	$	228,619	$	109,392	$	113,994	$	17,334	$	240,720	$	115,201	$	131,582	$	10,399	$	257,182	$	107,249	$	125,715	$	5,178	$	238,142


	Nine Months Ended September 30, 2021								Nine Months Ended September 30, 2020
	Waste		Field		Energy				Waste		Field		Energy
$s in thousands	Solutions		Services		Waste		Total		Solutions		Services		Waste		Total
United States	$	272,119	$	332,329	$	24,375	$	628,823	$	266,297	$	322,831	$	29,879	$	619,007
Canada		55,589		2,896		—		58,485		53,387		2,565		—		55,952
EMEA		—		35,052		—		35,052		—		13,349		—		13,349
Other (1)		—		4,214		—		4,214		—		4,472		—		4,472
Total revenue	$	327,708	$	374,491	$	24,375	$	726,574	$	319,684	$	343,217	$	29,879	$	692,780

(1)	Includes Mexico, Asia Pacific, and Latin America and Caribbean geographical regions.

Deferred Revenue

We record deferred revenue when cash payments are received, or advance billings are charged, prior to performance of services, such as waste that has been received but not yet treated or disposed. Revenue is recognized when these services are performed. During the three months ended ~~March 31,~~September 30, 2021 and 2020, we recognized ~~$10.7~~$405,000 and $735,000 of revenue that was included in the deferred revenue balance at the beginning of each year, respectively. During the nine months ended September 30, 2021 and 2020, we recognized $13.7 million and ~~$8.4~~$13.6 million of revenue that was included in the deferred revenue balance at the beginning of each year, respectively.

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Receivables

Our receivables include invoiced and unbilled amounts where the Company has an unconditional right to payment.

Principal versus Agent Considerations

The Company commonly contracts with third-parties to perform certain waste-related services that we have promised in our customer contracts. We consider ourselves the principal in these arrangements as we direct the timing, nature and pricing of the services ultimately provided by the third-party to the customer.

Costs to obtain a contract

The Company pays sales commissions to employees, which qualify as costs to obtain a contract. Sales commissions are expensed as incurred as the commissions are earned by the employee and paid by the Company over time as the related revenue is recognized. Other commissions and incremental costs to obtain a contract are not material.

Practical Expedients and Optional Exemptions

Our payment terms may vary based on type of service or customer; however, we do not adjust the promised amount of consideration in our contracts for the time value of money as payment terms extended to our customers do not exceed one year and are not considered a significant financing component in our contracts.

We do not disclose the value of unsatisfied performance obligations as contracts with an original expected length of more than one year and contracts for which we do not recognize revenue at the amount to which we have the right to invoice for services performed is insignificant and the aggregate amount of fixed consideration allocated to unsatisfied performance obligations is not material.

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NOTE 3. BUSINESS COMBINATIONS

Acquisition of Impact Environmental Services, Inc.

On January 28, 2020, we acquired Impact Environmental Services, Inc., an industrial cleaning and environmental services company based in Romulus, Michigan for $3.3 million. The acquired operations are reported as part of our Field Services segment, however, revenues, net income, earnings per share and total assets are not material to our consolidated financial position or results of operations.

We allocated the purchase price to the assets acquired and liabilities assumed based on estimates of the fair value at the date of the acquisition, resulting in $300,000 allocated to goodwill and $900,000 allocated to amortizing intangible assets (primarily customer relationships) to be amortized over a weighted average life of approximately 12 years. All of the goodwill recognized was assigned to our Field Services segment and is expected to be deductible for income tax purposes over a 15-year amortization period.

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NOTE 4. ACCUMULATED OTHER COMPREHENSIVE LOSS

Changes in accumulated other comprehensive income (loss) (“AOCI”) consisted of the following:


	Foreign		Unrealized Gain				Foreign		Unrealized Gain
	Currency		(Loss) on Interest				Currency		(Loss) on Interest
$s in thousands	Translation		Rate Hedge		Total		Translation		Rate Hedge		Total
Balance at December 31, 2020	$	(7,870)	$	(6,788)	$	(14,658)	$	(7,870)	$	(6,788)	$	(14,658)
Other comprehensive income before reclassifications, net of tax		1,439		8,323		9,762
Other comprehensive (loss) income before reclassifications, net of tax								(1,248)		6,182		4,934
Amounts reclassified out of AOCI, net of tax (1)		—		894		894		—		2,380		2,380
Other comprehensive income, net		1,439		9,217		10,656
Balance at March 31, 2021	$	(6,431)	$	2,429	$	(4,002)
Other comprehensive (loss) income, net								(1,248)		8,562		7,314
Balance at September 30, 2021							$	(9,118)	$	1,774	$	(7,344)

(1)

Before-tax reclassifications of ~~$1.1~~$743,000 ($587,000 after-tax) and $3.0 million ($~~894,000~~2.4 million after-tax) for the three and nine months ended ~~March 31,~~September 30, 2021, were included in Interest expense in the Company’s consolidated statements of operations. Amounts relate to the Company’s interest rate swap which is designated as a cash flow hedge. Changes in fair value of the swap recognized in AOCI are reclassified to interest expense when hedged interest payments on the underlying long-term debt are made or, for terminated swap agreements, amortized to interest expense over the period from termination to original maturity. Amounts in AOCI expected to be reclassified to interest expense over the next 12 months total approximately ~~$3.3~~$2.9 million ($~~2.6~~2.3 million after-tax).


	Foreign		Unrealized Gain				Foreign		Unrealized Gain
	Currency		(Loss) on Interest				Currency		(Loss) on Interest
$s in thousands	Translation		Rate Hedge		Total		Translation		Rate Hedge		Total
Balance at December 31, 2019	$	(10,925)	$	(929)	$	(11,854)	$	(10,925)	$	(929)	$	(11,854)
Other comprehensive loss before reclassifications, net of tax		(8,259)		(6,310)		(14,569)		(3,328)		(10,074)		(13,402)
Amounts reclassified out of AOCI, net of tax (2)		—		212		212		—		1,721		1,721
Other comprehensive loss, net		(8,259)		(6,098)		(14,357)		(3,328)		(8,353)		(11,681)
Balance at March 31, 2020	$	(19,184)	$	(7,027)	$	(26,211)
Balance at September 30, 2020							$	(14,253)	$	(9,282)	$	(23,535)

(2)

Before-tax reclassifications of ~~$268,000~~$1.2 million ($~~212,000~~921,000 after-tax) and $2.2 million ($1.7 million after-tax) for the three and nine months ended ~~March 31,~~September 30, 2020, were included in Interest expense in the Company’s consolidated statements of operations. Amounts relate to the ~~Company��s~~Company’s interest rate swap which is designated as a cash flow hedge. Changes in fair value of the swap recognized in AOCI are reclassified to interest expense when hedged interest payments on the underlying long-term debt are ~~made.~~made or, for terminated swap agreements, amortized to interest expense over the period from termination to original maturity.

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NOTE 5. CONCENTRATIONS AND CREDIT RISK

Major Customers

No customer accounted for more than 10% of total revenue for the three or nine months ended ~~March 31,~~September 30, 2021 or 2020, respectively. No customer accounted for more than 10% of total trade receivables as of ~~March 31,~~September 30, 2021 or December 31, 2020.

Credit Risk Concentration

We maintain most of our cash and cash equivalents with nationally recognized financial institutions. Substantially all balances are uninsured and are not used as collateral for other obligations. Concentrations of credit risk on accounts receivable are believed to be limited due to the number, diversification and character of the obligors and our credit evaluation process. Credit risk associated with a portion of the Company’s trade receivables ismay be reduced by our ability to submit claims to the Oil Spill Liability Trust Fund (“OSLTF”) for reimbursement of unpaid customer receivables related to services regulated under the provisions of the Oil Pollution Act of ~~1990 (“OPA 90”).~~1990. As of ~~March 31,~~September 30, 2021, the Company did not have any trade receivables that are eligible for submission to the OSLTF for reimbursement.

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NOTE 6. RECEIVABLES

Receivables consisted of the following:


	March 31,		December 31,		September 30,		December 31,
$s in thousands	2021		2020		2021		2020
Trade	$	189,092	$	186,502	$	198,948	$	186,502
Unbilled revenue		52,075		52,858		61,320		52,858
Other		5,353		5,554		4,458		5,554
Total receivables		246,520		244,914		264,726		244,914
Allowance for credit losses		(3,666)		(2,936)		(3,598)		(2,936)
Receivables, net	$	242,854	$	241,978	$	261,128	$	241,978

NOTE 7. FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value are categorized using defined hierarchical levels directly related to the amount of subjectivity associated with the inputs to fair value measurements, as follows:

●

Level 1 - Quoted prices in active markets for identical assets or liabilities;

●

Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable;

●

Level 3 - Unobservable inputs in which little or no market activity exists, requiring an entity to develop its own assumptions that market participants would use to value the asset or liability.

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, restricted cash and investments, accounts payable and accrued liabilities, debt, interest rate swap agreements and contingent consideration. The estimated fair value of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their carrying value due to the short-term nature of these instruments.

In each of September 2019 and March 2021, the Company invested $7.9 million and $712,000, respectively, in the preferred stock of a privately held company. The investment does not have a readily determinable fair value therefore the investment is

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valued at cost, less impairment, plus or minus observable price changes of an identical or similar investment of the same issuer, if any. In March 2021, in connection with our incremental investment of $712,000, we observed that the fair value of our initial investment of $7.9 million increased by $3.5 million and, accordingly, recognized a gain on our minority interest investment of $3.5 million. The fair value of our minority interest investment is included in Other assets in the Company’s consolidated balance sheets. Changes in the fair value of our minority interest investment are included in Other income in the Company’s consolidated statements of operations. As of September 30, 2021, there have been no other identified events or changes in circumstances that would indicate the cost method investment should be impaired nor have there been any observable price changes of an identical or similar investment of the same issuer.

The Company estimates the fair value of its variable-rate debt using Level 2 inputs, such as interest rates, related terms and maturities of similar obligations. At ~~March 31,~~September 30, 2021, the fair value of the Company’s variable rate term loan was estimated to be ~~$444.7~~$441.8 million, and the carrying value of the Company’s variable-rate revolving credit facility approximates fair value due to the short-term nature of the interest rates.

The Company estimates the fair value of its contingent consideration liabilities using Level 3 inputs, including both observable and unobservable inputs. As a result, unrealized gains and losses may include changes in fair value that are

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attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs.

The Company’s assets and liabilities measured at fair value on a recurring basis consisted of the following:


	March 31, 2021								September 30, 2021
	Quoted Prices in		Other Observable		Unobservable				Quoted Prices in		Other Observable		Unobservable
	Active Markets		Inputs		Inputs				Active Markets		Inputs		Inputs
$s in thousands	(Level 1)		(Level 2)		(Level 3)		Total		(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Fixed-income securities ⁽¹⁾	$	3,405	$	915	$	—	$	4,320	$	1,708	$	455	$	—	$	2,163
Money market funds ⁽²⁾		1,526		—		—		1,526		1,657		—		—		1,657
Interest rate swap agreement ⁽³⁾		—		1,619		—		1,619		—		606		—		606
Total	$	4,931	$	2,534	$	—	$	7,465	$	3,365	$	1,061	$	—	$	4,426

Liabilities:
Contingent consideration ⁽⁴⁾	$	—	$	—	$	2,208	$	2,208
Total	$	—	$	—	$	2,208	$	2,208


	December 31, 2020
	Quoted Prices in		Other Observable		Unobservable
	Active Markets		Inputs		Inputs
$s in thousands	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Fixed-income securities ⁽¹⁾	$	2,914	$	1,427	$	—	$	4,341
Money market funds ⁽²⁾		1,319		—		—		1,319
Total	$	4,233	$	1,427	$	—	$	5,660

Liabilities:
Interest rate swap agreement ⁽³⁾	$	—	$	9,744	$	—	$	9,744
Contingent consideration ⁽⁴⁾		—		—		2,173		2,173
Total	$	—	$	9,744	$	2,173	$	11,917

(1)

We invest a portion of our Restricted cash and investments in fixed-income securities, including U.S. Treasury and U.S. agency securities. We measure the fair value of U.S. Treasury securities using quoted prices for identical assets in active markets. We measure the fair value of U.S. agency securities using observable market activity for similar assets. The fair value of our fixed-income securities approximates our cost basis in the investments.

(2)

We invest portions of our Cash and cash equivalents and Restricted cash and investments in money market funds. We measure the fair value of these money market fund investments using quoted prices for identical assets in active markets. The portion of Restricted cash and investments that is invested in money market funds is considered restricted

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cash for purposes of reconciling the beginning-of-period and end-of-period amounts presented in the Company’s consolidated statements of cash flows.

(3)

In order to manage interest rate exposure, we entered into an interest rate swap agreement in March 2020 that effectively converts a portion of our variable-rate debt to a fixed interest rate. The swap is designated as a highly-effective cash flow hedge, with gains and losses deferred in other comprehensive income to be recognized as an adjustment to interest expense in the same period that the hedged interest payments affect earnings. The interest rate swap has an effective date of March 31, 2020 in an initial notional amount of $500.0 million. The fair value of the interest rate swap agreement represents the difference in the present value of cash flows calculated (i) at the contracted interest rates and (ii) at current market interest rates at the end of the period. We calculate the fair value of interest rate swap agreements quarterly based on the quoted market price for the same or similar financial instruments. The fair value of the interest rate swap agreement is included in Other assets and Other long-term liabilities in the Company’s consolidated balance sheets as of ~~March 31,~~September 30, 2021 and December 31, ~~2020.~~2020, respectively.

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(4)

Our contingent consideration liabilities represent the estimated fair value of potential future payments the Company may be required to remit under the terms of historical purchase agreements entered into by NRC Group Holdings Corp. (“NRC”) prior to the Company’s acquisition of NRC ~~Merger.~~(“NRC Merger”). The payments are contingent on the acquired businesses’ achievement of annual earnings targets in certain years and other events considered in the purchase agreements. The fair value of our contingent consideration liabilities is calculated using either a Monte Carlo simulation or modified Black-Scholes analyses based on earnings projections for the respective earn-out periods, corresponding earnings thresholds, and approximate timing of payments as outlined in the purchase agreements. The analyses utilize the following assumptions: (i) expected term; (ii) risk-adjusted net sales or earnings; (iii) risk-free interest rate; and (iv) expected volatility of earnings. Estimated payments, as determined through the respective models, are discounted by a credit spread assumption to account for credit risk. As of September 30, 2021, we have settled all acquired contingent consideration liabilities associated with the NRC Merger. The fair value of our contingent consideration liability as of ~~both March 31, 2021 and~~ December 31, 2020 was $2.2 million and is included in Accrued liabilities in the Company’s consolidated balance sheet. We revalue our contingent consideration payments each period and any increases or decreases to fair value are included in Selling, general and administrative expenses in our consolidated statements of operations. Fair values may be impacted by certain unobservable inputs, most significantly with regard to discount rates, expected volatility and historical and projected performance. Significant changes to these inputs in isolation could result in a significantly different fair value measurement.


	Three Months Ended		Three Months Ended		Nine Months Ended
$s in thousands	March 31, 2021		September 30, 2021		September 30, 2021
Contingent consideration, beginning of period	$	2,173	$	—	$	2,173
Change in fair value of contingent consideration				—		282
Contingent consideration paid				—		(2,553)
Foreign currency translation		35		—		98
Contingent consideration, end of period	$	2,208	$	—	$	—

NOTE 8. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:


	March 31,		December 31,		September 30,		December 31,
$s in thousands	2021		2020		2021		2020
Cell development costs	$	193,496	$	186,170	$	201,382	$	186,170
Land and improvements		72,605		65,953		74,198		65,953
Buildings and improvements		130,693		128,206		131,119		128,206
Railcars		17,299		17,299		17,299		17,299
Vehicles, vessels and other equipment		331,632		331,167		337,909		331,167
Construction in progress		37,284		44,840		56,357		44,840
Total property and equipment		783,009		773,635		818,264		773,635
Accumulated depreciation and amortization		(334,761)		(316,998)		(367,544)		(316,998)
Property and equipment, net	$	448,248	$	456,637	$	450,720	$	456,637

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Depreciation and amortization expense for the three months ended ~~March 31,~~September 30, 2021 and 2020 was ~~$18.2~~$17.9 million and ~~$18.0~~$18.4 million, respectively. Depreciation and amortization expense for the nine months ended September 30, 2021 and 2020 was $54.1 million and $54.8 million, respectively.

