Waste Management and Recycling Market Update – Q3 2013

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HW&Co. understands the key trends and dynamics driving the waste management and recycling (WMR) sector.

Solid Waste – Solid Waste – Collection Disposal

Recycling E-Waste

Specialty Waste – Specialty Waste – Industrial Hazardous

Specialty Waste – Recycled Content Medical

Waste-to-Energy (“WtE”)

1 Public Markets Update

Waste management and recycling comparables are trading at a 3.2% discount to the S&P 500 but 19.4% above their five-year median.

Trading Statistics (TEV/LTM EBITDA) Comparable Company TEV/LTM EBITDA (Oct. 2008 – Oct. 2013) 12x Diversified Waste 5.4x 8.0x 8.4x 9.7x 9.8x 10x Management and Recycling 8x 6x Solid Waste Management 5.8x 7.6x 7.8x 8.9x 14.6x 4x and Recycling 2x Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Oct-13 5.6x 8.4x 8.6x 10.5x Specialty Waste Waste Management and Recycling S&P 500 TEV/EBITDA – Current Trading Performance

3.8x 6.7x 7.4x 9.5x 11.0x Recycled Materials Metals Processing 16.6x and E-Waste

Waste-to-Energy 10.6x 7.4x 10.0x 10.3x 10.6x 12.3x Waste-to-Energy S&P 500 9.9x

Diversified Waste 9.7x Metals Processing and E- 3.2x 6.7x 7.5x 16.6x 31.6x Management and Recycling Waste All Waste Management 9.6x and Recycling Comps All Waste Management and 5.7x 8.1x 9.6x 9.7x 9.5x Recycling Comps Recycled Materials Solid Waste Management 8.9x and Recycling S&P 500 5.8x 8.4x 8.5x 9.9x Specialty Waste 8.6x

5-Year Min. & Max. 3-Year Median 5-Year Median Current 0x 5x 10x 15x 20x

Data as of October 29, 2013. Data as of October 29, 2013. Source: S&P Capital IQ. Source: S&P Capital IQ.

2 Q3 2013 Earnings Release Calendar

August October November November

26 7 14 21 28 4 11 18 25 $30,000

Oct. 29

$25,000 Nov. 7

Oct. 24 $20,000

Oct. 31

Enterprise Value $15,000 ($ in mm)

$10,000 Oct. 23

$5,000 Nov. 6 Oct. 22 Oct. 24 Nov. 5 Nov. 7 $0 Aug. 29 Oct. 17 Oct. 29 3 Earnings Update Q3 2013

Half way through the Q3 2013 earnings season, the overall waste management and recycling sector has experienced positive performance over prior periods.

Q3 2013 Earnings Update

Company Ticker Release Date Location Q3 2013 Performance Key Observations

LTM Revenue: $466 ▲ Y-o-Y ∆: 1.7% • Casella continues to see the same recessionary trends LTM EBITDA: $79 ▼ Y-o-Y ∆: (7.0%) in the business and the weak regional economy that NasdaqGS:CWST 8/29/2013 Rutland, VT has plagued the company all fiscal year. LTM Net Income: ($46) ▼ Y-o-Y ∆: (44.6%) • Casella made progress on improved pricing of collections, integrating the BBI acquisition, and LTM Diluted EPS: ($1.24) ▼ Y-o-Y ∆: (60.0%) closure of Maine Energy.

LTM Revenue: $269 ▲ Y-o-Y ∆: 17.0% • Growth in revenue was aided by HCCI’s ability to continually add new customers – serving 93,000 LTM EBITDA: $12 ▲ Y-o-Y ∆: 5.6% individual customer locations from 74 branches. NasdaqGM:HCCI 10/17/2013 Elgin, IL LTM Net Income: $2 ▼ Y-o-Y ∆: (30.1%) • Improved efficiency of HCCI’s used oil collection routes and its transportation in the Oil Business LTM Diluted EPS: $0.09 ▼ Y-o-Y ∆: (41.5%) during the third quarter. • Revenue, EBITDA and free cash flow met or LTM Revenue: $1,892 ▲ Y-o-Y ∆: 18.8% exceeded the upper end of WCN’s expectations. LTM EBITDA: $632 ▲ Y-o-Y ∆: 25.5% • Volume once again exceeded expectations at over NYSE:WCN 10/23/2013 The Woodlands, TX 2% in the quarter, with continued broad-based LTM Net Income: $182 ▲ Y-o-Y ∆: 13.1% disposal activity and the addition of R360 driving another quarter of double-digit year-over-year LTM Diluted EPS: $1.47 ▲ Y-o-Y ∆: 9.0% increases in solid waste landfill volumes. LTM Revenue: $2,079 ▲ Y-o-Y ∆: 12.0% • Stericycle closed 17 transactions in the third quarter, totaling $60 million in revenue and maintains a LTM EBITDA: $624 ▲ Y-o-Y ∆: 12.9% pipeline of opportunities worth $100 million. NasdaqGS:SRCL 10/23/2013 Lake Forest, IL • This increase in customer base provides a long-term LTM Net Income: $303 ▲ Y-o-Y ∆: 15.7% growth platform for selling multiple services that LTM Diluted EPS: $3.47 ▲ Y-o-Y ∆: 14.9% can more than triple the customers' revenues.

