Greetings, and welcome to Clean Harbors, Incorporated Second Quarter 2017 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. It is now my pleasure to turn the conference over to your host today, Mr. Michael McDonald. Thank you. You may begin.

Thank you, Rob, 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, August 2, 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 strong growth in Q2, as we saw good success on many strategic fronts. Revenue is increased 8% to $752.8 million and adjusted EBITDA grew by 9% to $120.7 million. While our growth was led by Tech Services and Safety-Kleen, I'm pleased to report that all four segments grew both their revenues and adjusted EBITDA from a year ago. Technical Services revenues were up sharply with the addition of the El Dorado incinerator and a rebound in landfill volumes as the overall macroeconomic environment improved. Industrial and Field Services delivered improved margins on strong growth. Safety-Kleen grew both revenue and adjusted EBITDA by 9%. Oil and Gas and Lodging Services posted a higher top and bottom line for the first time in several years, as North American energy markets showed some signs of stabilizing. Turning to the segments in more detail, starting with Tech Services on slide 4. The full launch of our El Dorado incinerator in Q2, coupled with several project wins, our retail initiative and an increase in base business helped produce a strong quarter. Incineration utilization of 87% in the quarter would have been 99% without the additional capacity of the new kiln. We also grew our landfill tonnage by 23% from a year ago to a solid increase in base business, supported by an uptick in project volumes. Technical Service revenues rose 11%. This translated into a 6% percent increase in adjusted EBITDA, largely because of a lower margin mix, including some high-volume incineration projects. In addition, we're still absorbing some cost in the shakedown process of the new El Do incinerator, as well as investing to further grow the business. Turning to slide 5, our Industrial and Field Services segment also had an excellent…

Thank you, Alan, and good morning, everyone. Turning to our income statement on slide 12, as Alan highlighted, revenue increased by 8% in Q2, largely due to sizeable growth in Tech Services and Safety-Kleen. Gross profit for the quarter was $233 million, or 30.9% of revenue. Gross margin was down slightly from a year ago, mostly due to the mix of business in the quarter, as we focused on driving greater volumes through our disposal network. We did not reduce our pricing in the quarter, but given the level of project work, we saw higher volumes with lower-priced streams. SG&A expenses were up slightly to $112.3 million year-over-year, reflecting higher overall revenue and the impact of the 2016 acquisitions. On a percentage basis, however, SG&A costs improved by 40 basis points to 14.9%. For full year 2017, we continue to expect SG&A expenses to increase on an absolute dollar basis as higher incentive compensation is largely offset by lower integration and severance expense and cost action. Depreciation and amortization was $71.5 million in Q2. 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 El Dorado incinerator as well as the full year effects of the 2016 acquisitions. Income from operations increased 35% from Q2 2016 to $46.7 million, primarily reflecting higher year-over-year revenue. Q2 adjusted EBITDA was up 9% from a year ago, driven by higher revenue and supported by our cost reduction programs. On a GAAP basis, our EPS was $0.45 per share. Adjusting for the sale of our Transformer Services business, as well as other items, we recorded adjusted net income of $13.7 million, or $0.24 per share. Turning to the balance sheet on…

Thank you. Our first question comes from Noah Kaye with Oppenheimer & Company. Please proceed with your question. Noah Kaye - Oppenheimer & Co., Inc.: Morning, Alan and Mike. Thanks for taking the question. Maybe we can start with Tech Services, a very nice top line growth there. So just looking at the margins, is there a way to kind of disaggregate some of the puts and takes you identified around mix and the El Dorado ramp? To what extent were those headwinds to margins? And then how should we think about kind of the mix of the waste streams that you're looking at going forward? You mentioned an uptick in project activity and nice trends.

Sure. So I think because of the projects that we have been successful at winning, particularly as it relates to incineration volumes, that larger volume has impacted some of our margins a little bit. I would also say that as we ramp up El Do, which quite frankly is really doing very well after only several months being in production, we've seen for the total site a number of million-pound-plus days at that facility. And clearly, at a million pounds is really what's going to get us at 150,000-ton a year kind of rate across those three units that are now running at that site. So we're really excited about the production we're getting out of the new plant and the overall plant. Our deferred revenue also went up. So we have quite a bit of growth that we have now deferred. And some of that is also showing up in those margins. Our deferred is now up to about $72 million, Mike. I think?

I believe so.

Roughly, which is growth of about $6 million or $7 million. So I think that gives us good visibility into the volume and probably had a little impact on the margins as well. Noah Kaye - Oppenheimer & Co., Inc.: Okay. Great. You could touch on M&A for a second. You made the acquisition of the hydrovac daylighting business. As you kind of look across the portfolio, what comes to mind in terms of obvious areas within the segments or adjacencies where you feel it still may make sense to do some additions?