NOTE 9. LEASES

We lease certain facilities, office space, land and equipment. Our lease payments are primarily fixed, but also include variable payments that are based on usage of the leased asset. Initial lease terms range from one to 15 years, and may include one or more options to renew, with renewal terms extending a lease up to 40 years. None of our renewal options are considered reasonably certain to be exercised. Provisions for residual value guarantees exist in some of our equipment

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leases, however, amounts associated with these provisions are not material. Our leases do not include any material restrictive covenants.

Leases with an initial term of 12 months or less are not recorded on the balance sheet and expense is recognized on a straight-line basis over the lease term. We combine lease and non-lease components in our leases. We use the rate implicit in the lease, when available, to discount lease payments to present value. However, many of our leases do not provide a readily determinable implicit rate and we estimate our incremental borrowing rate to discount payments based on information available at lease commencement.

Lease assets and liabilities consisted of the following:


	March 31,		December 31,		September 30,		December 31,
$s in thousands	2021		2020		2021		2020
Assets:
Operating right-of-use assets (1)	$	48,824	$	51,474	$	44,947	$	51,474
Finance right-of-use assets (2)		21,235		21,209		18,601		21,209
Total	$	70,059	$	72,683	$	63,548	$	72,683

Liabilities:
Current:
Operating (3)	$	16,208	$	17,048	$	15,114	$	17,048
Finance (4)		4,935		4,462		4,974		4,462
Long-term:
Operating (5)		33,362		35,069		30,739		35,069
Finance (6)		15,836		17,501		13,339		17,501
Total	$	70,341	$	74,080	$	64,166	$	74,080

(1)	Included in Operating lease assets in the Company’s consolidated balance sheets.

(2)	Included in Property and equipment, net in the Company’s consolidated balance sheets. Finance right-of-use assets are recorded net of accumulated amortization of ~~$9.3~~$12.0 million and $8.0 million as of ~~March 31,~~September 30, 2021 and December 31, 2020, respectively.

(3)	Included in Current portion of operating lease liabilities in the Company’s consolidated balance sheets.

(4)	Included in Accrued liabilities in the Company’s consolidated balance sheets.

(5)	Included in Long-term operating lease liabilities in the Company’s consolidated balance sheets.

(6)	Included in Other long-term liabilities in the Company’s consolidated balance sheets.

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Lease expense consisted of the following:


	Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
$s in thousands	2021		2020		2021		2020		2021		2020
Operating lease cost (1)	$	5,296	$	4,999	$	4,853	$	5,008	$	15,172	$	14,947
Finance lease cost:
Amortization of leased assets (2)		1,334		1,294		1,311		1,330		3,947		3,974
Interest on lease liabilities (3)		278		318		233		292		786		925
Total	$	6,908	$	6,611	$	6,397	$	6,630	$	19,905	$	19,846

(1)

Included in Direct operating costs and Selling, general, and administrative expenses in the Company’s consolidated statements of operations. Operating lease cost includes short-term leases, excluding expenses relating to leases with a term of one month or less, which are not material. Operating lease cost excludes variable lease costs which are not material.

(2)	Included in Direct operating costs in the Company’s consolidated statements of operations.

(3)	Included in Interest expense in the Company’s consolidated statements of operations.

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Supplemental cash flow information related to our leases is as follows:


	Three Months Ended March 31,				Nine Months Ended September 30,
$s in thousands	2021		2020		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	5,151	$	4,851	$	14,749	$	14,547
Operating cash flows from finance leases	$	278	$	318	$	786	$	925
Financing cash flows from finance leases	$	1,192	$	1,128	$	3,649	$	3,457

Non-cash investing and financing activities:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	2,074	$	2,391	$	7,092	$	7,195
Right-of-use assets obtained in exchange for new finance lease liabilities	$	—	$	4,192	$	—	$	6,089

NOTE 10. GOODWILL AND INTANGIBLE ASSETS

Changes in goodwill for the ~~three~~nine months ended ~~March 31,~~September 30, 2021 consisted of the following:


	Waste Solutions				Field Services				Energy Waste						Waste Solutions				Field Services				Energy Waste
			Accumulated				Accumulated				Accumulated						Accumulated				Accumulated				Accumulated
$s in thousands	Gross		Impairment		Gross		Impairment		Gross		Impairment		Total		Gross		Impairment		Gross		Impairment		Gross		Impairment		Total
Balance at December 31, 2020	$	166,863	$	(6,870)	$	237,341	$	(19,900)	$	399,503	$	(363,900)	$	413,037	$	166,863	$	(6,870)	$	237,341	$	(19,900)	$	399,503	$	(363,900)	$	413,037
Foreign currency translation		215		—		94		—		—		—		309		44		—		20		—		—		—		64
Balance at March 31, 2021	$	167,078	$	(6,870)	$	237,435	$	(19,900)	$	399,503	$	(363,900)	$	413,346
Balance at September 30, 2021															$	166,907	$	(6,870)	$	237,361	$	(19,900)	$	399,503	$	(363,900)	$	413,101

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Intangible assets, net consisted of the following:


	March 31, 2021						December 31, 2020						September 30, 2021						December 31, 2020
			Accumulated						Accumulated						Accumulated						Accumulated
$s in thousands	Cost		Amortization		Net		Cost		Amortization		Net		Cost		Amortization		Net		Cost		Amortization		Net
Amortizing intangible assets:
Permits, licenses and lease	$	175,148	$	(24,127)	$	151,021	$	174,885	$	(23,005)	$	151,880	$	174,940	$	(26,127)	$	148,813	$	174,885	$	(23,005)	$	151,880
Customer relationships		340,147		(68,348)		271,799		340,032		(61,778)		278,254		340,056		(81,407)		258,649		340,032		(61,778)		278,254
Technology - formulae and processes		7,227		(2,378)		4,849		7,142		(2,293)		4,849		7,159		(2,471)		4,688		7,142		(2,293)		4,849
Customer backlog		3,652		(2,478)		1,174		3,652		(2,387)		1,265		3,652		(2,661)		991		3,652		(2,387)		1,265
Tradename		10,390		(8,728)		1,662		10,390		(8,015)		2,375		10,390		(10,153)		237		10,390		(8,015)		2,375
Developed software		2,905		(2,259)		646		2,902		(2,182)		720		2,902		(2,402)		500		2,902		(2,182)		720
Non-compete agreements		5,578		(4,910)		668		5,571		(4,318)		1,253		5,572		(5,171)		401		5,571		(4,318)		1,253
Internet domain and website		536		(191)		345		536		(184)		352		536		(206)		330		536		(184)		352
Database		390		(220)		170		389		(214)		175		390		(230)		160		389		(214)		175
Total amortizing intangible assets		545,973		(113,639)		432,334		545,499		(104,376)		441,123		545,597		(130,828)		414,769		545,499		(104,376)		441,123
Non-amortizing intangible assets:
Permits and licenses		82,739		—		82,739		82,732		—		82,732		82,733		—		82,733		82,732		—		82,732
Tradename		135		—		135		133		—		133		134		—		134		133		—		133
Total intangible assets	$	628,847	$	(113,639)	$	515,208	$	628,364	$	(104,376)	$	523,988	$	628,464	$	(130,828)	$	497,636	$	628,364	$	(104,376)	$	523,988

~~During the three months ended March 31,~~On January 28, 2020, the Company acquired Impact Environmental Services, Inc. and recorded $300,000 of goodwill and $900,000 of amortizing intangible assets (consisting primarily of customer relationships). See Note 3 for additional information.

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Amortization expense for the three months ended ~~March 31,~~September 30, 2021 and 2020 was ~~$9.1~~$8.6 million and ~~$9.4~~$9.2 million, respectively. Amortization expense for the nine months ended September 30, 2021 and 2020 was $26.5 million and $27.8 million, respectively. Foreign intangible asset carrying amounts are affected by foreign currency translation.

NOTE 11. DEBT

Long-term debt consisted of the following:


	March 31,		December 31,		September 30,		December 31,
$s in thousands	2021		2020		2021		2020
Revolving credit facility	$	347,277	$	347,000	$	321,000	$	347,000
Term loan		444,375		445,500		442,125		445,500
Unamortized term loan discount and debt issuance costs		(6,373)		(6,657)		(5,801)		(6,657)
Total debt		785,279		785,843		757,324		785,843
Current portion of long-term debt		(3,635)		(3,359)		(3,359)		(3,359)
Long-term debt	$	781,644	$	782,484	$	753,965	$	782,484

Future Maturities of long-term debt, excluding unamortized discount and debt issuance costs, as of ~~March 31,~~September 30, 2021 consisted of the following:


$s in thousands	Maturities		Maturities
2021 (excluding the three months ended March 31, 2021)	$	3,652
2021 (excluding the nine months ended September 30, 2021)			$	1,125
2022		4,500		4,500
2023		4,500		4,500
2024		351,500		4,500
2025		4,500		4,500
Thereafter		423,000		744,000
	$	791,652	$	763,125

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Credit Agreement

On April 18, 2017, US Ecology Holdings, Inc. (f/k/a US Ecology, Inc.) (“Predecessor US Ecology”), now a wholly-owned subsidiary of the Company, entered into a new senior secured credit agreement (as amended, restated, supplemented or otherwise modified through the date hereof, the “Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent for the lenders, swingline lender and issuing lender, and Bank of America, N.A., as an issuing lender, that ~~provides~~initially provided for a $500.0 million, five-year revolving credit facility (the “Revolving Credit Facility”), including a $75.0 million sublimit for the issuance of standby letters of credit and a $40.0 million sublimit for the issuance of swingline loans used to fund short-term working capital requirements. The Credit Agreement also contains an accordion feature whereby Predecessor US Ecology may request up to $200.0 million of additional funds through an increase to the Revolving Credit Facility, through incremental term loans, or some combination thereof. As described below, the Credit Agreement was amended in November 2019 in connection with the NRC Merger and further amended on June 26, 2020 pursuant to the Third Amendment (as defined below).

The Revolving Credit Facility provides up to $500.0 million of revolving credit loans or letters of credit with the use of proceeds restricted solely for working capital and other general corporate purposes (including acquisitions and capital expenditures). Except as modified by the Third Amendment as described below, under the Revolving Credit Facility, revolving credit loans are available based on a base rate (as defined in the Credit Agreement) or the London Inter-Bank Offered Rate (“LIBOR”), at the Company’s option, plus an applicable margin which is determined according to a pricing grid under which the interest rate decreases or increases based on our ratio of funded debt to consolidated earnings before interest, taxes, depreciation and amortization (as defined in the Credit Agreement), as set forth in the table below:

Consolidated Total Net Leverage Ratio
LIBOR Rate Loans Interest Margin
Base Rate Loans Interest Margin
Equal to or greater than 3.25 to 1.00
2.00%
1.00%
Equal to or greater than 2.50 to 1.00, but less than 3.25 to 1.00
1.75%
0.75%
Equal to or greater than 1.75 to 1.00, but less than 2.50 to 1.00
1.50%
0.50%
Equal to or greater than 1.00 to 1.00, but less than 1.75 to 1.00
1.25%
0.25%
Less than 1.00 to 1.00
1.00%
0.00%

During the three months ended March 31, 2021, the effective interest rate on the Revolving Credit Facility, after giving effect to the impact of our interest rate swap and the amortization of the loan discount and debt issuance costs, was 4.06%. Interest only payments are due either quarterly or on the last day of any interest period, as applicable.

Except as modified by the Third Amendment as described below, Predecessor US Ecology is required to pay a commitment fee ranging from 0.175% to 0.35% on the average daily unused portion of the Revolving Credit Facility, with such commitment fee to be based upon Predecessor US Ecology’s total net leverage ratio (as defined in the Credit Agreement). The maximum letter of credit capacity under the Revolving Credit Facility is $75.0 million and the Credit Agreement provides for a letter of credit fee equal to the applicable margin for LIBOR loans under the Revolving Credit Facility. At March 31, 2021, there were $347.0 million of revolving credit loans outstanding on the Revolving Credit Facility. These revolving credit loans are due upon the earliest to occur of (i) November 1, 2024 (or, with respect to any lender, such later date as requested by us and accepted by such lender), (ii) the date of termination of the entire revolving credit commitment (as defined in the Credit Agreement) by us, and (iii) the date of termination of the revolving credit commitment and are presented as long-term debt in the consolidated balance sheets.

Predecessor US Ecology has entered into a sweep arrangement whereby day-to-day cash requirements in excess of available cash balances are advanced to the Company on an as-needed basis with repayments of these advances automatically made from subsequent deposits to our cash operating accounts (the “Sweep Arrangement”). Total advances outstanding under the Sweep Arrangement are subject to the $40.0 million swingline loan sublimit under the Revolving Credit Facility. Predecessor US Ecology’s revolving credit loans outstanding under the Revolving Credit Facility are not subject to repayment through the Sweep Arrangement. As of March 31, 2021, there were $277,000 in borrowings

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~~outstanding subject to the Sweep Arrangement, which are presented as Short-term borrowings in the consolidated balance sheet.~~

As of March 31, 2021, the availability under the Revolving Credit Facility was $142.9 million, with $9.8 million of the Revolving Credit Facility issued in the form of standby letters of credit utilized as collateral for closure and post-closure financial assurance and other assurance obligations.

Predecessor US Ecology may at any time and from time to time prepay revolving credit loans and swingline loans, in whole or in part, without premium or penalty, subject to the obligation to indemnify each of the lenders against any actual loss or expense (including any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain a LIBOR rate loan (as defined in the Credit Agreement) or from fees payable to terminate the deposits from which such funds were obtained) with respect to the early termination of any LIBOR rate loan. The Credit Agreement provides for mandatory prepayment at any time if the revolving credit outstanding exceeds the revolving credit commitment (as such terms are defined in the Credit Agreement), in an amount equal to such excess. Subject to certain exceptions, the Credit Agreement provides for mandatory prepayment upon certain asset dispositions, casualty events and issuances of indebtedness.

Pursuant to (i) an unconditional guarantee agreement and (ii) a collateral agreement, each entered into by Predecessor US Ecology and its domestic subsidiaries on April 18, 2017, Predecessor US Ecology’s obligations under the Credit Agreement are (or will be) jointly and severally and fully and unconditionally guaranteed on a senior basis by all of the Company’s existing and certain future domestic subsidiaries and are secured by substantially all of the assets of Predecessor US Ecology and the Company’s existing and certain future domestic subsidiaries (subject to certain exclusions), including 100% of the equity interests of the Company’s domestic subsidiaries and 65% of the voting equity interests of the Company’s directly owned foreign subsidiaries (and 100% of the non-voting equity interests of the Company’s directly owned foreign subsidiaries).

The Credit Agreement contains customary restrictive covenants, subject to certain permitted amounts and exceptions, including covenants limiting the ability of the Company to incur additional indebtedness, pay dividends and make other restricted payments, repurchase shares of our outstanding stock and create certain liens. Upon the occurrence of an event of default (as defined in the Credit Agreement), among other things, amounts outstanding under the Credit Agreement may be accelerated and the commitments may be terminated.

The Credit Agreement also contains financial maintenance covenants, a maximum consolidated total net leverage ratio and a consolidated interest coverage ratio (as such terms are defined in the Credit Agreement). Except as further modified by the Third Amendment as described below, our consolidated total net leverage ratio as of the last day of the respective fiscal quarter, may not exceed the maximum consolidated total net leverage ratios set forth in the table below, subject to certain exceptions:

~~Fiscal Quarter(s)~~	~~Consolidated Total Net Leverage Ratio~~
~~Fiscal Quarters ending June 30, 2017 through September 30, 2019~~	~~3.50:1.00~~
~~Fiscal Quarters ending December 31, 2019 and thereafter~~	~~4.00:1.00~~

~~Our consolidated interest coverage ratio as of the last day of any fiscal quarter, commencing with the fiscal quarter ending June 30, 2017, may not be less than 3.00 to 1.00.~~

~~Amendments to the Credit Agreement~~

On August 6, 2019, Predecessor US Ecology entered into the first amendment (the “First Amendment”) to the Credit Agreement, by and among Predecessor US Ecology, the subsidiaries of Predecessor US Ecology party thereto, the lenders referred to therein and Wells Fargo, as issuing lender, swingline lender and administrative agent.Agreement. Effective November 1, 2019, the First Amendment, among other things, extended the expiration of the Revolving Credit Facility to November 1, 2024, permitted the issuance of a $400.0 million incremental term loan to be used to refinance the indebtedness of NRC

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and pay related transaction expenses in connection with the NRC Merger, modified the accordion feature allowing Predecessor US Ecology to request up to the greater of (x) $250.0 million and (y) 100% of consolidated ~~EBITDA~~earnings before interest, taxes, depreciation and amortization (“EBITDA”) plus certain additional amounts, increased the sublimit for the issuance of swingline loans to $40.0 million and increased the maximum consolidated total net leverage ratio to 4.00 to 1.00.