4 Earnings Update (cont.) Q3 2013

Q3 2013 Earnings Update

Company Ticker Release Date Location Q3 2013 Performance Key Observations

LTM Revenue: $19,441 ▲ Y-o-Y 3.8% ∆: • Suez expects its European waste volumes to drop LTM EBITDA: $3,070 ▲ Y-o-Y ∆: 20.0% 3% for 2013E, but expects stabilization in 2014P. ENXTPA:SEV 10/24/2013 Paris, France • Suez continues to close sites in Europe to restructure LTM Net Income: $446 ▲ Y-o-Y ∆: 147.6% its waste division – the company shut 13 additional sites in Q3 2013. LTM Diluted EPS: $0.79 ▲ Y-o-Y ∆: 169.7%

LTM Revenue: $2,020 ▲ Y-o-Y ∆: 8.7% • In the third quarter, Progressive delivered its highest organic revenue improvement of the past five years. LTM EBITDA: $532 ▲ Y-o-Y ∆: 1.7% • This growth reflects a continuation of the higher TSX:BIN 10/24/2013 Ontario, Canada construction and demolition volumes that it LTM Net Income: $93 ▼ Y-o-Y ∆: (143.8%) experienced in the second quarter this year, which LTM Diluted EPS: $0.81 ▼ Y-o-Y ∆: (144.2%) have continued to date. • Acquired a 1,050-ton-per-day Energy from Waste LTM Revenue: $1,643 ▼ Y-o-Y ∆: (0.1%) facility in Camden, NJ for $49 million, which was LTM EBITDA: $418 ▼ Y-o-Y ∆: (3.0%) immediately accretive. NYSE:CVA 10/24/2013 Morristown, NJ • Energy sales were lower than expected not because LTM Net Income: $47 ▼ Y-o-Y ∆: (19.0%) of its production but because of a couple of unusual circumstances related to customers' inability to take LTM Diluted EPS: $0.36 ▼ Y-o-Y ∆: (15.8%) its steam and electricity.

LTM Revenue: $192 ▲ Y-o-Y ∆: 19.9% • Treatment and Disposal revenue grew at 10% over prior year levels, attributed to continued strength of LTM EBITDA: $66 ▲ Y-o-Y ∆: 15.0% its project-based work or Event Business. NasdaqGS:ECOL 10/29/2013 Boise, ID LTM Net Income: $29 ▲ Y-o-Y ∆: 10.7% • Its Event Business grew 23% during the quarter, led by growth in the commercial sector, which offset LTM Diluted EPS: $1.57 ▲ Y-o-Y ∆: 9.1% U.S. Ecology’s softness in the government sector.

LTM Revenue: $13,917 ▲ Y-o-Y ∆: 2.2% • Strong results were driven by WM’s continued focus on increasing revenue growth from yield gains and LTM EBITDA: $3,400 ▲ Y-o-Y ∆: 2.3% controlling costs. NYSE: WM 10/29/2013 Houston, TX • Margins expanded despite continued headwinds LTM Net Income: $927 ▲ Y-o-Y ∆: 7.9% confronting WM’s recycling and waste-to-energy LTM Diluted EPS: $1.98 ▲ Y-o-Y ∆: 6.6% businesses and modestly lower volumes.

5 Overall M&A Activity

M&A volume across the waste management and recycling sector has been generally in line with the broader market despite some year-to-year variations.

