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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 ~~quarterly~~REPORT ~~period~~PURSUANT ~~ended~~TO ~~March~~SECTION ~~31,~~13 ~~2019~~ or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

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

☐	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: 0000-11688~~

Commission file number: 000-11688

US ECOLOGY, INC.

(Exact name of registrant as specified in its charter)

Delaware		95-3889638
(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)


Delaware		95-3889638
(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

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 ☐


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

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 ☐~~


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 30, 2019, there were 22,089,018 shares of the registrant’s Common Stock outstanding.~~

At July 30, 2019, there were 22,089,345 shares of the registrant’s Common Stock outstanding.

Table of Contents

US ECOLOGY, INC.

FORM 10-Q

TABLE OF CONTENTS

Item		Page
	PART I — FINANCIAL INFORMATION
1.	Financial Statements (Unaudited)	3
	Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018	3
	Consolidated Statements of Operations for the three months ended March 31, 2019 and 2018	4
	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2019 and 2018	5
	Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018	6
	Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2019 and 2018	7
	Notes to Consolidated Financial Statements	8
	Report of Independent Registered Public Accounting Firm	26
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
3.	Quantitative and Qualitative Disclosures About Market Risk	36
4.	Controls and Procedures	37
	PART II — OTHER INFORMATION
	Cautionary Statement	38
1.	Legal Proceedings	39
1A.	Risk Factors	39
2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
3.	Defaults Upon Senior Securities	40
4.	Mine Safety Disclosures	40
5.	Other Information	40
6.	Exhibits	40
	SIGNATURE	41


Item		Page

	PART I — FINANCIAL INFORMATION

1.	Financial Statements (Unaudited)	3

	Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018	3

	Consolidated Statements of Operations for the three and six months ended June 30, 2019 and 2018	4

	Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2019 and 2018	5

	Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018	6

	Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2019 and 2018	7

	Notes to Consolidated Financial Statements	8

	Report of Independent Registered Public Accounting Firm	30

2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
3.	Quantitative and Qualitative Disclosures About Market Risk	45
4.	Controls and Procedures	46

	PART II — OTHER INFORMATION

	Cautionary Statement	47
1.	Legal Proceedings	48
1A.	Risk Factors	48
2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
3.	Defaults Upon Senior Securities	49
4.	Mine Safety Disclosures	49
5.	Other Information	49
6.	Exhibits	50
	SIGNATURE	51

Table of Contents

PART I - FINANCIAL INFORMATION

~~ITEM 1. FINANCIAL STATEMENTS~~

USITEM ~~ECOLOGY, INC~~1. FINANCIAL STATEMENTS

~~CONSOLIDATED BALANCE SHEETS~~

~~(Unaudited)~~ US ECOLOGY, INC.

~~(In~~CONSOLIDATED ~~thousands,~~BALANCE ~~except par value amount)~~ SHEETS

	March 31, 2019		December 31, 2018
Assets
Current Assets:
Cash and cash equivalents	$	16,120	$	31,969
Receivables, net		127,970		144,690
Prepaid expenses and other current assets		11,121		10,938
Income taxes receivable		8,559		7,071
Total current assets		163,770		194,668
Property and equipment, net		256,902		258,443
Operating lease assets		18,270		—
Restricted cash and investments		4,977		4,941
Intangible assets, net		277,263		279,666
Goodwill		210,126		207,177
Other assets		2,024		3,003
Total assets	$	933,332	$	947,898
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	16,408	$	17,754
Deferred revenue		10,441		10,451
Accrued liabilities		27,133		35,524
Accrued salaries and benefits		13,367		16,732
Income taxes payable		—		505
Short-term borrowings		2,118		—
Current portion of closure and post-closure obligations		2,214		2,266
Current portion of operating lease liabilities		5,358		—
Total current liabilities		77,039		83,232
Long-term debt		334,000		364,000
Long-term closure and post-closure obligations		76,842		76,097
Long-term operating lease liabilities		12,769		—
Other long-term liabilities		3,098		2,146
Deferred income taxes, net		66,092		63,206
Total liabilities		569,840		588,681
Commitments and contingencies
Stockholders’ Equity:
Common stock $0.01 par value, 50,000 authorized; 22,089 and 22,040 shares issued, respectively		221		220
Additional paid-in capital		183,953		183,834
Retained earnings		193,397		189,324
Treasury stock, at cost, 22 and 8 shares, respectively		(1,286)		(370)
Accumulated other comprehensive loss		(12,793)		(13,791)
Total stockholders’ equity		363,492		359,217
Total liabilities and stockholders’ equity	$	933,332	$	947,898

(Unaudited)

~~The~~(In ~~accompanying~~thousands, ~~notes~~except ~~are~~par anvalue ~~integral part of these financial statements.~~ amount)

Table of Contents


	June 30, 2019		December 31, 2018
Assets
Current Assets:
Cash and cash equivalents	$	17,690	$	31,969
Receivables, net		150,037		144,690
Prepaid expenses and other current assets		11,938		10,938
Income taxes receivable		6,661		7,071
Total current assets		186,326		194,668

Property and equipment, net		265,620		258,443
Operating lease assets		17,575		—
Restricted cash and investments		5,021		4,941
Intangible assets, net		274,866		279,666
Goodwill		210,466		207,177
Other assets		1,542		3,003
Total assets	$	961,416	$	947,898

Liabilities and Stockholders’ Equity

Current Liabilities:
Accounts payable	$	21,733	$	17,754
Deferred revenue		12,985		10,451
Accrued liabilities		32,895		35,524
Accrued salaries and benefits		14,790		16,732
Income taxes payable		—		505
Current portion of closure and post-closure obligations		2,231		2,266
Current portion of operating lease liabilities		4,932		—
Total current liabilities		89,566		83,232

Long-term debt		334,000		364,000
Long-term closure and post-closure obligations		77,688		76,097
Long-term operating lease liabilities		12,553		—
Other long-term liabilities		4,132		2,146
Deferred income taxes, net		66,718		63,206
Total liabilities		584,657		588,681

Commitments and contingencies

Stockholders’ Equity:
Common stock $0.01 par value, 50,000 authorized; 22,089 and 22,040 shares issued and outstanding, respectively		221		220
Additional paid-in capital		184,747		183,834
Retained earnings		204,916		189,324
Treasury stock, at cost, 14 and 8 shares, respectively		(835)		(370)
Accumulated other comprehensive loss		(12,290)		(13,791)
Total stockholders’ equity		376,759		359,217
Total liabilities and stockholders’ equity	$	961,416	$	947,898

~~US ECOLOGY, INC.~~

~~CONSOLIDATED~~The ~~STATEMENTS~~accompanying OFnotes ~~OPERATIONS~~ are an integral part of these financial statements.

~~(Unaudited)~~

~~(In thousands, except per share amounts)~~ 3

	Three Months Ended March 31,
	2019		2018
Revenue	$	131,037	$	120,059
Direct operating costs		95,796		84,388
Gross profit		35,241		35,671
Selling, general and administrative expenses		20,305		22,232
Operating income		14,936		13,439
Other income (expense):
Interest income		207		24
Interest expense		(4,030)		(2,809)
Foreign currency loss		(139)		(14)
Other		110		2,123
Total other expense		(3,852)		(676)
Income before income taxes		11,084		12,763
Income tax expense		3,041		3,520
Net income	$	8,043	$	9,243
Earnings per share:
Basic	$	0.37	$	0.42
Diluted	$	0.36	$	0.42
Shares used in earnings per share calculation:
Basic		21,987		21,801
Diluted		22,197		21,957

Table of Contents

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

4 US ECOLOGY, INC.

~~Table~~CONSOLIDATED ofSTATEMENTS ~~Contents~~ OF OPERATIONS

~~US ECOLOGY, INC.~~ (Unaudited)

~~CONSOLIDATED~~(In ~~STATEMENTS~~thousands, OFexcept ~~COMPREHENSIVE~~per ~~INCOME~~ share amounts)

~~(Unaudited)~~

(In thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Revenue	$	155,802	$	136,912	$	286,839	$	256,971
Direct operating costs		106,219		95,464		202,015		179,852
Gross profit		49,583		41,448		84,824		77,119
Selling, general and administrative expenses		24,049		21,156		44,354		43,388
Operating income		25,534		20,292		40,470		33,731
Other income (expense):
Interest income		202		39		409		63
Interest expense		(3,588)		(2,907)		(7,618)		(5,716)
Foreign currency loss		(384)		(139)		(523)		(153)
Other		122		193		232		2,316
Total other expense		(3,648)		(2,814)		(7,500)		(3,490)

Income before income taxes		21,886		17,478		32,970		30,241
Income tax expense		6,395		4,258		9,436		7,778
Net income	$	15,491	$	13,220	$	23,534	$	22,463

Earnings per share:
Basic	$	0.70	$	0.60	$	1.07	$	1.03
Diluted	$	0.70	$	0.60	$	1.06	$	1.02

Shares used in earnings per share calculation:
Basic		22,006		21,867		21,997		21,835
Diluted		22,208		22,024		22,203		21,991

	Three Months Ended March 31,
	2019		2018
Net income	$	8,043	$	9,243
Other comprehensive income (loss):
Foreign currency translation gain (loss)		1,689		(1,871)
Net changes in interest rate hedge, net of taxes of ($184) and $425, respectively		(691)		1,595
Comprehensive income, net of tax	$	9,041	$	8,967

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

~~Table of Contents~~ 4

USTable ~~ECOLOGY, INC.~~ of Contents

~~CONSOLIDATED~~US ~~STATEMENTS OF CASH FLOWS~~ ECOLOGY, INC.

~~(Unaudited)~~ CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(~~In thousands~~Unaudited)

	Three Months Ended March 31,
	2019		2018
Cash flows from operating activities:
Net income	$	8,043	$	9,243
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment		8,125		6,605
Amortization of intangible assets		2,811		2,302
Accretion of closure and post-closure obligations		1,125		1,074
Property and equipment impairment charges		25		—
Unrealized foreign currency loss (gain)		(371)		654
Deferred income taxes		2,905		450
Share-based compensation expense		1,222		1,068
Unrecognized tax benefits		131		—
Net loss (gain) on disposition of assets		(272)		17
Gain on insurance proceeds from damaged property and equipment		(4,653)		—
Amortization of debt issuance costs		204		202
Changes in assets and liabilities:
Receivables		16,577		14,947
Income taxes receivable		(1,487)		(573)
Other assets		525		(792)
Accounts payable and accrued liabilities		(11,935)		(4,163)
Deferred revenue		(47)		301
Accrued salaries and benefits		(3,417)		(2,432)
Income taxes payable		(517)		215
Closure and post-closure obligations		(470)		(288)
Net cash provided by operating activities		18,524		28,830
Cash flows from investing activities:
Purchases of property and equipment		(7,223)		(7,558)
Insurance proceeds from damaged property and equipment		5,000		—
Proceeds from sale of property and equipment		459		42
Purchases of restricted investments		(23)		(498)
Proceeds from sale of restricted investments		—		417
Net cash used in investing activities		(1,787)		(7,597)
Cash flows from financing activities:
Payments on long-term debt		(30,000)		—
Payments on short-term borrowings		(4,331)		—
Proceeds from short-term borrowings		6,449		—
Dividends paid		(3,970)		(3,938)
Payment of equipment financing obligations		(199)		(108)
Proceeds from exercise of stock options		—		731
Other		(915)		(312)
Net cash used in financing activities		(32,966)		(3,627)
Effect of foreign exchange rate changes on cash		393		(488)
Increase (decrease) in Cash and cash equivalents and restricted cash		(15,836)		17,118
Cash and cash equivalents and restricted cash at beginning of period		32,753		28,799
Cash and cash equivalents and restricted cash at end of period	$	16,917	$	45,917
Reconciliation of Cash and cash equivalents and restricted cash
Cash and cash equivalents at beginning of period		31,969		27,042
Restricted cash at beginning of period		784		1,757
Cash and cash equivalents and restricted cash at beginning of period	$	32,753	$	28,799
Cash and cash equivalents at end of period		16,120		44,251
Restricted cash at end of period		797		1,666
Cash and cash equivalents and restricted cash at end of period	$	16,917	$	45,917
Supplemental Disclosures:
Income taxes paid, net of receipts	$	2,085	$	3,429
Interest paid	$	3,462	$	2,554
Non-cash investing and financing activities:
Capital expenditures in accounts payable	$	912	$	245
Restricted stock issued from treasury shares	$	—	$	11

(In thousands)

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Net income	$	15,491	$	13,220	$	23,534	$	22,463
Other comprehensive income (loss):
Foreign currency translation gain (loss)		1,680		(1,597)		3,369		(3,468)
Net changes in interest rate hedge, net of taxes of $(313), $167, $(497) and $592, respectively		(1,177)		628		(1,868)		2,223
Comprehensive income, net of tax	$	15,994	$	12,251	$	25,035	$	21,218

~~Table of Contents~~

USThe ~~ECOLOGY, INC~~accompanying notes are an integral part of these financial statements.

~~CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY~~

~~(Unaudited)~~ 5

~~(In~~Table ~~thousands)~~ of Contents

	Three Months Ended March 31,
	2019		2018
Total stockholders' equity, beginning balances	$	359,217	$	324,077
Common stock:
Beginning balances	$	220	$	218
Stock option exercises and issuance of common stock and restricted common stock		1		1
Ending balances	$	221	$	219
Additional paid-in capital:
Beginning balances	$	183,834	$	177,498
Share-based compensation		1,222		1,068
Stock option exercises and issuance of common stock and restricted common stock		(1,103)		285
Issuance of restricted common stock from treasury shares		—		(11)
Ending balances	$	183,953	$	178,840
Retained earnings:
Beginning balances	$	189,324	$	155,533
Net income		8,043		9,243
Dividend paid		(3,970)		(3,938)
Ending balances	$	193,397	$	160,838
Treasury stock:
Beginning balances	$	(370)	$	(68)
Repurchase of common stock		(916)		(313)
Issuance of restricted common stock from treasury shares		—		11
Ending balances	$	(1,286)	$	(370)
Accumulated other comprehensive income (loss):
Beginning balances	$	(13,791)	$	(9,104)
Other comprehensive income (loss)		998		(276)
Ending balances	$	(12,793)	$	(9,380)
Total stockholders' equity, ending balances	$	363,492	$	330,147

US ECOLOGY, INC.

~~The~~CONSOLIDATED ~~accompanying~~STATEMENTS ~~notes~~OF ~~are~~CASH ~~an integral part of these financial statements.~~ FLOWS

7 (Unaudited)

~~Table~~(In ~~of Contents~~ thousands)

~~US ECOLOGY, INC.~~

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


	Six Months Ended June 30,
	2019		2018
Cash flows from operating activities:
Net income	$	23,534	$	22,463
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment		17,254		13,649
Amortization of intangible assets		5,674		4,598
Accretion of closure and post-closure obligations		2,258		2,155
Property and equipment impairment charges		25		—
Unrealized foreign currency loss (gain)		(502)		1,222
Deferred income taxes		3,690		27
Share-based compensation expense		2,467		2,079
Unrecognized tax benefits		131		—
Net loss (gain) on disposition of assets		(142)		11
Gain on insurance proceeds from damaged property and equipment		(9,153)		—
Amortization of debt issuance costs		409		405
Changes in assets and liabilities:
Receivables		(5,346)		(2,087)
Income taxes receivable		452		(2,851)
Other assets		(1,384)		88
Accounts payable and accrued liabilities		404		10,286
Deferred revenue		2,418		1,770
Accrued salaries and benefits		(2,025)		(2,317)
Income taxes payable		(515)		(2,905)
Closure and post-closure obligations		(775)		(583)
Net cash provided by operating activities		38,874		48,010

Cash flows from investing activities:
Purchases of property and equipment		(24,657)		(14,960)
Insurance proceeds from damaged property and equipment		9,500		—
Proceeds from sale of property and equipment		512		141
Purchases of restricted investments		(400)		(498)
Proceeds from sale of restricted investments		354		431
Net cash used in investing activities		(14,691)		(14,886)

Cash flows from financing activities:
Payments on long-term debt		(30,000)		—
Payments on short-term borrowings		(14,384)		—
Proceeds from short-term borrowings		14,384		—
Dividends paid		(7,942)		(7,884)
Payment of equipment financing obligations		(408)		(217)
Proceeds from exercise of stock options		—		1,471
Other		(914)		(312)
Net cash used in financing activities		(39,264)		(6,942)

Effect of foreign exchange rate changes on cash		836		(902)

Increase (decrease) in Cash and cash equivalents and restricted cash		(14,245)		25,280
Cash and cash equivalents and restricted cash at beginning of period		32,753		28,799
Cash and cash equivalents and restricted cash at end of period	$	18,508	$	54,079

Reconciliation of Cash and cash equivalents and restricted cash
Cash and cash equivalents at beginning of period		31,969		27,042
Restricted cash at beginning of period		784		1,757
Cash and cash equivalents and restricted cash at beginning of period	$	32,753	$	28,799
Cash and cash equivalents at end of period		17,690		53,303
Restricted cash at end of period		818		776
Cash and cash equivalents and restricted cash at end of period	$	18,508	$	54,079
Supplemental Disclosures:
Income taxes paid, net of receipts	$	5,694	$	13,625
Interest paid	$	6,850	$	5,288
Non-cash investing and financing activities:
Capital expenditures in accounts payable	$	834	$	493
Restricted stock issued from treasury shares	$	451	$	11

~~(Unaudited)~~

~~NOTE~~The 1accompanying notes are an integral part of these financial statements. ~~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 financial statements words such as “we,” “us,” “our,” “US Ecology” and “the Company” refer to US Ecology, Inc. and its subsidiaries. 6

InTable ~~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, 2018. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the entire year ending December 31, 2019. Contents

~~The~~US ~~Company’s consolidated balance sheet as of December 31~~ECOLOGY, ~~2018 has been derived from the Company’s audited consolidated balance sheet as of that date~~ INC.