I think we've – each year we move forward with our strategic plan for the – looking out over the next three to five years when we discuss that with our board. We've done a lot of analysis of that over the last several years, and as result of that, as we've talked about earlier, we've divested a couple of businesses that we weren't the natural owner for any longer and raised some great proceeds from those sales. There are continuous reviews of some of the businesses we're in, relatively small pieces of our business that may not fit in the long term for us, so we'll continue to be looking at that. On the other hand, the daylighting business that we expanded into, we have about 130 or so daylighting units. We've now added close to another 100 now with the Lonestar acquisition. It really starts giving us some scale, allowing them to leverage off of our network and getting some real synergies there on the cost side. So I think you're going to continue to see our daylighting business expand, particularly with our industrial and refining customers. Noah Kaye - Oppenheimer & Co., Inc.: Great. Thank you. I'll jump back in queue.

Okay.

Our next question comes from Michael Hoffman with Stifel. Please proceed with your question. Brian Joseph Butler - Stifel, Nicolaus & Co., Inc.: Good morning. This is Brian Butler in for Michael. Thanks for taking my questions.

Okay.

Hi, Brian. Brian Joseph Butler - Stifel, Nicolaus & Co., Inc.: Hi. Just starting on the Safety-Kleen segment, when you talked about the upsets in the re-refineries, so that was like a $2 million expense in the quarter. When you combine that with the loss, kind of the base oil production, can you give a little color on what that did to the segment EBITDA combined and margins?

Yes. Maybe I'll start, and then Mike can chime in here. But I think it's important. We bought several re-refineries last year through acquisitions, and one particular one is a plant that we really had a couple of struggles with as we turned that plant on. It was a dormant facility when we acquired it, so we had to basically go through a full start-up. And as we have done that, we determined some engineering issues as it related to the construction of that plant that we are solving, particularly around catalysts and our reactors, and the quality of our oil has been superb. But as we have suffered through some degradation in our catalysts, that has impacted our quality and also impacted our runs there. And so that would probably be the main facility. When we did a turnaround in our East Chicago plant, which is 120-million gallon plant, we had some additional maintenance work that we found during that turnaround, and that extended out our downtime by another five or six days at those sites. So several million gallons of impacted on the production side. And as people probably know, in the base oil market, it's been a very strong market, very tight supply, and so we did everything to meet our contractual obligations with our customers, but clearly, we were off on volume as it relates to the two plants there and their production upsets.

Yeah, Brian. This is Mike. The only thing I can add to Alan is that I think that those disruptions, we can talk about the exact amount, but we think – particularly they're in the rearview mirror. And I feel like those are one-timey in nature. And obviously, bad things happen, and we plan for that, but these were kind of above and beyond kind of what we expected. And so that along with the centralization program that Alan mentioned in his prepared remarks I think are part of the reason why there was a bit of a drag on the Safety-Kleen margins for the quarter. Brian Joseph Butler - Stifel, Nicolaus & Co., Inc.: Okay. So it just – I mean, so looking at third quarter and the rest of the year, are you expecting those margins to be ticking up just in the sense that – I mean, maybe it's something – it's some number greater than $2 million just on the expense side, but going forward, that's not going to be there assuming current prices for everything else remain stable?

Yeah. So, Brian, so for the downtime in the plant, those are, we feel like they're in the rearview mirror. The centralization program, that's going to be – there's a long-term savings plan associated with that, but that's going to be a bit of a drag in the rest of the year as well. Brian Joseph Butler - Stifel, Nicolaus & Co., Inc.: Okay. And just kind of I guess looking at then the hydrovac business that you guys had picked up, could you give a little bit of color on just kind of where the margins ballpark are versus kind of the rest of the business?

Yes. Sure. So it is about a $5 million to $6 million of EBITDA maybe going into – as we look at the future in the back half. I think given the start-up costs and so forth, it's probably closer to $2 million. We don't give out kind of revenue numbers there, but that kind of gives you a sense of – and as a public company you can go look for yourself as to what the historical kind of revenue is. And so, again, we think that that business – the back half of the year is going to be rocky. We have some severance costs we have to kind of work our way through, but I don't think – it's not a huge number but there's a number there. But I think going into 2018, we think that's a $6 million incremental EBITDA number. Brian Joseph Butler - Stifel, Nicolaus & Co., Inc.: So annually, it's kind of $6 million on a normalized basis is the right way to think about where we're starting?

Yeah.

Fair enough. Yes. Brian Joseph Butler - Stifel, Nicolaus & Co., Inc.: Okay. And working capital this quarter kind of was a big negative. When you think about getting to your guidance for the free cash flow, how should we think about working capital swinging in the second half? Is that going to swing back another positive $20 million or is it possibly greater than that?