Global Waste Management and Recycling Middle Market M&A Volume1,2

For the Quarters Ended Q1 2007 – Q3 2013 2007 2008 2009 2010 2011 2012 All M&A: 1,711 All M&A: 1,847 All M&A: 1,421 All M&A: 1,795 All M&A: 1,979 All M&A: 1,797 WMR M&A: 10 WMR M&A: 21 WMR M&A: 11 WMR M&A: 15 WMR M&A: 14 WMR M&A: 12

All M&A: 7.9% All M&A: (23.1%) All M&A: 26.3% All M&A: 10.3% All M&A: (9.2%) WMR M&A: 110.0% WMR M&A: (47.6%) WMR M&A: 36.4% WMR M&A: (14.3%) WMR M&A: (14.3%)

10 Rebound in volume 9 after sluggish 1H.

0 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

Sources: Thomson Financial – SDC database, S&P Capital IQ (1) Includes transactions between $50 million and $1.5 billion in enterprise value. (2) Excludes minority purchases, acquisitions of remaining interest, self-tenders and repurchases. 6 Key M&A Activity

The waste management and recycling sector has seen significant investment activity from both strategic and financial buyers over the last several years. PSC Metals / Liberty Tire Services / Choice Environmental Services / GFL Environmental / Roark Capital Group Icahn Enterprises American Securities Progressive Waste Solutions US Liquids of Louisiana / Proactiva Medio Ambiente / OmniSource Southeast / R3 Treatment WCA Waste Corporation / Veolia Environnement Steel Dynamics Macquarie Infrastructure Partners EnviroServ Holdings / Waste Services / Evergreen Tank Solutions / Energy Products of Idaho / Synagro Technologies / Absa Capital Private Equity Progressive Waste Solutions Odyssey Investment Partners Outotec EQT Partners Metalico Neville / Swire SITA Waste Services/ Touchstone Wireless Repair and Logistics / Covanta Delaware Valley / Rothsay / Metalico Suez Environnement Company Brightpoint Covanta Maple Leaf Foods Greenstar Environmental / Palko Environmental / Siemens Water Technologies, Two Oil Waste EnergySolutions / Biffa Group Gibson Energy Treatment Units / FCC Energy Capital Partners RiverRoad Waste Solutions / Charterhouse Equity Waste Industries USA / Terra Renewal Services / Alaska Pacific Environmental Goldman Sachs Darling International Services Anchorage / Waste Connections Republic Services, Certain Assets / Intechra Group / May Gurney / Kier Group Waste Connections JWC Environmental / Windjammer Capital Arrow Electronics Evergreen Oil / Clean Harbors Metal Management / Waste Pro USA / EnGlobe / Oakleaf Waste Met-Pro / CECO Environmental Sims Metal Management Roark Capital Group ONCAP Management / R3 Treatment / Summit Energy & Liquid Indeck Maine Energy / Clover Technologies Group / Waste Management Waste Connections Logistics / Waste Management Oakleaf Waste Management / Covanta Holding Sanipac / Golden Gate Capital Oilfield Water Lines / New Mountain Capital Waste Connections Teleplan International / NGL Energy Partners Harold Lemay Enterprises / Gilde Buy Out Partners Griffin Industries / Befesa Medio Ambiente / Waste Connections Darling International Badlands Energy / Abengoa Nuverra ecoATM / Outerwall Clean Harbors Industrial Services Canada / Hudson Valley Waste Holding / Interstate Waste Services, Certain Clean Harbors Waste Connections Assets / Action Environmental Veolia ES Waste-to-Energy / Healthcare Waste Solutions / Caraustar Industries / Covanta Holding Corporation Stericycle H.I.G. Capital Allied Waste Industries / Choice Environmental Services / Veolia ES Solid Waste, US Operations / Republic Services Progressive Waste Solutions Advanced Disposal Services MedServe / WSN Environmental Solutions / Greenstar / Waste Management Stericycle Suez Environnement Company Thermo Fluids / AVR / Potrero Hills Landfill / Nuverra Cheung Kong (Holdings) Waste Connections FCR and Blue Mountain Recycling / HarbourVest Partners Rizzo Environmental / Kinderhook Industries Seaway / US Ecology Allied Waste Industries Inc., Solid Waste Landfill ECS Refining / EnviroWaste Services / Cheung Kong and Collection Assets / Veolia ES Solid Waste All Metals Infrastructure Holdings Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Quarterly Heat Map Notes: 0 Transactions (1) Size of circle represents relative transaction value. 1-2 Transactions (2) Includes WMR acquisitions between 2007 and YTD 2013 with reported and estimated transaction values above $50 million. Strategic Deals Private Equity Deals Enterprise Value N/A 3-4 Transactions (3) Proactiva Medio Ambiente / Veolia Environnement is a pending transaction. 4+ Transactions 7

Sub-Sector Overview

Positive momentum marks the trajectory of the waste management and recycling sub-sectors. Sub-Sector Sentiment Key Observations

• Rising population and increased manufacturing due to the economic recovery have pushed waste generation in the U.S., growing at a 1.9% CAGR from 243.6 million tons in 2009 to 262.7 million tons in 2013E. Solid Waste – Collection • MSW generation per person has steadily increased from 2.68 pounds per person per day in 1960 to 4.4 pounds per person per day in 2011. • Waste collection services revenue is expected to increase at a 2.3% CAGR from $47.1 billion in 2012 to $51.6 billion in 2016P.