~~Use~~CONSOLIDATED ofSTATEMENTS ~~Estimates~~ OF STOCKHOLDERS’ EQUITY

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. (Unaudited)

~~Recently~~(In ~~Issued Accounting Pronouncements~~ thousands)

In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, “Disclosure Update and Simplification,” adopting amendments to certain disclosure rules that were redundant, duplicative, overlapping, outdated, or superseded, in light of other SEC disclosure requirements, GAAP or changes in the information environment. In addition, the amendments expanded the disclosure requirements relating to the analysis of equity for interim financial statements. Under the amendments, an analysis of the changes in each caption of shareholders’ equity and noncontrolling interests presented in the balance sheet must be provided in a note or separate statement. The analysis must present a reconciliation of the beginning balance to the ending balance of each period for which a statement of earnings is required to be filed. The final rule was effective on November 5, 2018. The Company adopted the final rule effective for the first quarter of 2019. The adoption of the final rule did not have an impact on the Company’s consolidated financial position or results of operations.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815). This ASU amends the guidance in ASC 815 to better align an entity’s risk management activities and financial reporting for hedging relationships


	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Total stockholders' equity, beginning balances	$	363,492	$	330,147	$	359,217	$	324,077

Common stock:
Beginning balances	$	221	$	219	$	220	$	218
Stock option exercises and issuance of common stock and restricted common stock		—		1		1		2
Ending balances	$	221	$	220	$	221	$	220

Additional paid-in capital:
Beginning balances	$	183,953	$	178,840	$	183,834	$	177,498
Share-based compensation		1,245		1,011		2,467		2,079
Stock option exercises and issuance of common stock and restricted common stock		—		836		(1,103)		1,121
Issuance of restricted common stock from treasury shares		(451)		—		(451)		(11)
Ending balances	$	184,747	$	180,687	$	184,747	$	180,687

Retained earnings:
Beginning balances	$	193,397	$	160,838	$	189,324	$	155,533
Net income		15,491		13,220		23,534		22,463
Dividend paid		(3,972)		(3,946)		(7,942)		(7,884)
Ending balances	$	204,916	$	170,112	$	204,916	$	170,112

Treasury stock:
Beginning balances	$	(1,286)	$	(370)	$	(370)	$	(68)
Repurchase of common stock		—		—		(916)		(313)
Issuance of restricted common stock from treasury shares		451		—		451		11
Ending balances	$	(835)	$	(370)	$	(835)	$	(370)

Accumulated other comprehensive income (loss):
Beginning balances	$	(12,793)	$	(9,380)	$	(13,791)	$	(9,104)
Other comprehensive income (loss)		503		(969)		1,501		(1,245)
Ending balances	$	(12,290)	$	(10,349)	$	(12,290)	$	(10,349)

Total stockholders' equity, ending balances	$	376,759	$	340,300	$	376,759	$	340,300

~~Table~~The accompanying notes are an integral part of ~~Contents~~ these financial statements.

through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The guidance is effective for annual and interim reporting periods beginning after December 15, 2018, with early adoption permitted. The Company adopted ASU 2017-12 on January 1, 2019 and the standard did not have a material impact on its consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The ASU significantly changes the accounting model used by lessees to account for leases, requiring that all material leases be presented on the balance sheet. Lessees will recognize substantially all leases on the balance sheet as a right-of-use asset and a corresponding lease liability. The Company adopted ASU 2016-02 on January 1, 2019 utilizing the modified retrospective transition method and elected not to recast comparative periods. We elected the package of practical expedients, which allows the Company not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date and (3) initial direct costs for any existing leases as of the adoption date. We also elected the practical expedient related to land easements, allowing us to carry forward our accounting treatment for land easements on existing agreements. The Company did not elect to apply the hindsight practical expedient when determining lease term and assessing impairment of right-of-use assets. 7

~~Adoption~~Table of ASU 2016-02 resulted in the recognition of right-of-use assets and lease liabilities for operating leases of $18.1 million on its consolidated balance sheet as of March 31, 2019, with no material impact on its consolidated statement of stockholders’ equity or consolidated statements of operations. See Note 9 for additional information and disclosure on our leases. Contents

~~NOTE 2. REVENUES~~

~~Our~~US ~~operations are managed in two reportable segments~~ECOLOGY, ~~Environmental Services and Field & Industrial Services, reflecting our internal reporting structure and nature of services offered~~ INC. ~~See Note 17 for additional information on our operating segments.~~

~~Effective~~NOTES ~~December~~TO ~~31,~~CONSOLIDATED ~~2018,~~FINANCIAL we changed our presentation of disaggregated revenues to align with changes in how we manage our service lines within our Field & Industrial Services segment. Revenues previously combined and reported as Technical Services are now disaggregated into two service lines, Small Quantity Generation (“SQG”) and Total Waste Management (“TWM”) and certain revenues formerly classified as Technical Services are now included in Remediation. Also, marine terminal services revenues, formerly classified as Other, are now included in Industrial Services. Effective January 1, 2019, Emergency Response revenues, formerly classified as Other, are now presented as a discrete service line. We also conformed the allocation of intercompany revenues between Treatment & Disposal Revenue and Services Revenue to be consistent across both segments. Throughout this Quarterly Report on Form 10-Q, our disaggregated revenues for all periods presented have been recast to reflect these changes. STATEMENTS

~~The following table presents our revenue disaggregated by our reportable segments and service lines:~~ (Unaudited)

	Three Months Ended March 31, 2019
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Total
Treatment & Disposal Revenue (1)	$	77,713	$	2,796	$	80,509
Services Revenue:
Transportation and Logistics (2)		14,619		7,093		21,712
Industrial Services (3)		—		6,016		6,016
Small Quantity Generation (4)		—		8,189		8,189
Total Waste Management (5)		—		8,714		8,714
Remediation (6)		—		1,726		1,726
Emergency Response (7)		—		3,046		3,046
Other (8)		—		1,125		1,125
Revenue	$	92,332	$	38,705	$	131,037

9 NOTE 1. GENERAL

~~Table of Contents~~

	Three Months Ended March 31, 2018
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Total
Treatment & Disposal Revenue (1)	$	72,710	$	2,646	$	75,356
Services Revenue:
Transportation and Logistics (2)		13,761		5,651		19,412
Industrial Services (3)		—		3,879		3,879
Small Quantity Generation (4)		—		8,327		8,327
Total Waste Management (5)		—		10,222		10,222
Remediation (6)		—		2,190		2,190
Emergency Response (7)		—		642		642
Other (8)		—		31		31
Revenue	$	86,471	$	33,588	$	120,059

Basis of Presentation

(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, 2019 and 2018, 16% and 17%, respectively, of our treatment and disposal revenue was derived from Event Business projects. Base Business revenue accounted for 84% and 83% of our treatment and disposal revenue for the three months ended March 31, 2019 and 2018, respectively.

~~(2)~~The ~~Includes~~accompanying ~~collection~~unaudited consolidated financial statements include the results of operations, financial position and ~~transportation~~cash flows of ~~non~~US Ecology, Inc. and its wholly-~~hazardous~~owned subsidiaries. All inter-company balances have been eliminated. Throughout these financial statements words such as “we,” “us,” “our,” “US Ecology” and ~~hazardous~~“the ~~waste~~Company” refer to US Ecology, Inc. and its subsidiaries.

~~(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.~~

In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments (4consisting only of normal recurring adjustments) ~~Includes~~necessary ~~retail~~to ~~services~~present fairly, ~~laboratory~~in ~~packing~~all material respects, ~~less-than-truck-load~~the ~~service~~results of the Company for the periods presented. These consolidated financial statements have been prepared by the Company pursuant to the rules and ~~household~~regulations ~~hazardous~~of ~~waste~~the ~~collection~~Securities and Exchange Commission (“SEC”). ~~Contracts~~Certain ~~for~~information ~~Small~~and ~~Quantity~~footnote ~~Generation~~disclosures ~~may~~normally ~~extend~~included ~~beyond~~in ~~one~~financial ~~year~~statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted pursuant to the rules and aregulations ~~portion~~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, 2018. The results of operations for the ~~transaction~~three ~~price~~and ~~can~~six months ended June 30, 2019 are not necessarily indicative of the results to be ~~fixed~~expected for the entire year ending December 31, 2019.

(5) Through our 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)~~The ~~Includes~~Company’s ~~site~~consolidated ~~assessment,~~balance ~~onsite~~sheet ~~treatment,~~as ~~project~~of ~~management~~December ~~and~~31, ~~remedial~~2018 ~~action~~has ~~planning~~been ~~and~~derived ~~execution.~~from ~~Contracts~~the ~~for~~Company’s ~~Remediation~~audited ~~may~~consolidated ~~extend~~balance ~~beyond~~sheet ~~one~~as ~~year and a portion~~ of ~~the~~that ~~transaction price can be fixed~~date.

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

~~(8)~~Use ~~Includes~~of ~~equipment rental and other miscellaneous services.~~Estimates

We provide services in the United States and Canada. 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, 2019						Three Months Ended March 31, 2018
			Field &						Field &
	Environmental		Industrial				Environmental		Industrial
$s in thousands	Services		Services		Total		Services		Services		Total
United States	$	77,359	$	38,705	$	116,064	$	74,986	$	33,588	$	108,574
Canada		14,973		—		14,973		11,485		—		11,485
Total revenue	$	92,332	$	38,705	$	131,037	$	86,471	$	33,588	$	120,059

~~Deferred Revenue~~

WeRecently ~~record~~Issued ~~deferred~~Accounting revenue when cash payments are received, or advance billings are charged, prior to performance of services. Deferred revenue includes waste that has been received but not yet treated or disposed, and is recognized when services are performed. During the three months ended March 31, 2019 and 2018, we recognized $7.5 million and $6.3 million of revenue, respectively, that was included in the deferred revenue balance at the beginning of each year. Pronouncements

~~Table~~In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, “Disclosure Update and Simplification,” adopting amendments to certain disclosure rules that were redundant, duplicative, overlapping, outdated, or superseded, in light of ~~Contents~~ other SEC disclosure requirements, GAAP or changes in the information environment. In addition, the amendments expanded the disclosure requirements relating to the analysis of equity for interim financial statements. Under the amendments, an analysis of the changes in each caption of shareholders’ equity and noncontrolling interests presented in the balance sheet must be provided in a note or separate statement. The analysis must present a reconciliation of the beginning balance to the ending balance of each period for which a statement of earnings is required to be filed. The final rule was effective on November 5, 2018. The Company adopted the final rule effective for the first quarter of 2019. The adoption of the final rule did not have an impact on the Company’s consolidated financial position or results of operations.

~~Receivables~~ In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815). This ASU amends the guidance in ASC 815 to better align an entity’s risk management activities and financial reporting for hedging relationships

~~Our receivables include invoiced and unbilled amounts where the Company has an unconditional right to payment.~~ 8

~~Principal~~Table ~~versus~~of ~~Agent Considerations~~ Contents

~~The~~through ~~Company~~changes ~~commonly~~to ~~contracts~~both ~~with~~the ~~third-parties~~designation toand ~~perform~~measurement ~~certain~~guidance ~~waste-related~~for ~~services~~qualifying ~~that~~hedging werelationships ~~have~~and ~~promised~~the inpresentation ~~our~~of ~~customer~~hedge ~~contracts~~results. WeThe ~~consider~~guidance ~~ourselves~~is ~~the~~effective ~~principal~~for inannual ~~these~~and ~~arrangements~~interim asreporting weperiods ~~direct~~beginning ~~the~~after ~~timing~~December 15, ~~nature~~2018, ~~and~~with ~~pricing~~early ofadoption ~~the~~permitted. ~~services~~The ~~ultimately~~Company ~~provided~~adopted byASU ~~the third~~2017-~~party~~12 toon January 1, 2019 and the ~~customer~~standard did not have a material impact on its consolidated financial statements.

~~Costs~~In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The ASU significantly changes the accounting model used by lessees to ~~obtain~~account for leases, requiring that all material leases be presented on the balance sheet. Lessees will recognize substantially all leases on the balance sheet as a ~~contract~~ right-of-use asset and a corresponding lease liability. The Company adopted ASU 2016-02 on January 1, 2019 utilizing the modified retrospective transition method and elected not to recast comparative periods. We elected the package of practical expedients, which allows the Company not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date and (3) initial direct costs for any existing leases as of the adoption date. We also elected the practical expedient related to land easements, allowing us to carry forward our accounting treatment for land easements on existing agreements. The Company did not elect to apply the hindsight practical expedient when determining lease term and assessing impairment of right-of-use assets.

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.

~~Practical~~Adoption ~~Expedients~~of ASU 2016-02 resulted in the recognition of right-of-use assets and ~~Optional~~lease ~~Exemptions~~ liabilities for operating leases of $18.1 million on its consolidated balance sheet as of March 31, 2019, with no material impact on its consolidated statement of stockholders’ equity or consolidated statements of operations. See Note 9 for additional information and disclosure on our leases.

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.

WeNRCG 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. Merger

~~NOTE 3. BUSINESS COMBINATION~~

~~Ecoserv~~On ~~Industrial~~June ~~Disposal~~23, ~~LLC~~ 2019, US Ecology, Inc. entered into an Agreement and Plan of Merger (the “Merger Agreement”) with NRC Group Holdings Corp., a Delaware corporation (“NRCG”), US Ecology Parent, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Holdco”), Rooster Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Holdco (“Rooster Merger Sub”), and ECOL Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Holdco (“ECOL Merger Sub”).

On November 14, 2018, the Company acquired Ecoserv Industrial Disposal, LLC (“Winnie”), which provides non-hazardous industrial wastewater disposal solutions and employs deep-well injection technology in the southern United States.

The ~~following~~Merger ~~table~~Agreement ~~summarizes~~provides that, subject to the ~~consideration~~conditions ~~paid~~set ~~for~~forth ~~Winnie~~in the Merger Agreement, ECOL Merger Sub will merge with and into the ~~fair~~Company, ~~value~~with ~~estimates~~the Company continuing as the surviving company and as a wholly-owned subsidiary of ~~assets~~Holdco ~~acquired~~(the “Parent Merger”). Substantially concurrently therewith, NRCG Merger Sub will merge with and ~~liabilities~~into ~~assumed~~NRCG, ~~recognized~~with atNRCG continuing as the ~~acquisition~~surviving ~~date~~company and as a wholly-owned subsidiary of Holdco (the “Rooster Merger,” and, together with ~~purchase~~the ~~price~~Parent ~~allocation~~Merger, ~~adjustments~~the ~~since~~“Mergers”). The parties to the ~~preliminary~~Merger ~~purchase~~Agreement ~~price~~intend ~~allocation~~that (1) each of the Mergers will qualify as ~~previously~~a ~~disclosed~~“reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986 (the “Code”), (2) the Mergers together will be treated as an “exchange” described in Section 351 of ~~December~~the 31Code, ~~2018:~~ and (3) the Merger Agreement will constitute a “plan of reorganization” for purposes of Sections 354 and 361 of the Code.

	Purchase Price Allocation
	December 31,				March 31,
$s in thousands	2018		Adjustments		2019
Current assets	$	1,923	$	(63)	$	1,860
Property and equipment		6,300		(2,324)		3,976
Identifiable intangible assets		66,600		(100)		66,500
Current liabilities		(755)		—		(755)
Other liabilities		(512)		—		(512)
Total identifiable net assets		73,556		(2,487)		71,069
Goodwill		13,573		2,586		16,159
Total purchase price	$	87,129	$	99	$	87,228

~~Purchase~~In ~~price~~the ~~allocation~~Parent ~~adjustments~~Merger, ~~relate~~each ~~primarily~~share of common stock, par value $0.01 per share, of the Company (“Company Common Stock”) issued and outstanding immediately prior to the ~~receipt~~applicable ofEffective ~~additional~~Time ~~information~~(other ~~regarding~~than cancelled shares) will be converted into the ~~fair~~right ~~values~~to receive one share of ~~property~~common ~~and~~stock, ~~equipment~~par value $0.01 per share, of Holdco (“Holdco Common Stock”). Outstanding equity awards of the Company will be rolled into equity awards at Holdco on a ~~post~~one-~~closing~~for-one ~~price~~basis. ~~adjustment~~Each ~~based~~share onof ~~working~~Company ~~capital~~Common ~~requirements~~Stock that is held by the Company as treasury stock or that is owned by the Company, ECOL Merger Sub, or any other subsidiary of the Company, immediately prior to the effective time of the Mergers (the “Effective Time”) will cease to be outstanding and ~~residual~~will ~~goodwill~~be cancelled and retired and will cease to exist, and no consideration will be delivered in exchange therefor.