Yeah, Brian. So when the revenue's growing, right, and we haven't really experienced this much recently, but when revenue is growing, right, it gets stuck in receivables. So there is a bit of a lag there as we grow kind of 8%, 9% in the quarter whereas – although DSO is down, that cash is just not collected. We're going to collect that in Q3. We're doing really well in our cash taxes. Obviously, we lowered our interest expense. And so I think we're still well in the range. But as business is growing, that free cash flow does get a little trapped. So it is a bit of a lag associated with that. But there's nothing to think that – so we ended the first half with $30 million-plus of free cash flow, there's nothing to think we won't get into the range for the year. Brian Joseph Butler - Stifel, Nicolaus & Co., Inc.: Okay. And then last one on just tax, as you mentioned it. What should we think and be thinking about the tax rate, book tax rate, in the second half? Is it still kind of in that 45% range?

Yes, it's probably lower than that, a little bit, probably in the low 40%s. We did a lot of things, to be fair, around managing our effective rate, doing different types of programs in Canada to minimize the valuation allowances. Those things are starting to turn around too, which is also helpful. And so we think it's going to be in the low 40%s kind of going forward, you know, definitely. Brian Joseph Butler - Stifel, Nicolaus & Co., Inc.: Okay. I'll get back in the queue. Thanks.

Thank you.

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

Hey, guys. Thanks for taking the questions. Maybe first off, on the incinerator business. The 99% base utilization, helpful for that color, but when you back into it, it seems like only a few percentage points of the increase in tonnage this quarter was driven by El Dorado. So first off, is that a fair assumption? And then how should we be thinking about the contribution trend from that new facility in the back half? I guess in the context of overall utilization at 87%, where does that go to aggregating this year?

So I would say, and Alan feel free to chime in, that, Brian, it's hard to think of it as a standalone plant, right? It's a network, I know we say that often, but it's true. We have a whole routing team that spends all their time kind of thinking about kind of how to get the waste in the right locations, and based on where it's generated and based on the type of waste, the type of food groups and what burns well where, and so it's difficult to kind of put a pinpoint on that. I would say that, given the fact that we just opened up this facility, and we're at 87% kind of all-in is a great story, and I think that it's consistent with what we kind of – it's going faster than what we even said back 90 days ago. And so I couldn't be more pleased with the El Dorado incinerator and the overall network and rolling kind of doing really well. So as for the back half, we made prepared remarks on kind of where we think kind of Tech Services is going to be in total, and that includes the new incinerator and all of the incinerators kind of working as planned.

Okay. Great. Yes. No, you guys were definitely ahead of our anticipated utilization rate, so you do seem to be ramping ahead of plan. Maybe just a second question on Technical Services while we're on the topic. You mentioned the large projects in the quarter. Can you give us some sense of the cadence of that? Do those roll off in 3Q? Or how do we think about the sustainability of those new wins?

I think we've seen a good pipeline of opportunities across both our waste projects and remediation business, and I think that's going to continue in the third quarter and beyond. So I think we've got some pretty good visibility. Providing nothing gets pushed, we feel pretty good about volumes, both incineration and landfill.

Yeah, Brian, I would just add to that saying that we talked about in year-end and in Q1 kind of signs of life and we see a good pipeline and this and that, and I think this, in Q2, we're starting to see the manifestation of that in the financial statements.

Okay. Great. Last one from me, and I'll pass it on. But just a bit of a follow-up to an earlier question around Safety-Kleen and the view on margins heading through the back half of the year. You guys talked to some of the incremental investments that are ongoing. Can you give us a sense for maybe how much is left in that investment cycle?

Well, we have added about 120 or so folks to our customer care center based outside of Dallas, and that team is handling about 50% to 60% of the Safety-Kleen branch business today. So there's some continuous investment going on there, but I would say that adding additional sales personnel is still in the works as it relates to our direct sales for lube oil. We're hiring a number of folks across the network to help develop those new markets for us. So some continuation in that, and I think on the margin standpoint, Mike, I guess....

Yes, margins are – I think margins will stay kind of really healthy. It's just versus an expectation of what, right? And we're really pleased about the fact we've grown $30 million, $40 million from 2015 to 2016, and now 2016 to 2017 we said mid-teens, which if you just do the math, that's another $40 million on top of that. And so, again, we can talk about margins and talk about our investments, and I'm happy to do so because, again, we're playing the long game and we're making investments for the future. But I couldn't be more pleased with the success that we're having in Safety-Kleen and the managing of the spread and the parts washer services are up. And I think the closed loop is 10,000 customers. I mean, gosh, I mean, again, we can talk about margins, and there are some margin challenges. Certainly, we've talked about them, but I think they're a small piece of the overall kind of very positive story around Safety-Kleen.