• Despite the increase of waste generated in the U.S., the increase in recycling rates has lead to the steady decline in the number of landfills from 7,924 in 1988 to 1,908 in 2010, but recent trends show an increase in size of landfills as older, less efficient Solid Waste – landfills are replaced by larger, more efficient facilities. Disposal • Disposal of waste to a landfill has decreased from 90% of the amount generated in 1980 to under 65% of MSW in 2011. • Waste treatment and disposal services revenue in the U.S. is estimated to grow at a 3.3% CAGR from $16.0 billion in 2012 to $18.3 billion in 2016P. • Alongside evolving consumer preferences and regulatory changes, technological advancements like single-stream recycling and “all-in-one” mixed-waste processing have helped grow recycling and material recovery rates. • The recycling rate in the U.S. has increased from less than 10% of MSW generated in Recycling 1980 to close to 35% in 2011, indicating an increase in infrastructure and market demand for recycling. • U.S. recycling facilities revenue is estimated to grow at a 4.0% CAGR from $5.6 billion in 2012 to $6.5 billion in 2016P. 8 Sub-Sector Overview (cont.)

Sub-Sector Sentiment Key Observations

• More than half of the United States has some form of e-waste regulation or disposal ban enacted, with many still considering laws. • Due to the growing adoption and shorter lifecycles of electronics, the Consumer E-Waste Electronics Association estimates Americans own approximately 24 electronic products per household. • The global e-waste recycling market is expected to grow from $10.0 billion in 2012 to $18.0 billion in 2017P, representing a 12.5% CAGR.

• Large waste management businesses have begun to diversify their traditional business models by acquiring companies in specialized waste services industries, including oil and gas. Specialty • Global industrial waste recycling and services market is expected to grow at a 10% Waste – CAGR from 2012 to 2016P. Industrial • Oil and gas companies are expected to increase environmental, health, and safety (EHS) spending by 60% from $35 billion in 2011 to $56 billion in 2030P, driving demand for industrial waste solutions.

• Hazardous waste generation trends have fluctuated between 2001 and 2009, but the amount generated has roughly stayed constant while the portion of waste that was disposed of increased by 2.1 million tons. Specialty • The oil & gas, petrochemical, and manufacturing renaissance is driving increased Waste – demand for hazardous waste services. Hazardous • The growth of new industries like e-waste recovery and solar energy will also help to grow hazardous waste collections in the U.S. as new types of waste are classified as hazardous.

9 Sub-Sector Overview (cont.)

Sub-Sector Sentiment Key Observations

• Proper disposal of medical waste is imperative to reduce the risk of cross contamination and the spread of infection – currently over 90% of medical waste in incinerated to aid this effort. Specialty • U.S. EPA regulates the air emissions for medical waste incinerators and in May passed Waste – amendments aimed at further minimizing emissions. Medical • The U.S. medical waste management market is expected to grow at a 5.4% CAGR from $3.1 billion in 2013E to $4.0 billion in 2018P, driven by the growing demand of the pharmaceutical industry and the aging population.

• Nearly 170 million tons of annual building construction, renovation, and demolition derived wastes account for nearly 60% of the nation’s non-industrial, non-hazardous solid waste generation. Recycled • The sustainable building materials industry is expected to grow at a 17.6% CAGR from Content $21.0 billion in 2012 to $40.0 billion in 2016P, driven in part by the implementation of LEED v4. • Demand for post-consumer plastic is expected to rise 6.5% per year to 3.5 billion pounds in 2016P.