~~Table~~In the Rooster Merger, each share of ~~Contents~~ common stock, par value $0.0001 per share, of NRCG (“NRCG Common Stock”) issued and outstanding immediately prior to the applicable Effective Time (other than cancelled shares) will be converted into the right to receive, and become exchangeable for: (1) 0.196 shares (the “NRCG Exchange Ratio”) of Holdco Common Stock; (2) cash in lieu of fractional shares of Holdco Common Stock payable pursuant to the Merger Agreement; and (3) any dividends or other distributions to which the holder thereof becomes entitled to upon the surrender of such shares of NRCG Common Stock in accordance with the Merger Agreement. Outstanding shares of NRCG equity awards will be converted into equity awards of Holdco pursuant to the mechanics set forth in the Merger Agreement. In the Rooster

~~NOTE 4. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)~~ 9

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

	Foreign		Unrealized Gain
	Currency		(Loss) on Interest
$s in thousands	Translation		Rate Hedge		Total
Balance at December 31, 2018	$	(14,697)	$	906	$	(13,791)
Other comprehensive income (loss) before reclassifications, net of tax		1,689		(581)		1,108
Amounts reclassified out of AOCI, net of tax (1)		—		(110)		(110)
Other comprehensive income, net		1,689		(691)		998
Balance at March 31, 2019	$	(13,008)	$	215	$	(12,793)

Merger, each share of NRCG Common Stock that is held by NRCG as treasury stock or that is owned by NRCG, Rooster Merger Sub or any other subsidiary of the Company or NRCG immediately prior to the applicable Effective Time will cease to be outstanding and will be cancelled and retired and will cease to exist, and no consideration will be delivered in exchange therefor.

(1) Before-tax reclassifications of $139,000 ($110,000 after-tax) for the three months ended March 31, 2019, were included as a reduction of 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. Amounts in AOCI expected to be recognized as a reduction of interest expense over the next 12 months total approximately $557,000 ($440,000 after-tax).

	Foreign		Unrealized Gain
	Currency		(Loss) on Interest
$s in thousands	Translation		Rate Hedge		Total
Balance at December 31, 2017	$	(8,603)	$	(501)	$	(9,104)
Other comprehensive income (loss) before reclassifications, net of tax		(1,871)		1,382		(489)
Amounts reclassified out of AOCI, net of tax (2)		—		213		213
Other comprehensive income, net		(1,871)		1,595		(276)
Balance at March 31, 2018	$	(10,474)	$	1,094	$	(9,380)

In addition, in the Rooster Merger, each share of 7.00% Series A Convertible Cumulative Preferred Stock, par value $0.0001 per share, of NRCG (the “NRCG Series A Preferred Stock”) will be converted into, and become exchangeable for the right to receive that number of shares of Holdco Common Stock equal to (1) that number of shares of NRCG Common Stock that such share of NRCG Series A Preferred Stock could be converted into at the applicable Effective Time (including Fundamental Change Additional Shares and Accumulated Dividends (each, as defined in the Certificate of Designations, Preferences, Rights and Limitations of NRCG Series A Preferred Stock, dated as of October 17, 2018 and corrected on October 23, 2018 (the “NRCG Certificate of Designations”) establishing the rights of the NRCG Series A Preferred Stock)) multiplied by (b) the NRCG Exchange Ratio; (2) any cash in lieu of fractional shares of Holdco Common Stock payable pursuant to the Merger Agreement; and (3) any dividends or other distributions to which the holder thereof becomes entitled to upon the surrender of such shares of NRCG Common Stock in accordance with the Merger Agreement.

(2) Before-tax reclassifications of $273,000 ($213,000 after-tax) for the three months ended March 31, 2018, 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.

~~NOTE~~At 5the closing of the Rooster Merger, in respect of each outstanding warrant to purchase NRCG Common Stock (each, a “NRCG Warrant”) issued pursuant to that certain Warrant Agreement, dated as of June 22, 2017, between Continental Stock Transfer & Trust Company and NRCG, Holdco will issue a replacement warrant (each, a “Replacement Warrant”) to each holder providing that such Replacement Warrant will be exercisable for a number of shares of Holdco Common Stock equal to the product of (1) the number of shares of NRCG Common Stock that would have been issuable upon the exercise of the NRCG Warrant immediately prior to the effective time of the Rooster Merger and (2) the NRCG Exchange Ratio, at an exercise price equal to the quotient obtained by dividing (a) the pre-merger exercise price ($11. ~~CONCENTRATIONS~~50 ~~AND~~per ~~CREDIT~~share) ~~RISK~~ by (b) the NRCG Exchange Ratio.

~~Major Customers~~

NoThe ~~customer~~closing ~~accounted~~of ~~for~~the ~~more~~Mergers, ~~than~~which ~~10%~~is ofcurrently ~~total~~anticipated ~~revenue~~to ~~for~~occur during the ~~three~~fourth ~~months~~quarter ~~ended~~of ~~March~~2019, 31is subject to certain closing conditions, ~~2019~~including or(1) ~~2018~~requisite approvals of the Company’s and NRCG’s stockholders, ~~respectively.~~(2) Nothe ~~customer~~absence ~~accounted~~of ~~for~~certain ~~more~~legal ~~than~~impediments ~~10%~~to the consummation of ~~total~~the ~~trade~~Mergers, ~~receivables~~(3) the approval of the shares of Holdco Common Stock to be issued as consideration in the Mergers for listing on the Nasdaq Global Select Market, (4) effectiveness of ~~March~~the 31registration statement on Form S-4 registering the shares of Holdco Common Stock to be issued in connection with the Mergers, ~~2019~~the ~~or December~~Replacement 31Warrants and the shares of Holdco Common Stock underlying the Replacement Warrants, ~~2018~~which includes a joint proxy statement of the Company and NRCG and a prospectus of Holdco (the “Proxy Statement”), (5) subject to certain exceptions, the accuracy of the representations, warranties and compliance with the covenants of each party to the Merger Agreement and (6) written tax opinions from the Company’s counsel and NRCG’s counsel.

~~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.

12 NOTE 2. REVENUES

~~Table of Contents~~

~~NOTE~~Our 6operations are managed in two reportable segments, Environmental Services and Field & Industrial Services, reflecting our internal reporting structure and nature of services offered. ~~RECEIVABLES~~ See Note 17 for additional information on our operating segments.

~~Receivables consisted of the following:~~

	March 31,		December 31,
$s in thousands	2019		2018
Trade	$	103,118	$	118,909
Unbilled revenue		21,848		26,538
Other		5,794		2,241
Total receivables		130,760		147,688
Allowance for doubtful accounts		(2,790)		(2,998)
Receivables, net	$	127,970	$	144,690

Effective December 31, 2018, we changed our presentation of disaggregated revenues to align with changes in how we manage our service lines within our Field & Industrial Services segment. Revenues previously combined and reported as Technical Services are now disaggregated into two service lines, Small Quantity Generation (“SQG”) and Total Waste Management (“TWM”) and certain revenues formerly classified as Technical Services are now included in Remediation. Also, marine terminal services revenues, formerly classified as Other, are now included in Industrial Services. Effective January 1, 2019, Emergency Response revenues, formerly classified as Other, are now presented as a discrete service line. We also conformed the allocation of intercompany revenues between Treatment & Disposal Revenue and Services Revenue to be consistent across both segments. Throughout this Quarterly Report on Form 10-Q, our disaggregated revenues for all periods presented have been recast to reflect these changes.

~~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: 10

~~Level~~Table 1of ~~- Quoted prices in active markets for identical assets or liabilities;~~ Contents

~~Level~~The 2following -table ~~Inputs~~presents ~~other~~our ~~than~~revenue ~~quoted~~disaggregated ~~prices~~by ~~included~~our ~~within~~reportable ~~Level~~segments 1and ~~that~~service ~~are either directly or indirectly observable;~~ lines:

~~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, accrued liabilities, debt and interest rate swap agreements. 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.


	Three Months Ended June 30, 2019
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Total
Treatment & Disposal Revenue (1)	$	90,379	$	3,133	$	93,512
Services Revenue:
Transportation and Logistics (2)		22,465		12,760		35,225
Industrial Services (3)		—		4,963		4,963
Small Quantity Generation (4)		—		9,326		9,326
Total Waste Management (5)		—		8,004		8,004
Remediation (6)		—		889		889
Emergency Response (7)		—		3,180		3,180
Other (8)		—		703		703
Revenue	$	112,844	$	42,958	$	155,802

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, 2019, the carrying value of the Company’s variable-rate debt approximates fair value due to the short-term nature of the interest rates.

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


	Three Months Ended June 30, 2018
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Total
Treatment & Disposal Revenue (1)	$	78,093	$	2,902	$	80,995
Services Revenue:
Transportation and Logistics (2)		20,867		7,598		28,465
Industrial Services (3)		—		4,506		4,506
Small Quantity Generation (4)		—		9,138		9,138
Total Waste Management (5)		—		9,019		9,019
Remediation (6)		—		3,968		3,968
Emergency Response (7)		—		749		749
Other (8)		—		72		72
Revenue	$	98,960	$	37,952	$	136,912

	March 31, 2019
	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)	$	1,569	$	2,611	$	—	$	4,180
Money market funds (2)		797		—		—		797
Interest rate swap agreement (3)		—		272		—		272
Total	$	2,366	$	2,883	$	—	$	5,249


	Six Months Ended June 30, 2019
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Total
Treatment & Disposal Revenue (1)	$	168,092	$	5,929	$	174,021
Services Revenue:
Transportation and Logistics (2)		37,085		19,852		56,937
Industrial Services (3)		—		10,980		10,980
Small Quantity Generation (4)		—		17,515		17,515
Total Waste Management (5)		—		16,719		16,719
Remediation (6)		—		2,616		2,616
Emergency Response (7)				6,226		6,226
Other (8)		—		1,825		1,825
Revenue	$	205,177	$	81,662	$	286,839

~~Table of Contents~~

	December 31, 2018
	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)	$	1,561	$	2,596	$	—	$	4,157
Money market funds (2)		784		—		—		784
Interest rate swap agreement (3)		—		1,147				1,147
Total	$	2,345	$	3,743	$	—	$	6,088

~~(1)~~Table ~~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.Contents

(2) We invest a portion of our 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. Money market funds are considered restricted cash for purposes of reconciling the beginning-of-period and end-of-period amounts presented in the Company’s consolidated statements of cash flows.


	Six Months Ended June 30, 2018
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Total
Treatment & Disposal Revenue (1)	$	150,802	$	5,549	$	156,351
Services Revenue:
Transportation and Logistics (2)		34,629		13,248		47,877
Industrial Services (3)		—		8,385		8,385
Small Quantity Generation (4)		—		17,465		17,465
Total Waste Management (5)		—		19,241		19,241
Remediation (6)		—		6,158		6,158
Emergency Response (7)				1,391		1,391
Other (8)		—		103		103
Revenue	$	185,431	$	71,540	$	256,971

(31) InWe ~~order~~categorize toour ~~manage~~treatment ~~interest~~and ~~rate~~disposal ~~exposure,~~revenue weas ~~entered~~either ~~into~~“Base anBusiness” ~~interest~~or ~~rate~~“Event ~~swap~~Business” ~~agreement~~based inon ~~October~~the ~~2014~~underlying ~~that~~nature ~~effectively~~of ~~converts~~the arevenue ~~portion~~source. ofWe ~~our~~define ~~variable-rate~~Event ~~debt~~Business toas anon-recurring ~~fixed~~projects ~~interest~~that ~~rate.~~are ~~The~~expected ~~swap~~to isequal ~~designated~~or asexceed a1,000 ~~cash flow hedge~~tons, with ~~gains~~Base ~~and~~Business ~~losses~~defined ~~deferred~~as inall other ~~comprehensive~~business ~~income~~not tomeeting bethe ~~recognized~~definition asof anEvent ~~adjustment~~Business. toFor ~~interest expense in~~ the ~~same~~three ~~period~~months ~~that~~ended ~~the~~June ~~hedged~~30, ~~interest~~2019 ~~payments~~and ~~affect~~2018, ~~earnings.~~23% ~~The~~and ~~interest~~19%, ~~rate~~respectively, ~~swap~~of ~~has~~our antreatment ~~effective~~and ~~date~~disposal ofrevenue ~~December~~was ~~31,~~derived ~~2014~~from ~~with~~Event anBusiness ~~initial~~projects. ~~notional~~Base ~~amount~~Business ofrevenue ~~$250.0~~accounted ~~million.~~for ~~The~~77% ~~fair~~and ~~value~~81% of ~~the~~our ~~interest~~treatment ~~rate~~and ~~swap~~disposal ~~agreement~~revenue ~~represents~~for the ~~difference~~three inmonths ~~the~~ended ~~present~~June ~~value~~30, of2019 ~~cash~~and ~~flows~~2018, ~~calculated~~respectively. atFor the ~~contracted~~six ~~interest~~months ~~rates~~ended ~~and~~June at30, ~~current~~2019 ~~market~~and ~~interest~~2018, ~~rates~~19% atand ~~the~~18%, ~~end~~respectively, of ~~the~~our ~~period.~~treatment Weand ~~calculate~~disposal ~~the~~revenue ~~fair~~was ~~value~~derived offrom ~~the~~Event ~~interest~~Business ~~rate~~projects. ~~swap~~Base ~~agreement~~Business ~~quarterly~~revenue ~~based~~accounted ~~on the quoted market price~~ for ~~the~~81% ~~same~~and or82% ~~similar financial instruments. The fair value~~ of ~~the~~our ~~interest~~treatment ~~rate~~and ~~swap~~disposal ~~agreement~~revenue isfor ~~included in Other assets in~~ the ~~Company’s~~six ~~consolidated~~months ~~balance~~ended ~~sheet~~June ~~as of March 31~~30, 2019 and ~~December 31~~2018, ~~2018~~respectively.

~~NOTE~~(2) ~~8. PROPERTY~~Includes ~~AND~~collection ~~EQUIPMENT~~ and transportation of non-hazardous and hazardous waste.

~~Property~~(3) Includes industrial cleaning and ~~equipment~~maintenance ~~consisted~~for ofrefineries, ~~the~~chemical ~~following:~~ plants, steel and automotive plants, marine terminals and refinery services such as tank cleaning and temporary storage.

	March 31,		December 31,
$s in thousands	2019		2018
Cell development costs	$	146,720	$	146,155
Land and improvements		51,580		50,481
Buildings and improvements		89,495		91,358
Railcars		17,299		17,299
Vehicles and other equipment		156,535		154,014
Construction in progress		18,415		14,554
Total property and equipment		480,044		473,861
Accumulated depreciation and amortization		(223,142)		(215,418)
Property and equipment, net	$	256,902	$	258,443

(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.

~~Depreciation~~(5) ~~and~~Through ~~amortization~~our ~~expense~~TWM ~~for~~program, customers outsource the ~~three~~management ~~months~~of ~~ended~~their ~~March~~waste 31compliance program to us, ~~2019~~allowing us to organize and ~~2018 was~~coordinate ~~$8.1 million~~their waste management disposal activities and $6environmental compliance.6 ~~million,~~TWM ~~respectively~~contracts may extend beyond one year and a portion of the transaction price can be fixed.

14 (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.

~~Table~~(7) ofIncludes ~~Contents~~ spill response, waste analysis and treatment and disposal planning.

~~NOTE~~(8) 9Includes equipment rental and other miscellaneous services. ~~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 leases, however amounts associated with these provisions are not material. Our leases do not include any material restrictive covenants.

~~Leases~~We ~~with~~provide anservices ~~initial~~in ~~term of 12 months or less are not recorded on~~ the ~~balance~~United ~~sheet~~States and ~~expense is recognized on a straight-line basis over the lease term~~Canada. WeThe ~~combine~~following ~~lease~~table ~~and~~presents ~~nonlease components in~~ our ~~leases,~~revenue ~~except~~disaggregated ~~for~~by ~~equipment leases that include maintenance related services. We use the rate implicit in the lease, when available, to discount lease payments to present value. However, many of~~ our ~~leases~~reportable dosegments ~~not provide a readily determinable implicit rate~~ and wegeographic ~~estimate~~location ~~our~~where ~~incremental~~the ~~borrowing~~underlying ~~rate~~services towere ~~discount payments based on information available at lease commencement.~~ performed:

~~Lease assets and liabilities consisted of the following:~~

$s in thousands	March 31, 2019

Assets:
	Three Months Ended June 30, 2019						Three Months Ended June 30, 2018
Operating right-of-use assets (1)	$	18,270
			Field &						Field &
Finance right-of-use assets (2)		3,277
	Environmental		Industrial				Environmental		Industrial
Total	$	21,547
$s in thousands	Services		Services		Total		Services		Services		Total
Liabilities:
United States	$	85,785	$	42,958	$	128,743	$	84,917	$	37,952	$	122,869
Current:
Canada		27,059		—		27,059		14,043		—		14,043
Operating (3)	$	5,358
Total revenue	$	112,844	$	42,958	$	155,802	$	98,960	$	37,952	$	136,912
Finance (4)		859
Long-term:
Operating (5)		12,769
Finance (6)		2,460
Total	$	21,446

~~(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 $1.3 million as of March 31, 2019.