Yeah, and I think just recently in the last month or so we both put forth more price increases on the charge-for-oil program on the collection side, and even this morning came out with a small $0.10 a gallon price increase for our group two-plus base oil. So we continue to manage the spread I think well and the team is operating around the market dynamics that exist today in the crude oil market.

Okay. Thanks, guys.

Thanks.

Thanks, Brian.

Our next question comes from Joe Box with KeyBanc. Please proceed with your question.

Good morning, gentlemen.

Good morning.

Hi, Joe.

Hi, Joe.

So, Mike, speaking of the long game and some investments for the future, can you maybe just dig into what the right incremental EBITDA margin is for your business? And maybe if you could just help us understand how the incremental margins could shake out in the near term as you guys pursue some of those growth initiatives versus maybe what you expect longer term once some of those initiatives are really taking root?

Joe, you know when you think about margins, and we don't give our revenue guidance, so it's kind of tricky to kind of speak to that, but we have tried to go 75 to 100 basis points of margin improvement every year. That's been our goal. That's been our target. We were working toward that end, and I think that there's nothing, even with the investments we're talking about here, nothing that would prevent us from reaching those goals in 2017. I think that, again, the long game, we talked about over a long term trying to get to 20%, and again, I think the investments that we're making would allow us to get to that answer.

So, I mean, you guys put up, what, 18.5% incremental EBITDA margins in the quarter. Was that in line with your expectations? Was that below your expectations? Better? I'm just kind of curious how ultimately this is shaking out.

Yeah. A little below than what we wanted to do. I mean, we were thinking a little higher, but at the end of the day, we were pleased with the – I'm pleased with the progress we're making on the project work, and we're starting to see some of that. So I feel good about the back half of the year, given the kind of volume of the flow. We talked a lot about it and I was concerned that it wouldn't materialize, things get worse or different things happen that prevent us from experiencing that, but that's not the case. It's actually coming through, and we see it. We see the project work in our waste projects and in our remediation and just our base work as well.

Got it. I appreciate that. I guess speaking of the back half, you called out some severance expense for the back half stemming from your acquisition. Historically, you guys have included this in your numbers. So I'm curious, how should we be thinking about that incremental severance relative to your maintained EBITDA guide? Is that a needle move or no?

It's not. It's not, Joe. It's just more of when speaking to Lonestar, I wanted people to kind of understand kind of where some costs were going to be as we kind of work our way through integrating it. So it's not a needle mover at all. And it was included in...

A relatively small number.

A relatively small number.

Compared to last year, certainly, significantly a smaller number than last year.

Absolutely. Nothing has changed in our guidance, Joe, around that.

Sure. Okay. Changing gears, I guess with the flexibility of the term loan B, how should we be thinking about the percentage of free cash that could be earmarked towards debt pay-down?

Joe, that certainly gives us that optionality, which is a good thing to have, and obviously, we lowered our interest expense by 200 basis points. It's also nice to have. But again, we measure these investments based on return on invested capital, and whether that be stock buybacks or acquisitions or paying down the debt, that's something we're just going to have to evaluate. I don't really have anything earmarked. I know other companies do stuff like that. And maybe if we get some good cash flow numbers on the board we can have that conversation. But right now, I think we kind of measure our back half of the year, see how we do, and then continue to do an assessment of different types of investments, whether it be acquisitions, whether it be CapEx, whether it be buyback programs, or now we have debt repayment. And just as a reminder, Joe, we do have a minimum 1% we have to pay down per year. So that's a $4 million payment. We'll make $1 million a quarter here starting in Q3.

Understood. Thank you.

All right.

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

Hi. This is Kayvon Rahbar. I'm filling in for Hamzah Mazari. I appreciate you taking our question. I have a question about the possibilities of doing business in the health care or pharma waste sector. What's your current strategy in there? And what's the outlook? We know it's early in terms of – it's an early stage for you guys, but maybe you give some color?

Yeah. We have been rolling out a program focused on both red bag medical waste, mail back return and other waste streams, particularly focused on some of the retail, the pharmacy retail. And I think we're in the early innings of that rollout. We have opened up in a number of markets across U.S., not in Canada just yet. And I think we're seeing some real good opportunities there. We've looked at our pipeline. On a revenue basis, relatively small. It's a little bit longer cycle relating to how contracts mature and how we penetrate some of those customers today. But I think we are seeing good opportunities in that market, and we'll continue to drive that program.

Okay. Thanks for that color. Maybe a follow-up question, switching gears to the energy business. What's the – what kind of breakeven oil price do you need for that business to get back to around 50%, 60% of the prior peak?