• Current challenges in waste management, including unsustainable landfilling, methane gas emissions, growing waste volumes, and lack of space, are fueling the growth in the WtE market, which is expected to reach $7.4 billion in 2013. Waste-to- • While the U.S. is making strides in growing its WtE market, in 2011 only 11.7% of Energy municipal solid waste was used to create energy as opposed to the E.U. where 22.0% went to create energy. • The global WtE market is expected to grow from $6.2 billion in 2012 to $29.2 billion in 2022P, representing a 16.8% CAGR. 10 Sentiment Sub-Sector Review Solid Waste – Collection

• Rising population and increased manufacturing due to the economic recovery have pushed waste generation in the U.S., growing at a Solid Waste Collection News 1.9% CAGR from 243.6 million tons in 2009 to 262.7 million tons in 2013E. NYC’s Business Integrity Commission In its efforts to privatize waste has proposed a 15% increase in the collection services, Detroit is looking • MSW generation per person has steadily increased from 2.68 pounds city’s rate cap for commercial waste to establish a five-year agreement to per person per day in 1960 to 4.4 pounds per person per day in 2011. haulers, which would be the first rate expand single-stream recycling increase since 2008. ―Waste Age collection across the city. – Waste & • Organic materials continue to be the largest component of MSW Recycling News with paper and paperboard accounting for 28% and yard trimmings and food waste combined accounting for 28%. Bloomberg is leading New York’s • Recent technological advancements like single-stream recycling and move into separated food waste “all-in-one” mixed-waste processing have catered towards consumer collection, and just announced it preferences and helped grow collection rates. will reach up to 100,000 households by 2014. • Waste collection services revenue is expected to increase at a 2.3% ―GreenBiz CAGR from $47.1 billion in 2012 to $51.6 billion in 2016P. Historical U.S. Solid Waste Generation U.S. Waste Collection Services Revenue 2004 – 2013E 2010 – 2016P (Million Metric Tons) ($ in billions) 265 2009-2013E 262.7 $55 CAGR: 1.9% 2012-2016P $51.6 $50.6 260 258.2 CAGR: 2.3% $49.6 255.4 255.5 $50 $48.3 254.6 $47.1 255 251.3 249.7 249.9 $44.5 250 $45 247.3 $41.7 243.6 245 $40 240 $35 235

230 $30 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E 2010 2011 2012 2013E 2014P 2015P 2016P Source: IBIS World. Source: IBIS World. 11 Sentiment Sub-Sector Review Solid Waste – Disposal

• Despite the increase of waste generated in the U.S., the increase in recycling rates has lead to the steady decline in the number of Solid Waste Disposal News landfills from 7,924 in 1988 to 1,908 in 2010, but recent trends show an increase in size of landfills as older, less efficient landfills are North Carolina’s governor signed a bill Landfill emissions of methane fell 30.3% from 1990 to 2011, partially replaced by larger, more efficient facilities. that loosens environmental regulations for landfills and an executive order attributed to a 21% decrease in the • Disposal of waste to a landfill has decreased from 90% of the allowing local officials to protect against disposal of compostable materials amount generated in 1980 to under 65% of MSW in 2011. any leaks from waste trucks. – Waste and an increase in the amount of Age landfill gas that's being collected.– • Food waste, which accounted for approximately 15% of MSW in Waste & Recycling News 2011, represents a significant opportunity in the solid waste market Tipping fees at America's as its applications for waste-to-energy fuel and composting materials landfills are inching higher, but are further utilized. only enough to keep pace with The amount of out-of-state solid waste that inflation, according to a new • Waste treatment and disposal services revenue is estimated to grow ended up in Virginia – one of the top states survey from Waste & Recycling at a 3.3% CAGR from $16.0 billion in 2012 to $18.3 billion in for importing waste – fell about 3.4% in News. 2012. ―Waste & Recycling News 2016P as the population rises, manufacturing rebounds from the – Waste & Recycling News economic recovery, and the WtE market continues to grow. Number of U.S. Landfills U.S. Waste Treatment & Disposal Services Revenue 1988 – 2011 2010 – 2016P 10,000 ($ in billions) 1988 – 2011 $19 7,924 CAGR: -6.0% 2012-2016P $18.3 8,000 $18 CAGR: 3.3% $17.7 6,326 $17.0 $17 6,000 5,386 $16.4 $16.0 3,558 $16 $15.6 4,000 3,091 $15.2 2,314 $15 1,967 1,767 1,767 1,754 1,812 1,908 2,000 $14

0 $13 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2010 2011 2012 2013E 2014P 2015P 2016P Source: U.S. EPA. Source: IBIS World. 12 Sentiment Sub-Sector Review Recycling

• While the amount of municipal solid waste has steadily increased since 1960, Americans have shifted to recycling their waste. Recycling News