	Six Months Ended June 30, 2019						Six Months Ended June 30, 2018
			Field &						Field &
	Environmental		Industrial				Environmental		Industrial
$s in thousands	Services		Services		Total		Services		Services		Total
United States	$	163,144	$	81,662	$	244,806	$	159,903	$	71,540	$	231,443
Canada		42,033		—		42,033		25,528		—		25,528
Total revenue	$	205,177	$	81,662	$	286,839	$	185,431	$	71,540	$	256,971

~~(3) Included in Current portion of operating lease liabilities in the Company’s consolidated balance sheets.~~12

~~(4)~~Table ~~Included~~of ~~in Accrued liabilities in the Company’s consolidated balance sheets.~~Contents

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

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

~~Lease~~We ~~expense~~record ~~consisted~~deferred revenue when cash payments are received, or advance billings are charged, prior to performance of services. Deferred revenue includes waste that has been received but not yet treated or disposed, and is recognized when services are performed. We recognized $1.5 million of revenue during each of the ~~following:~~ three month periods ended June 30, 2019 and 2018 that was included in the deferred revenue balance at the beginning of each year. During the six months ended June 30, 2019 and 2018, we recognized $9.0 million and $7.8 million of revenue, respectively, that was included in the deferred revenue balance at the beginning of each year.

	Three Months Ended
$s in thousands	March 31, 2019
Operating lease cost (1)	$	1,742
Finance lease cost:
Amortization of leased assets (2)		228
Interest on lease liabilities (3)		20
Total	$	1,990

(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.Receivables

~~Table~~Our ofreceivables ~~Contents~~ include invoiced and unbilled amounts where the Company has an unconditional right to payment.

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

~~(3)~~Principal ~~Included~~versus inAgent ~~Interest expense in the Company’s consolidated statements of operations.~~Considerations

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

	Three Months Ended
$s in thousands	March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,615
Operating cash flows from finance leases		20
Financing cash flows from finance leases		199
Non-cash investing and financing activities:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	1,628
Right-of-use assets obtained in exchange for new finance lease liabilities		1,844

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.

~~Other information related to our leases is as follows:~~

	March 31, 2019
Weighted-average remaining lease term (years):
Operating leases		5.6
Finance leases		3.9
Weighted-average discount rate:
Operating leases		4.37	%
Finance leases		3.64	%

Costs to obtain a contract

~~The~~ ~~Company’s maturity analysis of its lease liabilities as of March 31, 2019 is as follows:~~

	Operating		Finance
$s in thousands	Leases		Leases		Total
2019 (excluding the three months ended March 31, 2019)	$	4,433	$	726	$	5,159
2020		3,936		792		4,728
2021		3,487		619		4,106
2022		2,199		548		2,747
2023		1,722		612		2,334
Thereafter		5,096		354		5,450
Total	$	20,873	$	3,651	$	24,524
Less: Interest		2,746		332		3,078
Present value of lease liabilities	$	18,127	$	3,319	$	21,446

~~Future minimum lease payments on non-cancellable operating leases as of December 31, 2018 are as follows:~~

$s in thousands	Payments
2019	$	5,638
2020		3,644
2021		3,184
2022		1,885
2023		1,457
Thereafter		5,065
	$	20,873

Practical Expedients and Optional Exemptions

~~Table~~Our payment terms may vary based on type of ~~Contents~~ 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.

~~NOTE 10. GOODWILL AND INTANGIBLE ASSETS~~

~~Changes~~We indo ~~goodwill~~not ~~for~~disclose the ~~three~~value ~~months ended~~of ~~March~~unsatisfied ~~31,~~performance ~~2019~~obligations ~~consisted~~as contracts with an original expected length of more than one year and contracts for which we do not recognize revenue at the ~~following:~~ 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.

					Field &
	Environmental				Industrial
	Services				Services
			Accumulated				Accumulated
$s in thousands	Gross		Impairment		Gross		Impairment		Total
Balance at December 31, 2018	$	162,816	$	(6,870)	$	51,231	$	—	$	207,177
Winnie purchase price allocation adjustment		2,586		—		—		—		2,586
Foreign currency translation		363		—		—		—		363
Balance at March 31, 2019	$	165,765	$	(6,870)	$	51,231	$	—	$	210,126

~~Intangible assets, net consisted of the following:~~

	March 31, 2019						December 31, 2018
			Accumulated						Accumulated
$s in thousands	Cost		Amortization		Net		Cost		Amortization		Net
Amortizing intangible assets:
Permits, licenses and lease	$	165,184	$	(15,812)	$	149,372	$	164,840	$	(14,804)	$	150,036
Customer relationships		99,321		(27,284)		72,037		99,241		(25,676)		73,565
Technology - formulae and processes		6,816		(1,806)		5,010		6,672		(1,714)		4,958
Customer backlog		3,652		(1,748)		1,904		3,652		(1,656)		1,996
Developed software		2,889		(1,659)		1,230		2,884		(1,581)		1,303
Non-compete agreements		1,542		(975)		567		1,542		(875)		667
Internet domain and website		536		(135)		401		536		(128)		408
Database		386		(174)		212		384		(167)		217
Total amortizing intangible assets		280,326		(49,593)		230,733		279,751		(46,601)		233,150
Non-amortizing intangible assets:
Permits and licenses		46,403		—		46,403		46,391		—		46,391
Tradename		127		—		127		125		—		125
Total intangible assets	$	326,856	$	(49,593)	$	277,263	$	326,267	$	(46,601)	$	279,666

NOTE 3. BUSINESS COMBINATION

Amortization expense for the three months ended March 31, 2019 and 2018 was $2.8 million and $2.3 million, respectively. Foreign intangible asset carrying amounts are affected by foreign currency translation.

~~NOTE~~Ecoserv ~~11. DEBT~~ Industrial Disposal, LLC

~~Long-term debt consisted of the following:~~

	March 31,		December 31,
$s in thousands	2019		2018
Revolving credit facility	$	334,000	$	364,000
Long-term debt	$	334,000	$	364,000

~~2017 Credit Agreement~~

On April 18, 2017, the Company entered into a senior secured credit agreement (the “2017 Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent for the lenders, swingline lender and issuing lender, and Bank of America, N.A., as an issuing lender, that provides for a $500.0 million, 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 $25.0 million sublimit for the issuance of swingline loans used to fund short-term working capital requirements. The 2017 Credit Agreement also contains an accordion feature whereby the Company may request up to $200.0 million of 13

17 Table of Contents

~~Table~~The following table summarizes the consideration paid for Winnie and the fair value estimates of ~~Contents~~ assets acquired and liabilities assumed, recognized at the acquisition date, with purchase price allocation adjustments since the preliminary purchase price allocation as previously disclosed as of December 31, 2018:

~~additional funds through an increase to the Revolving Credit Facility, through incremental term loans, or some combination thereof.~~

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). Under the Revolving Credit Facility, revolving credit loans are available based on a base rate (as defined in the 2017 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 2017 Credit Agreement), as set forth in the table below:


	Purchase Price Allocation
	December 31,				June 30,
$s in thousands	2018		Adjustments		2019
Current assets	$	1,923	$	(63)	$	1,860
Property and equipment		6,300		(2,324)		3,976
Identifiable intangible assets		66,600		(100)		66,500
Current liabilities		(755)		—		(755)
Other liabilities		(512)		—		(512)
Total identifiable net assets		73,556		(2,487)		71,069
Goodwill		13,573		2,586		16,159
Total purchase price	$	87,129	$	99	$	87,228

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%

AtPurchase ~~March~~price ~~31,~~allocation ~~2019,~~adjustments ~~the~~relate ~~effective~~primarily ~~interest~~to ~~rate on~~ the ~~Revolving~~receipt ~~Credit~~of ~~Facility,~~additional ~~after~~information ~~giving~~regarding ~~effect to~~ the ~~impact~~fair values of ~~our~~property ~~interest~~and ~~rate swap~~equipment, ~~was~~a ~~3.58%.~~post-closing ~~Interest~~price ~~only~~adjustment ~~payments~~based ~~are due either quarterly or~~ on ~~the~~working ~~last~~capital ~~day~~requirements ofand ~~any~~residual ~~interest period, as applicable~~goodwill.

In October 2014, the Company entered into an interest rate swap agreement, effectively fixing the interest rate on $165.0 million, or 49%, of the Revolving Credit Facility borrowings as of March 31, 2019.

The Company 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 reduced based upon the Company’s total net leverage ratio (as defined in the 2017 Credit Agreement). The maximum letter of credit capacity under the Revolving Credit Facility is $75.0 million and the 2017 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, 2019, there were $334.0 million of revolving credit loans outstanding on the Revolving Credit Facility. These revolving credit loans are due upon the earliest to occur of (a) April 18, 2022 (or, with respect to any lender, such later date as requested by us and accepted by such lender), (b) the date of termination of the entire revolving credit commitment (as defined in the 2017 Credit Agreement) by us, and (c) the date of termination of the revolving credit commitment and are presented as long-term debt in the consolidated balance sheets.

~~The~~NOTE ~~Company~~4. ACCUMULATED ~~has~~OTHER ~~entered~~COMPREHENSIVE ~~into~~INCOME 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”~~LOSS). Total advances outstanding under the Sweep Arrangement are subject to the $25.0 million swingline loan sublimit under the Revolving Credit Facility. The Company’s revolving credit loans outstanding under the Revolving Credit Facility are not subject to repayment through the Sweep Arrangement. As of March 31, 2019, there were $2.1 million in borrowings outstanding subject to the Sweep Arrangement, which are presented as Short-term borrowings in the consolidated balance sheet.

As of March 31, 2019, the availability under the Revolving Credit Facility was $158.2 million with $5.7 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.

~~The~~Changes ~~Company may at any time and from time to time prepay revolving credit loans and swingline loans,~~ in ~~whole~~accumulated orother incomprehensive ~~part,~~income ~~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 2017 Credit Agreement~~“AOCI”) orconsisted ~~from~~of ~~fees payable to terminate~~ the ~~deposits from which such funds were obtained) with respect to the early termination of any LIBOR rate loan. The 2017 Credit Agreement~~ following:

Table of Contents


	Foreign		Unrealized Gain
	Currency		(Loss) on Interest
$s in thousands	Translation		Rate Hedge		Total
Balance at December 31, 2018	$	(14,697)	$	906	$	(13,791)
Other comprehensive income (loss) before reclassifications, net of tax		3,369		(1,658)		1,711
Amounts reclassified out of AOCI, net of tax (1)		—		(210)		(210)
Other comprehensive income, net		3,369		(1,868)		1,501
Balance at June 30, 2019	$	(11,328)	$	(962)	$	(12,290)

~~provides~~(1) ~~for~~Before-tax ~~mandatory~~reclassifications ~~prepayment~~of at$127,000 ~~any~~($100,000 ~~time~~after-tax) ifand $266,000 ($210,000 after-tax) for the ~~revolving~~three ~~credit~~and ~~outstanding~~six ~~exceeds~~months ~~the~~ended ~~revolving~~June ~~credit~~30, ~~commitment~~2019, (were included as ~~such~~a ~~terms~~reduction ~~are~~of ~~defined~~Interest expense in the ~~2017~~Company’s ~~Credit~~consolidated ~~Agreement),~~statements inof anoperations. ~~amount~~Amounts ~~equal~~relate to ~~such~~the ~~excess~~Company’s interest rate swap which is designated as a cash flow hedge. ~~Subject~~Changes in fair value of the swap recognized in AOCI are reclassified to ~~certain~~interest ~~exceptions,~~expense when hedged interest payments on the ~~2017~~underlying ~~Credit~~long-term ~~Agreement~~debt ~~provides~~are ~~for~~made. ~~mandatory~~Amounts ~~prepayment~~in ~~upon~~AOCI ~~certain~~expected ~~asset~~to ~~dispositions,~~be ~~casualty~~recognized ~~events~~as ~~and~~a ~~issuances~~reduction of ~~indebtedness.~~interest expense over the next 12 months total approximately $509,000 ($402,000 after-tax).

Pursuant to (i) an unconditional guarantee agreement and (ii) a collateral agreement, each entered into by the Company and its domestic subsidiaries on April 18, 2017, the Company’s obligations under the 2017 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 the Company 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 2017 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 2017 Credit Agreement), among other things, amounts outstanding under the 2017 Credit Agreement may be accelerated and the commitments may be terminated.


	Foreign		Unrealized Gain
	Currency		(Loss) on Interest
$s in thousands	Translation		Rate Hedge		Total
Balance at December 31, 2017	$	(8,603)	$	(501)	$	(9,104)
Other comprehensive income (loss) before reclassifications, net of tax		(3,468)		1,913		(1,555)
Amounts reclassified out of AOCI, net of tax (2)		—		310		310
Other comprehensive income, net		(3,468)		2,223		(1,245)
Balance at June 30, 2018	$	(12,071)	$	1,722	$	(10,349)

~~The~~(2) ~~2017~~Before-tax ~~Credit~~reclassifications ~~Agreement~~of ~~also~~$119,000 ~~contains~~($94,000 ~~financial~~after-tax) ~~maintenance~~and ~~covenants~~$392,000 a($310,000 ~~maximum~~after-tax) ~~consolidated~~for ~~total~~the ~~net~~three ~~leverage ratio~~ and asix ~~consolidated~~months ~~interest~~ended ~~coverage~~June ~~ratio~~30, ~~(as~~2018, ~~such~~were ~~terms~~included ~~are~~in ~~defined~~Interest expense in the ~~2017~~Company’s ~~Credit Agreement). Our~~ consolidated ~~total~~statements ~~net~~of ~~leverage~~operations. ~~ratio~~Amounts asrelate ofto the ~~last~~Company’s ~~day~~interest ofrate ~~any~~swap ~~fiscal~~which ~~quarter~~is ~~may~~designated ~~not~~as ~~exceed~~a ~~3.50~~cash toflow 1hedge.~~00,~~ ~~subject~~Changes toin ~~certain~~fair ~~exceptions.~~value ~~Our~~of ~~consolidated~~the ~~interest~~swap ~~coverage~~recognized ~~ratio~~in asAOCI ofare ~~the~~reclassified ~~last~~to ~~day~~interest ofexpense ~~any~~when ~~fiscal~~hedged ~~quarter~~interest ~~may~~payments ~~not~~on bethe ~~less~~underlying ~~than~~long-term ~~3.00~~debt toare 1made.~~00.~~

~~At March 31, 2019, we were in compliance with all of the financial covenants in the 2017 Credit Agreement.~~

~~NOTE 12. CLOSURE AND POST-CLOSURE OBLIGATIONS~~ 14

~~Our~~Table ~~accrued closure and post-closure liability represents 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. Contents

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

	Three Months Ended
$s in thousands	March 31, 2019
Closure and post-closure obligations, beginning of period	$	78,363
Accretion expense		1,125
Payments		(470)
Foreign currency translation		38
Closure and post-closure obligations, end of period		79,056
Less current portion		(2,214)
Long-term portion	$	76,842

19 NOTE 5. CONCENTRATIONS AND CREDIT RISK

~~Table of Contents~~

~~NOTE~~Major ~~13. INCOME TAXES~~ Customers

Our effective tax rate for the three months ended March 31, 2019 was 27.4%, down from 27.6% for the three months ended March 31, 2018. The decrease for the three months ended March 31, 2019, compared to the three months ended March 31, 2018, was primarily due to a higher discrete benefit from the recognition of excess tax benefits of share-based compensation and federal research and development credits, partially offset by effects of the international tax provisions from U.S. tax reform that became effective in 2018. For the three months ended March 31, 2019 and 2018, the Company recognized a discrete tax benefit related to the excess tax benefits from share-based compensation of $304,000 and $235,000, respectively.

