Company: CLH
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0000822818-25-000007
Chunk: 82

Company: CLEAN HARBORS INC
Filing Date: 2025-02-19
Form: 10-K
Item: Item 1
Chunk 82
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 consolidated balance sheets and (ii) $6.5 million related to federal, state and provincial enforcement actions as well as legal claims, which were included in accrued expenses on the consolidated balance sheets. The inherent uncertainty related to the outcome of these matters can result in amounts materially different from any provisions made with respect to their resolution. In management's opinion, it is not reasonably possible that the potential liability in excess of what is recorded, if any, that may result from these actions, either individually or collectively, will have a material effect on our financial position, results of operations or cash flows.

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ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, we are exposed to market risks, including changes in interest rates and certain foreign currency rates, primarily relating to the Canadian dollar. 

Interest Rate Risk

Our philosophy in managing interest rate risk is to maintain a debt portfolio inclusive of both variable and fixed-rate debt so as to limit our exposure to interest rate volatility. As of December 31, 2024, before taking into account any interest rate swap agreements then in place, we held $1,464.9 million of variable rate debt under our secured senior term loans due in 2028 ("2028 Term Loans") which bear interest at the Term SOFR rate plus a margin of 1.75%. 

To hedge interest rate exposure on a portion of this outstanding variable debt, we entered into interest rate swap agreements. Under the terms of the interest rate swaps entered into in 2022 ("2022 Swaps"), which hedge the interest rate exposure on the 2028 Term Loans, as of December 31, 2024, we would receive interest based on the one-month Term SOFR index and we would pay interest at the fixed rate of 1.965% on a notional amount of $600.0 million. When combined with the 1.75% interest rate margin for Term SOFR borrowings under the 2028 Term Loans, the effective annual interest rate on such $600.0 million aggregate principal amount of the 2028 Term Loans was approximately 3.71%. The remaining balance of the 2028 Term Loans subject to interest rate risk as of December 31, 2024 was $864.9 million.

We designated our interest rate swap instruments as effective cash flow hedges at inception, and therefore the change in fair value is recorded in stockholders' equity