BUSINESS COMBINATIONS

Safety-Kleen, Inc.

On December 28, 2012, the Company acquired 100% of the outstanding common shares of Safety-Kleen for approximately $1.3 billion. The purchase price consisted of an all-cash purchase price of $1.25 billion, plus a $7.3 million adjustment for the amount by which the estimated net working capital (excluding cash) of Safety-Kleen on the closing date exceeded $50.0 million. The purchase price is subject to adjustment upon finalization of Safety-Kleen's net working capital balance (excluding cash) as of the closing date. The Company incurred acquisition-related costs of approximately $6.3 million in connection with the transaction which are included in selling, general and administrative expenses in the consolidated statements of income for the year ended December 31, 2012. The Company financed the purchase through a combination of approximately $300.0 million of existing cash, $369.5 million in net proceeds from the Company's public offering of 6.9 million shares of Clean Harbors common stock, and approximately $589.0 million in net proceeds from the Company's private debt offering of $600.0 million of 5.125% senior unsecured notes due 2021. Safety-Kleen, headquartered in Richardson, Texas, is the largest re-refiner and recycler of used oil in North America and a leading provider of parts cleaning and environmental services to commercial, industrial and automotive customers. In conjunction with the transaction, Safety-Kleen, Inc. and its subsidiaries became wholly-owned subsidiaries of Clean Harbors.

The Company believes Safety-Kleen is a good strategic fit, enabling Clean Harbors to (i) penetrate the small quantity waste generator market, (ii) broaden its waste treatment capabilities to include re-refining waste oil and expanded recycling capabilities, (iii) drive a substantial increase in waste volumes into its existing waste disposal treatment network, (iv) capitalize on the growing demand for recycled products including re-refined oil, (v) enhance its commitment to sustainability, (vi) leverage the combined sales forces to maximize cross-selling opportunities, (vii) add an immediately accretive (exclusive of transaction expenses) business to accelerate growth, (viii) leverage operating efficiencies through the combined company, and (ix) add to its cash flow.

The fair value of all the acquired identifiable assets and liabilities summarized below is provisional pending finalization of the Company's acquisition accounting. Measurement period adjustments reflect new information obtained about facts and circumstances that existed as of the acquisition date. The Company believes that such preliminary allocations provide a reasonable basis for estimating the fair values of assets acquired and liabilities assumed but the Company is waiting for additional information necessary to finalize fair value. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable but no later than one year from the acquisition date. Final determination of the fair value may result in further adjustments to the values presented below. The following table summarizes the recognized amounts of identifiable assets acquired and liabilities assumed (in thousands).



	At December 28, 2012
Inventories and supplies	$	102,339
Other current assets (i)	152,245
Property, plant and equipment	514,712
Permits and other intangibles	421,400
Other assets	4,985
Current liabilities	(192,652		)
Closure and post-closure liabilities, less current portion	(15,774		)
Remedial liabilities, less current portion	(38,370		)
Deferred taxes, unrecognized tax benefits and other long-term liabilities	(128,375		)
Total identifiable net assets	820,510
Goodwill (ii)	436,749
Total	$	1,257,259

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(i)	The fair value of the assets acquired includes customer receivables with a preliminary aggregate fair value of $132.9 million. Combined gross amounts due were $142.8 million.


(ii)	Goodwill represents the excess of the fair value of the net assets acquired over the purchase price. Goodwill of $436.7 million will be assigned to specific operating segments and reporting units in the first quarter of the Company's 2013 fiscal year. None of the goodwill related to this acquisition will be deductible for tax purposes.

No revenue, expense, income or loss of Safety-Kleen was included in the Company's consolidated statements of income for the year ended December 31, 2012 due to the immateriality of the operating results subsequent to the December 28, 2012 acquisition date.

Unaudited Pro Forma Financial Information

The following unaudited pro forma combined summary financial information presented below gives effect to the following transactions as if they had occurred as of January 1, 2011, and assumes that there were no material, non-recurring pro forma adjustments directly attributable to: (i) the acquisition of Safety-Kleen, (ii) the sale of 6.9 million shares of the Company's common stock, (iii) the issuance of $600.0 million aggregate principal amount of 5.125% senior unsecured notes due 2021, and (iv) the payment of related fees and expenses (in thousands).



	2012		2011
Pro forma combined revenues	$	3,529,592	$	3,245,637
Pro forma combined net income	$	125,425	$	129,242

This pro forma financial information is not necessarily indicative of the Company's consolidated operating results that would have been reported had the transactions been completed as described herein, nor is such information necessarily indicative of the Company's consolidated results for any future period.