~~Gross~~No ~~unrecognized~~customer ~~tax~~accounted ~~benefits,~~for ~~included~~more inthan ~~Other~~10% ~~long-term~~of ~~liabilities~~total inrevenue for the ~~consolidated~~three ~~balance~~or ~~sheets,~~six ~~were~~months ~~$616,000~~ended ~~and~~June ~~$555~~30,~~000~~ ~~as of March 31,~~ 2019 ~~and~~or ~~December 31,~~ 2018, respectively. ~~The~~No ~~gross~~customer ~~unrecognized~~accounted ~~tax~~for ~~benefits,~~more ifthan ~~recognized~~10% ~~by the Company, will result in a reduction~~ of ~~approximately $544,000 to the provision for income taxes thereby favorably impacting the Company’s effective tax rate. We do not anticipate our~~ total ~~unrecognized~~trade ~~tax~~receivables ~~benefits to increase or decrease materially within the next twelve months. We recognize interest assessed by taxing authorities or interest associated with uncertain tax positions~~ as ~~a component~~ of ~~interest~~June ~~expense.~~30, We2019 ~~recognize any penalties assessed by taxing authorities~~ or ~~penalties~~December ~~associated with uncertain tax positions as a component of Selling~~31, ~~general and administrative expenses~~2018.

We file a consolidated U.S. federal income tax return with the Internal Revenue Service (“IRS”) as well as tax returns in various states, Canada, and Mexico. The Company is subject to examination by the IRS for tax years 2014 through 2018. The Company is currently under examination by the state of Idaho for years 2014 through 2018 and the state of Texas for the year 2014. We may be subject to examinations by various state and local taxing jurisdictions for tax years 2014 through 2018. The Company has no significant foreign jurisdiction audits underway. The tax years 2014 through 2018 remain subject to examination by foreign jurisdictions.

~~NOTE~~Credit ~~14. EARNINGS~~Risk ~~PER SHARE~~ Concentration

	Three Months Ended March 31,
	2019				2018
$s and shares in thousands, except per share amounts	Basic		Diluted		Basic		Diluted
Net income	$	8,043	$	8,043	$	9,243	$	9,243
Weighted average basic shares outstanding		21,987		21,987		21,801		21,801
Dilutive effect of share-based awards				210				156
Weighted average diluted shares outstanding				22,197				21,957
Earnings per share	$	0.37	$	0.36	$	0.42	$	0.42
Anti-dilutive shares excluded from calculation				79				95

~~NOTE~~We 15maintain most of our cash and cash equivalents with nationally recognized financial institutions. ~~EQUITY~~ 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.

~~Stock Repurchase Program~~

On June 1, 2016, the Company’s Board of Directors authorized the repurchase of $25.0 million of the Company’s outstanding common stock. Repurchases may be made from time to time in the open market or through privately negotiated transactions. The timing of any repurchases will be based upon prevailing market conditions and other factors. The Company did not repurchase any shares of common stock under the repurchase program during the three months ended March 31, 2019. On May 29, 2018 the repurchase program was extended and will remain in effect until June 6, 2020, unless further extended by our Board of Directors.

20 NOTE 6. RECEIVABLES

~~Table of Contents~~

~~Omnibus~~Receivables ~~Incentive~~consisted ~~Plan~~ of the following:

On May 27, 2015, our stockholders approved the Omnibus Incentive Plan (“Omnibus Plan”), which was approved by our Board of Directors on April 7, 2015. The Omnibus Plan was developed to provide additional incentives through equity ownership in the Company and, as a result, encourage employees and directors to contribute to our success. The Omnibus Plan provides, among other things, the ability for the Company to grant restricted stock, performance stock, options, stock appreciation rights, restricted stock units (“RSUs”), performance stock units (“PSUs”) and other share-based awards or cash awards to officers, employees, consultants and non-employee directors. Subsequent to the approval of the Omnibus Plan in May 2015, we stopped granting equity awards under our 2008 Stock Option Incentive Plan and our 2006 Restricted Stock Plan (collectively, the “Previous Plans”). The Previous Plans will remain in effect solely for the settlement of awards granted under the Previous Plans. No shares that are reserved but unissued under the Previous Plans or that are outstanding under the Previous Plans and reacquired by the Company for any reason will be available for issuance under the Omnibus Plan. The Omnibus Plan expires on April 7, 2025 and authorizes 1,500,000 shares of common stock for grant over the life of the Omnibus Plan. As of March 31, 2019, 885,417 shares of common stock remain available for grant under the Omnibus Plan.

PSUs, RSUs and Restricted Stock


	June 30,		December 31,
$s in thousands	2019		2018
Trade	$	115,935	$	118,909
Unbilled revenue		27,741		26,538
Other		8,887		2,241
Total receivables		152,563		147,688
Allowance for doubtful accounts		(2,526)		(2,998)
Receivables, net	$	150,037	$	144,690

On March 1, 2019, the Company granted 17,111 PSUs to certain employees. Each PSU represents the right to receive, on the settlement date, one share of the Company’s common stock. The total number of PSUs each participant is eligible to earn ranges from 0% to 300% of the target number of PSUs granted. The actual number of PSUs that will vest and be settled in shares is determined at the end of a three-year performance period beginning January 1, 2019, based on adjusted earnings per share and return on invested capital relative to established targets with an additional adjustment based on total stockholder return relative to a set of peer companies. The fair value of the PSUs estimated on the grant date using a Monte Carlo simulation was $58.20 per unit. Compensation expense is recorded over the awards’ vesting period.

~~Assumptions used in the Monte Carlo simulation to calculate the fair value of the PSUs granted in 2019 are as follows:~~

	2019
Stock price on grant date	$	58.40
Expected term		3.0	years
Expected volatility		30	%
Risk-free interest rate		2.5	%
Expected dividend yield		1.1	%

ANOTE ~~summary~~7. FAIR ofVALUE ~~our PSU, restricted stock and RSU activity for the three months ended March 31, 2019 is as follows:~~ MEASUREMENTS

	PSUs			Restricted Stock			RSUs
		Weighted			Weighted			Weighted
		Average			Average			Average
		Grant Date			Grant Date			Grant Date
	Shares	Fair Value		Shares	Fair Value		Shares	Fair Value
Outstanding as of December 31, 2018	39,200	$	55.48	74,988	$	46.74	66,785	$	53.77
Granted	17,111		58.20	20,000		63.85	33,020		56.21
Vested	(13,600)		41.22	(30,134)		39.14	(26,362)		48.28
Cancelled, expired or forfeited	—		—	—		—	(243)		45.66
Outstanding as of March 31, 2019	42,711	$	61.11	64,854	$	55.55	73,200	$	56.88

~~During~~Fair value is defined as the ~~three~~price ~~months~~that ~~ended~~would ~~March~~be ~~31,~~received ~~2019,~~to ~~13,600~~sell ~~PSUs~~an ~~vested~~asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and ~~PSU~~liabilities ~~holders~~recorded ~~earned~~at ~~19,414~~fair ~~shares~~value are categorized using defined hierarchical levels directly related to the amount of subjectivity associated with the ~~Company’s~~inputs ~~common~~to ~~stock.~~ fair value measurements, as follows:

~~Table~~Level of1 ~~Contents~~ - Quoted prices in active markets for identical assets or liabilities;

~~Stock Options~~

ALevel ~~summary~~2 of- ~~our~~Inputs ~~stock~~other ~~option~~than ~~activity~~quoted ~~for~~prices ~~the~~included ~~three~~within ~~months~~Level ~~ended~~1 ~~March~~that ~~31,~~are ~~2019~~either isdirectly asor ~~follows:~~ indirectly observable;

		Weighted
		Average
		Exercise
	Shares	Price
Outstanding as of December 31, 2018	236,503	$	44.93
Granted	36,600		63.85
Exercised	(2,643)		43.01
Cancelled, expired or forfeited	(1,540)		43.55
Outstanding as of March 31, 2019	268,920	$	47.53
Exercisable as of March 31, 2019	192,359	$	43.82

~~During~~Level ~~the~~3 ~~three~~- ~~months~~Unobservable ~~ended~~inputs ~~March~~in ~~31,~~which ~~2019,~~little ~~option~~or ~~holders~~no ~~tendered~~market 1activity exists,~~862~~ ~~options~~requiring inan ~~connection~~entity ~~with~~to ~~options~~develop ~~exercised~~its ~~via~~own ~~net~~assumptions ~~share~~that ~~settlement~~market participants would use to value the asset or liability.

~~Treasury Stock~~

~~During~~The ~~the~~Company’s ~~three~~financial ~~months~~instruments ~~ended~~consist ~~March~~of 31cash and cash equivalents, ~~2019~~accounts receivable, ~~the~~restricted ~~Company~~cash ~~repurchased~~and 14investments,~~462~~ ~~shares~~accounts ofpayable, ~~the~~accrued ~~Company’s~~liabilities, ~~common~~debt ~~stock~~and ininterest ~~connection~~rate ~~with~~swap ~~the~~agreements. ~~net~~The ~~share~~estimated ~~settlement~~fair value of ~~employee~~cash ~~equity~~and ~~awards~~cash atequivalents, anaccounts ~~average~~receivable, ~~cost~~accounts ofpayable ~~$63.34~~and ~~per~~accrued ~~share~~liabilities approximate their carrying value due to the short-term nature of these instruments.

~~Dividends~~

The Company ~~paid~~estimates ~~dividends~~the fair value of $0its variable-rate debt using Level 2 inputs, such as interest rates, related terms and maturities of similar obligations.18 ~~per~~At ~~common~~June ~~share~~30, ~~during~~2019, ~~each~~the carrying value of the ~~three~~Company’s ~~months~~variable-rate ~~ended~~debt ~~March~~approximates ~~31,~~fair ~~2019~~value ~~and~~due ~~2018~~to the short-term nature of the interest rates.

~~NOTE 16. COMMITMENTS AND CONTINGENCIES~~ 15

~~Litigation~~Table ~~and~~of ~~Regulatory Proceedings~~ Contents

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.

~~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~~Company’s ~~primary~~assets ~~waste-treatment building as well as surrounding waste handling, waste storage, maintenance~~ and ~~administrative~~liabilities ~~support~~measured ~~structures, resulting in the closure of the entire facility that remained in effect through January 2019. We resumed limited operations~~ at ~~our~~fair ~~Grand~~value ~~View,~~on ~~Idaho~~a ~~facility~~recurring inbasis ~~February~~consisted ~~2019. In addition to initiating and conducting our own investigation into the incident, we are fully cooperating with Idaho Department~~ of ~~Environmental Quality (“IDEQ”),~~ the U.S. Environmental Protection Agency (“USEPA”) and the Occupational Safety and Health Administration (“OSHA”) to support their comprehensive and independent investigations of the incident. As we continue to investigate the cause of the incident, we are evaluating its impact, but, at this time, we are unable to predict the timing and outcome of the investigation. As such, we cannot presently estimate the potential liability, if any, related to the incident and, therefore, no amounts related to such claims have been recorded in our financial statements as of March 31, 2019. We have not been named as a defendant in any action relating to the incident. We maintain workers’ compensation insurance, business interruption insurance and liability insurance for personal injury, property and casualty damage. We believe that any potential third-party claims associated with the following:

~~Table of Contents~~

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.


	June 30, 2019
	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⁾	$	1,979	$	2,224	$	—	$	4,203
Money market funds ⁽²⁾		818		—		—		818
Total	$	2,797	$	2,224	$	—	$	5,021

Liabilities:
Interest rate swap agreement ⁽³⁾	$	—	$	1,217	$	—	$	1,217
Total	$	—	$	1,217	$	—	$	1,217

The Company received $5.0 million of property-related insurance payments in the first quarter of 2019 related to the incident at our Grand View, Idaho facility in the fourth quarter of 2018. The Company recognized $4.7 million of property-related insurance recovery gains in the first quarter of 2019. Although the Company is actively working with its insurance companies on comprehensive property and business interruption insurance claims, as of March 31, 2019, the Company has neither received nor recognized any business interruption insurance recoveries related to the loss of business, profits or customers.

Other than as described above, we are not currently a party to any material pending legal 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.

NOTE 17. OPERATING SEGMENTS


	December 31, 2018
	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⁾	$	1,561	$	2,596	$	—	$	4,157
Money market funds ⁽²⁾		784		—		—		784
Interest rate swap agreement ⁽³⁾		—		1,147				1,147
Total	$	2,345	$	3,743	$	—	$	6,088

~~Financial~~(1) ~~Information~~We byinvest ~~Segment~~ 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.

~~Our operations are managed in two reportable segments reflecting our internal reporting structure and nature of services offered as follows:~~

~~Environmental~~(2) ~~Services~~We -invest ~~This~~a ~~segment~~portion ~~provides~~of aour ~~broad~~Restricted ~~range~~cash and investments in money market funds. We measure the fair value of ~~hazardous~~these ~~material~~money ~~management~~market ~~services~~fund ~~including~~investments ~~transportation,~~using ~~recycling,~~quoted ~~treatment~~prices ~~and~~for ~~disposal~~identical assets in active markets. Money market funds are considered restricted cash for purposes of ~~hazardous,~~reconciling ~~non~~the beginning-~~hazardous~~of-period and ~~radioactive~~end-of-period ~~waste~~amounts atpresented ~~Company-owned~~in ~~landfill,~~the ~~wastewater,~~Company’s ~~deep-well~~consolidated ~~injection~~statements ~~and~~of ~~other~~cash ~~treatment facilities~~flows.

Field & Industrial Services - This segment provides packaging and collection of hazardous waste and total waste management solutions at customer sites and through our 10-day transfer facilities. Services include on-site management, waste characterization, transportation and disposal of non-hazardous and hazardous waste. This segment also provides specialty field services such as industrial cleaning and maintenance, remediation, lab packs, retail services, transportation, emergency response and other services to commercial and industrial facilities and to government entities.

~~The~~(3) ~~operations~~In ~~not~~order ~~managed~~to ~~through~~manage interest rate exposure, we entered into an interest rate swap agreement in October 2014 that effectively converts a portion of our ~~two~~variable-rate ~~reportable~~debt ~~segments~~to ~~are~~a ~~recorded~~fixed asinterest ~~“Corporate~~rate.” ~~Corporate~~The ~~selling~~swap is designated as a cash flow hedge, ~~general~~with gains and ~~administrative~~losses ~~expenses~~deferred ~~include~~in ~~typical~~other ~~corporate~~comprehensive ~~items~~income ~~such~~to be recognized as ~~legal,~~an ~~accounting~~adjustment ~~and~~to ~~other~~interest ~~items~~expense ofin athe ~~general~~same ~~corporate~~period ~~nature~~that the hedged interest payments affect earnings. ~~Income~~The ~~taxes~~interest ~~are~~rate ~~assigned~~swap tohas ~~Corporate~~an effective date of December 31, ~~but~~2014 ~~all~~with ~~other~~an ~~items~~initial ~~are~~notional ~~included~~amount of $250.0 million. The fair value of the interest rate swap agreement represents the difference in the ~~segment~~present ~~where~~value ~~they~~of ~~originated~~cash flows calculated at the contracted interest rates and at current market interest rates at the end of the period. ~~Inter-company~~We ~~transactions~~calculate ~~have~~the ~~been~~fair ~~eliminated~~value ~~from~~of the ~~segment~~interest ~~information~~rate swap agreement 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 long-term liabilities and ~~are~~Other ~~not~~assets ~~significant~~in ~~between~~the ~~segments~~Company’s consolidated balance sheet as of June 30, 2019 and December 31, 2018, respectively.

~~Table of Contents~~

~~Summarized financial information of our reportable segments is as follows:~~

	Three Months Ended March 31, 2019
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Corporate		Total
Revenue	$	92,332	$	38,705	$	—	$	131,037
Depreciation, amortization and accretion	$	9,625	$	2,132	$	304	$	12,061
Capital expenditures	$	6,712	$	178	$	333	$	7,223
Total assets	$	703,453	$	161,299	$	68,580	$	933,332

	Three Months Ended March 31, 2018
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Corporate		Total
Revenue	$	86,471	$	33,588	$	—	$	120,059
Depreciation, amortization and accretion	$	8,510	$	1,355	$	116	$	9,981
Capital expenditures	$	6,004	$	1,038	$	516	$	7,558
Total assets	$	595,304	$	124,184	$	81,597	$	801,085

~~Adjusted~~Table ~~Earnings~~of ~~Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”)~~ Contents

~~Management~~NOTE ~~uses Adjusted EBITDA as a financial measure to assess segment performance~~8. PROPERTY ~~Adjusted~~AND 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 property and equipment impairment charges, property insurance recoveries 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 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: EQUIPMENT

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

·Property ~~Adjusted~~and ~~EBITDA~~equipment ~~does~~consisted ~~not~~of ~~reflect our interest expense, or~~ the ~~requirements necessary to service interest or principal payments on our debt;~~following:

~~· 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; and


	June 30,		December 31,
$s in thousands	2019		2018
Cell development costs	$	147,059	$	146,155
Land and improvements		53,067		50,481
Buildings and improvements		91,743		91,358
Railcars		17,299		17,299
Vehicles and other equipment		162,388		154,014
Construction in progress		26,546		14,554
Total property and equipment		498,102		473,861
Accumulated depreciation and amortization		(232,482)		(215,418)
Property and equipment, net	$	265,620	$	258,443

· 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.