On November 1, 2019, Predecessor US Ecology entered into the lender joinder agreement and second amendment (the “Second Amendment”) to the Credit Agreement. Effective November 1, 2019, the Second Amendment, among other things, amended the Credit Agreement to increase the capacity for incremental term loans by $50.0 million and provided for Wells Fargo lending $450.0 million in incremental term loans to Predecessor US Ecology to pay off the existing debt of NRC in connection with the NRC Merger, to pay certain fees, costs and expenses incurred in connection with the NRC

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Merger and to repay outstanding borrowings under the Revolving Credit Facility. The seven-year incremental term loan matures November 1, 2026, requires principal repayment of 1% annually, and bears interest at ~~LIBOR~~London Inter-Bank Offered Rate (“LIBOR”) plus 2.25% or a base rate plus 1.25% (with a step-up to LIBOR plus 2.50% or a base rate plus 1.50% in the event that US Ecology credit ratings are not BB (with a stable or better outlook) or better from S&P and Ba2 (with a stable or better outlook) or better from Moody’s). During the ~~three~~nine months ended ~~March 31,~~September 30, 2021, the effective interest rate on the term loan, including the impact of the amortization of debt issuance costs, was ~~2.89%~~2.87%.

On June 26, 2020, Predecessor US Ecology entered into the third amendment (the “Third Amendment”) to the Credit Agreement. Among other things, the Third Amendment amended the Credit Agreement to provide a covenant relief period through the earlier of March 31, 2022 and the date Predecessor US Ecology elects to end such covenant relief period pursuant to the terms therein. During the covenant relief period, the Third Amendment increased Predecessor US Ecology’s consolidated total net leverage ratio requirement as of the end of each fiscal quarter to certain ratios above the 4.00 to 1.00 ratio in effect immediately before giving effect to the Third Amendment, subject to compliance with certain restrictions on restricted payments and permitted acquisitions during such covenant relief period. ~~Furthermore, during~~

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

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margin which is determined according to a pricing grid under which the interest rate decreases or increases based on our ratio of funded debt to ~~consolidated earnings before interest, taxes, depreciation and amortization~~EBITDA (as defined in the Credit Agreement), as set forth in the table below:


Consolidated Total Net Leverage Ratio	LIBOR Rate Loans Interest Margin	Base Rate Loans Interest Margin
Equal to or greater than 4.50 to 1.00	2.50%	1.50%
Equal to or greater than 4.00 to 1.00, but less than 4.50 to 1.00	2.25%	1.25%
Equal to or greater than 3.25 to 1.00, but less than 4.00 to 1.00	2.00%	1.00%
Equal to or greater than 2.50 to 1.00, but less than 3.25 to 1.00	1.75%	0.75%
Equal to or greater than 1.75 to 1.00, but less than 2.50 to 1.00	1.50%	0.50%
Equal to or greater than 1.00 to 1.00, but less than 1.75 to 1.00	1.25%	0.25%
Less than 1.00 to 1.00	1.00%	0.00%

~~Additionally, during~~During the ~~covenant relief~~nine months ended September 30, 2021, the effective interest rate on the Revolving Credit Facility, after giving effect to the impact of our interest rate swap and the amortization of the loan discount and debt issuance costs, was 4.03%. Interest only payments are due either quarterly or on the last day of any interest period, as applicable.

As modified by the Fourth Amendment, Predecessor US Ecology is required to pay a commitment fee ranging from 0.175% to 0.40% on the average daily unused portion of the Revolving Credit Facility, with such commitment fee to be based upon Predecessor US Ecology’s total net leverage ratio (as defined in the Credit Agreement). At September 30, 2021, there were $321.0 million of revolving credit loans outstanding on the Revolving Credit Facility, which are presented as long-term debt in the consolidated balance sheets.

As of September 30, 2021, the availability under the Revolving Credit Facility was $62.2 million, subject to our leverage covenant limitation, with $14.7 million of the Revolving Credit Facility issued in the form of standby letters of credit utilized as collateral for closure and post-closure financial assurance and other assurance obligations.

Predecessor US Ecology may at any time and from time to time prepay revolving credit loans and swingline loans, in whole or in part, without premium or penalty, subject to the obligation to indemnify each of the lenders against any actual loss or expense (including any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain a LIBOR Rate Loan (as defined in the Credit Agreement) or from fees payable to terminate the deposits from which such funds were obtained) with respect to the early termination of any LIBOR Rate Loan. The Credit Agreement provides for mandatory prepayment at any time if the Revolving Credit Outstandings exceed the Revolving Credit Commitment (as such terms are defined in the Credit Agreement), in an amount equal to such excess. Subject to certain exceptions, the Credit Agreement provides for mandatory prepayment upon certain asset dispositions, casualty events and issuances of indebtedness.

Predecessor US Ecology’s obligations under the Credit Agreement are (or will be) jointly and severally and fully and unconditionally guaranteed on a senior basis by all of the Company’s existing and certain future domestic subsidiaries and are secured by substantially all of the assets of Predecessor US Ecology and the Company’s existing and certain future domestic subsidiaries (subject to certain exclusions), including 100% of the equity interests of the Company’s domestic subsidiaries and 65% of the voting equity interests of the Company’s directly owned foreign subsidiaries (and 100% of the non-voting equity interests of the Company’s directly owned foreign subsidiaries).

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The Credit Agreement contains customary restrictive covenants, subject to certain permitted amounts and exceptions, including covenants limiting the ability of the Company to incur additional indebtedness, pay dividends and make other restricted payments, repurchase shares of our outstanding stock and create certain liens. Upon the occurrence of an Event of Default (as defined in the Credit Agreement), among other things, amounts outstanding under the Credit Agreement may be accelerated and the commitments may be terminated.

The Credit Agreement also contains financial maintenance covenants, a maximum consolidated total net leverage ratio and a consolidated interest coverage ratio. Except as further modified by the Third Amendment and Fourth Amendment as described above, our consolidated total net leverage ratio as of the last day of each fiscal quarter may not exceed 4.50:1:00. Our consolidated interest coverage ratio as of the last day of any fiscal quarter may not be less than 3.00 to 1.00. At ~~March 31,~~September 30, 2021, we were in compliance with all of the financial covenants in the Credit Agreement.

Interest Rate Swap

In March 2020, the Company entered into an interest rate swap agreement with Wells Fargo, effectively fixing the interest rate on ~~$470.0~~$450.0 million, or approximately 59%, of the Revolving Credit Facility and term loan borrowings outstanding as of ~~March 31,~~September 30, 2021. In connection with our entry into the March 2020 interest rate swap, we terminated our existing interest rate swap prior to its scheduled maturity date of June 2021. As the original hedged forecasted transaction (periodic interest

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payments on our variable-rate debt) ~~remains~~remained probable, the $1.8 million net loss related to the terminated swap reported in AOCI at the termination date ~~will be~~was amortized as additional interest expense over its original maturity.

NOTE 12. CLOSURE AND POST-CLOSURE OBLIGATIONS

Our accrued closure and post-closure liability ~~represents~~represent the expected future costs, including corrective actions, associated with closure and post-closure of our operating and non-operating disposal facilities. We record the fair value of our closure and post-closure obligations as a liability in the period in which the regulatory obligation to retire a specific asset is triggered. For our individual landfill cells, the required closure and post-closure obligations under the terms of our permits and our intended operation of the landfill cell are triggered and recorded when the cell is placed into service and waste is initially disposed in the landfill cell. The fair value is based on the total estimated costs to close the landfill cell and perform post-closure activities once the landfill cell has reached capacity and is no longer accepting waste. We perform periodic reviews of both non-operating and operating facilities and revise accruals for estimated closure and post-closure, remediation or other costs as necessary. Recorded liabilities are based on our best estimates of current costs and are updated periodically to include the effects of existing technology, presently enacted laws and regulations, inflation and other economic factors.

Changes to closure and post-closure obligations consisted of the following:


	Three Months Ended		Three Months Ended		Nine Months Ended
$s in thousands	March 31, 2021		September 30, 2021		September 30, 2021
Closure and post-closure obligations, beginning of period	$	95,869	$	97,524	$	95,869
Accretion expense		1,182		1,198		3,571
Payments		(338)		(337)		(1,104)
Foreign currency translation		21		(44)		5
Closure and post-closure obligations, end of period		96,734		98,341		98,341
Less current portion		(7,119)		(8,234)		(8,234)
Long-term portion	$	89,615	$	90,107	$	90,107

NOTE 13. INCOME TAXES

We ~~account for our~~have historically calculated the provision for income taxes ~~in accordance with ASC 740, Income Taxes, which requires~~during interim reporting periods by applying an estimate of the Annual Effective Tax Rate (“AETR”) for the full fiscal year to ~~be applied to the interim period, taking into account year-to-date amounts and projected results~~“ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the ~~full year. The provision for income~~reporting period. We used a discrete effective tax rate

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method to calculate taxes ~~represents federal, foreign, state, and local income taxes. During the year, management regularly updates forecasted annual pretax results~~ for the ~~various countries~~nine months ended September 30, 2021. We determined that since relatively small changes in ~~which we operate based on recurring and nonrecurring factors including, but not limited to: variations~~estimated “ordinary” income would result in significant changes in the estimated and actual level of pre-tax income or loss by jurisdiction; changes in enacted tax laws and regulations, and interpretations thereof, including with respect to tax credits and state and local income taxes; developments in tax audits and other matters; and certain nondeductible expenses. Changes in judgment fromAETR, that the ~~evaluation of new information resulting in~~historical method would not provide a reliable estimate for the recognition, derecognition, or remeasurement of a tax position taken in a prior annual period are recognized separately in the quarter of the change. To the extent that actual 2021 pretax results for U.S. and foreign income or loss vary from estimates, the actual income tax expense recognized in 2021 could be different from the forecasted amount used to estimate the incomenine months ended September 30, 2021.

Income tax expense for the three months ended ~~March 31, 2021.~~

~~Income tax benefit for the three months ended March 31,~~September 30, 2021 was ~~$1.4~~$2.5 million, resulting in an effective tax rate of ~~64.5%~~27.4%. Income tax benefit for the three months ended ~~March 31,~~September 30, 2020 was ~~$263,000,~~$1.5 million resulting in an effective tax rate of ~~0.1%~~(29.9)%. Income tax expense for the nine months ended September 30, 2021 was $1.3 million, resulting in an effective tax rate of 43.2%. Income tax expense for the nine months ended September 30, 2020 was $542,000, resulting in an effective tax rate of (0.2)%. The increase in our effective tax rate for the three and nine months ended ~~March 31,~~September 30, 2021 compared to the three and nine months ended ~~March 31,~~September 30, 2020 was primarily due to non-deductible goodwill impairment charges incurred during the ~~three~~nine months ended ~~March 31,~~September 30, 2020, and lower pre-tax earnings, excluding impairments, for the ~~three~~nine months ended ~~March 31,~~September 30, 2021, which resulted in aincome tax expense from the year-to-date earnings of our foreign operations, partially offset by an income tax benefit from the year-to-date loss of our ~~US operations, partially offset by foreign tax expense from the year-to-date earning of our foreign~~U.S. operations.

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Gross unrecognized tax benefits, included in Other long-term liabilities in the consolidated balance sheets, were ~~$252,000~~$277,000 and $239,000 as of ~~March 31,~~September 30, 2021 and December 31, 2020, respectively. The gross unrecognized tax benefits, if recognized by the Company, will result in a reduction of approximately ~~$252,000~~$277,000 to the provision for income taxes. We do not anticipate that the amount of existing unrecognized tax benefits will significantly increase or decrease within the next 12 months. Accrued interest and penalties related to unrecognized tax benefits are recorded in Interest expense and Selling, general and administrative expenses, respectively. The total accrued interest related to unrecognized tax benefits as of ~~March 31,~~September 30, 2021 and December 31, 2020 were not significant. There is 0 accrual for penalties.

The Company files income tax returns in the U.S. federal and various state, local and foreign jurisdictions. The Company’s U.S. federal income tax returns are subject to examination by the Internal Revenue Service for tax years beginning in 2017. For tax years beginning in 2016, our state tax returns are subject to examination by state tax authorities. Stablex Canada, Inc. is currently under examination by the Canadian Revenue Agency for years 2018 through 2020. Tax years 2016 through 2020 remain subject to examination in our significant foreign jurisdictions. The Company does not anticipate any material change as a result of any current examinations in progress.

NOTE 14. ~~LOSS~~EARNINGS (LOSS) PER SHARE


	Three Months Ended March 31,								Three Months Ended September 30,
	2021				2020				2021				2020
$s and shares in thousands, except per share amounts	Basic		Diluted		Basic		Diluted		Basic		Diluted		Basic		Diluted
Net loss	$	(796)	$	(796)	$	(298,086)	$	(298,086)
Net income									$	6,732	$	6,732	$	6,319	$	6,319
Weighted average basic shares outstanding		31,104		31,104		31,305		31,305		31,151		31,151		31,069		31,069

Dilutive effect of share-based awards and warrants				—				—				249				255
Weighted average diluted shares outstanding				31,104				31,305				31,400				31,324

Loss per share	$	(0.03)	$	(0.03)	$	(9.52)	$	(9.52)
Earnings per share									$	0.22	$	0.21	$	0.20	$	0.20
Anti-dilutive shares excluded from calculation				4,369				4,131				4,404				4,233

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	Nine Months Ended September 30,
	2021				2020
$s and shares in thousands, except per share amounts	Basic		Diluted		Basic		Diluted
Net income (loss)	$	1,773	$	1,773	$	(296,950)	$	(296,950)
Weighted average basic shares outstanding		31,131		31,131		31,142		31,142

Dilutive effect of share-based awards				246				—
Weighted average diluted shares outstanding				31,377				31,142

Earnings (loss) per share	$	0.06	$	0.06	$	(9.54)	$	(9.54)
Anti-dilutive shares excluded from calculation				4,333				4,208

NOTE 15. EQUITY

Stock Repurchase Program

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

Omnibus Incentive Plan

On May 27, 2015, the stockholders of Predecessor US Ecology approved the Omnibus Incentive Plan (as amended, “Pre-Merger Omnibus Plan”), which was approved by Predecessor US Ecology’s Board of Directors on April 7, 2015. In connection with the closing of the NRC Merger, the Company assumed the Pre-Merger Omnibus Plan, amended and restated such plan and renamed it the Amended and Restated US Ecology, Inc. Omnibus Incentive Plan (the “Omnibus Plan”) for the purpose of issuing replacement awards to award recipients under the Omnibus Plan pursuant to the NRC Merger Agreement and for the issuance of additional awards in the future.

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

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appreciation rights, restricted stock units, performance stock units and other share-based awards or cash awards to employees, consultants and non-employee directors.

The Omnibus Plan expires on ~~April 7, 2025~~March 31, 2031 and authorizes ~~1,500,000~~3,272,000 shares of common stock for grant over the life of the Omnibus Plan. As of ~~March 31,~~September 30, 2021, ~~260,273~~2,014,301 shares of common stock remain available for grant under the Omnibus Plan.

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

In addition, in connection with the closing of the NRC Merger, the Company assumed the NRC Group Holdings Corp. 2018 Equity Incentive Plan previously maintained by NRC by adopting the Amended and Restated US Ecology, Inc. 2018

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Equity and Incentive Compensation Plan solely for the purpose of issuing replacement awards to award recipients thereunder pursuant to the NRC Merger Agreement, and no future grants may be made under such plan.