Other 2012 Acquisitions

The Company acquired (i) during the second quarter of 2012, all of the outstanding stock of a privately owned Canadian company which provides workforce accommodations, camp catering and fresh food services; (ii) during the third quarter of 2012, certain assets of a privately owned U.S. company that is engaged in the business of materials handling services that includes a variety of support equipment to provide customers with a sole source for any dredging and dewatering project; and (iii) during the fourth quarter of 2012, the shares and assets of certain subsidiaries of a privately owned company that is engaged in the business of providing catalyst loading and unloading services in the United States and Canada. The combined purchase price for these acquisitions was approximately $107.5 million, including the assumption and payment of debt of $7.7 million and post-closing adjustments of $0.7 million based upon the assumed target amounts of working capital. Management has determined the preliminary purchase price allocations based on estimates of the fair values of all tangible and intangible assets acquired and liabilities assumed. Such amounts are subject to adjustment based on the additional information necessary to determine fair values. The Company believes that such information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, but the Company is waiting for additional information necessary to finalize fair value.

Acquisition related costs of $0.4 million were included in selling, general and administrative expenses in the Company's consolidated statements of income for the year ended December 31, 2012.

The Company has finalized the acquisition accounting of the identified acquired assets and liabilities for the acquisition completed in the third quarter of 2012. The Company has not finalized the acquisition accounting for the acquisition completed in the fourth quarter of 2012 or for the accounts receivable balances acquired in the acquisition completed in the second quarter. The Company expects to finalize the remaining valuations and complete the purchase price allocations as soon as practicable but no later than one year from the acquisition dates. Final determination of the fair value may result in further adjustments to the values presented below (in thousands).



	At Acquisition Dates			Measurement Period Adjustments			At Acquisition Dates (As Adjusted)
Current assets (i)	$	20,215		$	55		$	20,270
Property, plant and equipment	51,162			739			51,901
Customer relationships and other intangibles	21,701			69			21,770
Other assets	53			—			53
Current liabilities	(5,368		)	91			(5,277		)
Other liabilities	(5,009		)	(124		)	(5,133		)
Total identifiable net assets	82,754			830			83,584
Goodwill (ii)	24,759			(803		)	23,956
Total	$	107,513		$	27		$	107,540

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(i)	The preliminary fair value of the financial assets acquired included customer receivables with an aggregate fair value of $12.7 million. Combined gross amounts due were $13.3 million.


(ii)	Goodwill represents the excess of the fair value of the net assets acquired over the purchase price attributed to expected operating and cross selling synergies. The goodwill has been assigned to the Industrial Services segment and will not be deductible for tax purposes.

The following unaudited pro forma combined financial data presents information as if the 2012 acquisitions had been acquired as of January 1, 2011 and assumes that there were no material, non-recurring pro forma adjustments directly attributable to those acquisitions. The pro forma financial information does not necessarily reflect the actual results that would have been reported had the Company and those three acquisitions been combined during the periods presented, nor is it necessarily indicative of the future results of operations of the combined companies (in thousands).



	2012		2011
Pro forma combined revenues	$	2,268,621	$	2,112,297
Pro forma combined net income	$	130,322	$	126,768

Third Quarter 2011 Acquisitions

During the third quarter of 2011, the Company acquired (i) certain assets of a Canadian public company which is engaged in the business of providing geospatial, line clearing and drilling services in Canada and the United States; (ii) all of the outstanding stock of a privately owned U.S. company which specializes in treating refinery waste streams primarily in the United States; and (iii) all of the outstanding stock of a privately owned Canadian company which manufactures modular buildings. The combined purchase price for the three acquisitions was approximately $142.1 million, including the assumption and payment of debt of $25.2 million, and preliminary post-closing adjustments of $4.5 million based upon the assumed target amounts of working capital. These acquisitions (i) enhanced the Company's service offerings to its customers and its reputation as a leading provider of comprehensive field services for the oil and gas sectors; (ii) provided a complement to the Company's catalyst handling, industrial and specialty industrial services for the refinery and petrochemical industry; and (iii) helped expand the Company's growing lodging business, respectively. These acquisitions have been integrated with the Oil and Gas Field Services, Technical Services and Industrial Services segments of the Company's operations and reporting structure.

