Greetings, and welcome to the Clean Harbors, Inc. First Quarter 2017 Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. It is now my pleasure to introduce your host, Mr. Michael McDonald, General Counsel for Clean Harbors. Thank you, Mr. McDonald. You may begin

Thank you, Michelle, and good morning, everyone. On today's call with me are Chairman, President and Chief Executive Officer, Alan S. McKim; EVP and Chief Financial Officer, Mike Battles; and our SVP of Investor Relations, Jim Buckley. Slides for today's call are posted on our website and we invite you to follow along. Matters we are discussing today that are not historical facts are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Participants are cautioned not to place undue reliance on these statements which reflect management's opinions only as of today, May 3, 2017. Information on potential factors and risks that could affect our actual results of operations is included in our SEC filings. The company undertakes no obligation to revise or publicly release the results of any revision to the statements made in this morning's call, other than through filings that will be made concerning this reporting period. In addition, today's discussion will include references to non-GAAP measures. Clean Harbors believes that such information provides an additional measurement and consistent historical comparison of its performance. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is available in today's news release on our website and in the appendix of today's presentation. And now, I'd like to turn the call over to our CEO, Alan McKim. Alan?

Thanks, Michael, and good morning, everyone. Turning to slide three. We delivered a strong first quarter performance as revenues grew 8% and adjusted EBITDA increased 19%. Our ability to grow profits at more than double the rate of revenues demonstrates the operating leverage in our business model. Q1 results were driven by higher waste volumes, cost reductions and improved pricing, particularly in our lube oil business. Reviewing our segment performance in the quarter, Technical Service revenues increased as a result of our new El Dorado incinerator and growth initiatives. Industrial and Field Service revenue and margins were up slightly due to Field Service improving from a year ago. Safety-Kleen, again, performed exceptionally well. Oil, Gas and Lodging Services was down as expected, but the rate of the decline was slowed as the energy markets are beginning to recover, particularly in the United States. So now let's review the segments in more detail, beginning with Tech Services on slide four. With El Dorado coming online in the first quarter, Tech Services revenue was up 7% from a year ago, a portion of that increase came from retail customers where we're driving additional volumes. Lower segment profit and margins were largely expected in Q1, given the startup of El Do and costs associated with growth initiatives such as our healthcare as well as a decrease in landfill volumes. On the other hand, incineration utilization remains strong. Utilization including the new incinerator was 79%. Excluding the additional capacity, it was 90%, compared with 87% in Q1 a year ago. Turning to slide five. We experienced double-digit revenue growth in Field Services, largely due to new branches which have been co-located in existing Safety-Kleen and Tech Service sites. That growth was essentially offset by lower revenue in Industrial Services, resulting from the sale of…

Thank you, Alan, and good morning, everyone. Turning to our income statement on slide 12. Revenue increased by 8% in Q1 as a result of growth in Safety-Kleen and Tech Services. Gross profit for the quarter was $192.4 million or 27.9% of revenue. Gross margin improved 90 basis points from the year ago quarter, driven by the revenue increase and our cost control initiatives. SG&A expenses were up year-over-year, primarily reflecting the impact of the acquisitions we made in 2016, higher overall revenue and greater incentive compensation. On a percentage basis, SG&A cost declined by 10 basis points to 16.3%. For full year 2017, we now expect SG&A expenses to increase slightly on an absolute dollar basis as higher revenue and short-term incentive compensation are largely offset by lower severance and cost actions. Depreciation and amortization increased $3.5 million in Q1 due to the acquisitions and the El Dorado incinerator. For 2017, we continue to expect depreciation and amortization to be flat with 2016 in the range of $280 million to $290 million, despite the addition of $5 million related to the new incinerator as well as the full year effects of the 2016 acquisitions. Income from operations in the quarter was $5.4 million compared with a loss of $4.1 million in Q1 of 2016, reflecting higher year-over-year revenue. First quarter adjusted EBITDA was $80.1 million, up 19% from a year ago, driven by the combination of higher revenue and cost reductions. On a GAAP basis, the net loss for the quarter was $0.37 a share. Adjusting for the effects of not recognizing income tax benefit associated with the pre-tax losses generated by some of our Western Canadian subsidiaries, we recorded an adjusted net loss of $10.9 million or $0.19 per share. Turning to the balance sheet on slide 13.…

Thank you. Our first question comes from Joe Box with KeyBanc Capital Markets. Please proceed with your question.