• An example of this shifting consumer preference is the increase in In 2005, 20% of recycling communities The overall recycling rate for curbside recycling programs from 8,875 in 2002 to 9,800 in 2011. used single-stream, but by 2010, that had steel was 88% in 2012 with grown to 64%. – The Huffington Post nearly 84 million tons of steel • The recycling rate in the U.S. has increased from less than 10% of recycled, the Steel Recycling MSW generated in 1980 to close to 35% in 2011, indicating an Institute announced. ―Waste & Recycling News increase in infrastructure and market demand for recycling. On course to double its recycling rate to 30% by 2017 and save at least • U.S. recycling facilities revenue is estimated to grow at a 4.0% $60 million annually, New York City CAGR from $5.6 billion in 2012 to $6.5 billion in 2016P. Mayor Mike Bloomberg unveiled a new public information campaign – • Alongside evolving consumer preferences and regulatory changes, "Recycle Everything" – to remind technological advancements like single-stream recycling and “all-in- everyone how easy it can be to make a measurable difference. – Waste & one” mixed-waste processing have helped grow recycling and Recycling News material recovery rates.

Historical U.S. Waste Stream Trends U.S. Recycling Facilities Revenue 1960 – 2011 2010 – 2016P 300 100% ($ in billions) $7 250 94% 93% 2012-2016P $6.5 90% 80% $6.2 84% CAGR: 4.0% $6.2 $5.9 200 $6 71% 60% $5.6 65% $5.4 150 $5.1 35% 29% 40% $5 100 16% 50 10% 20% 6% 7% $4 0 0% 1960 1970 1980 1990 2000 2011 $3 MSW Waste Generated % Discarded to Landfill % Recycled 2010 2011 2012 2013E 2014P 2015P 2016P Source: U.S. EPA. Source: IBIS World. 13 Sentiment Sub-Sector Review E-Waste

• More than half of the United States has some form of e-waste regulation or disposal ban enacted, with many still considering laws. E-Waste News

• Due to the growing adoption and shorter lifecycles of electronics, U.S. General Services Administration The U.S. House introduced an the Consumer Electronics Association estimates Americans own announces new guidelines banning all electronic waste recycling bill approximately 24 electronic products per household. federal agencies from disposing of e- prohibiting the exporting of some waste in landfills. e-waste to avoid improper • Consumers and businesses now have more options to recycle their e- ―U.S. General Services Administration disposal. – Waste360 waste – local community recycling events or pickups, online buyback websites, and new technologies such as ATM-like machines Study finds that 25% of all e-waste The EU recently adopted new rules on located in shopping centers. handlers directly engage in exporting e-waste, which requires all member • Data security is an important consideration for consumers and and 41% reported being reasonably states to enact collection targets of certain some portion of their materials 45% of electronic equipment sold businesses when disposing of their electronic devices – this service was later exported by another starting in 2016, and a target of 65% is a valuable competitive advantage for certain e-waste businesses. organization. of equipment sold or 85% of • The global e-waste recycling market is expected to grow at a 13.2% ―U.S. International Trade electronic waste generated by 2019. – Commission GreenBiz CAGR from $9.8 billion in 2012 to $18.3 billion in 2017P.1

Historical E-Waste Generation and Recycling Trends E-Waste Laws 2000 – 2011 (Thousands of Tons) 4,000 30% 24.9% 18.8% 19.6% 18.3% 25% 3,000 13.7% 20%

2,000 10.0% 15%

10% 1,000 5%

0 0% 2000 2005 2007 2009 2010 2011 Total E-Waste Generated E-Waste Trashed E-Waste Recycled Percent Recycled E-Waste Law Proposed E-Waste Law No E-Waste Law Source: U.S. EPA. 14 (1) Transparency Market Research. Source: National Center for Electronics Recycling. Sentiment Sub-Sector Review Specialty Waste – Industrial