24 Depreciation and amortization expense for the three months ended June 30, 2019 and 2018 was $9.1 million and $7.0 million, respectively. Depreciation and amortization expense for the six months ended June 30, 2019 and 2018 was $17.3 million and $13.6 million, respectively.

~~Table of Contents~~

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

	Three Months Ended March 31,
$s in thousands	2019		2018
Net income	$	8,043	$	9,243
Income tax expense		3,041		3,520
Interest expense		4,030		2,809
Interest income		(207)		(24)
Foreign currency loss		139		14
Other income		(110)		(2,123)
Property and equipment impairment charges		25		—
Depreciation and amortization of plant and equipment		8,125		6,605
Amortization of intangible assets		2,811		2,302
Share-based compensation		1,222		1,068
Accretion and non-cash adjustment of closure & post-closure liabilities		1,125		1,074
Property insurance recoveries		(4,653)		—
Adjusted EBITDA	$	23,591	$	24,488

NOTE 9. LEASES

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

	Three Months Ended March 31,
$s in thousands	2019		2018
Adjusted EBITDA:
Environmental Services	$	35,260	$	34,672
Field & Industrial Services		2,554		2,345
Corporate		(14,223)		(12,529)
Total	$	23,591	$	24,488

~~Property and Equipment and Intangible Assets Outside of the United States~~

WeLeases ~~provide~~with ~~services~~an ininitial term of 12 months or less are not recorded on the ~~United~~balance ~~States~~sheet and ~~Canada.~~expense ~~Long~~is recognized on a straight-~~lived~~line ~~assets,~~basis ~~comprised~~over ofthe ~~property~~lease term. We combine lease and nonlease components in our leases, except for equipment ~~and~~leases ~~intangible~~that ~~assets~~include ~~net~~maintenance related services. We use the rate implicit in the lease, when available, to discount lease payments to present value. However, many of ~~accumulated~~our ~~depreciation~~leases do not provide a readily determinable implicit rate and ~~amortization,~~we byestimate ~~geographic~~our ~~location~~incremental ~~are~~borrowing asrate ~~follows:~~ to discount payments based on information available at lease commencement.

	March 31,		December 31,
$s in thousands	2019		2018
United States	$	475,703	$	480,322
Canada		58,462		57,787
Total long-lived assets	$	534,165	$	538,109

~~NOTE 18. SUBSEQUENT EVENTS~~ 17

~~Quarterly~~Table ~~Dividend~~ of Contents

OnLease ~~April~~assets 1,and ~~2019,~~liabilities weconsisted ~~declared a quarterly dividend~~ of ~~$0.18~~the ~~per common share to stockholders of record on April 19, 2019. The dividend was paid using cash on hand on April 26, 2019 in an aggregate amount of $4.0 million.~~ following:

Table of Contents


$s in thousands	June 30, 2019
Assets:
Operating right-of-use assets (1)	$	17,575
Finance right-of-use assets (2)		3,028
Total	$	20,603

Liabilities:
Current:
Operating (3)	$	4,932
Finance (4)		837
Long-term:
Operating (5)		12,553
Finance (6)		2,269
Total	$	20,591

~~REPORT~~(1) OFIncluded ~~INDEPENDENT~~in ~~REGISTERED~~Operating ~~PUBLIC~~lease ~~ACCOUNTING~~assets ~~FIRM~~ in the Company’s consolidated balance sheets.

To(2) ~~the~~Included ~~Stockholders~~in Property and ~~Board~~equipment, net in the Company’s consolidated balance sheets. Finance right-of-use ~~Directors~~assets are recorded net of USaccumulated ~~Ecology, Inc~~amortization of $1.5 million as of June 30, 2019.

~~Results~~(3) ofIncluded ~~Review~~in Current portion of ~~Interim~~operating ~~Financial~~lease ~~Information~~ liabilities in the Company’s consolidated balance sheets.

~~We have reviewed the accompanying consolidated balance sheet of US Ecology, Inc. and subsidiaries~~ (~~the “Company”~~4) asIncluded of March 31, 2019, the related consolidated statements of operations, comprehensive income, cash flows, and stockholders’ equity for the three-month periods ended March 31, 2019 and 2018, 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~~Accrued ~~with~~liabilities ~~accounting principles generally accepted~~ in the ~~United~~Company’s ~~States~~consolidated ofbalance ~~America~~sheets.

~~We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board~~ (~~United States~~5) ~~(PCAOB),~~Included the consolidated balance sheet of the Company as of December 31, 2018, 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~~Long-term ~~report~~operating ~~dated~~lease ~~February~~liabilities ~~28, 2019, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth~~ in the ~~accompanying~~Company’s consolidated balance ~~sheet as of December 31, 2018, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived~~sheets.

~~Basis~~(6) ~~for~~Included ~~Review~~in ~~Results~~ Other long-term liabilities in the Company’s consolidated balance sheets.

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.

WeLease ~~conducted~~expense ~~our~~consisted ~~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. following:

~~/s/ Deloitte & Touche LLP Boise, Idaho May 6, 2019~~


	Three Months Ended		Six Months Ended
$s in thousands	June 30, 2019		June 30, 2019
Operating lease cost (1)	$	1,713	$	3,455
Finance lease cost:
Amortization of leased assets (2)		248		476
Interest on lease liabilities (3)		30		50
Total	$	1,991	$	3,981

~~Table~~(1) Included in Direct operating costs and Selling, general, and administrative expenses in the Company’s consolidated statements of ~~Contents~~ 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.

~~ITEM~~ (2~~. MANAGEMENT’S~~) ~~DISCUSSION~~Included ~~AND~~in ~~ANALYSIS~~Direct OFoperating ~~FINANCIAL~~costs ~~CONDITION~~in ~~AND~~the ~~RESULTS~~Company’s OFconsolidated ~~OPERATIONS~~ statements of operations.

~~The~~(3) ~~information~~Included ~~contained~~ in ~~this~~Interest ~~section~~expense ~~should be read~~ in ~~conjunction~~the ~~with~~Company’s ~~our unaudited~~ consolidated ~~financial~~ statements ~~and~~of ~~related notes thereto appearing elsewhere in this quarterly report on Form 10-Q~~operations. ~~In this report words such as “we,” “us,” “our,” “US Ecology” and “the Company” refer to US Ecology, Inc. and its subsidiaries.~~

~~OVERVIEW~~

USSupplemental ~~Ecology, Inc.~~cash isflow ainformation ~~leading~~related ~~North American provider of environmental services~~ to ~~commercial~~our ~~and~~leases ~~government~~is ~~entities. The Company addresses the complex waste management needs of its customers, offering treatment, disposal and recycling of hazardous, non-hazardous and radioactive waste,~~ as well as a wide range of complementary field and industrial services. US Ecology’s comprehensive knowledge of the waste business, its collection of waste management facilities and focus on safety, environmental compliance, and customer service enables us to effectively meet the needs of our customers and to build long-lasting relationships. follows:

We have fixed facilities and service centers operating in the United States, Canada and Mexico. Our fixed facilities include five Resource Conservation and Recovery Act of 1976, subtitle C, hazardous waste landfills and one low-level radioactive waste landfill located near Beatty, Nevada; Richland, Washington; Robstown, Texas; Grand View, Idaho; Detroit, Michigan and Blainville, Québec, Canada. 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.

Our operations are managed in two reportable segments reflecting our internal management reporting structure and nature of services offered as follows:


	Six Months Ended
$s in thousands	June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,238
Operating cash flows from finance leases		50
Financing cash flows from finance leases		408

Non-cash investing and financing activities:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	2,397
Right-of-use assets obtained in exchange for new finance lease liabilities		1,844

Environmental Services - This segment provides a broad range of hazardous material management services including transportation, recycling, treatment and disposal of hazardous, non-hazardous and radioactive waste at Company-owned landfill, wastewater, deep-well injection and other treatment facilities.

InTable ~~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 Environmental Services segment based on the industry of the waste generator, based on North American Industry Classification System (“NAICS”) codes. Contents

27 Other information related to our leases is as follows:

~~Table of Contents~~

The composition of Environmental Services segment T&D revenues by waste generator industry for the three months ended March 31, 2019 and 2018 were as follows:


	June 30, 2019
Weighted-average remaining lease term (years):
Operating leases		5.6
Finance leases		3.7
Weighted-average discount rate:
Operating leases		4.38	%
Finance leases		3.71	%

	% of Treatment and Disposal Revenue (1) for the
	Three Months Ended March 31,
Generator Industry	2019	2018
Metal Manufacturing	16%	14%
Chemical Manufacturing	15%	13%
Broker / TSDF	15%	13%
General Manufacturing	13%	12%
Refining	10%	11%
Government	7%	5%
Transportation	4%	3%
Utilities	3%	4%
Waste Management & Remediation	2%	4%
Mining, Exploration and Production	2%	2%
Other (2)	13%	19%

~~(1)~~The ~~Excludes~~Company’s ~~all~~maturity ~~transportation~~analysis ~~service~~of ~~revenue.~~its lease liabilities as of June 30, 2019 is as follows:

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

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


	Operating		Finance
$s in thousands	Leases		Leases		Total
2019 (excluding the six months ended June 30, 2019)	$	2,936	$	484	$	3,420
2020		4,110		792		4,902
2021		3,663		619		4,282
2022		2,367		548		2,915
2023		1,886		612		2,498
Thereafter		5,157		354		5,511
Total	$	20,119	$	3,409	$	23,528
Less: Interest		2,634		303		2,937
Present value of lease liabilities	$	17,485	$	3,106	$	20,591

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.

~~For~~Future ~~the~~minimum ~~three~~lease ~~months~~payments ~~ended~~on ~~March~~non-cancellable ~~31,~~operating ~~2019,~~leases ~~Base~~as ~~Business revenue increased 8% compared to the three months ended March 31, 2018. For the three months ended March 31, 2019, approximately 84%~~ of ~~our~~December ~~total T&D revenue was derived from our Base Business, up from 83% for the three months ended March~~ 31, 2018. ~~Our~~are ~~business~~as ~~is highly competitive and no assurance can be given that we will maintain these revenue levels or increase our market share.~~ follows:

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, 2019, approximately 16% of our total T&D revenue was derived from Event Business projects, down from 17% for the three months ended March 31, 2018. For the three months ended March 31, 2019, Event Business revenue decreased 1% compared to the three months ended March 31, 2018. 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.

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.


$s in thousands	Payments
2019	$	5,638
2020		3,644
2021		3,184
2022		1,885
2023		1,457
Thereafter		5,065
	$	20,873

Depending on project-specific customer needs and competitive economics, transportation services may be offered at or near our cost to help secure new business. For waste transported by rail from the eastern United States and other locations distant from our Grand View, Idaho and Robstown, Texas facilities, transportation-related revenue can account for as

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much as 75% of total project revenue. While bundling transportation and disposal services reduces overall gross profit as a percentage of total revenue (“gross margin”), this value-added service has allowed us to win multiple projects that management believes we could not have otherwise competed for successfully. Our Company-owned fleet of gondola railcars, which is periodically supplemented with railcars obtained under operating leases, has reduced our transportation expenses by largely eliminating reliance on more costly short-term rentals. These Company-owned railcars also help us to win business during times of demand-driven railcar scarcity.

~~The~~NOTE ~~increased waste volumes resulting from projects won through this bundled service strategy further drive operating leverage benefits inherent to the disposal business, increasing profitability~~10. GOODWILL ~~While~~AND ~~waste~~INTANGIBLE treatment and other variable costs are project-specific, the incremental earnings contribution from large and small projects generally increases as overall disposal volumes increase. Based on past experience, management believes that maximizing operating income, net income and earnings per share is a higher priority than maintaining or increasing gross margin. We intend to continue aggressively bidding bundled transportation and disposal services based on this proven strategy. ASSETS

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.

~~RESULTS~~Changes OFin ~~OPERATIONS~~ goodwill for the six months ended June 30, 2019 consisted of the following:

~~THREE MONTHS ENDED MARCH 31, 2019 COMPARED TO THREE MONTHS ENDED MARCH 31, 2018~~

Operating results and percentage of revenues were as follows:


					Field &
	Environmental				Industrial
	Services				Services
			Accumulated				Accumulated
$s in thousands	Gross		Impairment		Gross		Impairment		Total
Balance at December 31, 2018	$	162,816	$	(6,870)	$	51,231	$	—	$	207,177
Winnie purchase price allocation adjustment		2,586		—		—		—		2,586
Foreign currency translation		703		—		—		—		703
Balance at June 30, 2019	$	166,105	$	(6,870)	$	51,231	$	—	$	210,466

	Three Months Ended March 31,								2019 vs. 2018
$s in thousands	2019		%		2018		%		$ Change		% Change
Revenue
Environmental Services	$	92,332	70	%	$	86,471	72	%	$	5,861	7	%
Field & Industrial Services		38,705	30	%		33,588	28	%		5,117	15	%
Total		131,037	100	%		120,059	100	%		10,978	9	%
Gross Profit
Environmental Services		31,556	34	%		32,452	38	%		(896)	(3)	%
Field & Industrial Services		3,685	10	%		3,219	10	%		466	14	%
Total		35,241	27	%		35,671	30	%		(430)	(1)	%
Selling, General & Administrative Expenses
Environmental Services		1,406	2	%		6,376	7	%		(4,970)	(78)	%
Field & Industrial Services		3,385	9	%		2,257	7	%		1,128	50	%
Corporate		15,514	n/m			13,599	n/m			1,915	14	%
Total		20,305	15	%		22,232	19	%		(1,927)	(9)	%
Adjusted EBITDA
Environmental Services		35,260	38	%		34,672	40	%		588	2	%
Field & Industrial Services		2,554	7	%		2,345	7	%		209	9	%
Corporate		(14,223)	n/m			(12,529)	n/m			(1,694)	14	%
Total	$	23,591	18	%	$	24,488	20	%	$	(897)	(4)	%

29 Table of Contents

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~~Adjusted~~Intangible ~~Earnings Before Interest~~assets, ~~Taxes,~~net ~~Depreciation~~consisted ~~and~~of ~~Amortization~~the ~~(“Adjusted EBITDA”)~~ following:

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 property and equipment impairment charges, property insurance recoveries and other income/expense. The reconciliation of Net income to Adjusted EBITDA is as follows:

	Three Months Ended March 31,				2019 vs. 2018

$s in thousands	2019		2018		$ Change		% Change
	June 30, 2019						December 31, 2018
Net income	$	8,043	$	9,243	$	(1,200)	(13)	%
			Accumulated						Accumulated
Income tax expense		3,041		3,520		(479)	(14)	%
$s in thousands	Cost		Amortization		Net		Cost		Amortization		Net
Interest expense		4,030		2,809		1,221	43	%
Amortizing intangible assets:
Interest income		(207)		(24)		(183)	763	%
Permits, licenses and lease	$	165,600	$	(16,817)	$	148,783	$	164,840	$	(14,804)	$	150,036
Foreign currency loss		139		14		125	893	%
Customer relationships		99,396		(28,948)		70,448		99,241		(25,676)		73,565
Other income		(110)		(2,123)		2,013	(95)	%
Technology - formulae and processes		6,951		(1,897)		5,054		6,672		(1,714)		4,958
Property and equipment impairment charges		25		—		25	n/m
Customer backlog		3,652		(1,839)		1,813		3,652		(1,656)		1,996
Depreciation and amortization of plant and equipment		8,125		6,605		1,520	23	%
Developed software		2,894		(1,737)		1,157		2,884		(1,581)		1,303
Amortization of intangible assets		2,811		2,302		509	22	%
Non-compete agreements		1,542		(1,076)		466		1,542		(875)		667
Share-based compensation		1,222		1,068		154	14	%
Internet domain and website		536		(142)		394		536		(128)		408
Accretion and non-cash adjustment of closure & post-closure liabilities		1,125		1,074		51	5	%
Database		387		(181)		206		384		(167)		217
Property insurance recoveries		(4,653)		—		(4,653)	n/m
Total amortizing intangible assets		280,958		(52,637)		228,321		279,751		(46,601)		233,150
Adjusted EBITDA	$	23,591	$	24,488	$	(897)	(4)	%
Non-amortizing intangible assets:
Permits and licenses		46,415		—		46,415		46,391		—		46,391
Tradename		130		—		130		125		—		125
Total intangible assets	$	327,503	$	(52,637)	$	274,866	$	326,267	$	(46,601)	$	279,666

Adjusted EBITDA is a complement to results provided in accordance with accounting principles generally accepted in the United States (“GAAP”) and we believe that such information provides additional useful information to analysts, stockholders and other users to understand the Company’s operating performance. Since Adjusted EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying calculations, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies. Items excluded from Adjusted 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~~Amortization ~~EBITDA~~expense ~~has~~for ~~limitations~~the asthree anmonths ~~analytical~~ended ~~tool~~June 30, 2019 and ~~should~~2018 ~~not~~was be$2.9 ~~considered~~million inand ~~isolation~~$2.3 ormillion, arespectively. ~~substitute~~Amortization expense for ~~analyzing~~the ~~our~~six ~~results~~months asended ~~reported~~June ~~under~~30, ~~GAAP~~2019 and 2018 was $5.7 ~~Some~~million ofand ~~the~~$4.6 ~~limitations~~million, respectively. Foreign intangible asset carrying amounts are: affected by foreign currency translation.