Hey, good morning, guys.

Good morning, Joe.

Hey, Joe.

So, Alan, you called out a noticeable uptick in customer activity and sales opportunities. What I'm curious about is, how are you guys able to differentiate some of those opportunities between just normal seasonality and the actual cyclical pickup in activity? Is there anything anecdotal that you guys could share with us to maybe give us a little bit of confidence that we are starting to see some of that cyclical tailwind flow through to the business?

One thing, Joe, that we did last year, we moved everybody from our old CRM system to Salesforce. And I think, now, having everybody on one platform, both Safety-Kleen and the legacy business, we're getting a lot more consistent visibility into the pipeline, looking at it by line of business across the businesses. And I think the confidence, I think, that we see in the activity is derived a lot of the data that we're now able to extrapolate from that CRM.

Yeah, Joe, this is Mike. With Salesforce, you can see kind of the pipeline and kind of close orders, so you can get a much better picture. If you at look kind of waste projects and remediation, they both look like those are the large projects that's going to drive kind of incremental growth and we see some of those coming on line here in Q2. So there are real signs there. That's not just kind of base work versus kind of the waste project remediation work which has long since been stagnant to down, as you know. And so we're seeing some of those signs of life there.

And I think – the only other point I'd make too is that we made a large investment in sales, a number of cost reductions that were in our plan for last year and this year did not include a reduction in our sales.

Actually, incremental sales.

And we increased quite a bit of folks in our sales organization – over 900 people now. So I think coupled with better management, better data, better trends now that we can see, I think we feel more confident with the business that we have in front of us.

Got it. And then maybe changing gears. There's a lot of moving pieces in the Safety-Kleen margin profile. Can you maybe just help us understand what some of those components were? How should we think about what the base oil pricing increase drove versus say, volume growth in that business versus the new closed loop initiative, which I'm going to assume was probably a net drag to margins, just to start.

Yeah, I'll touch on the base oil first. As you know, we saw some price improvement announced by the majors, and that was sort of late in the quarter, and there's a lag. So you'll start seeing more of that benefit come through in the second and third quarter, certainly, is our expectation. And we also had a lot more base oil to sell because of the additional three plants that we took on last year and very strong demand. There's really been somewhat of a shortage and even in some cases, an allocation. So good strong demand. We actually had to hold back some orders in the quarter due to some unexpected shutdown in a couple of our plants, that we actually had to move a May shutdown up into March. So a little bit of a delay in some of our volumes there that will pick up. We'll make up that benefit in the second and third quarter. Mike, did you want to chime in on the blended?

Yeah, Joe. So, if you think about the three things you mentioned, pricing, volume, closed loop. So closed loop will start, to your point, it's nominal, right because, again, it's starting up, it's up a bunch, kind of month-over-month, it's great trajectory. But as you well know, it's a pretty small number. So that's not a big adder or substractor in the quarter. The volume is up because of the acquisitions and again, as Alan said, there's a short supply so certainly volumes, we feel really good about volumes. And pricing is also, year-over-year, a good guy. Obviously, this time last year was kind of, oil was under duress. Oil price was under duress and we were kind of feeling it dramatically. So that's up but not so much up versus what we gave guidance out back in February. So, as Alan said, there's a lag there. And so it's a spread business, we talk all about that. There's a lag associated with that, we'll see that lag probably in Q2 as the pricing comes into the network. So I would say, if you tried to rank them, pricing and volume equal, closed loop very small.

Got it. Thank you, guys.

Thank you. Our next question comes from Hamzah Mazari with Macquarie. Please proceed with your question.

Hi, this is Kaman Rebar (25:25) filling in for Hamzah. Could you give us a sense of what oil price did you guys need see to see a sustainable improvement in the energy business? Given most of it's in Western Canada? And then in general, could you give us an update on what you're thinking about strategically, going forward, with that line of business?

Well, I'll let Mike answer the strategic point. But I guess, $60 has really been sort of the magic number that we've been looking at, that would be probably the minimum number, I think, particularly in Western Canada.

On a sustained basis.

On a sustained basis.