Certainly in Canada, I think they've been working real hard to lower costs to try to get that number down significantly down to the $40, but it historically had been north of $60 at many of the producers up there. But we've had to adjust our cost structure. We've had to consolidate and change our whole business model to meet customers' expectations on cost. Now, our hope is that we will now start seeing improvement in utilization. As we mentioned on our call, utilization was up, but still, when you look at the sheer size of our organization and our fleet of assets, only at 28%. So we've got a lot of opportunity to put more equipment to work up there, and we're hoping that with the cost structures that now are in place we can grow that business again.

Yeah, Kayvon, it's very difficult to kind of give that because at one juncture, as Alan said, it was $50, $70 a barrel, and now, it's probably lower than that just given the fact of us and everyone else taking a lot of cost out of the network. And so we're hopeful as we see kind of drill count, drill rig kind of slightly creeping up here in Western Canada, we see there could be an opportunity here. But as we gave guidance in the back half of the year, as I said in my prepared remarks, we're not anticipating a recovery in Western Canada in the back half of 2017, so.

Okay. That's real helpful. I appreciate it. Thank you.

Okay. No problem.

Our next question comes from Luke Junk with Robert W. Baird & Company. Please proceed with your question. Luke L. Junk - Robert W. Baird & Co., Inc. (Broker): Yeah. Good morning. The first question, I'm just trying to put a finer point on the incremental profitability drivers for Technical Services in the second half of this year. Relative to the factors that you mentioned in prepared remarks, Alan, how should we be thinking about the various impacts on incremental profitability in the near term?

I'll jump in, and certainly, Luke, and Alan can speak to this. At the end of the day, a good project pipeline is going to generate kind of very good kind of EBITDA growth. And as we said in our prepared remarks, some of these waste streams are bulk waste and bulk solids, which have lower price points. That doesn't mean that we're, our prices have not changed; it's actually gone up a bit this year, it's just that we haven't seen the mix of the business, which is a good thing, in my opinion is a good thing because we're using our new incinerator, our landfills are getting good utilization, and we're kind of pleased with the back half program. And so the margins, yeah, there's been some slippage in margin but I'm not necessarily concerned about that. I think as we get the incinerator kind of up and fully all shaken out and rolling well, we'll be able to take higher waste streams and we'll be able to kind of push and pull and drive higher margins, like we've done in the past, you know, we've done in the past. And this is – I'm new to the company but this is not new to them. So this will be something we'll do again.

Yes. And I think we've added over 100 personnel to run the new incinerator. And certainly when we look at the tonnage that we're operating at right now, that is impacting our overall margins. And so as we continue to ramp up production at that facility, you're going to start seeing that incremental margin really start to flow through.

Yeah.

Historically, we've seen about 30% margin on that incremental dollar in our core Technical Service business. I think you're just seeing right now just a little bit of remnants of the start-up of that massive plant that we built. And like we said, the team is doing extremely well getting that facility online, and, quite frankly, ahead of plan based on what we're seeing in production down there.

Yeah. I want to repeat, I mean, we're pleased about the utilization numbers. Those were kind of a bit of a surprise to us. We thought it was going to take a little longer, but we're pleased about – it just shows you the level of project work that's happening the marketplace so we can quickly go from 79% to 87% really in a quarter. Luke L. Junk - Robert W. Baird & Co., Inc. (Broker): And then a second question, just in terms of the Industrial and Field Services business. Obviously, some nice upside this quarter. I'm just curious about the sustainability of that upside. Maybe thinking the two big parts of that business, what you see in the U.S. and perchance the likelihood of some additional upside in Canada as well.

Yeah, I think that it is clearly a lot more of a lumpy business, more seasonal with turnaround work, so we expect a much stronger fourth quarter, for example, than we would in the third quarter simply because of the turnarounds that take place. I would say that we've had very little event business. Our Field Service business every year typically enjoys some large event-related work, and although we had some small activity there but nothing significant like we've seen in the past. So we're expanding our footprint with our Field business, and I think from a pipeline standpoint on the Industrial it looks really good for us. But it is a little bit more lumpy. And so the second quarter's pretty strong for us.

And, Luke, there were no ER events in Q1 that would be kind of national ER events to Q1 or in Q2. Luke L. Junk - Robert W. Baird & Co., Inc. (Broker): Right. Great. Thank you very much.

Thanks.