• Large waste management businesses have begun to diversify their traditional business models by acquiring companies in specialized Industrial Specialty Waste News waste services industries, including oil and gas. It’s no secret that those in the solid More than 860 trillion cubic feet of • As regulations continue to become more specific towards certain waste management business are shale gas sit under American soil, industries, the industrial specialty waste sector will continue to grow increasingly viewing oil and natural which means more waste. In the tri- state region of PA, OH, and WV, and see investment from larger waste management firms looking to gas field wastes as a business growth opportunity. Casella Waste Systems the waste from shale gas drilling has enter this attractive niche. is one of those companies looking to gone from 0% in 2008 to 6% in 2012. • Global industrial waste recycling and services market is expected expand their traditional business model. – Waste & Recycling News ―Waste & Recycling News to grow at a 10% CAGR from 2012 to 2016P, partially driven by the increase in sources of industrial waste generation.1 Waste Management is acquiring two The drilling waste management market energy services companies in a push to • Oil and gas companies are expected to increase environmental, is estimated to grow from over $4 expand its environmental service health, and safety (EHS) spending by 60% from $35 billion in billion in 2013 to nearly $8 billion by offerings to oil and gas industry 2011 to $56 billion in 2030P, driving demand for industrial waste 2018, at a CAGR of over 10%. customers in the Bakken shale formation. ―Waste & Recycling News solutions. ―Markets and Markets N.A. E&P Waste Treatment, Recycle, and Disposal Expansion Global EHS Spending by Oil & Gas Companies 2011 – 2030P 100% ($ in billions) $60 2011-2030P $56 80% Liquid Growth: 60% Waste Management $50 60% Future 50% Solid / Liquid Other Waste $40 $35 E&P Management 40% CapEx Solid $30 Waste 20% 90% Management E&P Waste 50% $20 10% Management 0% N.A. E&P Capital N.A. E&P Waste N.A. Future E&P $10 Budgets Management Waste Management Size $190 - $200bn $15 - $20bn TBD $0 2011 2030P Source: Equity Research. Source: Lux Research. 15 (1) TechNavio. Sentiment Sub-Sector Review Specialty Waste – Hazardous

• Hazardous waste generation trends have fluctuated between 2001 and 2009, but the amount generated has roughly stayed constant Hazardous Specialty Waste News while the portion of waste that was disposed of increased by 2.1 California is embarking on a new million tons. China’s “Green Fence” aims to avoid push to cut hazardous waste landfill receiving hazardous waste or medical • The oil & gas, petrochemical, and manufacturing renaissance is disposal in half by 2025, but also waste, which would reject the whole wants to allow expansion of one driving increased demand for hazardous waste services. shipment received. – Waste & such hazardous waste site. • Of the disposal methods, underground injection is the most popular, Recycling News ―Waste & Recycling News increasing from 90.7% of hazardous waste produced in 2001 to 91.2% of hazardous waste produced in 2009. While solar power is a far less • Other methods include landfill, land treatment, and incineration – in polluting energy source than coal the U.S., no new landfills have been permitted in the past 18 years or natural gas, many panel and no new incinerators have been constructed in the past 16 years. makers are nevertheless • The growth of new industries like e-waste recovery and solar grappling with a hazardous waste problem. energy will also help to grow hazardous waste collections in the ―Associated Press U.S. as new types of waste are classified as hazardous.

U.S. Hazardous Waste Disposal by Practice U.S. Hazardous Waste Generation Management

2001 – 2009 2001 – 2009 (millions of tons) (millions of tons) 30 35 0.00 28.8 0.00 30 27.6 25 0.01 24.6 24.8 0.02 1.92 1.85 23.7 24.3 20 25 0.02 1.90 21.6 1.78 19.5 20.1 15 20 1.60 16.1 22.44 10 21.75 15 17.68 19.67 14.48 5 10

0 5 2001 2003 2005 2007 2009 0 Underground Injection Landfill/Surface Impoundment 2001 2003 2005 2007 2009 Land Treatment/Land Application Generated Disposed Source: Environmental Business Journal. Source: U.S. EPA. 16 Sentiment Sub-Sector Review Specialty Waste – Medical

• Proper disposal of medical waste is imperative to reduce the risk of cross contamination and the spread of infection – currently over Medical Specialty Waste News 90% of medical waste in incinerated to aid this effort. • U.S. EPA regulates the air emissions for medical waste incinerators Citing growing community concern, Utah Government shutdown halts and in May passed amendments aimed at further minimizing Gov. Gary Herbert has ordered the state EPA hazardous waste and medical waste investigation at emissions. Department of Health to conduct a detailed study of a medical waste incinerator in North site of warehouse fire in • The U.S. medical waste management market is expected to grow at Salt Lake City. ―The Republic Detroit.―MLive.com a 5.4% CAGR from $3.1 billion in 2013E to $4.0 billion in 2018P, driven by the growing demand of the pharmaceutical industry and the aging population. GlaxoSmithKline hopes to collect 100,000 used Hospitals in two Australian respiratory inhalers through a new collection states have recycled 33,000 • Globally, the medical waste management market is expected to program being offered to community-based pounds of PVC waste, turning reach $10.3 billion in 2018P, representing a 4.9% CAGR from $8.1 retail pharmacies in 31 U.S. markets. Currently, it into industrial hoses and billion in 2013E. inhalers may not be recycled by curbside non-slip floor mats. ―Environmental Leader • Stericycle is one of the largest competitors in the medical waste recyclers, and therefore likely go to landfills, GSK said. ―Environmental Leader management industry with approximately 14% global market share.