That's what I was going to say, Kaman (26:08). It depends on kind of how you get there, right. There's a one-off thing that spikes oil prices, that's not going to mean much. If it's sustained supply and demand dislocation that drives the price up and keeps it there for a while, well then, we'll see activity in the $60s (26:22) we've heard anyway, $60 range. So, again, as I said in my prepared remarks, we see signs of life in that business. But we're not – as we're giving guidance for the year, we're kind of saying 2017's a flat year for that business. And strategically, we feel like selling at the trough where it is today is not the right answer. We've said that publicly. We continue to make investments in that business smartly where we've got some leadership involved. We made some CapEx improvement to try to turn that business around. Again, we see signs of life anecdotally, that certain subparts of our businesses are doing fine. But overall, we continue to struggle, especially in areas like seismic and cap manufacturing (27:01).

Small numbers...

But they're kind of dragging (27:04).

And we're the market leader. We have number one market share in seismic both in the U.S. and Canada. There's just no activity and no spending, and we expect in the third and fourth quarter to start seeing capital being put into the business. I think people are predicting over the next two or three years, a real shortage, quite frankly.

That's right.

Because people are not spending the kind of money that, historically, would be spent for a new find. So, again, we think that right now, we're in that trough on seismic, but things should start picking up.

That's right.

All right. Thank you so much.

Thank you.

Thank you.

Thank you. Our next question comes from Michael Hoffman with Stifel. Please proceed with your question. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Thank you very much, Alan and Michael, for taking my questions. On the SK business, if we got inside it again and asked this slightly differently, in the SKE business, what was the trend in average branch revenue or as a percentage change or dollar change? And then in the used oil piece, on the volume size, what was the percent change in volume year-over-year? And then what was the percent per gallon you've got in the queue, different than you thought, but what's that trend going into 2Q? That's the first question. Lots of pieces.

That's a (28:29) lot to unpack. So I'll take the volume. I mean we, I think we mentioned we were up a couple million gallons.

That's right.

Now we, as you know, we're really managing the spread of our business so, as crude oil ticks up to $55, and we saw our Gulf Coast No. 6 tick up, the RFO markets started to be under – a little of under pressure. We benefited a little bit because we have excess oil that are – we have oversupply for our refineries. So we benefit a little bit there, but obviously, it puts a little pressure on what we collect our oil for. And so we saw a little uptick in our CFO rate.

Yeah, downtick. It was down a bit.

We also – yeah, yeah. It went down, the value of that or the price. On the other hand, I think we've been gaining share in some markets. We're actually getting some national accounts back that walked away after we started charging for oil a year or 18 months ago. And so we are – our expectation or our trend continues to be positive, I think, in the volumes that we're bringing in. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: So...

Go ahead. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Well, just if I can ask. Either would you give us the gallons last year or just help us understand the percent change. The 2 million gallons is nice but what's it against?

On the collections, Michael, the 2 million gallons Alan's referencing is 50 million gallons collected versus 48 million gallons last year. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay.

We don't share gallons produced or anything if that's where you're going.

Yeah. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay. But your yields tend to be about 75%, so I can figure that out, right? That's – your yields are still – okay. Sorry.

Closer to 70%, Michael, probably with the new smaller plants.

Yeah. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay. All right. And then – I get the spread management and I applaud this and you do regain control. When I think about the puts and takes between the CFO, RFO and then the change in the base oil pricing through the quarter, when you get all – when it's all said and done, you're a couple pennies ahead of the game year-over-year, but the trend going to 2Q looks more like $0.10 or $0.15?

Yeah, you'll see a much better trend in the second quarter because a lot of our contracts with our main distributors and our base oil buyers, they have a lag and how those prices increase flow through. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay. And I just want...

And Michael, as Alan said, that we did move a shutdown out of Q2 into Q1 because we needed to. And that was a bit of a drain, but that's going to be kind of a good guy in Q2 as that shutdown was not going to happen, yeah.

We'll pick that back up again, yeah. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay. And then all of the public companies who managed turnarounds on the E&C side, especially in seaside, said they had a not a very good turnaround quarter in 1Q but felt that there was clear visibility of better turnarounds through the remainder of the year. What's your view on that?

Our second quarter will be much stronger. We view this year better than last year and 2018 is shaping up to be a much stronger year even than this year. So I think that's consistent with our view.

Yeah. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay. And then one last thing, Mike, on the guidance for $140 million to $180 million on the free cash flow. You are doing better than you expect than we certainly modeled on your working capital. How much of that improvement is a cushion to the $140 million to $180 million as opposed it was built into the $140 million to $180 million?