Our next question comes from Sean Hannan with Needham & Company. Please proceed with your question. Sean K. F. Hannan - Needham & Company, LLC: Yeah. Thanks. Good morning, folks. A few questions here. I want to see if I could start a little bit on Safety-Kleen. So did you say that the parts washing business is up on a same-branch basis? Or that we have more activity, or really more branches that are out there serving this? Just trying to get a better understanding there and where you are in perhaps either expanding your market share or expanding the market, et cetera. And particularly, again, kind of coming back to what you have for the branches from an overall numbers standpoint? Thanks.

Sure. As you look at the Safety-Kleen branches, there's not a number of new locations per se across the Safety-Kleen network at this time. We have been expanding in Western Canada with Safety-Kleen. The services that we mentioned, how our services are up, I think are more reflective of our service intervals than it is actually placement and growth of machines. We still have over 200,000 machines that we service out there, and we track that weekly. We've got a good handle on how that business is going. We are seeing growth in our DIY business and our oil filter recycling business. We touched on the 6 million gallons of additional used motor oil collected. So I think all of the key performance indicators for Safety-Kleen, I think, are all up and we're really excited about the growth potential that continues to exist across the Safety-Kleen branch network. Sean K. F. Hannan - Needham & Company, LLC: Okay. Yeah. And sorry that the initial question was a little convoluted there. But ultimately, do you feel that you're expanding the TAM? Or do you feel that you're gaining share?

What was your first part of the question? Sean K. F. Hannan - Needham & Company, LLC: Expanding the TAM? Or gaining share?

I don't think the market is growing, per se. When we look at the machines – I guess what I would say is that we're moving into a different style machine. We've expanded some of the technology that we're using. So there's a little bit of shifting going on, moving from solvents to aqueous, for example. But overall, I would say that we're growing that business as a result of just the market growing. I think the automotive industry, I think, has been growing and the services are growing and I think that is reflective in growth that you're seeing in the Safety-Kleen business.

Yes, Sean. I'd say, just to add on to what Alan said, I'd say that miles driven is up a bit, so that's a good sign. But I'd say that we constantly are kind of competing with our kind of our strong competitors. And sometimes we're up a bit; sometimes we're down a bit. But I don't think that's a – I think, overall, I think it's a little bit of market growth and not sure it's market. To answer your question, I'm not sure it's the market, generally. Sean K. F. Hannan - Needham & Company, LLC: Yeah. Sure. Okay. Yeah. So the TAM has expanded a little bit, but it's a natural flux is what it sounds like.

Yes.

Yeah. Sean K. F. Hannan - Needham & Company, LLC: Okay. On the re-refining side, can you share any feedback on the progress you're making for the announcement on the collection charges? I realize this is relatively recent, but any more detail you can provide on how that's working so far?

As you implement price increases across any part of our business, it always takes some time and lags a little bit. But I think overall, we're communicating with our customers. We're setting the expectations of the realities of what's going on in the market, where crude was operating in. The six oil market was impacting a little bit on the CFO in the first half of the year. It was relatively strong, which is what we intend to compete with for used motor oil to run our re-refineries. So, we saw even folks that are selling into that market having their margins compressed as well. And so I think our competitors, along with ourselves, realized that we need to manage our spread and do a better job of that. And I think we've been doing a good job of convincing our customers why that's important for both of us. Sean K. F. Hannan - Needham & Company, LLC: Okay. And then on the re-refined facilities where you had the hiccups, do you feel that you now have a strong handle on what needs to be addressed there? In essence, you've gone through perhaps a stepped-up diligence review of the facility so we don't run into other surprises. Or are there aspects of some deeper reviews a little further on down the road for you? Just trying to understand really where you have those facilities from a comfort level standpoint. Thanks.

Yes. First, I would say we have an exceptional team that runs the re-refinery network that we have. The levels of production that we're getting out of our plants and the quality of the product, we're creating close to a group three oil as we speak, and that's really the result of the work that the team has done not only in running the plants but the research and the development side that we're focused on. And so some of the work that we're doing around catalysts has somewhat to do with the improvement in what we're trying to get out of our products to try to get to that higher price point. And when you're doing that in a production environment, you tend to burn out your catalyst maybe or cause some upset conditions, but all for the right reason, which is to drive a higher quality, higher priced, higher margin product. And so, to that extent, we're going to continue to investigate that and push that envelope. On the other hand, as it related to the acquisition that we made last year, particularly the Nevada plant that we bought, there were some bottlenecks in that plant that needed to be addressed, and we have addressed them. There is still some additional engineering and equipment that has been ordered and will be installed the latter half of this year that will make that plant even better, but we are running very safe and well-run plants right now. Sean K. F. Hannan - Needham & Company, LLC: Okay. So from a review, assess and put some new plans into action standpoint, we feel comfortable that this is now done? We can proceed, move forward, and execute?