U.S. Medical Waste Management Revenue Global Medical Waste Market Competitive Landscape 2013E – 2018P As of Q2 2013 ($ in billions) 2013E-2018P $5 CAGR: 5.4% $4.0 $4 Onsite $3.1 Management Stericycle, 14% $3 and Other Competitors, $2 86%

$0 2013E 2018P Source: Markets and Markets. Sources: Frost & Sullivan, Stericycle. 17 Sentiment Sub-Sector Review Recycled Content

• The explosive demand for recycled content is driven by changing consumer preferences and the growing amount of waste. Recycled Content Waste News • The supply of post-consumer plastic has proven challenging for As pressure builds from special interests U.K. project to turn business waste businesses but recent changes in regulation, the emergence of for the federal government to ditch its from tenants including a food grade public-private and business-to-business partnerships, and improving preference for LEED certification of plastic recycling business, a technology and waste stream management are helping to mitigate buildings, the latest version of LEED has gasification plant, and an anaerobic been approved, making it more powerful roadblocks in the supply chain. digestion plant into green roof than ever. Members of the US Green material. ―GreenBiz.com • In addition, demand for post-consumer plastic is expected to rise Building Council voted overwhelmingly 6.5% per year to 3.5 billion pounds in 2016P. (85%) to include Cradle to Cradle China's "Green Fence" crackdown certification in LEED V4. on dirty scrap materials has reduced • Nearly 170 million tons of annual building construction, renovation, – Sustainable Business News imports of plastic waste by 5.5% in and demolition derived wastes account for nearly 60% of the the first four months of the year, a significant change for a country nation’s non-industrial, non-hazardous solid waste generation. 100% recycled plastic vehicle bridge, made long-used to double-digit increases from 80% post consumer plastic and 20% • The sustainable building materials industry is expected to grow at in recycled materials flowing in. – recycled car bumpers and dashboards, a 17.6% CAGR from $21.0 billion in 2012 to $40.0 billion in Waste & Recycling News 2016P, driven in part by the implementation of LEED v4. holds strong in Ohio. ―Earth Techling

U.S. Sustainable Building Materials Manufacturing Revenue U.S. Post-Consumer Plastic Demand 2010 – 2016P 2006 – 2016P ($ in billions) (Billion of Pounds) $50 4.0 2011-2016P 3.5 2012-2016P $40.0 3.5 CAGR: 6.5% $40 $36.1 CAGR: 17.6% 3.0 $31.3 2.4 2.5 2.5 $30 $25.0 $21.0 2.0 $20 $16.2 1.5 $13.1 1.0 $10 0.5 $0 0.0 2010 2011 2012 2013E 2014P 2015P 2016P 2006 2011 2016P

Source: IBISWorld. Source: Freedonia. 18 Sentiment Sub-Sector Review Waste-to-Energy (WtE)

• Current challenges in waste management, including unsustainable landfilling, methane gas emissions, growing waste volumes, and Waste-to-Energy News lack of space, are fueling the growth in the WtE market, which is expected to reach $7.4 billion in 2013. Massachusetts plans to ban commercial food waste in 2014. The plan would require any entity that disposes of at least • Consumers and businesses are recycling more biogenic waste (e.g. one ton of organic waste per week to food waste and yard clippings) and discarding more non-biogenic donate or repurpose the food starting July waste (e.g. plastics and metals), which has a higher heat content, 1, 2014. making it a more efficient fuel to produce electricity. ―Waste & Recycling News

• While the U.S. is making strides in growing its WtE market, in 2011 Global waste incineration markets only 11.7% of municipal solid waste was used to create energy as New York landfill adds another engine to a facility will more than double in value by opposed to the E.U. where 22.0% went to WtE plants. that utilizes landfill gas to 2022 to $16.8 billion, according to a create electricity. new study. • The global WtE market is expected to grow from $6.2 billion in ―Waste & Recycling News – GreenBiz 2012 to $29.2 billion in 2022P, representing a 16.8% CAGR.

Composition of Municipal Solid Waste Waste-to-Energy Plants Capacity in the U.S. 2005 – 2010 As of 2011 (Heat Content) (MW) 57% 57% 60% 54% 54% 51% 49% 50% 50% 50% 46% 46% 43% 43% 40%

30%

20%

10%

0% 2005 2006 2007 2008 2009 2010 Biogenic Non-Biogenic 1-25 26-100 101-200 201-300 300+ Source: U.S. EPA. Source: U.S. Energy Information Administration. 19 Disclosures

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