When we gave the $140 million to $180 million, Michael, we didn't assume any kind of working capital improvement. And so the fact we gained some DSO goodness is great. But realize too that as we roll out the closed loop oil pit and we move out oil and other products out across the network, inventory is going to go up a bit and it has gone up a little bit over the quarter, but as that continues to ramp up, that is going to be a small bad guy to working capital. And so as such, I mean – overall, I think it's going to be overall good. And to answer your question, it's probably a bit of a cushion. But in my mind, I need DSO to improve to offset a slight uptick in inventory. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Fair enough. And then you did 50 million gallons blended in the fourth quarter. What's the gallons blended in the first quarter? The closed loop.

Well, that wouldn't be the full closed loop number.

Well when you talk about blended, that's kind of all in. As Alan said in his comments, only 3% of the blended of the total volume was direct, if you will, which is the packaged product. The 55-gallon drums and cork bottles (33:08). Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Right, right. I'm just trying – I mean you had a goal of raising that number, 10 million gallons in 2017, trying to understand where we are against the 10 million gallon improvement.

I don't think we – Michael, that was from the fourth quarter call. You sort of set that 10 million gallon goal. We didn't share that number, you sort of said it's 40 million gallons to 50 million gallons and... Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: You didn't say no.

We didn't confirm or deny.

I think just at a high level, we've said we really want to shift the percentage of base oil and blended oil almost upside down, right.

That's right.

So we're – that ultimately is our goal to get out of that commodity base oil space.

And I think we're making good progress to that end, but what the right number is in 2017 versus 2018...

Yeah.

Early days. Michael E. Hoffman - Stifel, Nicolaus & Co., Inc.: Okay. Thanks for taking my questions.

You're welcome. Thank you.

Michael, great. We'll see you next week.

Thank you. Our next question comes from Brian Lee with Goldman Sachs. Please proceed with your question.

Hey, guys, thanks for taking the questions. Not to beat a dead horse here, but it does sound like you're expecting base oil prices to increase over the next few quarters as you have a bit of a catch-up effect. Did I understand that correctly, first? And then can you quantify how much uplift you're expecting and then through which quarter?

Sure, Brian. So as – you're right. We are expecting an uptick in base oil pricing as we kind of roll our price increases out to the network and as we talked about publicly many times. There's a lag. But what's going to happen is, it is a spread business. It is going to put pressure on CFO. That is going to drive those margins up. We've said publically we try to manage that spread well. I think we put in, in 2016, good systems and processes to manage that spread well, the team with new leadership and working well together. And so it's going to be up. How much of that is tough to tell. We're not updating our guidance numbers. We do – this is obviously a positive factor, but it's a lot of months left, right. We got a lot of months left. And so we're not going to try to quantify that. I think it's slightly better. And as we said in my prepared remarks, it's slightly higher than what we had said back at year end for the SK business.

Okay. Great. And then Maybe just as a follow-up on that. If – crude's been strong through the other part of the year, but it's been a bit more under pressure and ranged (35:29) sub $50 on WTI. So how should we think about how that impacts the different moving pieces here in terms of your ability to Charge-for-Oil and the trends in base oil pricing as you move later into the year and maybe some of the catch up effect starts to get lapped?

Brian, when we gave out the guidance and talked about here again, reaffirming the guidance in Q1, we don't assume any base oil price changes than what we have in front of us. We – I think that's a – tough to guess that in any sense. So, if it goes up or down, it's going to have an impact on our business. And as base oil pricing is hovered around the $50, maybe a little south of $50 in the past week or two, that's just – we don't have great hopes for the Western Canadian business. So the fact that that – the $50 range or the $47, $48 range doesn't really change that .

Okay, okay. Fair enough. Last one for me and I'll pass it on. On Technical Services, can you guys give us any sense, I know you broke out the utilization numbers, but how much volume you did get out of El Dorado here, out of the gate? And then how we should be thinking about increases in volumes over the next few quarters? And just overall utilization trends? Do you get to 90% across the network by year end out from the 79% or so you were at this quarter? Thank you.