~~PSUs, RSUs~~Performance Share Units (“PSUs”), Restricted Stock and Restricted Stock Units (“RSUs”)

A summary of our PSU, restricted stock and RSU activity for the ~~three~~nine months ended ~~March 31,~~September 30, 2021 is as follows:


	PSUs			Restricted Stock			RSUs			PSUs			Restricted Stock			RSUs
		Weighted			Weighted			Weighted			Weighted			Weighted			Weighted
		Average			Average			Average			Average			Average			Average
		Grant Date			Grant Date			Grant Date			Grant Date			Grant Date			Grant Date
	Shares	Fair Value		Shares	Fair Value		Shares	Fair Value		Shares	Fair Value		Shares	Fair Value		Shares	Fair Value
Outstanding as of December 31, 2020	86,070	$	49.45	72,766	$	51.47	147,243	$	39.92	86,070	$	49.45	72,766	$	51.47	147,243	$	39.92
Granted	—		—	58,700		35.33	62,759		39.33	—		—	84,800		36.49	62,759		39.33
Vested	(14,100)		63.56	(24,402)		56.99	(52,468)		39.99	(14,100)		63.56	(47,002)		47.08	(55,876)		42.03
Cancelled, expired or forfeited	—		—	—		—	(1,531)		46.38	—		—	—		—	(13,453)		44.57
Outstanding as of March 31, 2021	71,970	$	46.69	107,064	$	41.37	156,003	$	39.60
Outstanding as of September 30, 2021										71,970	$	46.69	110,564	$	41.85	140,673	$	38.38

During the ~~three~~nine months ended ~~March 31,~~September 30, 2021, 14,100 PSUs vested and PSU holders earned 0 shares of the Company’s common stock.

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Stock Options

A summary of our stock option activity for the ~~three~~nine months ended ~~March 31,~~September 30, 2021 is as follows:


		Weighted			Weighted
		Average			Average
		Exercise			Exercise
	Shares	Price		Shares	Price
Outstanding as of December 31, 2020	357,033	$	49.93	357,033	$	49.93
Granted	205,800		35.30	205,800		35.30
Outstanding as of March 31, 2021	562,833	$	44.58
Exercisable as of March 31, 2021	299,568	$	48.29
Outstanding as of September 30, 2021				562,833	$	44.58
Exercisable as of September 30, 2021				299,568	$	48.29

Treasury Stock

During the ~~three~~nine months ended ~~March 31,~~September 30, 2021, the Company repurchased 12,788 shares of the Company’s common stock in connection with the net share settlement of employee equity awards at an average cost of $36.33.

Warrants

At ~~March 31,~~September 30, 2021, there were a total of 3,772,753 warrants outstanding. Each warrant entitles the holder thereof to purchase 1 share of common stock at a price of $58.67 per share, subject to certain adjustments. The warrants may be exercised only for a whole number of shares of common stock. No fractional shares will be issued upon exercise of the warrants. The warrants will expire at 5:00 p.m. New York City time on October 17, 2023, or earlier upon redemption or liquidation. The warrants are listed on the Nasdaq Capital Market under the symbol “ECOLW”. The Company may call the warrants for redemption, in whole and not in part, at a price of $0.01 per warrant, upon not less than 30 days’ prior written notice of redemption to each warrant holder, if, and only if, the reported last sale price of ~~Common Stock~~common stock equals or exceeds $91.84 per share on each of 20 trading days within the 30 trading-day period ending on the business day prior to the date on which notice of the redemption is given and provided that there is an effective registration statement covering the shares of ~~Common Stock~~common stock issuable on exercise of the warrants and subject to the satisfaction of certain other requirements. The warrants were determined to be equity classified in accordance with ASC 815, Derivatives and Hedging and ASC 480, Distinguishing Liabilities from Equity.

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Dividends

On March 31, 2020, the Board of Directors approved a plan to suspend quarterly cash dividends, beginning with the second quarter of 2020. The Company did not pay dividends during the ~~three~~nine months ended ~~March 31,~~September 30, 2021 and paid dividends of $0.18 per common share during the ~~three~~nine months ended ~~March 31,~~September 30, 2020.

NOTE 16. COMMITMENTS AND CONTINGENCIES

Litigation and Regulatory Proceedings

In the ordinary course of business, we are involved in judicial and administrative proceedings involving federal, state, provincial or local governmental authorities, including regulatory agencies that oversee and enforce compliance with permits. Fines or penalties may be assessed by our regulators for non-compliance. Actions may also be brought by individuals or groups in connection with permitting of planned facilities, modification or alleged violations of existing permits, or alleged damages suffered from exposure to hazardous substances purportedly released from our operated sites, as well as other litigation. We maintain insurance intended to cover property and damage claims asserted as a result of our operations. Periodically, management reviews and may establish reserves for legal and administrative matters, or other fees expected to be incurred in relation to these matters.

In December 2010, National Response Corporation, a subsidiary of NRC acquired by the Company in the NRC Merger, was named as one of many “Dispersant Defendants” in multi-district litigation, arising out of the explosion of the BP

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Deepwater Horizon (“BP”) oil rig, filed in the U.S. District Court for the Eastern District of Louisiana (“In re Deepwater Horizon” or the “MDL”). The claims against National Response Corporation, and other “Dispersant Defendants,” were brought by workers and others who alleged injury arising from post-explosion clean–up efforts, including particularly the use of certain chemical dispersants. In January 2013, the Court approved a Medical Benefits Class Action Settlement, which, among other things, provided for a “class wide” settlement as well as a release of claims against Dispersant Defendants, including National Response Corporation. Further, National Response Corporation successfully moved the court to dismiss all claims against it based on derivative immunity, as it was acting at the direction of the U.S. Government. In early 2018, BP began asserting an alleged contractual right of indemnity against National Response Corporation and others in post-settlement lawsuits brought by persons who had either chosen not to participate in the class-wide agreement or whose injuries were allegedly manifest after the period covered by the claim submission process. The Company advised BP that it considers the attempt to bring National Response Corporation back into previously settled litigation to be improper and moved for a declaratory judgment that it owes no indemnity or contribution to BP, raising various arguments, including BP’s own actions and conduct over the preceding nine years with respect to these claims (including its failure to seek indemnity) and the resultant prejudice to National Response Corporation, BP’s waiver of any indemnity, and the court’s prior finding that National Response Corporation is entitled to derivative immunity. In response, BP asserted counterclaims against National Response Corporation for a declaratory judgment that National Response Corporation must indemnify BP under certain circumstances and for unjust enrichment. National Response Corporation successfully moved to dismiss the unjust enrichment claim. The parties filed simultaneous judgment on the pleadings briefs in February 2020, and all oppositions were filed on March 16, 2020. On May 4, 2020, the court found in favor of National Response Corporation, and held that the Company is not liable to BP or any back end litigation plaintiffs for any damages related to the Deepwater Horizon oil spill. BP timely appealed the ruling on June 11, 2020. The Company is currently unable to estimate the range of possible losses associated with this proceeding. However, the Company also believes that, were it deemed to have liability arising out of or related to BP’s indemnity claims, such liability would be covered by an indemnity by SEACOR Holdings Inc., the former owner of National Response Corporation, in favor of National Response Corporation and its affiliates.

On November 17, 2018, an explosion occurred at our Grand View, Idaho facility, resulting in 1 employee fatality and injuries to other employees. The incident severely damaged the facility’s primary waste-treatment building as well as surrounding waste handling, waste storage, maintenance and administrative support structures, resulting in the closure of the entire facility that remained in effect through January 2019. In addition to initiating and conducting our own investigation into the incident, we fully cooperated with the Idaho Department of Environmental Quality, the U.S. Environmental Protection Agency and the Occupational Safety and Health Administration (“OSHA”) to support their

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comprehensive and independent investigations of the incident. On January 10, 2020, we entered into a settlement agreement with OSHA settling a complaint made by OSHA relating to the incident for $50,000. On January 28, 2020, the Occupational Safety and Health Review Commission issued an order terminating the proceeding relating to such OSHA complaint. We maintain workers’ compensation insurance, business interruption insurance and liability insurance for personal injury, property and casualty damage. We believe that any potential third-party claims associated with the explosion in excess of our deductibles are expected to be resolved primarily through our insurance policies. Although we carry business interruption insurance, a disruption of our business caused by a casualty event, including the full and partial closure of our Grand View, Idaho facility, may result in the loss of business, profits or customers during the time of such closure. Accordingly, our insurance policies may not fully compensate us for these losses. In November 2020, we commenced a lawsuit against the generator and broker of the waste, the treatment of which we believe contributed to the Grand View explosion, seeking damages in connection with the losses suffered as a result of the incident. The Company is actively working with its insurance companies on comprehensive property and business interruption insurance claims related to the incident at our Grand View, Idaho facility.

In September 2021, Robert Dell, a Marine Technician for NRC from June 2021 to September 2021, filed a class action complaint against US Ecology in the Alameda Superior Court for the State of California (Robert Dell et. al. v. US Ecology Illinois, Inc., US Ecology, Inc., and US Ecology Vernon, Inc.) alleging the failure by the defendants to pay wages and/or overtime, failure to provide accurate itemized wage statements, and failure to provide meal and rest breaks as required by California law. Further, Mr. Dell has put the Labor & Workforce Development Agency on notice in an effort to exhaust administrative remedies and enable him to bring an additional claim under the California Labor Code Private Attorneys General Act, which permits an employee to assert a claim for violations of certain California Labor Code provisions on behalf of all aggrieved employees to recover statutory penalties. Given the recency of the filing, the Company has not yet filed a response to Mr. Dell’s complaint. The Company believes that Mr. Dell’s claims lack merit and intends to vigorously defend this action. The Company is currently unable to estimate the range of possible losses associated with this proceeding.

Other than as described ~~above, during the period covered by this Quarterly Report on Form 10-Q,~~herein, we ~~have~~are not ~~been~~currently a party to any material pending legal ~~proceedings.~~proceedings and are not aware of any other claims that could, individually or in the aggregate, have a materially adverse effect on our financial position, results of operations or cash flows. The decision to accrue costs or write-off assets is based on the pertinent facts and our evaluation of present circumstances.

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NOTE 17. OPERATING SEGMENTS

Financial Information by Segment

Effective in the fourth quarter of 2020, we made changes to the manner in which we manage our business, make operating decisions and assess our performance. The energy waste business that was acquired through the NRC Merger now comprises our Energy Waste segment. Prior to this change, the energy waste business was included in the Waste Solutions segment (formerly “Environmental Services”). Throughout this Quarterly Report on Form 10-Q, all periods presented have been recast to reflect these changes. Under our new structure our operations are now managed in 3 reportable segments reflecting our internal management reporting structure and nature of services offered as follows:

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

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

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

The operations not managed through our ~~three~~3 reportable segments are recorded as “Corporate.” Corporate selling, general and administrative expenses include typical corporate items of a general nature such as certain labor, information technology, legal, accounting and other expenses not associated with a specific reportable segment. Income taxes are assigned to Corporate, but all other items are included in the segment where they originated. Inter-company transactions have been eliminated from the segment information and are not significant between segments.

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Summarized financial information of our reportable segments is as follows:


	Three Months Ended March 31, 2021										Three Months Ended September 30, 2021
	Waste		Field		Energy						Waste		Field		Energy
$s in thousands	Solutions		Services		Waste		Corporate		Total		Solutions		Services		Waste		Corporate		Total
Revenue	$	104,142	$	118,249	$	6,228	$	—	$	228,619	$	115,201	$	131,582	$	10,399	$	—	$	257,182
Depreciation, amortization and accretion	$	11,431	$	11,371	$	4,965	$	784	$	28,551	$	10,500	$	11,062	$	5,334	$	786	$	27,682
Capital expenditures	$	8,145	$	931	$	283	$	255	$	9,614	$	10,693	$	6,221	$	481	$	1,521	$	18,916
Total assets	$	789,277	$	753,209	$	228,689	$	51,977	$	1,823,152	$	786,686	$	749,617	$	215,997	$	66,623	$	1,818,923

															��
	Three Months Ended March 31, 2020										Three Months Ended September 30, 2020
	Waste		Field		Energy						Waste		Field		Energy
$s in thousands	Solutions		Services		Waste		Corporate		Total		Solutions		Services		Waste		Corporate		Total
Revenue	$	109,392	$	113,994	$	17,334	$	—	$	240,720	$	107,249	$	125,715	$	5,178	$	—	$	238,142
Depreciation, amortization and accretion	$	10,419	$	12,015	$	5,613	$	638	$	28,685	$	10,377	$	12,129	$	5,566	$	820	$	28,892
Capital expenditures	$	10,141	$	5,289	$	1,391	$	2,310	$	19,131	$	5,189	$	2,531	$	1,270	$	177	$	9,167
Total assets	$	746,862	$	878,774	$	250,409	$	102,594	$	1,978,639	$	754,235	$	859,511	$	234,992	$	97,557	$	1,946,295


	Nine Months Ended September 30, 2021
	Waste		Field		Energy
$s in thousands	Solutions		Services		Waste		Corporate		Total
Revenue	$	327,708	$	374,491	$	24,375	$	—	$	726,574
Depreciation, amortization and accretion	$	32,905	$	33,794	$	15,108	$	2,360	$	84,167
Capital expenditures	$	31,553	$	10,426	$	1,233	$	2,135	$	45,347
Total assets	$	786,686	$	749,617	$	215,997	$	66,623	$	1,818,923


	Nine Months Ended September 30, 2020
	Waste		Field		Energy
$s in thousands	Solutions		Services		Waste		Corporate		Total
Revenue	$	319,684	$	343,217	$	29,879	$	—	$	692,780
Depreciation, amortization and accretion	$	31,119	$	36,420	$	16,729	$	2,187	$	86,455
Capital expenditures	$	22,343	$	12,997	$	5,719	$	4,065	$	45,124
Total assets	$	754,235	$	859,511	$	234,992	$	97,557	$	1,946,295

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”)

Management uses Adjusted EBITDA as a financial measure to assess segment performance. Adjusted EBITDA is defined as net income before interest expense, interest income, income tax expense, depreciation, amortization, share-based compensation, accretion of closure and post-closure liabilities, foreign currency gain/loss, non-cash goodwill impairment charges, business development and integration expenses and other income/expense. Adjusted EBITDA is a complement to results provided in accordance with GAAP and we believe that such information provides additional useful information to analysts, stockholders and other users to understand the Company’s operating performance. Since Adjusted EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying calculations, Adjusted

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EBITDA as presented may not be comparable to other similarly titled measures of other companies. Items excluded from Adjusted EBITDA are significant components in understanding and assessing our financial performance. Adjusted EBITDA should not be considered in isolation or as an alternative to, or substitute for, net income, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or a substitute for analyzing our results as reported under GAAP. Some of the limitations are:

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

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

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

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

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

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

A reconciliation of Net income (loss) to Adjusted EBITDA is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
$s in thousands	2021		2020		2021		2020
Net income (loss)	$	6,732	$	6,319	$	1,773	$	(296,950)
Income tax expense (benefit)		2,535		(1,456)		1,348		542
Interest expense		7,144		7,964		22,022		25,127
Interest income		(485)		(9)		(1,148)		(251)
Foreign currency (gain) loss		(341)		421		385		155
Other income		(114)		(86)		(4,020)		(382)
Goodwill impairment charges		—		—		—		300,300
Depreciation and amortization of plant and equipment		17,898		18,435		54,095		54,831
Amortization of intangible assets		8,586		9,178		26,501		27,812
Share-based compensation		1,713		1,773		5,748		4,861
Accretion and non-cash adjustment of closure & post-closure liabilities		1,198		1,279		3,571		3,812
Business development and integration expenses		523		1,627		2,528		7,507
Adjusted EBITDA	$	45,389	$	45,445	$	112,803	$	127,364

Adjusted EBITDA, by operating segment, is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
$s in thousands	2021		2020		2021		2020
Waste Solutions	$	43,439	$	45,556	$	123,528	$	134,540
Field Services		21,507		24,362		55,810		57,869
Energy Waste		3,497		90		7,063		4,163
Corporate		(23,054)		(24,563)		(73,598)		(69,208)
Total	$	45,389	$	45,445	$	112,803	$	127,364