~~· 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;~~

·NOTE ~~Adjusted EBITDA does not reflect our income tax expenses or the cash requirements to pay our taxes;~~11. DEBT

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

~~· Although depreciation and amortization charges are non~~Long-~~cash~~term ~~charges,~~debt ~~the~~consisted ~~assets~~of ~~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.~~following:

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	June 30,		December 31,
$s in thousands	2019		2018
Revolving credit facility	$	334,000	$	364,000
Long-term debt	$	334,000	$	364,000

~~Revenue~~

~~Total~~2017 ~~revenue~~Credit ~~increased 9% to $131.0 million for the first quarter of 2019 compared with $120.1 million for the first quarter of 2018.~~ Agreement

~~Environmental Services~~

~~Environmental~~On ~~Services~~April ~~segment~~18, ~~revenue~~2017, ~~increased~~the 7%Company toentered ~~$92.3~~into ~~million~~a ~~for~~senior secured credit agreement (the ~~first~~“2017 ~~quarter~~Credit ofAgreement”) ~~2019~~with Wells Fargo Bank, ~~compared~~National toAssociation ~~$86.5~~(“Wells ~~million~~Fargo”), as administrative agent for the ~~first~~lenders, ~~quarter~~swingline oflender ~~2018.~~and ~~T&D~~issuing ~~revenue~~lender, ~~increased~~and 7%Bank ~~compared~~of toAmerica, ~~the~~N.A., ~~first~~as ~~quarter~~an ofissuing ~~2018~~lender, ~~primarily~~that asprovides for a ~~result~~$500.0 ofmillion, anfive-year 8%revolving ~~increase~~credit infacility ~~Base~~(the ~~Business~~“Revolving ~~revenue~~Credit Facility”), ~~partially~~including ~~offset~~a by$75.0 amillion 1%sublimit ~~decrease~~for inthe ~~project-based~~issuance ~~Event~~of ~~Business~~standby ~~revenue~~letters of credit and a $25.0 ~~Transportation~~million ~~service~~sublimit ~~revenue~~for ~~increased~~the 6%issuance ~~compared~~of swingline loans used to ~~the~~fund ~~first~~short-term ~~quarter~~working ofcapital ~~2018,~~requirements. ~~reflecting~~The ~~more~~2017 ~~Event~~Credit ~~Business~~Agreement ~~projects~~also ~~utilizing~~contains an accordion feature whereby the Company’s ~~transportation~~may ~~and~~request ~~logistics~~up ~~services~~to $200.0 ~~Total~~million ~~tons~~ of ~~waste~~additional ~~disposed~~funds ofthrough oran ~~processed~~increase ~~across~~to ~~all~~the ofRevolving ~~our~~Credit ~~facilities~~Facility, ~~increased~~through ~~27%~~incremental ~~for~~term ~~the~~loans, ~~first~~or ~~quarter~~some ofcombination ~~2019~~thereof. ~~compared~~The Company is pursuing an amendment to the ~~first~~2017 ~~quarter~~Credit ofAgreement ~~2018~~to, ~~primarily~~among ~~reflecting~~other ~~incremental~~things, ~~volumes~~permit ~~disposed~~a at$400.0 ~~our~~million ~~Winnie~~term loan, ~~Texas~~which ~~deep-well~~the ~~facility~~Company ~~that~~intends ~~was~~to ~~acquired~~use in ~~the~~refinancing ~~fourth~~existing ~~quarter~~indebtedness of ~~2018. Tons~~NRCG ofin ~~waste~~connection ~~disposed~~with ofthe orMergers ~~processed~~and atto ~~our~~pay ~~landfills~~the ~~decreased~~fees 1%and ~~for~~expenses of the ~~first~~Company ~~quarter~~incurred ofin ~~2019~~connection ~~compared~~with tothe Mergers and the ~~first~~transactions ~~quarter~~in ofconnection ~~2018~~therewith.

T&D revenue from recurring Base Business waste generators increased 8% for the first quarter of 2019 compared to the first quarter of 2018 and comprised 84% of total T&D revenue for the first quarter of 2019. During the first quarter of 2019, increases in Base Business T&D revenue were primarily attributable to the metal manufacturing and broker/TSDF industry groups.

~~T&D~~The ~~revenue~~Revolving ~~from~~Credit ~~Event~~Facility ~~Business~~provides ~~waste~~up ~~generators~~to ~~decreased~~$500.0 1%million ~~for~~of ~~the~~revolving ~~first~~credit ~~quarter~~loans ofor ~~2019~~letters ~~compared~~of tocredit with the ~~first~~use ~~quarter~~ of ~~2018~~proceeds ~~and~~restricted ~~comprised~~solely ~~16%~~for ofworking ~~total~~capital ~~T&D~~and ~~revenue~~other ~~for~~general ~~the~~corporate ~~first~~purposes ~~quarter~~(including ofacquisitions ~~2019~~and capital expenditures). ~~During~~Under the ~~first~~Revolving ~~quarter~~Credit ~~of 2019~~Facility, ~~decreases~~revolving incredit ~~Event~~loans ~~Business~~are ~~T&D~~available ~~revenue~~based ~~from~~on ~~the~~a ~~“Other”~~base ~~and~~rate ~~waste~~(as ~~management~~defined &in ~~remediation~~the ~~industry~~2017 ~~groups~~Credit ~~were~~Agreement) ~~partially~~or ~~offset~~LIBOR, byat the Company’s option, plus an ~~increase~~applicable inmargin ~~Event~~which ~~Business~~is ~~T&D~~determined ~~revenue~~according ~~from~~to a pricing grid under which the ~~chemical~~interest ~~manufacturing~~rate ~~and~~decreases ~~government~~or ~~industry~~increases ~~groups.~~ based on our ratio of funded debt to consolidated

The following table summarizes combined Base Business and Event Business T&D revenue growth, within the Environmental Services segment, by generator industry for the first quarter of 2019 as compared to the first quarter of 2018: 20

		Treatment and Disposal Revenue Growth
		Three Months Ended March 31, 2019 vs.
		Three Months Ended March 31, 2018
Transportation		58%
Government		30%
Chemical Manufacturing		23%
Metal Manufacturing		17%
Broker / TSDF		17%
Mining, Exploration & Production		13%
General Manufacturing		5%
Utilities		-1%
Refining		-8%
Other		-19%
Waste Management & Remediation		-50%

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~~Field &~~earnings ~~Industrial~~before ~~Services~~ interest, taxes, depreciation and amortization (as defined in the 2017 Credit Agreement), as set forth in the table below:

Field & Industrial Services segment revenue increased 15% to $38.7 million for the first quarter of 2019 compared with $33.6 million for the first quarter of 2018. The increase in Field & Industrial Services segment revenue is primarily attributable to growth in our Emergency Response business line as a result of our acquisition of ES&H of Dallas, LLC (“ES&H Dallas”) in the third quarter of 2018 as well as growth in our Industrial Services and Transportation and Logistics business lines, partially offset by lower revenues from our Total Waste Management business line.

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%

~~Table of Contents~~

~~Gross~~At ~~Profit~~ June 30, 2019, the effective interest rate on the Revolving Credit Facility, after giving effect to the impact of our interest rate swap, was 3.61%. Interest only payments are due either quarterly or on the last day of any interest period, as applicable.

Total gross profit decreased 1% to $35.2 million for the first quarter of 2019, down from $35.7 million for the first quarter of 2018. Total gross margin was 27% for the first quarter of 2019 compared with 30% for the first quarter of 2018.

~~Environmental~~In ~~Services~~ October 2014, the Company entered into an interest rate swap agreement, effectively fixing the interest rate on $160.0 million, or 48%, of the Revolving Credit Facility borrowings as of June 30, 2019.

Environmental Services segment gross profit decreased 3% to $31.6 million for the first quarter of 2019, down from $32.5 million for the first quarter of 2018. Total segment gross margin for the first quarter of 2019 was 34% compared with 38% for the first quarter of 2018, primarily reflecting a less favorable service mix in segment transportation revenue. T&D gross margin was 39% for both the first quarter of 2019 and the first quarter of 2018.

~~Field &~~The ~~Industrial~~Company ~~Services~~ 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 reduced based upon the Company’s total net leverage ratio (as defined in the 2017 Credit Agreement). The maximum letter of credit capacity under the Revolving Credit Facility is $75.0 million and the 2017 Credit Agreement provides for a letter of credit fee equal to the applicable margin for LIBOR loans under the Revolving Credit Facility. At June 30, 2019, there were $334.0 million of revolving credit loans outstanding on the Revolving Credit Facility. These revolving credit loans are due upon the earliest to occur of (a) April 18, 2022 (or, with respect to any lender, such later date as requested by us and accepted by such lender), (b) the date of termination of the entire revolving credit commitment (as defined in the 2017 Credit Agreement) by us, and (c) the date of termination of the revolving credit commitment and are presented as long-term debt in the consolidated balance sheets.

Field & Industrial Services segment gross profit increased 14% to $3.7 million for the first quarter of 2019, up from $3.2 million for the first quarter of 2018. Total segment gross margin was 10% for both the first quarter of 2019 and the first quarter of 2018.

~~Selling,~~The ~~General~~Company ~~and~~has ~~Administrative~~entered ~~Expenses~~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 “~~SG&A~~Sweep Arrangement”) . Total advances outstanding under the Sweep Arrangement are subject to the $25.0 million swingline loan sublimit under the Revolving Credit Facility. The Company’s revolving credit loans outstanding under the Revolving Credit Facility are not subject to repayment through the Sweep Arrangement. As of June 30, 2019, there were no amounts outstanding subject to the Sweep Arrangement.

~~Total SG&A was $20.3 million, or 15% of total revenue, for the first quarter of 2019, down from $22.2 million, or 19% of total revenue, for the first quarter of 2018.~~

~~Environmental~~As ~~Services~~ of June 30, 2019, the availability under the Revolving Credit Facility was $160.3 million with $5.7 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.

Environmental Services segment SG&A decreased 78% to $1.4 million, or 2% of segment revenue, for the first quarter of 2019 compared with $6.4 million, or 7% of segment revenue, for the first quarter of 2018, primarily reflecting property insurance recoveries of $4.7 million recognized in the first quarter of 2019 related to the incident at our Grand View, Idaho facility in the fourth quarter of 2018.

~~Field &~~The ~~Industrial~~Company ~~Services~~ 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 2017 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 2017 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 2017 Credit Agreement), in an amount equal to such excess. Subject to certain exceptions, the 2017 Credit Agreement provides for mandatory prepayment upon certain asset dispositions, casualty events and issuances of indebtedness.

Field & Industrial Services segment SG&A increased 50% to $3.4 million, or 9% of segment revenue, for the first quarter of 2019 compared with $2.3 million, or 7% of segment revenue, for the first quarter of 2018, primarily reflecting incremental costs associated with new facilities.

~~Corporate~~ Pursuant to (i) an unconditional guarantee agreement and (ii) a collateral agreement, each entered into by the Company and its domestic subsidiaries on April 18, 2017, the Company’s obligations under the 2017 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 the Company and the Company’s existing and certain future domestic subsidiaries (subject to certain exclusions), including 100% of the equity interests of

Corporate SG&A was $15.5 million, or 12% of total revenue, for the first quarter of 2019 compared with $13.6 million, or 11% of total revenue, for the first quarter of 2018, primarily reflecting higher employee labor costs and higher information technology related expenses in the first quarter of 2019 compared with the first quarter of 2018. 21

~~Components~~Table of ~~Adjusted EBITDA~~ Contents

~~Income~~the ~~tax~~Company’s ~~expense~~ 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).

Our effective income tax rate for the first quarter of 2019 was 27.4%, compared with 27.6% for the first quarter of 2018. The decrease in the effective tax rate was primarily due to a higher discrete benefit from the recognition of excess tax benefits of share-based compensation and federal research and development credits, partially offset by effects of the international tax provisions from U.S. tax reform that became effective in 2018.

~~Interest~~The ~~expense~~ 2017 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 2017 Credit Agreement), among other things, amounts outstanding under the 2017 Credit Agreement may be accelerated and the commitments may be terminated.

~~Interest expense was $4.0 million for the first quarter of 2019 compared with $2.8 million for the first quarter of 2018.~~

32 The 2017 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 2017 Credit Agreement). Our consolidated total net leverage ratio as of the last day of any fiscal quarter may not exceed 3.50 to 1.00, subject to certain exceptions. Our consolidated interest coverage ratio as of the last day of any fiscal quarter may not be less than 3.00 to 1.00.

~~Table of Contents~~

~~The~~At ~~increase~~June is30, ~~the~~2019, ~~result~~we ofwere ~~higher outstanding debt levels~~ in ~~the~~compliance ~~first~~with ~~quarter~~all of ~~2019 due to~~ the ~~acquisition~~financial ofcovenants ~~Ecoserv Industrial Disposal, LLC (“Winnie”)~~ in ~~November of 2018, as well as higher interest rates on~~ the ~~variable~~2017 ~~portion~~Credit ~~of our outstanding debt~~Agreement.

~~Foreign currency gain (loss)~~

We recognized a $139,000 foreign currency loss for the first quarter of 2019 compared with a $14,000 foreign currency loss for the first quarter of 2018. Foreign currency gains and losses reflect changes in business activity conducted in a currency other than the United States dollar (“USD”), our functional currency. Additionally, we established intercompany loans between our Canadian subsidiaries, whose functional currency is the Canadian dollar (“CAD”), and our parent company, US Ecology, 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 March 31, 2019, we had $17.9 million of intercompany loans subject to currency revaluation.

~~Other~~NOTE ~~income~~ 12. CLOSURE AND POST-CLOSURE OBLIGATIONS

Other income was $110,000 for the first quarter of 2019 compared with other income of $2.1 million for the first quarter of 2018. Other income for the first quarter of 2018 includes a $2.0 million gain on the issuance of a property easement on a portion of unutilized Company-owned land at one of our operating facilities.

~~Depreciation~~Our accrued closure and ~~amortization~~post-closure liability represents the expected future costs, including corrective actions, associated with closure and post-closure of ~~plant~~our operating and ~~equipment~~ 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.

Depreciation and amortization expense was $8.1 million for the first quarter of 2019 compared with $6.6 million for the first quarter of 2018, primarily reflecting additional depreciation expense on assets associated with ES&H Dallas and Winnie that were acquired in the third and fourth quarter of 2018, respectively.

~~Amortization~~Changes to closure and post-closure obligations consisted of ~~intangible~~the ~~assets~~ following:

Intangible assets amortization expense was $2.8 million for the first quarter of 2019 compared with $2.3 million for the first quarter of 2018, primarily reflecting additional amortization of intangible assets recorded as a result of the ES&H Dallas and Winnie acquisitions in the third and fourth quarter of 2018, respectively.

Share-based compensation


	Three Months Ended		Six Months Ended
$s in thousands	June 30, 2019		June 30, 2019
Closure and post-closure obligations, beginning of period	$	79,056	$	78,363
Accretion expense		1,133		2,258
Payments		(305)		(775)
Foreign currency translation		35		73
Closure and post-closure obligations, end of period		79,919		79,919
Less current portion		(2,231)		(2,231)
Long-term portion	$	77,688	$	77,688

~~Share-based compensation expense was $1.2 million for the first quarter of 2019 compared with $1.1 million for the first quarter 2018.~~

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

~~Accretion and non-cash adjustment of closure and post-closure liabilities was $1.1 million for the first quarter of both 2019 and 2018.~~

~~Property~~NOTE ~~insurance~~13. INCOME ~~recoveries~~ TAXES

~~The Company recognized property-related insurance recoveries of $4.7 million in the first quarter of 2019 related to the incident at our Grand View, Idaho facility in the fourth quarter of 2018.~~

33 Our effective tax rate for the three months ended June 30, 2019 was 29.2%, up from 24.4% for the three months ended June 30, 2018. Our effective tax rate for the six months ended June 30, 2019 was 28.6%, up from 25.7% for the six months ended June 30, 2018. The increase for the three and six months ended June 30, 2019, compared to the three and six months ended June 30, 2018, was primarily due to increased non-deductible expenses and higher effective state tax rates, partially offset by federal research and development credits. The change in the effective tax rate for the three and six months ended June 30, 2019 also reflects the impact of discrete events including the recognition of excess tax benefits related to employee stock compensation.