Brian, no problem. So you add on 70,000 tons of capacity. It takes years to kind of build that back up. We feel like that will be a great investment for Clean Harbors shareholders. We are confident that we'll be able to hit the targets. We've said publicly that the El Dorado incinerator should contribute $5 million to $10 million of incremental EBITDA in 2017. Nothing has changed in that end. As Alan said in his public remarks, that it's got the normal shakedown process and the thing went online in Q1. We're going through direct burn, getting all the permits and qualifications done. We're excited about it. The team, the leadership team, led by our COO, has been a couple times down there, getting his leadership team down there to understand what can happen there. So we're – can't be more pleased with the progress. That things going to be delivered to the shareholders of Clean Harbors. So, again, it's going to take some time. And these are long selling cycles to increase volumes. So we don't anticipate – this is going to be measured in years, not quarters.

Okay. Appreciate the color. Thanks guys.

All right. Thanks, Brian.

Thank you. Our next question comes from Sean Hannan with Needham & Company. Please proceed with your question. Sean K. F. Hannan - Needham & Company, LLC: Yes, good morning, folks. Thanks for taking the question here. I'm going to come back to the base lube oil for a moment. I think there are some key things that perhaps we haven't touched on it. There have been some price increases that we've seen, some of which is a little bit of a function of some seasonality. But also, we've had the benefit of a number of turnarounds that have been kind of back to back to back, some of which are still going on. So do you have any worries or fears that, once we get into midsummer, so past the second quarter, and we get back to a more normalized supply scenario. What are your thoughts or plans or considerations around pricing at that point? Because we're going to have a different supply demand dynamic I think than what we're experiencing today. You could even argue that there is potential. You can get some declines that might be a little bit earlier than normal seasonality. So just wanted to sense that out with you as you think beyond the second quarter, getting back to more balanced dynamics.

All right. So I think, one, we're going to manage our spread, no matter where crude is going to be. Two, I don't think we have anything significant into the remainder of the year for price increases as we spoke of earlier. And as you – your points are all well taken. We agree with them. It is a possibility that as we get through the next six months, that you could see pricing pressure if there is more supply again. But as we look at the market and at least what's going to happen, we believe over the next two to three quarters -- two quarters, then that's sort of why we're sticking with our guidance for the year. Sean K. F. Hannan - Needham & Company, LLC: Okay.

Yeah, Sean, the other thing I would add to that is that, yeah, Q1 would be by a little bit than the midpoint of the range and we have puts and takes. And so if that happens, you make a very valid point that we're getting the benefit of a lot of shutdowns, there's a lot of supply issues in the marketplace that could solve itself in Q3. And then what do we do from there. The answer is that, that's why guidance is what it is.

And that would be impacted by crude oil pricing at that time, which I think, everyone is sort of up in the air about what's going to happen with the May meeting and where inventories are going to go there. So we agree with you, Sean. Sean K. F. Hannan - Needham & Company, LLC: Yeah, and I don't want to convey anything in terms of chinks in the armor around the guidance. It seems like at this point, you guys actually have a relatively healthy buffer to be able to manage from here and manage those unpredictable factors. So I'm comfortable on that high level front. And just a little bit more on the Charge-for-Oil, as that's gone down a little bit, there's been some commentary that I've heard within the space that the behavior at the Street level is -- has become a little bit more unpredictable and that there is some slightly irrational behavior versus the course of what's been seen over, say, the last one to two years. Want to see if we can get some commentary from you around that because you have the most exposure.

Sure. I don't think anything different than I've seen the last 40 years. To be honest with you, I mean, you always have people that try to take advantage of maybe a particular opportunity and a particular market. It certainly doesn't create a trend across the U.S. or Canada. And as the market leader, we have really, I think, provided market leadership since acquiring Safety-Kleen in 2012. I think we're managing the spread. I think customers realize that we're providing a valuable service to them. We continue to gain share. We know that there are one-off competitors out there that are irrational from time to time. And oftentimes, they go out of business sooner than later. Sometimes, the number 6 (42:38) oil market will spike up and the demand in Mexico will increase significantly and you'll see a big rush to buy a whole bunch of oil in the Street, and we're not following that business. And I think you'll continue to see us do a good job of managing our volumes. Sean K. F. Hannan - Needham & Company, LLC: That's great. If I can switch over to Safety-Kleen. Can we get a little -- I'm sorry, looking at the rest of Safety-Kleen for the parts washing, and I realize this is all consolidated here. But can you give us a sense of how much that side of the equation had grown within the segment?