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~~A reconciliation of Net loss to Adjusted EBITDA is as follows:~~

Three Months Ended March 31,
$s in thousands

2021

2020
Net loss

$
(796)

$
(298,086)
Income tax benefit

(1,444)

(263)
Interest expense

7,357

9,310
Interest income

(273)

(89)
Foreign currency loss (gain)

371

(937)
Other income

(3,710)

(171)
Goodwill impairment charges

—

300,300
Depreciation and amortization of plant and equipment

18,234

17,978
Amortization of intangible assets

9,135

9,441
Share-based compensation

1,928

1,564
Accretion and non-cash adjustment of closure & post-closure liabilities

1,182

1,266
Business development and integration expenses

1,220

2,907
Adjusted EBITDA

$
33,204

$
43,220

~~Adjusted EBITDA, by operating segment, is as follows:~~

Three Months Ended March 31,
$s in thousands

2021

2020
Waste Solutions

$
40,136

$
42,922
Field Services

17,137

17,465
Energy Waste

1,258

5,205
Corporate

(25,327)

(22,372)
Total

$
33,204

$
43,220

Property and Equipment and Intangible Assets Outside of the United States

We provide services primarily in the United States, Canada and the EMEA region. Long-lived assets, comprised of property and equipment and intangible assets net of accumulated depreciation and amortization, by geographic location are as follows:


	March 31,		December 31,		September 30,		December 31,
$s in thousands	2021		2020		2021		2020
United States	$	866,405	$	882,639	$	856,670	$	882,639
Canada		68,799		68,623		65,616		68,623
EMEA		17,307		18,042		15,946		18,042
Other (1)		10,945		11,321		10,124		11,321
Total long-lived assets	$	963,456	$	980,625
Total long-lived assets, net					$	948,356	$	980,625

(1)	Includes Mexico, Asia Pacific, and Latin America and Caribbean geographical regions.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

Results of Review of Interim Financial Information

We have reviewed the accompanying consolidated balance sheet of US Ecology, Inc. and subsidiaries (the “Company”) as of ~~March 31,~~September 30, 2021, the related consolidated statements of operations, comprehensive income, and stockholders’ equity for the three-month and nine-month periods ended September 30, 2021 and 2020, and of cash flows for the ~~three-month~~nine-month periods ended ~~March 31,~~September 30, 2021 and 2020, and the related notes (collectively referred to as the “interim financial information”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2020, and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated February 26, 2021, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2020, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Deloitte & Touche LLP

Boise, Idaho

~~May 3,~~November 5, 2021

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information contained in this section should be read in conjunction with our unaudited consolidated financial statements and related notes thereto appearing elsewhere in this quarterly report on Form 10-Q. In this report words such as “we,” “us,” “our,” “US Ecology” and “the Company” refer to US Ecology, Inc. and its subsidiaries.

OVERVIEW

US Ecology is a leading provider of environmental services to commercial and governmental entities. The Company addresses the complex waste management and response needs of its customers, offering treatment, disposal and recycling of hazardous, non-hazardous and radioactive waste, leading emergency response and standby services, and a wide range of complementary field and industrial services. US Ecology’s focus on safety, environmental compliance and best-in-class customer service enables us to effectively meet the needs of our customers and to build long-lasting relationships.

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

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

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

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

The composition of the Waste Solutions segment T&D revenues by waste generator industry for the three and nine months ended ~~March 31,~~September 30, 2021 and 2020 were as follows:


	% of Treatment and Disposal Revenue (1) for the		% of Treatment and Disposal Revenue (1) for the
	Three Months Ended March 31,		Three Months Ended September 30,
Generator Industry	2021	2020	2021	2020
Chemical Manufacturing	19%	20%	15%	19%
Metal Manufacturing	18%	16%	14%	15%
General Manufacturing			14%	11%
Broker / TSDF	12%	13%	12%	11%
General Manufacturing	11%	12%
Government	7%	7%	8%	9%
Refining	6%	6%	7%	5%
Waste Management & Remediation			5%	3%
Utilities	4%	3%	4%	8%
Waste Management & Remediation	4%	3%
Transportation	3%	6%	3%	3%
Mining, Exploration and Production	3%	2%	3%	2%
Other (2)	13%	12%	15%	14%


	% of Treatment and Disposal Revenue (1) for the
	Nine Months Ended September 30,
Generator Industry	2021	2020
Chemical Manufacturing	17%	20%
Metal Manufacturing	16%	15%
Broker / TSDF	12%	12%
General Manufacturing	12%	11%
Government	8%	8%
Refining	6%	6%
Utilities	4%	6%
Transportation	4%	4%
Waste Management & Remediation	4%	3%
Mining, Exploration and Production	3%	2%
Other (2)	14%	13%

(1)	Excludes all transportation service revenue.

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

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

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

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For the three months ended ~~March 31,~~September 30, 2021, Base Business revenue ~~decreased 3%~~increased 11% compared to the three months ended ~~March 31,~~September 30, 2020. For the three months ended ~~March 31,~~September 30, 2021, approximately 76% of our total T&D revenue was derived from our Base Business, up from ~~75%~~70% for the three months ended ~~March 31,~~September 30, 2020. For the nine months ended September 30, 2021, Base Business revenue increased 5% compared to the nine months ended September 30, 2020. For the nine months ended September 30, 2021, approximately 76% of our total T&D revenue was derived from our Base Business, up from 72% for the nine months ended September 30, 2020. Our business is highly competitive and no assurance can be given that we will maintain these revenue levels or increase our market share.

A significant portion of our disposal revenue is attributable to discrete Event Business projects which vary widely in size, duration and unit pricing. For the three months ended ~~March 31,~~September 30, 2021, approximately 24% of our total T&D revenue was derived from Event Business projects, down from ~~25%~~30% for the three months ended ~~March 31,~~September 30, 2020. For the three months ended ~~March 31,~~September 30, 2021, Event Business revenue decreased 9%18% compared to the three months ended ~~March 31,~~September 30, 2020. For the nine months ended September 30, 2021, approximately 24% of our total T&D revenue was derived from Event Business projects, down from 28% for the nine months ended September 30, 2020. For the nine months ended September 30, 2021, Event Business revenue decreased 14% compared to the nine months ended September 30, 2020. The one-time nature of Event Business, diverse spectrum of waste types received and widely varying unit pricing necessarily creates variability in revenue and earnings. This variability may be influenced by general and industry-specific economic conditions, funding availability, changes in laws and regulations, government enforcement actions or court orders, public controversy, litigation, weather, commercial real estate, closed military bases and other project timing, government appropriation and funding cycles and other factors. The types and amounts of waste received from Base Business also vary from quarter to quarter.

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

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

COVID-19 PANDEMIC UPDATE

The COVID-19 pandemic continued to affect our business through the ~~first~~third quarter of 2021. The impact of temporary closures and staff reductions by industrial facilities has ~~yet~~resulted in delays in mobilization and in regulatory approvals at our customers’ sites. Although we have seen evidence of volume recovery in the first nine months of 2021 as the economy continues to ~~be fully assessed~~rebound and ~~understood. We~~industrial facilities return to pre-pandemic levels of production, we have experienced ~~lower waste volumes resulting from these closures, which we expect to continue until industrial facilities resume normal levels of production.~~cost and inflationary pressures in areas such as labor and supplies. We have also experienced, and expect to continue to experience, delays and deferments of ~~industrial cleaning services and~~ some of our field services as our customers continue to limit ~~on site~~on-site visitation and delay noncritical services based on business conditions. ~~However,~~While uncertainty caused by the COVID-19 pandemic remains, including the spread of new variants of the virus and government and private sector responses to prevent and manage the disease, we expect ~~the Company’s services-based business~~ to ~~remain stable as we are experiencing growth~~continue to see improvements in our ~~small quantity generation services~~business as vaccines become more widely available and ~~our emergency response business has seen an increase in COVID-19 decontamination projects.~~vaccination rates increase.

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~~We expect that~~The impact of the COVID-19 pandemic will continue to affect our results of operations for the foreseeable future. See ~~“Part II, Item~~“Item 1A – Risk Factors” ~~in this Quarterly~~of the Company’s Annual Report on Form ~~10-Q~~10-K for the fiscal year ended December 31, 2020.

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RESULTS OF OPERATIONS

THREE MONTHS ENDED ~~MARCH 31,~~SEPTEMBER 30, 2021 COMPARED TO THREE MONTHS ENDED ~~MARCH 31,~~SEPTEMBER 30, 2020

Operating results and percentage of revenues were as follows:


	Three Months Ended March 31,								2021 vs. 2020				Three Months Ended September 30,								2021 vs. 2020
$s in thousands	2021		%		2020		%		$ Change		% Change		2021		%		2020		%		$ Change		% Change
Revenue
Waste Solutions	$	104,142	46	%	$	109,392	45	%	$	(5,250)	(5)	%	$	115,201	45	%	$	107,249	45	%	$	7,952	7	%
Field Services		118,249	52	%		113,994	47	%		4,255	4	%		131,582	51	%		125,715	53	%		5,867	5	%
Energy Waste		6,228	2	%		17,334	8	%		(11,106)	(64)	%		10,399	4	%		5,178	2	%		5,221	101	%
Total	$	228,619	100	%	$	240,720	100	%	$	(12,101)	(5)	%	$	257,182	100	%	$	238,142	100	%	$	19,040	8	%
Gross Profit
Waste Solutions	$	34,950	34	%	$	39,309	36	%	$	(4,359)	(11)	%	$	39,548	34	%	$	41,518	39	%	$	(1,970)	(5)	%
Field Services		18,306	15	%		18,276	16	%		30	0	%		22,164	17	%		24,938	20	%		(2,774)	(11)	%
Energy Waste		(383)	(6)	%		4,856	28	%		(5,239)	(108)	%		1,442	14	%		(2,163)	(42)	%		3,605	(167)	%
Total	$	52,873	23	%	$	62,441	26	%	$	(9,568)	(15)	%	$	63,154	25	%	$	64,293	27	%	$	(1,139)	(2)	%
Selling, General & Administrative Expenses
Waste Solutions	$	6,301	6	%	$	6,889	6	%	$	(588)	(9)	%	$	6,672	6	%	$	6,407	6	%	$	265	4	%
Field Services		12,725	11	%		12,853	11	%		(128)	(1)	%		11,761	9	%		13,637	11	%		(1,876)	(14)	%
Energy Waste		3,343	54	%		5,288	31	%		(1,945)	(37)	%		3,301	32	%		3,277	63	%		24	1	%
Corporate		28,999	n/m			27,347	n/m			1,652	6	%		25,949	n/m			27,819	n/m			(1,870)	(7)	%
Total	$	51,368	22	%	$	52,377	22	%	$	(1,009)	(2)	%	$	47,683	19	%	$	51,140	21	%	$	(3,457)	(7)	%
Adjusted EBITDA
Waste Solutions	$	40,136	39	%	$	42,922	39	%	$	(2,786)	(6)	%	$	43,439	38	%	$	45,556	42	%	$	(2,117)	(5)	%
Field Services		17,137	14	%		17,465	15	%		(328)	(2)	%		21,507	16	%		24,362	19	%		(2,855)	(12)	%
Energy Waste		1,258	20	%		5,205	30	%		(3,947)	(76)	%		3,497	34	%		90	2	%		3,407	3,786	%
Corporate		(25,327)	n/m			(22,372)	n/m			(2,955)	13	%		(23,054)	n/m			(24,563)	n/m			1,509	(6)	%
Total	$	33,204	15	%	$	43,220	18	%	$	(10,016)	(23)	%	$	45,389	18	%	$	45,445	19	%	$	(56)	(0)	%

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”)


	Three Months Ended March 31,				2021 vs. 2020				Three Months Ended September 30,				2021 vs. 2020
$s in thousands	2021		2020		$ Change		% Change		2021		2020		$ Change		% Change
Net loss	$	(796)	$	(298,086)	$	297,290	(100)	%
Income tax benefit		(1,444)		(263)		(1,181)	449	%
Net income									$	6,732	$	6,319	$	413	7	%
Income tax expense (benefit)										2,535		(1,456)		3,991	(274)	%
Interest expense		7,357		9,310		(1,953)	(21)	%		7,144		7,964		(820)	(10)	%
Interest income		(273)		(89)		(184)	207	%		(485)		(9)		(476)	5,289	%
Foreign currency loss (gain)		371		(937)		1,308	(140)	%
Foreign currency (gain) loss										(341)		421		(762)	(181)	%
Other income		(3,710)		(171)		(3,539)	2,070	%		(114)		(86)		(28)	33	%
Goodwill impairment charges		—		300,300		(300,300)	(100)	%
Depreciation and amortization of plant and equipment		18,234		17,978		256	1	%		17,898		18,435		(537)	(3)	%
Amortization of intangible assets		9,135		9,441		(306)	(3)	%		8,586		9,178		(592)	(6)	%
Share-based compensation		1,928		1,564		364	23	%		1,713		1,773		(60)	(3)	%
Accretion and non-cash adjustment of closure & post-closure liabilities		1,182		1,266		(84)	(7)	%		1,198		1,279		(81)	(6)	%
Business development and integration expenses		1,220		2,907		(1,687)	(58)	%		523		1,627		(1,104)	(68)	%
Adjusted EBITDA	$	33,204	$	43,220	$	(10,016)	(23)	%	$	45,389	$	45,445	$	(56)	(0)	%

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

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not be considered in isolation or as an alternative to, or substitute for,

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net income, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity.

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

●

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

●

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

●

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

●

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

●

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

●

Adjusted EBITDA does not reflect our business development and integration expenses, which may vary significantly from quarter to quarter.

Revenue

Total revenue increased 8% to $257.2 million for the third quarter of 2021 compared with $238.1 million for the third quarter of 2020.

Waste Solutions

Waste Solutions segment revenue increased 7% to $115.2 million for the third quarter of 2021, compared to $107.2 million for the third quarter of 2020. T&D revenue increased 5% compared to the third quarter of 2020, primarily as a result of an 11% increase in Base Business revenue, partially offset by an 18% decrease in project-based Event Business revenue. Transportation and logistics service revenue increased 20% compared to the third quarter of 2020, primarily reflecting Event Business projects utilizing more of the Company’s transportation and logistics services. Total tons of waste disposed of or processed across all of our facilities increased approximately 9% for the third quarter of 2021 compared to third quarter of 2020. Tons of waste disposed of or processed at our landfills increased approximately 13% for the third quarter of 2021 compared to the third quarter of 2020.

T&D revenue from recurring Base Business waste generators increased 11% for the third quarter of 2021 compared to the third quarter of 2020 and comprised 76% of total T&D revenue for the third quarter of 2021. Comparing the third quarter of 2021 to the third quarter of 2020, increases in Base Business T&D revenue primarily from the metal manufacturing, chemical manufacturing, refining, mining, exploration & production and transportation industry groups were partially offset by a decrease in Base Business T&D revenue primarily from the utilities industry group.

T&D revenue from Event Business waste generators decreased 18% for the third quarter of 2021 compared to the third quarter of 2020 and comprised 24% of total T&D revenue for the third quarter of 2021. Comparing the third quarter of 2021 to the third quarter of 2020, decreases in Event Business T&D revenue primarily from the chemical manufacturing, utilities, metal manufacturing and government industry groups were partially offset by increases in Event Business T&D revenue from the Other, waste management & remediation and general manufacturing industry groups.

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


		Treatment and Disposal Revenue Growth
		Three Months Ended September 30, 2021 vs.
		Three Months Ended September 30, 2020
Mining, Exploration & Production		52%
Waste Management & Remediation		44%
Refining		42%
Other		31%
General Manufacturing		22%
Transportation		11%
Broker / TSDF		5%
Metal Manufacturing		-3%
Government		-12%
Chemical Manufacturing		-20%
Utilities		-57%

Field Services

Field Services segment revenue increased 5% to $131.6 million for the third quarter of 2021 compared with $125.7 million for the third quarter of 2020. The increase in Field Services segment revenue is primarily attributable to higher revenues from our Remediation, Treatment & Disposal, Small Quantity Generation and Industrial Services business lines, partially offset by lower revenues from our Transportation and Logistics and Emergency Response business lines.