Yeah. And I would say we just had one of our oil summit meetings and Scott Miller, the gentlemen that runs these plants, 20-plus years with the Safety-Kleen organization, he is leading the team around those points that I was making. I can't say never that you would have an upset condition again in any of our plants because just the nature of handling hazardous waste and waste in general, you tend to have upset conditions, whether it be around fouling or quality of water, whatever it might be. But overall, directionally, this team is creating some great products and really doing a great job of converting those base oils now to blended oil. And that I think is going to continue to perform really well. Sean K. F. Hannan - Needham & Company, LLC: Great. Thanks so much for the feedback, folks.

Yes.

Thanks, Sean.

Thanks, Sean.

Next question comes from Tyler Brown with Raymond James. Please proceed with your question. Patrick Tyler Brown - Raymond James & Associates, Inc.: Hey. Good morning, guys. Hey, just a few questions on the Safety-Kleen segment from a modeling perspective. So I know at this point, you've got six re-refineries in the fleet, but it's still a little unclear to me how much nameplate UMO processing capacity you have, I guess, annually. I still don't know what Nevada, Washington, and Kansas are contributing.

I don't have that number

We don't have that number in front of us, Tyler. I don't know if we've given that out kind of publicly before, but let us research that and get back to you.

We handle – I think general, just directionally, about a little over 200 million gallons is what these plants take in as a feed, and the yield is typically around that 70%, 71% level. So it's directionally in that number, but don't hold us to it, okay? Patrick Tyler Brown - Raymond James & Associates, Inc.: Yeah, yeah. Okay. Okay. That's good. And then you collected 60 million UMO in the quarter. Is that a good run rate, or would you expect some of the pricing actions will bring that down back into the mid-50s?

I think second quarter and third quarter are seasonally strong, so you're going to continue to see that the demand for our business, the demand for our services is growing. And even with the pricing that we put out there, we are winning contracts. So I would say that we're going to continue to see strong volumes. Patrick Tyler Brown - Raymond James & Associates, Inc.: Okay.

We realize that....

It is lumpy. It is a little lumpy.

It is lumpy. But we're going to lose some – we'll lose some customers to a competitor who might try to increase or take advantage of our price increase, but generally speaking, our volumes are going to continue to be pretty strong.

Yes. Patrick Tyler Brown - Raymond James & Associates, Inc.: Right. Okay. And then on CFO, I think the slides noted a $0.10 drop year-over-year, but that would still imply a pretty big sequential step-down. I guess I'm just still a little unclear why that happened, and that seemed to be a relatively big move.

Yeah. I would say, Tyler, that at the end of the day, as we've been able to get – oil prices have increased, that's going to be a natural answer that that CFO pricing is going to decrease. And so our sequential drop, which we didn't publish, and consistent with our peer group, and I think that that's – and that's part of the reason why. Again, trying to get ahead of it, we announced in July a CFO price increase, so to try to, again, with the idea being to kind of widen that spread from base oil pricing on the street, in the market, as well as our feedstock costs. Patrick Tyler Brown - Raymond James & Associates, Inc.: Okay. So when you announced your CFO kind of pricing, does that include the stop fees? Or is that a completely separate revenue line?

Yes. Tyler, it's Jim. That number we've provided since we've had Safety-Kleen has always been an all-in number. Patrick Tyler Brown - Raymond James & Associates, Inc.: All-in.

So, some of them are stop fees. Some of them are charged stop fees. Some are charged per gallon. Some are charged to mix. And what we give to the Street has always been a compilation of everything. Patrick Tyler Brown - Raymond James & Associates, Inc.: Okay. Okay. Good. And then on the SG&A side, Mike, is this level basically assuming 100% accrual on the incentive comp? Or is it over 100% this year? I'm just basically trying to figure out if this year's SG&A is a baseline.

Yeah, it's a good baseline. It will be a little higher than last year, and it includes not at 100%, but a very high level. Patrick Tyler Brown - Raymond James & Associates, Inc.: Okay. Okay. And then my last one, on incineration, Alan, you noted that mix played a role on pricing, but if you stripped it down, do you feel that pricing is positive on an apples-to-apples basis? Or is it a little bit more flat?

I think it's positive. We initiated price increases in our Tech Services business this year. As expected, there was lag as they get implemented, and we will continue to see those price increases come across in the third and fourth quarter. Patrick Tyler Brown - Raymond James & Associates, Inc.: Okay. All right. Thanks, guys.

Thanks, Tyler.

Our next question comes from Jeff Silber with BMO Capital Markets. Please proceed with your question.

Thanks so much. I know it's late. I'll be quick. It looks like you raised your adjusted net income guidance for the year. Is that just because of the refinancing? Is there any impact from Lonestar in there as well? I'm just curious.

Yes, interest expense, Jeff.