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~~CRITICAL ACCOUNTING POLICIES~~ 22

~~Financial~~Table ~~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, 2018, other than the adoption of the Accounting Standards Codification Topic 842, Leases, described in Note 1 and Note 9 of the Notes to Consolidated Financial Statements in “Part I, Item 1. Financial Statements (Unaudited)” of this Quarterly Report on Form 10-Q. Contents

~~RECENTLY~~Gross ~~ISSUED~~unrecognized ~~ACCOUNTING~~tax ~~STANDARDS~~ benefits, included in Other long-term liabilities in the consolidated balance sheets, were $616,000 and $555,000 as of June 30, 2019 and December 31, 2018, respectively. The gross unrecognized tax benefits, if recognized by the Company, will result in a reduction of approximately $544,000 to the provision for income taxes thereby favorably impacting the Company’s effective tax rate. We do not anticipate our total unrecognized tax benefits to increase or decrease materially within the next twelve months. We recognize interest assessed by taxing authorities or interest associated with uncertain tax positions as a component of interest expense. We recognize any penalties assessed by taxing authorities or penalties associated with uncertain tax positions as a component of Selling, general and administrative expenses.

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.

~~LIQUIDITY~~We ~~AND~~file ~~CAPITAL~~a ~~RESOURCES~~ consolidated U.S. federal income tax return with the Internal Revenue Service (“IRS”) as well as tax returns in various states, Canada, and Mexico. The Company is subject to examination by the IRS for tax years 2014 through 2018. The Company is currently under examination by the state of Idaho for years 2014 through 2018 and the state of Texas for the year 2014. We may be subject to examinations by various state and local taxing jurisdictions for tax years 2014 through 2018. The Company has no significant foreign jurisdiction audits underway. The tax years 2014 through 2018 remain subject to examination by foreign jurisdictions.

Our primary sources of liquidity are cash and cash equivalents, cash generated from operations and borrowings under the 2017 Credit Agreement entered into on April 18, 2017. At March 31, 2019, we had $16.1 million in cash and cash equivalents immediately available and $158.2 million of borrowing capacity available under the 2017 Credit Agreement. 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 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 2017 Credit Agreement provide additional sources of liquidity should they be required.

~~Operating Activities~~

~~For~~NOTE ~~the three months ended March 31, 2019, net cash provided by operating activities was $18~~14.5 EARNINGS ~~million.~~PER This primarily reflects net income of $8.0 million, non-cash depreciation, amortization and accretion of $12.1 million, a decrease in accounts receivable of $16.6 million and deferred incomes taxes of $2.9 million, partially offset by a decrease in accounts payable and accrued liabilities of $11.9 million, a $4.7 million gain on insurance proceeds from damaged property and equipment, a decrease in accrued salaries and benefits of $3.4 million and an increase in income taxes receivable of $1.5 million. Impacts on net income are due to the factors discussed above under “Results of Operations.” The decrease in receivables is primarily attributable to the timing of customer payments. Changes in deferred income taxes are primarily attributable to deferred tax gains resulting from involuntary conversions related to the incident at our Grand View, Idaho facility in the fourth quarter of 2018. The decrease in accounts payable and accrued liabilities is primarily attributable to the timing of payments to vendors for products and services. We recognized property-related insurance recoveries in the first quarter of 2019 related to the incident at our Grand View, Idaho facility in the fourth quarter of 2018. The decrease in accrued salaries and benefits is primarily attributable to cash payments during the first quarter of 2019 for accrued 2018 incentive compensation. The increase in income taxes receivable is primarily attributable to the timing of income tax payments. SHARE

~~Days sales outstanding were 81 days as of March 31, 2019, compared to 77 days as of December 31, 2018 and 76 days as of March 31, 2018.~~

For the three months ended March 31, 2018, net cash provided by operating activities was $28.8 million. This primarily reflects net income of $9.2 million, non-cash depreciation, amortization and accretion of $10.0 million and a decrease in accounts receivable of $14.9 million, partially offset by a decrease in accounts payable and accrued liabilities of $4.2 million and a decrease in accrued salaries and benefits of $2.4 million. Impacts on net income are due to the factors discussed above under “Results of Operations.” The decrease in receivables is primarily attributable to the timing of customer payments. The decrease in accounts payable and accrued liabilities is primarily attributable to the timing of payments to vendors for products and services. The decrease in accrued salaries and benefits is primarily attributable to cash payments during the first quarter of 2018 for accrued 2017 incentive compensation.


	Three Months Ended June 30,
	2019				2018
$s and shares in thousands, except per share amounts	Basic		Diluted		Basic		Diluted
Net income	$	15,491	$	15,491	$	13,220	$	13,220
Weighted average basic shares outstanding		22,006		22,006		21,867		21,867

Dilutive effect of share-based awards				202				157
Weighted average diluted shares outstanding				22,208				22,024

Earnings per share	$	0.70	$	0.70	$	0.60	$	0.60
Anti-dilutive shares excluded from calculation				92				58

Table of Contents


	Six Months Ended June 30,
	2019				2018
$s and shares in thousands, except per share amounts	Basic		Diluted		Basic		Diluted
Net income	$	23,534	$	23,534	$	22,463	$	22,463
Weighted average basic shares outstanding		21,997		21,997		21,835		21,835

Dilutive effect of share-based awards				206				156
Weighted average diluted shares outstanding				22,203				21,991

Earnings per share	$	1.07	$	1.06	$	1.03	$	1.02
Anti-dilutive shares excluded from calculation				86				76

~~Investing Activities~~

For the three months ended March 31, 2019, net cash used in investing activities was $1.8 million, primarily related to capital expenditures of $7.2 million, partially offset by property insurance proceeds of $5.0 million related to the incident at our Grand View, Idaho facility in the fourth quarter of 2018. Significant capital projects included construction of additional disposal capacity at our Blainville, Quebec, Canada and our Robstown, Texas facilities as well as equipment purchases and infrastructure upgrades at our corporate and operating facilities.

For the three months ended March 31, 2018, net cash used in investing activities was $7.6 million, primarily related to capital expenditures. Significant capital projects included continuing construction of additional disposal capacity and railway expansion at our Blainville, Quebec, Canada location and equipment purchases and infrastructure upgrades at our corporate and operating facilities.

~~Financing Activities~~

~~For~~NOTE ~~the three months ended March 31, 2019, net cash used in financing activities was $33~~15.0 million, consisting primarily of $30.0 million in payments on our revolving credit facility, dividend payments to our stockholders of $4.0 million and net short-term borrowings under our sweep arrangement of $2.1 million. EQUITY

~~For the three months ended March 31, 2018, net cash used in financing activities was $3.6 million, consisting primarily of dividend payments to our stockholders.~~

~~2017~~Stock ~~Credit~~Repurchase ~~Agreement~~ Program

The 2017 Credit Agreement provides 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 $25.0 million sublimit for the issuance of swingline loans used to fund short-term working capital requirements. The 2017 Credit Agreement also contains an accordion feature whereby the Company 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. Proceeds from the Revolving Credit Facility are restricted solely for working capital and other general corporate purposes (including acquisitions and capital expenditures). Under the Revolving Credit Facility, revolving credit loans are available based on a base rate (as defined in the 2017 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 2017 Credit Agreement).

AtOn ~~March~~June 311, ~~2019~~2016, the ~~effective~~Company’s ~~interest~~Board ~~rate~~of onDirectors authorized the ~~Revolving~~repurchase ~~Credit~~of ~~Facility,~~$25.0 ~~including~~million of the ~~impact~~Company’s ofoutstanding ~~our~~common ~~interest~~stock. ~~rate~~Repurchases ~~swap,~~may ~~was~~be ~~3.58%.~~made ~~Interest~~from ~~only~~time ~~payments~~to ~~are~~time ~~due~~in ~~either~~the ~~quarterly~~open market or onthrough ~~the~~privately ~~last~~negotiated ~~day~~transactions. The timing of any ~~interest~~repurchases ~~period,~~will asbe ~~applicable.~~based Inupon ~~October~~prevailing ~~2014,~~market ~~the~~conditions and other factors. The Company ~~entered~~did ~~into~~not anrepurchase ~~interest~~any ~~rate~~shares ~~swap~~of ~~agreement,~~common ~~effectively~~stock ~~fixing~~under the ~~interest~~repurchase ~~rate~~program onduring ~~$165.0~~the ~~million,~~three or ~~49%~~six months ended June 30, of2019. On May 29, 2018 the ~~Revolving~~repurchase ~~Credit~~program ~~Facility~~was ~~borrowings~~extended asand ofwill ~~March~~remain 31in effect until June 6, ~~2019~~2020, unless further extended by our Board of Directors.

The Company 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 reduced based upon the Company’s total net leverage ratio (as defined in the 2017 Credit Agreement). The maximum letter of credit capacity under the Revolving Credit Facility is $75.0 million and the 2017 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, 2019, there were $334.0 million of borrowings outstanding on the Revolving Credit Facility. These borrowings are due on the revolving credit maturity date (as defined in the 2017 Credit Agreement) and presented as long-term debt in the consolidated balance sheets.

The Company 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 $25.0 million swingline loan sublimit under the Revolving Credit Facility. The 23

35 Table of Contents

~~Table~~Omnibus ofIncentive ~~Contents~~ Plan

Company’s revolving credit loans outstanding under the Revolving Credit Facility are not subject to repayment through the Sweep Arrangement. As of March 31, 2019, there were $2.1 million in borrowings outstanding subject to the Sweep Arrangement, which are presented as Short-term borrowings in the consolidated balance sheet.

AsOn May 27, 2015, our stockholders approved the Omnibus Incentive Plan (“Omnibus Plan”), which was approved by our Board of ~~March~~Directors 31on April 7, ~~2019~~2015. The Omnibus Plan was developed to provide additional incentives through equity ownership in the Company and, as a result, encourage employees and directors to contribute to our success. The Omnibus Plan provides, among other things, the ~~availability~~ability ~~under~~for the ~~Revolving~~Company ~~Credit~~to ~~Facility~~grant ~~was~~restricted ~~$158.2~~stock, ~~million~~performance ~~with~~stock, $5options, stock appreciation rights, restricted stock units (“RSUs”), performance stock units (“PSUs”) and other share-based awards or cash awards to officers, employees, consultants and non-employee directors.7 ~~million~~Subsequent to the approval of the ~~Revolving~~Omnibus ~~Credit~~Plan ~~Facility~~in ~~issued~~May 2015, we stopped granting equity awards under our 2008 Stock Option Incentive Plan and our 2006 Restricted Stock Plan (collectively, the “Previous Plans”). The Previous Plans will remain in effect solely for the ~~form~~settlement of ~~standby~~awards ~~letter~~granted ofunder ~~credit~~the ~~utilized~~Previous asPlans. ~~collateral~~No ~~for~~shares ~~closure~~that are reserved but unissued under the Previous Plans or that are outstanding under the Previous Plans and ~~post-closure~~reacquired ~~financial~~by ~~assurance~~the Company for any reason will be available for issuance under the Omnibus Plan. The Omnibus Plan expires on April 7, 2025 and ~~other~~authorizes ~~assurance~~1,500,000 ~~obligations~~shares of common stock for grant over the life of the Omnibus Plan. As of June 30, 2019, 873,117 shares of common stock remain available for grant under the Omnibus Plan.

~~For more information about our debt, 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~~PSUs, ~~OBLIGATIONS~~RSUs ~~AND~~and ~~GUARANTEES~~ Restricted Stock

There were no material changes in the amounts of our contractual obligations and guarantees during the three months ended March 31, 2019. 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, 2018.

~~ITEM~~On 3March 1, 2019, the Company granted 17,111 PSUs to certain employees. ~~QUANTITATIVE~~ ~~AND~~Each ~~QUALITATIVE~~PSU ~~DISCLOSURES~~represents ~~ABOUT~~the ~~MARKET~~right ~~RISK~~ to receive, on the settlement date, one share of the Company’s common stock. The total number of PSUs each participant is eligible to earn ranges from 0% to 300% of the target number of PSUs granted. The actual number of PSUs that will vest and be settled in shares is determined at the end of a three-year performance period beginning January 1, 2019, based on adjusted earnings per share and return on invested capital relative to established targets with an additional adjustment based on total stockholder return relative to a set of peer companies. The fair value of the PSUs estimated on the grant date using a Monte Carlo simulation was $58.20 per unit. Compensation expense is recorded over the awards’ vesting period.

~~Interest Rate Risk~~

WeAssumptions doused ~~not~~in ~~maintain~~the ~~equities,~~Monte ~~commodities,~~Carlo ~~derivatives,~~simulation ~~or any other similar instruments for trading purposes. We have minimal interest rate risk on investments or other assets due~~ to ~~our~~calculate ~~preservation~~the offair ~~capital~~value ~~approach to investments. At March 31, 2019, $5.0 million~~ of ~~restricted~~the ~~cash~~PSUs ~~was~~granted ~~invested~~ in ~~fixed-income~~2019 ~~U.S.~~are ~~Treasury~~as ~~and U.S. government agency securities and money market accounts.~~ follows:

We are exposed to changes in interest rates as a result of our borrowings under the 2017 Credit Agreement. Under the 2017 Credit Agreement, Revolving Credit Facility borrowings incur interest at a base rate (as defined in the 2017 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 2017 Credit Agreement). On October 29, 2014, 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 3.67% and receives interest at the variable one-month LIBOR rate on an initial notional amount of $250.0 million.

As of March 31, 2019, there were $334.0 million of revolving loans outstanding under the 2017 Credit Agreement. If interest rates were to rise and outstanding balances remain unchanged, we would be subject to higher interest payments on our outstanding debt. Subsequent to the effective date of the interest rate swap on December 31, 2014, we are subject to higher interest payments on only the unhedged borrowings under the 2017 Credit Agreement.


	2019
Stock price on grant date	$	58.40
Expected term		3.0	years
Expected volatility		30	%
Risk-free interest rate		2.5	%
Expected dividend yield		1.1	%

Based on the outstanding indebtedness of $334.0 million under the 2017 Credit Agreement at March 31, 2019 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 $1.8 million for the corresponding period.

~~Foreign~~A ~~Currency~~summary ~~Risk~~ of our PSU, restricted stock and RSU activity for the six months ended June 30, 2019 is as follows:

We are subject to currency exposures and volatility because of currency fluctuations. The majority of our transactions are in USD; however, our Canadian subsidiaries conduct business in both Canada and the United States. In addition, contracts for services that our Canadian subsidiaries provide to U.S. customers are generally denominated in USD. During the three months ended March 31, 2019, our Canadian subsidiaries transacted approximately 59% of their revenue in USD and at any time have cash on deposit in USD and outstanding USD trade receivables and payables related to these transactions. These USD cash, receivable and payable accounts are subject to non-cash foreign currency translation gains or losses. Exchange rate movements also affect the translation of Canadian generated profits and losses into USD.


	PSUs			Restricted Stock			RSUs
		Weighted			Weighted			Weighted
		Average			Average			Average
		Grant Date			Grant Date			Grant Date
	Shares	Fair Value		Shares	Fair Value		Shares	Fair Value
Outstanding as of December 31, 2018	39,200	$	55.48	74,988	$	46.74	66,785	$	53.77
Granted	17,111		58.20	27,800		62.59	33,020		56.21
Vested	(13,600)		41.22	(39,234)		43.77	(26,362)		48.28
Cancelled, expired or forfeited	—		—	—		—	(243)		45.66
Outstanding as of June 30, 2019	42,711	$	61.11	63,554	$	55.50	73,200	$	56.88

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We established intercompany loans between our Canadian subsidiaries and our parent company, US Ecology, as part of a tax and treasury management strategy allowing for repayment of third-party bank debt. These intercompany loans are payable using CAD and are subject to mark-to-market adjustments with movements in the CAD. At March 31, 2019, we had $17.9 million of intercompany loans outstanding between our Canadian subsidiaries and US Ecology. During the ~~three~~six months ended ~~March~~June 3130, 2019, ~~the~~13,600 ~~CAD~~PSUs ~~strengthened~~vested asand ~~compared~~PSU toholders ~~the~~earned ~~USD resulting in a $417~~19,~~000~~414 ~~non-cash~~shares ~~foreign~~of ~~currency translation gain being recognized in~~ the Company’s ~~consolidated~~common ~~statements of operations related to the intercompany loans~~stock. Based on intercompany balances as of March 31, 2019, a $0.01 CAD increase or decrease in currency rate compared to the USD at March 31, 2019 would have generated a gain or loss of approximately $179,000 for the three months ended March 31, 2019.

We had a total pre-tax foreign currency loss of $139,000 for the three months ended March 31, 2019. We currently have no foreign exchange contracts, option contracts or other foreign currency hedging arrangements. Management evaluates the Company’s risk position on an ongoing basis to determine whether foreign exchange hedging strategies should be employed.

~~ITEM 4. CONTROLS AND PROCEDURES~~ 24

~~Management~~Table 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, 2019. 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”). Contents

~~There~~Stock 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. Options

SEC guidance permits management to omit an assessment of an acquired business’ internal control over financial reporting from management’s assessment of internal control over financial reporting for a period not to exceed one year from the date of acquisition. Accordingly, we have assessed neither ES&H Dallas’ nor Winnie’s internal control over financial reporting as of March 31, 2019.

37 A summary of our stock option activity for the six months ended June 30, 2019 is as follows:

~~Table of Contents~~

PART II - OTHER INFORMATION

Filing Compare · US Ecology Holdings, Inc.