Energy Waste

Energy Waste segment revenue increased 101% to $10.4 million for the third quarter of 2021 compared with $5.2 million for the third quarter of 2020, primarily attributable to a partial recovery in energy markets and increases in energy-related exploration and production activities in the markets we serve.

Gross Profit

Total gross profit decreased 2% to $63.2 million for the third quarter of 2021, down from $64.3 million for the third quarter of 2020. Total gross margin was 25% for the third quarter of 2021 compared with 27% for the third quarter of 2020.

Waste Solutions

Waste Solutions segment gross profit decreased 5% to $39.5 million for the third quarter of 2021, down from $41.5 million for the third quarter of 2020. Total segment gross margin for the third quarter of 2021 was 34% compared with 39% for the third quarter of 2020. The decrease in segment gross margin was primarily attributable to a less favorable service mix and higher supplies and waste handling expenses, partially offset by higher volumes, in the third quarter of 2021 compared with the third quarter of 2020. T&D gross margin was 40% for the third quarter of 2021 compared with 43% for the third quarter of 2020.

Field Services

Field Services segment gross profit decreased 11% to $22.2 million for the third quarter of 2021, down from $24.9 million for the third quarter of 2020. Total segment gross margin was 17% for the third quarter of 2021 compared with 20% for the third quarter of 2020. The decrease in segment gross margin was primarily attributable to higher subcontracted services and supplies expenses and a less favorable service mix in the third quarter of 2021 compared with the third quarter of 2020.

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Energy Waste

Energy Waste segment gross profit was $1.4 million for the third quarter of 2021 compared to a gross loss of $2.2 million for the third quarter of 2020. Total segment gross margin was 14% for the third quarter of 2021 compared with (42)% for the third quarter of 2020. The increase in segment gross margin was primarily attributable to higher revenues combined with improved operating leverage due to our restructuring activities undertaken in 2020 in response to reduced energy-related exploration and production investments in the markets we serve.

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

Total SG&A decreased 7% to $47.7 million, or 19% of total revenue, for the third quarter of 2021, down from $51.1 million, or 21% of total revenue, for the third quarter of 2020.

Waste Solutions

Waste Solutions segment SG&A increased 4% to $6.7 million, or 6% of segment revenue, for the third quarter of 2021 compared with $6.4 million, or 6% of segment revenue, for the third quarter of 2020.

Field Services

Field Services segment SG&A decreased 14% to $11.8 million, or 9% of segment revenue, for the third quarter of 2021 compared with $13.6 million, or 11% of segment revenue, for the third quarter of 2020. The decrease in segment SG&A was primarily attributable to lower business development and integration expenses, lower insurance costs, lower intangible asset amortization expense, higher gains on disposition of assets and lower employee labor and benefits costs, partially offset by higher bad debt expenses.

Energy Waste

Energy Waste segment SG&A increased 1% to $3.3 million, or 32% of segment revenue, for the third quarter of 2021 compared with $3.3 million, or 63% of segment revenue, for the third quarter of 2020. The decrease in segment SG&A as a percentage of revenue was primarily attributable to higher revenues and improved operating leverage due to our restructuring activities undertaken in 2020 in response to reduced energy-related exploration and production investments in the markets we serve.

Corporate

Corporate SG&A decreased 7% to $25.9 million, or 10% of total revenue, for the third quarter of 2021 compared with $27.8 million, or 12% of total revenue, for the third quarter of 2020. The decrease in Corporate SG&A primarily reflects lower employee incentive compensation costs, lower insurance costs and lower business development and integration expenses, partially offset by higher employee labor and benefits costs and higher travel-related expenses in the third quarter of 2021 compared to the third quarter of 2020.

Components of Adjusted EBITDA

Income tax expense (benefit)

Income tax expense for the third quarter of 2021 was $2.5 million, resulting in a consolidated effective income tax rate of 27.4%. Income tax benefit for the third quarter of 2020 was $1.5 million, resulting in a consolidated effective income tax rate of (29.9)%. We used a discrete effective tax rate method to calculate taxes for the nine months ended September 30, 2021. For additional information on our consolidated effective income tax rate, see Note 13 of the Notes to Consolidated Financial Statements in “Part I, Item 1. Financial Statements (Unaudited)” of this Quarterly Report on Form 10-Q.

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Interest expense

Interest expense was $7.1 million for the third quarter of 2021 compared with $8.0 million for the third quarter of 2020. The decrease is primarily the result lower outstanding debt levels and lower interest expense amortization related to terminated swap agreements in the third quarter of 2021 compared to the third quarter of 2020.

Foreign currency (gain) loss

We recognized a $341,000 foreign currency gain for the third quarter of 2021 compared with a $421,000 foreign currency loss for the third quarter of 2020. Foreign currency gains and losses reflect changes in business activity conducted in a currency other than the U.S. dollar (“USD”), our functional currency. Additionally, we established intercompany loans with certain of our Canadian subsidiaries, whose functional currency is the Canadian dollar (“CAD”) as part of a tax and treasury management strategy allowing for repayment of third-party bank debt. These intercompany loans are payable by our Canadian subsidiaries to US Ecology in CAD requiring us to revalue the outstanding loan balance through our statements of operations based on USD/CAD currency movements from period to period. At September 30, 2021, we had $12.7 million of intercompany loans subject to currency revaluation.

Other income

Other income was $114,000 for the third quarter of 2021 compared with other income of $86,000 for the third quarter of 2020.

Depreciation and amortization of plant and equipment

Depreciation and amortization expense decreased 3% to $17.9 million for the third quarter of 2021 compared with $18.4 million for the third quarter of 2020.

Amortization of intangible assets

Intangible assets amortization expense decreased 6% to $8.6 million for the third quarter of 2021 compared with $9.2 million for the third quarter of 2020.

Share-based compensation

Share-based compensation expense decreased 3% to $1.7 million for the third quarter of 2021 compared with $1.8 million for the third quarter of 2020.

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

Accretion and non-cash adjustment of closure and post-closure liabilities decreased 6% to $1.2 million for the third quarter of 2021 compared with $1.3 million for the third quarter of 2020.

Business development and integration expenses

Business development and integration expenses decreased 68% to $523,000 in the third quarter of 2021, compared to $1.6 million in the third quarter of 2020, primarily attributable to lower NRC Merger integration expenses incurred in the third quarter of 2021 compared to the third quarter of 2020.

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NINE MONTHS ENDED SEPTEMBER 30, 2021 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2020

Operating results and percentage of revenues were as follows:


	Nine Months Ended September 30,								2021 vs. 2020
$s in thousands	2021		%		2020		%		$ Change		% Change
Revenue
Waste Solutions	$	327,708	45	%	$	319,684	46	%	$	8,024	3	%
Field Services		374,491	52	%		343,217	50	%		31,274	9	%
Energy Waste		24,375	3	%		29,879	4	%		(5,504)	(18)	%
Total	$	726,574	100	%	$	692,780	100	%	$	33,794	5	%
Gross Profit
Waste Solutions	$	110,165	34	%	$	123,042	38	%	$	(12,877)	(10)	%
Field Services		58,549	16	%		57,973	17	%		576	1	%
Energy Waste		1,866	8	%		737	2	%		1,129	153	%
Total	$	170,580	23	%	$	181,752	26	%	$	(11,172)	(6)	%
Selling, General & Administrative Expenses
Waste Solutions	$	19,743	6	%	$	19,841	6	%	$	(98)	(0)	%
Field Services		36,819	10	%		37,869	11	%		(1,050)	(3)	%
Energy Waste		9,975	41	%		13,457	45	%		(3,482)	(26)	%
Corporate		83,683	n/m			82,044	n/m			1,639	2	%
Total	$	150,220	21	%	$	153,211	22	%	$	(2,991)	(2)	%
Adjusted EBITDA
Waste Solutions	$	123,528	38	%	$	134,540	42	%	$	(11,012)	(8)	%
Field Services		55,810	15	%		57,869	17	%		(2,059)	(4)	%
Energy Waste		7,063	29	%		4,163	14	%		2,900	70	%
Corporate		(73,598)	n/m			(69,208)	n/m			(4,390)	6	%
Total	$	112,803	16	%	$	127,364	18	%	$	(14,561)	(11)	%

Adjusted EBITDA


	Nine Months Ended September 30,				2021 vs. 2020
$s in thousands	2021		2020		$ Change		% Change
Net income (loss)	$	1,773	$	(296,950)	$	298,723	(101)	%
Income tax expense		1,348		542		806	149	%
Interest expense		22,022		25,127		(3,105)	(12)	%
Interest income		(1,148)		(251)		(897)	357	%
Foreign currency loss		385		155		230	148	%
Other income		(4,020)		(382)		(3,638)	952	%
Goodwill impairment charges		—		300,300		(300,300)	(100)	%
Depreciation and amortization of plant and equipment		54,095		54,831		(736)	(1)	%
Amortization of intangible assets		26,501		27,812		(1,311)	(5)	%
Share-based compensation		5,748		4,861		887	18	%
Accretion and non-cash adjustment of closure & post-closure liabilities		3,571		3,812		(241)	(6)	%
Business development and integration expenses		2,528		7,507		(4,979)	(66)	%
Adjusted EBITDA	$	112,803	$	127,364	$	(14,561)	(11)	%

Adjusted EBITDA is a complement to results provided in accordance with GAAP and we believe that such information provides additional useful information to analysts, stockholders and other users to understand the Company’s operating performance. Since Adjusted EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying calculations, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies. Items excluded from Adjusted EBITDA are significant components in understanding and assessing our financial performance. Adjusted EBITDA should not be considered in isolation or as an alternative to, or substitute for,

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

●

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

●

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

●

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

●

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

●

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

Revenue

Total revenue ~~decreased~~increased 5% to ~~$228.6~~$726.6 million for the first ~~quarter~~nine months of 2021 compared with ~~$240.7~~$692.8 million for the first ~~quarter~~nine months of 2020.

Waste Solutions

Waste Solutions segment revenue ~~decreased 5%~~increased 3% to ~~$104.1~~$327.7 million for the first ~~quarter~~nine months of 2021, compared to ~~$109.4~~$319.7 million for the first ~~quarter~~nine months of 2020. T&D revenue ~~decreased 3%~~increased 2% compared to the first ~~quarter~~nine months of 2020, primarily as a result of a ~~3% decrease~~5% increase in Base Business revenue, ~~and~~partially offset by a 9%14% decrease in project-based Event Business revenue. Transportation and logistics service revenue ~~decreased 14%~~increased 6% compared to the first ~~quarter~~nine months of 2020, primarily reflecting Event Business projects utilizing ~~less~~more of the Company’s transportation and logistics services. Total tons of waste disposed of or processed across all of our facilities decreased ~~29%~~approximately 4% for the first ~~quarter~~nine months of 2021 compared to the first ~~quarter~~nine months of 2020. Tons of waste disposed of or processed at our landfills ~~decreased 18%~~increased approximately 5% for the first ~~quarter~~nine months of 2021 compared to the first ~~quarter~~nine months of 2020.

T&D revenue from recurring Base Business waste generators ~~decreased 3%~~increased 5% for the first ~~quarter~~nine months of 2021 compared to the first ~~quarter~~nine months of 2020 and comprised 76% of total T&D revenue for the first ~~quarter~~nine months of 2021. Comparing the first ~~quarter~~nine months of 2021 to the first ~~quarter~~nine months of 2020, increases in Base Business T&D revenue primarily from the metal manufacturing, mining, exploration & production, chemical manufacturing and general manufacturing industry groups were partially offset by decreases in Base Business T&D revenue primarily from the ~~broker/TSDF, general manufacturing, metal manufacturing~~refining and ~~transportation~~utilities industry ~~groups were partially offset by an increase in Event Business T&D revenue from the mining, exploration & production industry group.~~groups.

T&D revenue from Event Business waste generators decreased 9%14% for the first ~~quarter~~nine months of 2021 compared to the first ~~quarter~~nine months of 2020 and comprised 24% of total T&D revenue for the first ~~quarter~~nine months of 2021. Comparing the first ~~quarter~~nine months of 2021 to the first ~~quarter~~nine months of 2020, decreases in Event Business T&D revenue primarily from the ~~transportation,~~ chemical manufacturing, utilities and ~~general manufacturing~~transportation industry groups were partially offset by increases in Event Business T&D revenue primarily from the ~~metal~~Other, waste management & remediation and general manufacturing ~~and utilities~~ industry groups.

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The following table summarizes combined Base Business and Event Business T&D revenue growth, within the Waste Solutions segment, by generator industry for the first ~~quarter~~nine months of 2021 as compared to the first ~~quarter~~nine months of 2020:


		Treatment and Disposal Revenue Growth
		~~Three~~Nine Months Ended ~~March 31,~~September 30, 2021 vs.
		~~Three~~Nine Months Ended ~~March 31,~~September 30, 2020
Mining, Exploration & Production		~~79%~~
~~Utilities~~		~~34%~~77%
Waste Management & Remediation		~~24%~~50%
Other		7%17%
Metal Manufacturing		5%9%
General Manufacturing		7%
Government		~~-4%~~-1%
Broker / TSDF		~~-11%~~-1%
Refining		~~-11%~~
~~General Manufacturing~~		~~-12%~~-5%
Chemical Manufacturing		~~-12%~~-17%
Transportation		~~-53%~~-17%
Utilities		-44%

Field Services

Field Services segment revenue increased 4%9% to ~~$118.2~~$374.5 million for the first ~~quarter~~nine months of 2021 compared with ~~$114.0~~$343.2 million for the first ~~quarter~~nine months of 2020. The increase in Field Services segment revenue is primarily attributable to higher revenues from our ~~Emergency Response,~~Remediation, Small Quantity Generation, Treatment & Disposal and Total Waste Management business lines, partially offset by lower revenues from our ~~Industrial Services, Domestic Standby Services~~Transportation and Logistics, Other and Emergency Response business lines.

Energy Waste

Energy Waste segment revenue decreased ~~64%~~18% to ~~$6.2~~$24.4 million for the first ~~quarter~~nine months of 2021 compared with ~~$17.3~~$29.9 million for the first ~~quarter~~nine months of 2020, primarily attributable to declines in the energy markets and impacts from the COVID-19 pandemic.

Gross Profit

Total gross profit decreased ~~15%~~6% to ~~$52.9~~$170.6 million for the first ~~quarter~~nine months of 2021, down from ~~$62.4~~$181.8 million for the first ~~quarter~~nine months of 2020. Total gross margin was 23% for the first ~~quarter~~nine months of 2021 compared with 26% for the first ~~quarter~~nine months of 2020.

Waste Solutions

Waste Solutions segment gross profit decreased ~~11%~~10% to ~~$35.0~~$110.2 million for the first ~~quarter~~nine months of 2021, down from ~~$39.3~~$123.0 million for the first ~~quarter~~nine months of 2020. Total segment gross margin for the first ~~quarter~~nine months of 2021 was 34% compared with ~~36%~~38% for the first ~~quarter~~nine months of 2020. The decrease in segment gross margin was primarily attributable to a less favorable service mix and ~~lower volumes.~~higher supplies and waste handling expenses for the first nine months of 2021 compared to the first nine months of 2020. T&D gross margin was ~~37%~~38% for the first ~~quarter~~nine months of 2021 compared with ~~42%~~43% for the first ~~quarter~~nine months of 2020.

Field Services

Field Services segment gross profit ~~was $18.3~~increased 1% to $58.5 million for ~~both~~ the first ~~quarter~~nine months of 2021, ~~and~~up from $58.0 million for the first nine months of 2020. Total segment gross margin was ~~15%~~16% for the first ~~quarter~~nine months of 2021 compared with ~~16%~~17% for the first ~~quarter~~nine months of 2020. ~~The decrease in segment gross margin was primarily attributable to a less favorable service mix, partially offset by higher volumes.~~

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Energy Waste

Energy Waste segment gross profit ~~(loss) decreased 108%~~increased 153% to ~~$(383,000) for the first quarter of 2021, down from $4.9~~$1.9 million for the first ~~quarter~~nine months of 2021, up from $737,000 for the first nine months of 2020. Total segment gross margin was ~~(6)%~~8% for the first ~~quarter~~nine months of 2021 compared with ~~28%~~2% for the first ~~quarter~~nine months of 2020. The ~~decrease~~increase in segment gross margin was primarily attributable to ~~lower volumes~~improved operating leverage in the first nine months of 2021 due to our restructuring activities undertaken in 2020 in response to reduced energy-related exploration and ~~a less favorable service mix.~~production investments in the markets we serve.