I think we said that the parts washer services is about 251,000, so pretty flat with the year-ago. I would tell you that we track that -- our placed machines and our customer-owned machines. And we're seeing some losses in a couple of examples, but for the most part we're really holding our own in that space. Our oil filter recycling business is really strong. Our DIY placements are up substantially. Our vac services, we've added a lot of more vac equipment and we are putting more vacs out there. So we have well over 100 vac units in our Safety-Kleen team now. So that business is doing extremely well. And even our waste antifreeze and our windshield washer fluid business, all of those lines of business that kind of flow through our Safety-Kleen branch network, outside of parts washers, I think is why you're seeing that revenue growth across that business. Sean K. F. Hannan - Needham & Company, LLC: Okay. And so – sorry.

Go ahead. Sean K. F. Hannan - Needham & Company, LLC: No – so basically, we've seen the parts washing locations flattish. But are you getting increased pricing on that? And then as you get into those ancillaries, which I think that you had talked about, then that mix scale-wise, dollar-wise is also improving there. If I'm interpreting your comments correctly.

Yeah, I think we're doing a better job of capturing more with our existing customer base and providing more services and cross-selling more to our existing customers, absolutely. Sean K. F. Hannan - Needham & Company, LLC: Okay. Last question here. In terms of the landfill volumes on the Tech Services side, we've obviously seen, over the last few years, less and less volume's coming from the Bakken. To what degree in that decline that you saw in the quarter, is that primarily driven by projects versus the volumes that would come from the oil fields there? Just trying to understand that a little bit better because it seems like we should be getting to a point where we should have better comps coming out of the Bakken, of those depressed levels.

Yeah, I mean they are still depressed. And the amount of solids coming off the rigs, the amount of waste going into the landfills, both in California, North Dakota and Ryley, up in Alberta, are all depressed. And we don't anticipate them coming back. Our largest account up in Western Kansas still hasn't started back up. And quite frankly, not sure if they'll ever start that plant back up again. So that was our single largest sort of base account at our Alberta landfill. So I would say that our base business is pretty good. If you went through and looked at all 11 landfills, base is not bad. It's just that event business and particularly the oil and gas related drill cuttings and those kinds of waste streams is really the ones that's impacted. I would also tell you because of the weak turnaround season, not a lot of refinery waste came into the landfills as well. So I hope that we're going to see some pickup in that in the next couple of quarters. Sean K. F. Hannan - Needham & Company, LLC: That elaboration makes a lot of sense. Thanks so much, Alan.

Thanks.

Thanks, Sean.

Thank you. Our next question comes from Larry Solow with CJS Securities. Please proceed with your question.

Great. Thanks. Good morning, guys.

Good morning, Larry.

Most of my questions have been answered. Just a few follow-ups. Just, you mentioned your visibility certainly improved and your new systems have helped that. In terms of, on the landfill side, several quarters of down volumes there. You spoke of several larger projects coming online. Is that – are they already online? Are they already out for bid? Or is that your expectation? Or any thoughts there?

I would say, looking at like the second quarter, we see a nice uptick but nothing – it's not a hockey stick yet. We're – as we look at close date, execution date, we still see things getting pushed. Even business that we're awarded, we're still seeing some lag in some of those actual execution dates. So we're looking at that. But overall, I think the pipeline is pretty good for the waste project side of our business and our remediation business.

Right.

But probably consistent, quite frankly, with the last couple of years though.

Got it. And then on the incinerator side, do you see some more of these captives closing? Is that – your confidence in that seems to be – you seem to be speaking more about that again.

Yeah, I think with some of the consolidation going on, particularly with some of the majors where they – ownership changes have taken place, mergers and divestitures are happening. There's a lot of noise amongst our customers, particularly those that operate captives. We've seen a lot of interest in our new incinerator because of its capabilities as much as because of the captives winding down. So we're pretty optimistic about people's interest in El Do, and the ability to handle material that up until that plant coming online, quite frankly, we did not have the capacity for them to consider taking a captive down.

Got it. And then just switching gears on the Safety-Kleen side, you mentioned, I think, 3% of your blended sales were direct back to the closed loop. Do you have sort of a – maybe not an exact target, but will you expect this soon, I don't know, year end or the next two, three years? Any thoughts on that? And is that probably the best metric for us to sort of follow in terms of your progress on that, on the closed loop?

Yeah, we had talked about coming up with some metric for you that maybe you can hang your hat on.

Right.

And I think on a gallons basis, we haven't yet kind of determined what's – because when we look at our three- to five-year model, we know we're trying to get 70% of our material as blended oil rather than base oil, right.

Right.