As of September 30, 2012, the Company finalized the purchase accounting of the identified acquired assets and liabilities, including the completion of the intangible assets, current liabilities and remedial liability valuations. The following table summarizes the recognized amounts of identifiable assets acquired and liabilities assumed (in thousands).



	At Acquisition Dates(As adjusted)
Current assets (i)	$	41,551
Property, plant and equipment	62,969
Customer relationships and other intangibles	23,371
Other assets	1,671
Current liabilities	(23,148		)
Asset retirement obligations	(200		)
Other liabilities	(2,419		)
Total identifiable net assets	103,795
Goodwill (ii)	38,339
Total	$	142,134

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(i)	The fair value of the financial assets acquired included customer receivables with an aggregate fair value of $21.4 million. Combined gross amounts due were $22.1 million.


(ii)	Goodwill represents the excess of the fair value of the net assets acquired over the purchase price. Goodwill of $13.3 million, $11.1 million and $13.9 million has been assigned to the Oil and Gas Field Services segment, the Technical Services segment, and the Industrial Services segment, respectively and will not be deductible for tax purposes.

Acquisition related costs of $0.8 million were included in selling, general and administrative expenses in the Company's consolidated statements of income for the year ended December 31, 2011.

Peak

On June 10, 2011, the Company acquired 100% of the outstanding common shares of Peak Energy Services Ltd. (“Peak”) (other than the 3.15% of Peak’s outstanding common shares which the Company already owned) in exchange for approximately CDN $158.7 million in cash (CDN $0.95 for each Peak share) and the assumption and payment of Peak net debt of approximately CDN $37.5 million. The total acquisition price, which includes the previous investment in Peak shares referred to above, was approximately CDN $200.2 million, or U.S. $205.1 million based on an exchange rate of 0.976 CDN $ to one U.S. $ on June 10, 2011.

Peak is a diversified energy services corporation operating in western Canada and the U.S. Through its various operating divisions, Peak provides drilling and production equipment and services to its customers in the conventional and unconventional oil and natural gas industries as well as the oil sands region of western Canada. Peak also provides water technology solutions to a variety of customers throughout North America. Peak shares previously traded on the Toronto Stock Exchange under the symbol “PES.” This acquisition expanded the Company's presence in the energy services marketplace, particularly in the area of oil and natural gas drilling and production support. The Peak business has been integrated within the Oil and Gas Field Services and Industrial Services segments of the Company's operations and reporting structure.

The following table summarizes the purchase price for Peak at the acquisition date (in thousands).



	At June 10, 2011 (As Adjusted)
Cash paid for Peak common shares	$	162,585
Fair value of previously owned common shares (i)	4,117
Peak net debt assumed (ii)	38,431
Total purchase price	$	205,133

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(i)

The Company previously owned a 3.15% interest in Peak which was recorded in marketable securities. On June 10, 2011, the Company acquired the remaining outstanding shares of Peak and as a result, the Company remeasured the fair value of its previously held common shares and recognized the resulting gain of $1.9 million in other income. The unrealized gain on the Peak investment was previously recorded in accumulated other comprehensive income. For this purpose, the fair value of the Company's previous investment in Peak was deemed to be $4.1 million, calculated based on the closing price of Peak's shares on the Toronto Stock Exchange on the date before the acquisition was publicly announced.


(ii)	The outstanding Peak debt, net of $15.7 million of cash assumed, which consisted of three term loan facilities, was paid off on June 10, 2011.

Acquisition related costs of $0.7 million were included in selling, general and administrative expenses in the Company's consolidated statements of income for the year ended December 31, 2011.

As of June 30, 2012, the Company finalized the purchase accounting for the acquisition of Peak. The following table summarizes the amounts of identifiable assets acquired and liabilities assumed at June 10, 2011 (in thousands).



	At June 10, 2011 (As adjusted)
Current assets(i)	$	45,222
Property, plant and equipment	151,574
Identifiable intangible assets	12,337
Other assets	8,009
Current liabilities	(28,785		)
Asset retirement obligations	(103		)
Other liabilities	(11,341		)
Total identifiable net assets	176,913
Goodwill(ii)	28,220
Total	$	205,133

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(i)	The fair value of the financial assets acquired included customer receivables with a fair value of $33.3 million. The gross amount due was $34.7 million.


(ii)	Goodwill, which is attributable to expected operating and cross-selling synergies, will not be deductible for tax purposes. Goodwill of $12.9 million and $15.3 million has been recorded in the Oil and Gas Field Services and Industrial Services segments, respectively.