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

Total SG&A decreased 2% to ~~$51.4~~$150.2 million, or 21% of total revenue, for the first nine months of 2021, down from $153.2 million, or 22% of total revenue, for the first ~~quarter of 2021, down from $52.4 million, or 22% of total revenue, for the first quarter~~nine months of 2020.

Waste Solutions

Waste Solutions segment SG&A ~~decreased 9% to $6.3~~was $19.7 million, or 6% of segment revenue, for the first ~~quarter~~nine months of 2021 compared with ~~$6.9~~$19.8 million, or 6% of segment revenue, for the first ~~quarter~~nine months of 2020.

Field Services

Field Services segment SG&A decreased 1%3% to ~~$12.7~~$36.8 million, or 10% of segment revenue, for the first nine months of 2021 compared with $37.9 million, or 11% of segment revenue, for the first ~~quarter~~nine months of 2020. Field Services segment SG&A for the first nine months of 2020 includes $3.2 million of gains associated with the settlement and changes in fair value of contingent consideration liabilities. Excluding the impact of these gains, segment SG&A decreased 10% for the first nine months of 2021 compared with ~~$12.9 million, or 11% of segment revenue, for~~ the first ~~quarter~~nine months of ~~2020.~~2020, primarily attributable to lower employee labor and benefits costs, lower business development and integration expenses, lower insurance costs and higher gains on disposition of assets.

Energy Waste

Energy Waste segment SG&A decreased ~~37%~~26% to ~~$3.3~~$10.0 million, or ~~54%~~41% of segment revenue, for the first ~~quarter~~nine months of 2021 compared with ~~$5.3~~$13.5 million, or ~~31%~~45% of segment revenue, for the first ~~quarter~~nine months of 2020. The decrease in ~~Energy Waste~~ segment SG&A iswas primarily attributable to lower ~~employee labor~~costs in the first nine months of 2021 due to our restructuring activities undertaken in 2020 in response to reduced energy-related exploration and ~~benefits costs.~~production investments in the markets we serve.

Corporate

Corporate SG&A increased 2% to ~~$29.0~~$83.7 million, or ~~13%~~12% of total revenue, for the first ~~quarter~~nine months of 2021 compared with ~~$27.3~~$82.0 million, or ~~11%~~12% of total revenue, for the first ~~quarter~~nine months of 2020. The increase in Corporate SG&A primarily reflects higher employee labor and benefit costs, lower bad debt recoveries, higher information technology and software expenses and higher consulting and professional services ~~expenses, lower bad debt recoveries and higher insurance costs,~~expense, partially offset by lower business development and integration expenses and lower office and safety supplies expenses in the first ~~quarter~~nine months of 2021 compared to the first ~~quarter~~nine months of 2020.

Components of Adjusted EBITDA

Income tax ~~benefit~~expense

Income tax ~~benefit~~expense for the first ~~quarter~~nine months of 2021 was ~~$1.4~~$1.3 million, resulting in a consolidated effective income tax rate of ~~64.5%~~43.2%. Income tax ~~benefit~~expense for the first ~~quarter~~nine months of 2020 was ~~$263,000,~~$542,000, resulting in a consolidated effective income tax rate of ~~0.1%~~(0.2)%. The increase in our effective tax rate for the first ~~quarter~~nine months of 2021 compared to the first ~~quarter~~nine months of 2020 was primarily due to non-deductible goodwill impairment charges incurred during the first ~~quarter~~nine months of 2020, and lower pre-tax earnings, excluding impairments, for the first ~~quarter~~nine months of 2021, which resulted in aincome

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tax expense from the year-to-date earnings of our foreign operations, partially offset by an income tax benefit from the year-to-date loss of our ~~US operations, partially offset by foreign tax expense from the year-to-date earnings of our foreign~~U.S. operations.

Interest expense

Interest expense was ~~$7.4~~$22.0 million for the first ~~quarter~~nine months of 2021 compared with ~~$9.3~~$25.1 million for the first ~~quarter~~nine months of 2020. The decrease is primarily the result of the impact of lower interest rates on the variable portion of our outstanding debt as well as lower outstanding debt levels in the first ~~quarter~~nine months of 2021 compared to the first ~~quarter~~nine months of 2020.

Foreign currency loss ~~(gain)~~

We recognized a ~~$371,000~~$385,000 foreign currency loss for the first ~~quarter~~nine months of 2021 compared with a ~~$937,000~~$155,000 foreign currency ~~gain~~loss for the first ~~quarter~~nine months of 2020. Foreign currency gains and losses reflect changes in business activity conducted in a currency other than the USD, our functional currency. Additionally, we established intercompany loans with certain of our Canadian subsidiaries, whose functional currency is the ~~Canadian dollar (“CAD”)~~CAD as part of a tax and treasury management strategy allowing for repayment of third-party bank debt. These intercompany loans are payable by our Canadian subsidiaries to US Ecology in CAD requiring us to revalue the outstanding loan balance through our statements of

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operations based on USD/CAD currency movements from period to period. At ~~March 31,~~September 30, 2021, we had ~~$33.7~~$12.7 million of intercompany loans subject to currency revaluation.

Other income

Other income was ~~$3.7~~$4.0 million for the first ~~quarter~~nine months of 2021 compared with other income of ~~$171,000~~$382,000 for the first ~~quarter~~nine months of 2020. In the first quarter of 2021, the company recognized a gain of $3.5 million related to the change in the fair value of a minority interest investment.

Goodwill impairment charges

We performed an interim assessment of the fair value of certain reporting units as of March 31, 2020. Based on the results of the assessment, we recognized goodwill impairment charges of $300.3 million in the first quarter of 2020.

Depreciation and amortization of plant and equipment

Depreciation and amortization expense ~~increased~~decreased 1% to ~~$18.2~~$54.1 million for the first ~~quarter~~nine months of 2021 compared with ~~$18.0~~$54.8 million for the first ~~quarter~~nine months of 2020.

Amortization of intangible assets

Intangible assets amortization expense decreased 3%5% to ~~$9.1~~$26.5 million for the first ~~quarter~~nine months of 2021 compared with ~~$9.4~~$27.8 million for the first ~~quarter~~nine months of 2020.

Share-based compensation

Share-based compensation expense increased ~~23%~~18% to ~~$1.9~~$5.7 million for the first ~~quarter~~nine months of 2021 compared with ~~$1.6~~$4.9 million for the first ~~quarter~~nine months of 2020, primarily reflecting ~~a larger number of employees eligible for share-based compensation~~an increase in ~~the first quarter of 2021 compared~~equity-based awards granted to ~~the first quarter of 2020, as a result of the NRC Merger.~~employees.

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

Accretion and non-cash adjustment of closure and post-closure liabilities decreased 7%6% to ~~$1.2~~$3.6 million for the first ~~quarter~~nine months of 2021 compared with ~~$1.3~~$3.8 million for the first ~~quarter~~nine months of 2020.

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Business development and integration expenses

Business development and integration expenses decreased ~~58%~~66% to ~~$1.2~~$2.5 million infor the first ~~quarter~~nine months of 2021, compared to ~~$2.9~~$7.5 million infor the first ~~quarter~~nine months of 2020, primarily attributable to lower NRC Merger integration expenses incurred in the first ~~quarter~~nine months of 2021 compared to the first ~~quarter~~nine months of 2020.

CRITICAL ACCOUNTING POLICIES

Financial statement preparation requires management to make estimates and judgments that affect reported assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities. The accompanying unaudited consolidated financial statements are prepared using the same critical accounting policies disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

RECENTLY ISSUED ACCOUNTING STANDARDS

For information about recently issued accounting standards, see Note 1 of the Notes to Consolidated Financial Statements in “Part I, Item 1. Financial Statements (Unaudited)” of this Quarterly Report on Form 10-Q.

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LIQUIDITY AND CAPITAL RESOURCES

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

Our primary sources of liquidity are cash and cash equivalents, cash generated from operations and borrowings under the Credit Agreement. At ~~March 31,~~September 30, 2021, we had ~~$82.4~~$71.4 million in unrestricted cash and cash equivalents immediately available and ~~$142.9~~$62.2 million of borrowing capacity, subject to our leverage covenant limitation, available under our Revolving Credit Facility. We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. Our primary ongoing cash requirements are funding operations, capital expenditures, paying principal and interest on our long-term debt, and paying declared dividends pursuant to our dividend policy. We believe future operating cash flows will be sufficient to meet our future operating, investing and dividend cash needs for the foreseeable future. Furthermore, existing cash balances and availability of additional borrowings under the Credit Agreement provide additional sources of liquidity should they be required. On June ~~26, 2020,~~29, 2021, Predecessor US Ecology amended the Credit Agreement ~~which provides~~to extend the maturity date for athe existing revolving credit facility to June 29, 2026. The Credit Agreement was also amended to extend the existing covenant relief period ~~through~~to end on the earlier of ~~March~~December 31, 2022 and the date ~~the~~ Predecessor US Ecology elects to end such covenant relief period pursuant to the terms ~~therein.~~therein and to permanently increase Predecessor US Ecology’s consolidated total net leverage ratio requirement as of the end of each fiscal quarter ending on and after December 31, 2022 to 4.50 to 1.00. See additional information on the ~~Third~~Fourth Amendment under “Amendments to the Credit Agreement,” below.

Operating Activities

For the ~~three~~nine months ended ~~March 31,~~September 30, 2021, net cash provided by operating activities was ~~$19.5~~$77.0 million. This primarily reflects net ~~loss~~income of ~~$796,000,~~$1.8 million, non-cash depreciation, amortization and accretion of ~~$28.6~~$84.2 million, an increase ~~in deferred revenue of $2.2 million and share-based compensation expense of $1.9 million, partially offset by deferred incomes taxes of $3.8 million, a decrease~~ in accounts payable and accrued liabilities of ~~$3.6~~$20.7 million, share-based compensation expense of $5.7 million, and an increase deferred revenue of $2.2 million, partially offset by an increase in accounts receivable of $19.1 million, an increase in other assets of $7.1 million, deferred incomes taxes of $3.8 million, a gain of $3.5 million related to a change in the fair value of a minority interest investment and a decrease in accrued salaries and benefits of ~~$3.0~~$3.2 million. Impacts on net income are due to the factors discussed above under “Results of Operations.” Changes in accounts receivable and accounts

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payable and accrued liabilities are attributable to the timing of payments from customers and payments to vendors for products and services. The increase in other assets is primarily attributable to prepaid insurance costs associated with our annual renewal process. The decrease in accrued salaries and benefits is primarily attributable to lower accrued employee-incentive compensation. The increase in deferred revenue is primarily attributable to cash payments that are received, or advance billings charged, prior to performance of services and waste that has been received but not yet treated or disposed at the end of the period. Changes in accounts payable and accrued liabilities are attributable to the timing of payments to vendors for products and services. The decrease in accrued salaries and benefits is primarily attributable to the payment of accrued employee-incentive compensation related to fiscal 2020 financial performance.

We calculate days sales outstanding (“DSO”) as a rolling four quarter average of our net accounts receivable divided by our quarterly revenue. Our net accounts receivable balance for the DSO calculation includes trade accounts receivable, net of allowance for doubtful accounts, and unbilled accounts receivable, adjusted for changes in deferred revenue. DSO was 8890 days as of ~~March 31,~~September 30, 2021, compared to 86 days as of December 31, 2020, and 8487 days as of ~~March 31,~~September 30, 2020.

For the ~~three~~nine months ended ~~March 31,~~September 30, 2020, net cash provided by operating activities was ~~$29.3~~$83.2 million. This primarily reflects net loss of ~~$298.1~~$297.0 million, non-cash goodwill impairment charges of $300.3 million, non-cash depreciation, amortization and accretion of ~~$28.7~~$86.5 million and a decrease in accounts receivable of ~~$13.5 million and an increase in deferred revenue of $7.1~~$25.3 million, partially offset by a decrease in accounts payable and accrued liabilities of ~~$13.6~~$19.2 million, an increase in other assets of $8.3 million and ~~a decrease~~an increase in ~~accrued salaries and benefits~~income taxes receivable of ~~$7.4~~$6.3 million. Impacts on net income are due to the factors discussed above under “Results of Operations.” Changes in accounts receivable and accounts payable and accrued liabilities are attributable to the timing of payments from customers and payments to vendors for products and services. The increase in ~~deferred revenue~~other assets is primarily attributable to prepaid insurance costs and refundable deposits associated with our annual ~~invoicing of retainer-based services which will be recognized over the course of the year as services are performed.~~renewal process. The ~~decrease~~increase in ~~accrued salaries and benefits~~income taxes receivable is primarily attributable to ~~the payment of accrued employee-incentive compensation related~~projected net operating losses in 2020 that will be carried back to ~~fiscal 2019 financial performance.~~prior years with taxable income.

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Investing Activities

For the ~~three~~nine months ended ~~March 31,~~September 30, 2021, net cash used in investing activities was ~~$8.7~~$41.5 million, primarily related to capital expenditures of ~~$9.6~~$45.3 million and a $712,000 investment in the preferred stock of a privately held company, partially offset by ~~$1.6~~$2.4 million in proceeds from the sale of property and ~~equipment.~~equipment and net proceeds from the purchase and sale of restricted investments of $2.2 million. Capital projects consisted primarily of landfill cell development and infrastructure upgrades at our operating ~~facilities and landfill cell development.~~facilities.

For the ~~three~~nine months ended ~~March 31,~~September 30, 2020, net cash used in investing activities was ~~$21.7~~$46.4 million, primarily related to capital expenditures of ~~$19.1~~$45.1 million and the acquisition of Impact Environmental, Inc. for $3.3 million in January 2020. Capital projects consisted primarily of equipment purchases and infrastructure upgrades at our corporate and operating facilities.

Financing Activities

For the ~~three~~nine months ended ~~March 31,~~September 30, 2021, net cash used in financing activities was ~~$2.8~~$37.7 million, consisting primarily of ~~$1.5~~$26.0 million in payments on our revolving credit facility, $4.3 million in payments on our equipment financing obligations, ~~and a $1.1~~$3.4 million in quarterly ~~payment~~payments on our term ~~loan.~~loan and $2.6 million in payments to settle acquired contingent consideration liabilities. Quarterly cash dividends have been suspended and no dividends were paid in the first ~~quarter~~nine months of 2021.

For the ~~three~~nine months ended ~~March 31,~~September 30, 2020, net cash provided by financing activities was ~~$63.7~~$24.6 million, consisting primarily of $90.0 million in borrowings on our revolving credit facility, partially offset by $33.4 million in payments on our revolving credit facility and term loan, repurchases of our common stock of $18.3 million, ~~and~~ dividend payments to our stockholders of $5.7 ~~million.~~million and $4.8 million in payments on our equipment financing obligations. Quarterly cash dividends have been suspended and no dividends were paid in the third quarter of 2020.

Credit Agreement

On April 18, 2017, Predecessor US Ecology, a wholly-owned subsidiary of the Company, entered into ~~a new senior secured credit agreement (as amended, restated, supplemented or otherwise modified through~~ the ~~date hereof, the “Credit Agreement”) with Wells Fargo, as administrative agent for the lenders, swingline lender and issuing lender, and Bank of America, N.A., as an issuing lender,~~Credit Agreement that provides for a $500.0 million, five-year revolving credit facility (the “Revolving Credit Facility”),

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including a $75.0 million sublimit for the issuance of standby letters of credit and a $40.0 million sublimit for the issuance of swingline loans used to fund short-term working capital requirements. The Credit Agreement also contains an accordion feature whereby Predecessor US Ecology may request up to $200.0 million of additional funds through an increase to the Revolving Credit Facility, through incremental term loans, or some combination thereof. As described ~~below,~~herein, the Credit Agreement was amended in August and November 2019 in connection with the NRC ~~Merger~~Merger; and further amended on June 26, 2020 and June 29, 2021 pursuant to the Third Amendment ~~(as~~and Fourth Amendment (each as defined ~~below).~~herein), respectively.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2021, the effective interest rate on the Revolving Credit Facility, after giving effect to the impact of our interest rate swap and the amortization of the loan discount and debt issuance costs, was ~~4.06%~~4.03%. Interest only payments are due either quarterly or on the last day of any interest period, as applicable. In March 2020, the Company entered into an interest rate swap agreement, effectively fixing the interest rate on ~~$470.0~~$450.0 million, or approximately 59%, of the Revolving Credit Facility and term loan borrowings outstanding as of ~~March 31,~~September 30, 2021.