Okay. Great. Thanks so much.

Okay.

Our next question comes from Noah Kaye with Oppenheimer & Company. Please proceed with your question. Noah Kaye - Oppenheimer & Co., Inc.: Hey. Great. Thanks for letting me sneak this follow-up in. Just on one of the prior questions around SG&A levels. You mentioned you're at 50% to 60% use of the consolidated call centers. So presumably, you've got a lot of duplicative costs still at this point, which is partly creating that headwind there. Can you just remind us at what point this starts to become a net good guy, this effort, and kind of what the magnitude of that should be?

Yes. So Alan can talk a little bit about the centralization program. There's a lot of goodness coming out of it. I think that it's going to be a bit of a headwind here in 2017. I don't think it's a really super good guy in 2018 as well. And so I just want people to be aware that this is kind of a long-term investment. We recognize the fact that we're kind of lowering churn, getting better routing, helping with collections. There's a lot of things that that team is doing, and it's just going to take time. And so I don't anticipate this being like a huge winner in 2018 as we start taking on a lot of cost. It was more of a kind of increasing revenue, driving revenue to a centralization, better customer service, higher quality service, lower churn.

Lower churn, for sure. It's about $5 million of cost, roughly, is what that added cost is annually.

That's right. Noah Kaye - Oppenheimer & Co., Inc.: Perfect. Thanks so much for the clarification.

Okay.

No problem, Noah.

Our next question comes from Sean Hannan with Needham & Company. Please proceed with your question. Sean K. F. Hannan - Needham & Company, LLC: Yeah. Thanks for the follow-up as well. I just wanted to see if we could get some specific detail on the, what you're seeing for turnaround work for how that's trending right now specifically versus what you were seeing a few months ago.

Sean, I'll start, and Alan can chime in. Again, we have gotten good – now that we've had Salesforce.com in the system now for a year-plus, we're really seeing kind of better trends. And again, we talked about this for a long time, the level of costs that were going into our legal department. We can triangulate in many different ways. You've got to look at it kind of what's happening in the marketplace, what our peers are doing and again, how we feel about it. And again, I can't stress enough that I feel good about the level of project work that's out there and the opportunity for us to win not just small size, but medium and large-sized projects. Although things get pushed, things can happen, I get that. I've sat in this chair before for years and kind of explained that. And so bad things can happen, but I would say that the volume would speak to the fact that there's good trends. Sean K. F. Hannan - Needham & Company, LLC: The volume has been, I believe, out there for a period of time, right? There's just been so many quarters where we've heard, all right, look, there are more pushes than we would like or than what we have expected. So I'm just trying to get a sense of when we talk about trends today, is it really materialization that those turnarounds truly are starting to come back in that activity work?

Well, I think, I mean, when you look at what the oil industry has gone through since crude oil crashed from $100 down to where it went and where it's been going here, there's no question that every customer of ours is holding back spending and pushing and delaying and doing everything they can to deal with this market that they're in. And so what we have seen is turnarounds getting pushed. What we also have seen is some turnarounds becoming more driven by events, and then they become even longer, because now you're really spending a lot more money, because you're really dragging out some of these plants and running them too long. So there's quite a bit of noise in there, Sean. And I think a lot of it has got to do with individual companies doing everything they can to address cost as it relates to the impact of the crude oil market. Sean K. F. Hannan - Needham & Company, LLC: Okay. Thanks very much, folks.

Yes.

Thanks, Sean.

Our last question comes from Barbara Noverini with Morningstar. Please proceed with your question.

Hey. Thanks, everybody. Good morning. So going back to some signs of life in Western Canada, I'm wondering if you could provide us maybe with a roadmap to recovery, if you will? You've talked a little bit about turnaround work picking up in the area as well as outside room utilization improving in Lodging, but maybe you can share with us some additional indicators you might be monitoring that would help you feel more confident that recovery in the region would be gaining traction?

We have not seen any recovery really whatsoever on our seismic business, our survey, which is really a leading indicator of future spending, to be honest with you. And that is something that is a good indicator of what's going to happen in the market. So budgets should come out September/October timeframe. We should start getting some color for you in the third quarter, as well as obviously for us. But I would say that is something that we're still watching and have not seen any signs of life yet.

Gotcha. That's very helpful. Thank you.

Yes.

Thanks, Barbara.

At this point, I'd like to turn the call back to Alan McKim for closing comments.

Okay. Thank you, Rob. And thanks, everybody, for joining us today. We are speaking at the Canaccord Conference in Boston next week, and we'll be at other events in the fall, and so we look forward to seeing many of you there. And enjoy the rest of the summer.

This concludes today's conference. You may disconnect your lines at this time. And we thank you for your participation.