So that's sort of our long-term strategic plan. I don't know, Jim, do you want to comment on that?

Yeah, so Larry, if you just take apart what Alan just said and we're trying to get from, say, 33% to 70%, so we're trying to move it up 37% there.

Right.

That's primarily not going to be from distributors, that's going to be internally generated. So we're at 3% today and we want to be in that three- to five-year plan at that 35% to 40% direct. But I don't think we are prepared today to say on this call, we want to be 7% by the end of the year, whatever the number is. But that is the number to watch.

Yeah.

Got it, got it. Okay. Switching gears on the industrial side. You guys have, I think, over the last few quarters spoken a little bit more about your increased presence in hydro vac in the daylighting market. Could you maybe just take a minute sort of – is that market growing today in the U.S.? And how does it – is it bigger still in Canada versus the U.S.? Can you kind of just give us like a quick market size and growth outlook?

Absolutely. We're seeing a nice demand for those services in the U.S. The market is growing. People are looking at that technology in replacement of yellow lion (50:56) as a safer way of dealing with a lot of work that goes on both in the Streets where utility work as well as within the refineries and chemical plants. And so we're seeing a nice demand and the market improving there. And Canada is well ahead in utilizing that technology.

Right.

And I think, in the U.S, we're seeing a greater adoption of that. And we're growing. We're pretty pleased with the team and the growth that they're getting there.

So it sounds like, (51:30) you guys are more on the U.S. side relative to a more mature Canada piece – you're more...

Yeah, Eastern Canada and U.S. certainly have a lot more growth opportunity and Western Canada has been adopted that technology for a long time, so more so in those markets.

And just if I have to ballpark, not your share, but what is sort of that total market size today in North America?

I think if you look at like a badger who's got over 1,000 units overall, and you've got some other players out there that probably equal that, that's probably a good number to think about a couple thousand of those units that are probably in the market.

Okay, okay.

Badger times 2 if you want to think about the total market size.

Yes.

Got it. The badger's probably about half the share of that market. Okay. Just last question on, I think you mentioned your net CapEx, about $160 million, $170 million. In terms of disposal of assets, I think it was like $20 million last year. Is that sort of a good ballpark target to think about for 2017?

So, Larry, so at the end of the day, we're going to hit $160 million to $170 million in net CapEx and how we get there whether through kind of cutting back a little bit on CapEx and more asset disposals. I mean we try to give you the parts, but frankly, sometimes we're talking about selling property, it takes a long time to sell. And so I don't want to sit here and tell you it's going to be $185 million minus $20 million of asset disposals. What I am going to tell you is that it's $150 million to whatever we said, $150 million to $170 million of net CapEx and we'll get there. We'll manage it accordingly.

Got it. So sounds like you have a little discretion on the tail end at least – on both.

Yeah, at the end of the day, I think timing of payments and timing of acquisitions and the timing of CapEx spend, it's a timing thing.

Got it, got it. Great. Understood. Great. Thanks a lot. Appreciate it, guys. Thanks a lot.

Yeah. Okay, Larry.

Thanks Larry.

Thank you. Our next question comes from Noah Kaye with Oppenheimer & Company. Please proceed with your question. Noah Kaye - Oppenheimer & Co., Inc.: Hey, good morning, Alan, Mike and Jim. Thanks for taking my questions. So I'll just keep it quick here. First, can you update us on where you're at with the run rate on realizing some of the major cost reduction initiatives? And kind of how that run rate should trend over the next several quarters, heading into 2018?

Mike, that's right...

Yeah, no problem. At the end of the day, we think of kind of Q1. We did 8% in kind of reported revenue increase. We did 19% EBITDA increase, right. So it gets really tricky for us to try to measure, like do tech have the cost saving targets we had in there. Because at the same time, we're making investments in the sales force. We have a bunch of acquisition. The business has changed and more. I would say we're making very good progress. As Alan said in his prepared remarks, we have the executive leadership for cost saving initiatives. Although we're trying to invest for growth and we made some investment in the selling force and other areas, nothing's going to change here at Clean Harbors as far as kind of managing our cost effectively. And so we continue to drive that. Can I tell you – so I would say that given the results in Q1 and my view for the year, we're still kind of well on track to kind of get to the cost savings we talked about at year end. Nothing has changed there. Honestly, as we try to manage our growth, we're making some investments. So that makes SG&A and corporate costs a little higher. But at the end of the day, nothing changes around here. Noah Kaye - Oppenheimer & Co., Inc.: Yeah, totally fair. I mean, I guess, maybe just from a sort of a baseball sense of it, though. Kind of just thinking about the run rate versus where you ultimately want to be. What kind of inning are we in here on those initiatives?