~~Except as~~As modified by the ~~Third~~Fourth Amendment as described ~~below,~~herein, Predecessor US Ecology is required to pay a commitment fee ranging from 0.175% to ~~0.35%~~0.40% on the average daily unused portion of the Revolving Credit Facility, with such commitment fee to be based upon Predecessor US Ecology’s total net leverage ratio (as defined in the Credit Agreement). The maximum letter of credit capacity under the Revolving Credit Facility is $75.0 million and the Credit Agreement provides for a letter of credit fee equal to the applicable margin for LIBOR loans under the Revolving Credit Facility. At ~~March 31,~~September 30, 2021, there were ~~$347.0~~$321.0 million of revolving credit loans outstanding on the Revolving Credit Facility. These revolving credit loans are due upon the earliest to occur of (i) ~~November 1, 2024~~June 29, 2026 (or, with respect to any lender, such later date as requested by us and accepted by such lender), (ii) the date of termination of the entire revolving credit commitment (as defined in the Credit Agreement) by us, and (iii) the date of termination of the revolving credit commitment and are presented as long-term debt in the consolidated balance sheets.

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automatically made from subsequent deposits to our cash operating accounts (the “Sweep Arrangement”). Total advances outstanding under the Sweep Arrangement are subject to the $40.0 million swingline loan sublimit under the Revolving Credit Facility. Predecessor US Ecology’s revolving credit loans outstanding under the Revolving Credit Facility are not subject to repayment through the Sweep Arrangement. As of ~~March 31,~~September 30, 2021, there were ~~$277,000~~no in borrowings outstanding subject to the Sweep ~~Arrangement, which are presented as Short-term borrowings in the consolidated balance sheet.~~Arrangement.

As of ~~March 31,~~September 30, 2021, the availability under the Revolving Credit Facility was ~~$142.9~~$62.2 million, subject to our leverage covenant limitation, with ~~$9.8~~$14.7 million of the Revolving Credit Facility issued in the form of standby letters of credit utilized as collateral for closure and post-closure financial assurance and other assurance obligations.

Amendments to the Credit Agreement

On August 6, 2019, Predecessor US Ecology entered into the ~~first amendment (the “First Amendment”)~~First Amendment to the Credit Agreement, by and among Predecessor US Ecology, the subsidiaries of Predecessor US Ecology party thereto, the lenders referred to therein and Wells Fargo, as issuing lender, swingline lender and administrative agent. Effective November 1, 2019, the First Amendment, among other things, extended the expiration of the Revolving Credit Facility to November 1, 2024, permitted the issuance of a $400.0 million incremental term loan to be used to refinance the indebtedness of NRC and pay related transaction expenses in connection with the NRC Merger, modified the accordion feature allowing Predecessor US Ecology to request up to the greater of (x) $250.0 million and (y) 100% of consolidated EBITDA plus certain additional amounts, increased the sublimit for the issuance of swingline loans to $40.0 million and increased the maximum consolidated total net leverage ratio to 4.00 to 1.00.

On November 1, 2019, Predecessor US Ecology entered into the lender joinder agreement and ~~second amendment (the “Second Amendment”)~~the Second Amendment to the Credit Agreement. Effective November 1, 2019, the Second Amendment, among other things, amended the Credit Agreement to increase the capacity for incremental term loans by $50.0 million and provided for Wells Fargo lending $450.0 million in incremental term loans to Predecessor US Ecology to pay off the existing debt of NRC in connection with the NRC Merger, to pay certain fees, costs and expenses incurred in connection with the NRC Merger and to repay

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outstanding borrowings under the Revolving Credit Facility. The seven-year incremental term loan matures November 1, 2026, requires principal repayment of 1% annually, and bears interest at LIBOR plus 2.25% or a base rate plus 1.25% (with a step-up to LIBOR plus 2.50% or a base rate plus 1.50% in the event that US Ecology credit ratings are not BB (with a stable or better outlook) or better from S&P and Ba2 (with a stable or better outlook) or better from Moody’s). During the ~~three~~nine months ended ~~March 31,~~September 30, 2021, the effective interest rate on the term loan, including the impact of the amortization of debt issuance costs, was ~~2.89%~~2.87%.

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

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

For additional information see Note 11 of the Notes to Consolidated Financial Statements in “Part I, Item 1. Financial Statements (Unaudited)” of this Quarterly Report on Form 10-Q.

CONTRACTUAL OBLIGATIONS AND GUARANTEES

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~~of March 31,~~September 30, 2021. In connection with our entry into the March 2020 interest rate swap, we terminated our existing interest rate swap prior to its scheduled maturity date of June 2021. For more information, see Note 11 of the Notes to Consolidated Financial Statements in “Part I, Item 1. Financial Statements (Unaudited)” of this Quarterly Report on Form 10-Q.

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Except as set forth above, there were no material changes in the amounts of our contractual obligations and guarantees during the ~~three~~nine months ended ~~March 31,~~September 30, 2021. For further information on our contractual obligations and guarantees, refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We do not maintain equities, commodities, derivatives, or any other similar instruments for trading purposes. We have minimal interest rate risk on investments or other assets due to our preservation of capital approach to investments. At ~~March 31,~~September 30, 2021, ~~$5.8~~$3.8 million of restricted cash was invested in fixed-income U.S. Treasury and U.S. government agency securities and money market accounts.

We are exposed to changes in interest rates as a result of our Revolving Credit Facility and Term Loan borrowings under the Credit Agreement. Our Revolving Credit Facility borrowings incur interest at a base rate (as defined in the Credit Agreement) or LIBOR, at the Company’s option, plus an applicable margin which is determined according to a pricing grid under which the interest rate decreases or increases based on our ratio of funded debt to consolidated earnings before interest, taxes, depreciation and amortization (as defined in the Credit Agreement). Our Term Loan bears interest at LIBOR plus 2.25% or a base rate plus 1.25% (with a step-up to LIBOR plus 2.50% or a base rate plus 1.50% in the event that US Ecology credit ratings are not BB (with a stable or better outlook) or better from S&P and Ba2 (with a stable or better outlook) or better from Moody’s).

On March 6, 2020, the Company entered into an interest rate swap agreement with the intention of hedging the Company’s interest rate exposure on a portion of the Company’s outstanding LIBOR-based variable rate debt. Under the terms of the swap, the Company pays interest at the fixed effective rate of 0.83% and receives interest at the variable one-month LIBOR rate on an initial notional amount of $500.0 million.

As of ~~March 31,~~September 30, 2021, there were ~~$347.0~~$321.0 million of Revolving Credit Facility loans, and ~~$444.4~~$442.1 million of Term Loans outstanding under the Credit Agreement. If interest rates were to rise and outstanding balances remain unchanged, we would be subject to higher interest payments on our outstanding debt. Subsequent to the March 31, 2020 effective date of our interest rate swap we are subject to higher interest payments on only the unhedged borrowings under the Credit Agreement and the Term Loan.

Based on the outstanding indebtedness under the Credit Agreement on ~~March 31,~~September 30, 2021 and the impact of our interest rate hedge, if market rates used to calculate interest expense were to average 1% higher in the next twelve months, our interest expense would increase by approximately ~~$1.0~~$1.3 million for the corresponding period.

Foreign Currency Risk

We are subject to foreign currency exchange risk through our international operations. While we operate primarily in the United States and, accordingly, most of our consolidated revenue and associated expenses are denominated in USD. During the ~~three~~nine months ended ~~March 31,~~September 30, 2021, we recorded approximately ~~$20.2~~$58.5 million, or 9%8%, of our revenue in Canada, ~~$10.0~~$35.1 million, or 4%5%, of our revenue in the EMEA region, and less than 1% of our revenue from other international regions. Revenue and expenses denominated in foreign currencies may be affected by movements in foreign currency exchange rates.

Our exposure to foreign currency exchange risk in our Consolidated Balance Sheets relates primarily to cash, trade payables and receivables, and intercompany loans that are denominated in foreign currencies, primarily CAD. Contracts for services that our foreign subsidiaries provide to customers are often denominated in currencies other than their local

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functional currency. The resulting cash, receivable and payable accounts are subject to non-cash foreign currency translation gains or losses.

We established intercompany loans with certain of our Canadian subsidiaries, as part of a tax and treasury management strategy allowing for repayment of third-party bank debt. These intercompany loans are payable using CAD and are subject

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to mark-to-market adjustments with movements in the CAD. At ~~March 31,~~September 30, 2021, we had ~~$33.7~~$12.7 million of intercompany loans outstanding between our Canadian subsidiaries and US Ecology. During the ~~three~~nine months ended ~~March 31,~~September 30, 2021, the CAD strengthened as compared to the USD resulting in a ~~$395,000~~$155,000 non-cash foreign currency translation gain being recognized in the Company’s consolidated statements of operations related to the intercompany loans. Based on intercompany balances as of ~~March 31,~~September 30, 2021, a $0.01 CAD increase or decrease in currency rate compared to the USD at ~~March 31,~~September 30, 2021 would have generated a gain or loss of approximately ~~$337,000~~$127,000 for the ~~three~~nine months ended ~~March 31,~~September 30, 2021.

We had a total pre-tax foreign currency loss of ~~$371,000~~$385,000 for the ~~three~~nine months ended ~~March 31,~~September 30, 2021. We currently have no foreign exchange contracts, option contracts or other foreign currency hedging arrangements. Management evaluates our risk position on an ongoing basis to determine whether foreign exchange hedging strategies should be employed.

Commodity Price Risk

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

ITEM 4. CONTROLS AND PROCEDURES

Management of the Company, including the Chief Executive Officer and the Chief Financial Officer of the Company, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of ~~March 31,~~September 30, 2021. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures, including the accumulation and communication of disclosures to the Company’s Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding required disclosure, are effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the ~~Securities and Exchange Commission (“SEC”).~~SEC.

There were no changes in our internal control over financial reporting that occurred during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

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

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

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

Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the SEC, we are under no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on our forward-looking statements. Although we believe that the expectations reflected in forward-looking statements are reasonable, we cannot guarantee future results or performance. Before you invest in our common stock, you should be aware that the occurrence of the events described in the “Risk Factors” section in our Form 10-K for the fiscal year ended December 31, 2020 and in other reports we file with the SEC could harm our business, prospects, operating results, and financial condition.

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

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

ITEM 1. LEGAL PROCEEDINGS

In December 2010, National Response Corporation, a subsidiary of NRC Group Holdings Corp. (“NRC”) acquired by the Company in the Company’s acquisition of NRC ~~Merger,~~(“NRC Merger”), was named as one of many “Dispersant Defendants” in multi-district litigation, arising out of the explosion of the BP Deepwater Horizon (“BP”) oil rig, filed in the U.S. District Court for the Eastern District of Louisiana (“In re Deepwater Horizon” or the “MDL”). The claims against National Response Corporation, and other “Dispersant Defendants,” were brought by workers and others who alleged injury arising from post-explosion clean–up efforts, including particularly the use of certain chemical dispersants. In January 2013, the Court approved a Medical Benefits Class Action Settlement, which, among other things, provided for a “class wide” settlement as well as a release of claims against Dispersant Defendants, including National Response Corporation. Further, National Response Corporation successfully moved the court to dismiss all claims against it based on derivative immunity, as it was acting at the direction of the U.S. Government. In early 2018, BP began asserting an alleged contractual right of indemnity against National Response Corporation and others in post-settlement lawsuits brought by persons who had either chosen not to participate in the class-wide agreement or whose injuries were allegedly manifest after the period covered by the claim submission process. The Company advised BP that it considers the attempt to bring National Response Corporation back into previously settled litigation to be improper and moved for a declaratory judgment that it owes no indemnity or contribution to BP, raising various arguments, including BP’s own actions and conduct over the preceding nine years with respect to these claims (including its failure to seek indemnity) and the resultant prejudice to National Response Corporation, BP’s waiver of any indemnity, and the court’s prior finding that National Response Corporation is entitled to derivative immunity. In response, BP asserted counterclaims against National Response Corporation for a declaratory judgment that National Response Corporation must indemnify BP under certain circumstances and for unjust enrichment. National Response Corporation successfully moved to dismiss the unjust enrichment claim. The parties filed simultaneous judgment on the pleadings briefs in February 2020, and all oppositions were filed on March 16, 2020. On May 4, 2020, the court found in favor of National Response Corporation, and held that the Company is not liable to BP or any back end litigation plaintiffs for any damages related to the Deepwater Horizon oil spill. BP timely appealed the ruling on June 11, 2020. The Company is currently unable to estimate the range of possible losses associated with this proceeding. However, the Company also believes that, were it deemed to have liability arising out of or related to BP’s indemnity claims, such liability would be covered by an indemnity by SEACOR Holdings Inc., the former owner of National Response Corporation, in favor of National Response Corporation and its affiliates.

On November 17, 2018, an explosion occurred at our Grand View, Idaho facility, resulting in one employee fatality and injuries to other employees. The incident severely damaged the facility’s primary waste-treatment building as well as surrounding waste handling, waste storage, maintenance and administrative support structures, resulting in the closure of the entire facility that remained in effect through January 2019. In addition to initiating and conducting our own investigation into the incident, we fully cooperated with the Idaho Department of Environmental Quality, the U.S. Environmental Protection Agency and the Occupational Safety and Health Administration (“OSHA”) to support their comprehensive and independent investigations of the incident. On January 10, 2020, we entered into a settlement agreement with OSHA settling a complaint made by OSHA relating to the incident for $50,000. On January 28, 2020, the Occupational Safety and Health Review Commission issued an order terminating the proceeding relating to such OSHA complaint. We maintain workers’ compensation insurance, business interruption insurance and liability insurance for personal injury, property and casualty damage. We believe that any potential third-party claims associated with the explosion in excess of our deductibles are expected to be resolved primarily through our insurance policies. Although we carry business interruption insurance, a disruption of our business caused by a casualty event, including the full and partial closure of our Grand View, Idaho facility, may result in the loss of business, profits or customers during the time of such closure. Accordingly, our insurance policies may not fully compensate us for these losses. In November 2020, we commenced a lawsuit against the generator and broker of the waste, the treatment of which we believe contributed to the Grand View explosion, seeking damages in connection with the losses suffered as a result of the incident.

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ITEM 1A. RISK FACTORS

The Company is subject to various risks and uncertainties that could have a material impact on our business, financial condition, results of operations and cash flows. Reference is also made to those risk factors included in ~~Part I, Item~~“Item 1A – Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table summarizes the purchases of shares of our common stock during the ~~three~~nine months ended ~~March 31,~~September 30, 2021:


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

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

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ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS


~~10.1~~		US Ecology, Inc. 2021 Management Incentive Plan *

~~10.2~~		Form of Restricted Stock Award Agreement *

~~10.3~~		Form of Incentive Stock Option Award Agreement *

~~10.4~~		Form of Non-Qualified Stock Option Award Agreement *

15		Letter re: Unaudited Interim Financial Statements

31.1		Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101		The following materials from the quarterly report on Form 10-Q of US Ecology, Inc. for the quarter ended ~~March 31,~~September 30, 2021 formatted in Extensible Business Reporting Language (Inline XBRL) include: (i) Unaudited Consolidated Balance Sheets, (ii) Unaudited Consolidated Statements of Operations, (iii) Unaudited Consolidated Statements of Comprehensive Income, (iv) Unaudited Consolidated Statements of Cash Flows, and (v) Notes to the Unaudited Consolidated Financial Statements

104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~March 31,~~September 30, 2021, formatted in Inline XBRL

* Identifies management contracts or compensatory plans or arrangements filed as exhibits hereto.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	US Ecology, Inc.
	(Registrant)

Date: ~~May 3,~~November 5, 2021	/s/ Eric L. Gerratt
	Eric L. Gerratt
	Executive Vice President, Chief Financial Officer and Treasurer

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