Pertaining to this or pertaining to the $75 million, basically, all in (55:07).

Yeah, yeah. Noah Kaye - Oppenheimer & Co., Inc.: Yes.

We're making good progress.

We just had our corporate executive team in last week and I think the sense of all of the folks in the organization is that we're on track. And we actually have other initiatives that will be starting to put pen to the paper for next year as we think about our 2018 initiatives. So this is sort of never ending. But I think that $75 million is on track and we're probably in the early innings of seeing that showing up in the numbers if you want to think of it that way.

Just to clarify, $75 million gross, $30 million net, sort of making investments again.

That's right.

Healthcare costs go up, wages go up, things happen, inflation happened. So this is that $30 million that I spoke of is correlated to Alan's (56:01) and I think we're kind of well on our way.

Which is a point on the SG&A. You've seen a little uptick in SG&A because you're going to see stock-based compensation. Other incentive compensation is going to offset some of those cost reductions?

That's right, that's right. Noah Kaye - Oppenheimer & Co., Inc.: Yeah, and we are seeing more macro inflation as well. I mean I just went around the corner and my burrito pricing went up, so we're seeing it too. And then just a follow-up for me. On Tech Services, the margin headwind in the quarter, really I mean you're basically investing here. You've got the startup in El Dorado and you're investing in the healthcare business. But when should we start to see – how do we think about from all-in perspective, kind of incremental margin, margin improvement year-over-year returns in the business? Is that kind of more of a 2018 story? Or is it possible that we'll get it in future quarters this year?

So I'll take a shot at this one. But Alan, feel free to chime in. All year long, as we get the incinerator kind of running and operational, it's going to put pressure on the margin. We're going to have mixed matters, too, right. Whether it'd be – some of these projects are kind of higher margins. As the project kick in, we'll (57:13) some of that. Q1 was more base business kind of little lower margin. And so I don't think – I think, as I look at the year from an EBITDA margin standpoint, I think it's going to be flattish, kind of all year long. Higher revenue, slightly higher EBITDA on an absolute dollar basis. But the margins will remain there for 2017. And as the incinerator gets up and running and gets up kind of full capacity in 2018 and 2019, the margins are going to creep back up from there. Noah Kaye - Oppenheimer & Co., Inc.: That's perfect color. Thanks so much.

Thank you. Thanks, Noah.

Our next question is a follow-up from Sean Hannan with Needham & Company. Please proceed with your question. Sean K. F. Hannan - Needham & Company, LLC: Hi, thanks. Just quick here. Dow and DuPont, how much business are you doing with them today? What degree is that business trending with them, particularly related to Tech Services?

We couldn't comment, Sean, on particular customers at this point. To be honest with you, I think that would be – will get kicked under the table. We can't comment on that one. Sean K. F. Hannan - Needham & Company, LLC: Okay, fair enough. And then within oil and gas, there's a lot of activity that's been picking up that you've already acknowledged. And so can – and you've also in prior calls talked about pricing pressures. Can you elaborate on where some of those precious perhaps stand today, to what degree are they normalizing, how do we think about pricing here forward? And how is that assumed within your EBITDA guidance for the space? That's it for me. Thanks so much.

Sure. As we mentioned, our utilization was up substantially. But discounting really has hurt that business. So just sheer number of grades being serviced is so low compared to 2 or 3 years ago. So all of the suppliers and buyers are beating each other up and we've been caught in that. And so our discounting has been substantial. We are pushing back now and addressing that with our customers, realizing that for us to continue to service them and invest in the kinds of equipment they need to have reliable service, we've got to make a profit and get a return on our capital there. So we're pushing it back, and hopefully, going to see that discount improve. Sean K. F. Hannan - Needham & Company, LLC: Thanks so much.

Thanks Sean.

Thank you. There are no further questions at this time. I would like to turn the call back over to Mr. McKim for closing remarks.

Okay, great. Thanks, Michelle. Thanks for joining us today. We are speaking at several upcoming conferences in the next week, including events both in Boston, New York and New Orleans. So we look forward to seeing many of you at these and other events throughout 2017. Have a great day.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.